<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
JUNE 30, 1996
Date of Report
(Date of earliest event reported)
LANDMARK GRAPHICS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-17195 76-0029459
(State of other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
15150 MEMORIAL DRIVE
HOUSTON, TEXAS
(Address of principal executive offices)
77079-4304
(Zip Code)
(713) 560-1000
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
On June 30, 1996, Landmark Graphics Corporation ("Landmark"), Halliburton
Company ("Halliburton") and Halliburton Acq. Company ("Merger Sub") entered into
an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which the
parties propose to merge Landmark with and into Merger Sub. As a result of
such merger (the "Merger"), Landmark will become a wholly-owned subsidiary of
Halliburton. Pursuant to the Merger, each share (other than shares held by
Landmark, Halliburton or their respective wholly-owned subsidiaries (which will
be cancelled)) of the $0.05 par value per share common stock (the "Landmark
Common Stock") of Landmark which is issued and outstanding at the time the
Merger becomes effective (the "Effective Time"), will be converted into the
right to receive, upon surrender of the underlying certificate(s) representing
shares of Landmark Common Stock, whole shares of the $2.50 par value per share
common stock ("Halliburton Common Stock") of Halliburton (computed based upon an
exchange ratio of 0.574 share of Halliburton Common Stock for each share of
Landmark Common Stock) and cash in lieu of fractional shares of Halliburton
Common Stock which would otherwise be issuable. Upon surrender of such
certificates, Halliburton will also cause to be paid to the holder thereof any
dividends or other distributions with both a record date which is subsequent to
the Effective Time and a payment date which is prior to the surrender of such
certificate(s).
The Merger was unanimously approved by each party's Board of Directors and
by Halliburton (as the sole stockholder of Merger Sub). In the case of
Landmark, such approval is subject to the approval of the Merger by the
stockholders of Landmark. The Merger is also subject to antitrust review
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
The parties anticipate that the Merger will be completed in the fourth
quarter of the 1996 calendar year.
The Merger is intended to qualify as reorganization (within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended) and, for
financial accounting purposes, the parties intend to account for the Merger as a
"pooling of interests."
The Merger Agreement obligates Landmark to take all actions necessary to
promptly convene a special meeting (the "Special Meeting") of its stockholders
to consider a proposal to approve the Merger.
The Merger Agreement may be terminated (i) by the mutual consent of
Landmark and Halliburton, (ii) by Landmark, if Halliburton breaches the Merger
Agreement and fails to cure such breach, (iii) by Halliburton, if Landmark
breaches the Merger Agreement and fails to cure such breach, (iv) by either
Landmark or Halliburton, if any order is entered which prevents consummation of
the Merger; provided that the party seeking to terminate the Merger Agreement
has used reasonable efforts to prevent the entry of such order and to obtain the
termination of such order, (v) by either Landmark or Halliburton, if the Merger
has not been consummated by
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<PAGE>
December 31, 1996; provided, the Merger Agreement may be extended by either
Landmark or Halliburton to a date not later than February 28, 1997, if the
failure to consummate the Merger by December 31, 1996 is attributable to the
failure to receive all required governmental approvals or as a result of the
entry of an order preventing the consummation of the Merger, (vi) by either
Landmark or Halliburton, if the stockholders of Landmark do not approve the
Merger, (vii) by Halliburton, if (a) the Board of Directors of Landmark
withdraws or modifies its recommendation of the Merger in a manner which is
materially adverse to Halliburton or resolves to do so or if the Board of
Directors of Landmark recommends to the stockholders of Landmark a transaction
between a third party and Landmark or any of its subsidiaries which involves a
merger, consolidation, share exchange, business combination or similar
transaction or the acquisition by such third party of a material equity interest
in any voting securities of or a substantial portion of the assets of Landmark
or any of its significant subsidiaries (a "Competing Transaction"), (b) a tender
or exchange offer for 50% or more of the issued and outstanding Landmark Common
Stock is commenced and the Board of Directors of Landmark fails, within 10 days
thereafter, to recommend against the acceptance of such offer or to take a
position with respect to such offer or (c) any third party acquires or obtains
the right to acquire 50% or more of the then issued and outstanding shares of
Landmark Common Stock or (viii) by Landmark if it accepts a tender or exchange
offer for all of the outstanding capital stock of Landmark, a merger or a sale
of all or substantially all of the assets of Landmark on terms with the Board of
Directors of Landmark determines to be more favorable to the stockholders of
Landmark than is the Merger (a "Superior Proposal") and pays to Halliburton the
sum of $18 million.
Landmark is obligated to pay to Halliburton the sum of $18 million (the
"Break-up Fee") under the following circumstances:
(i) if the Merger Agreement is terminated as a result of the failure of
the Merger to be approved by the stockholders of Landmark and, between July 1,
1996 and the date of the Special Meeting (a) Landmark shall have provided
information to or entered into negotiations with a third party with respect to a
Competing Transaction involving Landmark or its subsidiaries and (b) the Board
of Directors of Landmark shall not have re-affirmed its recommendation for the
approval of the Merger;
(ii) if Halliburton terminates the Merger Agreement pursuant to clauses
(vii) (a) or (b) of the immediately preceding paragraph;
(iii) if Landmark terminates the Merger Agreement pursuant to clause (viii)
of the immediately preceding paragraph;
(iv) if within 12 months after the termination of the Merger Agreement
any third party acquires 50% or more of the issued and outstanding Landmark
Common Stock and (a) the value of the consideration received by the stockholders
of Landmark (on a per share basis) pursuant to such transaction is greater than
the value of the consideration to be received by the stockholders of Landmark
(on a per share basis) pursuant to the Merger or (b) such transaction shall be
on more favorable terms to the stockholders of Landmark than is the Merger; or
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(v) if (a) Halliburton terminates the Merger Agreement as a result of the
intentional or willful breach of the Merger Agreement by Landmark and (b) either
(x) within 12 months after such termination Landmark enters into an agreement
providing for a business combination with a third party (to which Landmark has
provided information regarding a business combination or commenced negotiations
with respect to a business combination during the period commencing January 1,
1995 and ending on the date of the termination of the Merger Agreement) which
contemplates the payment to Landmark or its stockholders of consideration having
a higher value than the consideration payable to the stockholders of Landmark
pursuant to the Merger Agreement or such transaction is on more favorable terms
to the stockholders of Landmark than is the Merger or (y) within 12 months
following the termination of the Merger Agreement any third party acquires 50%
or more of the issued and outstanding Landmark Common Stock pursuant to a
transaction in which the stockholders of Landmark receive higher consideration
per share than the consideration per share to be received by such stockholders
pursuant to the Merger or such transaction is on more favorable terms to the
stockholders of Landmark than is the Merger. For purposes of the Merger
Agreement, the consideration per share to be received by the stockholders of
Landmark will be deemed to be $31.857.
Simultaneously with the execution and delivery of the Merger Agreement,
Landmark and Halliburton executed and delivered a Stock Option Agreement (herein
so called) pursuant to which, Landmark granted Halliburton an option (the
"Option") to purchase up to such number of shares ("Option Shares") of Landmark
Common Stock as is equal to 15% of the then issued and outstanding shares of
Landmark Common Stock at a price of $31.857 per share. The Option first becomes
exercisable upon the occurrence of an Exercise Event (as hereinafter defined).
Subject to the expiration of the Option, the Stock Option Agreement also grants
Halliburton the right to require, upon the occurrence of Repurchase Event (as
hereinafter defined), Landmark to repurchase the Option and the Option Shares
purchased pursuant to the Stock Option Agreement which are then owned by
Halliburton at a price equal to the sum of (a) the aggregate price paid by
Halliburton for Option Shares then owned by Halliburton and (b) the excess of
the Applicable Price (as hereinafter defined) over the Exercise Price multiplied
by the number of Option Shares not yet issued upon exercise of the Option;
provided that Halliburton may not exercise such right in a manner that would
result in the cash payment to Halliburton of an aggregate amount in excess of
$24 million, including any Break-up Fee paid by Landmark. As used herein, the
term "Exercise Event" will be deemed to mean (i) any third party shall have
commenced or filed a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to a tender offer or exchange offer
to acquire 25% or more of the then outstanding shares of Landmark Common Stock,
(ii) Landmark or any of its subsidiaries shall have recommended or announced an
intention to recommend approval of or entered into an agreement with a third
party to (a) effect a merger, consolidation, share exchange or similar
transaction involving Landmark or any of its significant subsidiaries, (b) sell,
lease or otherwise dispose of assets of Landmark or its subsidiaries
representing 15% or more of the consolidated assets of Landmark and its
subsidiaries or (c) issue, sell or otherwise dispose of securities representing
15% or more of the voting power of Landmark or any of its significant
subsidiaries, (iii) any third party acquires or obtains the right to acquire 25%
or more of the then outstanding Landmark Common Stock or (iv) the stockholders
of Landmark do not approve the Merger at the Special Meeting
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<PAGE>
or the Special Meeting is not held and prior to such time (a) a third party
shall have publicly announced a proposal to engage in any transaction described
in clauses (i), (ii) or (iii) of this sentence or (b) the Board of Directors of
Landmark has withdrawn or modified its recommendation that the stockholders of
Landmark approve the Merger. As used herein, the term Repurchase Event will be
deemed to mean any event specified in clauses (ii), (iii) or (iv) of the
immediately preceding sentence. As used herein, the term Applicable Price will
be deemed to mean the highest of (i) the highest price per share at which a
tender or exchange offer has been made for shares of Landmark Common Stock prior
to the date (the "Request Date") at which Halliburton exercises its right to
require that Landmark repurchase the Option and the Option Shares, (ii) the
price per share to be paid by any third party for shares of Landmark Common
Stock pursuant to any merger or other business combination transaction entered
into by Landmark prior to the Request Date or (iii) the highest closing sales
price per share of Landmark Common Stock quoted on the National Market System
(the "National Market System") of the National Association of Securities
Dealers, Inc. during the 60 business days preceding the Request Date.
The Stock Option Agreement also grants (i) Halliburton the right to require
that Landmark register (under the Securities Act) the re-offer and sale of the
Option Shares by Halliburton, (ii) Landmark a "right of first refusal" with
respect to certain sales by Halliburton of the Option Shares, and (iii) Landmark
the right to require Halliburton to sell to Landmark (subject to Halliburton's
right to complete a sale of the Option and/or the Option Shares to a third party
in compliance with Landmark's right of first refusal with respect to any such
sale) any Option Shares acquired by Halliburton and held by Halliburton at such
time. The price per share at which Landmark has the right to repurchase Option
Shares from Halliburton is equal to the greater of (i) the Exercise Price or
(ii) the average closing price of the Landmark Common Stock on the National
Market System during the 10 business days immediately preceding the exercise of
such right by Landmark.
Pursuant to a Voting Agreement (herein so called) by and among Mr. S. Rutt
Bridges, Ms. Barbara Ann Bridges and Halliburton, Mr. Bridges and Ms. Bridges
have agreed to (i) vote the 1,971,263 shares (the "Bridges Shares") of Landmark
Common Stock owned by them in favor of the approval of the Merger, (ii) vote
against approval of any competing proposal to acquire Landmark or its assets,
(iii) refrain from selling, pledging, assigning or otherwise transferring any of
the Bridges Shares to any person or entity which is not a party to the Voting
Agreement, (iv) refrain from granting any person or entity other than
Halliburton a proxy with respect to the Bridges Shares and (v) revoke any prior
proxy granted with respect to the Bridges Shares.
The foregoing description of the Merger Agreement, Stock Option Agreement
and Voting Agreement does not purport to be complete and is qualified in its
entirety by reference to the copies of such agreements which are attached hereto
as exhibits.
To facilitate the consummation of the Merger, the Board of Directors of
Landmark has amended that certain Rights Agreement, dated September 1, 1995, by
and between Landmark and Chemical Bank, as agent, to exempt the Merger from the
provisions of the Rights Agreement.
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<PAGE>
Landmark, Halliburton and Electronic Data Systems Corporation have
announced their intention to form an alliance to develop a worldwide distributed
data management capability that integrates all information associated with the
oil field lifecycle.
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
None
(b) PRO FORMA FINANCIAL INFORMATION.
None
(c) EXHIBITS.
EXHIBIT 2.1 Agreement and Plan of Merger, dated June 30, 1996, by
-----------
and among, Landmark Graphics Corporation, Halliburton
Company and Halliburton Acq. Company.
EXHIBIT 99.1 Stock Option Agreement, dated June 30, 1996, by and
------------
among Landmark Graphics Corporation and Halliburton
Company.
EXHIBIT 99.2 Voting Agreement, dated June 30, 1996, by and among
------------
Halliburton Company, S. Rutt Bridges and Barbara Ann
Bridges.
EXHIBIT 99.3 First Amendment to Rights Agreement, dated June 30,
------------
1996, by and between Landmark Graphics Corporation and
Chemical Bank.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS
Certain of the information contained herein may be deemed to be forward
looking statements within the meaning of The Private Securities Litigation
Reform Act of 1995, including, without limitation, any implied representation
that the Merger will be consummated or that the strategic alliance (the
"Strategic Alliance") among Halliburton, Landmark and Electronic Data Systems
Corporation will be formed and any estimate of the date on which the Merger will
be consummated. Such statements are qualified by the following disclaimers:
Consummation of the Merger is subject to a number of conditions precedent,
including, without limitation, receipt of the requisite approval of the
stockholders of Landmark, no governmental action which would make the
consummation of the Merger illegal, the Merger qualifying for treatment as a
"pooling of interests" for financial accounting purposes, the continued accuracy
of each party's respective representations and warranties, the performance by
each party of its respective covenants, the listing of the shares of Halliburton
Common Stock to be issued in the Merger on the New York Stock Exchange and the
receipt of various opinions from the parties' financial and legal advisors. Not
all of such conditions are within the control of Landmark. Accordingly, there
can be no assurance that such conditions will be satisfied or waived or that the
Merger will be consummated.
Negotiations relating to the formation of the Strategic Alliance have not
yet been completed. Accordingly, no assurance can be given that the Strategic
Alliance will be formed or that, if formed, the Strategic Alliance will be
successful.
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<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LANDMARK GRAPHICS CORPORATION
By: /s/ William H. Seippel
---------------------------------
Name: William H. Seippel
-------------------------------
Title: Vice President, Finance and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
------------------------------
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<PAGE>
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
HALLIBURTON COMPANY,
HALLIBURTON ACQ. COMPANY
AND
LANDMARK GRAPHICS CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE I DEFINITIONS
<S> <C>
SECTION 1.1 Definitions.................................................. 1
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SECTION 1.2 Rules of Construction........................................ 2
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ARTICLE II TERMS OF MERGER
SECTION 2.1 Statutory Merger............................................. 2
----------------
SECTION 2.2 Effective Time............................................... 2
--------------
SECTION 2.3 Effect of the Merger......................................... 2
--------------------
SECTION 2.4 Certificate of Incorporation; Bylaws......................... 2
------------------------------------
SECTION 2.5 Directors and Officers....................................... 3
----------------------
ARTICLE III CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.1 Merger Consideration; Conversion and Cancellation of
----------------------------------------------------
Securities................................................... 3
----------
SECTION 3.2 Exchange of Certificates..................................... 4
-----------------------
SECTION 3.3 Closing...................................................... 6
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SECTION 3.4 Stock Transfer Books......................................... 6
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1 Organization and Qualification; Subsidiaries................. 7
--------------------------------------------
SECTION 4.2 Certificate of Incorporation and Bylaws...................... 7
---------------------------------------
SECTION 4.3 Capitalization............................................... 7
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SECTION 4.4 Authorization of Agreement................................... 9
--------------------------
SECTION 4.5 Approvals.................................................... 9
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SECTION 4.6 No Violation................................................. 10
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SECTION 4.7 Reports...................................................... 10
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SECTION 4.8 No Material Adverse Effect; Conduct.......................... 11
-----------------------------------
SECTION 4.9 Title to Properties.......................................... 11
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SECTION 4.10 Certain Obligations.......................................... 12
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SECTION 4.11 Permits; Compliance.......................................... 12
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SECTION 4.12 Litigation; Compliance with Laws............................. 12
--------------------------------
SECTION 4.13 Employee Benefit Plans....................................... 13
----------------------
SECTION 4.14 Taxes........................................................ 15
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SECTION 4.15 Environmental Matters........................................ 16
---------------------
SECTION 4.16 Intellectual Property........................................ 17
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SECTION 4.17 Insurance.................................................... 17
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</TABLE>
Agreement and Plan of Merger
-ii-
<PAGE>
<TABLE>
<S> <C>
SECTION 4.18 Pooling; Tax Matters........................................ 17
--------------------
SECTION 4.19 Affiliates.................................................. 18
----------
SECTION 4.20 Certain Business Practices.................................. 18
--------------------------
SECTION 4.21 Opinion of Financial Advisor................................ 19
----------------------------
SECTION 4.22 Brokers..................................................... 19
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SECTION 4.23 Acquiring Person............................................ 19
----------------
ARTICLE V REPRESENTATIONS AND WARRANTIES OF ACQUIROR
SECTION 5.1 Organization and Qualification; Subsidiaries................ 19
--------------------------------------------
SECTION 5.2 Certificate of Incorporation and Bylaws..................... 20
---------------------------------------
SECTION 5.3 Capitalization.............................................. 20
--------------
SECTION 5.4 Authorization of Agreement.................................. 21
--------------------------
SECTION 5.5 Approvals................................................... 21
---------
SECTION 5.6 No Violation................................................ 22
------------
SECTION 5.7 Reports..................................................... 22
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SECTION 5.8 No Material Adverse Effect; Conduct......................... 23
-----------------------------------
SECTION 5.9 Title to Properties......................................... 23
-------------------
SECTION 5.10 Certain Obligations......................................... 24
-------------------
SECTION 5.11 Permits; Compliance......................................... 24
-------------------
SECTION 5.12 Litigation; Compliance with Laws............................ 24
--------------------------------
SECTION 5.13 Employee Benefit Plans...................................... 25
----------------------
SECTION 5.14 Taxes....................................................... 26
-----
SECTION 5.15 Environmental Matters....................................... 26
---------------------
SECTION 5.16 Pooling; Tax Matters........................................ 26
--------------------
SECTION 5.17 Affiliates.................................................. 27
----------
SECTION 5.18 Brokers..................................................... 27
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SECTION 5.19 Acquiring Person............................................ 27
----------------
SECTION 5.20 Proposal to Acquire the Acquiror............................ 28
--------------------------------
SECTION 5.21 Certain Business Practices.................................. 28
--------------------------
ARTICLE VI COVENANTS
SECTION 6.1 Affirmative Covenants....................................... 28
---------------------
SECTION 6.2 Negative Covenants.......................................... 29
------------------
SECTION 6.3 No Solicitation............................................. 34
---------------
SECTION 6.4 Access and Information...................................... 35
----------------------
SECTION 6.5 Confidentiality Agreement................................... 35
-------------------------
ARTICLE VII ADDITIONAL AGREEMENTS
SECTION 7.1 Meeting of Stockholders..................................... 35
-----------------------
SECTION 7.2 Registration Statement; Proxy Statements.................... 36
----------------------------------------
</TABLE>
Agreement and Plan of Merger
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<PAGE>
<TABLE>
<S> <C> <C>
SECTION 7.3 Appropriate Action; Consents; Filings....................... 38
-------------------------------------
SECTION 7.4 Affiliates; Pooling; Tax Treatment.......................... 39
----------------------------------
SECTION 7.5 Public Announcements........................................ 40
--------------------
SECTION 7.6 NYSE Listing................................................ 40
------------
SECTION 7.7 Rights Agreement; State Takeover Statutes................... 40
-----------------------------------------
SECTION 7.8 Comfort Letters............................................. 40
---------------
SECTION 7.9 Assumption of Obligations to Issue Stock.................... 41
----------------------------------------
SECTION 7.10 Employee Benefit Plans...................................... 42
----------------------
SECTION 7.11 Indemnification of Directors and Officers................... 43
-----------------------------------------
SECTION 7.12 Newco....................................................... 44
-----
SECTION 7.13 Event Notices............................................... 44
-------------
SECTION 7.14 Stratworks Divestiture...................................... 44
----------------------
SECTION 7.15 Change in Control Agreements................................ 44
----------------------------
ARTICLE VIII CLOSING CONDITIONS
SECTION 8.1 Conditions to Obligations of Each Party Under This
--------------------------------------------------
Agreement................................................... 45
---------
SECTION 8.2 Additional Conditions to Obligations of the Acquiror Com-
---------------------------------------------------------
panies...................................................... 46
------
SECTION 8.3 Additional Conditions to Obligations of the Company......... 46
---------------------------------------------------
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 Termination................................................. 47
-----------
SECTION 9.2 Effect of Termination....................................... 49
---------------------
SECTION 9.3 Amendment................................................... 49
---------
SECTION 9.4 Waiver...................................................... 49
------
SECTION 9.5 Fees, Expenses and Other Payments........................... 49
---------------------------------
ARTICLE X GENERAL PROVISIONS
SECTION 10.1 Effectiveness of Representations, Warranties and
------------------------------------------------
Agreements.................................................. 51
----------
SECTION 10.2 Notices..................................................... 51
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SECTION 10.3 Headings.................................................... 52
--------
SECTION 10.4 Severability................................................ 52
------------
SECTION 10.5 Entire Agreement............................................ 53
----------------
SECTION 10.6 Assignment.................................................. 53
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SECTION 10.7 Parties in Interest......................................... 53
-------------------
SECTION 10.8 Failure or Indulgence Not Waiver; Remedies Cumulative...... 53
------------------------------------------------------
SECTION 10.9 Governing Law............................................... 53
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SECTION 10.10 Counterparts................................................ 53
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</TABLE>
Agreement and Plan of Merger
-iv-
<PAGE>
ANNEXES
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Annex A Schedule of Defined Terms
Annex B Affiliate's Agreement (Landmark Graphics Corporation Affiliates)
Annex C Affiliate's Agreement (Halliburton Company Affiliates)
Agreement and Plan of Merger
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<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of June 30, 1996 (this
"Agreement"), is by and among Halliburton Company, a Delaware corporation
("Acquiror"), Halliburton Acq. Company, a Delaware corporation and a wholly-
owned subsidiary of Acquiror ("Newco"), and Landmark Graphics Corporation, a
Delaware corporation (the "Company"). The Acquiror and Newco are sometimes
referred to herein as the "Acquiror Companies."
RECITALS:
The Board of Directors of the Company has determined that the business
combination to be effected by means of the Merger is consistent with and in
furtherance of the long-term business strategy of the Company and is fair to,
and in the best interests of, the Company and its stockholders and has approved
and adopted this Agreement and recommended approval and adoption of this
Agreement by the stockholders of the Company.
The Board of Directors of the Acquiror has determined that the business
combination to be effected by means of the Merger is consistent with and in
furtherance of the long-term business strategy of the Acquiror and is fair to,
and in the best interests of, the Acquiror and its stockholders and has approved
and adopted this Agreement.
Upon the terms and subject to the conditions of this Agreement and in
accordance with the GCL, the Company will merge with and into Newco and Newco
will be the Surviving Corporation.
For federal income tax purposes, it is intended that the Merger will
qualify as a reorganization within the meaning of the provisions of Section
368(a) of the Code.
The Merger is intended to be treated as a "pooling of interests" for
accounting purposes.
The parties hereto acknowledge the execution and delivery of the Stock
Option Agreement and the Voting Agreement concurrently with the execution and
delivery of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Certain capitalized and other terms used in
-----------
this Agreement are defined in Annex A hereto and are used herein with the
meanings ascribed to them therein.
<PAGE>
SECTION 1.2 Rules of Construction. Unless the context otherwise
---------------------
requires, as used in this Agreement: (a) a term has the meaning ascribed to it;
(b) an accounting term not otherwise defined has the meaning ascribed to it in
accordance with generally accepted accounting principles as in effect from time
to time: (c) "or" is not exclusive; (d) "including" means "including, without
limitation;" and (e) words in the singular include the plural and words in the
plural include the singular.
ARTICLE II
TERMS OF MERGER
SECTION 2.1 Statutory Merger. Subject to the terms and conditions and
----------------
in reliance upon the representations, warranties, covenants and agreements
contained herein, the Company shall merge with and into Newco at the Effective
Time. The terms and conditions of the Merger and the mode of carrying the same
into effect shall be as set forth in this Agreement. As a result of the Merger,
the separate corporate existence of each of the Constituent Corporations shall
cease and Newco shall continue as the Surviving Corporation.
SECTION 2.2 Effective Time. As soon as practicable after the
--------------
satisfaction or, if permissible, waiver of the conditions set forth in Article
VIII, the parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger with the Secretary of State of the State of Delaware, in
such form as required by, and executed in accordance with the relevant
provisions of, the GCL.
SECTION 2.3 Effect of the Merger. At the Effective Time, the effect of
--------------------
the Merger shall be as provided in the applicable provisions of the GCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, except as otherwise provided herein, all the property, rights, privileges,
powers and franchises of Newco and the Company shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Newco and the Company
shall become the debts, liabilities and duties of the Surviving Corporation.
SECTION 2.4 Certificate of Incorporation; Bylaws. At the Effective
------------------------------------
Time, the certificate of incorporation and the bylaws of Newco, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation and the bylaws of the Surviving Corporation, except that from and
after the Effective Time Article I of the certificate of incorporation shall be
and read in its entirety as follows:
ARTICLE I
The name of the corporation shall be "Landmark Graphics Corporation."
Prior to the Effective Time, the certificate of incorporation and bylaws of
Newco shall be amended so as to contain provisions substantially similar in form
and substance to the provisions
Agreement and Plan of Merger
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<PAGE>
contained in Article IX of the certificate of incorporation and Section 6.10 of
the bylaws of the Company, respectively.
SECTION 2.5 Directors and Officers. The directors of Newco immediately
----------------------
prior to the Effective Time shall be the directors of the Surviving Corporation,
each to hold office in accordance with the certificate of incorporation and
bylaws of the Surviving Corporation, and the officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
in each case until their respective successors are duly elected or appointed and
qualified.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.1 Merger Consideration; Conversion and Cancellation of
----------------------------------------------------
Securities. At the Effective Time, by virtue of the Merger and without any
- ----------
action on the part of the Acquiror Companies, the Company or the holders of any
of the following securities:
(a) Subject to the other provisions of this Article III, each share
of Company Common Stock issued and outstanding immediately prior to the
Effective Time (excluding any Company Common Stock described in Section
3.01(c)) shall be converted into 0.574 shares of Acquiror Common Stock.
Notwithstanding the foregoing, if between the date of this Agreement and
the Effective Time the outstanding shares of the Acquiror Common Stock or
the Company Common Stock shall have been changed into a different number of
shares or a different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares, the Common Stock Exchange Ratio shall be correspondingly adjusted
to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares.
(b) All shares of Company Common Stock shall, upon conversion thereof
into shares of Acquiror Common Stock at the Effective Time, cease to be
outstanding and shall automatically be cancelled and retired, and each
certificate previously evidencing Company Common Stock outstanding
immediately prior to the Effective Time (other than Company Common Stock
described in Section 3.01(c)) shall thereafter be deemed, for all purposes
other than the payment of dividends or distributions, to represent that
number of shares of Acquiror Common Stock determined pursuant to the Common
Stock Exchange Ratio and, if applicable, the right to receive cash pursuant
to Section 3.02(e). The holders of certificates previously evidencing
Company Common Stock shall cease to have any rights with respect to such
Company Common Stock except as otherwise provided herein or by law.
(c) Notwithstanding any provision of this Agreement to the contrary,
each share of Company Common Stock held in the treasury of the Company and
each share of Company Common Stock, if any, owned by the Acquiror or any
direct or indirect
Agreement and Plan of Merger
-3-
<PAGE>
wholly-owned Subsidiary of the Acquiror or of the Company immediately prior
to the Effective Time shall be cancelled and extinguished without
conversion thereof.
(d) Each share of common stock, par value $1.00 per share, of Newco
issued and outstanding immediately prior to the Effective Time shall
continue to be issued and outstanding as one share of common stock, par
value $1.00 per share, of the Surviving Corporation.
SECTION 3.2 Exchange of Certificates.
------------------------
(a) Exchange Fund. On the day of the Effective Time, the Acquiror
-------------
shall deposit, or cause to be deposited, with the Exchange Agent, for the
benefit of the former holders of Company Common Stock, for exchange in
accordance with this Article III, through the Exchange Agent, certificates
evidencing a number of shares of Acquiror Common Stock equal to the product
of the Common Stock Exchange Ratio multiplied by the number of shares of
Company Common Stock issued and outstanding immediately prior to the
Effective Time (exclusive of any such shares to be cancelled pursuant to
Section 3.01(c)). The Exchange Agent shall, pursuant to irrevocable
instructions from the Acquiror, deliver Acquiror Common Stock, together
with any cash to be paid in lieu of fractional interests in shares of
Acquiror Common Stock pursuant to Section 3.02(e) and any dividends or
distributions related thereto, in exchange for certificates theretofore
evidencing Company Common Stock surrendered to the Exchange Agent pursuant
to Section 3.02(c). Except as contemplated by Section 3.02(e), the
Exchange Fund shall not be used for any other purpose.
(b) Letter of Transmittal. Promptly after the Effective Time, the
---------------------
Acquiror will cause the Exchange Agent to send to each record holder of
Company Common Stock immediately prior to the Effective Time a letter of
transmittal and other appropriate materials for use in surrendering to the
Exchange Agent certificates that prior to the Effective Time evidenced
shares of Company Common Stock.
(c) Exchange Procedures. Promptly after the Effective Time, the
-------------------
Exchange Agent shall distribute to each former holder of Company Common
Stock, upon surrender to the Exchange Agent for cancellation of one or more
certificates that theretofore evidenced shares of Company Common Stock,
certificates evidencing the appropriate number of shares of Acquiror Common
Stock into which such shares of Company Common Stock were converted
pursuant to the Merger, together with any cash to be paid in lieu of
fractional interests in shares of Acquiror Common Stock pursuant to Section
3.02(e) and any dividends or distributions related thereto. If shares of
Acquiror Common Stock are to be issued to a Person other than the Person in
whose name the surrendered certificate or certificates are registered, it
shall be a condition of issuance of the Acquiror Common Stock that the
surrendered certificate or certificates shall be properly endorsed, with
signatures guaranteed, or otherwise in proper form for transfer and that
the Person requesting such payment shall pay any transfer or other taxes
required
Agreement and Plan of Merger
-4-
<PAGE>
by reason of the issuance of Acquiror Common Stock to a Person other than
the registered holder of the surrendered certificate or certificates or
such Person shall establish to the satisfaction of the Acquiror that such
tax has been paid or is not applicable. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to any
former holder of Company Common Stock for any Acquiror Common Stock, cash
in lieu of fractional share interests or dividends or distributions thereon
delivered to a public official pursuant to any applicable escheat law.
(d) Distributions with Respect to Unexchanged Shares of Company
-----------------------------------------------------------
Common Stock. No dividends or other distributions declared or made with
------------
respect to Acquiror Common Stock with a record date after the Effective
Time shall be paid to the holder of any certificate that theretofore
evidenced shares of Company Common Stock until the holder of such
certificate shall surrender such certificate. Subject to the effect of any
applicable escheat laws, following surrender of any such certificate, there
shall be paid (i) to the holder of the certificates evidencing whole shares
of Acquiror Common Stock issued in exchange therefor, without interest, (A)
promptly, the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares
of Acquiror Common Stock, and (B) at the appropriate payment date, the
amount of dividends or other distributions, with a record date after the
Effective Time but prior to surrender and a payment date occurring after
surrender, payable with respect to such whole shares of Acquiror Common
Stock and (ii) to the holder of any certificate that theretofore evidenced
shares of Company Common Stock, without interest, promptly the amount of
any cash payable with respect to a fractional share of Acquiror Common
Stock to which such holder is entitled pursuant to Section 3.02(e).
(e) No Fractional Shares. Notwithstanding anything herein to the
--------------------
contrary, no certificates or scrip evidencing fractional shares of Acquiror
Common Stock shall be issued in connection with the Merger, and any such
fractional share interests to which a holder of record of Company Common
Stock at the Effective Time would otherwise be entitled will not entitle
such holder to vote or to any rights of a stockholder of the Acquiror. In
lieu of any such fractional shares, each holder of record of Company Common
Stock at the Effective Time who but for the provisions of this Section
3.02(e) would be entitled to receive a fractional interest of a share of
Acquiror Common Stock pursuant to the Merger shall be paid cash, without
any interest thereon, as hereinafter provided. The Acquiror shall instruct
the Exchange Agent to determine the number of whole shares and fractional
shares of Acquiror Common Stock allocable to each holder of record of
Company Common Stock at the Effective Time, to aggregate all such
fractional shares into whole shares, to sell the whole shares obtained
thereby in the open market at then prevailing prices on behalf of holders
who otherwise would be entitled to receive fractional share interests and
to distribute to each such holder such holder's ratable share of the total
proceeds of such sale, after making appropriate deductions of the amount,
if any, required for Federal income tax withholding purposes and after
Agreement and Plan of Merger
-5-
<PAGE>
deducting any applicable transfer taxes. All brokers' fees and commissions
and fees of the Exchange Agent incurred in connection with such sales shall
be paid by the Acquiror.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
----------------------------
which remains unclaimed by the former holders of Company Common Stock for
twelve months after the Effective Time shall be delivered to the Acquiror,
upon demand, and any former holders of Company Common Stock who have not
theretofore complied with this Article III shall thereafter look only to
the Acquiror for the Acquiror Common Stock and any cash to which they are
entitled.
(g) Withholding of Tax. The Acquiror shall be entitled to deduct and
------------------
withhold from the consideration otherwise payable pursuant to this
Agreement to any former holder of Company Common Stock such amounts as the
Acquiror (or any affiliate thereof) is required to deduct and withhold with
respect to the making of such payment under the Code, or any provision of
state, local or foreign tax law. To the extent that amounts are so
withheld by the Acquiror, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the former holder of
Company Common Stock in respect of which such deduction and withholding was
made by the Acquiror.
(h) Lost Certificates. If any certificate evidencing Company Common
-----------------
Stock shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such certificate to be lost,
stolen or destroyed and, if required by the Acquiror, the posting by such
Person of a bond, in such reasonable amount as the Acquiror may direct, as
indemnity against claims that may be made against it with respect to such
certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed certificate the Acquiror Common Stock to which the
holder may be entitled pursuant to this Article III, any cash in lieu of
fractional shares of Acquiror Common Stock to which the holder thereof may
be entitled pursuant to Section 3.02(e) and any dividends or other
distributions to which the holder thereof may be entitled pursuant to
Section 3.02(d).
SECTION 3.3 Closing. The Closing shall take place at the offices of
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Vinson & Elkins L.L.P., 1001 Fannin, 3600 First City Tower, Houston, Texas
77002-6760, at 10:00 a.m. on the second Business Day following the date on which
the conditions to the Closing have been satisfied or waived or at such other
place, time and date as the parties hereto may agree. At the conclusion of the
Closing on the Closing Date, the parties hereto shall cause the Certificate of
Merger to be filed with the Secretary of State of the State of Delaware.
SECTION 3.4 Stock Transfer Books. At the Effective Time, the stock
--------------------
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company.
Agreement and Plan of Merger
-6-
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Acquiror Companies that:
SECTION 4.1 Organization and Qualification; Subsidiaries. The
--------------------------------------------
Company and each Subsidiary of the Company are legal entities duly organized,
validly existing and in good standing under the Laws of their respective
jurisdictions of incorporation or organization, have all requisite power and
authority to own, lease and operate their respective properties and to carry on
their business as it is now being conducted and are duly qualified and in good
standing to do business in each jurisdiction in which the nature of the business
conducted by them or the ownership or leasing of their respective properties
makes such qualification necessary, other than any matters, including the
failure to be so duly qualified and in good standing, that could not reasonably
be expected to have a Material Adverse Effect on the Company. Section 4.01 of
the Company's Disclosure Letter sets forth, as of the date of this Agreement, a
true and complete list of all the Company's directly or indirectly owned
Subsidiaries, together with (A) the jurisdiction of incorporation of each
Subsidiary and the percentage of each Subsidiary's outstanding capital stock or
other equity interests owned by the Company or another Subsidiary of the
Company, and (B) an indication of whether each such Subsidiary is a "Significant
Subsidiary." Neither the Company nor any of its Subsidiaries owns an equity
interest in any partnership or joint venture arrangement or other business
entity that is Material to the Company.
SECTION 4.2 Certificate of Incorporation and Bylaws. The Company has
---------------------------------------
heretofore marked for identification and furnished to the Acquiror complete and
correct copies of the certificate of incorporation and the bylaws or the
equivalent organizational documents, in each case as amended or restated to the
date hereof, of the Company and each of its Subsidiaries. Neither the Company
nor any of its Subsidiaries is in violation of any of the provisions of its
certificate of incorporation or bylaws (or equivalent organizational documents).
SECTION 4.3 Capitalization.
--------------
(a) The authorized capital stock of the Company consists of (i)
50,000,000 shares of Company Common Stock of which, as of March 29, 1996,
17,498,396 shares were issued and outstanding, all of which are duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, the Company's certificate of
incorporation or bylaws or any agreement to which the Company is a party or
is bound and (ii) 3,600,000 shares of Preferred Stock, par value $1.00 per
share, of which none is issued but of which 500,000 shares have been
designated as Series A Junior Participating Preferred Stock. As of June
30, 1996, 3,100,727 shares of Company Common Stock were reserved for future
issuance pursuant to outstanding Company Stock Options granted pursuant to
the Company Option Plans. Except as set forth in Section 4.03(a) of the
Company's Disclosure Letter, between March 29, 1996 and the date of this
Agreement, no shares of Company Common Stock
Agreement and Plan of Merger
-7-
<PAGE>
have been issued by the Company. Except as set forth in Section 4.03(a) of
the Company's Disclosure Letter, since March 29, 1996, the Company has not
granted any options for, or other rights to purchase, shares of Company
Common Stock.
(b) Except as set forth in Section 4.03(a), no shares of Common Stock
are reserved for issuance, and, except for the Company's Rights Plan and
Company Stock Options listed in Section 4.03(b) of the Company's Disclosure
Letter, there are no contracts, agreements, commitments or arrangements
obligating the Company (i) to offer, sell, issue or grant any shares of, or
any options, warrants or rights of any kind to acquire any shares of, or
any securities that are convertible into or exchangeable for any shares of,
capital stock of the Company, (ii) to redeem, purchase or acquire, or offer
to purchase or acquire, any outstanding shares of, or any outstanding
options, warrants or rights of any kind to acquire any shares of, or any
outstanding securities that are convertible into or exchangeable for any
shares of, capital stock of the Company or (iii) to grant any Lien on any
shares of capital stock of the Company.
(c) The authorized, issued and outstanding capital stock of, or other
equity interests in, each of the Company's Subsidiaries and the names and
addresses of the holders of record of the capital stock or other equity
interests of each such Subsidiary are set forth in Section 4.03(c) of the
Company's Disclosure Letter. Except as set forth in the Company's
Disclosure Letter, (i) the issued and outstanding shares of capital stock
of, or other equity interests in, each of the Subsidiaries of the Company
that are owned by the Company or any of its Subsidiaries have been duly
authorized and are validly issued, and, with respect to capital stock, are
fully paid and nonassessable, and were not issued in violation of any
preemptive or similar rights of any past or present equity holder of such
Subsidiary; (ii) all such issued and outstanding shares, or other equity
interests, that are indicated as owned by the Company or one of its
Subsidiaries in Section 4.03(c) of the Company's Disclosure Letter are
owned (A) beneficially as set forth therein and (B) free and clear of all
Liens; (iii) no shares of capital stock of, or other equity interests in,
any Subsidiary of the Company are reserved for issuance, and there are no
contracts, agreements, commitments or arrangements obligating the Company
or any of its Subsidiaries (A) to offer, sell, issue, grant, pledge,
dispose of or encumber any shares of capital stock of, or other equity
interests in, or any options, warrants or rights of any kind to acquire any
shares of capital stock of, or other equity interests in, or any securities
that are convertible into or exchangeable for any shares of capital stock
of, or other equity interests in, any of the Subsidiaries of the Company or
(B) to redeem, purchase or acquire, or offer to purchase or acquire, any
outstanding shares of capital stock of, or other equity interests in, or
any outstanding options, warrants or rights of any kind to acquire any
shares of capital stock of or other equity interest in, or any outstanding
securities that are convertible into or exchangeable for, any shares of
capital stock of, or other equity interests in, any of the Subsidiaries of
the Company or (C) to grant any Lien on any outstanding shares of capital
stock of, or other equity interest in, any of the Subsidiaries of the
Company; except for any matter under clause (i), (ii) or (iii) of this
Agreement and Plan of Merger
-8-
<PAGE>
Section 4.03(c) that could not reasonably be expected to have a Material
Adverse Effect on the Company.
(d) Except as set forth in Section 4.03(d) of the Company's
Disclosure Letter and for the Company's Rights Agreement, the Company Stock
Options listed in Section 4.03(b) of the Company's Disclosure Letter and
the Stock Option Agreement, there are no voting trusts, proxies or other
agreements, commitments or understandings of any character to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound with respect to the voting of any shares
of capital stock of the Company or any of its Subsidiaries or with respect
to the registration of the offering, sale or delivery of any shares of
capital stock of the Company or any of its Subsidiaries under the
Securities Act, except in the case of any Subsidiaries of the Company that
are not Significant Subsidiaries for any matters that could not reasonably
be expected to have a Material Adverse Effect on the Company.
SECTION 4.4 Authorization of Agreement. The Company has all requisite
--------------------------
corporate power and authority to execute and deliver this Agreement and each
instrument required hereby to be executed and delivered by it at the Closing, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby. The execution and delivery by the Company of
this Agreement and each instrument required hereby to be executed and delivered
by it at the Closing and the performance of its obligations hereunder and
thereunder have been duly and validly authorized by all requisite corporate
action on the part of the Company (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock in accordance with the GCL and the
Company's certificate of incorporation). This Agreement has been duly executed
and delivered by the Company and (assuming due authorization, execution and
delivery hereof by the other parties hereto) constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as the same may be limited by legal principles of general
applicability governing the application and availability of equitable remedies.
SECTION 4.5 Approvals. Except for the applicable requirements, if any,
---------
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws, (d) the HSR Act, (e) the competition Laws, Regulations and Orders of
foreign Governmental Authorities as set forth in the Company's Disclosure
Letter, (f) the NASD, (g) the filing and recordation of appropriate merger
documents as required by the GCL and (h) those Laws, Regulations and Orders
noncompliance with which could not reasonably be expected to have a material
adverse effect on the ability of the Company to perform its obligations under
this Agreement or to have a Material Adverse Effect on the Company, no filing or
registration with, no waiting period imposed by and no Permit or Order of, any
Governmental Authority is required under any Law, Regulation or Order applicable
to the Company or any of its Subsidiaries to permit the Company to execute,
deliver or perform this Agreement or any instrument required hereby to be
executed and delivered by it at the Closing.
Agreement and Plan of Merger
-9-
<PAGE>
SECTION 4.6 No Violation. Assuming effectuation of all filings and
------------
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits and Orders of, Governmental Authorities
indicated as required in Section 4.05 and receipt of the approval of the Merger
by the stockholders of the Company as required by the GCL and except as set
forth in Section 4.06 of the Company's Disclosure Letter, neither the execution
and delivery by the Company of this Agreement or any instrument required hereby
to be executed and delivered by it at the Closing nor the performance by the
Company of its obligations hereunder or thereunder will (a) violate or breach
the terms of or cause a default under (i) any Law, Regulation or Order
applicable to the Company, (ii) the certificate of incorporation or bylaws of
the Company or (iii) any contract or agreement to which the Company or any of
its Subsidiaries is a party or by which it or any of its properties or assets is
bound, or (b) with the passage of time, the giving of notice or the taking of
any action by a third Person, have any of the effects set forth in clause (a) of
this Section, except in any such case for any matters described in this Section
that could not reasonably be expected to have a material adverse effect upon the
ability of the Company to perform its obligations under this Agreement or a
Material Adverse Effect on the Company. Prior to the execution of this
Agreement, the Board of Directors of the Company has taken all necessary action
to cause this Agreement and the transactions contemplated hereby to be exempt
from the provisions of Section 203 of the GCL and to ensure that the execution,
delivery and performance of this Agreement by the parties hereto will not cause
any rights to be distributed or to become exercisable under the Company's Rights
Plan.
SECTION 4.7 Reports.
-------
(a) Since June 30, 1993, the Company and its Subsidiaries have filed
(i) all SEC Reports of the Company required to be filed with the Commission
and (ii) all other Reports of the Company required to be filed with any
other Governmental Authorities, including state securities administrators,
except where the failure to file any such Reports of the Company could not
reasonably be expected to have a Material Adverse Effect on the Company.
The Reports of the Company, including all those filed after the date of
this Agreement and prior to the Effective Time, (i) were prepared in all
material respects in accordance with the requirements of applicable Law
(including, with respect to the SEC Reports of the Company, the Securities
Act and the Exchange Act, as the case may be, and the applicable
Regulations of the Commission thereunder) and (ii), in the case of the SEC
Reports of the Company, did not at the time they were filed contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) The Company Consolidated Financial Statements and any
consolidated financial statements of the Company (including any related
notes thereto) contained in any SEC Reports of the Company filed with the
Commission after the date of this Agreement (i) have been or will have been
prepared in accordance with the published Regulations of the Commission and
in accordance with GAAP (except (A) to the extent required by
Agreement and Plan of Merger
-10-
<PAGE>
changes in GAAP and (B), with respect to SEC Reports of the Company filed
prior to the date of this Agreement, as may be indicated in the notes
thereto) and (ii) fairly present the consolidated financial position of the
Company and its Subsidiaries as of the respective dates thereof and the
consolidated results of their operations and cash flows for the periods
indicated (including, in the case of any unaudited interim financial
statements, reasonable estimates of normal and recurring year-end
adjustments).
(c) Except as set forth in Section 4.07(c) of the Company's
Disclosure Letter, there exist no liabilities or obligations of the Company
and its Subsidiaries that are Material to the Company, whether accrued,
absolute, contingent or threatened, which would be required to be
reflected, reserved for or disclosed under GAAP in consolidated financial
statements of the Company (including the notes thereto) as of and for the
period ended on the date of this representation and warranty, other than
(i) liabilities or obligations that are adequately reflected, reserved for
or disclosed in the Company's Consolidated Financial Statements, (ii)
liabilities or obligations incurred in the ordinary course of business of
the Company since March 31, 1996, and (iii) liabilities or obligations the
incurrence of which is not prohibited by Section 6.02(a).
SECTION 4.8 No Material Adverse Effect; Conduct.
-----------------------------------
(a) Since March 31, 1996, no event (other than any event that is
directly attributable to the prospect of consummation of the Merger or is
of general application to all or a substantial portion of the Company's
industry and other than any event that is expressly subject to any other
representation or warranty contained in Article IV) has, to the Knowledge
of the Company, occurred that, individually or together with other similar
events, could reasonably be expected to constitute or cause a Material
Adverse Effect on the Company.
(b) Except as disclosed in Section 4.08(b) of the Company's
Disclosure Letter, during the period from March 31, 1996 to the date of
this Agreement, neither the Company nor any of its Subsidiaries has engaged
in any conduct that is proscribed during the period from the date of this
Agreement to the Effective Time by subsections (i) through (xi) of Section
6.02(a) or agreed in writing or otherwise during such period prior to the
date of this Agreement to engage in any such conduct.
SECTION 4.9 Title to Properties. The Company or its Subsidiaries,
-------------------
individually or together, have indefeasible title to all of the properties
reflected in the Company's Consolidated Balance Sheet, other than any properties
reflected in the Company's Consolidated Balance Sheet that (i) have been sold or
otherwise disposed of since the date of the Company's Consolidated Balance Sheet
in the ordinary course of business consistent with past practice or (ii) are
not, individually or in the aggregate, Material to the Company, free and clear
of Liens, other than (x) Liens the existence of which is reflected in the
Company's Consolidated Financial Statements, (y) Permitted Encumbrances and (z)
Liens that, individually or in the aggregate, are not Material to the Company.
The Company or its Subsidiaries, individually or together, hold
Agreement and Plan of Merger
-11-
<PAGE>
under valid lease agreements all real and personal properties reflected in the
Company's Consolidated Balance Sheet as being held under capitalized leases, and
all real and personal property that is subject to the operating leases to which
reference is made in the notes to the Company's Audited Consolidated Financial
Statements, and enjoy peaceful and undisturbed possession of such properties
under such leases, other than (i) any properties as to which such leases have
expired in accordance with their terms without any liability of any party
thereto since the date of the Company's Consolidated Balance Sheet and (ii) any
properties that, individually or in the aggregate, are not Material to the
Company. Neither the Company nor any of its Subsidiaries has received any
written notice of any adverse claim to the title to any properties owned by them
or with respect to any lease under which any properties are held by them, other
than any claims that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Company.
SECTION 4.10 Certain Obligations. Section 4.10 of the Company's
-------------------
Disclosure Letter contains a true and complete list of the Material Contracts of
the Company and its Subsidiaries. Except as set forth in Section 4.10 of the
Company's Disclosure Letter, neither the Company nor any of its Subsidiaries is
a party to or bound by any Material Contract. All Material Contracts to which
the Company or any of its Subsidiaries is a party are in full force and effect,
the Company or the Subsidiary of the Company that is a party to or bound by such
Material Contract has performed its obligations thereunder to date and, to the
Knowledge of the Company, each other party thereto has performed its obligations
thereunder to date, other than any failure of a Material Contract to be in full
force and effect or any nonperformance thereof that could not reasonably be
expected to have a Material Adverse Effect on the Company.
SECTION 4.11 Permits; Compliance. To the Knowledge of the Company, the
-------------------
Company and its Subsidiaries have obtained all Permits that are necessary to
carry on their businesses as currently conducted, except for any such Permits as
to which, individually or in the aggregate, the failure to possess could not
reasonably be expected to have a Material Adverse Effect on the Company. Such
Permits are in full force and effect, have not been violated in any respect that
could reasonably be expected to have a Material Adverse Effect on the Company
and, to the Knowledge of the Company, no suspension, revocation or cancellation
thereof has been threatened and there is no action, proceeding or investigation
pending or threatened regarding suspension, revocation or cancellation of any of
such Permits, except where the suspension, revocation or cancellation of such
Permits could not reasonably be expected to have a Material Adverse Effect on
the Company.
SECTION 4.12 Litigation; Compliance with Laws. There are no actions,
--------------------------------
suits, investigations or proceedings (including any proceedings in arbitration)
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries, at law or in equity, in any Court or before or by any
Governmental Authority, except actions, suits or proceedings that (a) are set
forth in Section 4.12 or any other Section of the Company's Disclosure Letter or
(b), individually or, with respect to multiple actions, suits or proceedings
that allege similar theories of recovery based on similar facts, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
the Company. There are no claims pending
Agreement and Plan of Merger
-12-
<PAGE>
or, to the Knowledge of the Company, threatened by any Persons against the
Company or any of its Subsidiaries for indemnification pursuant to any statute,
organizational document, contract or otherwise with respect to any action, suit,
investigation or proceeding pending in any Court or before or by any
Governmental Authority. Except as set forth in Section 4.12 of the Company's
Disclosure Letter, the Company and its Subsidiaries are in substantial
compliance with all applicable Laws and Regulations and are not in default with
respect to any Order applicable to the Company or any of its Subsidiaries,
except such events of noncompliance or defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
the Company.
SECTION 4.13 Employee Benefit Plans.
----------------------
(a) Each Benefit Plan of the Company and its Subsidiaries is listed
in Section 4.13(a) of the Company's Disclosure Letter, including, with
respect to Terminated Benefit Plans, the date of termination. True and
correct copies of each of the following have been made available to the
Acquiror: (i) the most recent annual report (Form 5500) relating to each
such Current Benefit Plan filed with the IRS, (ii) each such Current
Benefit Plan, (iii) the trust agreement, if any, relating to each such
Current Benefit Plan, (iv) the most recent summary plan description for
each such Current Benefit Plan for which a summary plan description is
required by ERISA, (v) the most recent actuarial report or valuation
relating to each such Current Benefit Plan subject to Title IV of ERISA and
(vi) the most recent determination letter, if any, issued by the IRS with
respect to any such Current Benefit Plan qualified under Section 401 of the
Code.
(b) No event has occurred and, to the Knowledge of the Company, there
exists no condition or set of circumstances in connection with which the
Company or any of its Subsidiaries could be subject to any liability under
the terms of such Benefit Plans, or with respect to any such Benefit Plans,
under ERISA, the Code or any other applicable Law, other than any condition
or set of circumstances that could not reasonably be expected to have a
Material Adverse Effect on the Company.
(c) As to any such Current Benefit Plan intended to be qualified
under Section 401 of the Code, such Benefit Plan has been determined by the
IRS to satisfy in form the requirements of such Section and there has been
no termination or partial termination of such Benefit Plan within the
meaning of Section 411(d)(3) of the Code.
(d) As to any such Terminated Benefit Plan intended to have been
qualified under Section 401 of the Code, such Terminated Benefit Plan
received a favorable determination letter from the IRS with respect to its
termination.
(e) There are no actions, suits or claims pending (other than routine
claims for benefits) or, to the Knowledge of the Company, threatened
against, or with respect to, any of such Benefit Plans or their assets that
could reasonably be expected to have a Material Adverse Effect on the
Company.
Agreement and Plan of Merger
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<PAGE>
(f) To the Knowledge of the Company, there is no matter pending
(other than routine qualification determination filings) with respect to
any of such Benefit Plans before the IRS, the Department of Labor or the
PBGC.
(g) All contributions required to be made by the Company or the
Company's Subsidiaries to such Benefit Plans pursuant to their terms and
provisions have been made timely.
(h) As to any such Current Benefit Plan subject to Title IV of ERISA,
(i) there has been no event or condition which presents a material risk of
plan termination, (ii) no accumulated funding deficiency, whether or not
waived, within the meaning of Section 302 of ERISA or Section 412 of the
Code has been incurred within six years prior to date of this Agreement,
(iii) no reportable event within the meaning of Section 4043 of ERISA (for
which the disclosure requirements of Regulation section 2615.3 promulgated
by the PBGC have not been waived) has occurred within six years prior to
the date of this Agreement, (iv) no notice of intent to terminate such
Benefit Plan has been given under Section 4041 of ERISA, (v) no proceeding
has been instituted under Section 4042 of ERISA to terminate such Benefit
Plan, (vi) no liability to the PBGC has been incurred (other than with
respect to required premium payments) and (vii) the assets of the Benefit
Plan equal or exceed the actuarial present value of the benefit
liabilities, within the meaning of Section 4041 of ERISA, under the Benefit
Plan, based upon reasonable actuarial assumptions and the asset valuation
principles established by the PBGC.
(i) Except as set forth in Section 4.13(i) of the Company's
Disclosure Letter, in connection with the consummation of the transactions
contemplated by this Agreement, no payments have been or will be made under
any such Current Benefit Plans or any of the programs, agreements, policies
or other arrangements described in Section 4.13(k) of the Company's
Disclosure Letter which, in the aggregate, would be nondeductible under
Section 280G of the Code.
(j) Except as set forth in Section 4.13(j) of the Company's
Disclosure Letter, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not (i) require
the Company or any of its Subsidiaries to make a larger contribution to, or
pay greater benefits under, any Current Benefit Plan or any of the
programs, agreements, policies or other arrangements described in Section
4.13(k) of the Company's Disclosure Letter than it otherwise would or (ii)
create or give rise to any additional vested rights or service credits
under any Current Benefit Plan or any of such programs, agreements,
policies or other arrangements.
(k) Except as set forth in Section 4.13(k) of the Company's
Disclosure Letter, neither the Company nor any of its Subsidiaries is a
party to or is bound by any severance agreement (involving $50,000 or
more), program or policy. True and correct copies of all employment
agreements with officers of the Company and its Subsidiaries,
Agreement and Plan of Merger
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<PAGE>
and all vacation, overtime and other compensation policies of the Company
and its Subsidiaries relating to their employees have been made available
to the Acquiror.
(l) Except as set forth in Section 4.13(l) of the Company's
Disclosure Letter, no Benefit Plan provides retiree medical or retiree life
insurance benefits to any Person and neither the Company nor any of its
Subsidiaries is contractually or otherwise obligated (whether or not in
writing) to provide any Person with life insurance or medical benefits upon
retirement or termination of employment, other than as required by the
provisions of Sections 601 through 608 of ERISA and Section 4980B of the
Code. Each Benefit Plan or other arrangement described in Section 4.13(l)
of the Company's Disclosure Letter may be unilaterally amended or
terminated in its entirety without liability except as to benefits accrued
thereunder prior to such amendment or termination.
(m) Neither the Company nor any of its Subsidiaries contributes or
has an obligation to contribute, and has not within six years prior to the
date of this Agreement contributed or had an obligation to contribute, to a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(n) Except as set forth in Section 4.13(n) of the Company's
Disclosure Letter, the vacation policies of the Company and its
Subsidiaries do not provide for carryover vacation from one calendar year
to the next.
(o) No collective bargaining agreement to which the Company or any of
its Subsidiaries is a party is currently in effect or is being negotiated
by the Company or any of its Subsidiaries. There is no pending or, to the
Knowledge of the Company, threatened labor dispute, strike or work stoppage
against the Company or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect on the Company. To the Knowledge
of the Company, neither the Company or any of its Subsidiaries nor any
representative or employee of the Company or any of its Subsidiaries has in
the United States committed any unfair labor practices in connection with
the operation of the business of the Company and its Subsidiaries, and
there is no pending or, to the Knowledge of the Company, threatened charge
or complaint against the Company or any of its Subsidiaries by the National
Labor Relations Board or any comparable agency of any state of the United
States.
SECTION 4.14 Taxes.
-----
(a) Except for such matters as could not reasonably be expected to
have a Material Adverse Effect on the Company, (i) all Tax Returns that
are required to be filed by or with respect to the Company or any of its
Subsidiaries on or before the Effective Time have been or will be timely
filed, (ii) all Taxes that are due on or before the Effective Time have
been or will be timely paid in full, (iii) all withholding Tax requirements
imposed on or with respect to the Company or any of its Subsidiaries have
been or will be satisfied in full in all respects and (iv) no penalty,
interest or other charge
Agreement and Plan of Merger
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<PAGE>
is or will become due with respect to the late filing of any such Tax
Return or late payment of any such Tax.
(b) Except as set forth in Section 4.14(b) of the Company's
Disclosure Letter, all Tax Returns have been audited by the applicable
Governmental Authority or the applicable statute of limitations has expired
for the period covered by such Tax Returns.
(c) Except as set forth in Section 4.14(c) of the Company's
Disclosure Letter, there is not in force any extension of time with respect
to the due date for the filing of any material Tax Return or any waiver or
agreement for any extension of time for the assessment or payment of any
material Tax due with respect to the period covered by any Tax Return.
(d) There is no claim against the Company or any of its Subsidiaries
for any Taxes, and no assessment, deficiency or adjustment has been
asserted or proposed with respect to any Tax Return, that, in either case,
could reasonably be expected to have a Material Adverse Effect on the
Company.
(e) Except as set forth in Section 4.14(e) of the Company's
Disclosure Letter, none of the Company and its Subsidiaries, during the
last ten years, has been a member of an affiliated group filing a
consolidated federal income Tax Return other than the affiliated group of
which the Company is the common parent corporation.
SECTION 4.15 Environmental Matters. Except for matters disclosed in
---------------------
Section 4.15 of the Company's Disclosure Letter and except for matters that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on the Company, (a) the properties, operations and
activities of the Company and its Subsidiaries are in compliance with all
applicable Environmental Laws; (b) the Company and its Subsidiaries and the
properties and operations of the Company and its Subsidiaries are not subject to
any existing, pending or, to the Knowledge of the Company, threatened action,
suit, investigation, inquiry or proceeding by or before any Court or
Governmental Authority under any Environmental Law; (c) all Permits, if any,
required to be obtained or filed by the Company or any of its Subsidiaries under
any Environmental Law in connection with the business of the Company and its
Subsidiaries have been obtained or filed and are valid and currently in full
force and effect; (d) there has been no release of any hazardous substance,
pollutant or contaminant into the environment by the Company or its Subsidiaries
or in connection with their properties or operations; (e) to the Company's
knowledge, there has been no exposure (attributable to the action of the Company
or its Subsidiaries) of any Person or property to any hazardous substance,
pollutant or contaminant in connection with the properties, operations and
activities of the Company and its Subsidiaries; and (f) the Company and its
Subsidiaries have made available to the Acquiror all internal and external
environmental audits and studies and all correspondence on substantial
environmental matters (in each case relevant to the Company or any of its
Subsidiaries) in the possession of the Company or its Subsidiaries.
Agreement and Plan of Merger
-16-
<PAGE>
SECTION 4.16 Intellectual Property.
---------------------
(a) The Company or one or more of its Subsidiaries own, or hold
licenses under or otherwise have the right to use or sublicense, all
foreign and domestic patents, trademarks (common law and registered),
trademark registration applications, service marks (common law and
registered), service mark registration applications, trade names and
copyrights, copyright applications, trade secrets, know-how and other
proprietary information (including the Software) as are necessary for the
conduct of the business of the Company and its Subsidiaries as currently
conducted except for any such intellectual property as to which the failure
to own or hold licenses could not reasonably be expected to have a Material
Adverse Effect on the Company. Neither the Company nor any of its
Subsidiaries is currently in receipt of any notice of infringement or
notice of conflict with the asserted rights of others in any patents,
trademarks, service marks, trade names, trade secrets and copyrights owned
or held by other Persons, except, in each case, for matters that could not
reasonably be expected to have a Material Adverse Effect on the Company.
Neither the execution and delivery of this Agreement nor consummation of
the transactions contemplated hereby will violate or breach the terms of or
cause any cancellation of any material license held by the Company or any
of its Subsidiaries under, any patent, trademark, service mark, trade name,
trade secret or copyright.
(b) The list of components contained in the definition of Software
is, in all material respects, a true, accurate, and complete list of the
software applications with respect to which the Company has an ownership
interest. The Software, and its use, licensing, copying and/or
distribution, do not infringe or violate any copyrights, trade secrets,
patents, or other proprietary rights of any third party. Except as set
forth in Section 4.12 of the Company's Disclosure Letter, no claim of
infringement of any patent, copyright, trade secret, or other proprietary
right is pending against the Company. All security devices, techniques, and
applications used by the Company and its Subsidiaries and contained within
the Software can be identified and disabled by the Company. Section 4.16(b)
of the Company's Disclosure Letter sets forth material third party software
marketed by the Company and/or embedded into the Software.
SECTION 4.17 Insurance. The Company and its Subsidiaries own and are
---------
beneficiaries under all such insurance policies underwritten by reputable
insurers that, as to risks insured, coverages and related limits and
deductibles, are customary in the industries in which the Company and its
Subsidiaries operate. To the Knowledge of the Company, all such policies are in
full force and effect and all premiums due thereon have been paid. Section 4.17
of the Company's Disclosure Letter sets forth a list, including the name of the
underwriter, the risks insured, coverage and related limits and deductibles,
expiration dates and significant riders, of the principal insurance policies
currently maintained by the Company and its Subsidiaries.
SECTION 4.18 Pooling; Tax Matters. To the Knowledge of the Company,
--------------------
neither the Company nor any of its Affiliates has taken or agreed to take any
action that would prevent (a) the Merger from being treated for financial
accounting purposes as a "pooling of interests"
Agreement and Plan of Merger
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<PAGE>
in accordance with generally accepted accounting principles and the Regulations
and interpretations of the Commission or (b) the Merger from constituting a
reorganization within the meaning of section 368(a) of the Code. Specifically:
(i) To the Knowledge of the Company, there is no plan or intention
by any stockholder of the Company who owns 5 percent or more of the Company
Common Stock and there is no plan or intention on the part of any of the
remaining stockholders of the Company, to sell, exchange or otherwise
dispose of a number of shares of Acquiror Common Stock to be received in
the Merger that would reduce the ownership of Acquiror Common Stock by the
stockholders of the Company to a number of shares having a value, as of the
Effective Time, of less than 50 percent of the value of all Company Common
Stock (including shares of Company Common Stock sold for cash in lieu of
fractional shares of Acquiror Common Stock) outstanding immediately prior
to the Effective Time.
(ii) The Company and the stockholders of the Company will each pay
their respective expenses, if any, incurred in connection with the Merger.
(iii) There is no intercorporate indebtedness existing between the
Company and the Acquiror or between the Company and Newco that was issued,
acquired, or will be settled at a discount.
(iv) The Company is not an investment company as defined in section
368(a)(2)(F)(iii) and (iv) of the Code.
(v) The Company is not under the jurisdiction of a court in a title
11 or similar case within the meaning of section 368(a)(3)(A) of the Code.
(vi) The liabilities of the Company that will be assumed by the
Surviving Corporation in the Merger and any liability to which the assets
to be transferred to the Surviving Corporation are subject were incurred by
the Company in the ordinary course of its business. The total amount of
such liabilities does not equal or exceed the aggregate basis of the
Company in the assets to be transferred to the Surviving Corporation in the
Merger.
SECTION 4.19 Affiliates. Section 4.19 of the Company's Disclosure Letter
----------
contains a true and complete list of all Persons who, to the Knowledge of the
Company, may be deemed to be Affiliates of the Company, excluding all its
Subsidiaries but including all directors and executive officers of the Company.
SECTION 4.20 Certain Business Practices. As of the date of this
--------------------------
Agreement, neither the Company or any of its Subsidiaries nor any director,
officer, employee or agent of the Company or any of its Subsidiaries has (i)
used any funds for unlawful contributions, gifts, entertainment or other
unlawful payments relating to political activity, (ii) made any unlawful
Agreement and Plan of Merger
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<PAGE>
payment to any foreign or domestic government official or employee or to any
foreign or domestic political party or campaign or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, (iii) consummated any
transaction, made any payment, entered into any agreement or arrangement or
taken any other action in violation of Section 1128B(b) of the Social Security
Act, as amended, or (iv) made any other unlawful payment, except for any such
matters that could not reasonably be expected to have a Material Adverse Effect
on the Company.
SECTION 4.21 Opinion of Financial Advisor. The Company has received the
----------------------------
opinion of Morgan Stanley & Co. Incorporated on the date of this Agreement to
the effect that the Common Stock Exchange Ratio is fair, from a financial point
of view, to the holders of Company Common Stock.
SECTION 4.22 Brokers. No broker, finder or investment banker (other than
-------
Morgan Stanley & Co. Incorporated) is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company. Prior to
the date of this Agreement, the Company has made available to the Acquiror a
complete and correct copy of all agreements between the Company and Morgan
Stanley & Co. Incorporated pursuant to which such firm will be entitled to any
payment relating to the transactions contemplated by this Agreement.
SECTION 4.23 Acquiring Person. None of the Acquiror Companies is (a) an
----------------
"Acquiring Person" as defined in the Company Rights Plan or (b) will become an
"Acquiring Person" as a result of any of the transactions contemplated by this
Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
The Acquiror Companies hereby represent and warrant to the Company that:
SECTION 5.1 Organization and Qualification; Subsidiaries. The Acquiror,
--------------------------------------------
Newco and each other Subsidiary of the Acquiror are legal entities duly
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or organization, have all requisite
power and authority to own, lease and operate their respective properties and to
carry on their business as it is now being conducted and are duly qualified and
in good standing to do business in each jurisdiction in which the nature of the
business conducted by them or the ownership or leasing of their respective
properties makes such qualification necessary, other than any matters, including
the failure to be so duly qualified and in good standing, that could not
reasonably be expected to have a Material Adverse Effect on the Acquiror.
Section 5.01 of the Acquiror's Disclosure Letter sets forth, as of the date of
this Agreement, a true and complete list of all Significant Subsidiaries of the
Acquiror, together with the jurisdiction of incorporation of each such
Subsidiary and the percentage of each such Subsidiary's outstanding capital
stock or other equity interests owned by the Acquiror or another Subsidiary of
the Acquiror.
Agreement and Plan of Merger
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<PAGE>
SECTION 5.2 Certificate of Incorporation and Bylaws. The Acquiror has
---------------------------------------
heretofore marked for identification and furnished to the Company complete and
correct copies of the certificate of incorporation and the bylaws or the
equivalent organizational documents, in each case as amended or restated to the
date hereof, of the Acquiror and each of its Significant Subsidiaries. None of
the Acquiror, Newco or any of the Acquiror's Significant Subsidiaries is in
violation of any of the provisions of its certificate of incorporation or bylaws
(or equivalent organizational documents).
SECTION 5.3 Capitalization.
--------------
(a) The authorized capital stock of the Acquiror consists of (i)
200,000,000 shares of Acquiror Common Stock of which as of March 31, 1996:
114,787,914 shares were issued and outstanding, all of which are duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, the Acquiror's certificate of
incorporation or bylaws or any agreement to which the Acquiror is a party
or is bound, and (ii) 5,000,000 shares of Preferred Stock, par value $1.00
per share, of which none is issued but of which 2,000,000 shares have been
designated as Series A Junior Participating Preferred Stock. Between March
31, 1996 and the date of this Agreement, no shares of Acquiror Common Stock
have been issued by the Acquiror except pursuant to the exercise of
outstanding Acquiror Stock Options and otherwise to the extent set forth in
Section 5.03(a) of the Acquiror's Disclosure Letter. Except as set forth in
Section 5.03(a) of the Acquiror's Disclosure Letter, from March 31, 1996 to
the date of this Agreement, the Acquiror has not granted any options for,
or other rights to purchase, shares of Acquiror Common Stock.
(b) Except as set forth in Section 5.03(b) of the Acquiror's
Disclosure Letter, no shares of Acquiror Common Stock are reserved for
issuance, and, except for the Acquiror's Rights Plan, the Acquiror Stock
Options listed in Section 5.03(b) of the Acquiror's Disclosure Letter and
the other agreements listed in Section 5.03(b) of the Acquiror's Disclosure
Letter, there are no contracts, agreements, commitments or arrangements
obligating the Acquiror (i) to offer, sell, issue or grant any shares of,
or any options, warrants or rights of any kind to acquire any shares of, or
any securities that are convertible into or exchangeable for any shares of,
capital stock of the Acquiror, (ii) to redeem, purchase or acquire, or
offer to purchase or acquire, any outstanding shares of, or any outstanding
options, warrants or rights of any kind to acquire any shares of, or any
outstanding securities that are convertible into or exchangeable for any
shares of, capital stock of the Acquiror or (iii) to grant any Lien on any
shares of capital stock of the Acquiror.
(c) Except as set forth in the Acquiror's Disclosure Letter, (i) all
the issued and outstanding shares of capital stock of, or other equity
interests in, each Subsidiary of the Acquiror are owned by the Acquiror or
one of its Subsidiaries, have been duly authorized and are validly issued,
and, with respect to capital stock, are fully paid and nonassessable, and
were not issued in violation of any preemptive or similar rights of any
Agreement and Plan of Merger
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<PAGE>
Person; (ii) all such issued and outstanding shares, or other equity
interests, that are owned by the Acquiror or one of its Subsidiaries are
owned free and clear of all Liens; (iii) no shares of capital stock of, or
other equity interests in, any Subsidiary of the Acquiror are reserved for
issuance, and there are no contracts, agreements, commitments or
arrangements obligating the Acquiror or any of its Subsidiaries (A) to
offer, sell, issue, grant, pledge, dispose of or encumber any shares of
capital stock of, or other equity interests in, or any options, warrants or
rights of any kind to acquire any shares of capital stock of, or other
equity interests in, or any securities that are convertible into or
exchangeable for any shares of capital stock of, or other equity interests
in, any of the Subsidiaries of the Acquiror or (B) to redeem, purchase or
acquire, or offer to purchase or acquire, any outstanding shares of capital
stock of, or other equity interests in, or any outstanding options,
warrants or rights of any kind to acquire any shares of capital stock of or
other equity interest in, or any outstanding securities that are
convertible into or exchangeable for, any shares of capital stock of, or
other equity interests in, any of the Subsidiaries of the Acquiror or (C)
to grant any Lien on any outstanding shares of capital stock of, or other
equity interest in, any of the Subsidiaries of the Acquiror; except for any
matter under clause (i), (ii) or (iii) of this Section 5.03(c) that could
not reasonably be expected to have a Material Adverse Effect on the
Acquiror.
(d) There are no voting trusts, proxies or other agreements,
commitments or understandings of any character to which the Acquiror or any
of its Significant Subsidiaries is a party or by which the Acquiror or any
of its Significant Subsidiaries is bound with respect to the voting of any
shares of capital stock of the Acquiror or any of its Significant
Subsidiaries.
SECTION 5.4 Authorization of Agreement. Each of the Acquiror and Newco
--------------------------
has all requisite corporate power and authority to execute and deliver this
Agreement and each instrument required hereby to be executed and delivered by it
at the Closing, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby. The execution and delivery by
the Acquiror and Newco of this Agreement and each instrument required hereby to
be executed and delivered by the Acquiror or Newco at the Closing and the
performance of their respective obligations hereunder and thereunder have been
duly and validly authorized by all requisite corporate action (including
stockholder action) on the part of the Acquiror and Newco, respectively. This
Agreement has been duly executed and delivered by the Acquiror and Newco and
(assuming due authorization, execution and delivery hereof by the other party
hereto) constitutes a legal, valid and binding obligation of the Acquiror and
Newco, enforceable against the Acquiror and Newco in accordance with its terms,
except as the same may be limited by legal principles of general applicability
governing the application and availability of equitable remedies.
SECTION 5.5 Approvals. Except for the applicable requirements, if any,
---------
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws, (d) the HSR Act, (e) the competition Laws, Regulations and Orders of
foreign Governmental Authorities as set forth in the Acquiror's Disclosure
Letter, (f) the NYSE, (g) the filing and recordation of
Agreement and Plan of Merger
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<PAGE>
appropriate merger documents as required by the GCL and (h) those Laws,
Regulations and Orders noncompliance with which could not reasonably be expected
to have a material adverse effect on the ability of the Acquiror or Newco to
perform its obligations under this Agreement or to have a Material Adverse
Effect on the Acquiror, no filing or registration with, no waiting period
imposed by and no Permit or Order of, any Governmental Authority is required
under any Law, Regulation or Order applicable to the Acquiror or Newco to permit
the Acquiror or Newco to execute, deliver or perform this Agreement or any
instrument required hereby to be executed and delivered by it at the Closing.
SECTION 5.6 No Violation. Except as set forth in Section 5.06 of the
------------
Acquiror's Disclosure Letter, assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits and Orders of, Governmental Authorities
indicated as required in Section 5.05, neither the execution and delivery by the
Acquiror or Newco of this Agreement or any instrument required hereby to be
executed and delivered by the Acquiror or Newco at the Closing nor the
performance by the Acquiror or Newco of their respective obligations hereunder
or thereunder will (a) violate or breach the terms of or cause a default under
(i) any Law, Regulation or Order applicable to the Acquiror or Newco, (ii) the
certificate of incorporation or bylaws of the Acquiror or Newco or (iii) any
contract or agreement to which the Acquiror or any of its Subsidiaries is a
party or by which it or any of its properties or assets is bound, or (b) with
the passage of time, the giving of notice or the taking of any action by a third
Person, have any of the effects set forth in clause (a) of this Section, except
in any such case for any matters described in this Section that could not
reasonably be expected to have a material adverse effect upon the ability of the
Acquiror or Newco to perform its obligations under this Agreement or a Material
Adverse Effect on the Acquiror.
SECTION 5.7 Reports.
-------
(a) Since December 31, 1993, the Acquiror has filed all SEC Reports
of the Acquiror required to be filed with the Commission. The SEC Reports
of the Acquiror, including those filed after the date of this Agreement and
prior to the Effective Time, (i) were prepared in all material respects in
accordance with the applicable requirements of the Securities Act and the
Exchange Act, as the case may be, and the applicable Regulations of the
Commission thereunder and (ii) did not at the time they were filed contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) The Acquiror's Consolidated Financial Statements and any
consolidated financial statements of the Acquiror (including any related
notes thereto) contained in any SEC Reports of the Acquiror filed with the
Commission after the date of this Agreement (i) have been or will have been
prepared in accordance with the published Regulations of the Commission and
in accordance with GAAP (except (A) to the extent required by changes in
GAAP and (B), with respect to SEC Reports of the Acquiror filed prior to
the
Agreement and Plan of Merger
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<PAGE>
date of this Agreement, as may be indicated in the notes thereto) and (ii)
fairly present the consolidated financial position of the Acquiror and its
Subsidiaries as of the respective dates thereof and the consolidated
results of their operations and cash flows for the periods indicated
(including, in the case of any unaudited interim financial statements,
reasonable estimates of normal and recurring year-end adjustments).
(c) Except as set forth in the Acquiror's Disclosure Letter, there
exist no liabilities or obligations of the Acquiror and its Subsidiaries
that are Material to the Acquiror, whether accrued, absolute, contingent or
threatened, that would be required to be reflected, reserved for or
disclosed under GAAP in consolidated financial statements of the Acquiror
as of and for the period ended on the date of this representation and
warranty, other than (i) liabilities or obligations that are adequately
reflected, reserved for or disclosed in the Acquiror's Consolidated
Financial Statements, (ii) liabilities or obligations incurred in the
ordinary course of business of the Acquiror and its Subsidiaries since
March 31, 1996, (iii) liabilities or obligations the incurrence of which is
not prohibited by Section 6.02(b) and (iv) liabilities or obligations that
are not Material to the Acquiror.
SECTION 5.8 No Material Adverse Effect; Conduct.
-----------------------------------
(a) Since March 31, 1996, no event (other than any event that is
directly attributable to the prospect of consummation of the Merger or is
of general application to all or a substantial portion of the Acquiror's
industry and other than any event that is expressly subject to any other
representation or warranty contained in Article V) has, to the Knowledge of
the Acquiror, occurred that, individually or together with other similar
events, could reasonably be expected to constitute or cause a Material
Adverse Effect on the Acquiror.
(b) Except as disclosed in the Acquiror's Disclosure Letter, during
the period from March 31, 1996 to the date of this Agreement, neither the
Acquiror nor any of its Subsidiaries has engaged in any conduct that is
proscribed during the period from the date of this Agreement to the
Effective Time by subsections (i) through (vii) of Section 6.02(b) or
agreed in writing or otherwise during such period prior to the date of this
Agreement to engage in any such conduct.
SECTION 5.9 Title to Properties. The Acquiror or its Subsidiaries,
-------------------
individually or together, have indefeasible title to all of the properties
reflected in the Acquiror's Consolidated Balance Sheet, other than any
properties reflected in the Acquiror's Consolidated Balance Sheet that (i) have
been sold or otherwise disposed of since the date of the Acquiror's Consolidated
Balance Sheet or (ii) are not, individually or in the aggregate, Material to the
Acquiror, free and clear of Liens, other than (x) Liens the existence of which
is reflected in the Acquiror's Consolidated Financial Statements, (y) Permitted
Encumbrances and (z) Liens that, individually or in the aggregate, are not
Material to the Acquiror. The Acquiror or its Subsidiaries, individually or
together, hold under valid lease agreements all real and personal properties
Agreement and Plan of Merger
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<PAGE>
reflected in the Acquiror's Consolidated Balance Sheet as being held under
capitalized leases, and all real and personal property that is subject to the
operating leases to which reference is made in the notes to the Acquiror's
Audited Consolidated Financial Statements, and enjoy peaceful and undisturbed
possession of such properties under such leases, other than (i) any properties
as to which such leases have terminated in the ordinary course of business since
the date of the Acquiror's Consolidated Balance Sheet and (ii) any properties
that, individually or in the aggregate, are not Material to the Acquiror.
SECTION 5.10 Certain Obligations. Except as set forth in Section 5.10 of
-------------------
the Acquiror's Disclosure Letter, all Material Contracts to which the Acquiror
or any of its Subsidiaries is a party are in full force and effect, the Acquiror
or the Subsidiary of the Acquiror that is a party to or bound by such Material
Contract has performed its obligations thereunder to date and, to the Knowledge
of the Acquiror, each other party thereto has performed its obligations
thereunder to date, other than any failure of any such Material Contract to be
in full force and effect or any nonperformance thereof that could not reasonably
be expected to have a Material Adverse Effect on the Acquiror.
SECTION 5.11 Permits; Compliance. To the Knowledge of the Acquiror, the
-------------------
Acquiror and its Subsidiaries have obtained all Permits that are necessary to
carry on their businesses as currently conducted, except for any such Permits
that the failure to possess which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Acquiror. Such
Permits are in full force and effect, have not been violated in any respect that
could reasonably be expected to have a Material Adverse Effect on the Acquiror
and, to the Knowledge of the Acquiror, no suspension, revocation or cancellation
thereof has been threatened and there is no action, proceeding or investigation
pending or threatened regarding suspension, revocation or cancellation of any of
such Permits, except where the suspension, revocation or cancellation of such
Permits could not reasonably be expected to have a Material Adverse Effect on
the Acquiror.
SECTION 5.12 Litigation; Compliance with Laws. There are no actions,
--------------------------------
suits, investigations or proceedings (including any proceedings in arbitration)
pending or, to the Knowledge of the Acquiror, threatened against the Acquiror or
any of its Subsidiaries, at law or in equity, in any Court or before or by any
Governmental Authority, except actions, suits or proceedings that (a) are set
forth in Section 5.12 or any other Section of the Acquiror's Disclosure Letter
or (b), individually or, with respect to multiple actions, suits or proceedings
that allege similar theories of recovery based on similar facts, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
the Acquiror. The Acquiror and its Subsidiaries are in substantial compliance
with all applicable Laws and Regulations and are not in default with respect to
any Order applicable to the Acquiror or any of its Subsidiaries, except such
events of noncompliance or defaults that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect on the
Acquiror.
Agreement and Plan of Merger
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<PAGE>
SECTION 5.13 Employee Benefit Plans.
----------------------
(a) No event has occurred and, to the Knowledge of the Acquiror,
there exists no condition or set of circumstances in connection with which
the Acquiror or any of its Subsidiaries could be subject to any liability
under the terms of any Benefit Plans of the Acquiror or any of its
Subsidiaries or, with respect to any such Benefit Plan, under ERISA, the
Code or any other applicable Law, other than any condition or set of
circumstances that could not reasonably be expected to have a Material
Adverse Effect on the Acquiror.
(b) As to any Current Benefit Plan included in such Benefit Plans
that is intended to be qualified under Section 401 of the Code, such
Current Benefit Plan satisfies in form the requirements of such Section and
there has been no termination or partial termination of such Current
Benefit Plan within the meaning of Section 411(d)(3) of the Code.
(c) As to any Terminated Benefit Plan included in such Benefit Plans
that is intended to have been qualified under Section 401 of the Code, such
Terminated Benefit Plan received a favorable determination letter from the
IRS with respect to its termination.
(d) There are no actions, suits or claims pending (other than routine
claims for benefits) or, to the Knowledge of the Acquiror, threatened
against, or with respect to, any of such Benefit Plans or their assets that
could reasonably be expected to have a Material Adverse Effect on the
Acquiror.
(e) As to any such Current Benefit Plan subject to Title IV of ERISA,
(i) there has been no event or condition which presents the material risk
of plan termination, (ii) no accumulated funding deficiency, whether or not
waived, within the meaning of Section 302 of ERISA or Section 412 of the
Code has been incurred, (iii), except as set forth in Section 5.13(e) of
the Acquiror's Disclosure Letter, no reportable event within the meaning of
Section 4043 of ERISA (for which the disclosure requirements of Regulation
section 2615.3 promulgated by the PBGC have not been waived) has occurred
within six years prior to the date of this Agreement, (iv) no notice of
intent to terminate such Benefit Plan has been given under Section 4041 of
ERISA, (v) no proceeding has been instituted under Section 4042 of ERISA to
terminate such Benefit Plan, (vi) no liability to the PBGC has been
incurred (other than with respect to required premium payments) and (vii)
the assets of the Benefit Plan equal or exceed the actuarial present value
of the benefit liabilities, within the meaning of Section 4041 of ERISA,
under the Benefit Plan, based upon reasonable actuarial assumptions and the
asset valuation principles established by the PBGC.
(f) Neither the Acquiror nor any of its Subsidiaries contributes or
has an obligation to contribute, and has not within six years prior to the
date of this Agreement
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contributed or had an obligation to contribute, to a multiemployer plan
within the meaning of Section 3(37) of ERISA.
SECTION 5.14 Taxes.
-----
(a) Except for such matters as could not reasonably be expected to
have a Material Adverse Effect on the Acquiror, (i) all Tax Returns that
are required to be filed by or with respect to the Acquiror or any of its
Subsidiaries on or before the Effective Time have been or will be timely
filed, (ii) all Taxes that are due on or before the Effective Time have
been or will be timely paid in full, (iii) all withholding Tax requirements
imposed on or with respect to the Acquiror or any of its Subsidiaries have
been or will be satisfied in full in all respects and (iv) no penalty,
interest or other charge is or will become due with respect to the late
filing of any such Tax Return or late payment of any such Tax.
(b) There is no claim against the Acquiror or any of its Subsidiaries
for any Taxes, and no assessment, deficiency or adjustment has been
asserted or proposed with respect to any Tax Return, that, in either case,
could reasonably be expected to have a Material Adverse Effect on the
Acquiror.
SECTION 5.15 Environmental Matters. Except for matters disclosed in
---------------------
Section 5.15 of the Acquiror's Disclosure Letter and except for matters that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on the Acquiror, (a) the properties, operations and
activities of the Acquiror and its Subsidiaries are in compliance with all
applicable Environmental Laws; (b) the Acquiror and its Subsidiaries and the
properties and operations of the Acquiror and its Subsidiaries are not subject
to any existing, pending or, to the Knowledge of the Acquiror, threatened
action, suit, investigation, inquiry or proceeding by or before any Court or
Governmental Authority under any Environmental Law; (c) all Permits, if any,
required to be obtained or filed by the Acquiror or any of its Subsidiaries
under any Environmental Law in connection with the business of the Acquiror and
its Subsidiaries have been obtained or filed and are valid and currently in full
force and effect; (d) there has been no release of any hazardous substance,
pollutant or contaminant into the environment by the Acquiror or its
Subsidiaries or in connection with their properties or operations; and (e) there
has been no exposure of any Person or property to any hazardous substance,
pollutant or contaminant in connection with the properties, operations and
activities of the Acquiror and its Subsidiaries.
SECTION 5.16 Pooling; Tax Matters. To the Knowledge of the Acquiror,
--------------------
neither the Acquiror nor any of its Affiliates has taken or agreed to take any
action that would prevent (a) the Merger from being treated for financial
accounting purposes as a "pooling of interests" in accordance with generally
accepted accounting principles and the Regulations and interpretations of the
Commission or (b) the Merger from constituting a reorganization within the
meaning of section 368(a) of the Code. Specifically:
Agreement and Plan of Merger
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<PAGE>
(i) Following the Merger, the Surviving Corporation will hold at
least 90 percent of the fair market value of the Company's net assets and
at least 70 percent of the fair market value of the Company's gross assets
and at least 90 percent of Newco's net assets and at least 70 percent of
Newco's gross assets, held immediately prior to the Merger, taking into
account amounts used to pay Merger expenses and any distributions other
than regular dividends.
(ii) The Acquiror has no plan or intention to (A) liquidate the
Surviving Corporation, (B) merge the Surviving Corporation with or into
another corporation, (C) sell or otherwise dispose of the stock of the
Surviving Corporation, (D) cause or permit the Surviving Corporation to
issue additional shares of its capital stock that would result in the
Acquiror's losing control (within the meaning of section 368(c) of the
Code) of the Surviving Corporation, (E) cause or permit the Surviving
Corporation to sell or otherwise dispose of any of its assets or of any of
the assets acquired from Newco except for dispositions made in the ordinary
course of business and dispositions to a corporation controlled (within the
meaning of Section 368(c) of the Code) by the Surviving Corporation, or (F)
reacquire any of the Acquiror Common Stock issued to the holders of Company
Common Stock in the Merger.
(iii) Following the Merger, the Surviving Corporation will continue
the historic business of the Company or use a significant portion of its
assets in a business.
(iv) There is no intercorporate indebtedness existing between the
Company and the Acquiror or between the Company and Newco that was issued,
acquired, or will be settled at a discount.
(v) The Acquiror does not own, nor has it owned during the past
five years, any shares of capital stock of the Company.
SECTION 5.17 Affiliates. Section 5.17 of the Acquiror's Disclosure
----------
Letter contains a true and complete list of all Persons who, to the Knowledge of
the Acquiror, may be deemed to be Affiliates of the Acquiror, excluding all its
Subsidiaries but including all directors and executive officers of the Acquiror.
SECTION 5.18 Brokers. Except as set forth in Section 5.18 of the
-------
Acquiror's Disclosure Letter, no broker, finder or investment banker (other than
Dillon, Read & Co., Inc.) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Acquiror.
SECTION 5.19 Acquiring Person. Based on the information set forth in the
----------------
Company's SEC Reports, no holder of 5 percent or more of the outstanding Company
Common Stock whose existence is disclosed therein will at the Effective Time
become an "Acquiring
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<PAGE>
Person", as such term is defined in the Acquiror's Rights Plan, as a result of
any of the transactions contemplated by this Agreement.
SECTION 5.20 Proposal to Acquire the Acquiror. There is not pending any
--------------------------------
bona fide proposal received by the Acquiror regarding any merger, consolidation
or reorganization of the Acquiror with any other Person as a result of which
less than a majority of the combined voting power of the securities of the
Person surviving such transaction would be held immediately after such
transaction by all the holders of Acquiror Common Stock immediately prior to
such transaction and for which transaction financing, to the extent required, is
then committed.
SECTION 5.21 Certain Business Practices. As of the date of this
--------------------------
Agreement, neither the Acquiror or any of its Subsidiaries nor any director,
officer, employee or agent of the Acquiror or any of its Subsidiaries has (i)
used any funds for unlawful contributions, gifts, entertainment or other
unlawful payments relating to political activity, (ii) made any unlawful payment
to any foreign or domestic government official or employee or to any foreign or
domestic political party or campaign or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, (iii) consummated any transaction,
made any payment, entered into any agreement or arrangement or taken any other
action in violation of Section 1128B(b) of the Social Security Act, as amended,
or (iv) made any other unlawful payment, except for any such matters that could
not reasonably be expected to have a Material Adverse Effect on the Acquiror.
ARTICLE VI
COVENANTS
SECTION 6.1 Affirmative Covenants. Each of the Company and the Acquiror
---------------------
hereby covenants and agrees that, prior to the Effective Time, unless otherwise
expressly contem plated by this Agreement or consented to in writing by the
other, it will and will cause its Subsidiaries to:
(a) operate its business in the usual and ordinary course consistent
with past practices;
(b) use all reasonable efforts to preserve substantially intact its
business organization, maintain its rights and franchises, retain the
services of its respective key employees and maintain its relationships
with its respective customers and suppliers;
(c) maintain and keep its properties and assets in as good repair and
condition as at present, ordinary wear and tear excepted, and maintain
supplies and inventories in quantities consistent with its customary
business practice; and
(d) use all reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that
currently maintained;
Agreement and Plan of Merger
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<PAGE>
except for any matters that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on such party.
SECTION 6.2 Negative Covenants.
------------------
(a) Except as set forth in Schedule 6.02(a) of the Company's
Disclosure Letter, the Company covenants and agrees that, except as
expressly contemplated by this Agreement or otherwise consented to in
writing by the Acquiror, from the date of this Agreement until the
Effective Time, it will not do, and will not permit any of its Subsidiaries
to do, any of the following:
(i) (A) to increase the compensation payable to or to become
payable to any director or executive officer, except for increases in
salary or wages payable or to become payable upon promotion to an
office having greater operational responsibilities or otherwise in the
ordinary course of business and consistent with past practice; (B) to
grant any severance or termination pay (other than pursuant to the
normal severance policy of the Company or its Subsidiaries as in
effect on the date of this Agreement) to, or enter into or amend in
any material respect any employment or severance agreement, including
any amendment whatsoever to the Employment Agreement, with, any
director, officer or employee, either individually or as part of a
class of similarly situated persons; (C) to establish, adopt or enter
into any Benefit Plan or (D), except as may be required by applicable
law and actions that are not inconsistent with the provisions of
Section 7.09 of this Agreement, to amend, or to take any other actions
(including the acceleration of vesting, waiving of performance
criteria or the adjustment of awards or any other actions permitted
upon a change in control of such party or a filing under Section 13(d)
or 14(d) of the Exchange Act with respect to such party) with respect
to any of the Benefit Plans of such party;
(ii) to declare or to pay any dividend on, or to make any other
distribution in respect of, outstanding shares of capital stock,
except for dividends by a wholly-owned Subsidiary of the Company to
the Company or another wholly-owned Subsidiary of the Company;
(iii) (A) to redeem, purchase or acquire, or to offer to
purchase or acquire, any outstanding shares of capital stock of, or
other equity interests in, or any securities that are convertible into
or exchangeable for any shares of capital stock of, or other equity
interests in, or any outstanding options, warrants or rights of any
kind to acquire any shares of capital stock of, or other equity
interests in, the Company or any of its Subsidiaries (other than (1)
any such acquisition by the Company or any of its wholly-owned
Subsidiaries directly from any wholly-owned Subsidiary of the Company
in exchange for capital contributions or loans to such Subsidiary, (2)
any repurchase, forfeiture or retirement of shares of Company Common
Stock or Company Stock Options occurring pursuant to the terms (as in
Agreement and Plan of Merger
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<PAGE>
effect on the date of this Agreement) of any existing Benefit Plan of
the Company or any of its Subsidiaries, (3) the repurchase of rights
pursuant to the terms (as in effect on the date of this Agreement) of
the Company Rights Agreement to the extent required by a court of
competent jurisdiction or (4) any periodic purchase of Company Common
Stock for allocation to employee's accounts occurring pursuant to the
terms (as in effect on the date of this Agreement) of any existing
employee stock purchase plan); (B) to effect any reorganization or
recapitalization; or (C) to split, combine or reclassify any of the
capital stock of, or other equity interests in, the Company or any of
its Subsidiaries or to issue or to authorize or propose the issuance
of any other securities in respect of, in lieu of or in substitution
for, shares of such capital stock or such equity interests, other than
intercompany transfers among the Company and its wholly-owned
Subsidiaries or among such wholly-owned Subsidiaries;
(iv) (A) to offer, sell, issue or grant, or authorize the
offering, sale, issuance or grant, of any shares of capital stock of,
or other equity interests in, any securities convertible into or
exchangeable for any shares of capital stock of, or other equity
interests in, or any options, warrants or rights of any kind to
acquire any shares of capital stock of, or other equity interests in,
the Company or any of its Subsidiaries, other than issuances of
Company Common Stock (1) upon the exercise of Company Stock Options
outstanding at the date of this Agreement in accordance with the terms
thereof (as in effect on the date of this Agreement), (2) upon the
expiration of any restrictions upon issuance of any grant existing at
the date of this Agreement of restricted stock or stock bonus pursuant
to the terms (as in effect on the date of this Agreement) of any
Benefit Plans of the Company or any of its Subsidiaries or (3) any
periodic issuance of shares of Company Common Stock occurring pursuant
to the terms (as in effect on the date of this Agreement) of any
Benefit Plans of the Company or any of its Subsidiaries, (B), except
as set forth in Section 4.08(b) of the Company's Disclosure Letter, to
amend or otherwise modify the terms (as in effect on the date of this
Agreement) of any outstanding options, warrants or rights the effect
of which shall be to make such terms more favorable to the holders
thereof (except as may be required by ERISA or other applicable law);
(C) to take any action to accelerate the vesting of any outstanding
Company Stock Options or (D) to grant any Lien with respect to any
shares of capital stock of, or other equity interests in, any
Subsidiary of the Company;
(v) except as set forth in Section 4.08(b) of the Company's
Disclosure Letter, to acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion
of the assets of, or in any other manner, any business or any
corporation, partnership, association or other business organization
or division thereof or otherwise to acquire any assets of any other
Person (other than the purchase of assets from suppliers or vendors in
the ordinary course of business and consistent with past practice and
acquisitions of equity
Agreement and Plan of Merger
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<PAGE>
interests, assets and businesses in an amount not to exceed $250,000
in the aggregate);
(vi) except as set forth in Section 4.08(b) of the Company's
Disclosure Letter, to sell, lease, exchange or otherwise dispose of,
or to grant any Lien (other than a Permitted Encumbrance) with respect
to, any of the assets of the Company or any of its Subsidiaries that
are Material to the Company, except for dispositions of assets and
inventories in the ordinary course of business and consistent with
past practice and dispositions of assets and purchase money Liens
incurred in connection with the original acquisition of assets and
secured by the assets acquired in an amount not to exceed $250,000 in
the aggregate;
(vii) to adopt any amendments to its charter or bylaws or other
organizational documents that would alter the terms of its capital
stock or other equity interests or would have a material adverse
effect on the ability of the Company to perform its obligations under
this Agreement;
(viii) (A) to change any of its methods of accounting in effect
at June 30, 1995, except as may be required to comply with GAAP, (B)
to make or rescind any election relating to Taxes (other than any
election which must be made periodically which is made consistent with
past practice), (C) to settle or compromise any claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes (except where the cost to the Company
and its Subsidiaries of such settlements or compromises, individually
or in the aggregate, does not exceed $250,000) or (D) to change any of
its methods of reporting income or deductions for federal income tax
purposes from those employed in the preparation of the federal income
tax returns for the taxable year ending June 30, 1995, except, in each
case, as may be required by Law and for matters that could not
reasonably be expected to have a Material Adverse Effect on the
Company;
(ix) to incur any obligations for borrowed money or purchase
money indebtedness (other than purchase money indebtedness as to which
Liens may be granted as permitted by Section 6.02(a)(vi)) that are
Material to the Company, whether or not evidenced by a note, bond,
debenture or similar instrument, except drawings under credit lines
existing at the date of this Agreement or otherwise in the ordinary
course of business consistent with past practice and in no event
(including purchase money indebtedness as to which Liens may be
granted pursuant to Section 6.02(a)(vi)) in excess of $250,000;
(x) release any third Person from its obligations under any
existing standstill agreement relating to a Competing Transaction or
otherwise under any confidentiality agreement or similar agreement;
Agreement and Plan of Merger
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<PAGE>
(xi) enter into any Material Contract with any third Person
(other than customers and vendors in the ordinary course of business)
which provides for an exclusive arrangement with that third Person or
is substantially more restrictive on the Company or any of its
Subsidiaries or substantially less advantageous to the Company or any
of its Subsidiaries than Material Contracts existing on the date
hereof; or
(xii) agree in writing or otherwise to do any of the foregoing;
(b) The Acquiror covenants and agrees that, except as expressly
contemplated by this Agreement or otherwise consented to in writing by the
Company, from the date of this Agreement until the Effective Time, it will
not do, and will not permit any of its Subsidiaries to do, any of the
following:
(i) to declare or to pay any dividend on, or to make any other
distribution in respect of, outstanding shares of capital stock,
except for (A) dividends by a wholly-owned Subsidiary of such party to
such party or another wholly-owned Subsidiary of such party, (B)
regular quarterly dividends payable to holders of Acquiror Common
Stock in the amounts per share and at the approximate times paid
during calendar year 1995 and (C) dividends paid by partially owned
subsidiaries declared and paid in the ordinary course of business;
(ii) (A) to redeem, purchase or acquire, or to offer to
purchase or acquire, any outstanding shares of capital stock of, or
other equity interests in, or any securities that are convertible into
or exchangeable for any shares of capital stock of, or other equity
interests in, or any outstanding options, warrants or rights of any
kind to acquire any shares of capital stock of, or other equity
interests in, the Acquiror or any of its Subsidiaries (other than (1)
any such acquisition by the Acquiror or any of its wholly-owned
Subsidiaries directly from any wholly-owned Subsidiary of the Acquiror
in exchange for capital contributions or loans to such Subsidiary, (2)
any repurchase, forfeiture or retirement of shares of Acquiror Common
Stock or Acquiror Stock Options occurring pursuant to the terms (as in
effect on the date of this Agreement) of any existing Benefit Plan of
the Acquiror or any of its Subsidiaries, (3) any periodic purchase of
Acquiror Common Stock for allocation to employee's accounts occurring
pursuant to the terms (as in effect on the date of this Agreement) of
any existing Benefit Plan of the Acquiror or any of its Subsidiaries
and (4) any redemption, purchase or acquisition by a Subsidiary that
could not reasonably be expected to have a Material Adverse Effect on
the Acquiror) or (B) to effect any reorganization or recapitalization
other than any reorganization or recapitalization that could not
reasonably be expected to have a material adverse effect on the
ability of the Acquiror to perform its obligations under this
Agreement;
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<PAGE>
(iii) to offer, sell, issue or grant, or authorize the offering,
sale, issuance or grant, of any shares of capital stock of, or other
equity interests in, any securities convertible into or exchangeable
for any shares of capital stock of, or other equity interests in, or
any options, warrants or rights of any kind to acquire any shares of
capital stock of, or other equity interests in, the Acquiror or any of
its Subsidiaries, other than issuances of Acquiror Common Stock (A)
upon the exercise of Acquiror Stock Options outstanding at the date of
this Agreement in accordance with the terms thereof (as in effect on
the date of this Agreement), (B) upon the expiration of any
restrictions upon issuance of any grant existing at the date of this
Agreement of restricted stock or stock bonus pursuant to the terms (as
in effect on the date of this Agreement) of any Benefit Plans of the
Acquiror or any of its Subsidiaries, or (C) any periodic issuance of
shares of Acquiror Common Stock or Acquiror Stock Options pursuant to
the terms (as in effect on the date of this Agreement) of any Benefit
Plan of the Acquiror or any of its Subsidiaries or (D) any issuance of
shares of Acquiror Common Stock for cash or in connection with any
acquisition of equity interests, assets or businesses and other than
any such offer, sale, issuance or grant that could not reasonably be
expected to have a Material Adverse Effect on the Acquiror or a
material adverse effect on the ability of the Acquiror to perform its
obligations under this Agreement;
(iv) to acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion
of the assets of, or in any other manner, any business or any
corporation, partnership, association or other business organization
or division thereof, or otherwise to acquire any assets of any other
Person (other than the purchase of assets from suppliers or vendors in
the ordinary course of business and consistent with past practice and
acquisitions of equity interests, assets and businesses that could not
reasonably be expected to have a material adverse effect on the
ability of the Acquiror to perform its obligations under this
Agreement);
(v) to sell, lease, exchange or otherwise dispose of, or to
grant any Lien (other than a Permitted Encumbrance) with respect to,
any of the assets of the Acquiror or any of its Subsidiaries that are
Material to the Acquiror, except for dispositions of assets and
inventories in the ordinary course of business and consistent with
past practice and dispositions of assets and incurrences of Liens that
could not reasonably be expected to have a material adverse effect on
the ability of the Acquiror to perform its obligations under this
Agreement;
(vi) to adopt any amendments to its charter or bylaws or other
organizational documents that would alter the terms of the Acquiror's
Common Stock or could reasonably be expected to have a material
adverse effect on the ability of the Acquiror or Newco to perform its
obligations under this Agreement;
Agreement and Plan of Merger
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(vii) to incur any obligations for borrowed money or purchase
money indebtedness (other than purchase money indebtedness as to which
Liens may be granted as permitted by Section 6.02(b)(vi)) that are
Material to the Acquiror, whether or not evidenced by a note, bond,
debenture or similar instrument, except drawings under credit lines
existing at the date of this Agreement, obligations incurred in the
ordinary course of business consistent with past practice and
obligations that could not reasonably be expected to have a material
adverse effect on the ability of the Acquiror to perform its
obligations under this Agreement;
(viii) agree in writing or otherwise to do any of the foregoing;
SECTION 6.3 No Solicitation. From the date of this Agreement until the
---------------
Effective Time or the termination of this Agreement pursuant to Section 9.01,
the Company agrees that it will not initiate, solicit or knowingly encourage
(including by way of furnishing nonpublic information or assistance), or take
any other action knowingly to facilitate, any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Competing Transaction, or enter into discussions or negotiate with any Person in
furtherance of such inquiries or to obtain a Competing Transaction, or agree to
or endorse any Competing Transaction, or authorize or permit any of the
officers, directors or employees of the Company or any of its Subsidiaries or
any investment banker, financial advisor, attorney, accountant or other
representative retained by the Company or any of the Company's Subsidiaries to
take any such action and, to the extent permitted by contracts existing at the
date of this Agreement, the Company shall promptly notify the Acquiror of any
such inquiries and proposals received by the Company or any of its Subsidiaries
or by any such officer, director, investment banker, financial advisor or
attorney, relating to any of such matters; provided, however, that (i) nothing
contained in this Section 6.03 shall prohibit the Board of Directors of the
Company from (A) furnishing information to, or entering into discussions or
negotiations with, any Persons in connection with an unsolicited bona fide
proposal in writing by such Person to acquire the Company pursuant to a merger,
consolidation, share exchange, business combination or other similar transaction
or to acquire a substantial portion of the assets of the Company or any of its
Significant Subsidiaries, if, and only to the extent that (1) the Board of
Directors of the Company, after considering the advice of outside legal counsel
to the Company, determines in good faith that such action is required for the
Board of Directors of the Company to comply with its fiduciary duties to
stockholders imposed by Law and (2) prior to furnishing such information to, or
entering into discussions or negotiations with, such Person the Company provides
written notice to the Acquiror to the effect that it is furnishing information
to, or entering into discussions or negotiations with, such Person; or (B)
complying with Rule 14e-2 promulgated under the Exchange Act with regard to a
Competing Transaction and (ii) taking the actions contemplated by (i) above
under the circumstances described therein will not be deemed to be a breach of
this Agreement.
Agreement and Plan of Merger
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<PAGE>
SECTION 6.4 Access and Information.
----------------------
(a) Each of the parties shall, and shall cause its Subsidiaries to,
(i) afford to the other party and its officers, directors, employees,
accountants, consultants, legal counsel, agents and other representatives
(collectively, the "Representatives") reasonable access at reasonable times
upon reasonable prior notice to the officers, employees, agents,
properties, offices and other facilities of such party and its
Subsidiaries and to their books and records and (ii) furnish promptly to
the other party and its Representatives such information concerning the
business, properties, contracts, records and personnel of such party and
its Subsidiaries (including financial, operating and other data and
information) as may be reasonably requested, from time to time, by or on
behalf of the other party.
(b) If this Agreement is terminated for any reason pursuant to
Article IX hereof, a party that has received information in accordance with
Section 6.04(a), within ten days after request therefor from the other
party, shall return or destroy (and provide the other party within such
ten-day time period with a certificate of an executive officer certifying
such destruction) all of the information furnished to it and its
Representatives pursuant to the provisions of Section 6.04(a) and all
internal memoranda, analyses, evaluations and other similar material
containing or reflecting any such information, in each case other than
information available to the general public without restriction.
SECTION 6.5 Confidentiality Agreement. The parties shall comply with,
-------------------------
and shall cause their respective Representatives to comply with, all of their
respective obligations under the Confidentiality Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1 Meeting of Stockholders. The Company shall, promptly after
-----------------------
the date of this Agreement, take all actions necessary in accordance with the
GCL and its certificate of incorporation and bylaws to convene a special meeting
of the Company's stockholders to consider approval and adoption of this
Agreement and the Merger (the "Company Stockholders' Meeting"), and the Company
shall consult with the Acquiror in connection therewith. The Company shall use
all reasonable efforts to solicit from stockholders of the Company proxies in
favor of the approval and adoption of this Agreement and the Merger and to
secure the vote or consent of stockholders required by the GCL and its
certificate of incorporation and bylaws to approve and adopt this Agreement and
the Merger.
Agreement and Plan of Merger
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<PAGE>
SECTION 7.2 Registration Statement; Proxy Statements.
----------------------------------------
(a) As promptly as practicable after the execution of this Agreement,
the Acquiror Companies shall prepare and file with the Commission a
registration statement on Form S-4 (such registration statement, together
with any amendments thereof or supplements thereto, being the "Registration
Statement"), containing a proxy statement/prospectus for stockholders of
the Company (the "Company Proxy Statement/Prospectus"), in connection with
the registration under the Securities Act of the offering, sale and
delivery of Acquiror Common Stock to be issued in the Merger pursuant to
this Agreement. As promptly as practicable after the execution of this
Agreement, the Company shall prepare and file with the Commission a proxy
statement that will be the same as the Company Proxy Statement/Prospectus,
and a form of proxy, in connection with the vote of the Company's
stockholders with respect to the Merger (such Company Proxy
Statement/Prospectus, together with any amendments thereof or supplements
thereto, in each case in the form or forms mailed to the Company's
stockholders, being the "Company Proxy Statement"). Each of the Acquiror
Companies and the Company will use all reasonable efforts to have or cause
the Registration Statement to become effective as promptly as practicable,
and shall take any action required to be taken under any applicable federal
or state securities Laws in connection with the issuance of shares of
Acquiror Common Stock in the Merger. Each of the Acquiror Companies and the
Company shall furnish all information concerning it and the holders of its
capital stock as the other may reasonably request in connection with such
actions. As promptly as practicable after the Registration Statement shall
have become effective, the Company shall mail the Company Proxy Statement
to its stockholders entitled to notice of and to vote at the Company
Stockholders' Meeting. The Company Proxy Statement shall, subject to the
exercise, in good faith and with due care, by the Company's Board of
Directors of its fiduciary duty to the stockholders of the Company, include
the recommendation of the Company's Board of Directors in favor of the
Merger.
(b) The information supplied by the Company for inclusion in the
Registration Statement shall not, at the time the Registration Statement is
declared effective, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. The information
supplied by the Company for inclusion in (i) the Company Proxy Statement to
be sent to the stockholders of the Company in connection with the Company
Stockholders' Meeting shall not, at the date the Company Proxy Statement
(or any supplement thereto) is first mailed to stockholders, at the time of
the Company Stockholders' Meeting or at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time prior to the Effective Time any event or
circumstance relating to the Company or any of its Affiliates, or its or
their respective officers or directors, should be discovered by the Company
that should be set forth in an amendment to the Registration Statement or a
supplement to the Company Proxy
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<PAGE>
Statement, the Company shall promptly inform the Acquiror, and the Company
shall undertake to amend or supplement the Company Proxy Statement
accordingly. All documents that the Company is responsible for filing with
the Commission in connection with the transactions contemplated herein
shall comply as of the time of filing as to form in all material respects
with the applicable requirements of the Securities Act and the Regulations
thereunder and the Exchange Act and the Regulations thereunder.
(c) The information supplied by the Acquiror Companies for inclusion
in the Registration Statement shall not, at the time the Registration
Statement is declared effective, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. The
information supplied by the Acquiror Companies for inclusion in the Company
Proxy Statement to be sent to the stockholders of the Company in connection
with the Company Stockholders' Meeting shall not, at the date the Company
Proxy Statement (or any supplement thereto) is first mailed to
stockholders, at the time of the Company Stockholders' Meeting or at the
Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they are made, not misleading. If at any time prior to the Effective
Time any event or circumstance relating to the Acquiror or any of its
Affiliates, or to their respective officers or directors, should be
discovered by the Acquiror that should be set forth in an amendment to the
Registration Statement or a supplement to the Company Proxy Statement, the
Acquiror shall promptly inform the Company, and the Acquiror shall
undertake to amend or supplement the Registration Statement or the
prospectus contained therein accordingly. All documents that the Acquiror
Companies are responsible for filing with the Commission in connection with
the transactions contemplated hereby shall as of the time of filing comply
as to form in all material respects with the applicable requirements of the
Securities Act and the Regulations thereunder and the Exchange Act and the
Regulations thereunder.
(d) No amendment or supplement to the Registration Statement or the
Company Proxy Statement will be made by the Acquiror or the Company without
the approval of the other party. The Acquiror and the Company each will
advise the other, promptly after it receives notice thereof, of the time
when the Registration Statement has become effective or any supplement or
amendment has been filed, the issuance of any stop order suspending the
effectiveness of the Registration Statement or the solicitation of proxies
pursuant to the Company Proxy Statement, the suspension of the
qualification of the Acquiror Common Stock issuable in connection with the
Merger for offering or sale in any jurisdiction, any request by the staff
of the Commission for amendment of the Registration Statement or the
Company Proxy Statement, the receipt from the staff of the Commission of
comments thereon or any request by the staff of the Commission for
additional information with respect thereto.
Agreement and Plan of Merger
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<PAGE>
SECTION 7.3 Appropriate Action; Consents; Filings.
-------------------------------------
(a) The Company and the Acquiror shall each use all reasonable
efforts (i) to take, or to cause to be taken, all appropriate action, and
to do, or to cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the
transactions contemplated by this Agreement, (ii) to obtain from any
Governmental Authorities any Permits or Orders required to be obtained or
made by the Acquiror or the Company or any of their Subsidiaries in
connection with the authorization, execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby, including the Merger, (iii) to make all necessary filings, and
thereafter make any other required submissions, with respect to this
Agreement and the Merger required under (A) the Securities Act (in the case
of Acquiror) and the Exchange Act and the Regulations thereunder, and any
other applicable federal or state securities Laws, (B) the HSR Act and (C)
any other applicable Law; provided that the Acquiror and the Company shall
cooperate with each other in connection with the making of all such
filings, including providing copies of all such documents to the nonfiling
party and its advisors prior to filings and, if requested, shall accept all
reasonable additions, deletions or changes suggested in connection
therewith. The Company and the Acquiror shall furnish all information
required for any application or other filing to be made pursuant to any
applicable Law or any applicable Regulations of any Governmental Authority
(including all information required to be included in the Company Proxy
Statement or the Registration Statement) in connection with the
transactions contemplated by this Agreement.
(b) Each of the Company and the Acquiror shall give prompt notice to
the other of (i) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the Merger, (ii) any notice or other communication from any Governmental
Authority in connection with the Merger, (iii) any actions, suits, claims,
investigations or proceedings commenced or threatened in writing against,
relating to or involving or otherwise affecting the Company, the Acquiror
or their Subsidiaries that relate to the consummation of the Merger; (iv)
the occurrence of a default or event that, with notice or lapse of time or
both, will become a default under any Material Contract of the Acquiror or
Material Contract of the Company; and (v) any change that is reasonably
likely to have a Material Adverse Effect on the Company or the Acquiror or
is likely to delay or impede the ability of either the Acquiror or the
Company to consummate the transactions contemplated by this Agreement or to
fulfill their respective obligations set forth herein.
(c) The Acquiror Companies and the Company agree to cooperate and use
all reasonable efforts vigorously to contest and resist any action,
including legislative, administrative or judicial action, and to have
vacated, lifted, reversed or overturned any Order (whether temporary,
preliminary or permanent) of any Court or Governmental Authority that is in
effect and that restricts, prevents or prohibits the consummation of the
Merger or any other transactions contemplated by this Agreement, including
the vigorous
Agreement and Plan of Merger
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<PAGE>
pursuit of all available avenues of administrative and judicial appeal and
all available legislative action. Each of the Acquiror Companies and the
Company also agree to take any and all actions, including the disposition
of assets or the withdrawal from doing business in particular
jurisdictions, required by any Court or Governmental Authority as a
condition to the granting of any Permit or Order necessary for the
consummation of the Merger or as may be required to avoid, lift, vacate or
reverse any legislative or judicial action which would otherwise cause any
condition to Closing not to be satisfied; provided, however, that in no
event shall either party take, or be required to take, any action that
could reasonably be expected to have an Material Adverse Effect on the
Acquiror or the Company.
(d) (i) Each of the Company and Acquiror shall give (or shall
cause their respective Subsidiaries to give) any notices to third
Persons, and use, and cause their respective Subsidiaries to use, all
reasonable efforts to obtain any consents from third Persons (A)
necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, (B) otherwise required under any
contracts, licenses, leases or other agreements in connection with the
consummation of the transactions contemplated hereby or (C) required
to prevent a Material Adverse Effect on the Company from occurring
prior to or after the Effective Time or a Material Adverse Effect on
the Acquiror from occurring after the Effective Time.
(ii) If any party shall fail to obtain any consent from a third
Person described in subsection (d)(i) above, such party shall use all
reasonable efforts, and shall take any such actions reasonably
requested by the other parties, to limit the adverse effect upon the
Company and Acquiror, their respective Subsidiaries, and their
respective businesses resulting, or which could reasonably be expected
to result after the Effective Time, from the failure to obtain such
consent.
SECTION 7.4 Affiliates; Pooling; Tax Treatment.
----------------------------------
(a) The Company shall use all reasonable efforts to obtain an
executed letter agreement substantially in the form of Annex B hereto from
(i) each Person identified in Section 4.19 of the Company's Disclosure
Letter within 15 days following the execution and delivery of this
Agreement and (ii) from any Person who may be deemed to have become an
Affiliate of the Company after the date of this Agreement and prior to the
Effective Time as soon as practicable after attaining such status.
(b) The Acquiror shall use all reasonable efforts to obtain an
executed letter agreement substantially in the form of Annex C hereto from
(i) each Person identified in Section 5.17 of the Acquiror's Disclosure
Letter within 15 days following the execution and delivery of this
Agreement and (ii) from any Person who may be deemed to have become an
Affiliate of the Acquiror after the date of this Agreement and prior to the
Effective Time as soon as practicable after attaining such status.
Agreement and Plan of Merger
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<PAGE>
(c) The Acquiror Companies shall not be required to maintain the
effectiveness of the Registration Statement for the purpose of resale by
stockholders of the Company who may be Affiliates of the Company pursuant
to Rule 145 under the Securities Act.
(d) Each party hereto shall use all reasonable efforts to cause the
Merger to be treated for financial accounting purposes as a Pooling
Transaction, and shall not take, and shall use all reasonable efforts to
prevent any Affiliate of such party from taking, any actions which could
prevent the Merger from being treated for financial accounting purposes as
a Pooling Transaction.
(e) Each party hereto shall use all reasonable efforts to cause the
Merger to qualify, and shall not take, and shall use all reasonable efforts
to prevent any Affiliate of such party from taking, any actions which could
prevent the Merger from qualifying, as a reorganization under the
provisions of Section 368(a) of the Code.
SECTION 7.5 Public Announcements. The Acquiror and the Company shall
--------------------
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Merger and shall not issue any such press
release or make any such public statement prior to such consultation.
SECTION 7.6 NYSE Listing. The Acquiror shall use all reasonable efforts
------------
to cause the shares of Acquiror Common Stock to be issued in the Merger to be
approved for listing (subject to official notice of issuance) on the NYSE prior
to the Effective Time. To the Knowledge of the Acquiror, there are no facts and
circumstances that could reasonably be expected to preclude the Acquiror Common
Stock to be issued in the Merger from being approved for listing on the NYSE.
SECTION 7.7 Rights Agreement; State Takeover Statutes. The Company
-----------------------------------------
shall take all action (including, if necessary, redeeming all of the outstanding
rights issued pursuant to the Company Rights Agreement or amending or
terminating the Rights Agreement) so that the execution, delivery and
performance of this Agreement and the consummation of the Merger and the other
transactions contemplated hereby do not and will not result in the grant of any
rights to any Person under the Rights Agreement or enable or require any
outstanding rights to be exercised, distributed or triggered. The Company will
take all steps necessary to exempt the transactions contemplated by this
Agreement from Section 203 of the GCL.
SECTION 7.8 Comfort Letters.
---------------
(a) The Company shall use all reasonable efforts to cause Price
Waterhouse LLP to deliver a letter dated as of the date of the Company
Proxy Statement, and addressed to the Company and the Acquiror, in form and
substance reasonably satisfactory to Acquiror and customary in scope and
substance for agreed upon procedures letters delivered by independent
public accountants in connection with registration
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<PAGE>
statements and proxy statements similar to the Registration Statement and
the Company Proxy Statement.
(b) The Acquiror shall use all reasonable efforts to cause Arthur
Andersen LLP to deliver a letter dated as of the date of the Company Proxy
Statement, and addressed to the Acquiror and the Company, in form and
substance reasonably satisfactory to the Company and customary in scope and
substance for agreed upon procedures letters delivered by independent
public accountants in connection with registration statements and proxy
statements similar to the Registration Statement and the Company Proxy
Statement.
SECTION 7.9 Assumption of Obligations to Issue Stock.
----------------------------------------
(a) At the Effective Time, automatically and without any action on
the part of the holder thereof, each outstanding Company Stock Option shall
be assumed by the Surviving Corporation and become an option to purchase
that number of shares of Acquiror Common Stock obtained by multiplying the
number of shares of Company Common Stock issuable upon the exercise of such
option by the Common Stock Exchange Ratio at an exercise price per share
equal to the per share exercise price of such option divided by the Common
Stock Exchange Ratio and otherwise upon the same terms and conditions as
such outstanding options to purchase Company Common Stock; provided,
however, that in the case of any option to which Section 421 of the
Internal Revenue Code applies by reason of the qualifications under Section
422 or 423 of such Code, the exercise price, the number of shares
purchasable pursuant to such option and the terms and conditions of
exercise of such option shall be determined in a manner that complies with
Section 424(a) of the Code.
(b) On or prior to the Effective Time, the Company shall take or
cause to be taken all such actions, reasonably satisfactory to the
Acquiror, as may be necessary or desirable in order to authorize the
transactions contemplated by subsection (a) of this Section.
(c) The Acquiror shall take all corporate actions necessary to
reserve for issuance a sufficient number of shares of Acquiror Common Stock
for delivery upon exercise of the Company Stock Options assumed by Acquiror
pursuant to Section 7.09(a) above.
(d) As promptly as practicable after the Effective Time, the Acquiror
shall file one or more Registration Statements on Form S-8 (or any
successor or other appropriate forms) with respect to the shares of
Acquiror Common Stock subject to the Company Stock Options and shall use
its reasonable efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of
the prospectus or prospectuses contained therein) for so long as such
options remain outstanding and to comply with applicable state securities
and blue sky laws.
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<PAGE>
(e) Except as provided herein or as otherwise agreed to by the
parties, each of the Company Stock Option Plans providing for the issuance
or grant of Company Stock Options shall be assumed as of the Effective Time
by the Surviving Corporation with such amendments thereto as may be
required to reflect the Merger.
SECTION 7.10 Employee Benefit Plans. Provided that the Company shall not
----------------------
be obligated with respect to any action taken by the Company or its Subsidiaries
with respect to the Employee Benefit Plans of the Company or its Subsidiaries in
violation of the provisions of Section 6.02(a), the Acquiror hereby agrees to
guarantee and to cause the Surviving Corporation and each Subsidiary of the
Surviving Corporation to honor and perform all obligations of the Surviving
Corporation and each Subsidiary of the Surviving Corporation under all Benefit
Plans of the Company and such Subsidiaries and all employment contracts of the
Company listed on Section 4.10 of the Company's Disclosure Letter, including,
except as amended by the Employment Agreement, the Change in Control Agreements
and the Restricted Stock Agreement, including the provisions of the Change in
Control Agreements and the Restricted Stock Agreement that provide for the
acceleration of vesting schedules applicable to stock options and restricted
stock awards granted thereunder upon the Effective Time (other than the Company
Option Plans, the Company Stock Options granted thereunder (other than those
granted and outstanding on the date of this Agreement) and incentive
compensation plans of the Company and its Subsidiaries). The Acquiror shall
cause the Surviving Corporation to maintain through December 31, 1997 (the
"Benefit Continuation Period"), the Benefit Plans of the Company and its
- ----------------------------
Subsidiaries set forth in Section 4.13(a) of the Company's Disclosure Letter,
substantially as in effect immediately prior to the Effective Time (other than
the Company Option Plans, the Company Stock Options granted thereunder (other
than those granted and outstanding on the date of this Agreement) and incentive
compensation plans of the Company and its Subsidiaries). From and after the
Effective Time, including after the Benefit Continuation Period, the Acquiror
shall grant all employees of the Company and its Subsidiaries on the Closing
Date credit for all service (to the same extent as service with the Acquiror or
any Subsidiary of the Acquiror is taken into account with respect to similarly
situated employees of the Acquiror and the Subsidiaries of the Acquiror) with
the Company and any Subsidiary of the Company and their respective predecessors
prior to the Effective Time under all Benefit Plans of the Acquiror or its
Subsidiaries in which such employees shall become eligible to participate as if
such service with the Company or any Subsidiary of the Company was service with
the Acquiror or any Subsidiary of the Acquiror, and, with respect to any medical
or dental benefit plan in which such employees become eligible to participate,
the Acquiror shall waive any pre-existing condition exclusions and actively-at-
work requirements (provided, however, that no such waiver shall apply to a pre-
existing condition of any employee of the Company or any Subsidiary of the
Company who was, as of the Effective Time, excluded from participation in a
Benefit Plan by virtue of such pre-existing condition) and provided that any
covered expenses incurred on or before the Effective Time by an employee or an
employee's covered dependent shall be taken into account for purposes of
satisfying applicable deductible, coinsurance and maximum out-of-pocket
provisions after the Effective Time to the same extent as such expenses are
taken into account for the benefit of similarly situated employees of the
Acquiror and the Subsidiaries of the Acquiror.
Agreement and Plan of Merger
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<PAGE>
SECTION 7.11 Indemnification of Directors and Officers.
-----------------------------------------
(a) Until six years from the Effective Time, the certificate of
incorporation and bylaws of the Surviving Corporation as in effect
immediately after the Effective Time shall not be amended to reduce or
limit the rights of indemnity afforded to the present and former directors
and officers of the Company thereunder or as to the ability of the Company
to indemnify such Persons, or to hinder, delay or make more difficult the
exercise of such rights of indemnity or the ability to indemnify. The
Surviving Corporation will at all times exercise the powers granted to it
by its certificate of incorporation, its bylaws and applicable law to
indemnify to the fullest extent possible the present and former directors,
officers, employees and agents of the Company against claims made against
them arising from their service in such capacities prior to the Effective
Time.
(b) If any claim or claims shall, subsequent to the Effective Time
and within six years thereafter, be made against any present or former
director, officer, employee or agent of the Company based on or arising out
of the services of such Person prior to the Effective Time in the capacity
of such Person as a director, officer, employee or agent of the Company,
the provisions of this subsection (a) of this Section respecting the
certificate of incorporation and bylaws of the Surviving Corporation shall
continue in effect until the final disposition of all such claims.
(c) The Acquiror hereby agrees after the Effective Time to guarantee
the payment of the Surviving Corporation's indemnification obligations
described in Section 7.11(a) up to an amount determined as of the Effective
Time equal to (i) the fair market value of any assets of the Surviving
Corporation or any of its Subsidiaries distributed to the Acquiror or any
of its Subsidiaries (other than the Surviving Corporation and its
Subsidiaries), minus (ii) any liabilities of the Surviving Corporation or
any of its Subsidiaries assumed by the Acquiror or any of its Subsidiaries
(other than the Surviving Corporation and its Subsidiaries), minus (iii)
the fair market value of any assets of the Acquiror or any of its
Subsidiaries (other than the Surviving Corporation and its Subsidiaries)
contributed to the Surviving Corporation or any of its Subsidiaries and
plus (iv) any liabilities of the Acquiror or any of its Subsidiaries (other
than the Surviving Corporation and its Subsidiaries) assumed by the
Surviving Corporation or any of its Subsidiaries.
(d) Notwithstanding subsection (a), (b) or (c) of this Section 7.11,
the Acquiror and the Surviving Corporation shall be released from the
obligations imposed by such subsection if the Acquiror shall assume the
obligations of the Surviving Corporation thereunder by operation of Law or
otherwise. Notwithstanding anything to the contrary in this Section 7.11,
neither the Acquiror nor the Surviving Corporation shall be liable for any
settlement effected without its written consent, which shall not be
unreasonably withheld.
(e) The Acquiror shall cause to be maintained in effect until six
years from the Effective Time the current policies of directors' and
officers' liability insurance
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<PAGE>
maintained by the Company (or substitute policies providing at least the
same coverage and limits and containing terms and conditions that are not
materially less advantageous) with respect to claims arising from facts or
events which occurred before the Effective Time; provided, however, that in
no event shall the Acquiror or the Surviving Corporation be required to
expend more than 200 percent of the current annual premiums paid by the
Company for such insurance; provided, further, that, if the Acquiror or the
Surviving Corporation is unable to obtain insurance for any period for 200
percent of the current annual premiums, then the obligation of the Acquiror
and the Surviving Corporation pursuant hereto shall be to obtain the best
coverage reasonably available under the circumstances subject to the
foregoing limitations on premiums.
(f) The provisions of this Section 7.11 are intended to be for the
benefit of, and shall be enforceable by, each Person entitled to
indemnification hereunder and the heirs and representatives of such Person.
(g) The Acquiror shall not permit the Surviving Corporation to merge
or consolidate with any other Person unless the Surviving Corporation shall
ensure that the surviving or resulting entity assumes the obligations
imposed by subsections (a), (b), (c) and (e) of this Section.
SECTION 7.12 Newco. Prior to the Effective Time, Newco shall not conduct
-----
any business or make any investments other than as specifically contemplated by
this Agreement and will not have any assets (other than the minimum amount of
cash required to be paid to Newco for the valid issuance of its stock to the
Acquiror). The Acquiror shall take all action necessary to cause Newco to
perform its obligations under this Agreement and to consummate the Merger on the
terms and conditions set forth in this Agreement.
SECTION 7.13 Event Notices. From and after the date of this Agreement
-------------
until the Effective Time, each party hereto shall promptly notify the other
party hereto of (i) the occurrence or nonoccurrence of any event the occurrence
or nonoccurrence of which would be likely to cause any condition to the
obligations of such party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied and (ii) the failure of such
party to comply with any covenant or agreement to be complied with by it
pursuant to this Agreement which would be likely to result in any condition to
the obligations of such party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied. No delivery of any notice
pursuant to this Section 7.13 shall cure any breach of any representation or
warranty of such party contained in this Agreement or otherwise limit or affect
the remedies available hereunder to the party receiving such notice.
SECTION 7.14 Stratworks Divestiture. The Company shall divest itself on
----------------------
or prior to the Closing Date of any ownership interest in the software
application called "Stratworks" through the sale thereof to a Person
unaffiliated with either the Company or the Acquiror on terms reasonably
satisfactory to the Acquiror.
SECTION 7.15 Change in Control Agreements. Prior to the Effective Time,
----------------------------
the Company shall agree, and shall use all reasonable efforts to cause each
Person who is a party to
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<PAGE>
one of the Change in Control Agreements to agree, in writing that (a) for all
purposes of such Change in Control Agreements, Newco shall be substituted for
the Company as the successor to the Company, except that, for purposes of each
of the Change in Control Agreements, a "Change in Control" shall be deemed to
have occurred as a result of the Merger, (b) no payments will be required
pursuant to Section 5 of any of the Change in Control Agreements solely as a
result of the Merger and (c) Section 4(b)(ii)(A) of each of the Change in
Control Agreements will be amended and restated to read in its entirety as
follows: "Failure to elect or reelect the Executive to the office of the Company
which the Executive held immediately prior to a Change in Control;". Such
agreements shall be reasonably satisfactory in form and substance to the
Acquiror.
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.1 Conditions to Obligations of Each Party Under This
--------------------------------------------------
Agreement. The respective obligations of each party to effect the Merger and the
other transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Effective Time of the following conditions, any or all of which
may be waived by the parties hereto, in whole or in part, to the extent
permitted by applicable Law:
(a) Effectiveness of the Registration Statement. The Registration
-------------------------------------------
Statement shall have been declared effective by the Commission under the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission and no
proceedings for that purpose shall have been initiated by the Commission.
(b) Stockholder Approval. This Agreement and the Merger shall have
--------------------
been approved and adopted by the requisite vote of the stockholders of the
Company as required by the GCL.
(c) No Order. No Court or Governmental Authority shall have enacted,
--------
issued, promulgated, enforced or entered any Law, Regulation or Order
(whether temporary, preliminary or permanent) which is in effect and which
has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(d) HSR Act. The applicable waiting period under the HSR Act shall
-------
have expired or been terminated.
(e) Foreign Governmental Authorities. The applicable waiting period
---------------------------------
under any competition Laws, Regulations and Orders of foreign Governmental
Authorities, as set forth in the Acquiror's Disclosure Letter and the
Company's Disclosure Letter, shall have expired or been terminated.
(f) Pooling of Interests. The Acquiror and the Company shall have
--------------------
been advised in writing by Arthur Andersen LLP as of the date upon which
the Effective Time
Agreement and Plan of Merger
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<PAGE>
is to occur to the effect that such firm knows of no reason why the Merger
cannot be treated for financial accounting purposes as a pooling of
interests.
SECTION 8.2 Additional Conditions to Obligations of the Acquiror
----------------------------------------------------
Companies. The obligations of the Acquiror Companies to effect the Merger and
- ---------
the other transactions contemplated hereby shall be subject to the satisfaction
at or prior to the Effective Time of the following conditions, any or all of
which may be waived by the Acquiror Companies, in whole or in part, to the
extent permitted by applicable Law:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties of the Company contained in this Agreement shall be true and
correct in all material respects (without duplication of any materiality
exception contained in any individual representation and warranty) as of
the date of this Agreement and as of the Effective Time as though made
again on and as of the Effective Time. The Acquiror Companies shall have
received a certificate of the President and the Chief Financial Officer of
the Company, dated the date of the Effective Time, to such effect.
(b) Agreements and Covenants. The Company shall have performed or
------------------------
complied with all agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective Time. The
Acquiror Companies shall have received a certificate of the President and
the Chief Financial Officer of the Company, dated the date of the Effective
Time, to such effect.
(c) Tax Opinion. The Acquiror shall have received the opinion dated
------------
on or prior to the effective date of the Registration Statement of Vinson &
Elkins LLP to the effect that (i) the Merger will constitute a
reorganization under section 368(a) of the Code, (ii) the Acquiror, the
Company and Newco will each be a party to that reorganization, and (iii) no
gain or loss will be recognized by the Acquiror, the Company or Newco by
reason of the Merger.
SECTION 8.3 Additional Conditions to Obligations of the Company. The
---------------------------------------------------
obligations of the Company to effect the Merger and the other transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Effective Time of the following conditions, any or all of which may be waived by
the Company, in whole or in part, to the extent permitted by applicable Law:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties of the Acquiror Companies contained in this Agreement shall be
true and correct in all material respects (without duplication of any
materiality exception contained in any individual representation and
warranty) as of the date of this Agreement and as of the Effective Time as
though made again on and as of the Effective Time. The Company shall have
received a certificate of the President and the Chief Financial Officer of
each of the Acquiror Companies, dated the date of the Effective Time, to
such effect.
(b) Agreements and Covenants. The Acquiror Companies shall have
------------------------
performed or complied with all agreements and covenants required by this
Agreement to
Agreement and Plan of Merger
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<PAGE>
be performed or complied with by them on or prior to the Effective Time.
The Company shall have received a certificate of the President and the
Chief Financial Officer of each of the Acquiror Companies, dated the date
of the Effective Time, to such effect.
(c) Tax Opinion. The Company shall have received the opinion dated
-----------
on or prior to the effective date of the Registration Statement of Winstead
Sechrest & Minick P.C. to the effect that (i) the Merger will constitute a
reorganization under section 368(a) of the Code, (ii) the Acquiror, the
Company and Newco will each be a party to that reorganization, and (iii) no
gain or loss will be recognized by the stockholders of the Company upon the
receipt of shares of Acquiror Common Stock in exchange for shares of
Company Common Stock pursuant to the Merger except with respect to any cash
received in lieu of fractional share interests.
(d) Investment Banker's Opinion. The Company shall have received, on
---------------------------
the date of mailing of the Company Proxy Statement to the holders of
Company Common Stock, a written opinion from Morgan Stanley & Co.
Incorporated, dated the date of such mailing, confirming the opinion to
which reference is made in Section 4.21.
(e) NYSE Listing. The shares of Acquiror Common Stock to be issued
------------
pursuant to the Merger shall have been approved for listing, subject to
official notice of issuance, on the NYSE.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 Termination. This Agreement may be terminated at any time
-----------
prior to the Effective Time, whether before or after approval of this Agreement
and the Merger by the stockholders of the Company:
(a) by mutual consent of the Acquiror and the Company;
(b) by the Acquiror, upon a breach of any covenant or agreement on
the part of the Company set forth in this Agreement, or if any
representation or warranty of the Company shall have become untrue, in
either case such that the conditions set forth in Section 8.02(a) or
Section 8.02(b) would not be satisfied (a "Terminating Company Breach");
provided that, if such Terminating Company Breach is curable by the Company
through the exercise of reasonable efforts and for so long as the Company
continues to exercise such reasonable efforts, the Acquiror may not
terminate this Agreement under this Section 9.01(b);
(c) by the Company, upon breach of any covenant or agreement on the
part of the Acquiror Companies set forth in this Agreement, or if any
representation or warranty of the Acquiror Companies shall have become
untrue, in either case such that the conditions set forth in Section
8.03(a) or Section 8.03(b) would not be satisfied (a "Terminating Acquiror
Breach"); provided that, if such Terminating Acquiror Breach is
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<PAGE>
curable by the Acquiror Companies through the exercise of their reasonable
efforts and for so long as the Acquiror Companies continue to exercise such
reasonable efforts, the Company may not terminate this Agreement under this
Section 9.01(c);
(d) by either Acquiror or the Company, if there shall be any Order
which is final and nonappealable preventing the consummation of the Merger,
unless the party relying on such Order has not complied with its
obligations under Section 7.03;
(e) by either Acquiror or the Company, if the Merger shall not have
been consummated before December 31, 1996; provided, however, that this
Agreement may be extended by written notice of either Acquiror or the
Company to a date not later than February 28, 1997, if the Merger shall not
have been consummated as a result of the Company or the Acquiror Companies
having failed by December 31, 1996 to receive all required Permits and
Orders with respect to the Merger or as a result of the entering of an
Order by a Court or Governmental Authority;
(f) by either Acquiror or the Company, if this Agreement shall fail
to receive the requisite vote for approval and adoption by the stockholders
of the Company at the Company Stockholders' Meeting;
(g) by the Acquiror, if (i) the Board of Directors of the Company
withdraws, modifies or changes its recommendation of this Agreement or the
Merger in a manner materially adverse to the Acquiror Companies or shall
have resolved to do any of the foregoing or the Board of Directors of the
Company shall have recommended to the stockholders of the Company any
Competing Transaction or resolved to do so; (ii) a tender offer or exchange
offer for 50 percent or more of the outstanding shares of Company Common
Stock is commenced and the Board of Directors of the Company, within 10
Business Days after such tender offer or exchange offer is so commenced,
either fails to recommend against acceptance of such tender or exchange
offer by its stockholders or takes no position with respect to the
acceptance of such tender or exchange offer by its stockholders; or (iii)
any person shall have acquired beneficial ownership or the right to acquire
beneficial ownership of, or any "group" (as such term is defined under
Section 13(d) of the Exchange Act and the Regulations promulgated
thereunder), shall have been formed which beneficially owns, or has the
right to acquire beneficial ownership of, 50 percent or more of the then
outstanding shares of capital stock of the Company; or
(h) by the Company, if the Company accepts a Superior Proposal and
makes the payment required pursuant to Section 9.05(c)(i) of this Agreement
and pays the expenses for which the Company is responsible under Section
9.05(a) of this Agreement.
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.01 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
Agreement and Plan of Merger
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<PAGE>
SECTION 9.2 Effect of Termination. Except as provided in Section 9.05
---------------------
or Section 10.01 of this Agreement, in the event of the termination of this
Agreement pursuant to Section 9.01, this Agreement shall forthwith become void,
there shall be no liability on the part of the Acquiror Companies or the Company
or any of their respective officers or directors to the other and all rights and
obligations of any party hereto shall cease, except that nothing herein shall
relieve any party from liability for any breach of this Agreement.
SECTION 9.3 Amendment. This Agreement may be amended by the parties
---------
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after approval
of the Merger by the stockholders of the Company, no amendment may be made which
would reduce the amount or change the type of consideration into which each
share of Company Common Stock shall be converted pursuant to this Agreement upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 9.4 Waiver. At any time prior to the Effective Time, any party
------
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by the other party
with any of the agreements or conditions contained herein. Any such extension
or waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby. For purposes of this Section 9.04,
the Acquiror Companies shall be deemed to be one party.
SECTION 9.5 Fees, Expenses and Other Payments.
---------------------------------
(a) Except as provided in Section 9.05(c) of this Agreement, all
Expenses incurred by the parties hereto shall be borne solely and entirely
by the party which has incurred such Expenses; provided, however, that the
allocable share of the Acquiror Companies as a group and the Company for
all Expenses related to printing, filing and mailing the Registration
Statement and the Company Proxy Statement and all Commission and other
regulatory filing fees incurred in connection with the Registration
Statement and the Company Proxy Statement shall be one-half each; and
provided, further, that the Acquiror may, at its option, pay any Expenses
of the Company that are solely and directly related to the Merger.
(b) (i) The Company agrees that, if (A) either (1) this
Agreement is terminated pursuant to Section 9.01(f) and, after the
date of this Agreement and prior to the Company Stockholders' Meeting,
the Company shall have furnished information to, or entered into
discussions or negotiations with, any Person with respect to a
Competing Transaction involving the Company or any of its Subsidiaries
and the Board of Directors of the Company shall not have reaffirmed
its favorable recommendation to its stockholders with respect to the
transactions contemplated by this Agreement by the time of the Company
Stockholders' Meeting; (2) the Acquiror terminates this Agreement
pursuant to Section 9.01(g)(i) or 9.01(g)(ii); (3) the Company
terminates this Agreement pursuant to
Agreement and Plan of Merger
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<PAGE>
Section 9.01(h); or (4) within twelve months after the date of the
termination of this Agreement, any Person or "group" (as such term is
defined under Section 13(d) of the Exchange Act and the Regulations
promulgated thereunder), other than the Acquiror, its Subsidiaries or
Affiliates, shall have acquired beneficial ownership, by tender offer
or exchange offer or otherwise, of 50 percent or more of the
outstanding Company Common Stock and (x) the value of the
consideration per share received by the stockholders of the Company in
such transaction shall have been higher on a per share basis than the
consideration payable to the stockholders of the Company under this
Agreement on a per share basis or (y) such transaction shall be on
more favorable terms to the stockholders of the Company than the
Merger; then (B) in each such case the Company shall pay to the
Acquiror $18 million.
(ii) The Company agrees that, if (A) the Acquiror shall
terminate this Agreement pursuant to Section 9.01(b) and such
termination is the result of an intentional or willful breach by the
Company of any agreement, covenant, representation or warranty herein
and (B) either (1) within twelve months after such termination of this
Agreement the Company shall have entered into a definitive agreement
providing for a Business Combination with any Person or "group" (as
such term is defined under Section 13(d) of the Exchange Act and the
Regulations promulgated thereunder), other than Acquiror, its
Subsidiaries or Affiliates, to which the Company shall have furnished
information or with which the Company shall have had any contacts or
entered into any discussions or negotiations relating to a Business
Combination at any time during the period commencing eighteen months
prior to the date of this Agreement through the date of termination of
this Agreement and contemplating the payment to the Company or its
stockholders, as the case may be, of consideration having a higher
value in the aggregate than the consideration payable to the Company's
stockholders under this Agreement or such transaction shall be on more
favorable terms to the stockholders of the Company than the Merger and
such Business Combination is thereafter consummated or (2) within
twelve months after such termination of this Agreement, any such
Person or group shall have acquired beneficial ownership, by tender
offer or exchange offer or otherwise, of 50 percent or more of the
outstanding Company Common Stock and as a result the Company's
stockholders shall have received consideration having a higher value
per share than the consideration per share payable to the Company's
stockholders under this Agreement or such transaction shall be on more
favorable terms to the stockholders of the Company than the Merger,
then in such case the Company shall pay to the Acquiror $18 million.
(iii) For purposes of this Section 9.05(b), the value of the
consideration received by the Company's stockholders in connection
with a transaction described in clause (b)(i)(A), (b)(ii)(B)(1) or
(b)(ii)(B)(2) of this Section 9.05 shall be determined as of the date
the consideration becomes payable to such stockholders, and the value
of the consideration payable to such stockholders under this Agreement
shall be $31.857 per share.
Agreement and Plan of Merger
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<PAGE>
(c) Any payment required to be made pursuant to Section 9.05(b) of
this Agreement shall be made to the Acquiror not later than two Business
Days after delivery to the Company of notice of demand for payment, and
shall be made by wire transfer of immediately available funds to an account
designated by the Acquiror in the notice of demand for payment delivered
pursuant to this Section 9.05(c).
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1 Effectiveness of Representations, Warranties and Agreements.
-----------------------------------------------------------
(a) Except as set forth in Section 10.01(b) of this Agreement, the
representations, warranties and agreements of each party hereto shall
remain operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto, any Person
controlling any such party or any of their officers, directors,
representatives or agents whether prior to or after the execution of this
Agreement.
(b) The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Article IX, except that the agreements set forth in
Articles II and III and Sections 7.09, 7.10 and 7.11 shall survive the
Effective Time and those set forth in Sections 6.05, 9.02 and 9.05 and
Article X hereof shall survive termination.
SECTION 10.2 Notices. All notices and other communications given or made
-------
pursuant hereto shall be in writing and shall be deemed to have been duly given
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses or sent by electronic transmission to the telecopier number specified
below:
(a) If to any of the Acquiror Companies, to:
Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Attention: Lester L. Coleman, Executive Vice President
and General Counsel
Telecopier No.: (214) 978-2658
Agreement and Plan of Merger
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<PAGE>
with a copy to:
Vinson & Elkins L.L.P.
First City Tower
1001 Fannin
Houston, Texas 77002-6760
Attention: William E. Joor III
Telecopier No.: (713) 758-2346
(b) If to the Company, to:
Landmark Graphics Corporation
15150 Memorial Drive
Houston, Texas 77079-4304
Attention: Patti Massaro, General Counsel
and Corporate Secretary
Telecopier No.: (713) 560-1383
with a copy to:
Winstead Sechrest & Minick P.C. Shearman & Sterling
5400 Renaissance Tower 599 Lexington Avenue
1201 Elm Street New York, New York 10022
Dallas, Texas 75270 Attention: David W. Heleniak
Attention: Robert E. Crawford, Jr. Telecopier No.: (212) 848-7179
Telecopier No.: (214) 745-5390
or to such other address or telecopier number as any party may, from time to
time, designate in a written notice given in a like manner. Notice given by
telecopier shall be deemed delivered on the day the sender receives telecopier
confirmation that such notice was received at the telecopier number of the
addressee. Notice given by mail as set out above shall be deemed delivered
three days after the date the same is postmarked.
SECTION 10.3 Headings. The headings contained in this Agreement are for
--------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.4 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
Agreement and Plan of Merger
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<PAGE>
SECTION 10.5 Entire Agreement. This Agreement (together with the
----------------
Annexes, the Company's Disclosure Letter, the Acquiror's Disclosure Letter and
the Confidentiality Agreement) constitutes the entire agreement of the parties,
and supersedes all prior agreements and undertakings, both written and oral,
among the parties, with respect to the subject matter hereof.
SECTION 10.6 Assignment. This Agreement shall not be assigned by
----------
operation of Law or otherwise.
SECTION 10.7 Parties in Interest. This Agreement shall be binding upon
-------------------
and inure solely to the benefit of each party hereto, and, other than pursuant
to Sections 7.09, 7.10 and 7.11 hereof, nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 10.8 Failure or Indulgence Not Waiver; Remedies Cumulative. No
------------------------------------------------------
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 10.9 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the Laws of the State of Texas, regardless of the
Laws that might otherwise govern under applicable principles of conflicts of
law; provided, however, that any matter involving the internal corporate affairs
of any party hereto shall be governed by the provisions of the GCL.
SECTION 10.10 Counterparts. This Agreement may be executed in multiple
------------
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Agreement and Plan of Merger
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
HALLIBURTON COMPANY
By:_____________________________________
Lester L. Coleman
Executive Vice President and General
Counsel
HALLIBURTON ACQ. COMPANY
By:_____________________________________
Lester L. Coleman
President
LANDMARK GRAPHICS CORPORATION
By:_____________________________________
Robert P. Peebler
President and Chief Executive Officer
Agreement and Plan of Merger
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<PAGE>
ANNEX A
SCHEDULE OF DEFINED TERMS
The following terms when used in the Agreement shall have the meanings set
forth below unless the context shall otherwise require:
"Acquiror" shall mean Halliburton Company, a Delaware corporation, and its
successors from time to time.
"Acquiror Common Stock" shall mean the common stock, par value $2.50 per
share, of the Acquiror.
"Acquiror Companies" shall have the meaning ascribed to such term in the
first paragraph of this Agreement.
"Acquiror's Audited Consolidated Financial Statements" shall mean the
consolidated balance sheets of the Acquiror and its Subsidiaries as of December
31, 1994 and December 31, 1995 and the related consolidated statements of
operations and cash flows for the fiscal years ended December 31, 1993, 1994 and
1995, together with the notes thereto, all as audited by Arthur Andersen LLP,
independent accountants, under their report with respect thereto dated January
23, 1996 and included in the Acquiror's Annual Report on Form 10-K for the year
ended December 31, 1995 filed with the Commission.
"Acquiror's Consolidated Balance Sheet" shall mean the consolidated balance
sheet of the Acquiror as of December 31, 1995 included in the Acquiror's
Audited Consolidated Financial Statements.
"Acquiror's Consolidated Financial Statements" shall mean the Acquiror's
Audited Consolidated Financial Statements and the Acquiror's Unaudited
Consolidated Financial Statements.
"Acquiror's Disclosure Letter" shall mean a letter of even date herewith
delivered by the Acquiror to the Company with the execution of the Agreement,
which, among other things, shall identify exceptions to the Acquiror's
representations and warranties contained in Article V by specific section and
subsection references.
"Acquiror's Unaudited Consolidated Financial Statements" shall mean the
unaudited consolidated balance sheet of the Acquiror and its Subsidiaries as of
March 31, 1996 and the related consolidated statements of operations and cash
flows for the fiscal quarters ended March 31, 1995 and March 31, 1996, together
with the notes thereto, included in the Acquiror's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996 filed with the Commission.
"Acquiror's Rights Agreement" shall mean the Second Amended and Restated
Rights Agreement dated December 15, 1995 between Halliburton Company and
Chemical Mellon Shareholder Services LLC, as Rights Agent.
<PAGE>
"Acquiror Option Plan" shall mean the Halliburton Company 1993 Stock and
Long-Term Incentive Plan.
"Acquiror Stock Options" shall mean stock options granted pursuant to the
Acquiror Option Plan.
"Affiliate" shall, with respect to any Person, mean any other Person that
controls, is controlled by or is under common control with the former.
"Agreement" shall mean the Agreement and Plan of Merger made and entered
into as of June 30, 1996 among Acquiror, Newco and the Company, including any
amendments thereto and each Annex (including this Annex A) and Schedule thereto
(including the Acquiror's Disclosure Letter and the Company's Disclosure
Letter).
"Benefit Plans" shall mean, with respect to a specified Person, any
employee pension benefit plan (whether or not insured), as defined in Section
3(2) of ERISA, any employee welfare benefit plan (whether or not insured) as
defined in Section 3(1) of ERISA, any plans that would be employee pension
benefit plans or employee welfare benefit plans if they were subject to ERISA,
such as foreign plans and plans for directors, any stock bonus, stock ownership,
stock option, stock purchase, stock appreciation rights, phantom stock or other
stock plan (whether qualified or nonqualified), and any bonus or incentive
compensation plan sponsored, maintained, or contributed to by the specified
Person or any of its Subsidiaries for the benefit of any of the present or
former directors, officers, employees, agents, consultants or other similar
representatives providing services to or for the specified Person or any of its
Subsidiaries in connection with such services or any such plans which have been
so sponsored, maintained, or contributed to within six years prior to the date
of this Agreement; provided, however, that such term shall not include (a)
routine employment policies and procedures developed and applied in the ordinary
course of business and consistent with past practice, including wage, vacation,
holiday and sick or other leave policies, (b) workers compensation insurance and
(c) directors and officers liability insurance.
"Business Combination" shall mean (a) a merger, consolidation, share
exchange, business combination or similar transaction involving the Company; (b)
a sale, lease, exchange, transfer or other disposition of 50 percent or more of
the assets of the Company and its Subsidiaries, taken as a whole, in a single
transaction or series of transactions; or (c) the acquisition by a Person, or
any "group" (as such term is defined under Section 13(d) of the Exchange Act and
the Regulations promulgated thereunder), of beneficial ownership or the right to
acquire beneficial ownership of 50 percent or more of the outstanding Company
Common Stock, whether by tender offer or exchange offer or otherwise.
"Business Day" means any day other than a day on which banks in the State
of Texas are authorized or obligated to be closed;
"Certificate of Merger" shall have the meaning ascribed to such term in
Section 2.04.
Agreement and Plan of Merger
Annex A-2
<PAGE>
"Change in Control Agreements" shall mean those certain Change in Control
Agreements dated as of October 19, 1995 between the Company and certain officers
of the Company.
"Closing" shall mean a meeting, which shall be held in accordance with
Section 3.03, of all Persons interested in the transactions contemplated by the
Agreement at which all documents deemed necessary by the parties to the
Agreement to evidence the fulfillment or waiver of all conditions precedent to
the consummation of the transactions contemplated by the Agreement are executed
and delivered.
"Closing Date" shall mean the date of the Closing as determined pursuant to
Section 3.03.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and Regulations promulgated thereunder.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock Exchange Ratio" shall mean the ratio of conversion of Company
Common Stock into Acquiror Common Stock pursuant to the Merger as provided in
Section 3.01(a).
"Company" shall mean Landmark Graphics Corporation, a Delaware corporation,
and its successors from time to time.
"Company Common Stock" shall mean the common stock, par value $0.05 per
share, of the Company.
"Company Option Plans" shall mean the Landmark Graphics Corporation 1984
Incentive Stock Option Plan, the Landmark Graphics Corporation 1985 Incentive
Stock Option Plan, the Landmark Graphics Corporation 1987 Nonqualified Stock
Option Plan, the Landmark Graphics Corporation 1989 Flexible Stock Option Plan,
the Landmark Graphics Corporation Directors' Stock Option Plan, the Landmark
Graphics Corporation Consultants' Stock Option Plan, the Landmark Graphics
Corporation 1990 Employee Stock Option Plan and the Landmark Graphics
Corporation 1994 Flexible Incentive Plan.
"Company Proxy Statement" shall have the meaning ascribed to such term in
Section 7.02(a).
"Company Proxy Statement/Prospectus" shall have the meaning ascribed to
such term in Section 7.02(a).
"Company Stock Options" shall mean stock options granted pursuant to the
Company Option Plans.
"Company Stockholders' Meeting" shall have the meaning ascribed to such
term in Section 7.01(a).
Agreement and Plan of Merger
Annex A-3
<PAGE>
"Company's Consolidated Balance Sheet" shall mean the consolidated balance
sheet of the Company as of June 30, 1995 included in the Company's Audited
Consolidated Financial Statements.
"Company's Audited Consolidated Financial Statements" shall mean the
consolidated balance sheets of the Company and its Subsidiaries as of June 30,
1994 and June 30, 1995 and the related consolidated and combined statements of
operations and cash flows for the fiscal years ended June 30, 1993, 1994 and
1995, together with the notes thereto, all as audited by Price Waterhouse LLP,
independent accountants, under their report with respect thereto dated July 26,
1995 and included in the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1995 filed with the Commission.
"Company's Consolidated Financial Statements" shall mean the Company's
Audited Consolidated Financial Statements and the Company's Unaudited
Consolidated Financial Statements.
"Company's Disclosure Letter" shall mean a letter of even date herewith
delivered by the Company to the Acquiror Companies concurrently with the
execution of the Agreement, which, among other things, shall identify exceptions
to the Company's representations and warranties contained in Article IV by
specific section and subsection references.
"Company's Rights Agreement" shall mean that certain Rights Agreement dated
as of September 1, 1995 between the Company and Chemical Bank, as Rights Agent.
"Company's Unaudited Consolidated Financial Statements" shall mean the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
March 31, 1996 and the related consolidated statements of operations and cash
flows for the three months periods and nine months periods ended March 31, 1995
and March 31, 1996, together with the notes thereto, included in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 filed with
the Commission.
"Competing Transaction" shall mean any merger, consolidation, share
exchange, business combination or similar transaction involving the Company or
any of its Subsidiaries or the acquisition in any manner, directly or
indirectly, of a Material equity interest in any voting securities of, or a
substantial portion of the assets of, the Company or any of its Significant
Subsidiaries, other than the transactions contemplated by this Agreement.
"Confidentiality Agreement" shall mean that certain confidentiality
agreement between the Acquiror and the Company dated June 18, 1996.
"Constituent Corporations" shall mean the Company and Newco.
"control" (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of stock or as trustee or
executor, by contract or credit arrangement or otherwise.
Agreement and Plan of Merger
Annex A-4
<PAGE>
"Court" shall mean any court or arbitration tribunal of the United States,
any foreign country or any domestic or foreign state, and any political
subdivision thereof, and shall include the European Court of Justice.
"Current Benefit Plans" shall mean Benefit Plans that are sponsored,
maintained, or contributed to by a specified Person or any of its Subsidiaries
as of the date of this Agreement.
"Effective Time" shall mean the date and time of the completion of the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware in accordance with Section 2.02.
"Employment Agreement" shall mean that certain Executive Employment
Agreement of even date herewith between the Company and Robert P. Peebler.
"Environmental Law or Laws" shall mean any and all laws, statutes,
ordinances, rules, regulations, or orders of any Governmental Authority
pertaining to health or the environment currently in effect and applicable to a
specified Person and its Subsidiaries, including the Clean Air Act, as amended,
the Comprehensive Environmental, Response, Compensation, and Liability Act of
1980 ("CERCLA"), as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
the Hazardous & Solid Waste Amendments Act of 1984, as amended, the Superfund
Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, the Oil Pollution Act of 1990, as amended
("OPA"), any state or local Laws implementing the foregoing federal Laws, and
all other environmental conservation or protection Laws. For purposes of the
Agreement, the terms "hazardous substance" and "release" have the meanings
specified in CERCLA; provided, however, that, to the extent the Laws of the
state or locality in which the property is located establish a meaning for
"hazardous substance" or "release" that is broader than that specified in
CERCLA, such broader meaning shall apply within the jurisdiction of such state
or locality, and the term "hazardous substance" shall include all dehydration
and treating wastes, waste (or spilled) oil, and waste (or spilled) petroleum
products, and (to the extent in excess of background levels) radioactive
material, even if such are specifically exempt from classification as hazardous
substances pursuant to CERCLA or RCRA or the analogous statutes of any
jurisdiction applicable to the specified Person or its Subsidiaries or any of
their respective properties or assets.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the Regulations promulgated thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the Regulations promulgated thereunder.
"Exchange Agent" shall mean a bank or trust company having a net worth in
excess of $100 million designated and appointed to act in the capacities
required thereof under Section 3.02.
Agreement and Plan of Merger
Annex A-5
<PAGE>
"Exchange Fund" shall mean the fund of Acquiror Common Stock, cash in lieu
of fractional share interests and dividends and distributions, if any, with
respect to such shares of Acquiror Common Stock established at the Exchange
Agent pursuant to Section 3.02.
"Expenses" shall mean all reasonable out-of-pocket expenses (including all
fees and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement, the preparation,
printing, filing and mailing of the Registration Statement and the Company Proxy
Statement, the solicitation of stockholder approvals and all other matters
related to the consummation of the transactions contemplated hereby.
"GAAP" shall mean accounting principles generally accepted in the United
States consistently applied by a specified Person.
"GCL" shall mean the General Corporation Law of the State of Delaware.
"Governmental Authority" shall mean any governmental agency or authority
(other than a Court) of the United States, any foreign country, or any domestic
or foreign state, and any political subdivision or agency thereof, and shall
include any multinational authority having governmental or quasi-governmental
powers.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the Regulations promulgated thereunder.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" shall mean, with respect to either the Company or the Acquiror,
the actual knowledge (without duty of inquiry) of any executive officer of such
party.
"Law" shall mean all laws, statutes, ordinances and Regulations of the
United States, any foreign country, or any domestic or foreign state, and any
political subdivision or agency thereof, including all decisions of Courts
having the effect of Law in each such jurisdiction.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing), any conditional sale or other title retention agreement, any lease
in the nature thereof or the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction.
"Material" shall mean material to the condition (financial and other),
results of operations or business of a specified Person and its Subsidiaries, if
any, taken as a whole; provided, however, that, as used in this definition the
word "material" shall have the meaning accorded thereto in Section 11 of the
Securities Act.
"Material Adverse Effect" shall mean any change or effect that would be
material and adverse to the consolidated business, condition (financial or
other), operations, performance or
Agreement and Plan of Merger
Annex A-6
<PAGE>
properties (but excluding any outstanding capital stock or other securities) of
a specified Person and its Subsidiaries, if any, taken as a whole; provided,
however, that, as used in this definition the word "material" shall have the
meaning accorded thereto in Section 11 of the Securities Act.
"Material Contract" shall mean each contract, lease, indenture, agreement,
arrangement or understanding to which a specified Person or any of its
Subsidiaries is a party or to which any of the assets or operations of such
specified Person or any of its Subsidiaries is subject that is of a type that
would be required to be included as an exhibit to a registration statement on
Form S-1 pursuant, in the case of the Company, to Paragraph (2), (4), (10) or
(14) of Item 601(b) and, in the case of the Acquiror, to Paragraph (10) (other
than clause (iii) thereof) of Item 601(b) of Regulation S-K under the Securities
Act if such a registration statement were to be filed by such Person under the
Securities Act on the date of determination. Notwithstanding the foregoing,
such term shall, in the case of the Company, include any of the following
contracts, agreements or commitments, whether oral or written:
(1) Any collective bargaining agreement or other agreement with any
labor union;
(2) any agreement, contract or commitment with any other Person,
other than any agency or representation entered in the ordinary course of
business, containing any covenant limiting the freedom of such specified
Person or any of its Subsidiaries to engage in any line of business or to
compete with any other Person;
(3) any partnership, joint venture or profit sharing agreement with
any Person, which partnership, joint venture or profit sharing agreement
generated revenues during its most recently completed fiscal year of
$100,000 or more;
(4) any employment or consulting agreement, contract or commitment
between the Company or any of its Subsidiaries and any employee, officer or
director thereof (i) having more than one year to run from the date hereof,
(ii) providing for an obligation to pay or accrue compensation of $100,000
or more per annum or (iii) providing for the payment or accrual of any
additional compensation upon a change in control of such Person or any of
its Subsidiaries or upon any termination of such employment or consulting
relationship following a change in control of such Person or any of its
Subsidiaries; and
(5) any agency or representation agreement with any Person which is
not terminable by the Company or one of its Subsidiaries without penalty
upon not more than one year's notice.
"Merger" shall mean the merger of the Company with an into Newco as
provided in Article II of this Agreement.
"NASD" shall mean the National Association of Securities Dealers, Inc.
Agreement and Plan of Merger
Annex A-7
<PAGE>
"Newco" shall mean Halliburton Acq. Company, a Delaware corporation and a
wholly-owned Subsidiary of the Acquiror.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Order" shall mean any judgment, order or decree of any Court or
Governmental Authority, federal, foreign, state or local.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permit" shall mean any and all permits, licenses, authorizations, orders,
certificates, registrations or other approvals granted by any Governmental
Authority.
"Permitted Encumbrances" shall mean the following:
(1) liens for taxes, assessments and other governmental charges not
delinquent or which are currently being contested in good faith by
appropriate proceedings; provided that, in the latter case, the specified
Person or one of its Subsidiaries shall have set aside on its books
adequate reserves with respect thereto;
(2) mechanics' and materialmen's liens not filed of record and
similar charges not delinquent or which are filed of record but are being
contested in good faith by appropriate proceedings; provided that, in the
latter case, the specified Person or one of its Subsidiaries shall have set
aside on its books adequate reserves with respect thereto;
(3) liens in respect of judgments or awards with respect to which the
specified Person or one of its Subsidiaries shall in good faith currently
be prosecuting an appeal or other proceeding for review and with respect to
which such Person or such Subsidiary shall have secured a stay of execution
pending such appeal or such proceeding for review; provided that, such
Person or such Subsidiary shall have set aside on its books adequate
reserves with respect thereto;
(4) easements, leases, reservations or other rights of others in, or
minor defects and irregularities in title to, property or assets of a
specified Person or any of its Subsidiaries; provided that, such easements,
leases, reservations, rights, defects or irregularities do not materially
impair the use of such property or assets for the purposes for which they
are held; and
(5) any lien or privilege vested in any lessor, licensor or permittor
for rent or other obligations of a specified Person or any of its
Subsidiaries thereunder so long as the payment of such rent or the
performance of such obligations is not delinquent.
"Person" shall mean an individual, partnership, limited liability company,
corporation, joint stock company, trust, estate, joint venture, association or
unincorporated organization, or any other form of business or professional
entity, but shall not include a Governmental Authority.
Agreement and Plan of Merger
Annex A-8
<PAGE>
"Registration Statement" shall have the meaning ascribed to such term in
Section 7.02(a).
"Regulation" shall mean any rule or regulation of any Governmental
Authority having the effect of Law.
"Reports" shall mean, with respect to a specified Person, all reports,
registrations, filings and other documents and instruments required to be filed
by the specified Person or any of its Subsidiaries with any Governmental
Authority (other than the Commission).
"Restricted Stock Agreement" shall mean that certain Restricted Stock
Agreement listed on Item 29 of Section 4.10 of the Company's Disclosure Letter.
"SEC Reports" shall mean (1) all Annual Reports on Form 10-K, (2) all
Quarterly Reports on Form 10-Q, (3) all proxy statements relating to meetings of
stockholders (whether annual or special), (4) all Current Reports on Form 8-K
and (5) all other reports, schedules, registration statements or other documents
required to be filed during a specified period by a Person with the Commission
pursuant to the Securities Act or the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
Regulations promulgated thereunder.
"Significant Subsidiary" means any Subsidiary of the Company or Acquiror,
as the case may be, that would constitute a Significant Subsidiary of such party
within the meaning of Rule 1-02 of Regulation S-X of the Commission.
"Software" shall mean the following computer applications programs:
2DVIEW, 3D Knowledge Integrator (3DKI), 3DVIEW, Argus, Aries, Automate,
BatchZAP!, Blitz, CIMS, Compass, Continuity Tool, Contouring Assistant, DESKTOP-
PVT, DESKTOP-VIP, DIMS, DUAL, DXF (AutoCAD), EarthCube, EnerGIS, Fast Track,
GeoLink, GES, GMS, GRIDGENR, Geo-data Works, Jaguar, LeaseMap, LGR, LogEdit,
MIMIC+, MultiWell, OASIIS, OpenWorks, OpenWorks Development Kit, PAL, PARALLEL
VIP, PetroWorks, PlotView, PostStack, POWAR, Profile, ProMAX, ProMAX VSP, QUIK+,
QUIKDIG+, QUIKWELL+, RAYMAP+, RAVE, Resin-Plus, RMS, SeisCube, Seismic Data
Check, SeisTie, SeisVision, SeisWell, SeisWorks, SigmaView 2D, SigmaView 3D,
SIVA+, SuperSeisWorks, SurfCube, StrataModel SGM, StrataModel GTM, StratWorks,
SynTool, TDQ, TOW CS, VESPA, VIP-COMP, VIP-CORE, VIP-Encore, VIP-THERM, VoxCube,
Wellbore Manager, Wellplan, Z3D, Z-Cap, and Z-Map Plus.
"Stock Option Agreement" shall mean that certain Stock Option Agreement of
even date herewith between the Acquiror and the Company.
A "Subsidiary" of a specified Person shall be any corporation, partnership,
limited liability company, joint venture or other legal entity of which the
specified Person (either alone or through or together with any other Subsidiary)
owns, directly or indirectly, 50 percent or more of the stock or other equity or
partnership interests the holders of which are generally entitled to vote
Agreement and Plan of Merger
Annex A-9
<PAGE>
for the election of the board of directors or other governing body of such
corporation or other legal entity.
"Superior Proposal" means a bona fide proposal made by a third Person to
acquire the Company pursuant to a tender or exchange offer for all of the
outstanding capital stock of the Company, a merger, a sale of all or
substantially all of the Company's assets or otherwise on terms that the Board
of Directors of the Company determines in its good faith judgment to be more
favorable to the Company's stockholders than the Merger (based on the written
opinion, with only customary qualifications, of the Company's independent
financial advisor that the value of the consideration to the Company's
stockholders provided for in such proposal exceeds the value of the
consideration to the Company's stockholders provided for in the Merger) and for
which financing, to the extent required, is then committed or which, in the good
faith judgment of the Board of Directors of the Company (based on the written
advice of the Company's independent financial advisor), is reasonably capable of
being obtained by such third Person.
"Surviving Corporation" shall mean Newco as the corporation surviving the
Merger.
"Tax Returns" shall mean all returns and reports of or with respect to any
Tax which are required to be filed by or with respect to the Company or any of
its Subsidiaries.
"Taxes" shall mean all taxes, charges, imposts, tariffs, fees, levies or
other similar assessments or liabilities, including income taxes, ad valorem
taxes, excise taxes, withholding taxes, stamp taxes or other taxes of or with
respect to gross receipts, premiums, real property, personal property, windfall
profits, sales, use, transfers, licensing, employment, payroll and franchises
imposed by or under any Law; and such terms shall include any interest, fines,
penalties, assessments or additions to tax resulting from, attributable to or
incurred in connection with any such tax or any contest or dispute thereof.
"Terminated Benefit Plans" shall mean Benefit Plans that were sponsored,
maintained, or contributed to by a specified Person or any of its Subsidiaries
within six years prior to the date of this Agreement but which have been
terminated prior to the date of this Agreement.
"Voting Agreement" shall mean that certain Voting Agreement of even date
herewith between the Acquiror and S. Rutt Bridges and Barbara Ann Bridges.
Agreement and Plan of Merger
Annex A-10
<PAGE>
ANNEX B
Landmark Graphics Corporation Affiliates
AFFILIATE'S AGREEMENT
[Date]
Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Ladies and Gentlemen:
The undersigned has been advised that, as of the date hereof, the
undersigned may be deemed to be an "affiliate" of Landmark Graphics Corporation,
a Delaware corporation (the "Company"), as that term is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the Regulations of the Commission under
the Securities Act.
Pursuant to the terms and subject to the conditions of that certain
Agreement and Plan of Merger by and among Halliburton Company, a Delaware
corporation ("Acquiror"), Halliburton Acq. Company, a newly formed Delaware
corporation and a wholly-owned Subsidiary of Acquiror ("Newco"), and the Company
dated as of June 30, 1996 (the "Merger Agreement"), providing for, among other
things, the merger of the Company with and into Newco (the "Merger"), the
undersigned will be entitled to receive shares of Acquiror Common Stock in
exchange for shares of Company Common Stock owned by the undersigned at the
Effective Time of the Merger as determined pursuant to the Merger Agreement.
Capitalized terms used but not defined herein are defined in Annex A to the
Merger Agreement and are used herein with the same meanings as ascribed to them
therein.
The undersigned understands that the Merger will be treated for financial
accounting purposes as a "pooling of interests" in accordance with generally
accepted accounting principles and that the staff of the Commission has issued
certain guidelines that should be followed to ensure the application of pooling
of interests accounting to the transaction.
In consideration of the agreements contained herein, the Acquiror's
reliance on this letter in connection with the consummation of the Merger and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned hereby represents, warrants and agrees
that the undersigned will not make any sale, transfer or other disposition of
(i) Company Common Stock during the period from the date hereof until the
earlier of the Effective Time and the termination of the Merger Agreement (which
period, if the Merger is consummated, will be greater than thirty (30) days),
(ii) Acquiror Common Stock received by the undersigned pursuant to the Merger or
otherwise owned by the undersigned until such time as financial statements that
include at least thirty (30) days of combined operations of the Company and the
Acquiror after the Merger shall have been publicly reported, unless the
undersigned shall have delivered to the Acquiror, prior to any such sale,
transfer or other disposition, a written opinion from Arthur Andersen LLP,
independent public accountants for the
<PAGE>
Acquiror, or a written no-action letter from the accounting staff of the
Commission, in either case in form and substance reasonably satisfactory to the
Acquiror, to the effect that such sale, transfer or other disposition will not
cause the Merger not to be treated as a "pooling of interests" for financial
accounting purposes in accordance with generally accepted accounting principles
and the Regulations of the Commission or (iii) Acquiror Common Stock received by
the undersigned pursuant to the Merger in violation of the Securities Act or the
Regulations thereunder. The undersigned has been advised that the offering,
sale and delivery of the shares of Acquiror Common Stock pursuant to the Merger
will have been registered with the Commission under the Securities Act on a
Registration Statement on Form S-4. The undersigned has also been advised,
however, that, since the undersigned may be deemed to be an Affiliate of the
Company at the time the Merger is submitted for a vote of the stockholders of
the Company, the Acquiror Common Stock received by the undersigned pursuant to
the Merger can be sold by the undersigned only (i) pursuant to an effective
registration statement under the Securities Act, (ii) in conformity with the
volume and other limitations of Rule 145 promulgated by the Commission under the
Securities Act or (iii) in reliance upon an exemption from registration that is
available under the Securities Act.
The undersigned also understands that instructions will be given to the
transfer agent for the Acquiror Common Stock with respect to the Acquiror Common
Stock to be received by the undersigned pursuant to the Merger and that there
will be placed on the certificates representing such shares of Acquiror Common
Stock, or any substitutions therefor, a legend stating in substance as follows:
"These shares were issued in a transaction to which Rule 145 promulgated
under the Securities Act of 1933, as amended, applies. These shares may
only be trans ferred in accordance with the terms of such Rule and an
Affiliate's Agreement between the original holder of such shares and
Halliburton Company, a copy of which agreement is on file at the principal
offices of Halliburton Company."
It is understood and agreed that the legend set forth above shall be removed
upon surrender of certificates bearing such legend by delivery of substitute
certificates without such legend if the undersigned shall have delivered to the
Acquiror an opinion of counsel, in form and substance reasonably satisfactory to
the Acquiror, to the effect that (i) the sale or disposition of the shares
represented by the surrendered certificates may be effected without registration
of the offering, sale and delivery of such shares under the Securities Act and
(ii) the shares to be so transferred may be publicly offered, sold and delivered
by the transferee thereof without compliance with the registration provisions of
the Securities Act.
By its execution hereof, the Acquiror agrees that it will, as long as the
undersigned owns any Acquiror Common Stock to be received by the undersigned
pursuant to the Merger, take all reasonable efforts to make timely filings with
the Commission of all reports required to be filed by it pursuant to the
Exchange Act and will promptly furnish upon written request of the undersigned a
written statement confirming that such reports have been so timely filed.
If you are in agreement with the foregoing, please so indicate by signing
below and returning a copy of this letter to the undersigned, at which time this
letter shall become a binding agreement between us.
Annex B
-2-
<PAGE>
Very truly yours,
By:________________________________
Name:
Title:
Date:
Address:
ACCEPTED this ___ day
of __________, 1996
HALLIBURTON COMPANY
By: ___________________________________________
Name: ______________________
Title: _____________________
Annex B
-3-
<PAGE>
ANNEX C
Halliburton Company Affiliates
AFFILIATE'S AGREEMENT
[Date]
Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Ladies and Gentlemen:
The undersigned has been advised that, as of the date hereof, the
undersigned may be deemed to be an "affiliate" of Halliburton Company, a
Delaware corporation (the "Acquiror"), as that term is defined in the
Regulations of the Commission under the Securities Act.
The undertakings contained in this Affiliate's Agreement are being given by
the undersigned in connection with that certain Agreement and Plan of Merger by
and among Acquiror, Halliburton Acq. Company, a newly formed Delaware
corporation and a wholly-owned Subsidiary of Acquiror ("Newco"), and Landmark
Graphics Corporation, a Delaware Corporation (the "Company") dated as of June
___, 1996 (the "Merger Agreement"), providing for, among other things, the
merger of the Company with and into Newco (the "Merger"). Capitalized terms
used but not defined herein are defined in Annex A to the Merger Agreement and
are used herein with the same meanings as ascribed to them therein.
The undersigned understands that the Merger will be treated for financial
accounting purposes as a "pooling of interests" in accordance with generally
accepted accounting principles and that the staff of the Commission has issued
certain guidelines that should be followed to ensure the application of pooling
of interests accounting to the transaction.
In consideration of the agreements contained herein, the Acquiror's
reliance on this letter in connection with the consummation of the Merger and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned hereby represents, warrants and agrees
that the undersigned will not make any sale, transfer or other disposition of
(i) Company Common Stock during the period from the date hereof until the
earlier of the Effective Time and the termination of the Merger Agreement (which
period, if the Merger is consummated, will be greater than thirty (30) days) or
(ii) Acquiror Common Stock owned by the undersigned until such time as financial
statements that include at least thirty (30) days of combined operations of the
Company and the Acquiror after the Merger shall have been publicly reported,
unless the undersigned shall have delivered to the Acquiror, prior to any such
sale, transfer or other disposition, a written opinion from Arthur Andersen LLP,
independent public accountants for the Acquiror, or a written no-action letter
from the accounting staff of the Commission, in either case in form and
substance reasonably satisfactory to the Acquiror, to the effect that such sale,
transfer or other disposition will not cause the Merger not to be treated as a
"pooling of interests" for financial accounting purposes in accordance with
generally accepted accounting principles and the Regulations of the Commission.
<PAGE>
If you are in agreement with the foregoing, please so indicate by signing
below and returning a copy of this letter to the undersigned, at which time this
letter shall become a binding agreement between us.
Very truly yours,
By:________________________________
Name:___________________________
Title:__________________________
Date:___________________________
Address:________________________
ACCEPTED this ___ day
of __________, 1996
HALLIBURTON COMPANY
By: ___________________________________________
Name: ______________________
Title: _____________________
Annex C
-2-
<PAGE>
EXHIBIT 99.1
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement"), dated as of June 30, 1996, by and
between Landmark Graphics Corporation, a Delaware corporation (the "Company"),
and Halliburton Company, a Delaware corporation (the "Grantee").
RECITALS
The Grantee, the Company and Halliburton Acq. Company, a Delaware
corporation and a wholly-owned subsidiary of the Grantee ("Newco") propose to
enter into an Agreement and Plan of Merger dated as of the date hereof (the
"Merger Agreement") providing for, among other things, the merger (the "Merger")
of the Company with and into Newco which shall be the surviving corporation.
The Board of Directors of the Company has recommended the approval of the
Merger Agreement and the Merger by the holders of Company Common Stock.
As a condition and inducement to the Grantee's willingness to enter into
the Merger Agreement, the Grantee has requested that the Company agree, and the
Company has agreed, to grant the Grantee the Option (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, the Company and the Grantee agree as follows:
1. Capitalized Terms. Capitalized terms used but not defined herein
are defined in the Merger Agreement and are used herein with the same
meanings as ascribed to them therein; provided, however, that, as used in
this Agreement, "Person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
2. Grant of Option. Subject to the terms and conditions set forth
herein, the Company hereby grants to the Grantee an irrevocable option (the
"Option") to purchase, out of the authorized but unissued Company Common
Stock, a number of shares equal to up to 15.0% of the shares of Company
Common Stock outstanding as of the date hereof (as adjusted as set forth
herein) (the "Option Shares"), at a purchase price of $31.857 per Option
Share (the "Exercise Price").
3. Term. The Option shall be exercisable and shall remain in full
force and effect until the earliest to occur of (i) the Effective Time,
(ii) the first anniversary of the receipt by Grantee of written notice from
the Company of the occurrence of an Exercise Event (as hereinafter defined)
or (iii) termination of the Merger Agreement prior to the
<PAGE>
occurrence of an Exercise Event, at which time the Option shall terminate
and be of no further force or effect (the "Term"). The rights and
obligations set forth in Sections 7, 8, 9 and 10 shall not terminate when
the right to exercise the Option terminates as set forth herein, but shall
extend to such time as is provided in those Sections.
4. Exercise of Option.
(a) The Grantee may exercise the Option, in whole or in part, at
any time and from time to time during the Term following the
occurrence of an Exercise Event. Notwithstanding the expiration of the
Term, the Grantee shall be entitled to purchase those Option Shares
with respect to which it has exercised the Option in accordance with
the terms hereof prior to the expiration of the Term.
(b) As used herein, an "Exercise Event" shall mean any of the
following events:
(i) any Person (other than the Grantee or any subsidiary of
the Grantee) shall have commenced (as such term is defined in
Rule 14d-2 under the Exchange Act) or shall have filed a
registration statement under the Securities Act with respect to a
tender offer or 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
Company Common Stock;
(ii) the Company or any subsidiary of the Company shall
have authorized, recommended, proposed or publicly announced an
intention to authorize, recommend or propose, or entered into, an
agreement with any Person (other than the Grantee or any
subsidiary of the Grantee) to (A) effect a merger, consolidation,
share exchange or similar transaction involving the Company or
any of its Significant Subsidiaries, (B) sell, lease or otherwise
dispose of assets of the Company or its subsidiaries representing
15% or more of the consolidated assets of the Company and its
subsidiaries or (C) issue, sell or otherwise dispose of
(including by way of merger, consolidation, share exchange or any
similar transaction) securities (or options, rights or warrants
to purchase, or securities convertible into or exchangeable for,
such securities) representing 15% or more of the voting power of
the Company or any of its Significant Subsidiaries;
(iii) any Person (other than the Grantee or any Subsidiary
of the Grantee or the Company or, in a fiduciary capacity, any of
its Subsidiaries) shall have, subsequent to the date of this
Agreement, acquired beneficial ownership (as such term is defined
in Rule 13d-3 under the Exchange Act) or the right to acquire
beneficial ownership of, or any "Group" (as such
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<PAGE>
term is defined under the Exchange Act) shall have been formed
which beneficially owns or has the right to acquire beneficial
ownership of, 25% or more of the then outstanding Company Common
Stock; or
(iv) the holders of Company Common Stock shall not have
approved the Merger Agreement at the meeting of such stockholders
held for the purpose of voting on the Merger Agreement or such
meeting shall not have been called as required by the terms of
the Merger Agreement or shall have been canceled, in each case
after any Person (other than the Grantee or any subsidiary of the
Grantee) shall have publicly announced a proposal, or publicly
disclosed an intention to make a proposal, to engage in any
transaction described in clauses (i), (ii) or (iii) above, or the
Company's Board of Directors shall have withdrawn or modified in
a manner materially adverse to the Grantee the recommendation of
the Company's Board of Directors that the holders of the Company
Common Stock approve the Merger Agreement and the Merger.
(c) If the Grantee wishes to exercise the Option, it shall send a
written notice (the date of which being herein referred to as the "Notice
Date") to the Company specifying (i) the total number of Option Shares it
intends to purchase pursuant to such exercise and (ii) a place and a date
not earlier than three (3) Business Days nor later than fifteen (15)
Business Days from the Notice Date for the closing of such purchase (the
"Closing Date"); provided, however, that, if the closing of the purchase
and sale pursuant to the Option (the "Closing") cannot be consummated by
reason of any applicable Law, Regulation or Order, the period of time that
otherwise would run pursuant to this sentence shall run instead from the
date on which such restriction on consummation has expired or been
terminated; and, provided, further, that, without limiting the foregoing,
if prior notification to or approval of any Governmental Authority is
required in connection with such purchase, the Grantee and, if applicable,
the Company shall promptly file the required notice or application for
approval and shall expeditiously process the same (and the Company shall
cooperate with the Grantee in the filing of any such notice or application
and the obtaining of any such approval), and the period of time that
otherwise would run pursuant to this sentence shall run instead from the
date on which, as the case may be, (i) any required notification period has
expired or been terminated or (ii) such approval has been obtained and, in
either event, any requisite waiting period has passed.
(d) Notwithstanding Section 4(c), in no event shall any Closing Date
be more than eighteen (18) months after the related Notice Date, and, if
the Closing Date shall not have occurred within eighteen (18) months after
the related Notice Date due to the failure to obtain any required approval
of a Governmental Authority, the exercise of the Option effected on the
Notice Date shall be deemed to have expired. If (i) the Grantee receives
official notice that an approval of any Governmental Authority required for
the purchase of Option Shares will not be issued or granted or (ii) a
Closing Date shall not have occurred within eighteen (18) months after the
related Notice Date due to the failure to
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<PAGE>
obtain any such required approval of a Governmental Authority, the Grantee
shall be entitled to exercise its right as set forth in Section 6 or to
exercise the Option in connection with the resale of the Company Common
Stock or other securities pursuant to a registration statement as provided
in Section 8. The provisions of this Section 4 and Section 5 shall apply
with appropriate adjustments to any such exercise.
5. Payment and Delivery of Certificates.
(a) On each Closing Date, the Grantee shall pay to the Company
in immediately available funds by wire transfer to a bank account
designated by the Company an amount equal to the Exercise Price
multiplied by the Option Shares to be purchased on such Closing Date.
(b) At each Closing, simultaneously with the delivery of
immediately available funds as provided in Section 5(a), the Company
shall deliver to the Grantee a certificate or certificates
representing the Option Shares to be purchased at such Closing, which
Option Shares shall be fully paid and nonassessable and free and clear
of all Liens, and Grantee shall deliver to the Company its written
agreement that the Grantee will not offer to sell or otherwise dispose
of such Option Shares in violation of applicable Law or the provisions
of this Agreement.
(c) Certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE
IS SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND PURSUANT TO THE TERMS OF A
STOCK OPTION AGREEMENT DATED AS OF JUNE 30, 1996. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE COMPANY OF A WRITTEN
REQUEST THEREFOR.
A new certificate or certificates evidencing the same number of shares
of the Company Common Stock will be issued to the Grantee in lieu of
the certificate bearing the above legend, which new certificate shall
not bear such legend, insofar as it applies to the Securities Act, if
the Grantee shall have delivered to the Company a copy of a letter
from the staff of the Commission, or an opinion of counsel in form and
substance reasonably satisfactory to the Company and its counsel, to
the effect that such legend is not required for purposes of the
Securities Act.
Stock Option Agreement
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<PAGE>
6. Adjustment Upon Changes in Capitalization, Etc.
(a) In the event of any change in the Company Common Stock by
reason of a stock dividend, split-up, combination, recapitalization,
exchange of shares or similar transaction, the type and number of
shares or securities subject to the Option, and the Exercise Price
therefor, shall be adjusted appropriately, and proper provision shall
be made in the agreements governing such transaction, so that the
Grantee shall receive upon exercise of the Option the same class and
number of outstanding shares or other securities or property that
Grantee would have received in respect of the Company Common Stock if
the Option had been exercised immediately prior to such event, or the
record date therefor, as applicable. If any additional shares of the
Company Common Stock are issued after the date of this Agreement
(other than pursuant to an event described in the first sentence of
this Section 6(a)), the Company shall give written notice thereof to
the Grantee and, at the Grantee's option exercisable within ten (10)
Business Days after the Grantee's receipt of such notice, the number
of shares of the Company Common Stock subject to the Option shall be
adjusted so that, after such issuance, it equals 15.0% of the number
of shares of the Company Common Stock then issued and outstanding, so
that shares issued pursuant to the Option and shares remaining to be
issued pursuant to the Option will, in the aggregate, equal 15% of the
then issued and outstanding shares of Company Common Stock; provided,
however, that the number of shares of the Company Common Stock subject
to the Option shall only be increased to the extent the Company then
has available authorized but unissued and unreserved shares of the
Company Common Stock.
(b) If the Company shall enter into an agreement (i) to
consolidate or exchange shares with or merge into any Person, other
than the Grantee or one of its subsidiaries, and shall not be the
continuing or surviving corporation or other Person of such
consolidation or merger, (ii) to permit any Person, other than the
Grantee or one of its Subsidiaries, to merge into the Company and the
Company shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of Company
Common Stock shall be changed into or exchanged for stock or other
securities of the Company or any other Person or cash or any other
property, or the shares of Company Common stock outstanding
immediately before such merger shall after such merger represent less
than 50% of the outstanding common shares and common share equivalents
of the Company or (iii) to sell, lease or otherwise transfer all or
substantially all of its assets to any Person, other than the Grantee
or one of its Subsidiaries, then, and in each such case, the agreement
governing such transaction shall make proper provisions so that the
Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or
exchanged for, an option, at the election of the Grantee, of any of
the following Persons (as designated by the Grantee) (A) the Acquiring
Corporation (as
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<PAGE>
hereinafter defined), (B) any Person that controls the Acquiring
Corporation or (C) in the case of a merger described in clause (ii),
the Company.
(c) For purposes of this Section 6, "Acquiring Corporation"
means (i) the continuing or surviving corporation or other Person of a
consolidation, share exchange or merger with the Company (if other
than the Company), (ii) the Company in a merger or share exchange in
which the Company is the continuing or surviving corporation and (iii)
the transferee of all or substantially all of the Company's assets.
The provisions of Sections 7, 8, 9, 10 and 11 shall apply with
appropriate adjustments to any securities for which the Option becomes
exercisable pursuant to this Section 6.
7. Repurchase at the Option of Grantee.
(a) Unless the Option shall have theretofore expired or been
terminated in accordance with the terms hereof, at the request of the
Grantee made at any time commencing upon the first occurrence of a
Repurchase Event (as hereinafter defined) and ending on the first
anniversary thereof (the "Put Period"), the Company (or any successor
thereto) shall repurchase from the Grantee (i) that portion of the
Option that then remains unexercised and (ii) all (but not less than
all) the shares of Company Common Stock purchased by the Grantee
pursuant hereto and with respect to which the Grantee then has
beneficial ownership. The date on which the Grantee exercises its
rights under this Section 7 is referred to as the "Request Date."
Such repurchase shall be at an aggregate price (the "Section 7
Repurchase Consideration") equal to the sum of:
(i) the aggregate exercise price paid for any shares of
Company Common Stock acquired pursuant to the Option and with
respect to which the Grantee then has beneficial ownership;
(ii) the excess, if any, of the Applicable Price (as defined
below), over the Exercise Price (subject to adjustment pursuant
to Section 6) paid (or, in the case of Option Shares with respect
to which the Option has been exercised but the Closing Date has
not occurred, payable) by the Grantee for each share of Company
Common Stock with respect to which the Option has been exercised
and with respect to which the Grantee then has beneficial
ownership, multiplied by the number of such shares; and
(iii) the excess, if any, of (x) the Applicable Price for
each share of Company Common Stock over (y) the Exercise Price
(subject to adjustment pursuant to Section 6), multiplied by the
number of shares of Company Common Stock with respect to which
the Option has not been exercised.
Stock Option Agreement
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<PAGE>
(b) If the Grantee exercises its rights under this Section 7,
the Company shall, within ten (10) Business Days after the Request
Date, pay the Section 7 Repurchase Consideration to the Grantee in
immediately available funds, and the Grantee shall surrender to the
Company the Option and the certificates evidencing the shares of
Company Common Stock purchased thereunder with respect to which the
Grantee then has beneficial ownership, and the Grantee shall warrant
to the Company that, immediately prior to the repurchase thereof
pursuant to this Section 7, the Grantee had sole record and beneficial
ownership of such shares and that such shares were then held free and
clear of all Liens.
(c) For purposes of this Agreement, the "Applicable Price' means
the highest of (i) the highest price per share at which a tender or
exchange offer has been made for shares of Company Common Stock after
the date hereof and on or prior to the Request Date, (ii) the price
per share to be paid by any third Person for shares of Company Common
Stock, in each case pursuant to an agreement for a merger or other
business combination transaction with the Company entered into on or
prior to the Request Date, or (iii) the highest closing sales price
per share of Company Common Stock quoted on the New York Stock
Exchange Composite Transactions or, if not so quoted, on the New York
Stock Exchange (or if Company Common Stock is not quoted on the New
York Stock Exchange, the highest bid price per share as quoted on The
NASDAQ Stock Market or, if the shares of Company Common Stock are not
quoted thereon, on the principal trading market on which such shares
are traded as reported by a recognized source) during the sixty (60)
Business Days preceding the Request Date. If the consideration to be
offered, paid or received pursuant to either of the foregoing clauses
(i) or (ii) shall be other than in cash, the value of such
consideration shall be determined in good faith by an independent
nationally recognized investment banking firm selected by the Grantee
and reasonably acceptable to the Company, which determination shall be
conclusive for all purposes of this Agreement.
(d) As used herein, a "Repurchase Event" means the occurrence of
any Exercise Event specified in Section 4(b)(ii), (iii) or (iv).
(e) Notwithstanding any provision to the contrary in this
Agreement, the Grantee may not exercise its rights pursuant to this
Section 7 in a manner that would result in the cash payment to the
Grantee of an aggregate amount under this Section 7 of more than $24
million, including the amount, if any, of the Termination Fee paid to
the Grantee pursuant to Section 9.05 of the Merger Agreement;
provided, however, that nothing in this sentence shall limit the
Grantee's ability to exercise the Option in accordance with its terms.
Stock Option Agreement
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<PAGE>
8. Repurchase at the Option of The Company.
(a) Unless the Grantee shall have previously exercised its
rights under Section 7, at the request of the Company during the six-
month period commencing at the expiration of the Put Period (the "Call
Period"), the Company may repurchase from the Grantee, and the Grantee
shall sell to the Company, all (but not less than all) the shares of
Company Common Stock acquired by the Grantee pursuant hereto and with
respect to which the Grantee has beneficial ownership at the time of
such repurchase at a price per share equal to the greater of (A) the
Current Market Price (as hereinafter defined) or (B) the Exercise
Price per share in respect of the shares so acquired (such price
multiplied by the number of shares of Company Common Stock to be
repurchased pursuant to this Section 8 being herein called the
"Section 8 Repurchase Consideration"); provided, however, that the
Grantee, within thirty (30) days following the Company's notice of its
intention to purchase shares pursuant to this Section 8, may deliver
an Offeror's Notice pursuant to Section 10, in which case the
provisions of Section 10 and not those of this Section 8 shall control
(unless the sale to a third Person contemplated thereby is not
consummated); and provided, further, that the Company's rights under
this Section 8 shall be suspended (and the Call Period shall be
extended accordingly) during any period when the exercise of such
rights would subject the Grantee to liability pursuant to Section
16(b) of the Exchange Act by reason of the issuance of the Option, any
adjustment pursuant to Section 6 hereof, the Grantee's purchase of
shares of Company Common Stock hereunder or the Grantee's sale of
shares pursuant to Section 7, 8 or 10.
(b) If the Company exercises its rights under this Section 8 and
the Grantee does not deliver an Offeror's Notice or, having delivered
an Offeror's Notice, the Grantee does not sell the shares to a third
Person pursuant thereto, the Company shall, within ten (10) Business
Days after the expiration of the Grantee's rights to deliver an
Offeror's Notice or to sell the shares subject to an Offeror's Notice
to a third Person, pay the Section 8 Repurchase Consideration in
immediately available funds, and the Grantee shall surrender to the
Company certificates evidencing the shares of Company Common Stock
purchased hereunder, and the Grantee shall warrant to the Company
that, immediately prior to the repurchase thereof pursuant to this
Section 8, the Grantee had sole record and beneficial ownership of
such shares and that such shares were then held free and clear of all
Liens.
(c) As used herein, "Current Market Price" means the average
closing sales price per share of Company Common Stock quoted on the
New York Stock Exchange Composite Transactions, or, if not so quoted,
on the New York Stock Exchange (or if Company Common Stock is not
quoted on the New York Stock Exchange, on The NASDAQ Stock Market or,
if the shares of Company Common Stock are not quoted thereon, on the
principal trading market on which such
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<PAGE>
shares are traded as reported by a recognized source) for the ten (10)
Business Days preceding the date of the Company's request for
repurchase pursuant to this Section 8.
9. Registration Rights. The Company shall, if requested by the
Grantee at any time and from time to time within three years of the first
exercise of the Option (the "Registration Period"), as expeditiously as
practicable prepare, file and cause to be made effective up to two
registration statements under the Securities Act if such registration is
necessary or desirable in order to permit the offering, sale and delivery
of any or all shares of Company Common Stock or other securities that have
been acquired by or are issuable to the Grantee upon exercise of the Option
in accordance with the intended method of sale or other disposition stated
by the Grantee, including, at the sole discretion of the Company, a
"shelf" registration statement under Rule 415 under the Securities Act or
any successor provision, and the Company shall use all reasonable efforts
to qualify such shares or other securities under any applicable state
securities laws. Without the Grantee's prior written consent, no other
securities may be included in any such registration. The Grantee agrees to
use all reasonable efforts to cause, and to cause any underwriters of any
sale or other disposition to cause, any sale or other disposition pursuant
to such registration statement to be effected on a widely distributed basis
so that upon consummation thereof no purchaser or transferee shall own
beneficially more than 2% of the then outstanding voting power of the
Company. The Company shall use all reasonable efforts to cause each such
registration statement to become effective, to obtain all consents or
waivers of other parties which are required therefor and to keep such
registration statement effective for such period not in excess of 180 days
from the day such registration statement first becomes effective as may be
reasonably necessary to effect such sale or other disposition. The
obligations of the Company hereunder to file a registration statement and
to maintain its effectiveness may be suspended for one or more periods of
time not exceeding sixty (60) days in the aggregate if the Board of
Directors of the Company shall have determined in good faith that the
filing of such registration or the maintenance of its effectiveness would
require disclosure of nonpublic information that would materially and
adversely affect the Company. The expenses associated with the preparation
and filing of any such registration statement pursuant to this Section 9
and any sale covered thereby (including any fees related to blue sky
qualifications and filing fees in respect of the National Association of
Securities Dealers, Inc.) ("Registration Expenses") shall be for the
account of the Company except for underwriting discounts or commissions or
brokers' fees in respect to shares to be sold by the Grantee and the fees
and disbursements of the Grantee's counsel; provided, however, that the
Company shall not be required to pay for any Registration Expenses with
respect to such registration if the registration request is subsequently
withdrawn at the request of the Grantee unless the Grantee agrees to
forfeit its right to request one registration; provided further, however,
that, if at the time of such withdrawal the Grantee has learned of a
material adverse change in the results of operations, condition (financial
or other), business or prospects of the Company from that known to the
Grantee at the time of its request and has withdrawn the request with
reasonable promptness following disclosure
Stock Option Agreement
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<PAGE>
by the Company of such material adverse change, then the Grantee shall not
be required to pay any of such expenses and shall retain all remaining
rights to request registration. The Grantee shall provide all information
reasonably requested by the Company for inclusion in any registration
statement to be filed hereunder. If during the Registration Period the
Company shall propose to register under the Securities Act the offering,
sale and delivery of Company Common Stock for cash for its own account or
for any other stockholder of the Company pursuant to a firm underwriting,
it shall, in addition to the Company's other obligations under this Section
9, allow the Grantee the right to participate in such registration provided
that the Grantee participates in the underwriting; provided, however, that,
if the managing underwriter of such offering advises the Company in writing
that in its opinion the number of shares of Company Common Stock requested
to be included in such registration exceeds the number which can be sold in
such offering, the Company shall, after fully including therein all
securities to be sold by the Company, include the shares requested to be
included therein by Grantee pro rata (based on the number of shares
intended to be included therein) with the shares intended to be included
therein by Persons other than the Company. In connection with any offering,
sale and delivery of Company Common Stock pursuant to a registration
statement effected pursuant to this Section 9, the Company and the Grantee
shall provide each other and each underwriter of the offering with
customary representations, warranties and covenants, including covenants of
indemnification and contribution. For purposes of determining whether two
requests have been made under this Section 9, only requests relating to a
registration statement that has become effective under the Securities Act
and pursuant to which the Grantee has disposed of all shares covered
thereby in the manner contemplated therein shall be counted.
10. First Refusal. At any time after the first occurrence of an
Exercise Event and prior to the second anniversary of the first purchase of
shares of Company Common Stock pursuant to the Option, if the Grantee shall
desire to sell, assign, transfer or otherwise dispose of all or any of the
shares of Company Common Stock or other securities acquired by it pursuant
to the Option, it shall give the Company written notice of the proposed
transaction (an "Offeror's Notice"), identifying the proposed transferee,
accompanied by a copy of a binding offer to purchase such shares or other
securities signed by such transferee and setting forth the terms of the
proposed transactions. An Offeror's Notice shall be deemed an offer by the
Grantee to the Company, which may be accepted, in whole but not in part,
within ten (10) Business Days of the receipt of such Offeror's Notice, on
the same terms and conditions and at the same price at which the Grantee is
proposing to transfer such shares or other securities to such transferee.
The purchase of any such shares or other securities by the Company shall be
settled within ten (10) Business Days of the date of the acceptance of the
offer and the purchase price shall be paid to the Grantee in immediately
available funds. In the event of the failure or refusal of the Company to
purchase all the shares or other securities covered by an Offeror's Notice,
the Grantee may, within sixty (60) days from the date of the Offeror's
Notice, sell all, but not less than all, of such shares or other securities
to the proposed transferee at no less than the price specified and on terms
no more favorable than those
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<PAGE>
set forth in the Offeror's Notice; provided, however, that the provisions
of this sentence shall not limit the rights the Grantee may otherwise have
if the Company has accepted the offer contained in the Offeror's Notice and
wrongfully refuses to purchase the shares or other securities subject
thereto. The requirements of this Section 10 shall not apply to (a) any
disposition as a result of which the proposed transferee would own
beneficially not more than 2% of the outstanding voting power of the
Company, (b) any disposition of Company Common Stock or other securities by
a Person to whom the Grantee has assigned its rights under the Option with
the consent of the Company, (c) any sale by means of a public offering
registered under the Securities Act or (d) any transfer to a wholly-owned
Subsidiary of the Grantee which agrees in writing to be bound by the terms
hereof.
11. Listing. If the Company Common Stock or any other securities
then subject to the Option are then listed on the New York Stock Exchange,
the Company, upon the occurrence of an Exercise Event, will promptly file
an application to list on the New York Stock Exchange the shares of the
Company Common Stock or other securities then subject to the Option and
will use all reasonable efforts to cause such listing application to be
approved as promptly as practicable.
12. Replacement of Agreement. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender
and cancellation of this Agreement, if mutilated, the Company will execute
and deliver a new Agreement of like tenor and date. Any such new Agreement
shall constitute an additional contractual obligation of the Company,
whether or not the Agreement so lost, stolen, destroyed or mutilated shall
at any time be enforceable by anyone.
13. Miscellaneous.
(a) Expenses. Except as otherwise provided in the Merger
Agreement or in Sections 7, 8 and 9 hereof, each of the parties hereto
shall bear and pay all costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of
such provision. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written
agreement executed by the parties hereto.
(c) Entire Agreement; No Third Party Beneficiary; Severability.
Except as otherwise set forth in the Merger Agreement, this Agreement
(including the
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Merger Agreement and the other documents and instruments referred to
herein) (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof and (ii) is not
intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
(d) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Texas,
regardless of the Laws that might otherwise govern under applicable
principles of conflicts of law; provided, however, that any matter
involving the internal corporate affairs of any party hereto shall be
governed by the provisions of the GCL.
(e) Descriptive Headings. The descriptive headings contained
herein are for convenience or reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified
by like notice):
If to the Company to:
Landmark Graphics Corporation
15150 Memorial Drive
Houston, Texas 77079-4304
Attention: Patti Massaro, General Counsel
and Corporate Secretary
Telecopier No.: (713) 560-1383
with a copy to:
Winstead Sechrest & Minick P.C. Shearman & Sterling
5400 Renaissance Tower 599 Lexington Avenue
1201 Elm Street New York, New York 10022
Dallas, Texas 75270 Attention: David W. Heleniak
Attention: Robert E. Crawford, Jr. Telecopier No.: (212) 848-7179
Telecopier No.: (214) 745-5390
Stock Option Agreement
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<PAGE>
If to Grantee to:
Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Attention: Lester L. Coleman, Executive Vice President
and General Counsel
Telecopier No.: (214) 978-2658
with a copy to:
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
Attention: William E. Joor III, Esq.
Telecopier No.: (713) 615-5282
(g) Counterparts. This Agreement and any amendments hereto may
be executed in two counterparts, each of which shall be considered one
and the same agreement and shall become effective when both
counterparts have been signed by each of the parties and delivered to
the other party, it being understood that both parties need not
execute the same counterpart.
(h) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be
assigned by either of the parties hereto (whether by operation of law
or otherwise) without the prior written consent of the other party,
except that the Grantee may assign this Agreement to a wholly-owned
Subsidiary of the Grantee; provided, however, that no such assignment
shall have the effect of releasing the Grantee from its obligations
hereunder. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the
parties and their respective successors and assigns.
(i) Further Assurances. In the event of any exercise of the
Option by the Grantee, the Company and the Grantee shall execute and
deliver all other documents and instruments and take all other action
that may be reasonably necessary in order to consummate the
transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific
performance, injunctive relief and other equitable relief. Both
parties further agree to waive any requirement for the securing or
posting of any bond in connection with the obtaining of any such
Stock Option Agreement
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<PAGE>
equitable relief and that this provision is without prejudice to any
other rights that the parties hereto may have for any failure to
perform this Agreement.
IN WITNESS WHEREOF, the Company and the Grantee have caused this Stock
Option Agreement to be signed by their respective officers thereunto duly
authorized, all as of the day and year first written above.
LANDMARK GRAPHICS CORPORATION
By: _________________________________________
Robert P. Peebler
President, Chief Executive Officer
and Chief Operating Officer
HALLIBURTON COMPANY
By: _________________________________________
Lester L. Coleman
Executive Vice President and General Counsel
Stock Option Agreement
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<PAGE>
EXHIBIT 99.2
VOTING AGREEMENT
VOTING AGREEMENT ("Agreement") dated as of June 30, 1996, between
Halliburton Company, a Delaware corporation (the "Acquiror"), and S. Rutt
Bridges and Barbara Ann Bridges (the "Stockholders"), holders of shares of
common stock, par value $0.05 per share, of Landmark Graphics Corporation, a
Delaware corporation (the "Company").
RECITALS:
The Stockholders beneficially own an aggregate of 1,971,263 shares
(together with any additional shares as to which beneficial ownership is
acquired by any member of the Stockholder Group described below, the "Company
Shares") of common stock, par value $0.05 per share ("Company Common Stock"), of
the Company.
The Acquiror is prepared to enter into an Agreement and Plan of Merger with
the Company (the "Merger Agreement") providing for the merger of the Company
with and into a wholly-owned subsidiary of the Acquiror and the conversion in
such merger of each share of Company Common Stock into the number of shares of
the Common Stock, par value $2.50 per share, of the Acquiror set forth in the
Merger Agreement (the "Merger").
To facilitate the Merger, the Stockholders are willing to enter into
certain arrangements with respect to the Company Shares.
NOW, THEREFORE, in consideration of the premises set forth above, the
mutual promises set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Stockholders' Support of the Merger. From the date hereof until
February 28, 1997, or, if earlier, termination of the Merger Agreement:
(a) Except as contemplated by the Merger Agreement, neither the
Stockholders nor any Person controlled by either Stockholder or any
Affiliate or Associate thereof, other than the Company and its subsidiaries
(collectively, the "Stockholder Group"), will, directly or indirectly,
sell, transfer, pledge or otherwise dispose of, or grant a proxy with
respect to, any Company Shares to any Person other than any member of the
Stockholder Group or the Acquiror or its designee, or grant an option with
respect to any of the Company Shares or enter into any other agreement or
arrangement with respect to any of the Company Shares.
(b) The Stockholders agree that the Stockholders will vote, and will
cause each member of the Stockholder Group to vote, all Company Shares
beneficially owned by such Persons (i) in favor of the Merger and (ii)
subject to the provisions of paragraph (c) below, against any combination
proposal or other matter that may interfere or be inconsistent with the
Merger (including without limitation a Competing Transaction).
<PAGE>
(c) The Stockholders agree that, if reasonably requested by the
Acquiror in order to facilitate the Merger, they will not, and they will
cause each member of the Stockholder Group not to, attend or vote any
Company Shares beneficially owned by any such Person at any annual or
special meeting of stockholders or execute any written consent of
stockholders.
(d) The Stockholders hereby consent to the Acquiror's announcement in
any press release, public filing, advertisement or other document, that the
Stockholders have entered into this Agreement.
(e) To the extent inconsistent with the provisions of this Section 1,
each member of the Stockholder Group hereby revokes any and all proxies
with respect to such member's Company Shares or any other voting securities
of the Company.
2. Miscellaneous
(a) The Stockholders, on the one hand, and the Acquiror, on the
other, acknowledge and agree that irreparable damage would occur if any of
the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed
that the parties hereto shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United
States or any state thereof having jurisdiction, in addition to any other
remedies to which they may be entitled at law or equity.
(b) Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement.
(c) All notices, consents, requests, instructions, approvals and
other communications provided for herein shall be validly given, made or
served, if in writing and delivered personally, by telecopier (subject to
receipt of electronic confirmation) or sent by registered mail, postage
prepaid:
If to the Acquiror:
Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Attention: Lester L. Coleman, Executive Vice President
and General Counsel
Telecopier No.: (214) 978-2658
Voting Agreement
-2-
<PAGE>
with a copy to:
Vinson & Elkins L.L.P.
First City Tower
1001 Fannin
Houston, Texas 77002-6760
Attention: William E. Joor III
Telecopier No.: (713) 758-2346
If to the Stockholders:
S. Rutt Bridges
34 Silver Fox Circle
Greenwood Village, Colorado 80121
and
Barbara Ann Bridges
4200 East Plum Court
Greenwood Village, Colorado 80121
or to such other address or telecopier number as any party may, from time
to time, designate in a written notice given in a like manner. Notice
given by telecopier shall be deemed delivered on the day the sender
receives telecopier confirmation that such notice was received at the
telecopier number of the addressee. Notice given by mail as set out above
shall be deemed delivered three days after the date the same is postmarked.
(d) From and after the termination of this Agreement, the covenants
of the parties set forth herein shall be of no further force or effect and
the parties shall be under no further obligation with respect thereto.
(e) Definitions. For purposes of this Agreement, the following terms
-----------
shall have the following meanings:
(i) Affiliate. "Affiliate" shall have the meaning ascribed to
---------
it in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date hereof.
(ii) Associate. "Associate" shall have the meaning ascribed to
---------
it in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date hereof.
Voting Agreement
-3-
<PAGE>
(iii) Beneficial Owner. A person shall be deemed a "beneficial
----------------
owner" of or to have "beneficial ownership" of Company Shares in
accordance with the interpretations of the term "beneficial ownership"
as defined in Rule 13-d(3) under the Exchange Act, as in effect on the
date hereof, provided that a Person shall be deemed to be the
beneficial owner of, and to have beneficial ownership of, Company
Shares that such Person or any Affiliate of such Person has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange
rights, warrant, options or otherwise.
(iv) Exchange Act. "Exchange Act" shall mean the Securities
------------
Exchange Act of 1934, as amended.
(v) Person. A "Person" shall mean any individual, firm,
------
corporation, partnership, trust, limited liability company or other
entity.
(vi) Significant Subsidiary. "Significant Subsidiary" shall
----------------------
have the meaning ascribed to it in Rule 1-02 of SEC Regulation S-X as
in effect on the date hereof.
(g) Due Authorization; No Conflicts. The Stockholders hereby
-------------------------------
represent and warrant to the Acquiror as follows: The Stockholders have
full power and authority to enter into this Agreement; neither the
execution or delivery of this Agreement nor the consummation of the
transactions contemplated herein will (a) conflict with or result in a
breach, default or violation of (i) any of the terms, provisions or
conditions of the certificate of incorporation or bylaws of any member of
the Stockholder Group or (ii) any agreement, proxy, document, instrument,
judgment, decree, order, governmental permit, certificate, license, law,
statute, rule or regulation to which any member of the Stockholder Group is
a party or to which it is subject, (b) result in the creation of any lien,
charge or other encumbrance on any shares of Company Common Stock or (c)
require any member of the Stockholder Group to obtain the consent of any
private nongovernmental third party; no consent, action, approval or
authorization of, or regis tration, declaration or filing with, any
governmental department, commission, agency or other instrumentality or any
other person or entity is required to authorize, or is otherwise required
in connection with, the execution and delivery of this Agreement (with the
exception of an Amended Schedule 13D to be filed by the Stockholders
pursuant to the Securities Exchange Act of 1934, as amended) or the
Stockholders' performance of the terms of this Agreement or the validity or
enforceability of this Agreement; neither Stockholder has any plan or
intention to sell or otherwise dispose of any shares of Acquiror Common
Stock to be received by the undersigned pursuant to the Merger.
(h) Successors and Assigns. This Agreement shall be binding upon,
----------------------
and inure to the benefit of, the parties hereto and their respective heirs,
personal representatives,
Voting Agreement
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<PAGE>
successors, assigns and Affiliates, but shall not be assignable by either
party hereto without the prior written consent of the other party hereto.
(i) Waiver. No party may waive any of the terms or conditions of
------
this Agreement except by a duly signed writing referring to the specific
provision to be waived.
(j) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas, regardless of
the laws that might otherwise govern under applicable principles of
conflicts of law; provided, however, that any matter involving the internal
corporate affairs of any party hereto shall be governed by the provisions
of the General Corporation Law of the State of Delaware.
(k) Entire Agreement. This Agreement constitutes the entire
----------------
agreement and supersedes all other and prior agreements and understandings,
both written and oral, among the parties hereto and their Affiliates.
(l) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
Voting Agreement
-5-
<PAGE>
IN WITNESS WHEREOF, the Stockholders have each executed this Agreement and
the Acquiror has caused this Agreement to be duly executed by an officer,
thereunto duly authorized, all as of the day and year first above written.
HALLIBURTON COMPANY
By:____________________________________
Lester L. Coleman
Executive Vice President and
General Counsel
STOCKHOLDERS
_______________________________________
S. Rutt Bridges
_______________________________________
Barbara Ann Bridges
Voting Agreement
-6-
<PAGE>
EXHIBIT 99.3
FIRST AMENDMENT
to
RIGHTS AGREEMENT
by and between
LANDMARK GRAPHICS CORPORATION
and
CHEMICAL BANK
as
Rights Agent
This First Amendment ("First Amendment"), dated as of June 30, 1996,
evidences the amendment of that certain Rights Agreement (herein so called) by
and between Landmark Graphics Corporation (the "Company") and Chemical Bank as
Rights Agent, dated as of September 1, 1995.
RECITALS
Section 27 of the Rights Agreement provides that the Board of Directors of
the Company may, pursuant to Continuing Board Action (as defined in the Rights
Agreement), from time to time supplement or amend the Rights Agreement in such
manner as the Board of Directors deems necessary or desirable.
The Company, Halliburton Company, a Delaware corporation ("Halliburton"),
and Halliburton Acq. Company, a Delaware corporation and a wholly-owned
subsidiary of Halliburton ("Halliburton Acq. Company"), intend to enter into
that certain Agreement and Plan of Merger (the "Agreement and Plan of Merger")
pursuant to which the Company will be merged with and into Halliburton Acq.
Company and thereby become a wholly owned subsidiary of Halliburton.
The Board of Directors of the Company has unanimously approved this First
Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
1. Section 1(a) of the Rights Agreement is hereby amended to modify the
definition of "Acquiring Person" by adding a sentence to the end of such
definition as follows:
<PAGE>
"Notwithstanding anything to the contrary stated herein, neither
Halliburton Company nor Halliburton Acq. Company shall be deemed to be an
Acquiring Person to the extent, and only to the extent, (i) Halliburton
Company and/or Halliburton Acq. Company acquire Common Shares pursuant to
the transactions contemplated by the Agreement and Plan of Merger or the
Stock Option Agreement or (ii) Landmark is merged into Halliburton Acq.
Company pursuant to the Agreement and Plan of Merger."
2. Section 1 of the Rights Agreement shall be further revised by adding
the following additional definitions thereto:
"AGREEMENT AND PLAN OF MERGER" shall mean that certain Agreement and Plan
of Merger to be entered into by and among Halliburton Company, Halliburton
Acq. Company and the Company.
"HALLIBURTON COMPANY" shall mean Halliburton Company, a Delaware
corporation.
"HALLIBURTON ACQ. COMPANY" shall mean Halliburton Acq. Company, a Delaware
corporation.
"STOCK OPTION AGREEMENT" shall mean that certain Stock Option Agreement to
be entered into by and between Halliburton Company and the Company.
3. This First Amendment shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts to be made and performed entirely within the State of Delaware.
4. This First Amendment may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
5. Except to the extent expressly amended by the First Amendment, the
Rights Agreement shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
LANDMARK GRAPHICS CORPORATION
Attest:
By:__________________________ By:_________________________________
Title:_______________________ Title:______________________________
CHEMICAL BANK
Attest:
By:__________________________ By:_________________________________
Title:_______________________ Title:______________________________
