<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 3 TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ARVIN INDUSTRIES, INC.
--------------------------
(Name of Issuer)
COMMON STOCK
--------------------------
(Title of Class of Securities)
043339100
-------------------------
(CUSIP Number)
Ronald R. Snyder
Vice President, General Counsel and Corporate Secretary
Arvin Industries, Inc.
One Noblitt Plaza
Columbus, IN 47202
-------------------------
(Name, address and telephone number of person authorized to receive notice and
communications)
December 15, 1998
-------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b) (3) or (4), check the following box: / /
Check the following box if a fee is being paid with this statement: / /
-1-
<PAGE>
1. Name of Reporting Person
The Northern Trust Company, as Trustee for the Arvin Industries, Inc.
Employee Stock Benefit Trust
S.S. or I.R.S. Identification Number of Above Person: 36-6031971
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (a) / /
Not Applicable (b) /X/
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds: SC, OO
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is / /
Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization: Indiana
- --------------------------------------------------------------------------------
Number of Shares Beneficially Owned by Each Reporting Person With
7. Sole Voting Power:
8. Shared Voting Power: 1, 698,295
9. Sole Dispositive Power:
10. Shared Dispositive Power: 1,698,295
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1, 698,295
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares / /
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11): 6.93%
- --------------------------------------------------------------------------------
14. Type of Reporting Person: BK, EP
- --------------------------------------------------------------------------------
The filing of this statement on Schedule 13D by the Arvin Industries, Inc.
Employee Stock Benefit Trust (the "Trust") does not constitute, and should not
be construed as, an admission that either the Trust or The Northern Trust
Company, as trustee of the Trust (the "Trustee"), beneficially owns any
securities covered by this Statement or is required to file this Statement. In
this connection, the Trust and the Trustee disclaim beneficial ownership of the
securities covered by this Statement.
-2-
<PAGE>
ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this Statement relates is the Common
Stock, $2.50 par value (the "Common Stock"), of Arvin Industries, Inc., an
Indiana Corporation (the "Issuer"). The Issuer's principal executive offices
are located at One Noblitt Plaza, Columbus, IN 47202.
ITEM 2. IDENTITY AND BACKGROUND
This Statement is being filed by the Trust, which was created on December 20,
1996 pursuant to a trust agreement (the "Trust Agreement") entered into by the
Issuer and the Trustee, as trustee for the Trust. The business address of the
Trust is c/o The Northern Trust Company, 50 S. LaSalle Street, Chicago, Illinois
60675. The address of the Trustee is 50 S. LaSalle Street, Chicago, Illinois
60675. The Trust is a trust organized under the laws of the State of Indiana.
The Trustee is a banking corporation organized under the laws of the State of
Illinois.
During the past five years, neither the Trust nor the Trustee has been (i)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
State securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On December 15, 1998, the Issuer sold 1,300,000 shares of Common Stock to the
Trust pursuant to the terms of a common stock purchase agreement (the "1998
Common Stock Purchase Agreement") in exchange for a promissory note in the
amount of $54, 965,625 (the "1998 Note"). Such note bears interest at the rate
of 6.5% per annum and is payable in quarterly installments through January 1,
2006. Principal and interest on such note are expected to be repaid through
contributions to the Trust by the Issuer and dividends received on the shares of
Common Stock issued to the Trust.
Immediately prior the foregoing transaction, the Trust owned 422,926 shares of
Common Stock. Such shares had been acquired from the Issuer on December 20,
1996 pursuant to a common stock purchase agreement (the "1996 Common Stock
Purchase Agreement") under which the Issuer sold 1,800,000 shares of Common
Stock to the Trust in exchange for a promissory note in the amount of
$42,187,500 (the "1996 Note"). The 1996 Note bears interest at the rate of 8%
per annum and is payable in quarterly installments through January 1, 2006.
Principal and interest on the 1996 Note are expected to be repaid through
contributions to the Trust by the Issuer and dividends received on the shares of
Common Stock issued to the Trust.
ITEM 4. PURPOSE OF TRANSACTION
The Issuer has advised the Trustee that the Trust was created to satisfy future
obligations under existing benefit plans, including stock plans, 401(k) plans,
and other employee benefit plans as defined in the Trust Agreement and as
designated by the Issuer ("Plans") and to foster employee ownership in the
Issuer. The Trust was created with the objective of enfranchising and
motivating employees and thus enhancing the Issuer's long-term performance,
thereby benefiting all shareholders of the Issuer. The Trust Agreement sets
forth the manner in which shares are to be allocated to the Plans. The Issuer
has advised the Trustee that the Issuer's contributions to the Plans will be
decreased by the value of the shares allocated to the Plans from the Trust.
-3-
<PAGE>
The Issuer has further advised the Trustee that the Issuer is aware that the
creation of the Trust and the purchase of shares of Common Stock by the Trust
may have certain antitakeover effects. Under Indiana corporation law, a merger
requires the affirmative vote of a majority of the outstanding shares.
Moreover, under the Issuer's Articles of Incorporation, certain business
combinations must be approved by 80% of all outstanding shares. The Trust's
ownership of shares of Common Stock may thus make it more difficult for an
acquirer to obtain an affirmative merger vote without employee support.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
As of the date of this filing, the Trust holds 1,698,295 shares of Common Stock,
or approximately 6.93% of the Issuer's Common Stock, as to which the Trust may
be deemed to have shared voting and dispositive power. In addition to the
December 15, 1998 transaction described in Item 3 above, during the past 60 days
immediately preceding this filing the Trust effected the following transactions
in the Issuer's Common Stock: (i) on December 4, 1998, the Trust transferred to
the Plans 50,068 shares at approximately $40.63 per share; (ii) on December 24,
1998, the Trust transferred to the Plans 9,766 shares at approximately $40.50
per share; and (iii) on January 4, 1999, the Trust transferred to the Plans
14,865 shares at approximately $41.22 per share. All such transfers were made
pursuant to the allocations described above in Item 4.
The Trust Agreement provides that the Trustee shall follow the directions of the
trustee of any trust established under any DC Plan, as defined in the Trust
Agreement, as to the manner in which shares of Common Stock held by the Trust
are to be voted. The Trust Agreement further provides that each share assigned
to each participant in a DC Plan ("DC Participant") shall be voted in accordance
with such DC Participant's direction to the trustee of the DC Plan in which he
participates with respect to shares of Common Stock allocated to his account in
such DC Plan, as reflected in the certification to be delivered to the Trustee
by the trustee of the DC Plan ("DC Plan Trustee Certification"). The Trust
Agreement also provides that any shares of Common Stock which remain undirected
pursuant to the foregoing shall be voted in the same proportions as the shares
of Common Stock for which the Trustee is directed. With respect to the decision
as to whether or not to accept any tender or exchange offer for shares of Common
Stock, the Trust Agreement provides that the Trustee will similarly act in
accordance with the DC Plan Trustee Certification; however, if the Trustee shall
not receive timely instruction by means of the DC Plan Trustee Certification,
the Trustee shall not tender or exchange any shares of Common Stock with respect
to which the trustee of any DC Plan has the right of direction, and the Trustee
shall have no discretion in such matter. The Trust Agreement further provides
that all voting instructions and all tender or exchange instructions received by
the Trustee will be held in confidence and not disclosed to any person,
including the Issuer, other than (i) agents of the Trustee who are not
affiliated with the Issuer or its affiliates or (ii) by virtue of the execution
by the Trustee of any proxy, consent or letter of transmittal for the shares of
Common Stock held in the Trust or as otherwise is necessary in order for the
Trustee to carry out its responsibilities.
The filing of this Statement on Schedule 13D by the Trust does not constitute,
and should not be construed as, an admission that either the Trust or the
Trustee beneficially owns any securities covered by this Statement or is
required to file this Statement. In this connection, the Trust and the Trustee
disclaim beneficial ownership of the securities covered by this Statement.
-4-
<PAGE>
ITEM 6. CONTRACT, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
The Issuer and the Trustee, as trustee for the Trust, have entered into the
Trust Agreement, the 1996 Common Stock Purchase Agreement and the 1998 Common
Stock Purchase Agreement. The Trustee, as trustee for the Trust, has issued the
1996 Note and the 1998 Note to the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The Trust Agreement, the 1996 Common Stock Purchase Agreement and the 1996 Note
were filed as Exhibits under Form 8K filed by the Issuer on January 21, 1997.
Such filing is incorporated by reference herein.
The 1998 Common Stock Purchase Agreement and the 1998 Note are filed as Exhibits
hereto.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: January 15, 1999
THE NORTHERN TRUST COMPANY, TRUSTEE
- --------------------
NAME: Perry R. Pero
TITLE: Senior Executive Vice President
-5-
<PAGE>
Exhibit
COMMON STOCK PURCHASE AGREEMENT
-------------------------------
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement"), made this
15th day of December, 1998, between Arvin Industries, Inc., an Indiana
corporation (the "Seller") and The Northern Trust Company, an Illinois
corporation, not in its individual or corporate capacity, but solely in its
capacity as trustee (the "Trustee") of The Arvin Industries, Inc. Employee Stock
Benefit Trust (the "Trust", which is hereinafter sometimes referred to as the
"Purchaser") under a trust agreement between the Seller and the Trustee dated as
of December 20, 1996, and to be amended effective as of December 15th, 1998 (the
"Trust Agreement")
W I T N E S S E T H:
-------------------
WHEREAS, as contemplated by the Trust Agreement, the Purchaser is to
purchase from the Seller, and the Seller is to sell to the Purchaser, 1,300,000
shares of the Seller's Common Stock, par value $2.50 per share (the "Common
Shares"), all as more specifically provided herein;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I
---------
PURCHASE AND SALE OF SHARES
---------------------------
1.1. Purchase and Sale. Subject to the terms and conditions set
forth herein, the Seller will sell to the Purchaser, and the Purchaser will
purchase from the Seller, at the Closing (as hereinafter defined), the Common
Shares, and, in consideration for the Common Shares, the Purchaser will deliver
to the Seller the note in the form of Appendix I to this Agreement in the
principal amount of $54,965,625.00 (the "Note"). The transactions contemplated
hereby shall be the simultaneous execution of the Note by the Purchaser and
delivery of the Shares by the Seller, and the Purchaser shall not have the
ability to issue the Note to any other party other than the Seller.
1.2. Closing. The closing of the sale and purchase of the Common
Shares hereunder (the "Closing") will be held at the offices of the Seller at
10:00 a.m., Columbus, Indiana time, on the date of execution and delivery of
this Agreement by the Seller and the Purchaser, or at such other time, date and
place as may be mutually agreed upon by the Seller and the Purchaser.
1.3. Delivery and Payment. At the Closing, the Seller will deliver
to the Purchaser a certificate representing the Common Shares, which certificate
shall be registered in the name of the Trustee, or the name of its nominee,
against payment by the Purchaser to the Seller of the aggregate consideration
set forth in Section 1.1 therefor. The Seller will pay all stamp and other
transfer taxes, if any, that may be payable in respect of the sale and delivery
of the Common Shares.
-6-
<PAGE>
ARTICLE II
----------
REPRESENTATIONS AND WARRANTIES OF THE SELLER
--------------------------------------------
The Seller represents and warrants to the Purchaser as follows:
2.1. Corporate Existence and Authority. The Seller (a) is a
corporation duly organized and validly existing under the laws of the State of
Indiana, (b) has all requisite corporate power to execute, deliver and perform
this Agreement and (c) has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement.
2.2. No Conflict. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate, conflict with or constitute a default under (a) the Seller's articles
of incorporation or bylaws, (b) any agreement, indenture or other instrument to
which the Seller is a party or by which the Seller or its assets may be bound or
(c) any law, regulation, order, arbitration, award, judgment or decree
applicable to the Seller.
2.3. Validity. This Agreement has been duly executed and delivered
by the Seller and is a valid and binding agreement of the Seller enforceable
against the Seller in accordance with its terms, except as the enforceability
thereof may be limited by any applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws affecting the enforcement of
creditors' rights generally, and by general principles of equity.
2.4. The Common Shares. The Common Shares have been duly authorized
and issued and when sold as contemplated hereby will be validly issued, fully-
paid and non-assessable shares of the Seller. No stockholder of the Seller has
any preemptive or other subscription right to acquire any shares of Common
Stock. The Seller will convey to the Purchaser, on the date of Closing, good
and valid title to the Common Shares free and clear of any liens, claims,
security interests and encumbrances.
2.5. Litigation. There are no actions, suits, proceedings,
arbitrations or investigations pending, or to the Seller's best knowledge,
threatened in any court or before any governmental agency or instrumentality or
arbitration panel or otherwise against or by the Seller which seek to or could
restrain, prohibit, rescind or declare unlawful, or result in substantial
damages in respect of, this Agreement or the performance hereof by the Seller
(including, without limitation, the delivery of the Common Shares).
2.6. Business and Financial Information. Seller has heretofore
delivered to the Purchaser copies of the audited consolidated balance sheets,
statements of stockholders' equity, statements of income and statements of cash
flows of Seller and its subsidiaries as of and for the fiscal years ending in
1997 and in 1996 and the unaudited consolidated balance sheet, statement of
stockholders' equity, statement of income and statement of cash flows of Seller
and its subsidiaries as of and for the nine months ending September 30, 1998
(including the related notes and schedules, the "Seller Financial Statements").
The Seller Financial Statements fairly present the consolidated results of
operations, changes in stockholders' equity and cash flows for the periods set
forth therein and the consolidated financial position as at the dates thereof of
Seller and its subsidiaries, in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as set
forth in the notes thereto and subject, in the case of unaudited financial
statements, to the omission of certain notes not ordinarily accompanying such
unaudited financial statements and to normal year-end audit
-7-
<PAGE>
adjustments which in each case will not be material to Seller and its
subsidiaries taken as a whole. Since December 31, 1997, Seller has filed with
the Securities and Exchange Commission all forms, reports and documents required
pursuant to the Securities Act of 1933, as amended (the "1933 Act"), and the
Securities Exchange Act of 1934, as amended (the "1934 Act"), to be filed by it
(the "Disclosure Documents"). At the time filed, all of the Disclosure Documents
complied as to form in all material respects with all applicable requirements of
such Acts. None of the Disclosure Documents, at the time filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
The Purchaser hereby represents and warrants to the Seller as follows:
3.1. Authority; Validity. The Purchaser has full power and authority
under the Trust to execute and deliver this Agreement and the Note and to
consummate the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Trustee on behalf of the Trust and
represents with respect to itself that it is a valid and binding agreement of
the Purchaser enforceable in accordance with its terms, except as the
enforceability thereof may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws affecting the
enforcement of creditors' rights generally, and by general principles of equity.
Assuming the Trustee has received a direction from the Company in accordance
with the terms of the Trust, the Note has been duly authorized by the Trustee on
behalf of the Trust and, upon the execution and delivery by the Trustee on
behalf of the Trust, the Note will be a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as the enforceability
thereof may be limited by any applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws affecting the enforcement of
creditors' rights generally, and by general principles of equity.
3.2. No Conflict. The execution and delivery of this Agreement do
not, and the execution and delivery of the Note, and the consummation of the
transactions contemplated hereby and thereby will not, violate, conflict with or
constitute a default under (a) the terms of the Trust, (b) any agreement,
indenture or other instrument to which the Trust is a party or by which the
Trust or, to the best of the Trustee's knowledge, its assets may be bound or
subject or (c) to the best of the Trustee's knowledge, any law, regulation,
order, arbitration award, judgment or decree applicable to the Trust.
ARTICLE IV
----------
RESTRICTIONS ON DISPOSITION OF THE COMMON SHARES
------------------------------------------------
4.1. Restricted Securities. The Purchaser acknowledges that the
Purchaser is acquiring the Common Shares pursuant to a transaction exempt from
registration under the 1933 Act. The Purchaser represents, warrants and agrees
that all Common Shares acquired by the Purchaser pursuant to this Agreement are
being acquired for investment without any intention of making a distribution
thereof, or of making any sale or other disposition thereof which would be in
violation of the 1933 Act or any applicable state securities law, and that the
Purchaser will not
-8-
<PAGE>
dispose of any of the Common Shares, except that the Trustee will, from time to
time, convey a portion of the Common Shares to the participants in the Company's
stock incentive plans to satisfy the obligations of the Seller thereunder;
convey a portion of the Common Shares to the trustee of the Company's 401(k)
Plan; and may convey or sell a portion of the Common Shares to fund the
obligations of the Seller under certain other plans as may be set forth in
Schedule A to the Trust Agreement, and upon termination of the Trust to the
extent that the Trust then holds any Common Shares, all in compliance with all
provisions of applicable federal and state law regulating the issuance, sale and
distribution of securities.
4.2. Legend. Until such time as the Common Shares are registered
pursuant to the provisions of the 1933 Act, any certificate or certificates
representing the Common Shares delivered pursuant to Section 1.3 will bear a
legend in substantially the following form:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and may not be sold, transferred or
otherwise disposed of unless they have first been registered under such Act
or unless an exemption from registration is available."
The Seller may place stop transfer orders against the registration of transfer
of any share evidenced by such a certificate or certificates until such time as
the requirements of the foregoing are satisfied.
ARTICLE V
---------
COVENANTS OF SELLER
-------------------
The Seller agrees that:
5.1. Financial Statements, Reports and Documents. Subsequent to the
Closing, and for as long as the Common Shares are held by the Trust (unless the
Trustee shall otherwise consent in writing), the Seller shall deliver to the
Trustee each of the following:
(a) Annual Statements. As soon as available and in any event
within one hundred twenty (120) days after the close of each fiscal year of
the Seller, copies of the consolidated balance sheet of the Seller and its
subsidiaries as of the close of such fiscal year and consolidated
statements of income, statements of stockholders' equity and statements of
cash flow of the Seller and its subsidiaries for such fiscal year, in each
case setting forth in comparative form the figures for the preceding fiscal
year, all in reasonable detail and accompanied by an opinion thereon of
PriceWaterhouse Coopers LLP, or of other independent public accountants of
recognized national standing, to the effect that such financial statements
have been prepared in accordance with generally accepted accounting
principles consistently applied (except for changes in which such
accountants concur) and that the examination of such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and, accordingly, includes such tests
of the accounting records and such other auditing procedures as were
considered necessary in the circumstances;
(b) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by the Seller to stockholders generally and of each regular
or periodic report, registration statement or prospectus (other than any
registration statement on Form S-8 and its related
-9-
<PAGE>
prospectus) filed by the Seller with the Securities and Exchange Commission
or any successor agency; and
(c) Other Information. Such other information concerning the
business, properties or financial condition of the Seller as the Trustee
shall reasonably request.
The Seller will comply with all federal, state, local and foreign laws,
regulations or orders, and all the rules of any stock exchange or similar entity
which are applicable to it or to the conduct of its business, and, without
limiting the generality of the foregoing, shall make such filings, distributions
and disclosures as are required by the 1933 Act, the 1934 Act or any of the
regulations, rules or orders promulgated thereunder, insofar as the failure to
comply would materially and adversely affect the Seller and its subsidiaries
taken as a whole. The Seller will maintain complete and accurate books, records
and accounts in accordance with the requirements of Section 13(b)(2) under the
1934 Act.
5.2. Registration; Listing. If so requested by the Trustee, the
Seller shall cause the Common Shares to be listed on the New York Stock
Exchange, Inc. The Seller will, as promptly as practicable (but in any event
within 75 days) after a request by the Trustee, prepare for filing at the
Seller's expense a registration statement with the Securities and Exchange
Commission sufficient to permit the public offering of such Common Shares in
accordance with the terms of this Agreement, and the Seller will use its best
efforts in all matters necessary or advisable to cause such registration
statement to become effective as promptly as practicable and to remain effective
for a reasonable period, all to the extent requisite to permit the sale or other
disposition of such Common Shares. The Seller shall also use its best efforts
to register or qualify the Common Shares so registered under the securities blue
sky laws of such jurisdictions within the United States as the Trustee may
reasonably request; provided, however, that the Seller shall not be required to
consent to general service of process for all purposes in any jurisdiction where
it is not then qualified.
ARTICLE VI
----------
CONDITIONS TO CLOSING
---------------------
6.1. Conditions to Obligations of the Purchaser. The obligation of
the Purchaser to purchase the Common Shares is subject to the satisfaction of
the following conditions on the date of Closing:
(a) The representations and warranties of the Seller set forth in
Article II hereof shall be true and correct; and if the Closing shall occur
on a date other than the date of this Agreement, the Purchaser shall have
been furnished with a certificate, dated the date of the Closing, to such
effect, signed by an authorized officer of the Seller; and
(b) All permits, approvals, authorizations and consents of third
parties necessary for the consummation of the transactions herein shall
have been obtained, and no order of any court or administrative agency
shall be in effect which restrains or prohibits the transactions
contemplated by this Agreement, and no suit, action or other proceeding by
any governmental body or other person shall have been instituted which
questions the validity or legality of the transactions contemplated by this
Agreement.
-10-
<PAGE>
(c) Receipt of a direction from the Company regarding the
execution of the Note.
6.2. Conditions to Obligations of the Seller. The obligation of the
Seller to issue, sell and deliver the Common Shares to the Purchaser is subject
to the satisfaction of the following conditions on the date of Closing:
(a) The representations and warranties of the Purchaser set forth
in Article III hereof shall be true and correct; and if the Closing shall
occur on a date other than the date of this Agreement, the Seller shall
have been furnished with a certificate dated the date of the Closing, to
such effect, signed by an authorized officer of the Trustee; and
(b) No order of any court or administrative agency shall be in
effect which restrains or prohibits the transactions contemplated by this
Agreement, and no suit, action or other proceeding by any governmental body
or other person shall have been instituted which questions the validity or
legality of the transactions contemplated by this Agreement.
ARTICLE VII
-----------
MISCELLANEOUS
-------------
7.1. Expenses. The Seller shall pay all of its expenses, and it
shall pay the Purchaser's expenses, in connection with the authorization,
preparation, execution and performance of this Agreement, including without
limitation the reasonable fees and expenses of the Trustee, its agents,
representatives, counsel, financial advisors and consultants.
7.2. Survival of Seller's Representations and Warranties. All
representations and warranties made by the Seller to the Purchaser in this
Agreement shall survive the Closing.
7.3. Notices. All notices, requests, or other communications
required or permitted to be delivered hereunder shall be in writing, delivered
by registered or certified mail, return receipt requested, as follows:
(a) To the Seller:
One Noblitt Plaza
Columbus, Indiana 47202
Attention: General Counsel
(b) To the Purchaser:
50 South LaSalle Street
Chicago, Illinois 60675
Attention: Kerry Nelson
Any party hereto may from time to time, by written notice given as aforesaid,
designate any other address to which notices, requests or other communications
addressed to it shall be sent.
-11-
<PAGE>
7.4. Specific Performance. The parties hereto acknowledge that
damages would be an inadequate remedy for any breach of the provisions of this
Agreement and agree that the obligations of the parties hereunder shall be
specifically enforceable, and neither party will take any action to impede the
other from seeking to enforce such rights of specific performance.
7.5. Successors and Assigns; Integration; Assignment. This Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective legal representatives, successors and assigns. This
Agreement (a) constitutes, together with the Note, the Trust Agreement and any
other written agreements between the Purchaser and the Seller executed and
delivered on the date hereof, the entire agreement between the parties hereto
and supersedes all other prior agreements and understandings, both written and
oral, among the parties, with respect to the subject matter hereof, (b) shall
not confer upon any person other than the parties hereto any rights or remedies
hereunder and (c) shall not be assignable by operation of law or otherwise,
except that the Trustee may assign all its rights hereunder to any corporation
or other institution exercising trust powers in connection with any such
institution assuming the duties of a trustee under the Trust.
7.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
7.7. Further Assurances. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
7.8. Amendment and Waiver. No amendment or waiver of any provision
of this Agreement or consent to departure therefrom shall be effective unless in
writing and signed by the Purchaser and the Seller.
7.9. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures thereto were upon one
instrument.
7.10. Certain Limitations. The execution, delivery and performance
by the Trustee of this Agreement have been, and will be, effected by the Trustee
solely in its capacity as Trustee under the terms of the Trust and not in its
individual or corporate capacity. Nothing in this Agreement shall be
interpreted to increase, decrease or modify in any manner any liability of the
Trustee to the Seller or to any trustee, representative or other claimant by
right of the Seller resulting from the Trustee's performance of its duties under
the constituent instruments of the Trust, and no personal or corporate liability
shall be asserted or enforceable against the Trustee by reason of any of the
covenants, statements or representations contained in this Agreement.
7.11. Incorporation. The terms and conditions of the Trust Agreement
relating to the nature of the responsibilities of the Trustee and the
indemnification of the Trustee by the Seller are incorporated herein by
reference and made applicable to this Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
on the date and year first above written.
-12-
<PAGE>
ARVIN INDUSTRIES, INC.
By: /S/
-----------------------
Name:
----------------------
Title:
----------------------
THE NORTHERN TRUST COMPANY
By: /S/
-----------------------
Name:
-----------------------
Title:
-----------------------
-13-
<PAGE>
PROMISSORY NOTE
---------------
$54,965,625.00
Columbus, Indiana December 15, 1998
FOR VALUE RECEIVED, the undersigned, The Northern Trust Company not in
its individual or corporate capacity but solely in its capacity as Trustee of
The Arvin Industries, Inc. Employee Stock Benefit Trust (the "Trust") hereby
promises on behalf of the Trust to pay to the order of Arvin Industries, Inc.,
an Indiana corporation (the "Company") without relief from valuation and
appraisment laws, at the principal offices of the Company in Columbus, Indiana,
or at such other place as the Company shall designate in writing, the aggregate
principal amount of FIFTY FOUR MILLION NINE HUNDRED SIXTY FIVE THOUSAND SIX
HUNDRED TWENTY FIVE DOLLARS ($54,965,625.00), as shown on Schedule A attached
hereto as such may be amended from time to time, with interest in arrears
thereon, as hereinafter provided.
Principal shall be paid in installments in the amounts and on the
dates set forth on the Maturity Schedule attached hereto as Schedule A, the last
such installment due on January 1, 2006; provided, however, that this Note may
be prepaid in whole or in part at any time without penalty; and provided further
that the principal amount of this Note (1) shall be forgiven in the event that
the Trust shall have been terminated in accordance with Section 8.2 thereof and
the Trustee shall have complied with the requirements of such Section or (2)
shall be deemed forgiven, if applicable, in accordance with Section 2.1 of the
Trust. Interest on the unpaid principal balance, at an annual interest rate
(the "Interest Rate") equal to 6.5%, shall be paid quarterly, in arrears, on
each January 1, April 1, July 1 and October 1, commencing January 1, 1999, and
shall be calculated on the basis of a 360-day year of 30-day months. Whenever
any payment falls due on a Saturday, Sunday or public holiday, such payment
shall be made on the next succeeding business day.
This Note shall be construed under the laws of the State of Indiana.
The undersigned represents and warrants that the indebtedness
represented by this Note was incurred for the purpose of purchasing shares of
Common Stock, $2.50 par value, of the Company.
This Note may not be assigned by the Company, other than by operation
of law, without the prior express written consent of the undersigned.
-14-
<PAGE>
The Company shall have no recourse whatsoever to any assets of the
Trustee in its individual or corporate capacity for repayment. The Trustee is
entering into this Agreement not in its individual or corporate capacity but
solely as Trustee, and no personal or corporate liability or personal or
corporate responsibilities are assumed by, or shall at any time be asserted or
enforceable against, the Trustee in its individual or corporate capacity under,
or with respect to, this Agreement.
The Northern Trust Company, on behalf of THE
ARVIN INDUSTRIES, INC. EMPLOYEE
STOCK BENEFIT TRUST
By: /S/
---------------------------------------
Name:
Title:
-15-
<PAGE>
Schedule A
----------
PRINCIPAL PAYMENT DATES
<TABLE>
<CAPTION>
Date Amount
- ---- ------
<S> <C>
January 1, 2000 $ 1,000,000.00
January 1, 2001 $ 1,000,000.00
January 1, 2002 $ 1,000,000.00
January 1, 2003 $ 1,000,000.00
January 1, 2004 $ 1,000,000.00
January 1, 2005 $ 1,000,000.00
January 1, 2006 $48,965,625.00
</TABLE>
-16-
