<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement |X| Confidential, For Use of the
Commission Only (as permitted
|_| Definitive Proxy Statement by Rule 14a-6(e)(2))
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GOLDEN GENESIS COMPANY
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|_| No fee required.
|X| Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
form or schedule and the date of its filing.
(1) Amount previously paid:
--------------------------------
(2) Form, Schedule or Registration Statement No.:
----------
(3) Filing Party:
------------------------------------------
(4) Date Filed:
--------------------------------------------
Value of Shares of Common
Stock outstanding 17,155,948 X 2.33 = $39,973,358.84
Plus Value of "in-the-money" options
outstanding $1,775,513.18
Total Value of the proposed transaction $41,748,872.02
Times Fee Rate 1/50 of 1% .00002
Total Fee $8,349.77
<PAGE>
[GOLDEN GENESIS COMPANY LOGO]
4545 MCINTYRE ST.
GOLDEN, CO 80403
To Our Stockholders:
On behalf of the Board of Directors of Golden Genesis Company (the
"Company" or "Golden Genesis"), I cordially invite you to attend the Special
Meeting of Stockholders of Golden Genesis (the "Special Meeting") to be held
at 10:00 a.m., local time, on July [__], 1999, at 7812 East Acoma Drive,
Scottsdale, Arizona 85260.
At the Special Meeting, you will be asked to adopt the Agreement and
Plan of Merger, dated as of May 26, 1999 (the "Merger Agreement"), among
Kyocera International, Inc. ("Buyer"), GGC Acquisition Company ("Buyer Sub")
and Golden Genesis, as well as the merger of Buyer Sub with and into Golden
Genesis (the "Merger"). The Merger Agreement provides for Golden Genesis to
become a wholly owned subsidiary of Buyer in a transaction valuing Golden
Genesis' equity (not including the assumption of approximately $10,744,888.93
of debt) at approximately $39,966,368.84. Pursuant to the Merger, among other
things, each share (other than shares held by stockholders who perfect their
statutory appraisal rights) of Golden Genesis Common Stock will convert into
the right to receive $2.33.
The Denver, Colorado-based investment banking firm of Hanifen, Imhoff
Inc. has rendered a written opinion to the Board of Directors that, as of May
26, 1999, the consideration to be received by the holders of Common Stock
pursuant to the Merger Agreement was fair from a financial point of view to
such holders. As part of its investment banking business, Hanifen, Imhoff Inc.
is regularly engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings,
competitive bidding, secondary distributions of listed and unlisted
securities, private placements and valuations for estate, corporate and other
purposes. The Company selected Hanifen, Imhoff Inc. as its financial advisor
because it is a nationally recognized investment banking firm that has
substantial expertise in transactions similar to the Merger. Hanifen, Imhoff
Inc. is familiar with the Company in having acted as its financial advisor in
connection with certain acquisitions by the Company.
In an effort to maximize stockholder value, management of the
Company, at the approval of the Board of Directors, held discussions with
several potential buyers of the Company in late 1998 and early 1999. By early
March, three prospective buyers had made definitive offers for the acquisition
of the Company, contingent upon full due diligence and Board of Director
approval.
In light of the offers received and considering the other strategic
alternatives, your Board of Directors has unanimously approved the Merger
Agreement and the transactions contemplated thereby and determined that they
are advisable, fair to and in the best interests of the stockholders of Golden
Genesis. Your Board of Directors unanimously recommends that you vote FOR
adoption of the Merger Agreement.
<PAGE>
Adoption of the Merger Agreement will require the affirmative vote of
the holders of a majority of the voting power of all shares of Golden Genesis
Common Stock outstanding on June [__], 1999, the record date, with each share
of Common Stock entitled to one vote.
ACX Technologies, Inc. ("ACX") and Golden Technologies Company, Inc.
("GTC") beneficially own shares of Common Stock representing approximately 55%
of the voting power of the Common Stock. In the non-binding letter of intent
executed by Buyer and the Company on April 13, 1999, Buyer indicated that its
willingness to enter into the Merger Agreement would be subject to and
conditioned upon the execution of voting agreements by ACX and GTC. After
negotiations with Buyer, ACX and GTC agreed to vote all of their shares of
capital stock of Golden Genesis in favor of adoption of the Merger Agreement.
Accordingly, passage of the proposal to adopt the Merger Agreement is assured.
Details of the proposed Merger appear in the accompanying Proxy
Statement. Please give this material your careful attention.
Holders of record of shares of common stock of Golden Genesis
("Common Stock") who do not wish to accept the $2.33 cash payment per share
provided in the Merger have the right to seek an appraisal of the "fair value"
of their shares provided that they comply with the conditions established by
Section 262 of the Delaware General Corporation Law (the "DGCL"). For a
discussion of the rights of holders of Common Stock to seek appraisal of their
shares, see "The Merger--Rights of Dissenting Stockholders" in the
accompanying Proxy Statement. A copy of Section 262 of the DGCL is attached
to the Proxy Statement as Exhibit C. Holders of Common Stock who are
considering seeking appraisal should be aware that the fair value of their
shares as determined by Section 262 of the DGCL could be more than, the same
as or less than the value of the merger consideration that they would
otherwise receive if they did not seek appraisal of their shares. In addition,
stockholders should be aware that the Board of Directors of Golden Genesis has
determined that the Merger Agreement and the transactions contemplated thereby
are advisable, fair to and in the best interests of the stockholders of Golden
Genesis and that Hanifen, Imhoff Inc. rendered an opinion to the Board of
Directors on May 26, 1999 (confirming its oral opinion given to the Board of
Directors on May 18, 1999) that, as of May 26, 1999, the consideration to be
received by the holders of Common Stock pursuant to the Merger Agreement was
fair from a financial point of view to such holders. A holder of Common Stock
wishing to exercise appraisal rights must deliver to Golden Genesis, before
the vote on adoption of the Merger Agreement at the Special Meeting, a written
demand for appraisal of the holder's shares and must comply with the other
requirements of Section 262 of the DGCL.
Whether or not you plan to attend the Special Meeting, please
complete, sign and date the accompanying proxy and return it in the enclosed
prepaid envelope. If you hold shares of Common Stock and attend the Special
Meeting, you may vote in person even if you have previously returned your
proxy card. Your prompt cooperation will be greatly appreciated.
Sincerely,
J. Michael Davis
President and Chief Executive Officer
<PAGE>
[GOLDEN GENESIS COMPANY LOGO]
4545 MCINTYRE ST.
GOLDEN, CO 80403
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held July [__], 1999
To the stockholders of Golden Genesis Company:
NOTICE IS HEREBY GIVEN that the Special Meeting of Stockholders
of Golden Genesis Company, a Delaware corporation ("Golden Genesis"),
will be held at 10:00 a.m., local time, on July [__], 1999, at 7812 East
Acoma Drive, Scottsdale, Arizona 85260, for the following purposes:
1. To vote on a proposal to adopt the Agreement and Plan of
Merger, dated as of May 26, 1999 (the "Merger Agreement"), among Kyocera
International, Inc., a California corporation ("Buyer"), GGC Acquisition
Company, a Delaware corporation and a wholly owned subsidiary of Buyer
("Buyer Sub"), and Golden Genesis pursuant to which Buyer Sub will merge
with and into Golden Genesis (the "Merger"). Pursuant to the Merger,
Golden Genesis will become a wholly owned subsidiary of Buyer and, among
other things, holders of Golden Genesis Common Stock will receive $2.33
per share in accordance with the terms of the Merger Agreement, which is
described in the accompanying Proxy Statement and attached thereto as
Exhibit A.
2. To transact any other business that may properly come
before the Special Meeting and any adjournments or postponements
thereof.
Only holders of record of shares of Common Stock of Golden
Genesis outstanding on June [__], 1999 (the "Record Date"), will be
entitled to vote at the Special Meeting and any adjournments or
postponements thereof. Such shares will vote together as a single
class, with each share of Common Stock entitled to one vote.
Holders of record of shares of common stock of Golden Genesis
("Common Stock") who do not wish to accept the $2.33 cash payment per
share provided in the Merger have the right to seek an appraisal of the
"fair value" of their shares provided that they comply with the
conditions established by Section 262 of the Delaware General
Corporation Law (the "DGCL"). For a discussion of the rights of holders
of Common Stock to seek appraisal of their shares, see "The Merger--
Rights of Dissenting Stockholders" in the accompanying Proxy Statement.
A copy of Section 262 of the DGCL is attached to the Proxy Statement as
Exhibit C. Holders of Common Stock who are considering seeking appraisal
should be aware that the fair value of their shares as determined by
Section 262 of the DGCL could be more than, the same as or less than the
value of the merger consideration that they would otherwise receive if
<PAGE>
they did not seek appraisal of their shares. In addition, stockholders
should be aware that the Board of Directors of Golden Genesis has
determined that the Merger Agreement and the transactions contemplated
thereby are advisable, fair to and in the best interests of the
stockholders of Golden Genesis and that Hanifen, Imhoff Inc. rendered an
opinion to the Board of Directors on May 26, 1999 (confirming its oral
opinion given to the Board of Directors on May 18, 1999) that, as of May
26, 1999, the consideration to be received by the holders of Common
Stock pursuant to the Merger Agreement was fair from a financial point
of view to such holders. A holder of Common Stock wishing to exercise
appraisal rights must deliver to Golden Genesis, before the vote on
adoption of the Merger Agreement at the Special Meeting, a written
demand for appraisal of the holder's shares and must comply with the
other requirements of Section 262 of the DGCL.
By Order of the Board of Directors
Jeffrey C. Brines
Secretary
Golden, Colorado
June [__], 1999
All stockholders are cordially invited to attend the Special
Meeting. To ensure your representation at the Special Meeting, however,
you are urged to mark, sign, date and return the enclosed proxy card in
the accompanying envelope, whether or not you expect to attend the
Special Meeting. No postage is required if mailed in the United States.
Any holder of Common Stock attending the Special Meeting may vote in
person even if that stockholder has returned a proxy card.
- ------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT.
WE HAVE SENT PROXY CARDS TO HOLDERS OF COMMON STOCK.
TO VOTE YOUR SHARES, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD PROMPTLY IN THE ENCLOSED RETURN ENVELOPE.
PLEASE DO NOT SEND US YOUR GOLDEN GENESIS
STOCK CERTIFICATES.
- ------------------------------------------------------------------------
<PAGE>
This Proxy Statement (the "Proxy Statement") is being furnished
to stockholders of Golden Genesis Company, a Delaware corporation
("Golden Genesis" or the "Company"), in connection with the solicitation
of proxies by the Company's Board of Directors for use at a Special
Meeting of Stockholders (the "Special Meeting") to be held at 7812 East
Acoma Drive, Scottsdale, Arizona 85260, on July [__], 1999 local time,
or at any adjournments or postponements thereof, for the purposes set
forth in the accompanying Notice of Special Meeting of Stockholders.
This Proxy Statement and the related proxy cards and Voting Instruction
Cards are first being mailed to the Company's stockholders on or about
[DATE OF MAILING], 1999. Proxy cards have been sent to holders of the
Company's Common Stock, par value $.10 per share (the "Common Stock").
At the Special Meeting, the holders of record on [RECORD DATE] (the
"Record Date") of shares of Common Stock will be asked:
1. to vote on a proposal to adopt the Agreement and Plan of
Merger, dated as of May 26, 1999 (the "Merger Agreement") among Kyocera
International, Inc., a California corporation ("Buyer"), GGC Acquisition
Company, a Delaware corporation and a wholly-owned subsidiary of Buyer
("Buyer Sub"), and Golden Genesis, and the merger of Buyer Sub with and
into Golden Genesis (the "Merger"), whereby Golden Genesis will become a
wholly-owned subsidiary of Buyer; and
2. to transact any other business that may properly come
before the Special Meeting or any adjournments or postponements thereof.
When a Certificate of Merger relating to the Merger is filed
with the Secretary of State of the State of Delaware or as otherwise
specified in such Certificate of Merger (the "Effective Time"), Buyer
Sub will merge with and into Golden Genesis, with Golden Genesis as the
surviving corporation (the "Surviving Corporation"). At the Effective
Time, each outstanding share of the Company's Common Stock, par value
$.10 per share (the "Common Stock") (other than any shares held in the
treasury of the Company or by any wholly owned subsidiary of the
Company, which shares, by virtue of the Merger and without any action on
the part of the holder thereof, will be canceled and will cease to exist
with no payment being made with respect thereto, and other than any
shares of holders who perfect and exercise dissenters' appraisal rights)
will be converted into the right to receive $2.33 (the "Merger
Consideration"). The Merger Consideration will be payable in cash
without interest. Pursuant to the Merger Agreement, a holder of an
option to purchase Common Stock, upon delivery by such holder of a Stock
Option Cancellation Agreement (each, an "Option Cancellation
Agreement"), the form of which is attached to the Merger Agreement which
is attached hereto as Exhibit A, will be able to receive an amount in
respect of such option which is equal to the product of: (i) the
difference between $2.33 and the exercise price of such option, and (ii)
the number of shares of Common Stock subject to such option. See "The
Merger Agreement."
The Merger will be a taxable transaction to the Company's
stockholders for federal income tax purposes. See "Certain Federal
Income Tax Consequences of the Merger."
<PAGE>
A conformed copy of the Merger Agreement is included as Exhibit
A to this Proxy Statement. The summaries of portions of the Merger
Agreement set forth in this Proxy Statement do not purport to be
complete; they are subject to, and are qualified in their entirety by
reference to, the text of the Merger Agreement.
The Board of Directors has unanimously approved the Merger
Agreement and the transactions contemplated thereby and determined that
they are advisable, fair to and in the best interests of the
stockholders of the Company. The Board of Directors unanimously
recommends that the Company's stockholders adopt the Merger Agreement.
The Denver, Colorado-based investment banking firm Hanifen,
Imhoff Inc. has acted as financial advisor to the Company in connection
with the Merger. Hanifen, Imhoff Inc. rendered a written opinion to the
Board of Directors on May 26, 1999 (confirming its oral opinion given to
the Board of Directors on May 18, 1999) that, as of May 26, 1999, the
consideration to be received by the holders of Common Stock pursuant to
the Merger Agreement was fair from a financial point of view to such
holders. A copy of the full text of that written opinion is attached
hereto as Exhibit B and should be read in its entirety by the
stockholders of the Company.
As of the Record Date, there were outstanding [_______] shares
of Common Stock. In addition, as of the Record Date, the Company had
outstanding certain stock options, none of which entitle the holders
thereof to vote at the Special Meeting. The holders of such stock
options are not entitled to exercise dissenters' appraisal rights. The
holders of such options are entitled under the Merger Agreement to
receive payment of the amount by which the exercise price of their
options exceeds $2.33 upon delivery by such holders of an Option
Cancellation Agreement. See "The Merger Agreement--Treatment of
Options."
Adoption of the Merger Agreement will require the affirmative
vote of the holders of a majority of the voting power of all outstanding
shares of Common Stock with each share entitled to one vote.
ACX Technologies, Inc. ("ACX") and Golden Technologies Company,
Inc. ("GTC") have agreed to vote all of their shares of Common Stock in
favor of the adoption of the Merger Agreement. ACX and GTC collectively
own beneficially approximately 55% of the voting power of the Common
Stock. Accordingly, passage of the proposal to adopt the Merger
Agreement is assured. See "Principal Stockholders--Option and Voting
Agreement."
HOLDERS OF COMMON STOCK WHO DO NOT WISH TO ACCEPT THE $2.33
CASH PAYMENT PER SHARE PROVIDED IN THE MERGER HAVE THE RIGHT TO SEEK AN
APPRAISAL OF THE "FAIR VALUE" OF THEIR SHARES PROVIDED THAT THEY COMPLY
WITH THE CONDITIONS ESTABLISHED BY SECTION 262 OF THE DELAWARE GENERAL
CORPORATION LAW (the "DGCL"). FOR A DISCUSSION OF THE RIGHTS OF HOLDERS
OF COMMON STOCK TO SEEK APPRAISAL OF THEIR SHARES, SEE "THE MERGER--
RIGHTS OF DISSENTING STOCKHOLDERS."
<PAGE>
Although it is possible that the Merger may not occur for
several months after the Special Meeting, and that the information
regarding the Company will change materially from that contained or
incorporated by reference herein, the Company's stockholders will not be
entitled to another vote on the proposal to adopt the Merger Agreement.
The Company anticipates that the Common Stock will trade on The Nasdaq
SmallCap Market until the consummation of the Merger.
The proxy cards to be used by holders of Common Stock are being
solicited on behalf of the Board of Directors. The execution of a proxy
card does not preclude a holder of Common Stock from voting in person if
he or she so desires. A holder of Common Stock may revoke or change such
holder's proxy card at any time prior to its use at the Special Meeting
by giving Golden Genesis or its proxy tabulator a written direction to
revoke the proxy card, giving Golden Genesis a new proxy card or
attending the Special Meeting and voting in person. See "The Special
Meeting."
Golden Genesis' principal executive office is located at 4545
McIntyre St., Golden, Colorado 80403, and its telephone number is (303)
271-7465.
<PAGE>
TABLE OF CONTENTS
PAGE
SUMMARY.............................................................
Matters to Be Considered.......................................
Parties to the Merger Agreement................................
The Special Meeting............................................
Option and Voting Agreement....................................
The Merger.....................................................
Certain Federal Income Tax Consequences........................
Certain Legal Proceedings......................................
THE SPECIAL MEETING.................................................
Date, Time and Place; Matters to Be
Considered.................................................
Record Date; Quorum; Voting at the Special
Meeting....................................................
Voting of Proxies..............................................
Revocation of Proxies and Voting
Instructions...............................................
Proxy Solicitation.............................................
THE MERGER..........................................................
Background of the Merger.......................................
Reasons for the Merger; Recommendation
of the Board of Directors..................................
Opinion of Hanifen, Imhoff Inc.................................
Effective Time.................................................
Certain Effects of the Merger..................................
Interests of Certain Persons in the Merger.....................
Regulatory Matters.............................................
Rights of Dissenting Stockholders..............................
Accounting Treatment...........................................
Certain Legal Proceedings......................................
THE MERGER AGREEMENT................................................
The Merger.....................................................
Treatment of Options...........................................
Representations and Warranties.................................
Covenants......................................................
No Solicitation................................................
Conditions.....................................................
Termination; Fees and Expenses.................................
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER.....................................
PRINCIPAL STOCKHOLDERS..............................................
Option and Voting Agreement....................................
SELECTED CONSOLIDATED FINANCIAL DATA................................
MARKET PRICES AND DIVIDEND POLICY...................................
<PAGE>
FORWARD-LOOKING STATEMENTS..........................................
INDEPENDENT AUDITORS................................................
OTHER MATTERS.......................................................
AVAILABLE INFORMATION...............................................
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE...................................................
STOCKHOLDER PROPOSALS...............................................
EXHIBIT A -- Merger Agreement
EXHIBIT B -- Opinion of Hanifen, Imhoff Inc.
EXHIBIT C -- Section 262 of the General
Corporation Law of Delaware
EXHIBIT D -- Option and Voting Agreement
<PAGE>
SUMMARY
This Proxy Statement contains all material information relating
to the Merger. However, the following summary does not purport to be
complete. It is qualified in its entirety by, and should be read in
conjunction with, the more detailed information contained elsewhere in
this Proxy Statement, including the Exhibits attached hereto and
incorporated by reference herein and the financial statements and notes
thereto included therein. See "Incorporation of Certain Documents by
Reference." Stockholders are urged to read this Proxy Statement,
including the financial statements and notes thereto in the Exhibits
hereto, and the documents referred to herein in their entirety.
MATTERS TO BE CONSIDERED
At the Special Meeting, holders of Common Stock will consider
the adoption of the Merger Agreement. As a result of the Merger, Golden
Genesis will become a wholly-owned subsidiary of Buyer and, among other
things, each issued and outstanding share of Common Stock (other than
any shares held in the treasury of the Company or by any wholly owned
subsidiary of the Company, which shares, by virtue of the Merger and
without any action on the part of the holder thereof, will be canceled
and will cease to exist with no payment being made with respect thereto,
and other than any shares of holders who perfect and exercise
dissenters' appraisal rights) will be converted into the right to
receive $2.33. In addition, each holder of an option to purchase Common
Stock, upon delivery of an Option Cancellation Agreement, will be able
to receive an amount in respect of such option which is equal to the
product of: (i) the difference between $2.33 and the exercise price of
such option, and (ii) the number of shares of Common Stock subject to
such option.
Interest will not be paid on amounts to be received in the
Merger by holders of shares or options in respect of the period between
the time of the Merger and the time that payment is actually made.
If the Merger had occurred on April 30, 1999, and assuming no
holder of Common Stock exercises appraisal rights and each holder of an
option to purchase shares of Common Stock had delivered an executed
Option Cancellation Agreement, then (a) the 17,152,948 outstanding
shares of Common Stock would have converted into the right to receive an
aggregate of $39,966,368.84, and (b) the holders of "in-the-money"
options to purchase 1,986,272 shares of Common Stock would have been
entitled to receive (net of the payment of the exercise prices) an
aggregate of approximately $1,783,318.14.
In the non-binding letter of intent with respect to the Merger
entered into by Buyer and the Company on April 13, 1999 (the "Letter of
Intent"), Buyer indicated that its willingness to enter into the Merger
Agreement would be subject to and conditioned upon the execution of
voting agreements by ACX and GTC, who collectively own beneficially as
of the Record Date shares of Common Stock which represent approximately
55% of the voting power of the Common Stock. After negotiations with
Buyer, ACX and GTC executed agreements pursuant to which they have
<PAGE>
agreed to vote all of their shares of capital stock of Golden Genesis in
favor of the adoption of the Merger Agreement. Accordingly, adoption of
the Merger Agreement is assured. See "Principal Stockholders--Option and
Voting Agreement."
PARTIES TO THE MERGER AGREEMENT
The parties to the Merger Agreement are Golden Genesis, Buyer
and Buyer Sub.
Golden Genesis Company.
Golden Genesis markets, engineers, manufactures and distributes
solar electric systems utilized primarily in remote areas. Areas
generally include those where electric power is needed but access to
electricity is inconvenient, not available or costs are relatively high.
Three primary markets compose the majority of Golden Genesis' results
from operations: the industrial market, the distribution market and the
international market.
Golden Genesis services a variety of customers in the
industrial market. These customers have power generation needs for
communication systems, traffic signal systems and remote monitoring
systems. In addition, the industrial market includes customers that use
solar electric systems connected directly into power grids.
The Company's distribution market includes more than 1,000
solar energy dealers, which are predominantly located in North and South
America. The Company delivers a wide range of solar modules and related
hardware to the dealer network. The distribution market also includes
retail sales through a system integration and mail-order design
division, and direct sales to end users of pre-packaged solar systems
for recreational vehicles and boats and water pumping systems for small
residential customers or large agricultural and village applications.
The Company operates subsidiaries internationally in Australia,
Brazil and Argentina. These subsidiaries service customers in the
industrial and distribution market segments within their respective
countries.
The mailing address of Golden Genesis' principal executive
office is 4545 McIntyre St., Golden, Colorado 80403, and its telephone
number is (303) 271-7465.
Additional information regarding Golden Genesis is included in
its Annual Report on Form 10-K for the year ended December 31, 1998
which is incorporated herein by reference.
Kyocera International, Inc.
Buyer is the wholly-owned, non-operating North American holding
company for Kyocera Corporation of Japan, a manufacturer and seller of
high-performance ceramic-related products, electronic equipment and
optical instruments. Buyer is the parent of wholly-owned operating
<PAGE>
subsidiaries involved both in the manufacture and sale of ceramic-
related products and in the marketing, sale and service of electronic
equipment and optical instruments. Two of the Buyer's operating units
are competitors to ACX and GTC.
The mailing address of Buyer's principal executive offices is
8611 Balboa Avenue, San Diego, California 92123, and its telephone
number is (619) 576-2600.
GGC Acquisition Company. Buyer Sub, a Delaware corporation, was
recently formed by Buyer to effect the transactions contemplated by the
Merger Agreement and related agreements. At the Effective Time, Buyer
Sub will be merged with and into Golden Genesis, with Golden Genesis
continuing as the surviving corporation and a wholly-owned subsidiary of
Buyer. Buyer Sub has not conducted any substantial business activities
to date other than entering into, and performing its obligations under,
the Merger Agreement and related agreements. The mailing address of
Buyer Sub's principal executive offices is 8611 Balboa Avenue, San
Diego, California 92123, and its telephone number is (619) 576-2600.
THE SPECIAL MEETING
The Special Meeting
The Special Meeting will be held at 10:00 a.m., local time, on
July [__], 1999 at 7812 East Acoma Drive, Scottsdale, Arizona 85260.
Purpose of the Special Meeting
At the Special Meeting, the stockholders of Golden Genesis will
be asked to adopt the Merger Agreement and transact any other business
that may properly come before the Special Meeting or any adjournments or
postponements thereof. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT THE STOCKHOLDERS OF GOLDEN GENESIS VOTE FOR THE ADOPTION OF THE
MERGER AGREEMENT.
Record Date; Shares Outstanding; Quorum
The Board of Directors has fixed the close of business on June
[__], 1999 as the Record Date for the determination of the stockholders
of record entitled to notice of, and to vote at, the Special Meeting and
any adjournments or postponements thereof. Only holders of record of
shares of Common Stock will be entitled to vote at the Special Meeting.
Holders of stock options are not entitled to vote on the Merger.
As of the Record Date, there were issued and outstanding
[_____________] shares of Common Stock. The presence in person or by
proxy of holders of record of a majority of the voting power of the
shares of Common Stock will constitute a quorum at the Special Meeting
for purposes of adopting the Merger Agreement. See "The Special Meeting-
- -Record Date; Quorum; Voting at the Special Meeting."
Votes Per Share
<PAGE>
Each share of Common Stock will be entitled to one vote in all
matters upon which they vote at the Special Meeting or any adjournments
or postponements thereof.
Votes Required
In accordance with the DGCL and the Bylaws of the Company, the
affirmative vote of the holders of a majority of the voting power of all
outstanding shares of the Common Stock is required to adopt the Merger
Agreement. Accordingly, the affirmative vote of holders of Common Stock
holding at least [___________] shares of Common Stock is required to
adopt the Merger Agreement.
In the Letter of Intent, Buyer indicated that its willingness
to enter into the Merger Agreement would be subject to and conditioned
upon the execution of voting agreements by ACX and GTC, who collectively
own beneficially as of the Record Date shares of Common Stock which
represent approximately 55% of the voting power of the Common Stock.
After negotiations with Buyer, ACX and GTC executed agreements pursuant
to which they have agreed to vote all of their shares of capital stock
of Golden Genesis in favor of the adoption of the Merger Agreement.
Such holders collectively possess the right to cast 9,429,379 of the
17,152,948 votes entitled to be cast at the Special Meeting.
Accordingly, passage of the proposal to adopt the Merger Agreement is
assured. See "Principal Stockholders--Option and Voting Agreement."
OPTION AND VOTING AGREEMENT
Concurrently with the execution of the Merger Agreement and as
a condition to Buyer entering into the Merger Agreement, ACX and GTC
agreed in that certain Option, Voting and Indemnification Agreement
among ACX, GTC and Buyer, dated May 26, 1999 (the "Option and Voting
Agreement"), a copy of which is attached as Exhibit D hereto, to vote
all of the capital stock of Golden Genesis owned beneficially by them
(i) in favor of the Merger and for each of the other actions
contemplated by the Merger Agreement, (ii) against any action or
agreement that would result in a breach in any material respect of any
representation, warranty or covenant of Golden Genesis in the Merger
Agreement and (iii) against any action or agreement that would impede,
interfere with, delay, postpone, attempt to discourage the Merger or
otherwise materially adversely affect the Merger, including without
limitation, any action or agreement with respect to an acquisition
proposal with any person other than Buyer and Buyer Sub.
ACX and GTC have granted to Buyer an unconditional, irrevocable
option (the "Option") to purchase on one occasion, all (but not less
than all) securities of the Company consisting of Common Stock and all
or any part of any other securities of the Company not consisting of
Common Stock (including all options, warrants and other rights to
acquire shares of Common Stock) beneficially owned by ACX and GTC
(excluding securities with respect to which they merely hold voting
power). The shares of Common Stock subject to the Option constitute
approximately 52% of the issued and outstanding Common Stock. The Option
may be exercised at any time prior to the earlier of (x) the date upon
<PAGE>
which the Merger becomes effective, (y) the date upon which the Merger
Agreement is validly terminated pursuant to a mutual agreement of Buyer,
Buyer Sub and the Company or the entry of a final order permanently
enjoining the consummation of the Merger or (z) January 31, 2000, if an
event occurs giving Buyer the right to terminate the Merger Agreement
based upon the Company's Board of Directors' (i) (A) withdrawal of its
recommendation or approval in respect of the Merger Agreement or the
Merger or (B) modification or change of its recommendation or approval
in respect of the Merger Agreement or the Merger in a manner materially
adverse to Buyer or Buyer Sub or (C) failure to publicly oppose a Tender
Offer or Exchange Offer within 10 business days after commencement of
such Tender Offer or Exchange Offer, (ii) approval of any proposal other
than by Buyer and Buyer Sub in respect of a merger, consolidation or
other business combination involving the Company or its subsidiaries or
acquisition of more than 50% of the assets of the Company and its
subsidiaries taken as a whole or the issuance, sale, disposition of
(including by way of merger, consolidation, share exchange or similar
transaction) securities representing 50% or more voting control of the
Company (other than securities issued pursuant to existing stock
options) (an "Acquisition Transaction"), or (iii) waiver of the
Company's right of first refusal, under the Stock Purchase Agreement,
dated November 15, 1996, among GTC, New World Power Corporation and the
Company, to purchase all shares of Common Stock that GTC and its
subsidiaries may from time to time propose to sell (the "Company Right
of First Refusal"). In the event Common Stock of Golden Genesis is
purchased pursuant to the Option, the price per share at which Buyer may
exercise the Option is equal to $2.33, and in the case of all other
securities of Golden Genesis purchased pursuant to the Option, the
purchase price shall equal the price paid by ACX and GTC for such
securities (each, an "Option Price"). The date upon which consummation
of the exercise of the Option occurs is referred to as the "Option
Closing Date."
Pursuant to the Option and Voting Agreement, ACX and GTC have
irrevocably and unconditionally waived and agreed to cause to be waived
and to prevent the exercise of, any rights of appraisal, any dissenters'
rights and any similar rights that may be available to ACX or GTC
relating to the Merger or any related transaction.
During the period from May 26, 1999, up to and until the
earlier to occur of (i) the date upon which the Merger becomes
effective, (ii) the Option Closing Date, (iii) the date upon which the
Merger Agreement is validly terminated pursuant to a mutual agreement of
Buyer, Buyer Sub and the Company or the entry of a final order
permanently enjoining the consummation of the Merger or (iv) January 31,
2000 (the period described in items (i) through (iv) is referred to
herein as the "Restricted Period"), ACX and GTC (and their respective
officers, directors, employees, representatives and agents) cannot
solicit, initiate, encourage, inquire or discuss with any parties other
than Buyer and Buyer Sub any inquiries or the making of any proposal
with respect to any Acquisition Transaction.
In addition, during the Restricted Period, ACX and GTC cannot
request that Golden Genesis waive the Company Right of First Refusal,
<PAGE>
nor can either authorize or permit any of its directors, officers,
employees, agents or representatives to do so.
The Option and Voting Agreement provides that ACX indemnify,
defend and hold harmless, subject to certain limitations, (i) Golden
Genesis and (ii) each of Golden Genesis' stockholders, directors,
officers, employees and agents from and against liability which may be
incurred by any of them resulting from (A) any breach of any
representations or warranties contained in the Option and Voting
Agreement or the failure of ACX and GTC to observe, perform or abide by,
or any other breach of, any restriction, covenant, obligation or other
provision contained in the Option and Voting Agreement, (B) any breach
by Golden Genesis of any representation or warranty contained in the
Merger Agreement solely to the extent any such representation or
warranty applies to certain wholly owned foreign subsidiaries of the
Company, (C) any breach by ACX or GTC of any representation or warranty
contained in that certain Share Purchase Agreement, dated as of
September 4, 1998, among ACX, GTC and the Company, or (D) certain
matters relating to the Company's 401(k) Plan.
The Option and Voting Agreement provides that ACX and GTC shall
jointly and severally release and discharge Golden Genesis and its
subsidiaries, and each of their respective shareholders, affiliates,
officers, directors, employees and agents from any and all claims,
obligations or liabilities of any nature (whether known or unknown)
against any such persons by reason of any matter done or omitted to be
done prior to the Effective Time other than the obligation of Golden
Genesis to pay all indebtedness owed to ACX and GTC prior to the
Effective Time. See "Principal Stockholders--Option and Voting
Agreement."
THE MERGER
Recommendations of the Board; Reasons for the Merger
The Board of Directors has unanimously approved the Merger
Agreement and the transactions contemplated thereby and determined that
they are advisable, fair to and in the best interests of the
stockholders of Golden Genesis. The Board of Directors unanimously
recommends that Golden Genesis' stockholders adopt the Merger Agreement.
The Board of Directors, in reaching its conclusion, considered a number
of factors. See "The Merger--Background of the Merger" and "--Reasons
for the Merger; Recommendation of the Board of Directors."
Opinion of Hanifen, Imhoff Inc.
The Company retained Hanifen, Imhoff Inc. to act as its
financial advisor in connection with the sale of Golden Genesis.
Hanifen, Imhoff Inc. rendered an opinion to the Board of Directors on
May 26, 1999 (confirming its oral opinion given to the Board of
Directors on May 18, 1999) that, as of May 26, 1999, the consideration
to be received by the holders of the Common Stock pursuant to the terms
of the Merger Agreement was fair from a financial point of view to such
holders. See "The Merger--Background to the Merger" and "--Reasons for
<PAGE>
the Merger; Recommendation of the Board of Directors." A copy of the
opinion of Hanifen, Imhoff Inc. is attached to this Proxy Statement as
Exhibit C and should be read in its entirety by the stockholders of the
Company. See "The Merger--Opinion of Hanifen, Imhoff."
Effective Time
The Effective Time of the Merger will be the time of filing of
a Certificate of Merger relating to the Merger with the Secretary of
State of the State of Delaware in accordance with the provisions of the
DGCL or as otherwise provided in such Certificate of Merger. Subject to
the satisfaction or waiver of the closing conditions set forth in the
Merger Agreement, the Merger will be consummated (the "Closing") on or
before the 22nd business day following the mailing of the definitive
Proxy Statement (subject to extension under certain circumstances, as
provided in the Merger Agreement). It is anticipated that the Effective
Time of the Merger will occur during the third calendar quarter of 1999,
although there can be no assurance to such effect. See "The Merger--
Effective Time."
Surrender of Stock Certificates; Payment for Shares
Promptly after the Effective Time, a transmittal form will be
mailed to each record holder of shares of Common Stock. The transmittal
form will set forth the procedure for surrendering to a bank or trust
company mutually acceptable to Golden Genesis and Buyer (the "Paying
Agent") certificates previously representing Common Stock. In order to
receive the consideration to which the holder will be entitled as a
result of the Merger, the holder will be required, following the
Effective Time, to surrender the holder's stock certificate(s), together
with a duly executed and properly completed transmittal form (and any
other required documents), to the Paying Agent. STOCKHOLDERS SHOULD NOT
SEND IN THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE A TRANSMITTAL FORM.
Thereafter, the holder will receive as promptly as practicable, in
exchange for the surrendered certificate(s), cash in an amount equal to
$2.33 per share of Common Stock, subject to reduction only for any
applicable federal back-up withholding or transfer taxes. See "The
Merger Agreement--The Merger."
Holders of options issued by Golden Genesis will be entitled to
receive the amounts described in "The Merger Agreement--Treatment of
Options." HOLDERS OF OPTIONS SHOULD NOT SEND IN THEIR AGREEMENTS
REPRESENTING SUCH SECURITIES.
Conditions to the Merger
The parties' obligations to consummate the Merger are subject
to the satisfaction or waiver of certain conditions, including, among
others, the adoption of the Merger Agreement by the stockholders of
Golden Genesis, the expiration or termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as
amended (the "HSR Act"), and the absence of any injunction or other
legal restraint prohibiting the Merger. Buyer's and Buyer Sub's
obligations to consummate the Merger are subject to the satisfaction or
<PAGE>
waiver of certain additional conditions, including, among others, the
accuracy of Golden Genesis' representations and warranties in the Merger
Agreement and the performance by Golden Genesis of its obligations under
the Merger Agreement. Golden Genesis' obligations to consummate the
Merger are subject to the satisfaction or waiver of certain additional
conditions. See "The Merger--Regulatory Matters" and "The Merger
Agreement--Conditions."
No Solicitation
Golden Genesis has agreed, prior to the Effective Time, that it
shall not, and shall not authorize or permit any of its subsidiaries or
any of its or its subsidiaries' directors, officers, agents or
representatives to, with any parties other than the Buyer or the Buyer
Sub, solicit, initiate or encourage any inquiries or the making of any
proposal with respect to an Acquisition Transaction, or (b) initiate,
negotiate, explore or otherwise engage in substantive communications
regarding any Acquisition Transaction.
The Merger Agreement does not, however, prevent the Company
from furnishing non-public information to, entering into discussions
with, or recommending a transaction with respect to, any person who
makes an unsolicited bona fide written proposal for an Acquisition
Transaction, if (a) the Board of Directors believes in good faith that
the proposal, if consummated, would be financially more favorable to the
Company's stockholders than the transaction contemplated by the Merger
Agreement, and (b) prior to furnishing any non-public information to, or
entering into discussions with, the relevant party, the Board of
Directors receives a confidentiality agreement from the relevant party
which is no more favorable to such party than the confidentiality
agreement, dated February 5, 1999, between the Buyer and the Company.
See "The Merger Agreement--No Solicitation."
TERMINATION; EXPENSES AND FEES
The Merger Agreement may be terminated:
(a) by mutual written consent of the Company, Buyer and Buyer
Sub;
(b) by the Company, Buyer or Buyer Sub: (i) if the Merger shall
not have occurred on or before the 22nd business day after the date when
this Proxy Statement is mailed to the Company's stockholders (the
"Merger Deadline"), subject to extension in certain circumstances, or
(ii) if the Merger is permanently enjoined or prohibited.
(c) by Buyer or Buyer Sub if (i) the Company has breached any
representation or warranty contained in the Merger Agreement; (ii) the
Company has failed to comply with any of its agreements or covenants
under the Merger Agreement in all material respects; (iii) certain
conditions to closing have not been satisfied by the Company or waived
by Buyer and Buyer Sub prior to the Merger Deadline; (iv) the Board of
Directors shall (A) withdraw its recommendation or approval in respect
of the Agreement or the Merger or (B) modify or change its
<PAGE>
recommendation or approval in respect of the Merger Agreement or the
Merger in a manner materially adverse to Buyer or Buyer Sub or (C) fail
to publicly oppose a Tender Offer or Exchange Offer (each as defined
below) within 10 business days after commencement of such Tender Offer
or Exchange Offer; or (v) the Board of Directors shall have approved any
proposal other than by Buyer and Buyer Sub in respect of an Acquisition
Transaction or shall have approved the waiver of the Company Right of
First Refusal. As used herein, "Tender Offer" shall mean the
commencement (as such term is defined in Rule 14d-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") of a tender offer
or the filing by any person of a registration statement under the
Securities Act of 1933, as amended (the "Securities Act") with respect
to a tender offer to purchase any shares of Common Stock of the Company
such that upon consummation of such offer, such person would own or
control 15% or more of the then outstanding shares of Common Stock of
the Company. As used herein, "Exchange Offer" shall mean the
commencement (as such term is defined in Rule 14d-2 under the Exchange
Act) of an exchange offer or the filing by any person of a registration
statement under the Securities Act with respect to an exchange offer to
purchase any shares of Common Stock of the Company such that upon
consummation of such offer, such person would own or control 25% or more
of the then outstanding shares of Common Stock of the Company.
(d) by the Company notwithstanding approval thereof by the
stockholders of the Company at any time prior to the Effective Time if:
(i) Buyer or Buyer Sub has breached any representation and warranty of
Buyer or Buyer Sub contained in the Merger Agreement; (ii) Buyer or
Buyer Sub has failed to comply in all material respects with any of its
agreements or covenants under the Merger Agreement; (iii) certain
conditions to closing have not been satisfied by Buyer or Buyer Sub or
waived by the Company prior to the Merger Deadline; or (iv) the Board of
Directors shall have approved any proposal other than by Buyer and Buyer
Sub in respect of an Acquisition Transaction or shall have approved the
waiver by the Company of the Company Right of First Refusal.
If the Merger Agreement is terminated by Buyer or Buyer Sub due
to the fact that either (i) the Company has breached any representation
or warranty contained in the Merger Agreement, or (ii) the Company has
failed to comply with any of its agreements or covenants under the
Merger Agreement in all material respects, where the breach or failure
giving rise to such right of termination shall have been caused in whole
or in part by any action or inaction within the control of the Company
or any of its subsidiaries, the Company will be required to pay to Buyer
or Buyer Sub an amount equal to their out-of-pocket fees and expenses
not to exceed $750,000. Buyer and Buyer Sub shall not be able to
collect such payment if they are entitled to the payment of a Topping
Fee (as described below).
If the Merger Agreement is terminated by the Company due to the
fact that either (i) Buyer or Buyer Sub has breached any representation
and warranty of Buyer or Buyer Sub contained in the Merger Agreement, or
(ii) Buyer or Buyer Sub has failed to comply in all material respects
with any of its agreements or covenants under the Merger Agreement,
where the breach or failure giving rise to such right of termination
<PAGE>
shall have been caused in whole or in part by any action or inaction
within the control of Buyer or Buyer Sub, Buyer shall be required to pay
to the Company an amount equal to $500,000 as compensation for lost
opportunities and reimbursement of out-of-pocket fees and expenses.
If the Merger Agreement is terminated (i) by Buyer or Buyer Sub
due to the fact that (A) the Board of Directors has (1) withdrawn its
recommendation or approval in respect of the Agreement or the Merger or
(2) modified or changed its recommendation or approval in respect of the
Merger Agreement or the Merger in a manner materially adverse to Buyer
or Buyer Sub or (3) failed to publicly oppose a Tender Offer or Exchange
Offer within 10 business days after commencement of such Tender Offer or
Exchange Offer, or (B) the Board of Directors has approved any proposal
other than by Buyer and Buyer Sub in respect of an Acquisition
Transaction or has approved the waiver by the Company of the Company
Right of First Refusal, or (ii) by the Company due to the fact that the
Board of Directors has approved any proposal other than by Buyer and
Buyer Sub in respect of an Acquisition Transaction or has approved the
waiver by the Company of the Company Right of First Refusal, the Company
shall be required to pay to Buyer for the termination of this Agreement
$2,000,000 as compensation for lost opportunities and reimbursement of
out-of-pocket fees and expenses incurred in connection with the Merger
and the transactions contemplated by the Merger Agreement (the "Topping
Fee").
If the Merger Agreement is terminated by Buyer or Buyer Sub due
to the fact that either (i) the Company has breached any representation
or warranty contained in the Merger Agreement, or (ii) the Company has
failed to comply with any of its agreements or covenants under the
Merger Agreement in all material respects, where the breach or failure
giving rise to such right of termination shall have been caused in whole
or in part by any action or inaction within the control of the Company
or any Subsidiary, the Company shall pay to Buyer the Topping Fee if (i)
after the date of the Merger Agreement and before the termination of the
Merger Agreement, a proposal for an Acquisition Transaction shall have
been made and publicly announced by any person (other than Buyer, Buyer
Sub and their directors, officers, employees, agents and
representatives), and (ii) after the date of the Merger Agreement and at
or prior to January 31, 2000, the Company shall have effected such
Acquisition Transaction with such person or an affiliate thereof. The
Topping Fee described in this paragraph shall be payable as a condition
to the consummation of the foregoing Acquisition Transaction.
Rights of Dissenting Stockholders
Holders of Common Stock who do not wish to accept the $2.33
cash payment per share provided in the Merger have the right to seek an
appraisal of the "fair value" of their shares provided that they comply
with the conditions established by Section 262 of the DGCL. For a
discussion of the rights of holders of Common Stock to seek appraisal
rights of their shares, see "The Merger--Rights of Dissenting
Stockholders."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
<PAGE>
In general, the receipt of cash by a stockholder pursuant to
the Merger or the exercise of appraisal rights will be a taxable event
for the stockholder for federal income tax purposes and may also be
taxable events under applicable local, state and foreign tax laws. The
tax consequences for a particular stockholder will depend upon the facts
and circumstances applicable to that stockholder. Accordingly, each
stockholder should consult the holder's own tax advisor with respect to
the federal, state, local or foreign tax consequences of the Merger. See
"Certain Federal Income Tax Consequences."
CERTAIN LEGAL PROCEEDINGS
On February 18, 1998, Golden Genesis was named as one of two
dozen defendants in a lawsuit brought in the U.S. District Court for the
District of New Hampshire. The suit alleged various violations of
securities laws and breaches of fiduciary duties, among other things.
The Company was subsequently dismissed as a defendant from the lawsuit.
THE SPECIAL MEETING
DATE, TIME AND PLACE; MATTERS TO BE CONSIDERED
This Proxy Statement is being furnished to the holders of
Common Stock in connection with the solicitation of proxies by the Board
of Directors for use at the Special Meeting and any adjournments or
postponements thereof. The Special Meeting will be held at 10:00 a.m.,
local time, on July [__], 1999, at 7812 East Acoma Drive, Scottsdale,
Arizona 85260. At the Special Meeting, the holders of Common Stock will
be asked to vote on a proposal to adopt the Merger Agreement and
transact any other business that may properly come before the Special
Meeting or any adjournments or postponements thereof.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND DETERMINED THAT
THEY ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF THE
STOCKHOLDERS OF GOLDEN GENESIS. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT GOLDEN GENESIS' STOCKHOLDERS ADOPT THE MERGER AGREEMENT.
As a result of the Merger, Golden Genesis will become a wholly-
owned subsidiary of Buyer and, among other things, each issued and
outstanding share of Common Stock (other than any shares held in the
treasury of the Company or by any wholly owned subsidiary of the
Company, which shares, by virtue of the Merger and without any action on
the part of the holder thereof, will be canceled and will cease to exist
with no payment being made with respect thereto, and other than any
shares of holders who perfect and exercise dissenters' appraisal rights)
will be converted into the right to receive $2.33. In addition, each
holder of an option to purchase Common Stock, upon delivery of an Option
Cancellation Agreement, will be able to receive an amount in respect of
such option which is equal to the product of: (i) the difference between
$2.33 and the exercise price of such option, and (ii) the number of
shares of Common Stock subject to such option. See "The Merger
Agreement--The Merger" and "--Treatment of Options."
<PAGE>
Interest will not be paid on amounts to be received in the
Merger by holders of shares of Common Stock or stock options issued by
the Company in respect of the period between the time of the Merger and
the time that payment is actually made.
If the Merger had occurred on April 30, 1999, and assuming no
holder of Common Stock exercises appraisal rights and each holder of
options to purchase shares of Common Stock had delivered an executed
Option Cancellation Agreement, then (a) the 17,152,948 outstanding
shares of Common Stock would have converted into the right to receive an
aggregate of $39,966,368.84, and (b) the holders of "in-the-money"
options to purchase 1,986,272 shares of Common Stock would have been
entitled to receive (net of the payment of the exercise prices) an
aggregate of approximately $1,783,318.14.
RECORD DATE; QUORUM; VOTING AT THE SPECIAL MEETING
The Board of Directors has fixed the close of business on June
[__], 1999 as the Record Date for determining the holders of Common
Stock entitled to notice of and to vote at the Special Meeting. As of
the Record Date, there were issued and outstanding [__________] shares
of Common Stock. Golden Genesis also has outstanding stock options. The
holders of stock options have no voting rights with respect to the
Merger Agreement.
A quorum is necessary in order for a vote on the proposals
presented at the Special Meeting. The presence in person or by proxy of
the holders of record of a majority of the voting power of the
outstanding shares of Common Stock is necessary for there to be a quorum
for purposes of voting on the Merger Agreement.
Abstentions (i.e., votes withheld by stockholders who are
present and entitled to vote) and broker non-votes (i.e., shares held by
a broker for its customers that are not voted because the broker does
not receive instructions from the customer or because the broker does
not have discretionary voting power with respect to the item under
consideration) will be counted as present for purposes of determining
whether there is a quorum for the transaction of business.
The affirmative vote of the holders of a majority of the voting
power of all outstanding shares of the Common Stock, with each share of
Common Stock entitled to one vote, is required to adopt the Merger
Agreement. Accordingly, abstention and broker non-votes will have the
effect of votes against the adoption of the Merger Agreement.
Golden Genesis will appoint one or more inspectors, who may be
employees of Golden Genesis, to determine, among other things, the
number of shares of Common Stock represented at the Special Meeting and
the validity of the proxies submitted for voting at the Special Meeting.
Golden Genesis has retained Norwest Bank Minnesota, N.A. Shareowner
Services, its transfer agent for the Common Stock, as proxy tabulator to
assist the inspectors in the performance of their duties. Norwest Bank
Minnesota, N.A. Shareowner Services can be reached at 161 North Concord
<PAGE>
Exchange Street, South St. Paul, Minnesota 55075-1139, facsimile no.
(651) 450-4078, Attention: Barb Novak.
ACX and GTC own beneficially as of the Record Date shares of
Common Stock which represent approximately 55% of the voting power of
the outstanding Common Stock. Pursuant to the Option and Voting
Agreement, ACX and GTC have agreed to vote all shares of capital stock
of Golden Genesis owned beneficially by them in favor of adoption of the
Merger Agreement at the Special Meeting. Such holders collectively
possess the right to cast 9,429,379 of the 17,152,948 votes entitled to
be cast at the Annual Meeting. Accordingly, passage of the proposal to
adopt the Merger Agreement is assured. See "Principal Stockholders--
Option and Voting Agreement."
VOTING OF PROXIES
All shares of Common Stock that are entitled to vote and are
represented at the Special Meeting by properly executed proxy cards
received prior to or at the Special Meeting, and not duly and timely
revoked, will be voted at the Special Meeting (or any adjournment or
postponement thereof) in accordance with the instructions indicated on
the proxy cards. If no instructions are indicated, the proxies will be
voted FOR adoption of the Merger Agreement. Abstentions and broker non-
votes will have the effect of votes against adoption of the Merger
Agreement.
In the event that there is a motion to adjourn or postpone the
Special Meeting to another time and/or place (including for the purpose
of soliciting additional votes in favor of the adoption of the Merger
Agreement), then (i) proxies of holders of Common Stock who vote in
favor of adoption of the Merger Agreement and proxies of holders of
Common Stock which contain no voting instructions will be voted in favor
of the motion to adjourn or postpone the Special Meeting, (ii) proxies
of holders of Common Stock who vote against the adoption of the Merger
Agreement will be voted against the motion to adjourn or postpone the
Special Meeting, and (iii) proxies of holders of Common Stock who
abstain from voting on the adoption of the Merger Agreement will abstain
on the vote on adjournment or postponement, which will have the effect
of a vote against adjournment or postponement. If any other matters are
properly presented for consideration at the Special Meeting, then
[___________] and [___________] (the persons named in the enclosed proxy
card as the proxies for the Common Stock) will have discretion to vote
on these matters in accordance with their best judgment.
REVOCATION OF PROXIES AND VOTING INSTRUCTIONS
A holder of Common Stock may revoke a proxy card given pursuant
to this solicitation at any time before the proxy card is voted by
submitting a written revocation to the tabulation agent (Norwest Bank
Minnesota, N.A. Shareowner Services), by returning a subsequently dated
proxy card to the proxy tabulator or to the Secretary of Golden Genesis,
by filing an instrument in writing with the Secretary of Golden Genesis
revoking the proxy card, or by voting in person at the Special Meeting.
<PAGE>
Attendance at the Special Meeting will not in and of itself revoke a
proxy card.
Holders of Common Stock who are entitled to revoke their proxy
card may do so via facsimile at the number set forth above in "--Record
Date; Quorum; Voting at the Special Meeting." Any beneficial owner of
Common Stock whose shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes
to revoke should contact the registered holder promptly and instruct the
registered holder to revoke on his behalf. There can be no assurance
that the registered holder will have sufficient time prior to the
Special Meeting to deliver a revocation upon instruction by the
beneficial owner.
PROXY SOLICITATION
Golden Genesis will pay its own expenses incurred in
connection with this Proxy Statement and the Special Meeting, including
the disbursements of legal counsel and accountants. In addition to
solicitation by mail, proxies may be solicited by directors, officers
and employees of Golden Genesis in person or by telephone, facsimile or
other means of communication. The directors, officers and employees will
not be additionally compensated, but will be reimbursed for reasonable
out-of-pocket expenses, in connection with their solicitation.
Arrangements will also be made with custodians, nominees and fiduciaries
for forwarding of proxy solicitation materials to beneficial owners of
shares held of record by the custodians, nominees and fiduciaries, and
Golden Genesis will reimburse the custodians, nominees and fiduciaries
for reasonable expenses incurred in connection therewith.
STOCKHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES WITH THEIR
PROXY CARDS.
THE MERGER
BACKGROUND OF THE MERGER
Golden Genesis Company, formerly Photocomm, Inc. ("Photocomm"),
was formed by Don Anderson in 1981 in Scottsdale, Arizona, as one of the
first solar electric distributors in the United States. Photocomm's
strategy was to develop markets in the western United States utilizing
products from the emerging solar module suppliers within the industry.
As the product matured and costs declined, management developed new
strategies to capture markets utilizing distributed power with solar
modules as the key component.
In September 1988, Photocomm became a public company through a
reverse merger reorganization with Sunland Industries, Inc. The primary
strategy of the merger was to capture synergies of existing operations
and products within the renewable energy industry. Although the merger
did not result in additional capital to fund growth, the public stock
was a catalyst as it provided currency for carrying out acquisitions of
other targeted companies.
<PAGE>
On March 28, 1990, the Company entered into a long term
financial and strategic partnership with Westinghouse. The agreement
included the sale of 1,000,000 shares of unregistered Common Stock at
$1.00 per share and a $625,000 subordinated convertible debenture
(convertible to 500,000 common shares), providing a total cash
contribution of $1,625,000 to the Company. This new relationship
provided the framework for the Company to take advantage of the
accelerated growth in the solar electric industry.
On November 9, 1993, in cooperation with its strategic partner
Westinghouse, a major financing and strategic partnership agreement with
The New World Power Corporation ("NWP") was executed, including NWP
buying a 29% stake in the Company. NWP purchased 1.6 million newly
issued shares from the Company for $2,000,000, and acquired options to
purchase an additional 4.1 million shares through 1996 at a price range
of $2.50 to $3.00 per share. NWP also purchased 500,000 shares from a
private corporate shareholder for $625,000, and acquired an option to
purchase an additional 2.0 million shares through 1994 at $2.00 per
share. The Company saw this new partnership as critical from the
standpoint of dramatically improving the financial position of the
Company, as well as providing a substantial boost to the Company's
international market development activities in conjunction with NWP's
established worldwide network in the renewable energy industry.
In August, 1994, the Company entered into an Exchange Agreement
with Westinghouse and NWP. Pursuant to the Exchange Agreement, NWP
acquired from Westinghouse 1,800,000 shares of the Company's common
stock, 8,690 shares of the Series B Convertible Preferred Stock, the
remaining $250,000 Subordinated Convertible Debenture in exchange for
465,780 shares of NWP unregistered common stock.
On November 21, 1996, ACX, through its wholly-owned subsidiary
GTC, purchased a total of 8.6 million shares of the Company's common
stock for an approximate 52% majority interest. ACX acquired 6.6 million
shares from NWP and Programmed Land, Inc., and 1,550,000 newly issued
shares, which included 550,000 shares from officer stock option
exercises. This transaction improved the Company's financial position,
providing new equity capital to the Company totaling $3,383,000.
From February, 1997 through 1998, the Company aggressively
expanded the business under the leadership of newly appointed President
and CEO, John K. Coors. The focus of management had been to grow the
business through a combined strategy of growing markets, developing new
market applications and acquiring companies, which, were synergistic
with the Company. Several acquisitions were completed during this
period. In chronological order the purchases included: Integrated Power
Company from Westinghouse in July of 1997; Utility Power Group, Inc. in
January of 1998; Remote Power Inc. in July of 1998; Solartec of
Argentina; and Golden Genesis do Brazil from majority shareholder GTC in
September, 1998. The specifics of each of these acquisitions have been
disclosed in periodic filings with the Commission. Over this period,
revenues have grown from $21 million in 1996 to $43 million in 1998.
<PAGE>
Over the last several years, the industry has seen new interest
and significant investment from large multinational companies, including
British Petroleum, Enron and Amoco, through a joint venture named
Solarex, Kyocera, Siemens, Royal Dutch Shell, Idaho Power Company and
Total. As a result, there is currently an oversupply of solar module
production capacity and there has been vertical integration of these
companies into the industrial markets of the Company. The specific
impact on the Company has been reduced margins due to increased
competition, which will not improve until the imbalance of supply and
demand corrects to the actual market. This financial reality coupled
with a strong willingness of the multinational oil companies which
desire to gain market share and for public relations motives
specifically aimed at creating alternative green energy has created a
difficult business environment for the Company to operate on a stand-
alone basis. In addition, the small solar distributors who were once
potential candidates for acquisition have become more costly due to the
willingness of large companies to vertically integrate and acquire
distribution outlets to reduce their production capacity problem.
In October of 1998, John K. Coors resigned as President and CEO
of the Company. Shortly thereafter, management received several
unsolicited inquires about the willingness of the majority stockholders
ACX and GTC to sell their majority interest in the Company. While none
of ACX, GTC or the Board of Directors had instructed or encouraged
management to "shop" the Company, management recognized that this new
interest along with the factors outlined above might present
opportunities for the Company to maximize stockholder value through a
sale of the Company.
After discussion with ACX, GTC and the Board of Directors in
December of 1998, management of the Company was given the approval by
the Board of Directors to actively explore alternatives to maximize
stockholder value, including a sale of the Company. In that same month
and in the first quarter of 1999, management held both formal and
informal discussions with a number of potential suitors of the Company.
Three suitors approached the Company indicating an interest in
purchasing the Company and newly-appointed President and Chief Executive
Officer of the Company, J. Michael Davis, and Chief Financial Officer
Jeffrey C. Brines contacted other potential buyers within the industry.
On February 22, 1999, a Board of Directors meeting was held to
review the interest of the prospective buyers. Management of the
Company was given direction by the Board of Directors to pursue the
prospects and solicit all other qualified prospects within the industry.
During the winter and early spring of 1999, management of the
Company held multiple meetings with three potential buyers and made
numerous telephone contacts with representatives of other industry
members. By early March, three prospective buyers had made either
written or oral offers, contingent upon full due diligence and Board of
Director approval. The first offer was simply to purchase the majority
control from ACX and GTC at $2.10 per share of Common Stock. A second
suitor expressed a desire to purchase all outstanding shares of Common
Stock and buy-out all vested stock options at $2.19 per share of Common
<PAGE>
Stock and take the Company private in a reverse triangular merger
transaction. The final offer was to purchase all outstanding shares of
Common Stock and buy-out all vested stock options at $2.33 per share of
Common Stock and take the Company private in a reverse triangular merger
transaction.
In addition to these aforementioned offers, during the same
time period, management contacted by telephone the President and CEO of
Solarex/BP to solicit the potential business combination between the two
companies. After additional telephone conversations, management
determined that Solarex/BP had concluded the required investment to
consummate the transaction was cost prohibitive and management
terminated additional efforts to pursue this potential transaction.
Mr. Davis next contacted by telephone the Chief Operating
Officer of Siemens Solar in December of 1998. Mr. Davis explained the
purpose of the call was to solicit the interest of Siemens Solar in
purchasing Golden Genesis. As a result of this conversation, the
proposed transaction was discussed with the President and CEO of Siemens
Solar of Germany. Several weeks after the initial conversation, Siemens
communicated by telephone to Mr. Davis that Siemens Solar management had
determined that a purchase of Golden Genesis by Siemens was not a
strategic direction that it wished to pursue.
In light of the fact that all major industry members (other
than Total of France) had either made bona fide offers for the purchase
of either a majority or all of the Company's shares, or had decided not
to pursue a strategic alliance with the Company, the Company entered
into the Letter of Intent with Buyer, which has significant interests in
the solar module industry, on April 13, 1999. The Letter of Intent was
subject to negotiation of a definitive merger agreement, completion of
due diligence and indicated that Buyer's willingness to enter into any
merger agreement was subject to and conditioned upon Buyer entering into
a voting agreement with ACX and GTC. The transaction outlined indicated
that all holders of Common Stock would receive $2.33 in cash per share
and that the Merger would be free of financing contingencies. The
Letter of Intent established an exclusivity period through May 15, 1999,
during which the Company agreed not to entertain any other proposals for
its sale. During the exclusivity period, the parties worked to negotiate
the definitive merger agreement and completed exhaustive due diligence
and meetings. On May 13, 1999, the parties extended the exclusivity
period through May 29, 1999.
The Board of Directors determined that, since there was to be
no premium paid to ACX and GTC for their majority position in the
Company under the offer presented by Buyer and that all shareholders
would receive the same cash consideration for their shares of Common
Stock, there was not a need to establish an independent committee of the
Board of Directors to evaluate the proposal presented by Buyer.
On May 18, 1999 the Board of Directors met with its legal and
financial advisors in order to discuss the proposed Merger at $2.33 per
share and to review the relevant agreements, including the proposed
Merger Agreement and the proposed Option and Voting Agreement between
<PAGE>
Buyer, ACX and GTC, under which ACX and GTC would agree to vote in favor
of the Agreement and to give Buyer an option until January 31, 2000 to
acquire the shares of Common Stock owned by them at $2.33 per share if
the Company's Board of Directors withdraws or changes its recommendation
or approval of the Merger Agreement with Buyer, fails to oppose a
competing tender or exchange offer, or approves any acquisition
transaction with another buyer. See "Principal Stockholders--Option and
Voting Agreement." The Board of Directors reviewed management's
discussions with other potential buyers and concluded that the proposed
merger with Buyer was the best available transaction for the Company's
stockholders. The Board of Directors then discussed the consideration to
be paid to the holders of Common Stock and stock option holders. At this
meeting, Hanifen, Imhoff Inc. discussed the transaction from a financial
point of view and provided a comparative review of the value of other
companies with securities with similar attributes in similar
transactions. Hanifen, Imhoff Inc. indicated orally to the Board of
Directors that it was of the opinion that the consideration to be
received by the holders of Common Stock in the Merger was fair from a
financial point of view to such holders. Such opinion was subsequently
confirmed in writing on May 26, 1999, prior to the execution of the
Merger Agreement, and is set forth in its entirety as Exhibit B.
At the May 18, 1999 meeting, the Board of Directors unanimously
adopted a resolution to approve the Merger and the transactions
contemplated thereby, as fair and in the best interests of the
stockholders of the Company. Also at the May 18, 1999 meeting, the
Board of Directors, in order to make inapplicable the restrictions on
"business combinations" imposed by Section 203 of the DGCL, resolved to
approve the transactions contemplated under the proposed Option and
Voting Agreement between Buyer, ACX and GTC. Finally, on May 26, 1999,
and after receipt of the written opinion of Hanifen, Imhoff Inc., the
Board of Directors adopted resolutions approving the terms of the
definitive Merger Agreement as fair and in the best interest of the
stockholders of the Company and declaring the merger advisable and
recommending the Merger Agreement to the stockholders of the Company.
REASONS FOR THE MERGER; RECOMMENDATIONS OF THE BOARD OF DIRECTORS
The Board of Directors believes that the terms of the Merger
Agreement and the Merger contemplated thereby are advisable, fair to,
and in the best interests of the stockholders of the Company, and that,
based on the Company's discussions with other potential buyers, the
Merger is the best transaction available for the Company's stockholders.
Accordingly, the Board of Directors has unanimously approved the Merger
Agreement and the Merger and has recommended that the Company's
stockholders adopt the Merger Agreement. In reaching its conclusion to
approve the Merger Agreement and the Merger, the Board of Directors
consulted with the Company's management as well as the Company's legal
and financial advisors, and considered a number of factors, including
the following:
(a) The Board of Directors' familiarity with the solar
industry generally, its awareness of the trend towards consolidation in
the industry and its review and analysis of the Company's existing
<PAGE>
business, financial condition, results of operations and prospects and
the competitive environment facing the Company.
(b) The recent change within the industry including
consolidation and investment from large multinational companies,
including Solarex, Kyocera, Siemens, Royal Dutch Shell, Idaho Power
Company and Total. As a result, there is currently an oversupply of
solar module production capacity and there has been vertical integration
of these companies into the industrial markets of the Company. The
specific impact on the Company has been reduced margins due to increased
competition, which will not improve until the imbalance of supply and
demand corrects to the actual market. This financial reality coupled
with the willingness on the part of the multinational oil companies to
create alternative green energy in efforts to gain market share and for
public relations motives has created a difficult business environment
for the Company to operate on a stand-alone basis. In addition, the
Company believes that the small solar distributors who were once
potential candidates for acquisition have become more costly due to the
willingness of other large companies to vertically integrate and acquire
distribution outlets to reduce their production capacity problem.
Finally, in April of 1999, British Petroleum and Amoco merged their
solar assets, including Solarex, after an agreement was reached to buy
out the ownership of Enron. The Company believes that the combined
Solarex/BP, after the merger and buyout of Enron, represents the largest
solar company in the world.
(c) The value of the Merger Consideration to be received by
the holders of the Common Stock in the Merger. The Board of Directors
considered the historical market prices and trading information with
respect to the Common Stock, the price per share offered by the Buyer,
the certainty of the value provided by the cash consideration and the
fact that such price represents a premium over the market prices at
which of the Common Stock had previously been traded. The consideration
of $2.33 per share represents a 47.4% premium over average per share
trading price of the Common Stock as reported by the Nasdaq SmallCap
Market for the three months prior to May 26, 1999.
(d) The prospects of continuing to operate the Company and the
possibility that its future performance might not in the foreseeable
future lead to a trading price for the shares of Common Stock having a
higher present value than the Merger Consideration.
(e) The presentation and oral opinion of Hanifen, Imhoff Inc.
(including a consideration of the assumptions and methodologies
underlying its analyses) made to the Board of Directors of the Company
on May 18, 1999 and the written opinion of Hanifen, Imhoff Inc. given to
the Board of Directors on May 26, 1999 (confirming its May 18, 1999 oral
opinion) that, as of May 26, 1999, the consideration to be received by
the holders of Common Stock pursuant to the Merger Agreement was fair
from a financial point of view to such holders. See "-- Opinion of
Hanifen, Imhoff Inc."
The discussion contained herein of the information and factors
considered by the Board of Directors in not intended to be exhaustive.
<PAGE>
In view of the wide variety of factors considered in connection with its
evaluation of the proposed Merger, the Board of Directors did not find
it practicable to, and did not, quantify or otherwise attempt to assign
relative weights to any of the factors discussed herein. In addition,
individual members of the Board of Directors may have given different
weights to different factors.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND DETERMINED THAT
THEY ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF THE
STOCKHOLDERS OF THE COMPANY. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ADOPT THE MERGER AGREEMENT.
OPINION OF HANIFEN, IMHOFF INC.
On May 26, 1999, Hanifen, Imhoff Inc. delivered its written
opinion to the Board of Directors (confirming its oral opinion given to
the Board of Directors on May 18, 1999) that, as of the date of such
opinion, the $2.33 per share of Common Stock to be received by the
holders of Common Stock pursuant to the Merger Agreement was fair from a
financial point of view to such holders.
THE FULL TEXT OF THE WRITTEN OPINION OF HANIFEN, IMHOFF INC.
DATE MAY 26, 1999, WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS
CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN IN CONNECTION WITH
THE OPINION, IS ATTACHED HERETO AS EXHIBIT B TO THIS PROXY STATEMENT AND
IS INCORPORATED HEREIN BY REFERENCE. STOCKHOLDERS OF THE COMPANY ARE
URGED TO, AND SHOULD, READ SUCH OPINION IN ITS ENTIRETY.
In connection with its opinion, Hanifen, Imhoff Inc. reviewed,
among other things, (i) the Merger Agreement; (ii) contain publicly
available business and financial information relating to the Company;
and (iii) certain financial forecasts and other data for the Company
prepared by its management. Hanifen, Imhoff Inc. also held discussions
with members of senior management of the Company regarding the Company's
past and current business operations, financial condition and future
prospects. In addition, Hanifen, Imhoff Inc. reviewed the reported price
and trading activity for the Common Stock, compared certain financial
and stock market information for the Company with similar information
for certain other companies whose operations Hanifen, Imhoff Inc.
considered related to the Company, and reviewed the financial terms of
certain recent business combinations involving such companies.
Hanifen, Imhoff Inc. relied upon the accuracy and completeness
of all of the financial and other information reviewed by it and assumed
such accuracy and completeness for purposes of rendering its opinion. In
addition, Hanifen, Imhoff Inc. did not make any independent evaluation
or appraisal of the assets and liabilities of the Company or any of its
subsidiaries and Hanifen, Imhoff Inc. was not furnished with any such
evaluation or appraisal. The opinion of Hanifen, Imhoff Inc. referred to
herein was provided for the information and assistance of the Board of
Directors of the Company in connection with its consideration of the
transaction contemplated by the Merger Agreement, and such opinion does
<PAGE>
not constitute a recommendation as to how any holder of Common Stock
should vote with respect to such transaction.
The following is a summary of certain of the financial and
comparative analyses which Hanifen, Imhoff Inc. presented to the Board
of Directors of the Company on May 18, 1999, and which provided the
basis for Hanifen, Imhoff Inc.'s May 26, 1999 written opinion.
(a) Historical Stock Trading Analysis. Hanifen, Imhoff Inc.
reviewed the historical trading prices and volumes for shares of Common
Stock and analyzed the consideration to be received by holders of shares
of Common Stock pursuant to the Merger Agreement in relation to the
closing market price of such shares during the time periods referenced
below.
(b) Market Valuation of Selected Companies. Hanifen, Imhoff
Inc. performed a market valuation analysis of companies with operations
similar to the Company's.
(c) Present Value of Potential Future Share Prices. Hanifen,
Imhoff Inc. performed analysis of the present value.
(d) Selected Transaction Analysis. Hanifen, Imhoff Inc.
reviewed selected transactions in similar industry segments, although
direct industry comparatives were not possible.
The preparation of a fairness opinion is a complex process and
is not necessarily susceptible to partial analysis or summary
description. Selecting portions of the analyses or of the summary set
forth above, without considering the analyses as a whole, could create
an incomplete view of the processes underlying Hanifen, Imhoff Inc.'s
opinion. In arriving at its fairness determination, Hanifen, Imhoff Inc.
considered the results of all such analyses. No company or transaction
used in the above analyses as a comparison is directly comparable to the
Company or the contemplated transaction. The analyses were prepared
solely for the purpose of Hanifen, Imhoff Inc.'s providing its opinion
to the Board of Directors of the Company as to the fairness from a
financial point of view of the $2.33 per share cash consideration to be
received by the holders of Common Stock pursuant to the Merger Agreement
and do not purport to be appraisals or necessarily reflect the prices at
which businesses or securities actually may be sold. Analyses based upon
forecasts of future results are not necessarily indicative of actual
future results, which may be significantly more or less favorable than
suggested by such analyses. Because such analyses are inherently subject
to uncertainty, being based upon numerous factors or events beyond the
control of the parties or their respective advisors, none of the
Company, Hanifen, Imhoff Inc. or any other person assumes responsibility
if future results are materially different from those forecast. As
described above, Hanifen, Imhoff Inc.'s opinion to the Board of
Directors of the Company was one of many factors taken into
consideration by the Board of Directors of the Company in making its
determination to approve the Merger Agreement. The foregoing summary
does not purport to be a complete description of the analysis performed
<PAGE>
by Hanifen, Imhoff Inc. and is qualified by reference to the written
opinion of Hanifen, Imhoff Inc. set forth in Exhibit B hereto.
Hanifen, Imhoff Inc., as part of its investment banking
business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive bidding, secondary distributions of listed
and unlisted securities, private placements, and valuations for estate,
corporate and other purposes. The Company selected Hanifen, Imhoff Inc.
as its financial advisor because it is a nationally recognized
investment banking firm that has substantial expertise in transactions
similar to the Merger. Hanifen, Imhoff Inc. is familiar with the Company
in having acted as its financial advisor in connection with certain
acquisitions by the Company and other prospective transactions which
were not carried out.
Pursuant to a letter agreement dated May 14, 1999 (the
"Engagement Letter"), the Company engaged Hanifen, Imhoff Inc. to render
an opinion as to the fairness (the "Opinion") from a financial point of
view of the proposed Merger Agreement and the consideration to be paid
to the holders of Common Stock. Pursuant to the terms of the Engagement
Letter, the Company paid Hanifen, Imhoff Inc. a fee of $25,000 upon the
execution of the Engagement Letter, with the remaining $50,000 fee paid
upon the delivery of the opinion to the Company.
EFFECTIVE TIME
The Effective Time of the Merger will be the time of filing of
a Certificate of Merger relating to the Merger with the Secretary of
State of the State of Delaware in accordance with the provisions of the
DGCL or as otherwise provided in such Certificate of Merger. Subject to
the satisfaction or waiver of the closing conditions set forth in the
Merger Agreement, the Merger will be consummated (the "Closing") on or
before the 22nd business day after the mailing of the definitive Proxy
Statement (subject to extension under certain circumstances, as provided
in the Merger Agreement). It is anticipated that the Effective Time of
the Merger will occur during the third calendar quarter of 1999,
although there can be no assurance to such effect.
CERTAIN EFFECTS OF THE MERGER
If the Merger is consummated, the Company's stockholders will
not have an opportunity to continue their equity interest in the
Company's operations and, therefore, will not share in future earnings
and growth, if any, of those operations. The Company anticipates that
the shares of Common Stock will trade on the Nasdaq SmallCap Market
until the consummation of the Merger. If the Merger is consummated,
public trading of the shares of Common Stock (the only publicly traded
securities of the Company) will cease, the shares of Common Stock will
cease to be quoted on the Nasdaq SmallCap Market, and the registration
of the shares of Common Stock under the Exchange Act will be terminated.
As a result, the Surviving Corporation will be relieved of the duty to
file informational reports under the Exchange Act.
<PAGE>
For information concerning the federal income tax consequences
of the Merger, see "Certain Federal Income Tax Consequences of the
Merger."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the recommendation of the Board of Directors
that the stockholders vote for the adoption of the Merger Agreement and
the Merger and approve the transactions contemplated thereby, the
stockholders should be aware that certain members of the management of
Golden Genesis have certain interests in the Merger and the related
transactions that differ from, and are in addition to, the interests of
holders of Common Stock generally, and which may present them with
potential conflicts of interest.
Specifically, Golden Genesis, with Buyer's consent, has offered
each officer of Golden Genesis and its subsidiaries, the opportunity to
have all or a portion of such officer's options to purchase Common Stock
canceled and, with respect to each such cancelled option, to have an
amount equal to the product of (i) the excess, if any, by which $2.33
exceeds the exercise price of such option, and (ii) the number of shares
subject to such option, be treated as though it had been deferred under
and made subject to the terms of the Kyocera Executive Deferred
Compensation Plan. As of the Record Date, [__] officers had accepted
such offer.
REGULATORY MATTERS
The Merger is subject to antitrust review by the United States
Department of Justice (the "DOJ") and the Federal Trade Commission (the
"FTC"). Under the HSR Act, certain transactions, including the Merger,
may not be consummated until the parties have filed a notice with the
DOJ and the FTC and certain waiting period requirements have been
satisfied. On June 4, 1999, ACX and Buyer filed their respective
Premerger Notification and Report Forms in compliance with the HSR Act.
At any time before the Effective Time, the DOJ, which is the primary
agency that exercises antitrust enforcement jurisdiction, could take
action under the antitrust laws seeking to enjoin the Merger. In
addition, a state Attorney General in any state in which the combined
companies will operate could take an enforcement action to enjoin
consummation of the Merger.
RIGHTS OF DISSENTING STOCKHOLDERS
If the Merger is consummated, holders of shares of Common Stock
are entitled to appraisal rights under Section 262 of the DGCL ("Section
262"), provided that they comply with the conditions established by
Section 262.
Section 262 is reprinted in its entirety as Exhibit C to this
Proxy Statement. The following discussion is not a complete statement of
the law relating to appraisal rights and is qualified in its entirety by
reference to Exhibit C. This discussion and Exhibit C should be reviewed
carefully by any holder who wishes to exercise statutory appraisal rights
<PAGE>
or who wishes to preserve the right to do so, as failure to comply with
the procedures set forth herein or therein will result in the loss of
appraisal rights.
A record holder of shares of Common Stock who makes the demand
described below with respect to such shares, who continuously is the
record holder of such shares through the effective time of the Merger
(the "Effective Time"), who otherwise complies with the statutory
requirements of Section 262 and who neither votes in favor of the Merger
nor consents thereto in writing will be entitled to an appraisal by the
Delaware Court of Chancery (the "Delaware Court") of the fair value of
his or her shares of Common Stock. All references in this summary of
appraisal rights to a "stockholder" or "holders of shares of Common
Stock" are to the record holder or holders of shares of Common Stock.
Except as set forth herein, stockholders of the Company will not be
entitled to appraisal rights in connection with the Merger.
Under Section 262, where a merger is to be submitted for
approval at a meeting of stockholders, such as the Special Meeting, not
less than 20 days prior to the meeting a constituent corporation must
notify each of the holders of its stock for whom appraisal rights are
available that such appraisal rights are available and include in each
such notice a copy of Section 262. This Proxy Statement shall constitute
such notice to the record holders of Common Stock.
Holders of shares of Common Stock who desire to exercise their
appraisal rights must not vote in favor the Merger and must deliver a
separate written demand for appraisal to the Company prior to the vote by
the stockholders of the Company on the Merger. A demand for appraisal
must be executed by or on behalf of the stockholder of record and must
reasonably inform the Company of the identity of the stockholder of
record and that such stockholder intends thereby to demand appraisal of
the Common Stock. A proxy or vote against the Merger will not by itself
constitute such a demand. Within ten days after the Effective Time the
Company must provide notice of the Effective Time to all stockholders who
have complied with Section 262.
A stockholder who elects to exercise appraisal rights should
mail or deliver his or her written demand to:
4545 McIntyre St.
Golden, Colorado 80403
Attn: Secretary
A person having a beneficial interest in shares of Common Stock
that are held of record in the name of another person, such as a broker,
fiduciary, depositary or other nominee, must act promptly to cause the
record holder to follow the steps summarized herein properly and in a
timely manner to perfect appraisal rights. If the shares of Common Stock
are owned of record by a person other than the beneficial owner,
including a broker, fiduciary (such as a trustee, guardian or custodian),
depositary or other nominee, such demand must be executed by or for the
record owner. If the shares of Common Stock are owned of record by more
than one person, as in a joint tenancy or tenancy in common, such demand
<PAGE>
must be executed by or for all joint owners. An authorized agent,
including an agent for two or more joint owners, may execute the demand
for appraisal for a stockholder of record; however, the agent must
identify the record owner and expressly disclose the fact that, in
exercising the demand, such person is acting as agent for the record
owner. If a stockholder holds shares of Common Stock through a broker
who in turn holds the shares through a central securities depository
nominee such as Cede & Co., a demand for appraisal of such shares must be
made by or on behalf of the depository nominee and must identify the
depository nominee as record holder.
A record holder, such as a broker, fiduciary, depositary or
other nominee, who holds shares of Common Stock as a nominee for others,
may exercise appraisal rights with respect to the shares held for all or
less than all beneficial owners of shares as to which such person is the
record owner. In such case, the written demand must set forth the number
of shares covered by such demand. Where the number of shares is not
expressly stated, the demand will be presumed to cover all shares of
Common Stock outstanding in the name of such record owner.
Within 120 days after the Effective Time, either the Company or
any stockholder who has complied with the required conditions of Section
262 may file a petition in the Delaware Court, with a copy served on the
Company in the case of a petition filed by a stockholder, demanding a
determination of the fair value of the shares of all dissenting
stockholders. There is no present intent on the part of the Company to
file an appraisal petition and stockholders seeking to exercise appraisal
rights should not assume that the Company will file such a petition or
that the Company will initiate any negotiations with respect to the fair
value of such shares. Accordingly, holders of Common Stock who desire to
have their shares appraised should initiate any petitions necessary for
the perfection of their appraisal rights within the time periods and in
the manner prescribed in Section 262. Within 120 days after the
Effective Time, any stockholder who has theretofore complied with the
applicable provisions of Section 262 will be entitled, upon written
request, to receive from the Company a statement setting forth the
aggregate number of shares of Common Stock not voting in favor of the
Merger and with respect to which demands for appraisal were received by
the Company and the number of holders of such shares. Such statement
must be mailed (i) within 10 days after the written request therefor has
been received by the Company or (ii) within 10 days after the expiration
of the period for the delivery of demands as described above, whichever
is later.
If a petition for an appraisal is timely filed, at the hearing
on such petition, the Delaware Court will determine which stockholders
are entitled to appraisal rights. The Delaware Court may require the
stockholders who have demanded an appraisal for their shares and who hold
stock represented by certificates to submit their certificates of stock
to the Register in Chancery for notation thereon of the pendency of the
appraisal proceedings; and if any stockholder fails to comply with such
direction, the Delaware Court may dismiss the proceedings as to such
stockholder. Where proceedings are not dismissed, the Delaware Court
will appraise the shares of Common Stock owned by such stockholders,
<PAGE>
determining the fair value of such shares exclusive of any element of
value arising from the accomplishment or expectation of the Merger,
together with a fair rate of interest, if any, to be paid upon the amount
determined to be the fair value.
Although the Company believes that the Merger Consideration is
fair, no representation is made as to the outcome of the appraisal of
fair value as determined by the Delaware Court and stockholders should
recognize that such an appraisal could result in a determination of a
value higher or lower than, or the same as, the Merger Consideration.
Moreover, the Company does not anticipate offering more than the Merger
Consideration to any stockholder exercising appraisal rights and reserves
the right to assert, in any appraisal proceeding, that, for purposes of
Section 262, the "fair value" of a share of Common Stock is less than the
Merger Consideration. In determining "fair value," the Delaware Court is
required to take into account all relevant factors. In Weinberger v.
UOP, Inc., the Delaware Supreme Court discussed the factors that could be
considered in determining fair value in an appraisal proceeding, stating
that "proof of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise admissible
in court" should be considered and that "[f]air price obviously requires
consideration of all relevant factors involving the value of a company."
The Delaware Supreme Court has stated that in making this determination
of fair value the court must consider market value, asset value,
dividends, earnings prospects, the nature of the enterprise and any other
facts which could be ascertained as of the date of the merger which throw
any light on future prospects of the merged corporation. Section 262
provides that fair value is to be "exclusive of any element of value
arising from the accomplishment or expectation of the merger." In Cede &
Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such
exclusion is a "narrow exclusion [that] does not encompass known elements
of value," but which rather applies only to the speculative elements of
value arising from such accomplishment or expectation. In Weinberger,
the Delaware Supreme Court construed Section 262 to mean that "elements
of future value, including the nature of the enterprise, which are known
or susceptible of proof as of the date of the merger and not the product
of speculation, may be considered."
Holders of shares of Common Stock considering seeking appraisal
should recognize that the fair value of their shares determined under
Section 262 could be more than, the same as or less than the
consideration they are entitled to receive pursuant to the Merger
Agreement if they do not seek appraisal of their shares. The cost of the
appraisal proceeding may be determined by the Delaware Court and taxed
against the parties as the Delaware Court deems equitable in the
circumstances. However, costs do not include attorneys' and expert
witness fees. Each dissenting stockholder is responsible for his or her
attorneys' and expert witness expenses, although, upon application of a
dissenting stockholder of the Company, the Delaware Court may order that
all or a portion of the expenses incurred by any dissenting stockholder
in connection with the appraisal proceeding, including without
limitation, reasonable attorneys' fees and the fees and expenses of
experts, be charged pro rata against the value of all shares of stock
entitled to appraisal.
<PAGE>
Any holder of shares of Common Stock who has duly demanded
appraisal in compliance with Section 262 will not, after the Effective
Time, be entitled to vote for any purpose any shares subject to such
demand or to receive payment of dividends or other distributions on such
shares, except for dividends or distributions payable to stockholders of
record at a date prior to the Effective Time.
At any time within 60 days after the Effective Time, any
stockholder will have the right to withdraw such demand for appraisal and
to accept the terms offered in the Merger; after this period, the
stockholder may withdraw such demand for appraisal only with the consent
of the Company. If no petition for appraisal is filed with the Delaware
Court within 120 days after the Effective Time, stockholders' rights to
appraisal shall cease, and all holders of shares of Common Stock will be
entitled to receive the consideration offered pursuant to the Merger
Agreement. Inasmuch as the Company has no obligation to file such a
petition, and the Company has no present intention to do so, any holder
of shares of Common Stock who desires such a petition to be filed is
advised to file it on a timely basis. Any stockholder may withdraw such
stockholder's demand for appraisal by delivering to the Company a written
withdrawal of his or her demand for appraisal and acceptance of the
Merger Consideration, except (i) that any such attempt to withdraw made
more than 60 days after the Effective Time will require written approval
of the Company and (ii) that no appraisal proceeding in the Delaware
Court shall be dismissed as to any stockholder without the approval of
the Delaware Court, and such approval may be conditioned upon such terms
as the Delaware Court deems just.
ACCOUNTING TREATMENT
The Merger will be treated by Buyer as a "purchase," as that
term is used under United States generally accepted accounting
principles, for accounting and financial reporting purposes.
CERTAIN LEGAL PROCEEDINGS
On February 18, 1998, Golden Genesis was named as one of two
dozen defendants in a lawsuit brought in the U.S. District Court for the
District of New Hampshire. The suit alleged various violations of
securities laws and breaches of fiduciary duties, among other things.
The Company was subsequently dismissed as a defendant from the lawsuit.
THE MERGER AGREEMENT
The following is a summary of the material provisions of the
Merger Agreement, a copy of which is attached hereto as Exhibit A and
incorporated herein by reference. This summary does not purport to be a
complete description of the Merger Agreement and is qualified in its
entirety by reference to the full text of the Merger Agreement.
STOCKHOLDERS ARE URGED TO READ THE MERGER AGREEMENT IN ITS ENTIRETY FOR
A COMPLETE DESCRIPTION OF THE MERGER.
THE MERGER
<PAGE>
If Golden Genesis' stockholders adopt the Merger Agreement,
and if the other conditions to the Merger are satisfied or waived, then,
at the Effective Time, Buyer Sub will be merged with and into Golden
Genesis, with Golden Genesis continuing as the Surviving Corporation and
a wholly-owned subsidiary of Buyer.
Upon the consummation of the Merger, pursuant to the Merger
Agreement, except for (a) shares held in the treasury of Golden Genesis
or owned by any of its wholly owned subsidiaries, all of which will be
canceled, and (b) shares held by persons who exercise dissenters'
appraisal rights, each issued and outstanding share of Golden Genesis'
Common Stock will convert into the right to receive $2.33 in cash,
without interest. All amounts payable to Golden Genesis' stockholders in
accordance with this paragraph will be net of any applicable withholding
taxes.
ACX and GTC, who beneficially own 9,429,379 shares of Common
Stock, or approximately 55% of the voting power of the Common Stock,
have agreed to vote in favor of the Merger. These holders will have
sufficient voting power under the DGCL to adopt the Merger Agreement.
See "The Merger--Option and Voting Agreement."
Stockholders who do not vote in favor of the Merger, and who
comply with the provisions of the DGCL regarding the exercise of
statutory dissenters' appraisal rights, have the right to seek a
determination and payment of the fair value of their shares in lieu of
the consideration set forth in the Merger Agreement. See "The Merger--
Rights of Dissenting Stockholders."
Promptly after the Effective Time, Buyer shall cause a bank or
trust company designated by Buyer and approved by Golden Genesis (the
"Paying Agent") to mail transmittal forms to each holder of record of
shares of Common Stock. The transmittal forms should be used in
forwarding the holder's stock certificates for surrender and exchange
for cash pursuant to the Merger Agreement. After receipt of a
transmittal form, each holder of certificates formerly representing
shares of Common Stock should surrender the certificates to the Paying
Agent and will receive from the Paying Agent cash as set forth above.
Instructions specifying other details of the exchange will accompany the
transmittal forms. After the Effective Time, each certificate previously
evidencing shares of Common Stock will be deemed for all purposes to
evidence only the right to receive the consideration set forth in the
Merger Agreement.
STOCKHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES UNTIL
THEY RECEIVE A TRANSMITTAL FORM.
TREATMENT OF OPTIONS
The Company has agreed to take all actions necessary to cause
each option to purchase shares of Common Stock (each, a "Company
Option") that is outstanding immediately before the Effective Time,
whether or not presently exercisable, to be canceled at the Effective
<PAGE>
Time by virtue of the Merger. Upon delivery to Buyer on the business
day prior to the date of the Effective Time of an Option Cancellation
Agreement, a holder of a Company Option outstanding immediately before
the Effective Time will receive from the Company an amount equal to the
product of (i) the excess, if any, by which $2.33 exceeds the exercise
price of the Company Option, and (ii) the number of shares subject to
the Company Option, such amount to be paid to the holder by bank check
at the Effective Time, which amount will be subject to applicable
withholding taxes.
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains various representations and
warranties by Golden Genesis relating to, among other things, (a) the
organization and good standing of Golden Genesis and its subsidiaries,
(b) the capitalization of Golden Genesis and its subsidiaries, (c) the
corporate authority of Golden Genesis to perform its obligations under
the Merger Agreement, (d) the lack of conflict between the Merger
Agreement and related documents with (i) the organizational documents of
Golden Genesis or its subsidiaries, or (ii) certain agreements,
nongovernmental self-regulatory agency rules, judgments, statutes and
regulations, (e) due filing of required documents with the Securities
and Exchange Commission (the "SEC"), (f) the financial statements of
Golden Genesis, (g) absence of undisclosed liabilities, (h) litigation,
(i) compliance with applicable laws, (j) taxes, (k) employment and
severance agreements, (l) employee benefits and ERISA matters, (m)
environmental matters, (n) assets, real property and intellectual
property, (o) systems, software and Year 2000 compliance, (p) labor
matters, (q) material contracts, (r) insurance, (s) suppliers and
customers, (t) books and records of Golden Genesis and its subsidiaries,
(u) the banking facilities of Golden Genesis, (v) the non-applicability
of Section 203 of the DGCL,(w) the absence of broker's fees in
connection with the Merger, and (x) the accuracy of the foregoing.
The Merger Agreement contains representations and warranties of
Buyer and Buyer Sub relating to, among other things, (a) the
organization and good standing of Buyer and Buyer Sub, (b) the corporate
authority of Buyer and Buyer Sub to perform the obligations under the
Merger Agreement, (c) the lack of conflict between the Merger Agreement
and related documents with (i) the organizational documents of Buyer or
Buyer Sub, or (ii) certain agreements, nongovernmental self-regulatory
agency rules, judgments, statutes and regulations, (d) the absence of
certain filing requirements with federal agencies, (e) the absence of
broker's fees in connection with the Merger, and (f) the accuracy of the
foregoing.
COVENANTS
Golden Genesis has agreed that, until the Effective Time (a)
except as contemplated by the Merger Agreement, it will, and will cause
its subsidiaries to, conduct their respective businesses in the ordinary
course consistent with past practice, and (b) it will, and will cause
each subsidiary to, use best efforts to (i) preserve its business and
organization intact, (ii) keep available to Buyer and Buyer Sub the
<PAGE>
services of its present officers, employees, agents and independent
contractors, and (iii) preserve for the benefit of Buyer and Buyer Sub
the goodwill of its suppliers, customers, landlords, and others having
business relations with it.
Golden Genesis has also agreed that, except as otherwise
provided in the Merger Agreement, it will not, without the prior written
consent of Buyer, permit Golden Genesis or any of its subsidiaries to
(a) amend its organizational documents, (b) authorize, issue, sell,
deliver or agree or commit to do any of the foregoing with respect to
any stock or other securities or equity equivalents, except with respect
to Company Options outstanding as of the date of the Merger Agreement,
or amend the terms of any such securities agreements, (c) split, combine
or reclassify any shares of its capital stock, declare, set aside or pay
any dividend or other distribution in respect of capital stock, or
redeem or otherwise acquire any of the securities of Golden Genesis or
its subsidiaries, (d) with certain exceptions, incur any long-term or
short-term indebtedness, assume any third party obligations, pledge or
encumber shares of the capital stock of Golden Genesis or its
subsidiaries, or mortgage or pledge any Company assets, (e) except as
required by law, as contemplated by the Merger Agreement or in the
ordinary course of business consistent with past practice which would
not be material, enter into certain employee benefit arrangements for
the benefit of any officer, employee or director, or increase any
compensation or benefits thereof, (f) other than in the ordinary course
of business consistent with past practice, lease, sell or dispose any
assets or enter any commitments to do the same which would have a
material impact, (g) except as required as a result of a change in the
law, change its fiscal year or accounting practices, (h) acquire any
other company, enter into any material contract except in the ordinary
course of business consistent with past practice, or enter into any
contract that would be prohibited by the Merger Agreement, (i) revalue
in any material respect any assets except in accordance with generally
accepted accounting principles or Regulation S-X, (j) make any tax
election or settle or compromise any tax liability, (k) discharge any
liabilities or obligations, subject to exceptions, (l) settle or
compromise any pending or threatened litigation which is material or
relates to the transactions contemplated by the Merger Agreement, (m)
authorize or make any undisclosed capital expenditure, other than in the
ordinary course of business, in excess of $100,000 (individually) or
$500,000 (in the aggregate), (n) take or agree to take any of the
foregoing actions or take or omit to take any action which would make
any of the representations or warranties incorrect in any material
respect as of the date made.
NO SOLICITATION
Golden Genesis has agreed, prior to the Effective Time, that it
shall not, and shall not authorize or permit any of its subsidiaries or
any of its or its subsidiaries' directors, officers, agents or
representatives to, with any parties other than Buyer or Buyer Sub,
solicit, initiate or encourage any inquiries or the making of any
proposals with respect to any Acquisition Transaction, or provide any
<PAGE>
non-public information to any party other than Buyer or Buyer Sub in
connection with the foregoing.
Golden Genesis has also agreed that it shall waive its right of
first refusal, under the Stock Purchase Agreement, dated November 15,
1996, among ACX, New World Power and the Company, to purchase all shares
of Common Stock that ACX and its subsidiaries may from time to time
propose to sell.
Golden Genesis has further agreed that it shall not, and shall
not authorize or permit any of its subsidiaries or any of its or its
subsidiaries directors, officers, agents or representatives to enter
into any agreement requiring it to abandon or fail to consummate the
Merger or any transactions contemplated by the Merger Agreement.
Notwithstanding the foregoing, the Merger Agreement does not
prohibit the Company from furnishing non-public information to, entering
into discussions with, or recommending a transaction with respect to,
any person who makes an unsolicited bona fide written proposal for an
Acquisition Transaction, if (a) the Company's board of directors
believes in good faith that the proposal, if consummated, would be
financially more favorable to the Company's stockholders than the
transaction contemplated by the Merger Agreement, and (b) prior to
furnishing any non-public information, the board of directors receives a
confidentiality agreement from the relevant party which is no more
favorable to such party than the confidentiality agreement, dated
February 5, 1999, between Buyer and the Company.
Golden Genesis has agreed to advise Buyer and Buyer Sub in
writing of the receipt and status of any additional inquiries or
proposals related to any Acquisition Transaction, and shall provide to
same additional non-public information that is provided to the person
making such inquiry or proposal.
CONDITIONS
The obligations of each party to consummate the Merger are
subject to the satisfaction or, if permissible, waiver, of certain
conditions, including (a) the approval of the Merger Agreement by the
stockholders of Golden Genesis in accordance with the DGCL and the rules
and regulations of the Nasdaq SmallCap Market, (b) the absence of any
injunction or legal restraint prohibiting the Merger, (c) the lapse of a
specified time period since the mailing of this Proxy Statement to
holders of Common Stock, (d) the expiration of all waiting periods under
the HSR Act, and (e) the execution of an agreement under which the
Company, GTC and Coors Ceramics agree to continue the lease by Coors
Ceramics to the Company and the sublease by the Company to GTC of
certain real property in Golden, Colorado for 90 days following the
Closing.
The obligations of Buyer and Buyer Sub to consummate the Merger
are subject to the satisfaction or, if permissible, waiver, of certain
conditions, including (a) the representations and warranties of Golden
Genesis and its subsidiaries are true in all material respects, (b)
<PAGE>
there is no material adverse change in the Company's condition prior to
closing, (c) the Company has delivered certain documents and instruments
required by the Merger Agreement to Buyer and Buyer Sub, (d) the number
of shares of Common Stock for which appraisal rights are sought prior to
any vote of the stockholders of the Company with respect to the Merger
shall not exceed 30% of the outstanding shares of Common Stock, (e)
Golden Genesis and its subsidiaries shall be in compliance with the
covenants set forth in the Merger Agreement in all material respects,
and (f) all required third party approvals have been obtained.
The obligations of the Company are subject to the satisfaction
or, if permissible, waiver, of certain conditions, including (a) the
representations and warranties of Buyer and Buyer Sub are true in all
material respects, (b) each of Buyer and Buyer Sub shall be in
compliance with the covenants set forth in the Merger Agreement in all
material respects, and (c) Buyer and Buyer Sub have delivered certain
documents and instruments required by the Merger Agreement to the
Company.
TERMINATION; EXPENSES AND FEES
The Merger Agreement may be terminated:
(a) by mutual written consent of the Company, Buyer and Buyer
Sub:
(b) by the Company, Buyer or Buyer Sub: (i) if the Merger shall
not have occurred on or before the Merger Deadline (subject to extension
under certain circumstances, as provided in the Merger Agreement), or
(ii) if the Merger is permanently enjoined or prohibited.
(c) by Buyer or Buyer Sub if (i) the Company has breached any
representation or warranty contained in the Merger Agreement; (ii) the
Company has failed to comply with any of its agreements or covenants
under the Merger Agreement in all material respects; (iii) certain
conditions to closing have not been satisfied by the Company or waived
by Buyer and Buyer Sub prior to the Merger Deadline; (iv) the Board of
Directors shall (A) withdraw its recommendation or approval in respect
of the Agreement or the Merger or (B) modify or change its
recommendation or approval in respect of the Merger Agreement or the
Merger in a manner materially adverse to Buyer or Buyer Sub or (C) fail
to publicly oppose a Tender Offer or Exchange Offer within 10 business
days after commencement of such Tender Offer or Exchange Offer; or (v)
the Board of Directors shall have approved any proposal other than by
Buyer and Buyer Sub in respect of an Acquisition Transaction or shall
have approved the waiver of the Company Right of First Refusal.
(d) by the Company notwithstanding approval thereof by the
stockholders of the Company at any time prior to the Effective Time if:
(i) Buyer or Buyer Sub has breached any representation and warranty of
Buyer or Buyer Sub contained in the Merger Agreement; (ii) Buyer or
Buyer Sub has failed to comply in all material respects with any of its
agreements or covenants under the Merger Agreement; (iii) certain
conditions to closing have not been satisfied by Buyer or Buyer Sub or
<PAGE>
waived by the Company prior to the Merger Deadline; or (iv) the Board of
Directors shall have approved any proposal other than by Buyer and Buyer
Sub in respect of an Acquisition Transaction or shall have approved the
waiver by the Company of the Company Right of First Refusal.
If the Merger Agreement is terminated by Buyer or Buyer Sub in
accordance with subsections (c)(i) or (ii) above, where the failure
giving rise to such right of termination shall have been caused in whole
or in part by any action or inaction within the control of the Company
or any of its subsidiaries, the Company will be required to pay to Buyer
or Buyer Sub an amount equal to their out-of-pocket fees and expenses
not to exceed $750,000. Buyer and Buyer Sub shall not be able to
collect such payment if they are entitled to the payment of a Topping
Fee (as described below).
If the Merger Agreement is terminated by the Company in
accordance with subsections (d)(i) and (ii) above, where the failure
giving rise to such right of termination shall have been caused in whole
or in part by any action or inaction within the control of Buyer or
Buyer Sub, Buyer shall be required to pay to the Company an amount equal
to $500,000 as compensation for lost opportunities and reimbursement of
out-of-pocket fees and expenses.
If the Merger Agreement is terminated by Buyer or Buyer Sub in
accordance with subsections (c)(iv) and (v) above, or by the Company in
accordance with subsection (d)(iv) above, the Company shall be required
to pay to Buyer for the termination of this Agreement $2,000,000 as
compensation for lost opportunities and reimbursement of out-of-pocket
fees and expenses incurred in connection with the Merger and the
transactions contemplated by the Merger Agreement (the "Topping Fee").
If the Merger Agreement is terminated by Buyer or Buyer Sub
pursuant to subsection (c)(i) or (ii), where the failure giving rise to
such right of termination shall have been caused in whole or in part by
any action or inaction within the control of the Company or any
Subsidiary, the Company shall pay to Buyer the Topping Fee if (i) after
the date of the Merger Agreement and before the termination of the
Merger Agreement, a proposal for an Acquisition Transaction shall have
been made and publicly announced by any person (other than Buyer, Buyer
Sub and their directors, officers, employees, agents and
representatives), and (ii) after the date of the Merger Agreement and at
or prior to January 31, 2000, the Company shall have effected such
Acquisition Transaction with such person or an affiliate thereof. The
Topping Fee described in this paragraph shall be payable as a condition
to the consummation of the foregoing Acquisition Transaction.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following discussion sets forth certain federal income tax
consequences of the Merger applicable to stockholders that hold their
shares as capital assets within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended (the "Code"). However, the
discussion does not address all federal income tax considerations that
may be relevant to particular stockholders in light of their specific
<PAGE>
circumstances, such as stockholders who are dealers in securities,
foreign persons or stockholders who acquired their shares in connection
with stock options. Each stockholder is urged to consult the holder's
own tax advisor to determine the tax consequences to the holder of the
Merger in light of the holder's particular circumstances, including the
applicability and effect of federal, state, local and foreign income and
other tax laws and possible changes in those tax laws (which may have
retroactive effect).
The receipt by a Golden Genesis stockholder of cash pursuant to
the Merger (or cash pursuant to the exercise of dissenters' rights of
appraisal) will be a taxable event for the stockholder. A stockholder
will generally recognize capital gain or loss for federal income tax
purposes equal to the difference between (a) the amount of cash received
and (b) the tax basis in the shares of Golden Genesis stock surrendered
in exchange therefor (generally, the amount paid for the shares of
Golden Genesis). The gain or loss will be long-term capital gain or loss
if the stockholder's holding period for the surrendered shares is more
than one year at the Effective Time. Under recently enacted legislation,
individuals whose holding period for shares of Golden Genesis stock
exceeds one year will, in general, be subject to no more than a 20%
federal tax on any gain. If a Golden Genesis stockholder owns more than
one block of shares of Golden Genesis stock, the cash received must be
allocated ratably among the blocks in the proportion that the number of
shares of Golden Genesis stock in a particular block bears to the total
number of shares of Golden Genesis stock owned by the stockholder.
A stockholder may be subject to information reporting and to
backup withholding at a rate of 31% of amounts paid to the stockholder,
unless the stockholder provides proof of an applicable exemption or a
correct taxpayer identification number, and otherwise complies with
applicable requirements of the backup withholding rules.
THE DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH
ABOVE IS BASED ON EXISTING LAW AS OF THE DATE OF THIS PROXY STATEMENT.
STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER (INCLUDING THE
APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
LAWS).
PRINCIPAL STOCKHOLDERS
The following table gives information concerning the beneficial
ownership of Common Stock as of March 5, 1999 (the date of filing of the
Company's Annual Report on Form 10-K for the year ended December 31,
1998) by: (i) each person known to the Company to own more than 5% of
Common Stock of the Company, (ii) the Chief Executive Officer and each
of the directors and (iii) all directors and executive officers of the
Company as a group. (This table will be updated with information as of
the Record Date in the definitive Proxy Statement.)
Beneficial Ownership(1)(2)
Number of
Name of Beneficial Owner Shares Percent
<PAGE>
Directors and Executive Officers:
J. Michael Davis 4,500(3) *
Jeffrey C. Brines 5,000(3)
John K. Coors 16,000(3)(4)(5) *
Joseph Coors, Jr. 2,500(4)(6) *
Jed J. Burnham 11,500(7) *
Norman E. Miller 11,000(8) *
Gerritt J. Wolfaardt 11,500(9) *
John Markle 2,500(10) *
Directors and executive officers
as a group (13 persons) 1,235,708 6.8%
Others:
ACX Technologies, Inc. 9,429,379(11) 55.0%
Programmed Land Incorporated 1,550,000(12) 8.8%
* Less than one percent.
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is
deemed to be a "beneficial owner" of a security if he or she has or
shares the power to vote or direct the voting of such security or the
power to dispose or direct the disposition of such security. A person is
also deemed to be a beneficial owner of any securities of which that
person has the right to acquire beneficial ownership within 60 days of
March 5, 1999. More than one person may be deemed to be a beneficial
owner of the same securities. The percentage ownership of each
stockholder is calculated based on the total number of outstanding
shares of Common Stock as of the Record Date and those shares of Common
Stock that may be acquired by such stockholder within 60 days of March
5, 1999. Consequently, the denominator for calculating such percentage
may be different for each stockholder.
(2) This table is based upon information supplied by directors and
executive officers of the Company. Unless otherwise indicated in the
footnotes to this table, each of the stockholders named in this table
has sole voting and investment power with respect to the shares shown as
beneficially owned.
(3) During 1998 Mr. Davis, Mr. Brines and Mr. Coors without
consideration forfeited options to purchase shares of common stock of
125,000, 125,000 and 250,000, respectively.
(4) Does not include shares of Common Stock beneficially owned by ACX.
Joseph Coors, Jr. and John K. Coors are both directors of ACX, and John
K. Coors is a President, of Coors Ceramics, a wholly owned subsidiary of
ACX. In addition, Joseph Coors, Jr. is a co-trustee of one or more
family trusts that collectively own approximately 46 percent of the
outstanding common stock of ACX. As of March 5, 1999, ACX beneficially
owned 9,429,379 shares of Common Stock of the Company, representing
approximately 55% of the voting power of the Common Stock outstanding at
that date.
(5) Includes 10,000 shares of Common Stock that may be purchased
pursuant to options exercisable within 60 days of March 5, 1999.
<PAGE>
(6) Includes 2,500 shares of Common Stock that may be purchased
pursuant to options exercisable within 60 days of March 5, 1999.
(7) Does not include shares of Common Stock beneficially owned by ACX.
Mr. Burnham is Chief Financial Officer and Treasurer of ACX. Includes
11,500 shares of Common Stock that may be purchased pursuant to options
exercisable within 60 days of March 5, 1999.
(8) Includes 5,000 shares of Common Stock that may be purchased
pursuant to options exercisable within 60 days of March 5, 1999.
(9) Includes 11,500 shares of Common Stock that may be purchased
pursuant to options exercisable within 60 days of March 5, 1999.
(10) Includes 2,500 shares of Common Stock that may be purchased
pursuant to options exercisable within 60 days of March 5, 1999.
(11) Includes the voting rights to 500,000 shares pledged to ACX as a
part of ACX's loan agreement with Mr. Kauffman.
(12) Includes 500,000 shares of Common Stock that may be purchased
pursuant to options exercisable within 60 days of March 5, 1999.
John K. Coors, the Chairman of the Board of Directors of the
Company, is also a director of ACX. Joseph Coors, Jr., a director of
the Company, is also the President and a director of ACX. Jed J.
Burnham, a director of the Company, is also the Chief Financial Officer
and Treasurer of ACX. The remaining three members of the Company's Board
of Directors, Norman E. Miller, Gerritt J. Wolfaardt and John Markle are
not otherwise affiliated with ACX GTC or the Company.
OPTION AND VOTING AGREEMENT
Concurrently with the execution of the Merger Agreement and as
a condition to Buyer entering into the Merger Agreement, ACX and GTC
agreed in the Option and Voting Agreement to vote all of the capital
stock of Golden Genesis owned beneficially by them (i) in favor of the
Merger and for each of the other actions contemplated by the Merger
Agreement, (ii) against any action or agreement that would result in a
breach in any material respect of any representation, warranty or
covenant of Golden Genesis in the Merger Agreement and (iii) against any
action or agreement that would impede, interfere with, delay, postpone,
attempt to discourage the Merger or otherwise materially adversely
affect the Merger, including without limitation, any action or agreement
with respect to an acquisition proposal with any person other than Buyer
and Buyer Sub.
ACX and GTC have granted to Buyer an unconditional, irrevocable
option (the "Option") to purchase on one occasion, all (but not less
than all) securities of the Company consisting of Common Stock and all
or any part of any other securities of the Company not consisting of
<PAGE>
Common Stock (including all options, warrants and other rights to
acquire shares of Common Stock) beneficially owned by ACX and GTC
(excluding securities with respect to which they merely hold voting
power). The shares of Common Stock subject to the Option constitute
approximately 52% of the issued and outstanding Common Stock. The
Option may be exercised at any time prior to the earlier of (x) the date
upon which the Merger becomes effective, (y) the date upon which the
Merger Agreement is validly terminated pursuant to a mutual agreement of
Buyer, Buyer Sub and the Company or the entry of a final order
permanently enjoining the consummation of the Merger or (z) January 31,
2000, if an event occurs giving Buyer the right to terminate the Merger
Agreement based upon the Company's Board of Directors' (i) (A)
withdrawal of its recommendation or approval in respect of the Merger
Agreement or the Merger or (B) modification or change of its
recommendation or approval in respect of the Merger Agreement or the
Merger in a manner materially adverse to Buyer or Buyer Sub or (C)
failure to publicly oppose a Tender Offer or Exchange Offer within 10
business days after commencement of such Tender Offer or Exchange Offer,
(ii) approval of any Acquisition Transaction or (iii) waiver of the
Company Right of First Refusal. In the event Common Stock of Golden
Genesis is purchased pursuant to the Option, the price per share at
which Buyer may exercise the Option is equal to $2.33, and in the case
of all other securities of Golden Genesis purchased pursuant to the
Option, the purchase price shall equal the price paid by ACX or GTC for
such securities.
Pursuant to the Option and Voting Agreement, ACX and GTC have
irrevocably and unconditionally waived and agreed to cause to be waived
and to prevent the exercise of, any rights of appraisal, any dissenters'
rights and any similar rights relating to the Merger or any related
transaction.
During the Restricted Period, ACX and GTC (and their respective
officers, directors, employees, representatives and agents) cannot
solicit, initiate, encourage, inquire or discuss with any parties other
than Buyer and Buyer Sub any inquiries or the making of any proposal
with respect to any Acquisition Transaction.
In addition, during the Restricted Period, ACX and GTC cannot,
nor authorize or permit any of their directors, officers, employees,
agents or representatives to, request that Golden Genesis waive the
Company Right of First Refusal.
The Option and Voting Agreement provides that ACX indemnify,
defend and hold harmless (i) Golden Genesis and (ii) each of Golden
Genesis' stockholders, directors, officers, employees and agents from
and against liability which may be incurred by any of them resulting
from (A) any breach of any representations or warranties contained in
the Option and Voting Agreement or the failure of ACX and GTC to
observe, perform or abide by, or any other breach of, any restriction,
covenant, obligation or other provision contained in the Option and
Voting Agreement, (B) any breach by Golden Genesis of any representation
or warranty contained in the Merger Agreement solely to the extent any
such representation or warranty applies to certain wholly owned foreign
<PAGE>
subsidiaries of the Company, (C) any breach by the ACX or GTC of any
representation or warranty contained in that certain Share Purchase
Agreement, dated as of September 4, 1998, among the ACX, GTC and the
Company, or (D) certain matters relating to the Company's 401(k) Plan.
The Option and Voting Agreement provides that ACX and GTC shall
jointly and severally release and discharge Golden Genesis and its
subsidiaries, and each of their respective shareholders, affiliates,
officers, directors, employees and agents from any and all claims,
obligations or liabilities of any nature (whether known or unknown)
against any such persons by reason of any matter done or omitted to be
done prior to the Effective Time other than the obligation of Golden
Genesis to pay all indebtedness owed to ACX and GTC prior to the
Effective Time.
SELECTED CONSOLIDATED FINANCIAL DATA
Selected financial data for the years ended December 31, 1998
and 1997 the four months ended December 31, 1996, and the years ended
August 31, 1996 and 1997 is included in Item 6 of the Company's Annual
Report on Form 10-K for December 31, 1998 and incorporated herein by
reference. Financial data for the three months ended March 31, 1999 is
included in Item 1 of the Company's Quarterly Report of Form 10-Q on
March 31, 1999 and incorporated herein by reference.
MARKET PRICE AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock trades on the Nasdaq SmallCap Market
system under the symbol GGGO. The following information sets forth the
high and low bid quotations in dollars per share for the Company's
common stock as reported by the Nasdaq SmallCap Market.
Low High
1997
First Quarter (through March 31, 1997) $2.06 $3.13
Second Quarter (through June 30, 1997) 1.88 2.50
Third Quarter (through September 30, 1997) 1.50 2.31
Fourth Quarter (through December 31, 1997) 1.38 2.03
1998
First Quarter (through March 31, 1998) $1.53 $2.38
Second Quarter (through June 30, 1998) 1.88 2.81
Third Quarter (through September 30, 1998) 1.13 2.72
Fourth Quarter (through December 31, 1998) 1.13 1.81
1999
First Quarter (through March 31, 1999) $0.78 $1.75
Second Quarter (through [RECORD DATE]) $[__] $[__]
On [RECORD DATE], 1999 there were [787] stockholders of record
for the Company's common stock. The Company estimates that there are
approximately [3,700] beneficial owners of the Company's common stock.
<PAGE>
No dividends have been declared or paid on the Common Stock
since the Company's incorporation.
On May 24, 1999, the last trading day preceding the public
announcement that Buyer had reached an agreement with the Company, ACX
and GTC to acquire 100% of the Common Stock, the high and low sale
prices of the Common Stock as reported by the Nasdaq SmallCap Market
were $2.0312 and $1.875. On [DAY BEFORE RECORD DATE], 1999, the last
trading day prior to the date of this Proxy Statement, the high and low
sale prices of the Common Stock, as reported by the Nasdaq SmallCap
Market, were $[HIGH] and $[LOW]. STOCKHOLDERS ARE URGED TO OBTAIN A
CURRENT PRICE QUOTATION FOR THE COMMON STOCK.
FORWARD LOOKING STATEMENTS
This Proxy Statement, including the Exhibits attached hereto,
contains forward-looking statements. Future events and actual results,
financial or otherwise, may differ materially from the results set forth
in or implied in the forward-looking statements. Factors that might
cause such a difference include the risks and uncertainties involved in
the Company's business, including, but not limited to, the possible
inability to obtain regulatory approvals required to consummate the
Merger, the effect of economic and market conditions, the level and
volatility of interest rates, the impact of current or pending
legislation and regulation and the other risks and uncertainties
discussed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, which is
incorporated by reference to this Proxy Statement.
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP serves as the Company's independent
auditors. A representative of PricewaterhouseCoopers will be at the
Special Meeting to answer questions by stockholders and will have the
opportunity to make a statement if so desired.
OTHER MATTERS
The Board of Directors knows of no other matter to be acted
upon at the Special Meeting. However, if any other matters are properly
brought before the Special Meeting, the persons named in the
accompanying form of proxy card as proxies by the holders of Common
Stock will vote thereon in accordance with their best judgment.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Exchange Act, and in accordance therewith files reports, proxy
statements and other information with the SEC. The reports, proxy
statements and other information filed by the Company with the SEC can
be inspected and copied at the public reference facilities maintained by
the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the following Regional Offices of the
<PAGE>
SEC: Seven World Trade Center, 13th Floor, New York, New York 10048 and
Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of the material also can be obtained from the
Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Golden Genesis is an electronic filer
under the EDGAR (Electronic Data Gathering, Analysis and Retrieval)
system maintained by the SEC. The SEC maintains a Web Site
(http://www.sec.gov) on the Internet that contains reports, proxy and
information statements and other information regarding companies that
file electronically with the SEC. In addition, material filed by Golden
Genesis can be inspected at the offices of The Nasdaq Stock Market,
Inc., Reports Section, 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The information contained in the Company's Annual Report on
Form 10-K for the year ended December 31, 1998 and the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 is
incorporated herein by reference, as permitted by the rules and
regulations of the SEC.
STOCKHOLDER PROPOSALS
Under the rules of the SEC, any Company stockholder who wishes
to submit a proposal for presentation at the Company's 1999 Annual
Meeting of Stockholders (if the Merger has not been consummated prior to
the date that Meeting is to be held) must submit the proposal to the
Company at its principal executive offices, Attention: Secretary. The
proposal must be received no later than September 30, 1999 for
inclusion, if appropriate, in the Company's proxy statement and form of
proxy card relating to the 1999 Annual Meeting. Proposals which the
Company's stockholders intend to present at the 1999 Annual Meeting of
Stockholders (if such a meeting is held) pursuant to Rule 14a-8
promulgated under the Exchange Act and wish to have included in the
Company's proxy materials relating to that meeting must be received by
the Company a reasonable time prior to the date that the Company
distributes the proxy materials to its stockholders. Under the rules of
the SEC, if a stockholder fails to notify the Company of its intention
to bring a non-Rule 14a-8 proposal before the 1999 Annual Meeting within
a reasonable time prior to the date that the Company distributes the
proxy materials relating to such meeting to its stockholders, then the
proxy card solicited by the Board of Directors of Golden Genesis may
grant discretionary voting authority to the proxies named in the proxy
card with respect to the non-Rule 14a-8 proposal.
BY ORDER OF THE BOARD OF DIRECTORS
Jeffrey C. Brines
Secretary
<PAGE> A
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
by and among
GOLDEN GENESIS COMPANY
GGC ACQUISITION COMPANY
and
KYOCERA INTERNATIONAL, INC.
Dated as of May 26, 1999
<PAGE> A-i
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER 3
1.1. THE MERGER. 3
1.2. EFFECTIVE TIME. 3
1.3. CERTIFICATE OF INCORPORATION AND BYLAWS OF SURVIVING CORPORATION. 3
1.4. DIRECTORS OF SURVIVING CORPORATION. 3
1.5. COMPANY DELIVERIES. 3
1.6. PARENT AND BUYER CLOSING DELIVERIES. 4
ARTICLE II CONVERSION OF COMPANY COMMON STOCK 5
2.1. EFFECT ON COMPANY COMMON STOCK AND BUYER'S CAPITAL STOCK. 5
2.2. COMPANY OPTION PLANS 5
2.3. CONSUMMATION OF THE MERGER. 5
ARTICLE III DISSENTING SHARES; PAYMENT FOR SHARES 6
3.1. DISSENTING SHARES. 6
3.2. PAYMENT FOR SHARES. 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY 8
4.1. ORGANIZATION. 8
4.2. CAPITALIZATION. 8
4.3. AUTHORITY. 9
4.4. SEC DOCUMENTS; FINANCIAL STATEMENTS. 10
4.5. FINANCIAL CONDITION. 10
4.6. LITIGATION. 11
4.7. COMPLIANCE WITH APPLICABLE LAW. 11
4.8. TAXES. 11
4.9. TERMINATION, SEVERANCE AND EMPLOYMENT AGREEMENTS. 12
4.10. EMPLOYEE BENEFIT PLANS; ERISA. 12
4.11. ENVIRONMENTAL MATTERS. 14
4.12. ASSETS; REAL PROPERTY; INTELLECTUAL PROPERTY. 15
4.13. SYSTEMS AND SOFTWARE; YEAR 2000. 17
4.14. LABOR MATTERS. 17
4.15. AGREEMENTS. 18
4.16. INSURANCE. 19
4.17. SUPPLIERS AND CUSTOMERS. 19
4.18. BOOKS AND RECORDS. 19
4.19. BANKING FACILITIES. 19
4.20. DELAWARE SECTION 203. 20
4.21. BROKER'S FEES. 20
4.22. REPRESENTATIONS AND WARRANTIES. 20
<PAGE> A-ii
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER 20
5.1. ORGANIZATION. 20
5.2. AUTHORITY. 20
5.3. NO VIOLATIONS; CONSENTS AND APPROVALS 21
5.4. BROKER'S FEES. 21
5.5. REPRESENTATIONS AND WARRANTIES. 21
ARTICLE VI COVENANTS 21
6.1. CONDUCT OF BUSINESS OF THE COMPANY. 21
6.2. NO SOLICITATION. 24
6.3. ACCESS TO INFORMATION; CONFIDENTIALITY. 25
6.4. REASONABLE BEST EFFORTS; OTHER ACTIONS. 25
6.5. PUBLIC ANNOUNCEMENTS AND OTHER COMMUNICATIONS. 26
6.6. NOTIFICATION OF CERTAIN MATTERS; REPORTING. 26
6.7. EXPENSES. 27
6.8. HSR ACT FILINGS. 27
6.9. STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT. 28
6.10. INFORMATION. 28
6.11. ENVIRONMENTAL ASSESSMENTS. 29
ARTICLE VII CONDITIONS TO OBLIGATIONS OF THE COMPANY, PARENT AND BUYER 30
7.1. STOCKHOLDER APPROVAL. 30
7.2. NO ACTION OR PROCEEDING. 30
7.3. MAILING OF PROXY STATEMENT. 30
7.4. HSR ACT. 30
7.5. GOLDEN, COLORADO OFFICE 30
ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF PARENT AND BUYER 31
8.1. REPRESENTATIONS AND WARRANTIES. 31
8.2. MATERIAL ADVERSE CHANGE. 31
8.3. SATISFACTION OF CLOSING OBLIGATIONS. 31
8.4. DISSENTING SHARES. 31
8.5. COMPLIANCE WITH COVENANTS. 31
8.6. THIRD PARTY CONSENTS. 31
ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF THE COMPANY 32
9.1. REPRESENTATIONS AND WARRANTIES. 32
9.2. COMPLIANCE WITH COVENANTS. 32
9.3. SATISFACTION OF CLOSING OBLIGATIONS. 32
<PAGE> A-iii
ARTICLE X TERMINATION AND ABANDONMENT 32
10.1. TERMINATION. 32
10.2. TERMINATION BY PARENT OR BUYER. 33
10.3. TERMINATION BY THE COMPANY. 34
10.4. PROCEDURE FOR TERMINATION. 34
10.5. EFFECT OF TERMINATION. 34
10.6. TERMINATION FEE. 34
10.7. TOPPING FEE. 35
10.8. REMEDIES. 35
ARTICLE XI MISCELLANEOUS 36
11.1. AMENDMENT AND MODIFICATION. 36
11.2. WAIVER. 36
11.3. SURVIVABILITY. 36
11.4. NOTICES. 36
11.5. ASSIGNMENT. 37
11.6. GOVERNING LAW. 37
11.7. COUNTERPARTS. 37
11.8. INTERPRETATION. 37
11.9. ENTIRE AGREEMENT. 38
Exhibits
Exhibit A Certificate of Incorporation of Surviving Corporation
Exhibit B Stock Option Cancellation Agreement
<PAGE> A-1
AGREEMENT AND PLAN OF MERGER
Preamble AGREEMENT AND PLAN OF MERGER, dated as of May 26, 1999 (the
"Agreement"), by and among GOLDEN GENESIS COMPANY, a Delaware corporation (the
"Company"), GGC ACQUISITION COMPANY, a Delaware corporation ("Buyer"), and
KYOCERA INTERNATIONAL, INC., a California corporation ("Parent").
RECITALS:
WHEREAS, Buyer is a wholly owned subsidiary of Parent;
WHEREAS, the Boards of Directors of Buyer, Parent and the Company have each
approved the merger of Buyer with and into the Company in accordance with the
terms of this Agreement and the General Corporation Law of the State of Delaware
(the "DGCL");
WHEREAS, Hanifen, Imhoff Inc., the Company's financial advisor, has rendered to
the Board of Directors of the Company (the "Board") its written opinion that the
Merger Price to be received by the stockholders of the Company pursuant to the
Merger (as such terms are hereinafter defined) is fair to such stockholders from
a financial point of view; and
WHEREAS, the Board has, in light of and subject to the terms and conditions set
forth herein, (i) determined that the Merger is in the best interests of the
stockholders of the Company, and (ii) resolved to approve and adopt this
Agreement and the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants, agreements and conditions contained herein, the parties
hereto agree as follows:
DEFINITIONS. The following terms used herein shall have the meanings ascribed
in the indicated sections:
Acquisition Transaction 6.2(a)
Advisors 6.7
Agreement Preamble
Board RECITALS
Buyer Preamble
Certificate of Merger 1.2
Certificates 3.2(a)
Closing 1.2
Code 4.8
Company Preamble
Company Agreements 1.5(b)(i)
Company Balance Sheet 4.5(b)
Company Common Stock 2.1(a)
Company Material Contracts 4.15
Company Permits 4.7
Company Preferred Stock 4.2
<PAGE> A-2
Company Right of First Refusal 6.2(a)
Contracts 4.15
Delaware Secretary of State 1.2
DOJ 4.3(b)
DGCL RECITALS
Disclosure Letter ARTICLE IV
Dissenting Shares 3.1
Effective Time 1.2
Employee Benefit Plan 4.10(a)
Environmental Laws 4.11
ERISA 4.10(a)
ERISA Affiliate 4.10(b)
Exchange Act 4.3(b)
Exchange Offer 10.2
FTC 4.3(b)
Financial Statements 4.5(a)
Hazardous Substances 4.11
HSR Act 4.3(b)
Intellectual Property 4.12(c)
Majority Shareholder 3.2(b)
Material Adverse Effect 11.8
Merger 1.1
Merger Deadline 10.1
Merger Price 2.1(a)
Multi-employer Plan 4.10(a)
Option 2.2(a)
Option Plans 2.2(a)
Order 4.3(b)
Parent Preamble
Paying Agent 3.2(a)
Pension Plan 4.10(a)
Permitted Liens 4.12(a)
Plans 4.10(a)
Proxy Statement 6.9(b)
Real Property 4.12(b)
RPI Purchase Agreement 1.5(b)(vii)
SEC 4.3(b)
SEC Documents 4.4
Securities Act 10.2
Site Assessments 6.11(a)
Subsidiary 11.8
Surviving Corporation 1.1
Systems 4.13(a)
Tax 4.8
Tender Offer 10.2
<PAGE> A-3
Welfare Plan 4.10(a)
Year 2000 Compliance 4.13(b)
ARTICLE I
THE MERGER
1.1. THE MERGER. In accordance with the provisions of this Agreement and the
DGCL, at the Effective Time, Buyer shall be merged with and into the Company
(the "Merger"), and the Company shall be the surviving corporation (hereinafter
sometimes called the "Surviving Corporation") and shall continue its corporate
existence under the laws of the State of Delaware. The Merger shall have the
effects on the Company and Buyer as provided under the DGCL. At the Effective
Time, the separate existence of Buyer shall cease, and the name of the Surviving
Corporation shall be Golden Genesis Company, until thereafter changed as
provided by law.
1.2. EFFECTIVE TIME. As promptly as practicable after the satisfaction or, if
permissible, waiver of the conditions set forth in ARTICLE VII, ARTICLE VIII and
ARTICLE IX hereof, the parties hereto shall cause the Merger to be consummated
by filing a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware (the "Delaware Secretary of State"),
in such form as required by, and executed in accordance with the relevant
provisions of, the DGCL (the date and time of the filing of the Certificate of
Merger or the time specified therein being the "Effective Time"). Prior to such
filing, a closing (the "Closing") shall be held at the offices of Loeb & Loeb
LLP, 1000 Wilshire Boulevard, Suite 1800, Los Angeles, California, or such other
place as the Company and Parent shall agree, for the purpose of confirming the
satisfaction or waiver, as the case may be, of the conditions set forth in
ARTICLE VII, ARTICLE VIII and ARTICLE IX hereof.
1.3. CERTIFICATE OF INCORPORATION AND BYLAWS OF SURVIVING CORPORATION. The
Certificate of Incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be amended and restated as of the Effective Time to
read as set forth in Exhibit A hereto, and, as so amended, such amended and
restated Certificate of Incorporation shall be the Certificate of Incorporation
of the Surviving Corporation effective as of the Effective Time until thereafter
amended as provided by law. The Bylaws of Buyer in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation in effect
immediately prior to the Effective Time until thereafter amended as provided by
law.
1.4. DIRECTORS OF SURVIVING CORPORATION. Subject to applicable law, the initial
directors of the Surviving Corporation upon the effectiveness of the Merger at
the Effective Time shall be those persons who are the directors of Buyer
immediately prior to the Effective Time, to hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
1.5. COMPANY DELIVERIES.
(a) Signing Deliveries. On the date hereof, the Company has or has caused to be
delivered to Parent and Buyer (i) the Disclosure Letter, and (ii) a Bill of Sale
and Assignment, among the Company and the other parties thereto.
<PAGE> A-4
(b) Closing Deliveries. At the Closing and subject to the terms and conditions
of this Agreement, the Company shall deliver or otherwise make available to
Parent and Buyer:
(i) certified resolutions of the Board approving the Merger, this Agreement, all
other agreements and instruments executed and delivered by the Company pursuant
to the terms hereof (the "Company Agreements"), and the transactions
contemplated hereby and thereby;
(ii) certified resolutions duly adopted by the holders of a majority of the
outstanding shares of Company Common Stock approving the Merger and this
Agreement;
(iii) a certificate of the secretary of the Company certifying as to the
Company's and the Subsidiaries' respective certificates of incorporation, bylaws
and incumbency of officers immediately prior to the Effective Time;
(iv) resignations by each current member of the Board, each effective as of the
Effective Time;
(v) the minute books of the Company;
(vi) stock certificates representing all issued and outstanding shares of
capital stock of the Subsidiaries and the stock ledger and other stock records
(including all cancelled stock certificates) and minute books of each
Subsidiary;
(vii) the stock certificates representing 150,000 shares of Company Common Stock
pledged by the sellers (the "Pledged Shares") named in that certain Share
Purchase Agreement dated July 21, 1998, among the Company, Remote Power, Inc.
and such sellers (the "RPI Purchase Agreement") as security for performance of
such sellers' indemnification obligations, and any stock assignments or stock
powers previously delivered to the Company with respect to the Pledged Shares,
subject, however, to any prior release thereof in accordance with the terms of
the RPI Purchase Agreement and the respective Security Agreement and Collateral
Assignment related to such Pledged Shares; and
(viii) a good standing certificate issued by the Maryland Secretary of State,
including tax good standing, for Integrated Power Corporation.
1.6. PARENT AND BUYER CLOSING DELIVERIES. At the Closing and subject to the
terms and conditions of this Agreement, Parent and Buyer shall each deliver to
the Company: (i) certified resolutions of its respective board of directors and
certified resolutions of the sole stockholder of Buyer, each approving the
Merger, this Agreement and the transactions contemplated hereby; and (ii) a
certificate of its respective secretary certifying as to its respective
incumbency of officers as of the Effective Time.
<PAGE> A-5
ARTICLE II
CONVERSION OF COMPANY COMMON STOCK
2.1. EFFECT ON COMPANY COMMON STOCK AND BUYER'S CAPITAL STOCK.
(a) As of the Effective Time, by virtue of the Merger and without any action on
the part of the holders thereof, each share of the Company's common stock, par
value $.10 per share (the "Company Common Stock"), issued and outstanding
immediately prior to the Effective Time (other than any shares held in the
treasury of the Company or by any wholly owned Subsidiary of the Company, which
shares, by virtue of the Merger and without any action on the part of the holder
thereof, shall be canceled and shall cease to exist with no payment being made
with respect thereto, and other than any Dissenting Shares (as defined in
Section 3.1 hereof)) shall be converted into the right to receive $2.33 net to
the holder in cash (the "Merger Price"), payable to the holder thereof, without
interest thereon, as set forth in Section 3.2 hereof.
(b) As of the Effective Time, by virtue of the Merger and without any action on
the part of the holders thereof, each share of capital stock of Buyer issued and
outstanding immediately prior to the Effective Time shall be converted into
17,152,948 fully paid and nonassessable shares of common stock, par value $0.001
per share, of the Surviving Corporation.
2.2. COMPANY OPTION PLANS
(a) The Company and the Board shall take all actions necessary to cause (a) each
option to purchase shares of Company Common Stock (an "Option") that is
outstanding immediately before the Effective Time, whether or not presently
exercisable, to be canceled at the Effective Time by virtue of the Merger, and
(b) the plans of the Company and the Subsidiaries providing for Options ("Option
Plans") to terminate as of the Effective Time and the provisions in any other
plan, program or arrangement, providing for the issuance or grant by the Company
or any of the Subsidiaries of any interest in respect of the capital stock of
the Company or any of the Subsidiaries to be terminated as of the Effective
Time. Without limiting the generality of the foregoing, the Company and the
Board shall have given all requisite notices under all Option Plans and any
agreements with respect to any Option, accelerated the vesting of Options and
given holders of Options the requisite opportunity to exercise as is required,
in each case, such that following the Effective Time no holder of Options or any
participant in the Option Plans or any other such plans, programs or
arrangements shall have any right thereunder to acquire any equity securities of
the Company or any Subsidiary.
(b) Upon delivery to Parent on the business day prior to the date of the
Effective Time of an executed Stock Option Cancellation Agreement, in the form
of Exhibit B hereto, a holder of an Option outstanding immediately before the
Effective Time shall receive from the Company an amount equal to the product of
(i) the excess, if any, by which the Merger Price exceeds the exercise price of
the Option and (ii) the number of Shares subject to the Option, such amount to
be paid to the holder by bank check at the Effective Time.
2.3. CONSUMMATION OF THE MERGER. As soon as practicable after the satisfaction
or, if permissible, waiver of the conditions set forth in ARTICLE VII, ARTICLE
VIII and ARTICLE IX hereof, (a) the Surviving Corporation shall execute in the
manner required by the
<PAGE> A-6
DGCL and file with the Delaware Secretary of State the
Certificate of Merger and (b) the parties shall take such other and further
actions as may be required by law to make the Merger effective.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
3.1. DISSENTING SHARES. Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has demanded appraisal for such shares in
accordance with Section 262 of the DGCL, if such Section 262 provides for
appraisal rights for such shares in the Merger ("Dissenting Shares"), shall not
be converted into the right to receive the Merger Price, as provided in Section
2.1 hereof, unless and until such holder fails to perfect or withdraws or
otherwise loses such holder's right to appraisal and payment under the DGCL.
If, after the Effective Time, any such holder fails to perfect or withdraws or
loses such holder's right to appraisal, such Dissenting Shares shall thereupon
be treated as if they had been converted as of the Effective Time into the right
to receive the Merger Price to which such holder is entitled, without interest
or dividends thereon. The Company shall give Parent prompt notice of any
demands received by the Company for appraisal of shares of Company Common Stock
and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with
the prior written consent of Parent, make any voluntary payment with respect to,
or settle or offer to settle, any such demands.
3.2. PAYMENT FOR SHARES.
(a) From and after the Effective Time, a bank or trust company designated by
Parent and approved by the Company in its reasonable discretion shall act as
paying agent (the "Paying Agent") in effecting the payment of the Merger Price
for certificates formerly representing shares of Company Common Stock and
entitled to payment of the Merger Price pursuant to Section 2.1 hereof (the
"Certificates"). At the Effective Time, Parent shall deposit, or cause to be
deposited, in trust with the Paying Agent sufficient funds to permit the Paying
Agent to make the payments contemplated by this Section 3.2 and Section 2.1
hereof.
(b) Promptly after the Effective Time, Parent shall cause the Paying Agent to
mail to each record holder of Certificates (other than Certificates representing
shares held in the treasury of the Company or by any wholly-owned Subsidiary of
the Company) a form of letter of transmittal which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Paying Agent and
instructions for use in surrendering such Certificates and receiving the Merger
Price therefor. Upon the surrender of each such Certificate, the Paying Agent
shall promptly pay the holder of such Certificate in exchange therefor cash in
an amount equal to the Merger Price multiplied by the number of shares of
Company Common Stock formerly represented by such Certificate, and such
Certificate shall forthwith be canceled. Said payment (i) if requested by Golden
Technologies Company, Inc., a Colorado corporation ("Majority Shareholder"), at
least one (1) business day prior to the Closing, shall, upon delivery of
Majority Shareholder's Certificate(s) at the Closing, be paid to Majority
Shareholder on the date of the Closing, by wire transfer in immediately
available funds, subject to Section 3.2(d) below and (ii) if requested by any
holder
<PAGE> A-7
of a Certificate who is an officer or director of the Company at least
two (2) business days prior to the Closing, shall, upon delivery of such
holder's Certificate(s) at the Closing, be paid to such holder at the Closing by
delivery to such holder of a cashier's check subject to Section 3.2(d) below.
Until so surrendered, each such Certificate (other than Certificates
representing Dissenting Shares and Certificates representing shares held in the
treasury of the Company or by any wholly-owned Subsidiary of the Company) shall
represent solely the right to receive the aggregate Merger Price relating
thereto. No interest shall be paid or accrued on such Merger Price.
(c) After the Effective Time, there shall be no transfers on the stock transfer
books of the Surviving Corporation of any shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates formerly representing a share or shares of Company
Common Stock (other than Certificates representing shares held in the treasury
of the Company or by any wholly-owned Subsidiary of the Company) are presented
to the Surviving Corporation or the Paying Agent, they shall be surrendered and
canceled in return for the payment of the aggregate Merger Price relating
thereto, without interest, as provided in this ARTICLE III hereof subject to
applicable law in the case of Dissenting Shares.
(d) The Merger Price shall be net to each holder of Certificates in cash,
subject to reduction only for any applicable federal back-up withholding or, as
set forth in Section 3.2(e) hereof, stock transfer taxes payable by such holder.
(e) If payment of cash in respect of any Certificate is to be made to a person
other than the person in whose name such Certificate is registered, it shall be
a condition to such payment that the Certificate so surrendered shall be
properly endorsed or shall be otherwise in proper form for transfer and that the
person requesting such payment shall have paid any transfer and other taxes
required by reason of such payment in a name other than that of the registered
holder of the Certificate surrendered or shall have established to the
satisfaction of Parent or the Paying Agent that such tax either has been paid or
is not payable.
(f) Promptly following the date which is one hundred eighty (180) days after the
Effective Time, the Paying Agent shall deliver to Parent all cash, Certificates
and other documents in its possession relating to the transactions described in
this Agreement, and the Paying Agent's duties shall terminate. Thereafter, each
holder of a Certificate formerly representing a share or shares of Company
Common Stock (other than Certificates representing Dissenting Shares and
Certificates representing shares held in the treasury of the Company or by any
wholly-owned Subsidiary of the Company) may surrender such Certificate to Parent
and (subject to applicable abandoned property, escheat and similar laws) receive
in consideration therefor the aggregate Merger Price relating thereto, without
any interest or dividends thereon. Neither Parent nor the Surviving Corporation
shall be liable to any holder of shares of Company Common Stock for any amount
paid to a public official in accordance with applicable abandoned property,
escheat or similar laws.
<PAGE> A-8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Buyer as follows, except as
disclosed by the Company to Parent and Buyer in a Disclosure Letter dated of
even date herewith (the "Disclosure Letter"):
4.1. ORGANIZATION. The Company and each of the Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation and the Company and each of the
Subsidiaries has all requisite corporate power and authority to own, lease and
operate its respective properties and to carry on its respective business as now
being conducted. The Company and each of the Subsidiaries is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary except for such jurisdictions where the
failure to so qualify or be licensed would not have any Material Adverse Effect
(as defined in Section 11.8) on the Company or any of the Subsidiaries. Section
4.1(a) of the Disclosure Letter lists (a) the names of all of the Company's
Subsidiaries, and (b) the jurisdiction of incorporation or formation (as
applicable) of each such Subsidiary. Section 4.1(b) of the Disclosure Letter
sets forth all of the jurisdictions in which the Company and the Subsidiaries
are qualified to do business as foreign corporations. Copies of the Certificate
of Incorporation and Bylaws of the Company and the articles or certificate of
incorporation and bylaws of each of the Subsidiaries, including all amendments,
have been made available to Parent and such copies are accurate and complete.
4.2. CAPITALIZATION. The authorized capital stock of the Company consists of
30,000,000 shares, of which 25,000,000 are shares of common stock, each par
value $.10 per share, and 5,000,000 are shares of preferred stock ("Company
Preferred Stock"), each par value $.001 per share. Section 4.2(a) of the
Disclosure Letter lists the following information as of the date hereof: the
capitalization of each Subsidiary and the number of shares of each Subsidiary's
capital stock owned by the Company. The Company owns directly all of the
outstanding capital stock of each Subsidiary (except that 1 share (or quota) of
Golden Genesis do Brasil Energia Renovavel, Ltda. is owned by an individual who
is a citizen of Brazil, the laws of which require that a citizen of that country
be the holder of at least 1 quota of each corporation formed under the laws
thereof), free and clear of any lien, claim or encumbrance and neither the
Company nor any Subsidiary is a partner or member of any partnership, joint
venture, limited liability company or similar entity. As of April 30, 1999,
there were 17,152,948 shares of Company Common Stock issued and outstanding
(excluding shares held in the Company's treasury) and no shares of Company
Preferred Stock issued and outstanding, and as of the date hereof, an aggregate
of 1,169 shares of Company Common Stock and no shares of Company Preferred Stock
are held in the Company's treasury. All issued and outstanding shares of Company
Common Stock and all issued and outstanding shares of capital stock of each
Subsidiary, are duly authorized and validly issued, fully paid, nonassessable
and, except as set forth in Section 4.2(b) of the Disclosure Letter, free of
preemptive rights with respect thereto. As of the date hereof, there were
outstanding options to purchase 3,190,697 shares of Company Common Stock under
the Option Plans and no options to purchase shares of Company Common Stock not
subject to any Option Plan and the Company has provided to Parent complete and
accurate copies of each Option Plan and copies of all stock option agreements
entered into by the Company. There is no restricted
<PAGE> A-9
stock outstanding or
available under the Option Plans. Section 4.2(c) of the Disclosure Letter
contains a list of all Options outstanding, indicating for each: (a) the name
of the grantee, (b) the grant date, (c) whether it was issued under an Option
Plan, and if so, which Option Plan, and (d) the exercise price. Except for
Options listed in Section 4.2(c) of the Disclosure Letter (which shall be
canceled as provided in Section 2.2 hereof) and any shares of Company Common
Stock issued upon exercise of such Options, the foregoing 17,152,948 shares of
Company Common Stock (excluding shares held in the Company's treasury), and the
shares of capital stock of each Subsidiary listed in Section 4.2(a) of the
Disclosure Letter, there are not as of the date hereof, and at all times
hereafter through the Effective Time there will not be (i) any shares of capital
stock or other securities or other equity interests of the Company or any
Subsidiary issued or outstanding, (ii) any options, warrants, calls,
subscriptions, or other rights or other agreements or commitments obligating the
Company or any of the Subsidiaries to issue, transfer, sell or vote any shares
of its capital stock or (iii) any other securities convertible into or
evidencing the right to subscribe for any such shares.
4.3. AUTHORITY.
(a) The Company has full corporate power and authority to execute and deliver
this Agreement and, subject to the approval of its stockholders, to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement and the Company Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized and
approved by the Board, and, other than approval by the Company's stockholders,
no other corporate proceedings are necessary to authorize this Agreement or the
Company Agreements or the consummation of the transactions contemplated hereby
and thereby. This Agreement and each of the Company Agreements have been duly
and validly executed and delivered by the Company and constitute the legal,
valid and binding agreements of the Company, enforceable against it in
accordance with their terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar applicable laws
affecting creditors' rights generally or by general equitable principles
affecting the enforcement of contracts.
(b) Except as otherwise disclosed in Section 4.3(b) of the Disclosure Letter
and except for: (i) the compliance with the provisions of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (ii) the filing of
Notification and Report forms under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as the same may hereafter be amended from time to time (the "HSR
Act") with the Federal Trade Commission (the "FTC") and the Antitrust Division
of the Department of Justice (the "DOJ") with respect to the transactions
contemplated herein, (iii) the obtaining of the requisite approval of the
stockholders of the Company, (iv) the filing of the Certificate of Merger with
the Delaware Secretary of State, (v) the filing with, and approval of, the
Nasdaq Stock Market and the Securities and Exchange Commission (the "SEC") with
respect to the delisting and deregistration of the Company Common Stock, the
execution and delivery by the Company of this Agreement and the Company
Agreements and the consummation by the Company of the transactions contemplated
hereby and thereby will not: (a) violate any provision of the Certificate or
Articles of Incorporation or Bylaws of the Company or any Subsidiary; (b)
violate in any material respect any applicable law or order, writ, injunction or
decree (each, and "Order") or the rules or regulations of any nongovernmental
self-regulatory agency by which the Company or any Subsidiary or any of their
respective properties
<PAGE> A-10
or assets may be bound; (c) require any filing by the
Company with or permit, consent, or approval to be obtained by the Company from
any governmental authority or any nongovernmental self-regulatory agency by
which the Company or any of their respective properties or assets may be bound;
or (d) result in any violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default under, result in the loss of any
material benefit under, or give rise to any right of termination, cancellation,
increased payments, or acceleration under, or result in the creation of any lien
or other encumbrance on any of the properties or assets of the Company or any
Subsidiary under, any of the terms, conditions, or provisions of any Contract or
Company License, except, in the case of clauses (b), (c) and (d), for any such
filings, permits, consents or approvals or violations, breaches, defaults, or
other occurrences that could not reasonably be expected to prevent or delay
consummation of any of the transactions contemplated hereby in any material
respect or otherwise prevent the Company from performing its obligations under
this Agreement in any material respect, and would not have a Material Adverse
Effect.
4.4. SEC DOCUMENTS; FINANCIAL STATEMENTS. Since December 31, 1995, the Company
has filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, copies of which have been
provided or made available, except to the extent prohibited by law, that were
required to be filed with the SEC. All such reports, registrations and filings
are collectively referred to as the "SEC Documents". As of their respective
filing dates, each of the SEC Documents (a) was true and complete in all
material respects (or was amended so as to be so promptly following discovery of
any discrepancy); and (b) complied in all material respects with all of the
statutes, rules and regulations enforced or promulgated by the SEC (or was
amended so as to be so promptly following discovery of any such noncompliance)
and none of such SEC Documents (as the same may have been so amended) contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
4.5. FINANCIAL CONDITION.
(a) Financial Statements. The Company has provided or made available to Parent
complete and accurate copies of (i) the audited consolidated balance sheets of
the Company and the Subsidiaries as of December 31, 1998, December 31, 1997, and
August 31, 1996, the related consolidated statements of operations,
stockholders' equity and cash flows for the fiscal years then ended, certified
by the Company's independent certified public accountants, whose reports thereon
are included therewith (collectively, the "Financial Statements"). The
Financial Statements (i) were prepared in accordance with the books and records
of the Company and the Subsidiaries; (ii) were prepared in accordance with
United States generally accepted accounting principles; and (iii) fairly present
the Company's consolidated financial condition and the results of its operations
as of the relevant dates thereof and for the periods covered thereby.
(b) Undisclosed Liabilities. Except (i) as reflected or reserved against on the
audited consolidated balance sheet of the Company as of December 31, 1998 (the
"Company Balance Sheet"), (ii) as disclosed or reflected in the SEC Documents,
(iii) as disclosed in Section 4.5(b) of the Disclosure Letter, and (iv) for
current liabilities for trade or business obligations incurred since December
31, 1998 in connection with the purchase of goods or services in the ordinary
<PAGE> A-11
course of business and consistent with past practice, neither the Company nor
any Subsidiary has (a) incurred any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, (b)
made any changes in accounting methods, principles or practices or (c) declared,
set aside or paid any dividend or other distribution with respect to its capital
stock. Since December 31, 1998, each of the Company and the Subsidiaries has
conducted its operations according to its ordinary course of business consistent
with past practice.
4.6. LITIGATION. Except as disclosed by the Company in the SEC Documents or in
Section 4.6 of the Disclosure Letter, there is no suit, claim, action,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against the Company or any of the Subsidiaries or any of their
respective properties or assets before any court or governmental authority, nor,
to the knowledge of the Company, are there any facts that are reasonably likely
to give rise to any such suit, claim, action, proceeding or investigation.
Except as disclosed in Section 4.6 of the Disclosure Letter, neither the Company
nor any of the Subsidiaries is subject to any outstanding Order.
4.7. COMPLIANCE WITH APPLICABLE LAW. Except as disclosed by the Company in the
SEC Documents or in Section 4.7 of the Disclosure Letter, the Company and the
Subsidiaries hold all material permits, licenses, variances, exemptions, orders
and approvals of all governmental entities necessary for the lawful conduct of
their respective businesses (including, without limitation, all of those
required under Environmental Laws) (the "Company Permits"). Except as disclosed
by the Company in the SEC Documents or in Section 4.7 of the Disclosure Letter,
the Company and the Subsidiaries have in all material respects complied with and
are in all material respects in compliance with the terms of the Company Permits
and all applicable laws, ordinances, regulations or Orders, and no material
capital expenditures will be required in order to insure continued compliance
therewith. Except as disclosed by the Company in the SEC Documents, no
investigation by any governmental authority with respect to the Company or any
of the Subsidiaries is pending or, to the Company's knowledge, threatened nor
has any governmental authority indicated an intention to conduct the same, and
except as disclosed in Section 4.7 of the Disclosure Letter, there are no
pending or, to the knowledge of the Company, threatened proceedings by or before
any governmental authority which involve new special assessments, assessment
districts, bonds, taxes, condemnation actions, applicable laws or Orders or
similar matters which, if instituted, could reasonably be expected to have a
Material Adverse Effect.
4.8. TAXES. Each of the Company and the Subsidiaries has filed, or caused to be
filed, all material federal, state, local and foreign income and other material
tax returns required to be filed by it, has paid or withheld, or caused to be
paid or withheld, all taxes of any nature whatsoever, with any related
penalties, interest and liabilities (any of the foregoing being referred to
herein as a "Tax"), that are shown on such tax returns as due and payable, other
than such Taxes as are being contested in good faith and for which adequate
reserves have been established. Each such tax return filed by the Company and
each Subsidiary fully and accurately reflects its liability for Taxes for such
year or period and accurately sets forth all items (to the extent required to be
included or reflected in such returns) relevant to its future liabilities for
material Taxes, including the Tax bases of its properties and assets. Except as
disclosed in Section 4.8 of the Disclosure Letter, the Company and each of the
Subsidiaries has paid or will
<PAGE> A-12
timely pay all Taxes due with respect to any
period ending at or prior to the Effective Time, or where the payment of Taxes
is not yet due, has established, or with respect to Taxes incurred after the
date hereof will timely establish in accordance with past practices, an adequate
accrual in accordance with generally accepted accounting practices. Except as
disclosed in Section 4.8 of the Disclosure Letter, there are no claims,
assessments or audits pending, or to the Company's knowledge threatened, against
the Company or the Subsidiaries for any alleged deficiency in any Tax. Neither
the Company nor any Subsidiary has waived or extended any applicable statute of
limitations to assess any Taxes. There are no outstanding requests for any
extension of time within which to file any return or within which to pay any
Taxes shown to be due on any return. There are no liens for any Taxes upon the
assets of the Company or any of the Subsidiaries (other than statutory liens for
Taxes not yet due and payable and liens for real estate taxes being contested in
good faith). Neither the Company nor any of the Subsidiaries is a party to, is
bound by or has any obligation under, a tax sharing or tax allocation agreement
or arrangement for the allocation, apportionment, sharing, indemnification or
payment of taxes. Neither the Company nor any of the Subsidiaries has filed a
consent pursuant to Section 341(f) of the Internal Revenue Code of 1986, as
amended (the "Code") nor has any such corporation agreed to have Section
341(f)(2) of the Code applied to any disposition of a Subsection (f) asset (as
such term is defined in Section 341(f)(4) of the Code). The Company has
delivered to Parent true and correct copies of all federal and state income tax
returns of the Company and the Subsidiaries for the last five complete fiscal
years.
4.9. TERMINATION, SEVERANCE AND EMPLOYMENT AGREEMENTS. Section 4.9 of the
Disclosure Letter contains a complete and accurate list of each (a) written
employment or severance agreement to which the Company or any Subsidiary is a
party; and (b) written agreement, plan or arrangement to which the Company or
any Subsidiary is a party under which any person may receive payments that may
be subject to tax imposed by Section 4999 of the Code or included in the
determination of such person's "parachute payment" under Section 280G of the
Code. Except as set forth in Section 4.9 of the Disclosure Letter, since
December 31, 1998, neither the Company nor any of the Subsidiaries has entered
into or amended any written employment or severance agreement with any director,
officer or other employee of the Company or any of the Subsidiaries or granted
any severance or termination pay to any director, officer or employee of the
Company or any of the Subsidiaries.
4.10. EMPLOYEE BENEFIT PLANS; ERISA.
(a) Neither the Company nor any Subsidiary maintains, administers, contributes
to or has any liability under, and has not maintained, administered, contributed
to or had any liability under any: employee pension benefit plan (as defined in
Section 3(2) of the Employment Retirement Income Security Act of 1974, as
amended ("ERISA")) ("Pension Plan") (including any multiemployer plan as defined
in Section 3(37) or 4001(a)(3) of ERISA ("Multiemployer Plan")); employee
welfare benefit plan (as defined in Section 3(1) of ERISA) ("Welfare Plan"); or
bonus, stock, stock purchase, or stock option plan, deferred compensation plan,
severance plan, salary continuation, vacation, sick leave, fringe benefit,
incentive, insurance, welfare or similar plan or arrangement ("Employee Benefit
Plan") other than those Pension Plans, Welfare Plans and Employee Benefit Plans
described in Section 4.10(a) of the Disclosure Letter. The Pension Plans,
Welfare Plans and Employee Benefit Plans (whether or not listed in any part of
the Disclosure Letter) shall be collectively referred to herein as the "Plans".
<PAGE> A-13
(b) None of (i) the Company, (ii) any Subsidiary or (iii) any other corporation
or business which is now or at the relevant time was an affiliate of the Company
or a Subsidiary, as determined under Section 414(b), (c), (m) or (o) of the Code
(an "ERISA Affiliate"), (i) maintains, administers, contributes to or has any
liability under any Pension Plan subject to the minimum funding standards set
forth in Section 412 of the Code or subject to Title IV of ERISA; or (ii) has
ever maintained, administered, contributed to or had any liability under any
Pension Plan subject to either the Code Section 412 minimum funding standards or
Title IV of ERISA, other than a terminated Pension Plan as to which all
liabilities have been satisfied in full.
(c) Except as set forth in Section 4.10(c) of the Disclosure Letter, all Plans
and related trusts, insurance contracts or other funding arrangements have been
maintained and administered in all material respects in compliance with each
applicable provision of ERISA, the Code, other federal statutes, state law
(including, without limitation, state insurance law) and the regulations and
rules promulgated pursuant thereto or in connection therewith. Without limiting
the generality of the preceding sentence, no Plan fiduciary who is or was an
officer or employee of the Company or who is or was otherwise affiliated with
the Company has engaged in a prohibited transaction or other wrongdoing in
respect of any Plan. Each Pension Plan which is intended to be qualified under
Code Section 401(a) has been administered in material compliance with such
requirements and has received a post-Tax Reform Act of 1986 determination letter
from the IRS that such Pension Plan satisfies the requirements of Section 401(a)
of the Code.
(d) All contributions to Plans (including both employee and employer
contributions) which are required to have been made, whether by virtue of the
terms of the particular plan or arrangement or by operation of law, have been
made by the due date thereof (including all applicable extensions). Without
limiting the foregoing, contributions with respect to all current Plan years
(i.e., from the first day of the current plan year to the Closing Date) shall be
made or accrued prior to the Closing Date by Company and/or the Subsidiaries, as
applicable, with respect to each Pension Plan. With respect to all other
Welfare Plans and Employee Benefit Plans, all required (in accordance with plan
terms and past practice) payments, premiums, contributions, reimbursements or
accruals for all periods ending prior to or as of the Closing Date shall have
been made or properly accrued on the financial statements. None of the Plans
has any material unfunded liabilities which are not reflected on the financial
statements of the Company. Except as set forth in Section 4.10(d) of the
Disclosure Letter, neither the Company nor any of the Subsidiaries has any
plans, programs, arrangements or made any other commitments to its employees,
former employees or their beneficiaries under which it has any obligation to
provide any retiree or other employee benefit payments which are not adequately
funded through a trust, insurance or other funding arrangement. There have been
no changes in the operation or interpretation of any of the Plans since the most
recent annual report which would have any material effect on the cost of
operating or maintaining such Plans.
(e) The Company has provided to Parent true and complete copies of: (i) the
plan documents and any related trusts or funding vehicles, policies or contracts
and the related summary plan descriptions with respect to each Plan; (ii) any
pending applications, filings or notices with respect to any of the Plans with
the IRS, the pension Benefit Guaranty Corporation, the Department of Labor or
any other governmental agency; (iii) the last two financial statements and
annual reports for each of the Plans and related trusts or funding vehicles,
policies or
<PAGE> A-14
contracts as of the end of the most recent plan year with respect to
which the filing date for such information has passed; and (iv) all corporate
resolutions or other documents pertaining to the adoption of the Plans or any
amendments thereto. As to each Plan which provides health or medical benefits or
which provides uninsured benefits not prefunded through a trust, the Company has
provided true and complete information to Parent regarding the following: (i)
the amount of annual claims under each Plan for the past three (3) fiscal years,
(ii) pending claims under each Plan, (iii) anticipated claims with respect to
events which have occurred prior to the date hereof and with respect to which
the Company has received notice from third parties or otherwise is aware of and
any other information known to the Company which the Company could reasonably
provide to Parent to enable Parent to evaluate the Company's or a Subsidiary's
potential liability under each Plan.
(f) There are no pending or, to the Company's or any Subsidiary's knowledge,
threatened claims, lawsuits or arbitration asserted or instituted against any of
the Plans (or against the Company or any Subsidiary with respect to a Plan) by
any employee or beneficiary covered under any Plans or otherwise involving any
Plans (other than routine claims for benefits); and the Company and the
Subsidiaries have no knowledge of any facts which would give rise to or could
reasonably be expected to give rise to any such claims, lawsuits or
arbitrations.
(g) Except as provided for in this Agreement or as disclosed in Section 4.9 or
4.10(g) of the Disclosure Letter, the consummation of the transactions
contemplated by this Agreement will not (i) entitle any current or former
director, officer or employee of the Company, any Subsidiary or any ERISA
Affiliate to severance pay, unemployment compensation or any other payment or
increased benefit, or (ii) accelerate the time of payment or vesting or increase
the amount of compensation or benefit due any such director, employee or
officer.
(h) No governmental agency has initiated an examination, audit or investigation
of a Plan which has not been completed without a finding of Company liability
and without a Company obligation to take corrective action(s).
(i) No Pension Plan provides for any optional form of benefit protected under
Section 411(d)(6) of the Code and the regulations thereunder which is not
expressly set forth in the current plan document.
(j) Neither the Company nor any Subsidiary maintains any plan or arrangement
which provides for retiree health or other welfare benefits, except as required
by COBRA.
(k) Neither the Company nor any Subsidiary currently or in the past participated
in a Multiemployer Plan.
4.11. ENVIRONMENTAL MATTERS. Except as set forth in the SEC Documents, each of
the Company and the Subsidiaries has been and presently is in compliance in all
material respects with all applicable Environmental Laws (as hereinafter
defined). No asbestos in a friable condition, equipment containing
polychlorinated biphenyls, or leaking underground or above-ground storage tanks
are contained in
<PAGE> A-15
or located at any facility currently owned, leased or
controlled by the Company or any of the Subsidiaries, nor was any of the
foregoing contained in or located at any facility previously owned, leased or
controlled by the Company or any of the Subsidiaries during the period of such
ownership, tenancy or control. Neither the Company nor any Subsidiary has
released, discharged or disposed of on, under or about any facility currently or
previously owned, leased or controlled by the Company or any of the
Subsidiaries, any Hazardous Substances, and to the Company's knowledge, no third
party has released, discharged or disposed of on, under or about any facility
currently or previously owned, leased or controlled by the Company or any of the
Subsidiaries, any Hazardous Substances, except in each case for quantities of
cleaning, pest control and office supplies and other chemicals used in the
ordinary course of business and used and stored in compliance with applicable
Environmental Laws, or ordinary rubbish, debris and non-hazardous solid waste
stored in garbage cans or bins for regular disposal off-site, or petroleum
contained in, and de minimis quantities discharged from, motor vehicles in their
ordinary operation on real property owned, used or leased by the Company and the
Subsidiaries. Neither the Company nor any of the Subsidiaries has received
notice of any past or present events, conditions, circumstances, activities,
practices, incidents, actions or plans of the Company or the Subsidiaries that
have resulted in or could reasonably be expected to result in any common law or
legal liability, or otherwise form the basis of any claim, action, suit,
proceeding, hearing or investigation under, any applicable Environmental Laws
and there is no pending civil or criminal litigation, notice of violation or
administrative proceeding involving the Company or any of the Subsidiaries and
relating in any way to any Environmental Law. For purposes of this Section
4.11, (a) "Environmental Laws" mean applicable federal, state, local and foreign
laws, regulations and codes relating in any respect to pollution or protection
of the environment and (b) "Hazardous Substances" means any toxic, caustic, or
other substance listed or regulated under federal, state or local environmental
statutes, rules, ordinances, or Orders, including (i) "hazardous substance" as
defined in 42 U.S.C. Section 9601, and (ii) petroleum products, derivatives,
byproducts and other hydrocarbons.
4.12. ASSETS; REAL PROPERTY; INTELLECTUAL PROPERTY.
(a) Each of the Company and each Subsidiary owns or has rights to use all assets
(tangible and intangible) necessary to permit it to conduct its business as it
is currently being conducted. Except as disclosed in Section 4.12(a) of the
Disclosure Letter, the Company and each Subsidiary has good and marketable title
to each item of its property (other than Real Property) owned by it, free and
clear of all liens, other than Permitted Liens. The term "Permitted Liens" shall
mean (i) liens or encumbrances for water, sewage and similar charges and current
taxes and assessments not yet due and payable or being contested in good faith,
(ii) mechanics', carriers', workers', repairers', materialmen's, warehousemen's
and other similar liens or encumbrances arising or incurred in the ordinary
course of business, (iii) liens, encumbrances, mortgages and security interests
arising or resulting from any action taken by Parent or Buyer, (iv) liens,
encumbrances, mortgages and security interests of record or securing
indebtedness described in the SEC Documents and (v) easements, rights of way,
restrictions and other similar charges or encumbrances that do not materially
interfere with the ordinary conduct of the business or the Company or any of the
Subsidiaries.
(b) Section 4.12(b) of the Disclosure Letter contains an accurate list and
general description of all real property owned or leased by the Company or any
of the Subsidiaries ("Real Property"), together with a list of all leases or
other agreements, and all amendments thereto, under which the Company or any
Subsidiary has any interest or estate in real property.
<PAGE> A-16
The Company and the
Subsidiaries have good and marketable title to the Real Property they
respectively own, free and clear of all mortgages, covenants, conditions,
restrictions, easements, liens, security interests, charges, claims, assessments
and encumbrances, except for (i) rights of lessors, lessees or sublessees in
such matters that are reflected in a written lease; (ii) current taxes
(including assessments collected with taxes) not yet due and payable; (iii)
encumbrances, if any, that are not substantial in character, amount or extent or
that do not materially detract from the value, or interfere with present use of
the property subject thereto or affected thereby; and (iv) other matters as
described in Section 4.12(b) of the Disclosure Letter. The Company and the
Subsidiaries have valid leasehold interests in the Real Property they
respectively lease, free and clear of all mortgages, liens, security interest,
charges, claims, assessments and encumbrances, except for (i) claims of lessors,
co-lessees or sublessees in such matters as are reflected in a written lease;
(ii) title exceptions affecting the fee estate of the lessor under such leases;
and (iii) other matters as described in Section 4.12(b) of the Disclosure
Letter. Except as set forth in Section 4.12(b) of the Disclosure Letter, the
Company and the Subsidiaries enjoy quiet possession under all leases to which
either is the lessee and all of such leases are valid and in full force and
effect. The Company has not received notice of and does not otherwise have
knowledge of any condemnation, requisition or taking by any public authority of
all or any portion of the Real Property. All of the buildings, fixtures and
other improvements constituting a part of any Real Property are in good
operating condition and repair, normal wear and tear excepted.
(c) As used herein, "Intellectual Property" shall mean all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations, continuations-in-
part, revisions, extensions and reexaminations thereof, trademarks, service
marks, trade dress, logos, trade names and corporate names, together with all
translations, adaptations, derivations and combinations thereof and including
all goodwill associated therewith, and all applications, registrations and
renewals in connection therewith, copyrightable works, all copyrights and all
applications, registrations and renewals in connection therewith, mask works and
all applications, registrations and renewals in connection therewith, trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information and business and
marketing plans and proposals), proprietary software, proprietary rights and
copies and tangible embodiments thereof (in whatever form or medium). Except as
set forth on Section 4.12(c) of the Disclosure Letter, neither the Company nor
any Subsidiary has licensed or encumbered any of its Intellectual Property to
any third-party, nor have any other distribution rights been granted by the
Company or any Subsidiary to a third-party. Except as set forth on Section
4.12(c) of the Disclosure Letter, the Company has not entered into any agreement
which restricts or affects the use and/or location of use of any of its
Intellectual Property.
(d) Except as identified in Section 4.12(d) of the Disclosure Letter (i) each
trademark registration included in the Intellectual Property exists and is owned
by the Company or the Subsidiaries and has been maintained in good standing;
(ii) each patent and application included in the Intellectual Property exists,
is owned by or licensed to the Company or one of the Subsidiaries, and has been
maintained in good standing; (iii) each copyright registration included
<PAGE> A-17
in the Intellectual Property exists and is owned by the Company or the
Subsidiaries; or(iv) to the Company's knowledge, no other firm, corporation,
association or person claims the right to use in connection with similar or
related goods and in any geographic area, any mark, logo, name, symbol, device,
or slogan which is identical or confusingly similar to any of the trademarks
included in the Intellectual Property or which could serve to dilute the
distinctiveness of such trademarks.
4.13. SYSTEMS AND SOFTWARE; YEAR 2000.
(a) Each of the Company and the Subsidiaries owns or has the right to use
pursuant to lease, license, sublicense, agreement, or permission all computer
hardware, software and information systems necessary for the operation of the
businesses of the Company and the Subsidiaries as presently conducted
(collectively, "Systems"). To the Company's knowledge, each System owned or
used by the Company or the Subsidiaries immediately prior to the Effective Time
will be owned or available for use by the Company or the Subsidiaries on
identical terms and conditions immediately subsequent to the Effective Time.
With respect to each System owned by a third party and used by the Company or
the Subsidiaries pursuant to lease, license, sublicense, agreement or
permission, to the Company's knowledge: (a) the lease, license, sublicense,
agreement, or permission covering the System is legal, valid, binding,
enforceable, and in full force and effect; (b) the lease, license, sublicense,
agreement, or permission will continue to be legal, valid, binding, enforceable,
and in full force and effect on identical terms following the Effective Time;
(c) no party to any such lease, license, sublicense, agreement, or permission is
in breach or default, and no event has occurred which with notice or lapse of
time would constitute a breach or default or permit termination, modification,
or acceleration thereunder; and (d) no party to any such lease, license,
sublicense, agreement, or permission has repudiated any provision thereof.
(b) To the Company's knowledge, the Company and the Subsidiaries have taken
reasonable and practicable steps to identify, address and remediate problems of
(a) all software, hardware and Systems material to the business of the Company
and each Subsidiary and (b) software and systems of all customers, suppliers and
vendors that are material to the business of the Company and each Subsidiary
(including systems and equipment with which each such person's systems
interface) relating to Year 2000 Compliance (as hereinafter defined). Except
for such remediation as may be necessary, the cost of which will not result in
any Material Adverse Effect, the computer and management information systems of
the Company and each Subsidiary are and, with ordinary course upgrading and
maintenance, will continue to be sufficient to permit the Company and each
Subsidiary to conduct its respective businesses in a manner consistent with past
practice. As used herein, the term "Year 2000 Compliance" means, with respect
to a person, that all software, hardware, and systems utilized by or material to
the business operations or financial condition of that person will properly
perform date sensitive functions before, during and after the year 2000.
4.14. LABOR MATTERS. The Company has provided or made available to Parent a
true and complete list of all current employees of the Company and the
Subsidiaries together with each employee's age, tenure with the Company or
Subsidiary, title or job classification, and the current annual rate of
compensation anticipated to be paid to each such employee. Section 4.14(b) of
the Disclosure Letter sets forth the names of all employees subject to
<PAGE> A-18
employment agreements with the Company whose employment with the Company has
terminated either voluntarily or involuntarily since January 1, 1996. Except as
set forth in Section 4.14(b) of the Disclosure Letter, there are no unfair labor
practice complaints, strikes, slowdowns, stoppages or other controversies
pending or, to the knowledge of Company attempts to unionize or controversies
threatened between Company or any Subsidiary, or relating to, any of their
employees that are likely to have a Material Adverse Effect. None of the
Company or any Subsidiary is a party to any collective bargaining agreement with
respect to any of their employees. The Company and the Subsidiaries have
complied in all material respects with all applicable federal and state statutes
and regulations which govern the employment of labor, workers' compensation,
equal employment opportunity and equal pay, including, but not limited to, all
civil rights laws, Presidential Executive Order 1124, and the Fair Labor
Standards Act of 1938, as amended and the Americans with Disabilities Act.
4.15. AGREEMENTS. Section 4.15 of the Disclosure Letter sets forth a true and
correct list of all contracts, agreements, warranties, guaranties, indentures,
bonds, options, leases, subleases, easements, mortgages, plans, licenses,
commitments or binding arrangements of any nature whatsoever, express or
implied, written or unwritten, and all amendments thereto ("Contracts"), entered
into or binding upon the Company or any Subsidiary or to which any property of
the Company or any Subsidiary may be subject now in effect except (i) any
Contract which is required by any other Section of this Agreement to be
specifically identified anywhere in the Disclosure Letter or which would be
required to be disclosed therein but for specific exemptions contained in those
other Sections; (ii) purchase or sales orders made in the ordinary course of
their business and not involving a commitment for a duration greater than six
months or an aggregate amount in excess of $250,000; (iii) any other Contract
made in the ordinary course of their business and not providing for a duration
in excess of six months or involving aggregate payments or potential liabilities
in excess of $250,000, and (iv) any other Contract filed as an Exhibit to any
SEC Document. Except as disclosed in Section 4.15 of the Disclosure Letter, as
of the date hereof: (i) each Contract which is required to be identified
anywhere in the Disclosure Letter by the terms and provisions of this Agreement
("Company Material Contracts") is to the knowledge of the Company the valid and
binding obligation of the other contracting party enforceable in all material
respects in accordance with its terms against the other contracting party and is
in full force and effect except as is not reasonably likely, individually or in
the aggregate to have a Material Adverse Effect, (ii) the Company or the
relevant Subsidiary has fulfilled all material obligations required pursuant to
each Company Material Contract to have been performed by it prior to the date
hereof, and to the knowledge of the Company, the Company or the relevant
Subsidiary will be able to fulfill, when due, all of its obligations under each
Company Material Contract which remain to be performed after the date hereof,
(iii) no other contracting party to any Company Material Contract is now in
material breach thereof or has breached the same in any material respect within
the twelve-month period prior to the date hereof; to the knowledge of the
Company, there are not now, nor have there been in the twelve-month period prior
to the date hereof, any material disagreements or disputes between the Company
or its relevant Subsidiary and any other party to any Company Material Contract
relating to the validity or interpretation of such Company Material Contract or
to the performance by any party thereunder, (iv) neither the Company nor any
Subsidiary is a party to, nor bound by, any Contract, or any provision of its
Articles or Certificate of Incorporation or bylaws which restricts the conduct
of its business anywhere in the world, and neither the Company nor any
Subsidiary is under any material liability or obligation with respect to the
<PAGE> A-19
return of inventory or products sold by the Company or any Subsidiary which are
in the possession of distributors, wholesalers, retailers or customers. To the
Company's knowledge, no event has occurred which gives rise to any
indemnification claim by the Company under the RPI Purchase Agreement or that
certain Merger Agreement, dated January 23, 1998, among the Company, Silicon
Energy Corporation and the sellers named therein.
4.16. INSURANCE. Section 4.16 of the Disclosure Letter sets forth a true and
correct list of all policies or binders of fire, liability, workers'
compensation, vehicular or other insurance held by or on behalf of the Company
or any of the Subsidiaries specifying the insurer, the policy number or covering
note number with respect to binders, and describing each pending claim
thereunder of more than $50,000. Such policies and binders are in full force
and effect and are in all material respects in accordance with the customary
insurance requirements for the industry of the Company and each of the
Subsidiaries and in compliance with all applicable laws and Orders. Neither the
Company nor any of the Subsidiaries is in any material respect in default, nor
since January 31, 1997 has it ever been in any material respect in default, with
respect to any provision contained in any such policy or binder or has failed to
give any notice or present any claim under any such policy or binder in due and
timely fashion. There are no outstanding unpaid claims under any such policy or
binder. Since January 31, 1997, neither the Company nor any of the Subsidiaries
has received a notice of cancellation or non-renewal of any such policy or
binder. Since January 31, 1997, neither the Company nor any of the Subsidiaries
has been refused any insurance with respect to its properties or operations, nor
has its insurance coverage ever been limited.
4.17. SUPPLIERS AND CUSTOMERS. Section 4.17 of the Disclosure Letter is a
correct and current list of all suppliers and customers of the Company or any of
the Subsidiaries from whom such corporation purchased or who purchased more than
$250,000 of products or services from the Company or such Subsidiary during the
last fiscal year, together with summaries of the sales made to each such
customer during the Company's and such Subsidiary's last fiscal year. Except as
disclosed in Section 4.17 of the Disclosure Letter, no single supplier or
customer of the Company or any of the Subsidiaries is of material importance to
the Company or such Subsidiaries.
4.18. BOOKS AND RECORDS. The Company has heretofore furnished or made available
Parent for its examination the following, each of which is accurate and complete
in all material respects: (i) the minute books of the Company and each of its
corporate Subsidiaries containing all proceedings, consents, actions and
meetings of their respective stockholders and Boards of Directors, (ii) copies
of all agreements and documents referred to in the Disclosure Letter, and all
other books and records of the Company and each of the Subsidiaries. Section
4.18 of the Disclosure Letter contains an accurate list of all of the incumbent
officers and directors of the Company and each Subsidiary.
4.19. BANKING FACILITIES. Section 4.19 of the Disclosure Letter contains a true
and complete list of: (i) each bank, savings and loan or similar financial
institution in which the Company or any of the Subsidiaries has an account or
safety deposit box and the numbers of the accounts or safety deposit boxes
maintained by the Company or such Subsidiary thereat, and (ii) the names of all
persons authorized to draw on each such account or to have access to any such
<PAGE> A-20
safety deposit box facility, together with a description of the authority (and
conditions thereof, if any) of each such person with respect thereto.
4.20. DELAWARE SECTION 203. The provisions of Section 203 of the DGCL will not
apply to this Agreement, as it may be amended from time, to time or any of the
transactions contemplated hereby. The Company has heretofore delivered to
Parent a complete and correct copy of the resolutions of the Board of Directors
of the Company to the effect that pursuant to Section 203(a)(1) of the DGCL, the
restrictions contained in Section 203 of the DGCL are and shall be inapplicable
to the Merger and the transactions contemplated by this Agreement, as it may be
amended from time to time.
4.21. BROKER'S FEES. Neither the Company, nor any of the Subsidiaries nor any
of their respective directors or officers has incurred any direct or indirect
liability for any broker's fees, commissions, or financial advisory or finder's
fees in connection with any of the transactions contemplated by this Agreement,
and neither the Company, any of the Subsidiaries nor any of their respective
directors or officers has employed any other broker, finder or financial advisor
in connection with any of the transactions contemplated by this Agreement.
4.22. REPRESENTATIONS AND WARRANTIES. None of the information contained in the
representations and warranties of the Company set forth in this Agreement or in
any certificate delivered to Parent or Buyer as contemplated by this Agreement
contains any untrue statement of a material fact or omits or will omit to state
a material fact necessary to make the statements contained herein or therein not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER
Each of Parent and Buyer, jointly and severally, represents and warrants to the
Company, as to itself, as follows:
5.1. ORGANIZATION. It is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation and it has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. True and complete copies
of the Certificate of Incorporation and Bylaws of Buyer have been made available
to the Company.
5.2. AUTHORITY. It has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
approved by its Board of Directors and its stockholders to the extent required
by applicable law and its certificate of incorporation and no other corporate
proceedings are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by it and constitutes its legal, valid and binding
agreement, enforceable against it in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar applicable laws affecting creditors' rights generally or
by general equitable principles affecting the enforcement of contracts.
<PAGE> A-21
5.3. NO VIOLATIONS; CONSENTS AND APPROVALS
(a) Neither the execution nor delivery by it of this Agreement nor the
consummation by it of the transactions contemplated herein or therein will: (i)
violate any provision of its Certificate or Articles of Incorporation, bylaws or
other charter documents; (ii) violate in any material respect any applicable law
or Order; or (iii) constitute a violation of or a default under any Contract to
which it is a party, excluding from the foregoing clauses (i) through (iii),
violations, defaults, rights and losses which would not, individually or in the
aggregate, prevent the consummation of any of the transactions contemplated
hereby.
(b) No filing or registration with, notification to, or authorization, consent
or approval of, any governmental authority is required by it in connection with
the execution and delivery of this Agreement, or the consummation by it of the
transactions contemplated hereby, except (i) in connection, or in compliance,
with the provisions of the Exchange Act, (ii) the filing of the Certificate of
Merger with the Delaware Secretary of State, (iii) the filing of Notification
and Report forms under the HSR Act with the FTC and the DOJ with respect to the
transactions contemplated herein and (iv) such filings and consents as may be
required under any Environmental Law pertaining to any notification, disclosure
or required approval triggered by the Merger or the transactions contemplated by
this Agreement.
5.4. BROKER'S FEES. It does not have any direct or indirect liability for any
broker's fees, commissions, or financial advisory or finder's fees in connection
with any of the transactions contemplated by this Agreement which will have the
effect of reducing the Merger Price.
5.5. REPRESENTATIONS AND WARRANTIES. None of the information contained in its
representations and warranties set forth in this Agreement or in any certificate
delivered to the Company as contemplated by this Agreement contains any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.
ARTICLE VI
COVENANTS
6.1. CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated by this
Agreement or as expressly agreed to in writing by Parent, during the period from
the date hereof to the Effective Time, the Company shall conduct its business
and shall cause the businesses of the Subsidiaries to be conducted, only in, and
the Company and the Subsidiaries shall not take any action except in, the
ordinary course of business consistent with past practice; and the Company
shall, and shall cause each Subsidiary, to use its best commercial efforts (i)
to preserve its business and organization intact, (ii) to keep available to
Parent and Buyer the services of its present officers, employees, agents and
independent contractors and (iii) to preserve for the benefit of Parent and
Buyer the goodwill of its suppliers, customers, landlords and others having
business relations with it. Without limiting the generality of the foregoing,
and except as otherwise expressly provided in this Agreement, prior to the
Effective Time, the Board will not, without the prior written consent of Parent,
permit the Company or any of the Subsidiaries to:
<PAGE> A-22
(a) amend its certificate or articles of incorporation or bylaws (or similar
constituent documents);
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue,
sell or deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class or any other securities or equity equivalents (including, without
limitation, any stock options or stock appreciation rights), except for shares
of Company Common Stock issued upon exercise of Options outstanding as of the
date of this Agreement (in accordance with their respective terms), or amend any
of the terms of any such securities or agreements outstanding as of the date
hereof, except as specifically contemplated by this Agreement;
(c) split, combine or reclassify any shares of its capital stock, declare, set
aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock, or redeem
or otherwise acquire any of its securities or any securities of the
Subsidiaries;
(d) (i) incur, assume or prepay any long-term or short-term debt (except for
the intercompany indebtedness set forth on Section 6.1(d) of the Disclosure
Letter or short-term indebtedness not to exceed $500,000 in the aggregate) or
issue any debt securities; (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for any
obligations of any other person; (iii) make any loans, advances or capital
contributions to, or investments in, any other entity (other than customary
loans or advances to employees in the ordinary course of business consistent
with past practice); (iv) pledge or otherwise encumber shares of capital stock
of the Company or any of the Subsidiaries; or (v) mortgage or pledge any of its
assets, tangible or intangible, or create or suffer to exist any lien or other
encumbrance thereupon, excluding Permitted Liens and liens and other
encumbrances existing on the date hereof;
(e) except as may be required by law or as contemplated by this Agreement, enter
into, adopt or amend or terminate any bonus, profit sharing, compensation,
severance, termination, stock option, stock appreciation right, restricted
stock, performance unit, stock equivalent, stock purchase agreement, stock
ownership plan, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund or other
arrangement for the benefit or welfare of any director, officer or employee in
any manner, or (except for normal increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not result in a
material increase in benefits or compensation expense to the Company, and as
required under existing agreements) increase in any manner the compensation or
fringe benefits of any director, officer or employee or pay any benefit or make
any special or extraordinary payment to any person not required by any plan and
arrangement as in effect as of the date hereof (including, without limitation,
the granting of stock options, stock appreciation rights or performance units);
(f) lease any assets (other than in the ordinary course of business and
consistent with past practice) or acquire, sell, or dispose of any assets
outside the ordinary course of business or any assets which in the aggregate are
material to the Company or the Subsidiaries, or enter into any commitments,
contracts, agreements or transactions outside the ordinary course of business
<PAGE> A-23
consistent with past practice or which would, individually or in the aggregate,
be material to the Company or the Subsidiaries, or modify, amend, terminate or
waive any material rights under any contract or agreement;
(g) except as may be required as a result of a change in law or in generally
accepted accounting principles, change its fiscal year or any of the accounting
principles or practices used by it;
(h) (i) acquire (by merger, consolidation, or acquisition of stock or assets)
any corporation, partnership or other business organization or division thereof
or any equity interest therein; (ii) except as contemplated by this Agreement,
enter into any contract or agreement other than in the ordinary course of
business consistent with past practice which would be material to the Company or
the Subsidiaries; or (iii) enter into or amend any contract, agreement,
commitment or arrangement providing for the taking of any action that would be
prohibited hereunder;
(i) revalue in any material respect any of its assets, including, without
limitation, writing down the value of inventory or writing-off notes or accounts
receivable other than in the ordinary course of business or in accordance with
United States generally accepted accounting principles or Regulation S-X;
(j) make any tax election or settle or compromise any federal, state or local
tax liability or assent to the extension of time for collection or assessment of
any federal, state or local tax;
(k) pay, discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business of
liabilities reflected or reserved against in, or contemplated by, the Financial
Statements (or the notes thereto) or incurred in the ordinary course of business
consistent with past practice;
(l) settle or compromise any pending or threatened suit, action or claim
relating to the transactions contemplated hereby or material to the Company or
any of the Subsidiaries;
(m) authorize or make any capital expenditure other than those described in
Section 6.1(m) of the Disclosure Letter or those made in the ordinary course of
business, which expenditures shall not, in any event, individually exceed
$100,000 or in the aggregate exceed $500,000; or
(n) take, or agree in writing or otherwise to take, any of the actions described
in Sections 6.1(a) through 6.1(m) hereof or, except as contemplated by this
Agreement, take, or omit to take, any action which would make any of the
representations or warranties of the Company contained in this Agreement untrue
or incorrect in any material respect as of the date when made.
<PAGE> A-24
6.2. NO SOLICITATION.
(a) The Company shall, and shall direct its officers, directors, employees,
representatives and agents (including, without limitation, its attorneys,
investment bankers and accountants) to, refrain from any discussions and
negotiations with any parties other than Parent and Buyer with respect to any
proposal relating to an Acquisition Transaction. The Company agrees that, prior
to the Effective Time, it shall not, and shall not authorize or permit any of
the Subsidiaries or any of its or the Subsidiaries' directors, officers,
employees, agents or representatives (including, without limitation, its
attorneys, investment bankers and accountants), directly or indirectly, to
solicit, initiate or encourage (including by way of furnishing or disclosing
non-public information) any inquiries or the making of any proposal with respect
to a merger, consolidation or other business combination involving the Company
or the Subsidiaries or acquisition of more than 50% of the assets of the Company
and the Subsidiaries taken as a whole or the issuance, sale, disposition of
(including by way of merger, consolidation, share exchange or similar
transaction) securities representing 50% or more voting control of the Company
(other than securities issued pursuant to Options existing as of the date
hereof) (an "Acquisition Transaction") or initiate, negotiate, explore or
otherwise engage in substantive communications in any way with any person (other
than Buyer, Parent and their directors, officers, employees, agents and
representatives) with respect to any Acquisition Transaction, including, without
limitation, waiving its right of first refusal, under the Stock Purchase
Agreement, dated November 15, 1996, among Majority Shareholder, New World Power
Corporation and the Company, to purchase all shares of Company Common Stock that
Majority Shareholder and its subsidiaries may from time to time propose to sell
(the "Company Right of First Refusal"), or enter into any agreement, arrangement
or understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by this Agreement.
Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
the Company or the Board from furnishing non-public information to, or entering
into discussions or negotiations with, any person in connection with an
unsolicited bona fide written proposal for an Acquisition Transaction by such
person or recommending an unsolicited bona fide written proposal for an
Acquisition Transaction to the stockholders of the Company, if and only to the
extent that (A) the Board believes in good faith (after consultation with its
financial adviser) that such proposal for an Acquisition Transaction would, if
consummated, result in a transaction more favorable to the Company's
stockholders from a financial point of view than the transactions contemplated
by this Agreement (a "Superior Proposal"), and (B) prior to furnishing such non-
public information to, or entering into discussions with, such person, the Board
receives from such person an executed confidentiality agreement, with terms no
more favorable to such party than those contained in the Letter Agreement re
Confidentiality, dated February 5, 1999, between Parent and the Company. Nothing
in this Agreement shall prevent the Company from complying with the provisions
of Rule 14e-2 promulgated under the Exchange Act with respect to an Acquisition
Transaction.
(b) The Company shall immediately advise Parent and Buyer in writing of the
receipt of any inquiries or proposals relating to an Acquisition Transaction,
including the terms of any such inquiries or proposals, and the actions taken by
the Company or its agents or representatives with respect thereto, and the
Company shall provide Parent with all non-public information to be provided to
the person making such inquiry or proposal which Parent has not previously
received
<PAGE> A-25
from the Company, and the Company shall keep Parent informed, on a
daily or more regular basis if the context requires or Parent so requests, of
the status of such inquiries and proposals.
6.3. ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) From the date of this Agreement until the Effective Time, the Company will
give Parent and Buyer and their authorized representatives (including counsel,
consultants, financial advisors, accountants, banks, financial institutions and
auditors), full access during normal business hours to all properties,
facilities, personnel and operations and to all books and records of the Company
and the Subsidiaries, will permit Parent and Buyer and their authorized
representatives to make such inspections as it may reasonably request and will
cause its officers and those of the Subsidiaries to furnish Parent and Buyer and
their authorized representatives with such financial and operating data and
other information with respect to its business and properties as Parent and
Buyer or such representatives may from time to time request; provided, that, any
such inspections and examinations shall be conducted at reasonable times and
under reasonable circumstances in a manner not disruptive to the Company's day-
to-day operations. The Company shall give Parent and Buyer and their authorized
representatives full and reasonable access to the Company's management and the
Company shall permit Parent and Buyer to approach and negotiate with any or all
employees of the Company and each Subsidiary, including, but not limited to,
managerial staff, in an effort to persuade them to continue in the employ of the
Company and each Subsidiary pending the Closing and thereafter, and the Company
shall use commercially reasonable efforts to assist Parent and Buyer in such
negotiations. No investigation by Parent or Buyer shall, however, diminish or
obviate in any way, or affect the right of Parent or Buyer to rely upon, any of
the representations, warranties, covenants or agreements of the Company
contained in this Agreement or in any other Company Agreement.
(b) Each of Parent and Buyer agrees to keep confidential and not divulge to any
other party or person (other than to the employees, attorneys, accountants and
consultants of each who have a need to receive such information and other than
as may be required by law or the rules of the Nasdaq Market) any information
received from the Company, unless and until such documents and other information
otherwise becomes publicly available. In the event of termination of this
Agreement for any reason, each of Parent and Buyer shall promptly return, or at
the election of the Company, destroy all non-public documents obtained from the
Company and any copies or notes of such documents (except as otherwise required
by law) and, upon the request of the Company, confirm such destruction to the
Company in writing.
6.4. REASONABLE BEST EFFORTS; OTHER ACTIONS. Subject to the terms and
conditions herein provided and applicable law, each of the Company, Parent and
Buyer shall use its reasonable best efforts promptly to take, or cause to be
taken, all other actions and do, or cause to be done, all other things
necessary, proper or appropriate under applicable laws and regulations to
consummate and make effective the Merger and all other transactions contemplated
by this Agreement, including, without limitation, using such reasonable best
efforts to (a) obtain and file, as applicable, all consents, permits and
approvals from and filings with any governmental authorities, nongovernmental
self-regulatory agencies and from parties to any Company Material Contract which
may be required in connection with the lawful consummation of the transactions
contemplated hereby or the continuance of such Company Material Contract
<PAGE> A-26
after the Closing Date, (b) substitute Parent as guarantor in the place and
stead of Majority Shareholder or Majority Shareholder's sole shareholder, as the
case may be, under the guaranties set forth in Section 6.4(b) of the Disclosure
Letter, and (c) lift any legal bar to the Merger. If any "fair price,"
"moratorium," "control share acquisition" or other form of antitakeover statute,
regulation, charter provision or contract is or becomes applicable to the
transactions contemplated by this Agreement, the Company will use its reasonable
best efforts to grant such approvals and take such actions as are necessary
under such laws, provisions or contracts so that the transactions contemplated
by this Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise act to eliminate or minimize the
effects of such statute, regulation, provision or contract on the transactions
contemplated by this Agreement.
6.5. PUBLIC ANNOUNCEMENTS AND OTHER COMMUNICATIONS.
(a) Neither the Company, on the one hand, nor Parent or Buyer, on the other,
shall issue any press release or otherwise make any public statements with
respect to this Agreement or the Merger without the prior written consent of the
other, which consent shall not be unreasonably withheld; provided, that the
foregoing shall not preclude any press release or public statement by the
Company, on the one hand, or Parent or Buyer, on the other, required by
applicable law or any obligations pursuant to any listing agreement with any
national securities exchange so long as the party issuing a press release or
making a public statement uses its best efforts to allow the other party to
review and comment on such release or statement prior to publication or
dissemination and further uses its best efforts to cause such comments to be
effected.
(b) The Company shall, prior to distributing or otherwise circulating any
notices, directives, or other communications directed to all or groups of
customers, vendors, employees, distributors, or others associated with its
business relating to the transactions contemplated by this Agreement or to the
operation of business after consummation of such transactions, consult with
Parent and give Parent reasonable opportunity to comment thereon.
6.6. NOTIFICATION OF CERTAIN MATTERS; REPORTING.
(a) Each of the Company, Parent and Buyer shall give prompt notice to the other
party of (i) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be likely to cause either (x) any representation
or warranty of any party contained in this Agreement to be untrue or inaccurate
in any material respect at any time from the date hereof to the Effective Time,
or (y) any condition set forth in ARTICLE VII, ARTICLE VIII or ARTICLE IX hereof
to be unsatisfied at any time from the date hereof to the Effective Time, and
(ii) any material failure of the Company, Parent or Buyer, as the case may be,
or any officer, director, employee or agent thereof, 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 6.6 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice. Without limiting the generality of the
foregoing, the Company shall promptly notify Parent of the filing of any
litigation, or the filing of any governmental or regulatory action, including
any investigation or notice of investigation,
<PAGE> A-27
or similar proceeding or notice of any material claim against the Company or any
Subsidiary of which the Company becomes aware.
(b) The Company shall furnish to Parent as soon as practicable and in any event
within fifteen (15) days after it is prepared, (i) a copy of any report
submitted to the Board, provided, however, that the Company need not furnish
Parent any materials relating to the Company's rights and obligations under this
Agreement or any agreement or instrument delivered pursuant to this Agreement,
including, without limitation, communications of the Company's legal counsel
regarding the Company's rights against and obligations to Parent or Buyer under
this Agreement or books, records and documents covered by the attorney-client
privilege, or which are attorneys' work product, (ii) copies of all material
reports, renewals, filings, certificates, statements, correspondence and other
documents specific to the Company or filed with or received from the SEC or any
governmental authority; (iii) monthly unaudited balance sheets, statements of
income and changes in stockholders' equity for the Company and the Subsidiaries
and quarterly unaudited consolidated and consolidating balance sheets,
statements of income and changes in stockholders' equity for the Company, in
each case prepared on a basis consistent with past practice, and (iv) such other
reports as Parent may reasonably request (which are otherwise deliverable under
this Section 6.6(b)) relating to the Company. Each of the financial statements
of the Company delivered pursuant to this Subsection 6.6(b) shall be accompanied
by a certificate of the Chief Financial Officer of the Company to the effect
that such financial statements fairly present the financial condition of the
Company, for the periods covered, subject to recurring adjustments normal in
nature and amount, necessary for a fair presentation and are prepared on a basis
consistent with past practice. Additionally, at the request of Parent (which
shall not be made more than once a week), the Company shall advise Parent of the
approximate total amount of expenses incurred by the Company as of the date of
such request in connection with this Agreement and the Merger.
6.7. EXPENSES. Except as set forth in Sections 6.8, 10.6 and 10.7 hereof,
Parent, Buyer and the Company shall each bear their respective expenses incurred
in connection with this Agreement and the Merger, including, without limitation,
the preparation, execution and performance of this Agreement and the
transactions contemplated hereby, and all fees and expenses of investment
bankers, finders, brokers, agents, representatives, financial printers, counsel
and accountants, and their counsel (collectively, "Advisors"). The Company
shall ensure that its Advisors engaged in connection with the transactions
contemplated by this Agreement submit full and final bills on or before the
Closing Date and that all such expenses are paid or properly accrued on or prior
to the Closing Date.
6.8. HSR ACT FILINGS. The parties shall, as soon as practicable after the date
hereof, file Notification and Report forms under the HSR Act with the FTC and
the DOJ with respect to the transactions contemplated herein, shall file
requests for early termination and shall use reasonable efforts to respond as
promptly as practicable to all inquiries received from the FTC or the DOJ for
additional information or documentation. Parent or Buyer, on the one hand, and
the Company, on the other hand, shall share equally the cost of all filing fees
related to the Notification and Report forms. To the extent permitted by
applicable law, the parties shall request such governmental agencies to treat as
confidential all such information submitted to them.
<PAGE> A-28
6.9. STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT.
(a) As promptly as practicable after the execution of this Agreement, the
Company shall duly call, give notice of, convene and hold a special meeting of
its stockholders to consider and vote upon this Agreement and the Merger (the
"Company Stockholders Meeting"), on a date to be agreed upon between the Company
and Parent, which date shall be set taking into account the status of pending
regulatory matters pertaining to the transactions contemplated hereby.
(b) As promptly as practicable after the execution of this Agreement, the
Company shall prepare and file with the SEC a Proxy Statement relating to this
Agreement and the Merger (the "Proxy Statement"). The Company shall use its
reasonable best commercial efforts to cause the Proxy Statement to be "cleared"
by the SEC for mailing to the stockholders of the Company as promptly as
practicable and shall mail the Proxy Statement to its stockholders as promptly
as practicable thereafter. Parent and Buyer shall furnish all information
concerning it and the holders of its capital stock as the Company may reasonably
request for inclusion in such Proxy Statement. Subject to receipt by the
Company of a proposal for a Superior Transaction, the Proxy Statement shall
include the recommendation of the Board in favor of approval and adoption of
this Agreement and the Merger. Parent and Buyer shall have the right to review
the Proxy Statement before it is filed with the SEC. The Company shall notify
Parent immediately of the receipt of comments from the SEC and provide Parent
immediately with a copy of such comments. Parent and Buyer shall have the right
to review all revisions to preliminary drafts of the Proxy Statement before
filed with the SEC. Whenever any event occurs that should be described in an
amendment of or supplement to the definitive Proxy Statement, the Company shall,
upon learning of such event, promptly notify and consult with Parent, and the
parties shall cooperate with each other in connection with the preparation of a
mutually acceptable amendment or supplement. The Company shall promptly file
each such amendment or supplement with the SEC and mail such amendment or
supplement as soon as practicable after it is cleared by the SEC. No amendment
or supplement to the definitive Proxy Statement will be made by the Company
without the approval of Parent, which approval shall not be unreasonably
withheld or delayed.
6.10. INFORMATION.
(a) The Company covenants and agrees that neither the Proxy Statement, nor any
other document filed or to be filed by or on behalf of the Company with the SEC,
the FTC, the DOJ or any other governmental authority or stock exchange in
connection with the transactions contemplated by this Agreement shall contain at
the respective times filed (whether concurrently herewith or hereafter) with the
SEC, the FTC, the DOJ or other governmental authority or stock exchange any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading;
provided, that the foregoing shall not apply to information supplied by Parent
or Buyer specifically for inclusion or incorporation by reference in any such
document. The Company further covenants and agrees that neither the Proxy
Statement nor any amendment or supplement thereto shall, when mailed to the
Company's stockholders and at the time of the Company Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were
<PAGE> A-29
made, not misleading; provided, that the foregoing shall not apply to
information supplied by Parent or Buyer specifically for inclusion or
incorporation by reference therein. The Company covenants and agrees that the
Proxy Statement shall comply in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder and the rules and
regulations of the NASDAQ Smallcap Market. The Company represents and warrants
to Parent and Buyer that none of the information supplied by the Company
specifically for inclusion or incorporation by reference in any document filed
or to be filed by or on behalf of Parent or Buyer with the SEC, the FTC, the DOJ
or any other governmental authority or stock exchange in connection with the
transactions contemplated by this Agreement shall contain, any untrue statement
of a material fact or omits, or will omit, to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
(b) Each of Parent and Buyer covenants and agrees that no document filed or to
be filed by or on behalf of it with the SEC, the FTC, the DOJ or any other
governmental authority or stock exchange in connection with the transactions
contemplated by this Agreement shall contain at the respective times filed
(whether concurrently herewith or hereafter) with the SEC, the FTC, the DOJ or
other governmental authority or stock exchange any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided, that the
foregoing shall not apply to information supplied by the Company specifically
for inclusion or incorporation by reference in any such document. Each of Parent
and Buyer represents and warrants to the Company that none of the information
supplied by it specifically for inclusion or incorporation by reference in the
Proxy Statement or any other document filed or to be filed by or on behalf of
the Company with the SEC, the FTC, the DOJ or any other governmental authority
or stock exchange in connection with the transactions contemplated by this
Agreement shall contain, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
6.11. ENVIRONMENTAL ASSESSMENTS.
(a) Parent and Buyer shall have the right (to the extent allowable by the
current owner of such property) to conduct before the Closing Date, at their
sole expense, environmental site investigations and assessments ("Site
Assessments") covering any real property owned or leased by the Company, for the
purpose of determining whether there exists on such real property any
environmental condition which could result in any liability, cost or expense to
Parent, Buyer or the Surviving Corporation relating to Hazardous Substances or
other adverse environmental conditions. Such Site Assessment may include both
above and below the ground testing for environmental damage or the presence of
Hazardous Substances on such property as may be reasonably necessary to conduct
the Site Assessment in the opinion of the persons conducting such Site
Assessment and the Company shall allow such persons access to such property
during normal business hours and upon reasonable prior notice in order to permit
them to conduct the Site Assessment and shall otherwise cooperate with such
persons in connection therewith. In exercising its rights hereunder, Parent
shall coordinate with the Company to avoid unduly interfering with the conduct
of business by the Company and the Subsidiaries. For
<PAGE> A-30
invasive testing (exclusive of asbestos sampling) (e.g., soil and
soil boring testing), Parent will first present to the Company the
plan or testing that is contemplated by Parent and Parent may not
conduct such testing without the Company's prior written consent,
which shall not be unreasonably withheld or delayed. In connection
with such inspection and testing, Parent shall obtain at its sole
cost and expense all permits and licenses required in connection with the
performance of such work. Parent shall repair any damages caused by its tests
or inspections. Parent hereby agrees to defend and indemnify the Company for
all injuries and damages to persons or property caused by such surveys and
testing and for the cost of removing all mechanics' or materialmen's liens on
the inspected property resulting from such surveys and testing ordered by
Parent.
(b) Parent and Buyer shall not provide any such Site Assessment, or any non-
public information contained therein, to any third party, including any
governmental authority, unless otherwise required to do so by court order or
order of a regulatory agency, in which case, Parent or Buyer shall first notify
the Company and afford the Company the right to seek a protective order or other
appropriate remedy. In the event that such protective order or other remedy is
not obtained in a timely fashion so as to preclude the violation of any law or
order, Parent or Buyer (as the case may be) shall furnish only that portion of
such non-public information which it is advised by written opinion of counsel is
legally required and shall exercise its best commercial efforts to obtain
assurances that confidential treatment shall be accorded such non-public
information.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY, PARENT AND BUYER
The obligations of the parties to effect the Merger shall be subject to the
satisfaction or, if permissible, waiver at or prior to the Effective Time of
each of the following conditions:
7.1. STOCKHOLDER APPROVAL. The holders of a majority of the shares of Company
Common Stock entitled to vote thereon shall have approved and adopted this
Agreement in accordance with the DGCL and the rules and regulations of the
Nasdaq Small Cap Market.
7.2. NO ACTION OR PROCEEDING. No temporary restraining order, preliminary or
permanent injunction, cease and desist order or other legal restraint preventing
the consummation of the transactions contemplated herein, or imposing material
damages in respect thereof, shall be in effect.
7.3. MAILING OF PROXY STATEMENT. At least twenty (20) business days shall have
elapsed since the mailing of the Proxy Statement to Company stockholders.
7.4. HSR ACT. All waiting periods under the HSR Act shall have expired.
7.5. GOLDEN, COLORADO OFFICE. The Company, Majority Shareholder and Coors
Ceramics shall have entered into an agreement agreeing to continue the lease by
Coors Ceramics to the Company and the sublease by the Company to Majority
Shareholder of premises located in Golden, Colorado for a period of ninety (90)
days following the Closing upon such terms as such premises have been leased and
subleased to date.
<PAGE> A-31
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS
OF PARENT AND BUYER
The obligations of Parent and Buyer to effect the Merger shall be subject to the
satisfaction by the Company or, if permissible, waiver by Parent and Buyer at or
prior to the Effective Time of each of the following conditions:
8.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties of the
Company and each Subsidiary contained in this Agreement and in any Company
Agreement shall have been true and correct in all material respects (except to
the extent the representation or warranty is already qualified by materiality or
Material Adverse Effect, in which case it shall have been true in all respects)
when made and shall be true and correct in all material respects (except to the
extent the representation or warranty is already qualified by materiality or
Material Adverse Effect, in which case it shall have been true in all respects)
on and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date, other than such representations and warranties as
are made as of another specified date, which shall have been true and correct in
all material respects (except to the extent the representation or warranty is
already qualified by materiality or Material Adverse Effect, in which case it
shall have been true in all respects) as of such date.
8.2. MATERIAL ADVERSE CHANGE. There shall not have occurred between the date
hereof and the Closing Date any event which had a Material Adverse Effect, or
which has affected the ability of the Company to consummate the transactions
contemplated herein, nor shall there have occurred any event, development or
state of facts or circumstances (other than a change in general economic
conditions) which could reasonably be expected to result in any of the
foregoing, either alone or together with other such occurrences.
8.3. SATISFACTION OF CLOSING OBLIGATIONS. The Company shall have delivered
and/or satisfied each of its obligations set forth in Section 1.5.
8.4. DISSENTING SHARES. The number of shares of Company Common Stock for which
appraisal rights are sought prior to any vote of the stockholders of the Company
with respect to the Merger shall not exceed thirty percent (30%) of the
outstanding shares of Company Common Stock.
8.5. COMPLIANCE WITH COVENANTS. The Company and each Subsidiary shall have
performed or complied in all material respects (except to the extent the
agreement or covenant is already qualified by materiality or Material Adverse
Effect, in which case it shall have been performed or complied with in all
respects) with all agreements and covenants required by this Agreement or any
Company Agreement to be performed or complied with by it on or prior to the
Effective Time.
8.6. THIRD PARTY CONSENTS. All consents, permits and approvals from and filings
with any governmental authorities, nongovernmental self-regulatory agencies and
from parties to any Company Material Contract which may be required in
connection with the lawful consummation of the transactions contemplated hereby
or the continuance of such Company Material Contract
<PAGE> A-32
after the Closing Date, including without limitation all consents, permits,
approvals and filings referenced in Section 4.3(b) of this Agreement, Section
4.3(b) of the Disclosure Letter and Section 4.15 of the Disclosure Letter, shall
have been obtained upon terms and conditions reasonably satisfactory to Parent.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
The obligations of the Company to effect the Merger shall be subject to the
satisfaction by Parent and/or Buyer, as the case may be, or, if permissible,
waiver by the Company at or prior to the Effective Time of each of the following
conditions:
9.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Parent and Buyer contained in this Agreement shall have been true and correct in
all material respects (except to the extent the representation or warranty is
already qualified by materiality, in which case it shall have been true in all
respects) when made and shall be true and correct in all material respects
(except to the extent the representation or warranty is already qualified by
materiality, in which case it shall have been true in all respects) on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date, other than such representations and warranties as are made as of
another specified date, which shall have been true and correct in all material
respects (except to the extent the agreement or covenant is already qualified by
materiality, in which case it shall have been performed or complied with in all
respects) as of such date.
9.2. COMPLIANCE WITH COVENANTS. Each of Parent and Buyer shall have performed
or complied in all material respects (except to the extent the agreement or
covenant is already qualified by materiality, in which case it shall have been
performed or complied with in all respects) with all agreements and covenants
required by this Agreement or any Company Agreement to which it is a party to be
performed or complied with by it on or prior to the Effective Time.
9.3. SATISFACTION OF CLOSING OBLIGATIONS. Parent and Buyer shall have delivered
and/or satisfied each of their respective obligations set forth in Section 1.6.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1. TERMINATION. This Agreement may be terminated (and the Merger
contemplated hereby may be abandoned) notwithstanding approval thereof by the
stockholders of the Company at any time prior to the Effective Time: (a) by
mutual written consent of Parent, Buyer and the Company; (b) by any party if,
without any material breach by such terminating party of its obligations under
this Agreement, the Merger shall not have occurred on or before 5:00 p.m. (Los
Angeles time) on the twenty-second (22nd) business day after the date when the
Proxy Statement is mailed to the Company's stockholders (the "Merger Deadline"),
which date may be extended by mutual written consent of the parties hereto;
provided, however, that if a request for additional information is received from
the FTC or the DOJ pursuant to the HSR Act, such date shall be extended to the
fourteenth (14th) calendar day following acknowledgment by the FTC or
<PAGE> A-33
DOJ, as applicable, that the parties have complied with such request, but in any
event not later than July 31, 1999; or (c) by Parent, Buyer or the Company if
any court of competent jurisdiction in the United States or other governmental
body in the United States shall have issued an order (other than a temporary
restraining order), decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Merger, and such order, decree, ruling or
other action shall have become final and nonappealable; provided that the party
seeking to terminate this Agreement shall have used its reasonable best efforts
to remove or lift such order, decree or ruling.
10.2. TERMINATION BY PARENT OR BUYER. This Agreement may be terminated and the
Merger may be abandoned by Parent or Buyer prior to the Effective Time if (a)
any representation or warranty of the Company or any Subsidiary contained in
this Agreement or in any Company Agreement is not true and correct in all
material respects (or in all respects if the representation or warranty is
already qualified by materiality or Material Adverse Effect) at and as of any
date prior to the Effective Time as if made at and as of such time, except for
(i) failures to comply as are capable of being and are cured (other than by the
Company merely disclosing the breach to Parent or Buyer) within ten (10) days
after written notice from Parent or Buyer to the Company of such failure, or
(ii) any representation or warranty which speaks as of a specified date which
was true and correct in all material respects (or in all respects if the
representation or warranty is already qualified by materiality or Material
Adverse Effect) as of such specified date; (b) the Company or any Subsidiary has
failed to comply with any of its agreements or covenants under this Agreement or
any Company Agreement in all material respects (or in all respects if the
agreement or covenant is already qualified by materiality or Material Adverse
Effect), except for failures to comply as are capable of being and are cured
within ten (10) days after written notice from Parent or Buyer to the Company of
such failure; (c) the conditions specified in ARTICLE VII and ARTICLE VIII to be
satisfied by the Company shall not have been satisfied by the Company or waived
by Parent and Buyer prior to the Merger Deadline; (d) the Board shall (i)
withdraw its recommendation or approval in respect of this Agreement or the
Merger or (ii) modify or change its recommendation or approval in respect of
this Agreement or the Merger in a manner materially adverse to Parent or Buyer
or (iii) fail to publicly oppose a Tender Offer or Exchange Offer (each as
hereinafter defined) within ten (10) business days after commencement of such
Tender Offer or Exchange Offer; or (e) the Board shall have approved any
proposal other than by Parent and Buyer in respect of an Acquisition Transaction
or shall have approved the waiver of the Company Right of First Refusal. As
used herein, "Tender Offer" shall mean the commencement (as such term is defined
in Rule 14d-2 under the Exchange Act) of a tender offer or the filing by any
person of a registration statement under the Securities Act of 1933, as amended
(the "Securities Act") with respect to a tender offer to purchase any shares of
Company Common Stock such that upon consummation of such offer, such person
would own or control 15% or more of the then outstanding shares of Company
Common Stock. As used herein, "Exchange Offer" shall mean the commencement (as
such term is defined in Rule 14d-2 under the Exchange Act) of an exchange offer
or the filing by any person of a registration statement under the Securities Act
with respect to an exchange offer to purchase any shares of Company Common Stock
such that upon consummation of such offer, such person would own or control 25%
or more of the then outstanding shares of Company Common Stock.
<PAGE> A-34
10.3. TERMINATION BY THE COMPANY. This Agreement may be terminated and the
Merger may be abandoned by the Company notwithstanding approval thereof by the
stockholders of the Company at any time prior to the Effective Time if (a) any
representation and warranty of Parent or Buyer contained in this Agreement or
any Company Agreement to which it is a party is not true and correct in all
material respects (or in all respects if the representation or warranty is
already qualified by materiality) at and as of any date prior to the Effective
Time as if made at and as of such time, except for (i) failures to comply as are
capable of being and are cured (other than by Parent or Buyer, as the case may
be, merely disclosing the breach to the Company) within ten (10) days after
written notice from the Company to Parent or Buyer of such failure, or (ii) any
representation or warranty which speaks as of a specified date which were true
and correct in all material respects (or in all respects if the representation
or warranty is already qualified by materiality) as of such specified date; (b)
Parent or Buyer has failed to comply in all material respects (or in all
respects if the agreement or covenant is already qualified by materiality) with
any of its agreements or covenants under this Agreement or any Company Agreement
to which it is a party, except for failures to comply as are capable of being
and are cured within ten (10) days after written notice from the Company to
Parent or Buyer of such failure; (c) the conditions in ARTICLE VII and ARTICLE
IX to be satisfied by the Buyer or Parent shall not have been satisfied by the
Buyer or Parent or waived by the Company prior to the Merger Deadline; or (d)
the Board shall have approved any proposal other than by Parent and Buyer in
respect of an Acquisition Transaction or shall have approved the waiver of the
Company Right of First Refusal.
10.4. PROCEDURE FOR TERMINATION. In the event of termination and abandonment of
the Merger by Parent, Buyer or the Company pursuant to this ARTICLE X, written
notice thereof shall be given by the terminating party to the other parties.
10.5. EFFECT OF TERMINATION. In the event of termination of this Agreement
pursuant to and in accordance with this ARTICLE X, the Merger shall be deemed
abandoned and this Agreement shall forthwith become void, except as provided in
Sections 6.3(b) and 6.7 hereof (which Sections shall survive any termination of
this Agreement), without liability on the part of any party hereto or its
affiliates, directors, officers or stockholders except as provided in Sections
10.6 and 10.7 hereof, and each of the parties hereto hereby waives and releases
any other claim which may otherwise exist upon such termination.
10.6. TERMINATION FEE.
(a) Termination by Parent or Buyer. In the event this Agreement is terminated
by Parent or Buyer pursuant to Section 10.2(a) or 10.2(b) hereof, where the
failure giving rise to such right of termination shall have been caused in whole
or in part by any action or inaction within the control of the Company or any
Subsidiary (it being understood that any action or inaction outside the control
of the Company or any Subsidiary such as, by way of example only, the filing of
a lawsuit against them, shall not come within this Section 10.6(a)), the Company
shall within five (5) business days following the termination of this Agreement
pay to the terminating party an amount equal to the actual out-of-pocket fees
and expenses reasonably incurred and paid by such terminating party in
connection with the Merger and the transactions contemplated by this Agreement,
such amount not to exceed $750,000. Notwithstanding anything to the contrary
set forth in this Section 10.6(a): (i) in the event that Parent is entitled to
<PAGE> A-35
a fee pursuant to Section 10.7 hereof, neither Parent nor Buyer shall be
entitled to any fee under this Section 10.6(a), and (ii) under no circumstances
shall both Parent and Buyer be entitled to a fee pursuant to this Section
10.6(a).
(b) Termination by Company. In the event this Agreement is terminated by the
Company pursuant to Section 10.3(a) or 10.3(b) hereof, where the failure giving
rise to such right of termination shall have been caused in whole or in part by
any action or inaction within the control of Buyer or Parent (it being
understood that any action or inaction outside the control of Buyer or Parent
shall not come within this Section 10.6(b)), Parent shall within five (5)
business days following the termination of this Agreement pay to the Company an
amount equal to $500,000 as compensation for lost opportunities and
reimbursement of out-of-pocket fees and expenses incurred by the Company in
connection with the Merger and the transactions contemplated by this Agreement.
10.7. TOPPING FEE.
(a) In the event this Agreement is terminated by Parent or Buyer pursuant to
Section 10.2(d) or 10.2(e) hereof, or by the Company pursuant to Section 10.3(d)
hereof, the Company shall within five (5) business days following the
termination of this Agreement pay to Parent Two Million Dollars ($2,000,000) as
compensation for lost opportunities and reimbursement of out-of-pocket fees and
expenses incurred in connection with the Merger and the transactions
contemplated by this Agreement (the "Topping Fee").
(b) In the event this Agreement is terminated by Parent or Buyer pursuant to
Section 10.2(a) or Section 10.2(b), where the failure giving rise to such right
of termination shall have been caused in whole or in part by any action or
inaction within the control of the Company or any Subsidiary (it being
understood that any action or inaction outside the control of the Company or any
Subsidiary such as, by way of example only, the filing of a lawsuit against
them, shall not come within this Section 10.7(b)), the Company shall also pay to
Parent the Topping Fee if (A) after the date hereof and before the termination
of this Agreement, a proposal for an Acquisition Transaction shall have been
made and publicly announced by any person (other than Parent, Buyer and their
directors, officers, employees, agents and representatives), and (B) after the
date hereof and at or prior to January 31, 2000, the Company shall have effected
such Acquisition Transaction with such person or an affiliate thereof. The
Topping Fee payable under this Section 10.7(b) shall be payable as a condition
to the consummation of the foregoing Acquisition Transaction.
(c) If any party fails to pay promptly the fees, costs or expenses due to
another party pursuant to Sections 10.6 or 10.7, the party failing to make such
payment shall also pay the other party's costs and expenses (including legal
fees and expenses) in connection with any action, including the filing of any
lawsuit or other legal action, taken to collect payment, together with interest
on the amount of the unpaid fees, costs and/or expenses under said Sections,
accruing from their due date, at an interest rate per annum equal to two
percentage points in excess of the prime commercial lending or reference rate
quoted by Bank of America.
10.8. REMEDIES. Each party hereto hereby agrees that the sole and exclusive
remedy of such party arising out of, resulting from, in connection with or
relating to, directly or indirectly,
<PAGE> A-36
another party's breach, default or failure
in performance of any of such other party's covenants, agreements,
representations or warranties occurring prior to the Effective Time, shall be
termination of this Agreement pursuant to this ARTICLE X, and receipt of a
payment pursuant to Section 10.6 or 10.7 hereof, if applicable.
ARTICLE XI
MISCELLANEOUS
11.1. AMENDMENT AND MODIFICATION. At any time prior to the Effective Time,
subject to applicable law, this Agreement may be amended, modified or
supplemented only by written agreement (referring specifically to this
Agreement) of Parent, Buyer and the Company with respect to any of the terms
contained herein.
11.2. WAIVER. At any time prior to the Effective Time, Parent and Buyer, on the
one hand, and the Company, on the other hand, may (i) extend the time for the
performance of any of the obligations or other acts of the other, (ii) waive any
inaccuracies in the representations and warranties of the other contained herein
or in any documents delivered pursuant hereto and (iii) waive compliance by the
other with any of the agreements or conditions contained herein which may
legally be waived. Any such extension or waiver shall be valid only if set forth
in an instrument in writing specifically referring to this Agreement and signed
on behalf of each party.
11.3. SURVIVABILITY. The respective representations and warranties of Parent,
Buyer and the Company contained herein or in any certificates or other documents
delivered prior to or as of the Effective Time shall not survive beyond the
Effective Time. The covenants and agreements of the parties hereto (including
the Surviving Corporation after the Merger) shall survive the Effective Time
without limitation (except for those which, by their terms, contemplate a
shorter survival period).
11.4. NOTICES. All notices and other communications hereunder shall be in
writing and shall be delivered personally, by FedEx or other nationally
recognized next-day courier, telecopied with confirmation of receipt, or mailed
first class, postage prepaid, by certified mail, return receipt requested, to
the parties at the addresses specified below (or at such other address for a
party as shall be specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof) All notices, requests and
other communications shall be deemed given on the date of actual receipt or
delivery as evidenced by written receipt, acknowledgement or other evidence of
actual receipt or delivery to the address specified below. In case of service
by telecopy, a copy of such notice shall be personally delivered or sent by
certified mail, in the manner set forth above, within three (3) business days
thereafter.
(a) if to the Company,
to: Golden Genesis Company
4585 McIntyre Street
Golden, Colorado 80403
Attention: J. Michael Davis
Fax No.: (303) 271-7193
<PAGE> A-37
with a copy to: Hogan & Hartson L.L.P.
1200 17th Street
Suite 1500
Denver, Colorado 80202
Attention: Steven A. Cohen, Esq.
Fax No.: (303) 899-7333
(b) if to Parent
or Buyer, to: Kyocera International, Inc.
8611 Balboa Avenue
San Diego, California 92123-1580
Attention: President
Fax No.: (619) 492-1456
with a copy to: Loeb & Loeb LLP
1000 Wilshire Blvd., Suite 1800
Los Angeles, California 90017
Attention: Kenneth R. Benbassat, Esq.
Fax No.: (213) 688-3460
11.5. ASSIGNMENT. This Agreement and all of the provisions hereto shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by any of the parties
hereto without the prior written consent of the other parties, provided that
Buyer may assign its rights and obligations under this Agreement to any direct
or indirect wholly-owned Subsidiary of Parent, but no such assignment will
relieve any party of its obligations under this Agreement. This Agreement,
except for the provisions of Sections 2.2 and 3.2 hereof (which are intended to
be for the benefit of the persons identified therein, and may be enforced by
such persons), is not intended to confer any rights or remedies hereunder upon
any other person except the parties hereto.
11.6. GOVERNING LAW. This Agreement shall be governed by the laws of the State
of Delaware (regardless of the laws that might otherwise govern under applicable
Delaware principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and remedies.
11.7. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
11.8. INTERPRETATION. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement. Where the context or construction requires, all words applied
in the plural shall be deemed to have been used in the singular, and vice versa;
and the masculine shall include the feminine and neuter, and vice versa. As
used in this Agreement, (i) the term "person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a
<PAGE> A-38
government or any department or agency
thereof; (ii) the term "Subsidiary" shall mean each corporation, limited
liability company, partnership, joint venture, trust or other entity in which
the Company has, directly or indirectly, an equity interest representing 50% or
more of the capital stock thereof or other equity interest therein having
ordinary voting power to elect a majority of the board of directors or other
governing body of such entity; (iii) the term "including" and words of similar
import shall mean "including, without limitation," unless the context otherwise
requires or unless otherwise specified; (iv) the term "to the Company's
knowledge" (or words of similar import) shall mean to the knowledge of the Board
or any senior officer of the Company; and (v) the term "Material Adverse Effect"
or other similar phrase including the word "material" shall mean (i) with
respect to the Company and the Subsidiaries, taken as a whole, any adverse
change or effect or potential adverse change or effect, or any series thereof,
involving more than Five Hundred Thousand Dollars ($500,000) in the aggregate,
or (ii) an effect that is, or at the time of such effect it is probable that the
effect will be, materially adverse to the ability of the Surviving Corporation
to conduct the business of the Company and the Subsidiaries, taken as a whole,
as presently conducted, following the Effective Time.
11.9. ENTIRE AGREEMENT. This Agreement and the Disclosure Letter and the
exhibits and schedules hereto (which are incorporated herein by this reference)
embody the entire agreement and understanding of the parties hereto in respect
of the subject matter contained herein and therein and supersede all prior
agreements and understandings among the parties with respect to such subject
matter, including, without limitation, that certain letter agreement, dated
April 13, 1999, between the Company and Parent. There are no representations,
promises, warranties, covenants or undertakings in respect of such subject
matter, other than those expressly set forth or referred to herein and therein.
*****
<PAGE> A-39
IN WITNESS WHEREOF, Parent and the Company have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
COMPANY:
GOLDEN GENESIS COMPANY
By:___________________________
J. Michael Davis
President
BUYER:
GGC ACQUISITION COMPANY
By:___________________________
Rodney N. Lanthorne
President
PARENT:
KYOCERA INTERNATIONAL, INC.
By:___________________________
Rodney N. Lanthorne
President
<PAGE> A-40
EXHIBIT A (to the Agreement and Plan of Merger)
Certificate of Incorporation
of
Golden Genesis Company
First: The name of the corporation is Golden Genesis Company.
Second: The address of the registered office of the corporation in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of the registered agent of the corporation at such address is
The Corporation Trust Company.
Third: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
Fourth: The total number of shares of stock which the corporation is
authorized to issue is 17,153,000 shares of common stock with a par value of
$.001 per share.
Fifth: The business and affairs of the corporation shall be managed by the
board of directors, and the directors need not be elected by ballot unless
required by the bylaws of the corporation.
Sixth: In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the board of directors is expressly authorized to
adopt, amend or repeal the bylaws.
Seventh: The corporation reserves the right to amend and repeal any
provision contained in this certificate of incorporation in the manner
prescribed by the laws of the State of Delaware. All rights herein conferred
are granted subject to this reservation.
Eighth: A Director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit. If the Delaware General Corporation Law is amended after
approval by the stockholders of this article to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.
<PAGE> A-41
Ninth: The name and mailing address of the incorporator (the "Incorporator")
are E.L. Kinsler, 1209 Orange Street, Wilmington, Delaware 19801. The powers of
the Incorporator shall terminate upon the filing of this Certificate of
Incorporation.
Tenth: The following persons, having the following mailing addresses, shall
serve as the directors of the corporation until the first annual meeting of the
stockholders of the corporation or until their successors are elected and
qualified:
Name Mailing Address
Jed J. Burnham 4584 McIntyre Street
Golden, Colorado 80403
John K. Coors 4584 McIntyre Street
Golden, Colorado 80403
Joseph Coors, Jr. 4584 McIntyre Street
Golden, Colorado 80403
John Markle 4584 McIntyre Street
Golden, Colorado 80403
Norman E. Miller 4584 McIntyre Street
Golden, Colorado 80403
Gerrit J. Wolfaardt 4584 McIntyre Street
Golden, Colorado 80403
Any repeal or modification of the foregoing paragraph by the stockholders of the
corporation shall not adversely affect any right or protection of a director of
the corporation existing at the time of such repeal or modification.
<PAGE> A-42
EXHIBIT B (to the Agreement and Plan of Merger)
STOCK OPTION CANCELLATION AGREEMENT
This STOCK OPTION CANCELLATION AGREEMENT is made this ____ day of __________,
1999 ("Agreement"), by and between Golden Genesis Company, a Delaware
corporation (the "Company"), and __________ (the "Optionee").
W I T N E S S E T H:
WHEREAS, the Company has previously established a 1998 Stock Option and
Incentive Plan, a 1996 Stock Option Plan, a 1990 Stock Option Plan and a Non-
Employee Directors Stock Option Plan (hereinafter collectively referred to as
the "Plans"); and
WHEREAS, the Company has, pursuant to one or more Stock Option Agreements (the
"Stock Option Agreements") between the Company and the Optionee, previously
issued to Optionee under one or more of the Plans one or more options to
purchase shares of the Company's Common Stock, par value $.10 per share (the
"Shares"), which options, as of the date hereof, have not been exercised, and
which options are described in Schedule A attached hereto (the "Options"); and
WHEREAS, the Company has entered into an Agreement and Plan of Merger, dated as
of May 26, 1999, by and among the Company, GGC Acquisition Company, and Kyocera
International, Inc.(the "Merger Agreement"); and
WHEREAS, upon consummation of the transactions contemplated by the Merger
Agreement (i) all of the Shares then issued and outstanding shall be cancelled
and the Company's existing stockholders shall cease to be stockholders of the
Company or any successor entity and shall receive a cash payment in the amount
of $2.33 per share in consideration for cancellation of all of such Shares then
owned by them; and (ii) the Shares shall cease to be listed on the NASDAQ
Smallcap market and shall no longer be publicly traded on that or any other
exchange or otherwise; and
WHEREAS, the parties hereto hereby agree that it is in their mutual interests to
cancel the Options.
NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth below and for good and valuable consideration, the parties hereto have
agreed as follows:
1. Effective as of the Effective Time (as hereinafter defined), the Options
shall be cancelled. Such cancellation shall be self-effectuating, requiring no
further action on Company's part other than Company's compliance with its
obligations hereunder. Upon cancellation of the Options, the Stock Option
Agreements shall be null and void in their entirety. Furthermore, in
consideration of the payment to be made to Optionee pursuant to this Agreement,
Optionee hereby waives all notice requirements contained in the Plans and in the
Stock Option Agreements.
<PAGE> A-43
2. In full consideration of the cancellation of the Options, the Company shall
pay Optionee at the Effective Time an amount equal to the product of (a) the
excess, if any, by which the Merger Price (as hereinafter defined) exceeds the
exercise price of the Option and (b) the number of Shares subject thereto.
3. Subject to all applicable federal, state and local laws, rules and
regulations with regard to the withholding of taxes, the Company shall pay the
amount specified in Section 2 above by bank check, in a single lump sum payment,
at the Effective Time.
4. Notwithstanding Section 2, no amount shall be paid to Optionee with respect
to an Option (or the portion thereof) which is exercised after the date hereof,
but prior to the date of the Effective Time.
5. The rights and obligations of the parties hereunder shall not be assignable.
6. For purposes of this Agreement, the following definitions shall apply:
(i) "Effective Time" means the date and time of the filing of the Certificate
of Merger (or the time specified therein) pursuant to the Merger Agreement; and
(ii) "Merger Price" means $2.33.
7. The terms and provisions of this Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto, their personal representatives,
administrators, executors, heirs, successors and assigns.
8. All sections, clauses and covenants contained in this Agreement are
severable, and in the event any of them shall be held to be invalid by any
court, this Agreement shall be interpreted as if such invalid sections, clauses
or covenants were not contained herein.
9. This Agreement shall be governed by and construed in accordance with the
laws of the State of California applicable to contracts made and to be performed
wholly within such State, and without regard to the conflicts of laws principles
thereof.
<PAGE> A-44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed the day and year first written above.
The Company:
GOLDEN GENESIS COMPANY
By:
Name: J. Michael Davis
Title: President
Optionee:
Signature
Print Name:
<PAGE> A-45
SCHEDULE A (to the Stock Option Cancellation Agreement)
[Instructions: List all unexercised options issued to the Optionee. With
respect to each Option specify: (i) date of issuance, (ii) number of shares
subject to the Option and (iii) option exercise price. With respect to any
Option which has been partially exercised, specify the number of shares as to
which the Option has not been exercised.]
<PAGE> B-1
OPINION OF HANIFEN, IMHOFF INC.
Hanifen, Imhoff Inc.
1125 17th Street, Suite 1500
Denver, CO 80202
May 26, 1999
The Board of Directors
Golden Genesis Company
4585 McIntyre Street
Golden, CO 80403
Members of the Board:
You have requested our opinion as to the fairness, from a financial point of
view, to the holders of the common stock of Golden Genesis Company ("GGC") of
the consideration to be received by such stockholders pursuant to the terms of
and subject to the conditions set forth in the Agreement and Plan of Merger
dated May 26, 1999, (the "Merger Agreement"), by and among Kyocera Solar
Corporation / Kyocera International ("Kyocera") and GGC. As more fully
described in the Merger Agreement: (i) Kyocera will be merged with and into GGC
(the "Merger"); and (ii) each outstanding share of the common stock, par value
$0.01 per share, of GGC (the "GGC Common Stock") will be converted into the
right to receive $2.33 net to the holder in cash.
In arriving at our opinion: (i) we reviewed the financial terms of the Merger as
set forth in the Merger Agreement; (ii) we held discussions with senior
management of GGC concerning the businesses, operations and prospects of GGC and
Kyocera; (iii) we examined certain publicly available business and financial
information relating to GGC, as well as certain financial forecasts and other
data for GGC which were provided to us by GGC's management; (iv) we examined the
terms of other relevant transactions that had certain characteristics in common
with the Merger; and (v) we analyzed certain financial, market and other
publicly available information relating to the businesses of other companies
whose operations we considered related to those of GGC. In addition to the
foregoing, we conducted such other analyses and examinations and considered such
other financial, economic and market criteria as we deemed necessary to arrive
at our opinion.
In rendering our opinion, we have relied upon and assumed, without independent
verification, upon the accuracy and completeness of all financial and other
information publicly available or furnished to, or otherwise reviewed by or
discussed with, us. With respect to financial forecasts relating to GGC, we
have assumed that such forecasts and other information were reasonably prepared
on bases reflecting the best currently available estimates and judgments of
management as to the future financial performance of GGC. We did not receive
from Kyocera's management, nor did we review, financial forecasts for Kyocera.
Our opinion, as set forth herein, relates to the purchase price paid to the
holders of GGC Common Stock by Kyocera. We have not made, or been provided
with, an independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of GGC or Kyocera.
We were not requested to and did not provide advice concerning the structure,
the specific amount of the consideration, or any other aspects of the Merger, or
to provide services other than the
<PAGE> B-2
delivery of this opinion. We were not authorized to, and did not, solicit third
party indications of interest in acquiring all or any part of GGC, and we were
not asked to consider, and our opinion does not address, the relative merits of
the Merger as compared to any alternative business strategies that might exist
for GGC, or the effect of any other transaction in which GGC might engage. We
did not participate in negotiations with respect to the terms of the Merger.
Our opinion is necessarily based upon information available to us, and
financial, stock market and other conditions and circumstances existing and
disclosed to us, as of the date hereof.
Hanifen, Imhoff Inc. ("Hanifen"), as part of its investment banking services, is
regularly engaged in the valuation of businesses and securities in connection
with mergers, acquisitions, underwritings, sales and distributions of listed and
unlisted securities, private placements and valuations for corporate and other
purposes. In the ordinary course of our business, we may actively trade the
securities of GGC for our own account or for the accounts of our customers and,
accordingly, may at any time hold long or short positions in such securities.
For our services in rendering this opinion, GGC will pay us a fee and indemnify
us against certain liabilities; the fee is not contingent upon consummation of
the Merger.
The opinion expressed herein is provided solely for the use of the Board of
Directors of GGC in connection with and for the purposes of its evaluation of
the proposed Merger, and our opinion is not intended to be and does not
constitute a recommendation to any stockholder as to how such stockholder should
vote on the proposed Merger. Our opinion may not be published or otherwise used
or referred to, nor shall any public reference to Hanifen be made, without our
prior written consent, except that it may appear in any proxy statement or
similar document related to the proposed Merger.
Based upon and subject to the foregoing, our experience as investment bankers,
our work as described above and other factors we deemed relevant, we are of the
opinion that, as of the date hereof, the consideration to be received in the
Merger is fair, from a financial point of view, to the holders of GGC Common
Stock.
Very truly yours,
HANIFEN, IMHOFF INC.
<PAGE> C-1
SECTION 262 OF THE DELAWARE
GENERAL CORPORATION LAW
262 APPRAISAL RIGHTS - (a) Any stockholder of a corporation of this
State who holds shares of stock on the date of the making of a demand pursuant
to subsection (d) of this section with respect to such shares, who
continuously holds such shares through the effective date of the merger or
consolidation, who has otherwise complied with subsection (d) of this section
and who has neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to s228 of this title shall be entitled
to an appraisal by the Court of Chancery of the fair value of the
stockholder's shares of stock under the circumstances described in subsections
(b) and (c) of this section. As used in this section, the word "stockholder"
means a holder of record of stock in a stock corporation and also a member of
record of a nonstock corporation; the words "stock" and "share" mean and
include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely
of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class
or series of stock of a constituent corporation in a merger or consolidation
to be effected pursuant to s251 (other than a merger effected pursuant to
s251(g) of this title), s252, s254, s257, s258, s263 or s264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or consolidation,
were either (i) listed on a national securities exchange or designated as a
national market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc. or (ii) held of record by
more than 2,000 holders; and further provided that no appraisal rights shall
be available for any shares of stock of the constituent corporation surviving
a merger if the merger did not require for its approval the vote of the
<PAGE> C-2
stockholders of the surviving corporation as provided in subsection (f) of
s251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal
rights under this section shall be available for the shares of any class or
series of stock of a constituent corporation if the holders thereof are
required by the terms of an agreement of merger or consolidation pursuant to
ss251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in respect
thereof) or depository receipts at the effective date of the merger or
consolidation will be either listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this paragraph;
or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts described
in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under s253 of this title is not owned
by the parent corporation immediately prior to the
merger, appraisal rights shall be available for the shares of the subsidiary
Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation
that appraisal rights under this section shall be available for the shares of
any class or series of its stock as a result of an amendment to its
certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or substantially
all of the assets of the corporation. If the certificate of incorporation
contains such a provision, the procedures of this section, including those
<PAGE> C-3
set forth in subsections (d) and (e) of this section, shall apply as nearly as
is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a meeting
of stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for such
meeting with respect to shares for which appraisal rights are available
pursuant to subsections (b) or (c) hereof that appraisal rights are available
for any or all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder electing to
demand the appraisal of such stockholder's shares shall deliver to the
corporation, before the taking of the vote on the merger or consolidation, a
written demand for appraisal of such stockholder's shares. Such demand will
be sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal
of such stockholder's shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein provided.
Within 10 days after the effective date of such merger or consolidation, the
surviving or resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection and has not
voted in favor of or consented to the merger or consolidation of the date that
the merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to s228 or
s253 of this title, each constituent corporation, either before the effective
date of the merger or consolidation or within ten days thereafter, shall
notify each of the holders of any class or series of stock of such constituent
corporation who are entitled to appraisal rights of the approval of the merger
or consolidation and that appraisal rights are available for any or all shares
of such class or series of stock of such constituent corporation, and shall
include in such notice a copy of this section; provided that, if the notice is
given on or after the effective date of the merger or consolidation, such
notice shall be given by the surviving or resulting corporation to all such
holders of any class or series of stock of a constituent corporation that are
entitled to appraisal rights. Such notice
<PAGE> C-4
may, and, if given on or after the
effective date of the merger or consolidation, shall, also notify such
stockholders of the effective date of the merger or consolidation. Any
stockholder entitled to appraisal rights may, within 20 days after the date of
mailing of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal
of such holder's shares. If such notice did not notify stockholders of the
effective date of the merger or consolidation, either (i) each such
constituent corporation shall send a second notice before the effective date
of the merger or consolidation notifying each of the holders of any class or
series of stock of such constituent corporation that are entitled to appraisal
rights of the effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second notice to all such
holders on or within 10 days after such effective date; provided, however,
that if such second notice is sent more than 20 days following the sending of
the first notice, such second notice need only be sent to each stockholder who
is entitled to appraisal rights and who has demanded appraisal of such
holder's shares in accordance with this subsection. An affidavit of the
secretary or assistant secretary or of the transfer agent of the corporation
that is required to give either notice that such notice has been given shall,
in the absence of fraud, be prima facie evidence of the facts stated therein.
For purposes of determining the stockholders entitled to receive either
notice, each constituent corporation may fix, in advance, a record date that
shall be not more than 10 days prior to the date the notice is given,
provided, that if the notice is given on or after the effective date of the
merger or consolidation, the record date shall be such effective date. If no
record date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the day
on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who
has complied with subsections (a) and (d) hereof and who is otherwise entitled
to appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have
<PAGE> C-5
the right to
withdraw such stockholder's demand for appraisal and to accept the terms
offered upon the merger or consolidation. Within 120 days after the effective
date of the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and with respect to
which demands for appraisal have been received and aggregate number of holders
of such shares. Such written statement shall be mailed to the stockholder
within 10 days after such stockholder's written request for such a statement
is received by the surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal under
subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of
a copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If
the petition shall be filed by the surviving or resulting corporation, the
petition shall be accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the time and place
fixed for the hearing of such petition by registered or certified mail to the
surviving or resulting corporation and to the stockholders shown on the list
at the addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail
and by publication shall be approved by the Court, and the costs thereof shall
be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates
to submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings;
<PAGE> C-6
and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be fair value. In determining such fair value,
the Court shall take into account all relevant factors. In determining the
fair rate of interest, the Court may consider all relevant factors, including
the rate of interest which the surviving or resulting corporation would have
had to pay to borrow money during the pendency of the proceeding. Upon
application by the surviving or resulting corporation or by any stockholder
entitled to participate in the appraisal proceeding, the Court may, in its
discretion, permit discovery or other pretrial proceedings and may proceed to
trial upon the appraisal prior to the final determination of the stockholder
entitled to an appraisal. Any stockholder whose name appears on the list
filed by the surviving or resulting corporation pursuant to subsection (f) of
this section and who has submitted such stockholder's certificates of stock to
the Register in Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that such stockholder is not
entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and the
case of holders of shares represented by certificates upon the surrender to
the corporation of the certificates representing such stock. The Court's
decree may be enforced as other decrees in the Court of Chancery may be
enforced, whether such surviving or resulting corporation be a corporation of
this State or of any state.
(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances.
Upon application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
<PAGE> C-7
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation,
no stockholder who has demanded appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal
of such stockholder's demand for an appraisal and an acceptance of the merger
or consolidation, either within 60 days after the effective date of the merger
or consolidation as provided in subsection (e) of this section or thereafter
with the written approval of the corporation, then the right of such
stockholder to an appraisal shall cease. Notwithstanding the foregoing, no
appraisal proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval may be
conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
<PAGE> D-1
OPTION, VOTING AND INDEMNIFICATION AGREEMENT
This Option, Voting and Indemnification Agreement ("Agreement") is made
as of May 26, 1999, by and among ACX Technologies, Inc., a Colorado
corporation ("ACX"), Golden Technologies Company, Inc., a Colorado
corporation ("Stockholder," and together with ACX, collectively referred to
as the "Selling Parties," and individually, a "Selling Party") and Kyocera
International, Inc., a California corporation ("Parent"). All terms not
otherwise defined in this Agreement shall have the meanings ascribed to them
in the Merger Agreement (as that term is defined below).
RECITALS
A. Kyocera, GGC Acquisition Company, a Delaware corporation ("Merger
Sub") and Golden Genesis Company, a Delaware corporation (the "Company") have
entered into an Agreement and Plan of Merger (as amended from time to time,
the "Merger Agreement"), of even date herewith, pursuant to which Merger Sub,
a wholly-owned subsidiary of Parent, will be merged with and into the Company
(the "Merger").
B. The Board of Directors of the Company has adopted resolutions
approving the Merger pursuant to the Merger Agreement and this Agreement for
purposes of making inapplicable the restrictions on "business combinations"
imposed by Section 203 of the Delaware General Corporation Law.
C. In order to induce Parent to enter into the Merger Agreement, the
Selling Parties have agreed to take certain actions and to refrain from
taking other actions in connection with the Merger.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement:
(a) "COMPANY COMMON STOCK" shall mean the common stock, par
value $.10 per share, of the Company.
(b) An "EXERCISE EVENT" shall be deemed to have occurred if
Parent shall have the right to terminate the Merger Agreement pursuant to
Section 10.2(d) or 10.2(e) of the Merger Agreement.
(c) "EXPIRATION DATE" shall mean the earlier of (i) the date
upon which the Merger becomes effective (the "Effective Date"), (ii) the date
upon which the Option Closing occurs, (iii) the date upon which the Merger
Agreement is validly terminated pursuant to Section 10.1(a) or 10.1(c) of the
Merger Agreement, and (iv) January 31, 2000 (the "Expiration Date").
<PAGE> D-2
(d) Each Selling Party shall be deemed to "OWN" or to have
acquired "OWNERSHIP" of a security if it: (i) is the record owner of such
security; or (ii) is the "beneficial owner" (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934) of such security.
(e) "PERSON" shall mean any (i) individual, (ii) corporation,
limited liability company, partnership, trust or other entity, or (iii)
governmental authority.
(f) "RESTRICTED PERIOD" shall mean the period from the date of
this Agreement through the Expiration Date.
(g) "SUBJECT SECURITIES" shall mean: (i) all securities of the
Company (including all shares of Company Common Stock and all options,
warrants and other rights to acquire shares of Company Common Stock) Owned by
the Selling Parties as of the date of this Agreement; and (ii) all additional
securities of the Company (including all additional shares of Company Common
Stock and all additional options, warrants and other rights to acquire shares
of Company Common Stock) of which each Selling Party acquires Ownership
during the Restricted Period.
(h) A Person shall be deemed to have effected a "TRANSFER" of a
security if such Person directly or indirectly: (i) sells, pledges,
encumbers, grants an option with respect to, transfers, distributes or
disposes of such security or any interest in such security; or (ii) enters
into an agreement or commitment contemplating the possible sale of, pledge
of, encumbrance of, grant of an option with respect to, transfer of or
disposition of such security or any interest therein.
SECTION 2. TRANSFER OF SUBJECT SECURITIES.
2.1 NO TRANSFER OF SUBJECT SECURITIES. During the Restricted Period,
neither Selling Party shall cause or permit any Transfer of any of the
Subject Securities to be effected. Any Transfer in violation of this Section
2.1 shall be null and void ab initio.
2.2 NO TRANSFER OF VOTING RIGHTS. Each Selling Party shall ensure
that, during the Restricted Period: (a) none of the Subject Securities is
deposited into a voting trust; and (b) no proxy is granted other than to
Parent pursuant to this Agreement, and no voting agreement or similar
agreement is entered into, with respect to any of the Subject Securities.
SECTION 3. VOTING OF SHARES.
3.1 VOTING AGREEMENT. Each Selling Party agrees that, during the
Restricted Period:
(a) at any meeting of stockholders of the Company, however
called, and at every adjournment or postponement thereof, it shall (unless
otherwise directed in writing by Parent) cause all outstanding shares of
Company Common Stock (and any other Subject Securities having voting rights)
that are Owned by such Selling Party as of the record date fixed for such
meeting to be voted (i) FOR the approval and adoption of the Merger
<PAGE> D-3
Agreement and the approval of the Merger, and FOR each of the other actions
contemplated by the Merger Agreement, and (ii) AGAINST any action or
agreement that would result in a breach in any material respect of any
representation, warranty or covenant of the Company in the Merger Agreement,
and AGAINST any action or agreement that would impede, interfere with, delay,
postpone, attempt to discourage the Merger or otherwise materially adversely
affect the Merger, including, without limitation, any action or agreement
with respect to an Acquisition Transaction with any Person (other than Parent
or Merger Sub); and
(b) in the event written consents are solicited or otherwise
sought from stockholders of the Company with respect to the approval or
adoption of the Merger Agreement, with respect to the approval of the Merger
or with respect to any of the other actions contemplated by the Merger
Agreement, it shall (unless otherwise directed in writing by Parent) cause to
be validly executed, with respect to all outstanding shares of Company Common
Stock (and any other Subject Securities having voting rights) that are Owned
by such Selling Party as of the record date fixed for the consent to the
proposed action, a written consent or written consents (i) FOR the approval
and adoption of the Merger Agreement and the approval of the Merger, and FOR
each of the other actions contemplated by the Merger Agreement, and
(ii) AGAINST any action or agreement that would result in a breach in any
material respect of any representation, warranty or covenant of the Company
in the Merger Agreement, and AGAINST any action or agreement that would
impede, interfere with, delay, postpone, attempt to discourage the Merger or
otherwise materially adversely affect the Merger, including, without
limitation, any action or agreement with respect to an Acquisition
Transaction with any Person (other than Parent or Merger Sub).
3.2 PROXY; ADDITIONAL PURCHASES; FURTHER ASSURANCES.
(a) Contemporaneously with the execution of this Agreement: (i)
each Selling Party shall deliver to Parent a proxy in the form attached to
this Agreement as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law, with respect to the shares referred to therein
(individually, a "Proxy," and collectively, the "Proxies"); and (ii) each
Selling Party shall cause to be delivered to Parent an additional proxy (in
the form attached hereto as Exhibit A) executed on behalf of the record owner
of any outstanding shares of Company Common Stock that are owned beneficially
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934),
but not of record, by such Selling Party.
(b) Each Selling Party shall, at its own expense, perform such
further acts and execute such further documents and instruments as may
reasonably be required to vest in Parent the power to carry out and give
effect to the provisions of this Agreement.
SECTION 4. THE OPTION
4.1 Each Selling Party hereby grants to Parent an unconditional,
irrevocable option (the "Option") to purchase on one occasion, subject to the
terms hereof, all of the Subject Securities Owned by such Selling Party
(other than the 500,000 shares of Company Common Stock Owned by Robert
Kaufmann with respect to which ACX has voting power) at any time on or prior
to the Expiration Date if after the date of this Agreement an Exercise Event
occurs. Following the occurrence of an Exercise Event, Parent may purchase:
(i) all (but not less than all) Subject Securities consisting of Company
Common Stock at a purchase price of $2.33 per
<PAGE> D-4
share (as adjusted pursuant to Section 4.2 below, the "Standard Option Price"),
and (ii) all or any part of any other Subject Securities at a purchase price
equal to that paid by such Selling Party for such Subject Securities (the "Other
Option Price"). If Parent wishes to exercise the Option, it shall send to the
Selling Parties a written notice (the date of which is referred to herein as the
"Notice Date") on or prior to the Expiration Date specifying (i) which Subject
Securities not consisting of Company Common Stock Parent will purchase, if any,
and (ii) a place and date not later than the later of (A) five (5) business days
from the Notice Date and (B) notwithstanding the Expiration Deadline (but in
any event not later than March 15, 2000), two (2) business days following the
expiration or earlier termination of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, for the
closing of such purchase (the "Option Closing"). At the Option Closing,
Parent shall pay to each Selling Party the aggregate purchase price for the
Subject Securities sold by such Selling Party in immediately available funds
by a wire transfer to a bank account designated by such Selling Party;
provided that failure or refusal of such Selling Party to designate such a
bank account shall not preclude Parent from exercising the Option. At the
Option Closing, simultaneously with the payment of the aggregate Standard
Option Price and the Other Option Price, if applicable, by Parent, each
Selling Party shall deliver to Parent a certificate or certificates
representing the Subject Securities accompanied by duly executed stock
powers. If prior notification to or approval of any governmental authority is
required (or if any waiting period must expire or be terminated) in
connection with the exercise of the Option, the Selling Parties shall
promptly cause to be filed, if applicable, the required notice or application
for approval and shall expeditiously process the same (and the Selling
Parties shall cooperate with Parent in the filing of any such notice or
application required to be filed by Parent and the obtaining of any such
approval required to be obtained by Parent), and notwithstanding anything to
the contrary set forth in this Agreement, the Expiration Deadline may be
extended by Parent to a date not more than three (3) business days after the
date on which any required notification has been made, approval has been
obtained or waiting period has expired or been terminated; provided, however,
that in no event may the Expiration Deadline be extended beyond March 15,
2000.
4.2 If at any time the Company shall (i) pay a dividend (other than
regular cash dividends) or otherwise make a distribution to the holders of
Company Common Stock, (ii) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock or combine its outstanding
shares of Company Common Stock into a smaller number of shares of Company
Common Stock, (iii) reorganize its capital, reclassify its capital stock,
consolidate or merge with or into another entity or sell, transfer or
otherwise dispose of all or substantially all of its property, assets or
business to another entity or (iv) engage in any similar dilutive
transaction, the parties agree to adjust the Standard Option Price and/or the
number of shares of Company Common Stock (or Company Common Stock obtainable
upon conversion of other Subject Securities, if applicable) subject to the
Option as necessary and equitable in order to ensure that Parent shall
receive, upon exercise of the Option, the number of shares of Company Common
Stock (or Company Common Stock obtainable upon conversion of other Subject
Securities, if applicable) which Parent would have received in connection
with or as a result of such dividend, distribution or other transaction, if
it had exercised the Option immediately prior to (i) the record date for any
such dividend or other distribution or (ii) the effective time of any such
other transaction.
<PAGE> D-5
4.3 Until exercise of the Option, all rights, ownership and economic
benefits of and relating to the Subject Securities shall remain vested in and
belong to the Selling Parties, and Parent shall have no authority to manage,
direct, superintend, restrict, regulate, govern, or administer any of the
policies or operations of the Company or exercise any power or authority to
direct either Selling Party in the voting of any of the Subject Securities,
except as otherwise provided herein and in the Proxies, or the performance of
either Selling Party's duties or responsibilities as a stockholder of the
Company.
SECTION 5. WAIVER OF APPRAISAL RIGHTS.
Each Selling Party hereby irrevocably and unconditionally waives, and
agrees to cause to be waived and to prevent the exercise of, any rights of
appraisal, any dissenters' rights and any similar rights relating to the
Merger or any related transaction that such Selling Party or any other Person
may have by virtue of the ownership of any Subject Securities.
SECTION 6. NO SOLICITATION.
6.1 During the Restricted Period, each Selling Party shall, and shall
direct its officers, directors, employees, representatives and agents
(including, without limitation, its attorneys, investment bankers and
accountants) to, refrain from any discussions and negotiations with any
parties other than Parent and Merger Sub with respect to any proposal
relating to an Acquisition Transaction, and agrees that it shall not, and
shall not authorize or permit any of its directors, officers, employees,
agents or representatives (including, without limitation, its attorneys,
investment bankers and accountants), directly or indirectly, to solicit,
initiate or encourage (including by way of furnishing or disclosing
non-public information) any inquiries or the making of any proposal with
respect to an Acquisition Transaction or initiate, negotiate, explore or
otherwise engage in substantive communications in any way with any Person
(other than Merger Sub, Parent and their directors, officers, employees,
agents and representatives) with respect to any Acquisition Transaction.
Without limiting the generality of the foregoing, each Selling Party agrees
that during the Restricted Period, it shall not, and shall not authorize or
permit any of its directors, officers, employees, agents or representatives
(including, without limitation, its attorneys, investment bankers and
accountants) to request that the Company waive its right of first refusal,
under the Stock Purchase Agreement, dated November 15, 1996, among
Stockholder, New World Power Corporation and the Company, to purchase all
shares of Company Common Stock that Stockholder and its subsidiaries may from
time to time propose to sell.
6.2 ACX agrees that if either J. Michael Davis or Jeffrey C. Brines
(each, a "Company Employee") becomes an employee of ACX or any of its
affiliates, ACX shall, for a period 18 months after such employment
commences, not permit such Company Employee to do either of the following for
the benefit of ACX or such affiliate, as the case may be: (a) cause or
attempt to cause any employee, agent or contractor of the Company, to
terminate his or her employment, agency or contractor relationship with the
Company; interfere or attempt to interfere with the relationship between the
Company and any employee, contractor or agent of the Company; hire or attempt
to hire any employee, agent or contractor of the Company; or conduct business
of any kind with any Company contractor; or (b) solicit business from or
conduct business with any customer or client served by the Company while he
was an employee
<PAGE> D-6
of the Company; or interfere or attempt to interfere with any transaction,
agreement or business relationship in which the Company or any affiliate was
involved while he was an employee of the Company.
SECTION 7. ASSIGNMENT OF SOLAR ELECTRIC ASSETS.
Contemporaneously with the execution of this Agreement, the Selling
Parties and Golden International, Inc., a Colorado corporation (or any
successor-in-interest to Golden International, Inc., "Photon Subsidiary")
shall execute and deliver to Parent, an Assignment and Bill of Sale in the
form of Exhibit B hereto (the "Assignment"), assigning, as of the Effective
Time, to the Company, all of their right, title and interest in and to the
following (collectively, the "Solar Electric Assets"): all Intellectual
Property owned by them (whether or not developed by them) for use in (a)
solar electric applications and (b) the manufacture of CdTe thin film modules
(or otherwise relating thereto) other than any such Intellectual Property in
which PE Limited Liability Company has an interest. The Solar Electric
Assets shall be assigned to the Company on an as-is, where-is basis, without
any representation or warranty except as set forth in Section 9.
SECTION 8. REPAYMENT OF CERTAIN COMPANY INDEBTEDNESS.
Parent agrees that if the indebtedness of the Company owing to the
Selling Parties listed on Schedule 1 hereto (the "Intercompany Indebtedness")
is not paid in full as of the Effective Time, Parent shall cause the
Intercompany Indebtedness to be paid in full immediately after the Effective
Time but no later than twenty-four (24) hours thereafter. Additionally, to
the extent Stockholder and/or ACX, as the case may be, attempt to obtain
releases from the guaranties of obligations of the Company listed on Exhibit
D hereto (the "Guaranties"), Parent shall offer to be substituted as
guarantor under the Guaranties, in the place and stead of Stockholder or ACX,
as the case may be, and shall use best commercial efforts to effect such
substitution.
SECTION 9. REPRESENTATIONS AND WARRANTIES OF EACH SELLING PARTY.
Each Selling Party hereby represents and warrants to Parent as to
itself (and as to Photon Subsidiary) as follows:
9.1 AUTHORIZATION, ETC. It has the absolute and unrestricted right,
power, authority and capacity to execute and deliver this Agreement, the
Assignment and its Proxy and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement, the Assignment and
its Proxy have been duly and validly authorized and approved by its Board of
Directors and its stockholders to the extent required by applicable law and
its Certificate or Articles of Incorporation, bylaws or other charter
documents and no other corporate proceedings are necessary to authorize this
Agreement, the Assignment or its Proxy. This Agreement, the Assignment and
its Proxy have been duly and validly executed and delivered by it and
constitute its legal, valid and binding obligations, enforceable against it
in accordance with their terms, subject to (i) laws of general application
relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules
of law governing specific performance, injunctive relief and other equitable
remedies. Photon Subsidiary has the absolute and unrestricted right, power,
authority and capacity to execute and deliver the Assignment and to
<PAGE> D-7
perform its obligations thereunder. The execution and delivery of the
Assignment has been duly and validly authorized and approved by Photon
Subsidiary's Board of Directors and its stockholders to the extent required by
applicable law. The Assignment has been duly and validly executed and delivered
by Photon Subsidiary and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive
relief and other equitable remedies.
9.2 NO CONFLICTS OR CONSENTS.
(a) The execution and delivery of this Agreement, the
Assignment and its Proxy by it do not, and the performance of this Agreement,
the Assignment and its Proxy by it will not: (i) conflict with or violate any
law, rule, regulation, order, decree or judgment applicable to it or by which
it or its properties is or may be bound or affected; or (ii) result in or
constitute (with or without notice or lapse of time) any breach of or default
under, or give to any other Person (with or without notice or lapse of time)
any right of termination, amendment, acceleration or cancellation of, or
result (with or without notice or lapse of time) in the creation of any
encumbrance or restriction on any of the Subject Securities or the Solar
Electric Assets pursuant to, any contract to which it is a party or by which
it or any of its affiliates or properties is or may be bound or affected,
except in the case of clause (i) or (ii) above where any of such events would
not have a material adverse effect on it or otherwise impair its ability to
satisfy its obligations hereunder.
(b) The execution and delivery of the Assignment by Photon
Subsidiary do not, and the performance of the Assignment by it will not: (i)
conflict with or violate any law, rule, regulation, order, decree or judgment
applicable to it or by which it or its properties is or may be bound or
affected; or (ii) result in or constitute (with or without notice or lapse of
time) any breach of or default under, or give to any other Person (with or
without notice or lapse of time) any right of termination, amendment,
acceleration or cancellation of, or result (with or without notice or lapse
of time) in the creation of any encumbrance or restriction on any of the
Solar Electric Assets pursuant to, any contract to which it is a party or by
which it or any of its affiliates or properties is or may be bound or
affected, except in the case of clause (i) or (ii) above where any of such
events would not have a material adverse effect on it or otherwise impair its
ability to satisfy its obligations hereunder.
(c) The execution and delivery of this Agreement, the
Assignment and its Proxy by it do not, and the performance of this Agreement,
the Assignment and its Proxy by it will not, require any consent or approval
of any Person.
(d) The execution and delivery of the Assignment by Photon
Subsidiary will not when executed, and the performance of the Assignment by
it will not, require any consent or approval of any Person.
9.3 TITLE TO SECURITIES. As of the date of this Agreement: (a)
Stockholder holds of record 8,399,327 shares of Company Common Stock, free
and clear of all liens, pledges, claims, charges, security interests,
options, rights of first refusal, agreements, limitations on the
Stockholder's voting rights, or other encumbrances of any kind and
Stockholder is not the
<PAGE> D-8
"beneficial owner" (as such term is used in Section 1(d)) of any additional
shares of Company Common Stock; (b) ACX holds of record 530,052 shares of
Company Common Stock and is the "beneficial owner" (as such term is used in
Section 1(d)) of an additional 500,000 shares of Company Common Stock, free and
clear of all liens, pledges, claims, charges, security interests, options,
rights of first refusal, agreements, limitations on ACX's voting rights, or
other encumbrances of any kind; (c) neither Selling Party owns any options,
warrants or other rights to acquire shares of Company Common Stock (by purchase,
conversion or otherwise); and (d) neither Selling Party directly or indirectly
Owns any shares of capital stock or other securities of the Company other than
the those specified in this Section 9.3.
9.4 TITLE TO SOLAR ELECTRIC ASSETS. Each Selling Party and Photon
Subsidiary will have good and marketable title to those Solar Electric Assets
which it is assigning to the Company pursuant to the Assignment when those
Solar Electric Assets are assigned, free and clear of all liens, other than
Permitted Liens, and it has not granted any license or distribution rights
with respect to any of its Solar Electric Assets to any third-party which
will be in existence at the time of the assignment of such Solar Electric
Assets.
9.5 ACCURACY OF REPRESENTATIONS. The representations and warranties
contained in this Agreement are accurate in all material respects as of the
date of this Agreement, will be accurate in all material respects at all
times through the Expiration Date and will be accurate in all material
respects as of the date of the consummation of the Merger as if made on that
date.
SECTION 10. INDEMNIFICATION AND RELEASE.
10.1 Subject to the limitations set forth in Sections 10.4 and 10.5
below, ACX shall, from and after the Effective Time, indemnify, defend and
hold harmless (a) the Company, (b) each of the Company's stockholders,
directors, officers, employees, agents, attorneys and representatives, and
(c) solely as to clause (iv) below, the persons currently serving as trustees
of the Company's 401(k) Plan, from and against any and all Losses (as
hereinafter defined) which may be incurred or suffered by any such party and
which may arise out of or result from (i) any breach of any representation or
warranty contained in this Agreement, or the failure of any of the Selling
Parties or Photon Subsidiary to observe, perform or abide by, or any other
breach of, any restriction, covenant, obligation or other provision contained
this Agreement, the Assignment or in the Proxies, (ii) any breach by the
Company of any representation or warranty contained in the Merger Agreement
or in any other Company Document solely to the extent any such representation
or warranty applies to either Solartec Sociedad Anonima, a corporation
organized under the laws of the Republic of Argentina and a wholly owned
subsidiary of the Company (the "Argentinean Sub") or Golden Genesis do Brasil
Energia Renovavel, Ltda., a corporation organized under the laws of the
Federative Republic of Brazil and a wholly owned subsidiary of the Company
(the "Brazilian Sub"), (iii) any breach by the Selling Parties of any
representation or warranty contained in that certain Share Purchase
Agreement, dated as of September 4, 1998, among the Selling Parties and the
Company (the "1998 Share Purchase Agreement"), or (iv) the failure of the
Company's 401(k) Plan to satisfy the qualification requirements of Sections
401(a) and 501(a) of the Internal Revenue Code of 1986, as amended, and any
remedial action required to satisfy such requirements (whether or not
initiated by the Internal Revenue Service or the Company). As used herein,
"Losses" shall mean all damages, awards, judgments, assessments,
<PAGE> D-9
fines, sanctions, penalties, charges, costs, expenses, payments, diminutions in
value and other losses, however suffered or characterized, all interest
thereon, all costs and expenses of investigating any claim, lawsuit or
arbitration and any appeal therefrom, all actual attorneys', accountants'
investment bankers' and expert witness' fees incurred in connection
therewith, whether or not such claim, lawsuit or arbitration is ultimately
defeated and, subject to the other provisions of this Section 10, all amounts
paid incident to any compromise or settlement of any such claim, lawsuit or
arbitration.
10.2 If any party (the "Indemnified Party") receives notice of any
claim or other commencement of any action or proceeding with respect to which
ACX is obligated to provide indemnification pursuant to Section 10.1, the
Indemnified Party shall promptly give the ACX written notice thereof, which
notice shall specify in reasonable detail, if known, the amount or an
estimate of the amount of the liability arising therefrom and the basis of
the claim. Such notice shall be a condition precedent to any liability of
the ACX for indemnification hereunder, but the failure of the Indemnified
Party to give prompt notice of a claim shall not adversely affect the
Indemnified Party's right to indemnification hereunder unless the defense of
that claim is materially prejudiced by such failure. The Indemnified Party
shall not settle or compromise any claim by a third party for which it is
entitled to indemnification hereunder without the prior written consent of
the ACX (which shall not be unreasonably withheld or delayed) unless suit
shall have been instituted against it and the ACX shall not have taken
control of such suit after notification thereof as provided in Section 10.3.
10.3 In connection with any claim giving rise to indemnity hereunder
resulting from or arising out of any claim or legal proceeding by a Person
who is not a party to this Agreement, the ACX at its sole cost and expense
may, upon written notice to the Indemnified Party, assume the defense of any
such claim or legal proceeding if it provides assurances, reasonably
satisfactory to the Indemnified Party, that it will be financially able to
satisfy such claims in full if the same are decided adversely. The
Indemnified Party shall be entitled to participate in (but not control) the
defense of any such action, with its counsel and at its own expense;
provided, however, that if the Indemnified Party, in its sole discretion,
determines that there exists a conflict of interest between the ACX (or any
constituent party thereof) and the Indemnified Party, the Indemnified Party
(or any constituent party thereof) shall have the right to engage separate
counsel, the reasonable costs and expenses of which shall be paid by the ACX,
but in no event shall ACX be liable for the costs and expenses of more than
one such separate counsel. If the ACX assumes the defense of any such claim
or legal proceeding, the ACX shall take all steps necessary to pursue the
resolution thereof in a prompt and diligent manner. The ACX shall be
entitled to consent to a settlement of, or the stipulation of any judgment
arising from, any such claim or legal proceeding, with the consent of the
Indemnified Party, which consent shall not be unreasonably withheld or
delayed; provided, however, that no such consent shall be required from the
Indemnified Party if (i) the ACX pays or causes to be paid all Losses arising
out of such settlement or judgment concurrently with the effectiveness
thereof (as well as all other Losses theretofore incurred by the Indemnified
Party which then remain unpaid or unreimbursed), (ii) in the case of a
settlement, the settlement is conditioned upon a complete release by the
claimant of the Indemnified Party and (iii) such settlement or judgment does
not require the encumbrance of any asset of the Indemnified Party or impose
any restriction upon its conduct of business
<PAGE> D-10
10.4 Notwithstanding anything to the contrary stated in the Merger
Agreement or the 1998 Share Purchase Agreement, each of the following
representations and warranties (the "Specified Representations and
Warranties")
and the covenant to indemnify with respect to the matters set
forth in clause (iv) of Section 10.1 shall survive the Closing and shall
thereafter terminate and expire on the first (1st) anniversary of the Closing
Date, unless before such date, an Indemnified Party has delivered to ACX a
written notice of a claim with respect thereto: (i) the representations and
warranties of the Selling Parties contained in this Agreement, (ii) the
representations and warranties of the Company contained in the Merger
Agreement or any Company Document, in any case, relating to either the
Argentinean Sub or the Brazilian Sub, and (iii) the representations and
warranties of the Selling Parties in the 1998 Share Purchase Agreement.
10.5 The aggregate amount of all claims arising under clauses (ii),
(iii) and (iv) of Section 10.1 hereof shall not exceed $250,000.
10.6 In consideration of the payment to each Selling Party at the
Closing, effective as of the Effective Time, the Selling Parties jointly and
severally release and discharge the Company and each of the Subsidiaries, and
each of their respective shareholders, affiliates, officers, directors,
employees, agents and attorneys, from any and all claims, contentions,
demands, causes of action at law or in equity, debts, liens, agreements,
notes, obligations or liabilities of any nature, character or description
whatsoever, whether known or unknown, which they or either of them may now or
hereafter have against any such Persons by reason of any matter, event, thing
or state of facts occurring, arising, done, omitted or suffered to be done
prior to the Effective Time, other than any obligations of the Company to
either of them with respect to any Intercompany Indebtedness not paid in full
as of the Effective Time.
SECTION 11. ADDITIONAL COVENANTS OF THE SELLING PARTIES.
11.1 FURTHER ASSURANCES. From time to time and without additional
consideration, each of the Selling Parties shall (at its sole expense)
execute and deliver, or cause to be executed and delivered, such additional
transfers, assignments, endorsements, proxies, consents and other
instruments, and shall (at its sole expense) take such further actions, as
Parent may reasonably request for the purpose of carrying out and furthering
the intent of this Agreement.
11.2 LEGEND. Immediately after the execution of this Agreement (and
from time to time upon the acquisition by either Selling Party of Ownership
of any shares of Company Common Stock prior to the Expiration Date), each
Selling Party shall ensure that each certificate evidencing any outstanding
shares of Company Common Stock or other securities of the Company Owned by
such Selling Party and which are held in certificated form bears a legend in
the following form:
THE SECURITY OR SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE
WITH THE PROVISIONS OF THE OPTION, VOTING AND INDEMNIFICATION AGREEMENT DATED
AS OF MAY 26, 1999, AMONG ACX TECHNOLOGIES, INC., GOLDEN TECHNOLOGIES
COMPANY, INC. AND KYOCERA
<PAGE> D-11
INTERNATIONAL, INC., A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICES OF GOLDEN GENESIS COMPANY.
SECTION 12. MISCELLANEOUS.
12.1 EXPENSES. Each party will pay that party's costs and expenses,
including attorney and accountant fees, in connection with this Agreement and
the transactions contemplated by this Agreement.
12.2 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Subject
to Section 10.4, all representations, warranties, covenants and obligations
of each Selling Party contained in this Agreement shall survive the
Expiration Date and the Closing.
12.3 INDEPENDENCE OF OBLIGATIONS. The covenants and obligations of
the Selling Parties set forth in this Agreement shall be construed as
independent of any other agreement or arrangement between any Selling Party,
on the one hand, and the Company or Parent, on the other. The existence of
any claim or cause of action by any Selling Party against the Company or
Parent shall not constitute a defense to the enforcement of any of such
covenants or obligations against such Selling Party.
12.4 SPECIFIC PERFORMANCE. Each Selling Party agrees that in the
event of any breach or threatened breach by it of any covenant, obligation or
other provision contained in this Agreement, Parent shall be entitled (in
addition to any other remedy that may be available to Parent) to: (a) a
decree or order of specific performance or mandamus to enforce the observance
and performance of such covenant, obligation or other provision; and (b) an
injunction restraining such breach or threatened breach. Each Selling Party
further agrees that neither Parent nor any other Person shall be required to
obtain, furnish or post any bond or similar instrument in connection with or
as a condition to obtaining any remedy referred to in this Section 12.4, and
it irrevocably waives any right it may have to require the obtaining,
furnishing or posting of any such bond or similar instrument.
12.5 NOTICES. All notices and other communications hereunder shall be
in writing and shall be delivered personally, by FedEx or other nationally
recognized next-day courier, telecopied with confirmation of receipt, or
mailed first class, postage prepaid, by certified mail, return receipt
requested, to the parties at the addresses specified below (or at such other
address for a party as shall be specified by like notice; provided that
notices of a change of address shall be effective only upon receipt thereof)
All notices, requests and other communications shall be deemed given on the
date of actual receipt or delivery as evidenced by written receipt,
acknowledgement or other evidence of actual receipt or delivery to the
address specified below. In case of service by telecopy, a copy of such
notice shall be personally delivered or sent by certified mail, in the manner
set forth above, within three (3) business days thereafter.
<PAGE> D-12
If to Parent:
Kyocera International, Inc.
8611 Balboa Avenue
San Diego, California 92123-1580
Attention: President
Fax No.: (619) 492-1456
With a copy to:
Loeb & Loeb LLP
1000 Wilshire Boulevard, Suite 1800
Los Angeles, California 90017
Attention: Kenneth R. Benbassat, Esq.
Fax No.: (213) 688-3460
If to Stockholder or ACX, to:
ACX Technologies, Inc.
16000 Table Mountain Parkway
Golden, Colorado 80403
Attention: Jed Burnham
Fax No.: (303) 271-7055
With a copy to:
ACX Technologies, Inc.
16000 Table Mountain Parkway
Golden, Colorado 80403
Attention: Jill B.W. Sisson, Esq.
Fax No.: (303) 271-7055
12.6 SEVERABILITY. If any provision of this Agreement or any part of
any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to
the fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c)
the invalidity or unenforceability of such provision or part thereof shall
not affect the validity or enforceability of the remainder of such provision
or the validity or enforceability of any other provision of this Agreement.
Each provision of this Agreement is separable from every other provision of
this Agreement, and each part of each provision of this Agreement is
separable from every other part of such provision.
12.7 APPLICABLE LAW; JURISDICTION. THIS AGREEMENT IS MADE UNDER, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN,
WITHOUT GIVING EFFECT TO
<PAGE> D-13
PRINCIPLES OF CONFLICTS OF LAW. In any action between the parties hereto,
whether arising out of this Agreement or otherwise: (a) each of the parties
irrevocably and unconditionally consents and submits to the exclusive
jurisdiction and venue of the state and federal courts located in the State of
Delaware; (b) if any such action is commenced in a state court, then, subject to
applicable law, no party shall object to the removal of such action to any
federal court located in Delaware; (c) each of the parties irrevocably waives
the right to trial by jury; and (d) each of the parties irrevocably consents to
service of process by first class certified mail, return receipt requested,
postage prepaid, to the address at which such party is to receive notice in
accordance with Section 12.5.
12.8 WAIVER. No failure on the part of Parent to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of Parent in
exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy. Parent shall not be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of Parent;
and any such waiver shall not be applicable or have any effect except in the
specific instance in which it is given.
12.9 ATTORNEYS' FEES. If any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this
Agreement is brought against any Selling Party, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be entitled).
12.10 CAPTIONS. The captions contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
12.11 ENTIRE AGREEMENT. This Agreement, the Assignment and the Proxies
set forth the entire understanding of Parent and the Selling Parties relating
to the subject matter hereof and thereof and supersede all other prior
agreements and understandings between Parent and any Selling Party relating
to the subject matter hereof and thereof.
12.12 NON-EXCLUSIVITY. The rights and remedies of Parent under this
Agreement are not exclusive of or limited by any other rights or remedies
which it may have, whether at law, in equity, by contract or otherwise, all
of which shall be cumulative (and not alternative). Without limiting the
generality of the foregoing, the rights and remedies of Parent under this
Agreement, and the obligations and liabilities of each Selling Party under
this Agreement, are in addition to their respective rights, remedies,
obligations and liabilities under common law requirements and under all
applicable statutes, rules and regulations. Nothing in this Agreement shall
limit any Selling Party's obligations, or the rights or remedies of Parent,
under the Assignment or any Proxy; and nothing in the Assignment or any Proxy
shall limit any Selling Party's obligations, or any of the rights or remedies
of Parent, under this Agreement.
<PAGE> D-14
12.13 AMENDMENTS. This Agreement may not be amended, modified, altered
or supplemented other than by means of a written instrument duly executed and
delivered on behalf of Parent and the Selling Parties.
12.14 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of
the interests or obligations hereunder may be assigned or delegated by any
Selling Party, and any attempted or purported assignment or delegation of any
of such interests or obligations shall be void. Subject to the preceding
sentence, this Agreement shall be binding upon each Selling Party and its
successors and assigns, and shall inure to the benefit of Parent and its
successors and assigns. Nothing in this Agreement is intended to confer on
any Person (other than Parent and its successors and assigns) any rights or
remedies of any nature.
12.15 THIRD-PARTY BENEFICIARY. The Company and the trustees of the
Company's 401(k) Plan are intended to be a third-party beneficiary of the
agreements of the parties hereto set forth in Sections 7 and 10 hereof.
12.16 COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be
an original, but all of which shall together constitute one and the same
instrument.
12.17 CONSTRUCTION.
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include masculine and feminine genders.
(b) The parties agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall
not be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of
this Agreement and Exhibits to this Agreement.
<PAGE> D-15
IN WITNESS WHEREOF, Parent and the Selling Parties have caused this
Agreement to be executed as of the date first written above.
PARENT:
Kyocera International, Inc.
By:
Name: Rodney N. Lanthorne
Title: President
STOCKHOLDER:
Golden Technologies Company, Inc.
By:
Name:
Title:
ACX Technologies, Inc.
By:
Name:
Title:
<PAGE> D-16
EXHIBIT A (to the Option, Voting and Indemnification Agreement)
FORM OF IRREVOCABLE PROXY
The undersigned stockholder of Golden Genesis Company, a Delaware
corporation (the "Company"), hereby irrevocably (to the fullest extent
permitted by law) appoints and constitutes Kyocera International, Inc., a
California corporation ("Parent"), the attorney and proxy of the undersigned
with full power of substitution and resubstitution, to the full extent of the
undersigned's rights with respect to (i) the ______________ shares of common
stock of the Company owned of record by the undersigned as of the date of
this proxy, and (ii) any and all other shares of capital stock (whether
common or preferred) of the Company which the undersigned may acquire on or
after the date hereof. (The shares of the capital stock of the Company
referred to in clauses "(i)" and "(ii)" of the immediately preceding sentence
are collectively referred to as the "Shares.") Upon the execution hereof,
all prior proxies given by the undersigned with respect to any of the Shares
are hereby revoked, and the undersigned agrees that no subsequent proxies
will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest, is granted in
connection with the execution and delivery of the Voting and Indemnification
Agreement, of even date herewith, among Parent, [ACX Technologies, Inc.]
[Golden Technologies Company, Inc.] and the undersigned (the "Voting
Agreement") and is granted in consideration of Parent entering into the
Agreement and Plan of Merger, of even date herewith, among Parent, GGC
Acquisition Company ("Merger Sub") and the Company (the "Merger Agreement").
The attorney and proxy named above (and its successors) will be
empowered, and may exercise this proxy, to vote the Shares at any meeting of
the stockholders of the Company, however called, and at every adjournment or
postponement thereof, or in connection with any solicitation of written
consents from stockholders of the Company (i) FOR the approval and adoption
of the Merger Agreement and the approval of the merger contemplated thereby
(the "Merger"), and FOR each of the other actions contemplated by the Merger
Agreement, and (ii) AGAINST any action or agreement that would result in a
breach in any material respect of any representation, warranty or covenant of
the Company in the Merger Agreement, and AGAINST any action or agreement that
would impede, interfere with, delay, postpone, attempt to discourage the
Merger or otherwise materially adversely affect the Merger, including,
without limitation, any action or agreement with respect to an Acquisition
Transaction (as defined in the Merger Agreement) with any person or entity
(other than Parent or Merger Sub). The undersigned may vote the Shares on
all other matters.
This proxy shall be binding upon the permitted successors and assigns
of the undersigned.
If any provision of this proxy or any part of any such provision is
held under any circumstances to be invalid or unenforceable in any
jurisdiction, then (a) such provision or part thereof shall, with respect to
such circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (b) the invalidity or unenforceability of such provision or part
thereof under such circumstances and in
<PAGE> D-17
such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (c) the invalidity or unenforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
proxy. Each provision of this proxy is separable from every other provision of
this proxy, and each part of each provision of this proxy is separable from
every other part of such provision.
This proxy shall terminate upon the valid termination of the Voting
Agreement.
Dated: _______________, 1999
[Golden Technologies Company, Inc.]
[ACX Technologies, Inc.]
By:
Name:
Title:
<PAGE> D-18
EXHIBIT B
FORM OF BILL OF SALE AND ASSIGNMENT
This Bill of Sale and Assignment is made and entered into this ____ day
of ______________, 1999, by and among ACX Technologies, Inc., a Colorado
corporation ("ACX"), Golden Technologies Company, Inc., a Colorado
corporation ("GTC"), Golden International, Inc. a Colorado corporation
(collectively "Assignors") and Golden Genesis Company, a Delaware corporation
(hereinafter "Assignee") and is made with reference to the following:
A. Concurrently herewith, Kyocera International, Inc., a California
corporation ("Parent"), GGC Acquisition Company, a Delaware corporation and a
wholly-owned subsidiary of Parent ("Merger Sub"), and Assignee, more than
fifty percent of whose outstanding shares of capital stock are held by GTC,
are entering into an Agreement and Plan of Merger (as amended from time to
time, the "Merger Agreement"), pursuant to which Merger Sub will be merged
with and into Assignee (the "Merger").
B. In order to induce Parent to enter into the Merger Agreement,
concurrently herewith, ACX, GTC and Parent are entering into an Option,
Voting and Indemnification Agreement (the "Subject Agreement"), which
provides, among other things, for the assignment by Assignors to Assignee of
certain assets of Assignors hereinbelow described.
NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE 1
ASSIGNMENT
For valuable consideration, the receipt and sufficiency of which
Assignors hereby acknowledge, each Assignor, pursuant to and in compliance
with the Subject Agreement, does, effective as of the Effective Time, hereby
sell, convey, transfer, assign and deliver to Assignee, and Assignee does,
effective as of the Effective Time, hereby accept from each Assignor, all of
such Assignor's right, title and interest in and to all of the following
interests and assets (the "Transferred Assets"):
All Intellectual Property (as defined below) owned by such Assignor
(whether or not developed by such Assignor) for use in (a) solar electric
applications, and (b) the manufacture of CdTe thin film modules (or otherwise
relating thereto) other than any such Intellectual Property in which PE
Limited Liability Company has an interest. As used herein, "Intellectual
Property" shall mean all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all
patents, patent applications and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions and
reexaminations thereof, trademarks, service marks, trade dress, logos, trade
names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith, copyrightable works, all copyrights and all applications,
registrations and
<PAGE> D-19
renewals in connection therewith, mask works and all applications, registrations
and renewals in connection therewith, trade secrets and confidential business
information (including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information and business and marketing plans and proposals),
proprietary software, proprietary rights and copies and tangible embodiments
thereof (in whatever form or medium).TO HAVE AND TO HOLD all such interests and
assets hereby assigned, transferred and conveyed unto Assignee, its successors
and assigns, to its and their own use and behalf forever.
ARTICLE 2
FURTHER ASSURANCES
Assignors shall, as promptly as practicable after the date hereof,
prepare a list describing in detail all Transferred Assets (including,
without limitation, all registrations thereof or applications to register
such Transferred Assets). Additionally, at any time and from time to time
after the date hereof, upon the request of Assignee, execute, acknowledge and
deliver all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances, and take all such further actions, as
shall be necessary or desirable to give effect to the transactions hereby
consummated and to collect and reduce to the possession of Assignee any and
all of the interests and assets hereby transferred to Assignee. Without
limiting the generality of the foregoing, each Assignor hereby appoints
Assignee, and its successors and assigns, the true and lawful attorney of
such Assignor, in the name of Assignee or in the name of such Assignor but
for the benefit and at the expense of Assignee, to demand and receive any and
all interests and assets hereby transferred; to give releases and
acquittances for or in respect of the same or any part thereof; to endorse,
collect and deposit any checks, drafts or other instruments payable to such
Assignor which constitute accounts receivable hereby assigned or relate to
payments for goods and/or services provided by such Assignor or Assignee in
connection with the accounts or rights under contract hereby assigned; to
institute and prosecute, in the name of such Assignor or otherwise, any and
all proceedings at law, in equity or otherwise, which Assignee, or its
successors and assigns, may deem necessary or advisable to collect, assert or
enforce any claim, right, title, debt or account hereby assigned; and to
defend and compromise any and all actions, suits or proceedings in respect of
any of the interests and assets hereby assigned that Assignee, or its
successors or assigns, shall deem necessary or advisable. Assignor hereby
declares that the foregoing powers are coupled with an interest and shall be
irrevocable.
ARTICLE 3
TERMINATION
This Bill of Sale and Assignment shall automatically terminate and be
of no further force or effect upon the valid termination of the Merger
Agreement.
<PAGE> D-20
ARTICLE 4
SUCCESSORS AND ASSIGNS
This Instrument and the covenants and agreements herein contained shall
inure to the benefit of Assignee and shall bind each Assignor and their
respective successors and assigns.
<PAGE> D-21
IN WITNESS WHEREOF, the parties hereto have executed this Bill of Sale
and Assignment as of the day and year first hereinabove written.
"Assignors"
ACX Technologies, Inc.
By:
Its:
Golden Technologies Company, Inc.
By:
Its:
Golden International, Inc.
By:
Its:
"Assignee"
Golden Genesis Company
By:
Its:
<PAGE>
PROXY CARD
Golden Genesis Company
Special Meeting of Stockholders July [__], 1999
This Proxy Is Solicited on Behalf of the Board of Directors
John K. Coors and Jed J. Burnham and each of them, as proxies, with full
power of substitution in each of them, are hereby authorized to represent and
to vote, as designated below and on the reverse side, on all proposals and in
the direction of the proxies on such other matters as may properly come before
the special meeting of stockholders of Golden Genesis Company (the "Company")
to be held on July [__], 1999 or any adjournment(s), postponement(s), or other
delay(s) thereof (the "Special Meeting"), all shares of stock of the Company
to which the undersigned is entitled to vote at the Special Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
1. Proposal #1:
Proposal to adopt the Agreement / / FOR/ / AGAINST/ / ABSTAIN
and Plan of Merger, dated May 26,
1999, by and among Kyocera International,
Inc., GGC Acquisition Company and the
Company (the "Merger Agreement") and to
approve the merger of GGC Acquisition
Company with and into the Company (with
the Company being the surviving corporation)
pursuant to the terms of the Merger Agreement.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL
Address: Date:
Signature(s) in Box
Please sign exactly as your name(s) appear on
Proxy. If held in joint tenancy, all persons
must sign. Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the proxy.
<PAGE>
CONSENT OF HANIFEN, IMHOFF INC.
We hereby consent to the inclusion in the Proxy Statement of Golden
Genesis Company (the "Company") of our opinion delivered to the Board of
Directors of the Company on May 26, 1999 as to the fairness, from a
financial point of view, to the holders of common stock of the Company
of the transaction described in our opinion.
Hanifen, Imhoff Inc.
Denver, Colorado
June 4, 1999
<PAGE>
