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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
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SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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PLENUM PUBLISHING CORPORATION
(Name of Subject Company)
PLENUM PUBLISHING CORPORATION
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of Class of Securities)
729093104
(CUSIP Number of Class of Securities)
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MARTIN E. TASH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PLENUM PUBLISHING CORPORATION
233 SPRING STREET
NEW YORK, NEW YORK 10013
(212) 620-8000
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications
on Behalf of the Person(s) Filing Statement)
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WITH A COPY TO:
BERNARD BRESSLER, ESQ.
BRESSLER, AMERY & ROSS, P.C.
17 STATE STREET
NEW YORK, NEW YORK 10004
(212) 425-9300
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Plenum Publishing Corporation, a Delaware
corporation (the "Company"), and the address of the principal executive offices
of the Company is 233 Spring Street, New York, New York 10013. The title of the
class of equity securities to which this statement relates is the common stock,
par value $.10 per share (the "Shares"), of the Company.
ITEM 2. TENDER OFFER OF PURCHASER.
This statement relates to the tender offer by PPC Acquisition Corp., a
Delaware corporation ("Purchaser"), a wholly-owned subsidiary of Kluwer Boston,
Inc., a Massachusetts corporation ("Parent"), disclosed in a Tender Offer
Statement on Schedule 14D-1, dated June 16, 1998 (the "Schedule 14D-1"), to
purchase all of the issued and outstanding Shares, at a price of $73.50 per
Share, net to the seller in cash (the "Offer Price"), upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated June 16, 1998 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, together
with the Offer to Purchase and all amendments and supplements thereto,
constitute the "Offer").
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of June 10, 1998 (the "Merger Agreement"), by and among Parent, Purchaser and
the Company. The Merger Agreement provides, among other things, that as soon as
practicable after the satisfaction or waiver of the conditions set forth in the
Merger Agreement, Purchaser will be merged with and into the Company (the
"Merger"), and the Company will continue as the surviving corporation (the
"Surviving Corporation"). A copy of the Merger Agreement is filed herewith as
EXHIBIT 1 and is incorporated herein by reference.
The principal executive offices of Parent and Purchaser are c/o Kluwer
Academic Publishers B.V., Spuiboulevard 50, 3300 AZ Dordrecht, the Netherlands.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and address of the Company, which is the person filing this
statement, are set forth in Item 1 above.
(b) Except as described in this Item 3(b), as of the date hereof, there are
no material contracts, agreements, arrangements or understandings, or any actual
or potential conflicts of interest between the Company or its affiliates and (i)
its executive officers, directors or affiliates or (ii) Parent, Purchaser or
their respective officers, directors or affiliates.
(1) MATERIAL CONTRACTS BETWEEN THE COMPANY AND ITS EXECUTIVE OFFICERS, DIRECTORS
OR AFFILIATES
COMPENSATION OF EXECUTIVE OFFICERS.
The following table sets forth all compensation awarded to, earned by or
paid to the following persons for services rendered in all capacities to the
Company and its subsidiaries during each of fiscal years ended December 31,
1997, 1996 and 1995: the Company's Chief Executive Officer, and (2) each of the
other
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executive officers of the Company whose total compensation for the fiscal year
ended December 31, 1997 exceeded $100,000.
<TABLE>
<CAPTION>
NAME AND ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) COMPENSATION ($)(2)
- -------------------------------------------------------- --------- ----------- ------------ -------------------
<S> <C> <C> <C> <C>
Martin E. Tash.......................................... 1997 360,000 345,450 26,448
Chairman of the Board 1996 340,000 418,250 26,814
and President (Chief 1995 320,000 428,050 27,435
Executive Officer)
Mark Shaw............................................... 1997 360,000 246,750 26,448
Executive Vice President 1996 340,000 298,750 26,814
and Publisher 1995 320,000 305,750 27,435
Ghanshyam A. Patel...................................... 1997 165,000 39,000 26,156
Treasurer and Chief 1996 157,500 47,000 25,670
Financial Officer 1995 150,000 48,000 25,308
</TABLE>
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(1) (Incentive Compensation Plan) Represents amounts paid to the named executive
officer, for the applicable fiscal year, under the Company's Incentive
Compensation Plan. For each fiscal year an amount equal to 5% of the
Company's Income from Operations as reported in the Company's year-end
financial statements (together with, when applicable, 5% of the excess of
cumulative Investment Profit over cumulative Investment Loss) is distributed
to key employees. 35% percent of such amount is distributed to the chief
executive officer and 25% is distributed to the next senior officer. The
balance of such amount is distributed as determined by the chief executive
officer. Since there was Investment Profit (as defined) in 1995, 1996 and
1997, the amount of such Profit was added to Income from Operations for the
purpose of calculating incentive compensation for each of such years.
(2) (Qualified Profit Sharing Plan) Represents amount of contribution made to or
accrued for the account of the named executive officer, in respect of the
applicable fiscal year, in the Company's Profit Sharing Plan (a defined
contribution plan qualified under the Internal Revenue Code). The Plan is
maintained for all full-time employees who have completed certain minimum
periods of service. The Company contributes to the Plan specified amounts
based upon its after tax income as a percentage of gross revenue. The
Company's contribution to the Plan for each employee is determined by his
salary level and length of service. Contributions are invested by the Plan
Trustee in stock of the Company and/or in a variety of other investment
options, depending upon the employee's election. Interests in the Plan
become vested to the extent of 20% after three years of service and vest at
the rate of an additional 20% for each year of service thereafter and in any
event become 100% vested at death or at the "normal retirement age" of 55 as
specified in the Plan. Each employee (or his beneficiary) is entitled to
receive the value of his vested interest upon his death or retirement. He
may also receive the value of such interest upon prior termination of his
services with the Company, or if he elects at any time to withdraw his
interest. The interests of Messrs. Tash, Shaw and Patel are fully vested.
The aggregate contributions made or accrued by the Company through the end
of fiscal 1997 for Messrs. Tash, Shaw and Patel under this Plan are
$514,000, $533,879 and $210,100, respectively; these contributions have been
invested in the manner set forth above, and (as to Mr. Shaw) a portion of
the investments was transferred from the Plan into a private profit sharing
plan of which Mr. Shaw is the beneficiary.
COMPENSATION OF DIRECTORS.
Directors fees for Dr. Israel Gitman and Messrs. Earl Ubell, Howard F.
Mathiasen and Nathan Tash are currently at the rate of $13,000 per annum.
Directors of the Company who are also officers of the Company receive no
additional compensation for their services as directors.
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TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS REGARDING NAMED
EXECUTIVE OFFICERS.
Footnote 2 to the above table regarding executive officer compensation sets
forth information as to entitlement of Messrs. Tash, Shaw and Patel to receive
certain distributions under the Company's Profit Sharing Plan upon termination
of their employment.
On August 1, 1996, the Company adopted "Second Amended Contingent
Compensation Agreements" with Martin E. Tash, Mark Shaw and Ghanshyam Patel
(executive officers of the Company named in the above table) and with Harry
Allcock and Ken Derham (officers of subsidiaries of the Company). The Second
Amended Contingent Compensation Agreements supersede certain earlier Contingent
Compensation Agreements, and provide that if (a) during the officer's employment
or within six months after his employment terminates, there is a sale of 75% of
the book value of the Company's operating assets (as defined), or if any person
or group becomes the owner of over 25% of the Company's outstanding stock, and
(b) the officer's employment is terminated at or prior to the end of the sixth
month after such event, then the Company or a successor in interest to the
Company shall pay the terminated officer cash equal to 290% of the officer's
average annual taxable compensation over the preceding five calendar years.
On August 1, 1996, the Company entered into Contingent Compensation
Agreements with John Hwang and Carol Bischoff (officers and key employees of the
Company) which provide that if, during the officer's employment or within twelve
months after his employment terminates, there is a sale of 75% of the book value
of the Company's operating assets (as defined), or if any person or group
becomes the owner of over 25% of the Company's outstanding stock, and the
officer's employment is terminated at or prior to the end of the sixth month
after such event, then the Company or a successor in interest to the Company
shall pay the terminated officer cash equal to 100% of the officer's average
annual taxable compensation over the preceding five calendar years.
INDEMNIFICATION AGREEMENTS.
In September 1987, the Company's liability insurance for its directors and
officers expired and was not renewed due to the significant increased cost. In
light of this development, and to provide increased protection to the officers
and directors, the Company's By-Laws were amended on November 18, 1987 to
require the Company to advance expenses of directors or officers in defending a
civil or criminal action as such expenses are incurred, subject to certain
conditions. Furthermore, on that date the Company entered into a contract with
each person then holding a position as a director or executive officer,
requiring indemnification for expenses, judgments, fines and amounts paid in
settlement, in accordance with the By-Laws as amended, or any future By-Laws
which provide greater indemnification. As of March 14, 1996, the Company entered
into substantially identical contracts with Israel Gitman and Nathan Tash (who
became directors on June 23, 1995).
The present By-Laws provide for indemnification of directors and officers,
in connection with claims arising from service to the Company, or to another
entity at Company's request, except where it would be prohibited under
applicable law.
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SECURITIES OWNERSHIP.
The following table sets forth information regarding the voting securities
of the Company beneficially owned by each director of the Company, each of the
executive officers of the Company and all executive officers and directors as a
group (8 persons), as of June 16, 1998.
<TABLE>
<CAPTION>
NATURE OF
BENEFICIAL
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNERSHIP
- ----------------- ------------------------------------------------------------------------- -------------------
<S> <C> <C>
Common Stock Martin E. Tash........................................................... 423,485 shares(1)
$.10 par value
Mark Shaw................................................................ 80,667 shares(2)
Earl Ubell............................................................... 1,000 shares
Howard F. Mathiasen...................................................... 7,125 shares
Bernard Bressler......................................................... 11,757 shares(3)
Israel Gitman............................................................ 500 shares
Nathan Tash.............................................................. 400 shares
Ghanshyam A. Patel....................................................... 10,554 shares(4)
All Executive Officers and Directors shares as a Group (comprising the 8
persons shown above)..................................................... 535,488 shares
</TABLE>
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(1) Includes 112,336 shares held by the Company's Profit Sharing Plan, as to
which Mr. Tash has voting and investment power. Of the aggregate of 423,485
shares shown, Mr. Tash has sole voting and investment power as to 125,256
shares and shared voting and investment power with his wife as to 298,229
shares.
(2) Includes 50,625 shares held in trust for his adult children. Of the
aggregate of 80,667 shares shown, Mr. Shaw has sole voting and dispositive
power as to 67,085 shares and shared voting and dispositive power with his
wife as to 13,582 shares.
(3) Includes 520 shares held by a trustee for Mr. Bressler under an Individual
Retirement Account. Does not include 10,497 shares held by Mr. Bressler's
wife as to which he disclaims beneficial ownership.
(4) Includes 5,204 shares held by the Company's Profit Sharing Plan, as to which
Mr. Patel has sole voting and dispositive power. As to the balance of 5,350
shares, Mr. Patel shares voting and dispositive power with his wife.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Bernard Bressler, Secretary and a director of the Company, is a member of
the law firm of Bressler, Amery & Ross, P.C., counsel to the Company for all
matters, including the transactions described herein. During the 1997 fiscal
year, the Company paid legal fees of $145,927 to such firm.
(2) MATERIAL CONTRACTS BETWEEN THE COMPANY AND PARENT OR PURCHASER.
CONFIDENTIALITY AGREEMENT.
The following is a summary of certain material provisions of the
Confidentiality Agreement, dated April 6, 1998, between the Company and Wolters
Kluwer U.S. Corporation (the "Confidentiality Agreement"). This summary does not
purport to be complete and is qualified in its entirety by reference to the
complete text of the Confidentiality Agreement, a copy of which is filed as
EXHIBIT 3 hereto. Capitalized terms not otherwise defined below shall have the
meanings set forth in the Confidentiality Agreement.
The Confidentiality Agreement contains customary provisions pursuant to
which, among other matters, Wolters Kluwer U.S. Corporation and its affiliates
agreed to keep confidential all nonpublic,
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confidential or proprietary information furnished to it by the Company relating
to the Company, subject to certain exceptions (the "Confidential Information"),
and to use the Confidential Information solely for the purpose of evaluating a
possible transaction involving the Company and Parent. Parent has agreed in the
Confidentiality Agreement that for a period of one year from the date thereof,
without the prior written consent of the Company, neither it nor any of its
affiliates will, among other things, acquire or offer or agree to acquire,
directly or indirectly, any securities or assets of the Company or any successor
or affiliate of the Company or propose any tender or exchange offer, merger or
other business combination involving the Company, "solicit" any "proxies" (as
those terms are used in the rules of the Securities and Exchange Commission (the
"Commission")) or seek to influence the management, policy or conduct of the
business affairs of the Company. Parent further agreed that, for a period of six
months from the date of the Confidentiality Agreement, neither Parent nor any of
its affiliates will, without the written consent of the Company, solicit the
employment of any employee of the Company or any of its affiliates with whom
Parent or its representatives had contact during the negotiations and
investigations in connection with a possible transaction between Parent and the
Company.
THE MERGER AGREEMENT.
The following is a summary of certain material provisions of the Merger
Agreement, which contains the terms of the tender offer (the "Offer") as well as
the merger terms. This summary does not purport to be complete and is qualified
in its entirety by reference to the complete text of the Merger Agreement, a
copy of which is filed as EXHIBIT 1. Capitalized terms not otherwise defined
below shall have the meanings set forth in the Merger Agreement.
THE OFFER. The Merger Agreement provides for the commencement of the Offer
to purchase all of the Common Stock of the Company at $73.50 per share not later
than the fifth business day from the public announcement of the execution of the
Merger Agreement. The Offer is initially to remain in effect for 20 business
days following its commencement. The Merger Agreement also provides that,
without the prior written consent of the Company, neither Parent nor Purchaser
will decrease the price per Share or change the form of consideration payable in
the Offer, decrease the number of Shares sought to be purchased in the Offer,
change any of the conditions set forth in the Merger Agreement, impose
additional conditions to the Offer or amend any other term of the Offer in any
manner materially adverse to the holders of the Shares. Notwithstanding the
foregoing, Purchaser may, without the consent of the Company, (i) extend the
Offer on one or more occasions for up to ten business days for each such
extension beyond the then scheduled expiration date, if at the then scheduled
expiration date of the Offer any of the conditions to Purchaser's obligation to
accept for payment and pay for the Shares shall not be satisfied or waived, (ii)
increase the Offer Price and extend the Offer for any period required by any
rule, regulation, interpretation or provision of the Commission or the staff
thereof applicable to the Offer and (iii) extend the Offer for an aggregate
period of not more than ten business days beyond the latest expiration date that
would otherwise be permitted under clauses (i) and (ii) above if there shall not
have been tendered and not withdrawn pursuant to the Offer at least 90% of the
outstanding Shares.
The obligation of Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer is subject to the condition that there will be
validly tendered and not withdrawn a number of Shares which, together with any
Shares beneficially owned by Parent or Purchaser, represent at least a majority
of the Shares outstanding on a fully diluted basis (the "Minimum Condition"). In
addition, Purchaser is not required to accept for payment or pay for any Shares
tendered pursuant to the Offer, and may terminate the Offer and not accept for
payment any tendered Shares, if (a) any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
or the antitrust laws of applicable jurisdictions outside the United States, has
not expired or been terminated prior to the expiration of the Offer; (b) at any
time on or after June 10, 1998, and before the expiration of the Offer any of
the following occur: (i) there shall be threatened or pending any suit, action
or proceeding by any governmental entity of competent jurisdiction against
Purchaser, Parent, the Company or any Subsidiary of
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the Company (A) seeking to prohibit or impose any material limitations on
Purchaser's or Parent's ownership or operation (or that of any of their
respective Subsidiaries or affiliates) of all or a material portion of their or
the Company's businesses or assets (or that of any of its Subsidiaries), or to
compel Purchaser or Parent or their respective Subsidiaries and affiliates to
dispose of or hold separate any material portion of the business or assets of
the Company or Parent and their respective Subsidiaries, in each case taken as a
whole, (B) challenging the acquisition by Purchaser or Parent of any Shares
under the Offer, seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or the performance of any of the other transactions
contemplated by the Merger Agreement or the Stock Purchase Agreements, or
seeking to obtain from the Company, Purchaser or Parent any damages that are
material in relation to the Company and its Subsidiaries taken as a whole, (C)
seeking to impose material limitations on the ability of Purchaser, or render
Purchaser unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger or (D) seeking to impose material
limitations on the ability of Purchaser or Parent effectively to exercise full
rights of ownership of the Shares, including, without limitation, the right to
vote the Shares purchased by it on all matters properly presented to the
Company's stockholders or there shall be pending any suit, action or proceeding
by any Governmental Entity against Purchaser, Parent, the Company or any
Subsidiary of the Company which is reasonably likely to have a Material Adverse
Effect on the Company (as defined below); (ii) there shall be any statute, rule,
regulation, judgment, order or injunction enacted, entered, enforced,
promulgated, or deemed applicable, pursuant to an authoritative interpretation
by or on behalf of a Government Entity, to the Offer or the Merger, or any other
action shall be taken by any Governmental Entity, other than the application to
the Offer or the Merger of applicable waiting periods under the HSR Act, that is
reasonably likely to result, directly or indirectly, in any of the consequences
referred to in clauses (A) through (D) of paragraph (i) above; (iii) there shall
have occurred any events after the date of the Merger Agreement which have or
will have a Material Adverse Effect on the Company; (iv)(A) the Board of
Directors of the Company or any committee thereof shall have withdrawn or
modified in a manner adverse to Parent or Purchaser its approval or
recommendation of the Offer, the Merger or the Merger Agreement, or approved or
recommended any Acquisition Proposal (as defined below) or (B) the Company shall
have entered into any agreement with respect to any Superior Proposal (as
defined below); (v) the representations and warranties of the Company set forth
in the Merger Agreement shall not be true and correct, in each case (A) as of
the date referred to in any representation or warranty which addresses matters
as of a particular date, or (B) as to all other representations and warranties,
as of the date of the Merger Agreement and as of the scheduled expiration of the
Offer unless the inaccuracies without giving effect to any materiality or
material adverse effect qualifications or materiality exceptions contained
therein under such representations and warranties, taking all the inaccuracies
under all such representations and warranties together in their entirety, do not
result in a Material Adverse Effect on the Company; (vi) the Company shall have
failed to perform any obligation or to comply with any agreement or covenant to
be performed or complied with by it (A) under any agreement or covenant to be
performed or complied with by it which are described below under "INTERIM
OPERATIONS" and "ALTERNATIVE PROPOSALS," or (B) under any other agreement or
covenant under the Merger Agreement, unless the failure to so perform or comply
would not have a Material Adverse Effect on the Company; or (vii) the Merger
Agreement shall have been terminated in accordance with its terms.
For purposes of the Merger Agreement, "Material Adverse Effect on the
Company" means any adverse change, circumstance or effect that, individually or
in the aggregate with all other adverse changes, circumstances and effects, has
had or will have a material adverse effect on the business, financial condition,
properties or results of operations of the Company and its Subsidiaries taken as
a whole, other than any adverse change, circumstance or effect relating to or
arising out of (a) the economy or securities markets in general, (b) the
announcement of the Merger Agreement or the transactions contemplated therein
(including any impact on employees, vendors or customers resulting therefrom) or
(c) the industry of the Company and its Subsidiaries in general, and not
specifically relating to the Company or its Subsidiaries.
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THE MERGER. The Merger Agreement provides that, subject to the terms and
conditions thereof, Purchaser will be merged with and into the Company, with the
Company continuing as the surviving corporation (the "Surviving Corporation")
and a wholly-owned subsidiary of Parent, and each issued and outstanding Share
(other than Shares owned by Parent, Purchaser or any other wholly owned
subsidiary of Parent and Shares owned by the Company as treasury stock, which
Shares shall be cancelled and retired, and other than Dissenting Shares (as
defined below)) shall be converted into the right to receive the Offer Price,
without interest. Each issued and outstanding Share of Purchaser common stock
shall be converted into and become one fully paid and nonassessable share of
Common Stock of the Surviving Corporation. The Merger Agreement also provides
that (i) the directors and officers of Purchaser immediately prior to the
effective time of the Merger (the "Effective Time") will be the initial
directors and officers, respectively, of the Surviving Corporation; (ii) the
Certificate of Incorporation of the Company will be the initial Certificate of
Incorporation of the Surviving Corporation; and (iii) the By-laws of Purchaser
will be the initial By-laws of the Surviving Corporation.
DIRECTORS. The Merger Agreement provides that, promptly upon the purchase
of and payment for Shares by Parent or any of its Subsidiaries which represent
at least a majority of the outstanding Shares, Purchaser will be entitled to
designate such number of directors, rounded up to the next whole number, on the
Company Board as shall give Purchaser, subject to compliance with Section 14(f)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
Rule 14f-1 promulgated thereunder, representation on the Company Board equal to
the product of the total number of directors on the Company Board (giving effect
to the directors elected in accordance with the foregoing) multiplied by the
percentage that the aggregate number of Shares accepted for payment pursuant to
the Offer bears to the total number of Shares then outstanding. The Company will
take all action necessary to cause Purchaser's designees to be elected or
appointed to the Company Board and to secure the resignations of such number of
its incumbent directors as is necessary. The Company will take all action
necessary to cause individuals designated by Purchaser to constitute the same
percentage as such individuals represent on the Company Board of each committee
of the Company Board and each board of directors (and committee thereof) of each
of the Company's Subsidiaries. Notwithstanding the foregoing, until the
Effective Time, the Company will have on the Company Board at least two
directors who were directors of the Company on the date of the Merger Agreement.
The Merger Agreement also provides that from and after the time, if any,
that Purchaser's designees constitute a majority of the Company Board, any
amendment or termination of the Merger Agreement by the Company, any exercise or
waiver of the Company's rights under the Merger Agreement, or any other action
by the Company Board in connection with the Merger Agreement may be effected
only by the action of a majority of the directors of the Company then in office
who were directors on the date of the Merger Agreement.
STOCKHOLDERS' MEETING. Pursuant to the Merger Agreement, the Company shall,
if required by applicable law in order to consummate the Merger, duly call, give
notice of, convene and hold a special meeting of its stockholders as soon as
practicable following the acceptance for payment and purchase of Shares by
Purchaser pursuant to the Offer for the purpose of considering and taking action
upon the Merger Agreement.
The Merger Agreement also provides that the Company shall, if required by
applicable law in order to consummate the Merger, prepare and file with the
Commission a preliminary proxy or information statement relating to the Merger
and the Merger Agreement and shall (i) obtain and furnish the information
required to be included by the Commission in the Proxy Statement (as hereinafter
defined) and, after consultation with Parent, respond promptly to any comments
made by the Commission with respect to the preliminary proxy or information
statement and cause a definitive proxy or information statement (the "Proxy
Statement") to be mailed to its stockholders and (ii) obtain the necessary
approvals of the Merger and the Merger Agreement by its stockholders. The Merger
Agreement also provides that, subject to the fiduciary obligations of the
Company Board, the Company shall include in the Proxy
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Statement the recommendation of the Company Board that stockholders of the
Company vote in favor of the approval of the Merger and the adoption of the
Merger Agreement. The Merger Agreement also provides that, in the event that
Parent, Purchaser or any other Subsidiary of Parent shall acquire at least 90%
of the outstanding Shares of the Company, pursuant to the Offer, the parties
shall take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition, without a meeting of
the Company's stockholders in accordance with the Delaware General Corporation
Law (the "GCL").
DISSENTING SHARES. Under Section 262 of the GCL, Stockholders of the
Company who have not tendered their Shares, or in the case of a vote at a
stockholders meeting shall not have voted in favor of the Merger, shall have
dissenter's rights entitling them to an appraisal of their Shares ("Dissenting
Shares") if they have complied with all the conditions for such exercise imposed
by the GCL.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains
representations and warranties of one or both of the parties with respect to,
among other things, (i) organization, good standing, corporate power and
enforceability, (ii) capitalization, (iii) required consents or approvals, (iv)
no material misstatements in filings made with the Commission or financial
statements, (v) absence of material adverse changes, (vi) no litigation, (vii)
tax returns filed and taxes paid, (viii) no liabilities under ERISA, (ix)
compliance with environmental laws and regulations, (x) no infringement upon the
intellectual property of third parties, (xi) compliance with law, (xii)
insurance, (xiii) approvals under the GCL and the inapplicability of
anti-takeover provisions under the GCL, (xiv) voting requirements, (xv)
employment of investment bankers and financial advisors, (xvi) receipt of a
fairness opinion from a financial advisor, (xvii) confidentiality agreements
signed with other parties, (xviii) interim operations of Purchaser and (xix)
sufficiency of funds to consummate the Merger.
None of the representations and warranties in the Merger Agreement survive
beyond the Effective Time.
INTERIM OPERATIONS. In the Merger Agreement, the Company has covenanted and
agreed that, among other things, between the date of the Merger Agreement and
the Effective Time, unless Parent otherwise consents in writing and except as
otherwise contemplated by the Merger Agreement, the Company will, and will cause
each of its Subsidiaries to, conduct its operations only in the ordinary and
usual course of business consistent with past practice and will use its
reasonable best efforts, and will cause each of its Subsidiaries to use its
reasonable best efforts, to preserve intact the business organization of the
Company and each of its Subsidiaries, to keep available the services of its
present officers and key employees, and to preserve the goodwill of those having
business relationships with it. Without limiting the generality of the
foregoing, and except as otherwise expressly contemplated by the Merger
Agreement, the Company will not, and will not permit any of its Subsidiaries to,
prior to the Effective Time, without the prior written consent of Parent: (a)
adopt any amendment to its Certificate of Incorporation or By-laws or comparable
organizational documents; (b) except for issuances of capital stock of the
Company's Subsidiaries to the Company or a wholly-owned Subsidiary of the
Company, issue, reissue, pledge or sell, or authorize the issuance, reissuance,
pledge or sale of (i) additional shares of capital stock of any class, or
securities convertible into, exchangeable for or evidencing the right to
substitute for, capital stock of any class, or any rights, warrants, options,
calls, commitments or any other agreements of any character, to purchase or
acquire any capital stock or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for, capital stock, or
(ii) any other securities in respect of, in lieu of, or in substitution for,
Shares outstanding on the date hereof; (c) declare, set aside or pay any
dividends or other distribution (whether in cash, securities or property or any
combination thereof) in excess of the regular quarterly dividend in an amount
equal to the last paid regular quarterly cash dividend paid by the Company which
would normally be paid approximately three months after such last paid regular
quarterly dividend was paid, if any such dividends are declared and paid; (d)
split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire,
or propose to redeem or purchase or otherwise acquire, any shares
8
<PAGE>
of its capital stock, or any of its other securities; (e) except for (i)
increases in salary and wages granted to officers and employees of the Company
or its Subsidiaries in conjunction with promotions or other changes in job
status or normal compensation reviews (within the amounts projected in the
Company's 1998 operating plan previously provided to Parent) in the ordinary
course of business consistent with past practice, or (ii) increases in salary,
wages and benefits to employees of the Company pursuant to collective bargaining
agreements in effect on the date hereof, increase the compensation or fringe
benefits payable or to become payable to its directors, officers or employees
(whether from the Company or any of its Subsidiaries), or pay or award any
benefit not required by any existing plan or arrangement (including, without
limitation, the granting of stock options, stock appreciation rights, shares of
restricted stock or performance units) or grant any additional severance or
termination pay to (other than as required by existing agreements or policies),
or enter into any employment or severance agreement with, any director, officer
or other employee of the Company or any of its Subsidiaries or, except pursuant
to existing arrangements, establish, adopt, enter into, amend, accelerate any
rights or benefits or waive any performance or vesting criteria under any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, savings, welfare, deferred
compensation, "golden parachute", employment, termination, severance or other
employee benefit plan, agreement, trust, fund, policy or arrangement for the
benefit or welfare of any directors, officers or current or former employees
(any of the foregoing being an "Employee Benefit Arrangement"), except in each
case to the extent required by applicable law or regulation; provided, however,
that nothing herein will be deemed to prohibit the payment of benefits as they
become payable; (f) acquire, sell, lease or dispose of any assets or securities
which are material to the Company and its Subsidiaries, or enter into any
commitment to do any of the foregoing or enter into any material commitment or
transaction, other than transactions between a wholly-owned Subsidiary of the
Company and the Company or another wholly-owned Subsidiary of the Company or
transactions in the ordinary course of business consistent with past practice;
(g) (i) incur, assume or pre-pay any long-term debt or incur or assume any
short-term debt, (ii) assume except in the ordinary course of business
consistent with past practice, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person or (iii) make any advances except in the ordinary course of
business consistent with past practice (other than advances to Salomon Smith
Barney required under a letter agreement between Salomon Smith Barney and the
Company dated February 24, 1998), loans or capital contributions to, or
investments in, any other person (except for investments in short-term interest
bearing instruments purchased with excess cash of the Company, and for loans,
advances, capital contributions or investments between any wholly-owned
Subsidiary of the Company and the Company or another wholly-owned Subsidiary of
the Company); (h) settle or compromise any material suit or claim or material
threatened suit or claim; (i) other than in the ordinary course of business
consistent with past practice, (i) modify, amend or voluntarily terminate any
contract, (ii) waive, release, relinquish or assign any contract (or any rights
of the Company or any of its Subsidiaries thereunder), right or claim, or (iii)
cancel or forgive any indebtedness owed to the Company or any of its
Subsidiaries except for any indebtedness relating to goods properly returned to
the Company; (j) make any tax election not required by law or settle or
compromise any tax liability, in either case that is material to the Company and
its Subsidiaries; (k) make any material change, other than in the ordinary
course of business and consistent with past practice or as required by
applicable law, regulation or change in generally accepted accounting
principles, applied by the Company (including tax accounting principles); (l)
release any person or entity from, or waive any provision of, any standstill
agreement to which it is a party or any confidentiality agreement between it and
another person or entity; or (m) agree in writing or otherwise to take any of
the foregoing actions or any action which would cause any representation or
warranty in the Merger Agreement to be or become untrue or incorrect in any
material respect.
ALTERNATIVE PROPOSALS. Pursuant to the Merger Agreement, the Company has
agreed that it and its Subsidiaries (a) will not, and will ensure that their
respective officers, directors and consultants (including, but not limited to,
investment bankers, attorneys and accountants) and will use their best efforts
to ensure that its employees, representatives and agents do not, directly or
indirectly, initiate, solicit
9
<PAGE>
participate in or encourage discussions or negotiations with, or provide any
information to any other person concerning any proposal or offer to acquire all
or a substantial part of the business of, or any capital stock, of the Company
or any of its Subsidiaries, whether by merger, tender offer, exchange offer,
sale of assets or similar transactions involving the Company or any of its
Subsidiaries (an "Acquisition Proposal"); and (b) will immediately cease any
existing discussions or negotiations, if any, with any parties conducted prior
to entering into the Merger Agreement with respect to any proposal.
Notwithstanding the foregoing, the Merger Agreement does not prohibit the
Company or the Company's Board from (i) taking and disclosing to the Company's
stockholders a position with respect to a tender or exchange offer by a third
party pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act, or
(ii) making such disclosure to the Company's stockholders as, in the good faith
judgment of the Board, after receiving advice from Company counsel, is required
under applicable law; provided that the Company may not, except as described
below, withdraw or modify its position with respect to the Offer or the Merger
or approve or recommend, or propose to approve or recommend any Acquisition
Proposal, or enter into any agreement with respect to any Acquisition Proposal.
Notwithstanding the foregoing, the Company may furnish information
concerning the Company and its Subsidiaries to any corporation, partnership,
person or other entity or group pursuant to appropriate confidentiality
agreements with terms substantially similar to those contained in the
Confidentiality Agreement, and may negotiate and participate in discussions and
negotiations with such entity or group concerning an Acquisition Proposal if (i)
such entity or group, which has not been solicited by or on behalf of the
Company after the date of the Merger Agreement, has submitted a bona fide
written proposal to the Company relating to the acquisition of all or
substantially all of the business or properties of the Company and its
Subsidiaries or the acquisition of all of the capital stock of the Company with
respect to which the Board concludes in good faith, after consulting with a
nationally recognized investment banking firm (including but not limited to
Salomon Smith Barney), (A) the proposal is more favorable to the Company's
stockholders (in their capacities as stockholders), from a financial point of
view, than the Offer and the Merger and (B) the bidder is fully capable of
completing the transaction in accordance with the terms of such proposal, and
(ii) in the good faith opinion of the Board of Directors of the Company, only
after receipt of written advice from legal counsel to the Company, the failure
to provide such information or access or to engage in such discussions or
negotiations would cause the Board of Directors to violate its fiduciary duties
to the Company's stockholders under applicable law (an Acquisition Proposal
which satisfies clauses (i) and (ii) being referred to herein as a "Superior
Proposal"). The Company is required to provide reasonable notice to Purchaser to
the effect that it has received an Acquisition Proposal, including its terms and
conditions (but excluding the identity of the party or parties making such
Acquisition Proposal, unless the terms and conditions of such Acquisition
Proposal contains a purchase price that includes stock of such party or
parties). At any time after 48 hours following notification to Purchaser of the
Company's intent to do so (which notification shall include the identity of the
bidder and the material terms and conditions of the proposal) and if the Company
has otherwise complied with the terms of the Merger Agreement, the Board of
Directors may withdraw or modify its approval or recommendation of the Offer and
may cause the Company to enter into an agreement with respect to a Superior
Proposal, provided it shall, concurrently with entering into such agreement, pay
or cause to be paid to Purchaser the Termination Fee (as defined below) plus any
amount payable at the time for Reimburseable Expenses (as defined below). If the
Company shall have notified Purchaser of its intent to enter into an agreement
with respect to a Superior Proposal in compliance with the preceding sentence
and has otherwise complied with such sentence, the Company may enter into an
agreement with respect to such Superior Proposal (with the bidder and on terms
no less favorable than those specified in such notification to Purchaser) after
the expiration of such 48 hour period.
10
<PAGE>
DIRECTORS' AND OFFICERS' INDEMNIFICATION. The Merger Agreement provides
that (a) from and after June 10, 1998, Parent and Purchaser shall indemnify and
hold harmless each person who is, or has been at any time prior to June 10, 1998
or who becomes prior to the Effective Time, an officer, director or employee of
the Company or any of its Subsidiaries (collectively, the "Indemnified Parties"
and individually, the "Indemnified Party") against all losses, liabilities,
expenses, claims or damages in connection with any claim, suit, action,
proceeding or investigation based in whole or in part on the fact that such
Indemnified Party is or was a director, officer or employee of the Company or
any of its Subsidiaries and arising out of acts or omissions occurring prior to
and including the Effective Time (including but not limited to the transactions
contemplated by the Merger Agreement) to the fullest extent permitted by the
GCL, for a period of not less than six years following the Effective Time;
provided, however, that in the event any claim or claims are asserted or made
within such six-year period, all rights to indemnification in respect of any
such claim or claims shall continue until final disposition of any and all such
claims; (b) Parent shall cause the Certificate of Incorporation and By-Laws of
the Surviving Corporation and its Subsidiaries to include provisions for the
limitation of liability of directors and indemnification of the Indemnified
Parties to the fullest extent permitted under applicable law and shall not
permit the amendment of such provisions in any manner adverse to the Indemnified
Parties, as the case may be, without the prior written consent of such persons,
for a period of six years from and after June 10, 1998; (c) without limitation
of the foregoing, in the event any such Indemnified Party is or becomes involved
in any capacity in any action, proceeding or investigation in connection with
any matter, including, without limitation, the transactions contemplated by the
Merger Agreement, occurring prior to, and including, the Effective Time, Parent
will pay as incurred such Indemnified Party's legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith, subject to the provision by such Indemnified Party of an undertaking
to reimburse such payments in the event of a final determination by a court of
competent jurisdiction that such Indemnified Party is not entitled thereto.
Subject to the undertaking to reimburse referred to in the previous sentence,
Parent shall pay all expenses, including attorneys' fees, that may be incurred
by any Indemnified Party in enforcing the indemnity and other obligations
provided for in the Merger Agreement or any action involving an Indemnified
Party resulting from the transactions contemplated by the Merger Agreement; and
(d) any determination to be made as to whether any Indemnified Party has met any
standard of conduct imposed by law shall be made by legal counsel reasonably
acceptable to such Indemnified Party, Parent and the Surviving Corporation,
retained at Parent's and the Surviving Corporation's expense.
CONDITIONS TO THE MERGER. The Merger Agreement provides that the respective
obligations of each party to effect the Merger shall be subject to the
satisfaction, at or prior to the Effective Time, of the following conditions:
(a) if required by the GCL, the transactions contemplated by the Merger
Agreement shall have been approved by the Company's stockholders; (b) the
consummation of the Merger shall not be restrained, enjoined or prohibited by
any order, judgment, decree, injunction or ruling of a court of competent
jurisdiction or any Governmental Entity and there shall not have been any
statute, rule or regulation enacted, promulgated or deemed applicable to the
Merger by any Governmental Entity which prevents the consummation of the Merger;
and (c) Parent and/or Purchaser shall have purchased all Shares validly tendered
and not withdrawn pursuant to the Offer; provided, however, that the foregoing
condition shall not be applicable to the obligations of Parent or Purchaser if
Parent and/or Purchaser fails to purchase Shares tendered pursuant to the Offer
in violation of the terms of the Merger Agreement or the Offer.
TERMINATION. The Merger Agreement provides that it may be terminated at any
time prior to the Effective Time: (a) by the mutual consent of Parent and the
Company; (b) by Parent or the Company: (i) if any court or Governmental Entity
shall have issued an order, decree or ruling or taken any other action (which
order, decree, ruling or other action the parties hereto shall use their
reasonable best efforts to lift) restraining, enjoining or otherwise prohibiting
the Merger and such order, decree, ruling or other action shall have become
final and nonappealable; or (ii) if (A) the Offer shall have expired without any
Shares being purchased therein or (B) Purchaser shall not have accepted for
payment all Shares tendered
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<PAGE>
pursuant to the Offer by March 31, 1999; provided, however, that the right to
terminate the Merger Agreement under this provision shall not be available to
any party whose failure to fulfill any obligation under the Merger Agreement has
been the cause of, or resulted in, the failure of Purchaser, to purchase the
Shares pursuant to the Offer on or prior to such date; (c) by the Company: (i)
if Parent and/or Purchaser fails to commence the Offer as required under the
Merger Agreement unless the Company has breached its obligations under the
Merger Agreement such as to cause a Material Adverse Effect on the Company; (ii)
in connection with entering into a definitive agreement with respect to a
Superior Proposal, provided it has complied with all provisions relating to
Superior Proposals set forth above, including the notice provisions, and that it
makes simultaneous payment of the Termination Fee (as defined below) plus any
amounts then due as a reimbursement of expenses; or (iii) if Parent or Purchaser
shall have made a material misrepresentation or have breached in any material
respect any of their respective representations, covenants or other agreements
contained in the Merger Agreement, which breach (A) cannot be or has not been
cured, in all material respects, within 30 days after the giving of written
notice to Parent or Purchaser, as applicable, and (B) limits or restricts the
ability of Parent or Purchaser to consummate the transactions contemplated in
the Merger Agreement; (d) by Parent: (i) if prior to the purchase of Shares
pursuant to the Offer, the Company shall have breached any representation,
warranty, covenant or other agreement contained in the Merger Agreement which
(A) would give rise to the failure of a condition set forth in paragraphs (b)(v)
or (b)(vi) appearing in this Statement under the caption "THE OFFER," above, and
(B) cannot be or has not been cured, in all material respects, within 30 days
after the giving of written notice to the Company; or (ii) if any event set
forth in paragraph (b)(iv) of this Statement under the caption "THE OFFER,"
shall have occurred.
EFFECT OF TERMINATION. In the event of the termination of the Merger
Agreement in accordance with the foregoing, the Merger Agreement shall become
void and have no effect, without any liability on the part of any party or its
directors, officers or stockholders, except to the extent that a Termination Fee
and Reimbursable Expenses are owed as set forth below, and with respect to
Parent's obligations under the Confidentiality Agreement.
TERMINATION FEE AND EXPENSES. The Merger Agreement provides that each party
thereto shall bear its own expenses and costs in connection with the Merger
Agreement and the transactions contemplated thereby, except that the Company
shall pay to Purchaser an amount equal to Seven Million Five Hundred Thousand
Dollars ($7,500,000) (the "Termination Fee"), plus an amount equal to
Purchaser's actual documented reasonable out-of-pocket fees and expenses
(including, without limitation, reasonable legal, investment banking, financing
commitment fees and commercial banking fees and expenses) incurred by Purchaser
and Parent in connection with the due diligence investigation, the Offer, the
Merger, the Merger Agreement and the consummation of the transactions
contemplated thereby (the "Reimbursable Expenses") if (a) the Company terminates
the Merger Agreement in accordance with paragraph (c)(ii) under the caption
"TERMINATION" above; (b) Parent terminates the Merger Agreement in accordance
with paragraph (d)(ii) under the caption "TERMINATION" above; (c) either the
Company or Parent terminates the Merger Agreement in accordance with paragraph
(b)(ii) under the caption "TERMINATION" above, and (i) prior thereto there shall
have been publicly announced another Acquisition Proposal (provided, however,
that solely for purposes of this clause, the term Acquisition Proposal shall not
include (A) the purchase of less than 5% of any class or series of capital stock
of the Company if such purchase does not involve an offer to acquire additional
shares of capital stock of the Company that could cause any person, entity or
"group" (as defined in Section 13(d)(3) of the Exchange Act), other than
Purchaser or its affiliates or any group of which any of them is a member, to
beneficially own 5% or more of any such class or series or (B) any purchase of
5% or more of any class or series of capital stock of the Company which can
properly be reported on a Schedule 13G under the Exchange Act) and (ii) an
Acquisition Proposal pursuant to which any Person acquires all or a substantial
part of the business or properties of the Company or any of its Subsidiaries,
any of the capital stock (or securities exercisable for or convertible into such
capital stock) of any of the Subsidiaries of the Company or any capital stock
(or securities exercisable for or convertible into such capital stock) of the
Company which
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<PAGE>
represents 20% or more of the equity interest or voting power of the Company
shall be consummated on or prior to March 31, 1999; or (d) Parent terminates the
Merger Agreement in accordance with paragraph (d)(i) under the caption
"TERMINATION" above, and an Acquisition Proposal pursuant to which any Person
acquires all or a substantial part of the business or properties of the Company
or any of its Subsidiaries, any of the capital stock (or securities exercisable
for or convertible into such capital stock) of any of the Subsidiaries of the
Company or any capital stock (or securities exercisable for or convertible into
such capital stock) of the Company which represents 20% or more of the equity
interest or voting power of the Company shall be consummated on or prior to
March 31, 1999.
The Company shall also be obligated to pay to Purchaser the Reimbursable
Expenses if Parent terminates the Merger Agreement in accordance with paragraph
(d)(i) under the caption "TERMINATION" above (regardless of whether an
Acquisition Proposal is consummated thereafter).
AMENDMENT. The Merger Agreement may be amended by Parent and the Company at
any time before or after any approval of the Merger Agreement by the
stockholders of the Company but, after any such approval, no amendment shall be
made which decreases the Offer Price or changes the form thereof without the
approval of such stockholders.
STOCK OPTION AGREEMENT.
Concurrently with the execution of the Merger Agreement, the Company has
entered into a Stock Option Agreement (the "Stock Option Agreement") with Parent
pursuant to which Parent obtained an option to purchase up to 698,540 shares of
the Company's common stock at a price per share of $73.50 payable in cash. The
shares subject to the option represent 19.9% of the presently outstanding shares
of the Company. The following summary of the Stock Option Agreement does not
purport to be complete and is qualified in its entirety by reference to the
complete text of the Stock Option Agreement which is attached as EXHIBIT 2
hereto.
The option may be exercised from time to time prior to its expiration only
after an event has occurred which requires the payment under the Merger
Agreement of a Termination Fee (a "Triggering Event") (See the discussion in
this Statement under the caption "TERMINATION FEE AND EXPENSES" above). The
option expires on the earlier of (a) the date of the consummation of the Merger
contemplated by the Merger Agreement; (b) twenty (20) days after the date of
consummation of any Superior Proposal or Acquisition Proposal under
circumstances requiring payment of a Termination Fee; or (c) the date on which
the Merger Agreement is terminated other than in connection with the occurrence
of a Triggering Event.
The Company has agreed that, at the request of Parent, it will file
applications to list Option Shares on the NASDAQ National Market System and that
at its own expense it will file one registration statement under the Securities
Act of 1933 with respect to any proposed disposition of Option Shares unless
counsel to the Company shall opine in writing that such a registration statement
is not required. The Company has covenanted that, except under certain
conditions, it will cause such registration statement to remain effective for a
reasonable period of time to permit the disposition by Parent of the shares
subject to the Option.
STOCK PURCHASE AGREEMENTS.
Concurrently with the execution of the Merger Agreement, Purchaser also
entered into Stock Purchase Agreements (the "Stock Purchase Agreements") with
certain stockholders of the Company listed below (the "Stockholders") with
respect to Shares owned beneficially and/or of record by such Stockholders. The
following summary of the Stock Purchase Agreements does not purport to be
complete and is
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<PAGE>
qualified in its entirety by reference to the complete text of the Stock
Purchase Agreements for the stockholders which are attached as EXHIBIT 4 THROUGH
8 hereto and are incorporated by reference:
<TABLE>
<S> <C>
423,485
Martin and Arlene Tash....................................... shares
Mark and Hally Shaw.......................................... 80,667 shares
Ghanshyam and Anila Patel.................................... 10,554 shares
Bernard Bressler............................................. 11,757 shares
Teresa Bressler.............................................. 10,497 shares
-------------
536,960
shares
</TABLE>
Said 536,960 shares represent 15.3% of the outstanding shares of the Company.
Pursuant to the Stock Purchase Agreements, the Stockholders have agreed to
tender their shares in response to the Offer or at the election of Purchaser to
sell such shares if not tendered. The Stockholders have also granted Purchaser
an option exercisable under certain conditions (the "Stock Option").
The Stock Option may be exercised by Purchaser if (i) the Offer is
terminated by Parent or Purchaser because (A) the Company shall have entered
into a definitive agreement with respect to any Superior Proposal as provided
under the caption "ALTERNATIVE PROPOSALS" above, or (B) the Company's Board of
Directors or any committee thereof shall have withdrawn or modified in a manner
adverse to Parent or Purchaser its recommendation of the Offer, the Merger
Agreement or the Merger or approved or recommended any Acquisition Proposal, or
(ii) if the Offer expires without the purchase of Shares thereunder when either
(x) the Minimum Condition was not satisfied or (y) the occurrence of
circumstances in subclauses (i) (A) and (B) of this sentence, in each case
without any violation of the Offer or the Merger Agreement by Purchaser or
Parent. Purchaser may also exercise the Stock Option if the Company terminates
the Merger Agreement for the reasons described in clause (c)(ii) under "The
Merger Agreement --Termination" above. The Stock Option may be exercised under
those circumstances during the period (the "Exercise Period") commencing on the
date the Offer is terminated or expires, as described above, and ending on March
31, 1999.
The delivery of the Shares subject to the Stock Purchase Agreements is
conditioned upon (i) the waiting periods under the HSR Act expiring or
terminating and (ii) there being no order of a court of competent jurisdiction
restricting or prohibiting the exercise of the Stock Option or the delivery of
the Shares thereunder.
Pursuant to the Stock Purchase Agreements, the Stockholders have agreed to
vote all Shares held by such Stockholders (i) in favor of the Merger, the Merger
Agreement and the transactions contemplated thereby and (ii) against any action
or agreement that would result in a breach of a covenant, representation or
warranty or other obligation of the Company under the Merger Agreement and (iii)
against any action or agreement that would reasonably be expected to impede,
interfere with, delay or attempt to discourage the Offer or the Merger.
The Stockholders have covenanted not to solicit or participate in
negotiations with any Company concerning any proposal or offer to acquire all or
substantially all of the business or assets of the Company. This covenant does
not restrict the ability of the Stockholders to act in their capacity as
directors with respect to Superior Proposals described in the Merger Agreement.
Each of the Stockholders has agreed that, during the Exercise Period, in the
event that such Stockholder has breached the voting agreements described above,
such Stockholder shall be deemed to have granted to Purchaser proxies to vote
his or her Shares.
Each Stock Purchase Agreement provides that except for the Stock Option, the
Stock Purchase Agreement terminates on the date the Merger Agreement terminates.
In addition, Parent has guaranteed performance by Purchaser under the Stock
Purchase Agreements.
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<PAGE>
WOLTERS KLUWER LETTER.
In connection with the Merger Agreement, Wolters Kluwer U.S. Corporation
("Wolters Kluwer U.S."), an indirect parent of Parent and Purchaser, has agreed
to fund the payment obligations of Parent and Purchaser under the Merger
Agreement pursuant to a letter from Wolters Kluwer U.S. to the Company dated
June 10, 1998, a copy of which is filed herewith as EXHIBIT 9 (the "Wolters
Kluwer U.S. Letter"). Wolters Kluwer U.S. agreed to fund such obligations
through available cash balances and existing credit lines of Wolters Kluwer nv,
a corporation existing under the laws of the Netherlands ("Wolters Kluwer") and
an indirect parent of Wolters Kluwer U.S., Parent and Purchaser. Wolter Kluwer
U.S. also represented and warranted that there are available cash balances and
bank credit lines to enable it to meet the obligations in the letter.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(A) RECOMMENDATION OF THE COMPANY BOARD
The Company Board has unanimously approved the Merger Agreement, the Offer
and the Merger, has unanimously determined that the Offer and the Merger are
fair to, and in the best interests of, the Company's stockholders, and
recommends that the Company's stockholders accept the Offer and tender their
Shares in the Offer.
A letter to the Company's stockholders communicating the Company Board's
recommendation and a press release announcing the execution of the Merger
Agreement are filed herewith as EXHIBITS 10 AND 11, respectively.
(B) BACKGROUND REASONS; REASONS FOR THE COMPANY BOARD'S RECOMMENDATION.
Over the past decade the Company has sought possible collaborations or
acquisitions but found no reasonably available substantial acquisition. During
this period no serious effort was made to sell the Company. The Company has used
the cash generated from its business to pay dividends and to repurchase its
Shares as market opportunities arose. As a result of (i) consolidation
developments in the publishing industry as a whole and the scientific, technical
and medical publishing industry specifically, (ii) the potential changes in the
industry by reason of the development of the internet and (iii) the decrease in
the Company's dependence on its Russian translation activities, management
considered it advisable to review a range of strategic alternatives to enhance
stockholder value and initiated a dialogue with investment bankers in December
1997. The strategic alternatives considered included, among others, possible
acquisitions and the potential sale of the Company, whether to management or to
others. On February 24, 1998 the Company retained Salomon Smith Barney to render
financial advisory and investment banking services to the Company in connection
with the sale of the Company. A press release announcing such retention was
issued immediately. The Company instructed Salomon Smith Barney to initiate a
process to explore the sale of the entire equity interest in the Company through
an auction process (the "Auction Process").
At a Board Meeting on March 12, 1998, the Salomon Smith Barney engagement
was ratified and Salomon Smith Barney presented a list of leading candidates
that might be expected to have an interest in potentially purchasing the
Company, outlined a description of the Auction Process and presented a
preliminary timetable for a potential transaction.
Throughout March and April, 1998, Salomon Smith Barney contacted 53
potential buyers and together with the Company and the Company's legal counsel,
Salomon Smith Barney negotiated and executed confidentiality agreements with 35
parties that expressed an interest in participating in the Auction Process.
Salomon Smith Barney prepared a "Confidential Offering Memorandum" based on
information provided by the Company. This Confidential Offering Memorandum was
provided to the parties with
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<PAGE>
whom confidentiality agreements had been executed to assist such parties in
evaluating an acquisition of the Company. The Confidential Offering Memorandum
contained, among other things, a history of the Company, an overview of the
Company's business and financial information, including the Company's Form 10-K
for calendar year 1997. Parties receiving the Confidential Offering Memorandum
were instructed to submit a preliminary indication of interest to Salomon Smith
Barney by May 5, 1998. The preliminary indication of interest was to include,
among other things, a non-binding indication of the amount and form of
consideration the submitting party would be prepared to pay for the common
equity of the Company and the source of financing of the potential transaction.
On May 5, 1998, Salomon Smith Barney on behalf of the Company received five
preliminary indications of interest. After consulting with Salomon Smith Barney,
the Company's management selected three of the parties submitting preliminary
indications of interest to continue in the Auction Process.
On May 11, 1998 Salomon Smith Barney on behalf of the Company sent to the
three potentially interested parties a letter (the "Bid Procedures Letter")
setting forth further procedures for the Auction Process and a form of the
Merger Agreement which had been prepared by the Company. The parties were
invited to submit a firm written offer by May 29, 1998 to acquire the Company (a
"Proposal"). Each party was asked to mark changes in the form of the Merger
Agreement and to include in the Proposal a statement that such party would be
prepared to execute the Agreement and Plan of Merger (with any proposed
modifications) in the form submitted. Pursuant to the Bid Procedures Letter,
submission of a Proposal constituted an agreement to be bound by the terms set
forth therein.
Thereafter, between May 14 and May 22, 1998, each of the three parties
invited to participate in the second stage of the Auction Process made trips to
New York to conduct a due diligence review of the Company, which included
presentations by, and discussions with, the management of the Company and a
detailed review of the Company's legal, regulatory and financial documents.
From May 29 through June 3, 1998, Salomon Smith Barney, the Company and the
Company's legal counsel met to evaluate the responses received from the
potential purchasers. After such discussions the Company concluded that the
Proposal submitted by Wolters Kluwer U.S. on behalf of Parent (the "Wolters
Kluwer Proposal") which included a requirement that the Company also execute the
Stock Option Agreement appeared to be the most favorable to the Company and its
stockholders, both as to price and other terms, and authorized Salomon Smith
Barney to begin negotiations with Parent and its financial advisors on several
issues.
On June 3, 1998, Salomon Smith Barney discussed the Wolters Kluwer Proposal
with Parent's financial advisor. On the evening of June 3, 1998, the Company and
the Company's legal counsel discussed the merits of the Wolters Kluwer Proposal.
At the conclusion of this discussion, the Company determined to enter into
exclusive negotiations with Parent through their respective financial and legal
advisors. On June 4, 1998, the Company's legal counsel and legal counsel for
Parent negotiated provisions of the Merger Agreement and Stock Option Agreement
and agreement was reached on all substantive matters subject to final approval
and completion of legal documentation. On that date the parties executed an
Exclusivity Agreement pursuant to which the Parent agreed to keep its offer open
until June 24, 1998, and in exchange the Company agreed to deal only with
Parent.
On June 9, 1998 the Supervisory Board of Directors of Wolters Kluwer
approved the transaction. On June 10, 1998, the Company Board met to consider
the Wolters Kluwer Proposal and the Merger Agreement. The Company Board reviewed
and discussed alternatives to the Wolters Kluwer Proposal. Salomon Smith Barney
made a presentation to the Company Board outlining the results of the Auction
Process and discussing the Wolters Kluwer Proposal. Thereafter, the Company
Board unanimously approved the Offer, the Merger, the Merger Agreement, the
Stock Option Agreement and the consummation of the transactions set forth in
such agreements. One director was absent from the meeting.
16
<PAGE>
On June 10, 1998, the Company, Parent and Purchaser entered into the Merger
Agreement and Stock Option Agreement. Purchaser and the Stockholders entered
into the Stock Purchase Agreements.
On June 10, 1998 the Company and Wolters Kluwer issued a joint press release
announcing the execution of the Merger Agreement. A copy of the press release is
filed herewith as EXHIBIT 11.
On June 16, 1998, Parent and Purchaser commenced the Offer.
In approving the Offer, the Merger, the Merger Agreement and the other
transactions contemplated thereby and recommending that all holders of Shares
accept the Offer and tender their Shares pursuant to the Offer, the Company
Board considered a number of factors, including:
1. The presentations and views expressed by management of the Company
(at the meeting of the Company Board held on June 10, 1998, and at previous
meetings of the Company Board) regarding, among other things: (a) the
financial condition, results of operations, cash flows, business and
prospects of the Company; including the prospects of the Company if it
remained independent; (b) the strategic alternatives available to the
Company; (c) the fact that in view of the discussions held with various
parties, as well as the Auction Process conducted, it appeared to be
unlikely that any other party would propose an acquisition or strategic
business combination that would be more favorable to the Company and its
stockholders than the Offer and the Merger; and (d) the recommendation of
the Merger by the management of the Company and the willingness of certain
officers of the Company to enter into binding commitments to sell the stock
owned by them.
2. The opinion of Salomon Smith Barney, expressed orally at the June
10, 1998 Board meeting (and subsequently confirmed in writing), to the
effect that, as of June 10, 1998, the consideration to be received by the
Company's stockholders pursuant to the Merger Agreement is fair, from a
financial point of view, to the Company's stockholders. The full text of the
opinion of Salomon Smith Barney, dated June 10, 1998, which sets forth the
assumptions made, matters considered and limitations on the review
undertaken by Salomon Smith Barney, is attached hereto as EXHIBIT 12.
Stockholders are urged to read the opinion of Salomon Smith Barney carefully
in its entirety for information concerning the assumptions made, matters
considered and the limits of the review undertaken by Salomon Smith Barney.
3. The historical market prices, the recent limited trading activity of
the Shares and the fact that the Offer Price represents a premium of
approximately 58% over the reported closing price of the Shares on the
National Association of Securities Dealers Automatic Quotation system on the
last full trading day preceding the public announcement of the retention of
Salomon Smith Barney.
4. The results of the inquiries made by the Company's management and
financial advisor in the Auction Process regarding a possible sale of the
Company and the public nature of the Auction Process itself.
5. The arms-length negotiations between the Company and Parent leading
to the belief of the Company Board that $73.50 per Share represents the
highest price per Share that could be negotiated with Parent.
6. The fact that the Offer and the Merger provide for a prompt all-cash
tender offer for all Shares to be followed by a merger for the same
consideration, thereby enabling the Company's stockholders to obtain the
benefits of the transaction in exchange for their Shares at the earliest
possible time.
7. Other provisions of the Offer and the Merger Agreement, including
the parties' representations, warranties and covenants, the conditions to
their respective obligations, and the limited ability of Parent and the
Purchaser to terminate the Wolters Kluwer Proposal or the Merger Agreement.
17
<PAGE>
8. The ability of the Company to withdraw from the Merger Agreement if
an appropriate Superior Proposal is received.
9. The business reputation and capabilities of Parent and its
management, and Parent's financial strength, including its warranted ability
to fund the offer.
The foregoing discussion of information and factors considered and given
weight by the Company Board is not intended to be exhaustive. In view of the
variety of factors considered in connection with its evaluation of the Offer and
the Merger, the Company Board did not find it practicable to, and did not,
quantify or otherwise assign relative weights to the specific factors considered
in reaching its determinations and recommendations. In addition, individual
members of the Company Board may have given different weights to different
factors.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Pursuant to the terms of the Engagement Letter, the Company retained Salomon
Smith Barney to render financial advisory and investment banking services to the
Company in connection with the possible sale of the Company or an interest in
the Company. The Company has agreed to pay Salomon Smith Barney a fee of 1.1% of
the aggregate consideration received in any sale transaction. No expenses are
reimburseable pursuant to such engagement. $500,000 of this amount has been paid
pursuant to the engagement letter, with the balance payable at the consummation
of the transactions contemplated by the Merger Agreement. On May 28, 1998 the
Company entered into an additional engagement letter with Salomon Smith Barney
pursuant to which Salomon Smith Barney agreed to render a fairness opinion
relating to the fairness, from a financial point of view, to the Company's
stockholders of the consideration to be offered in the proposed acquisition of
the Company. The fee for the fairness opinion is $250,000 plus legal fees
associated with the review of this opinion. Pursuant to these Engagement
Letters, the Company has agreed to indemnify Salomon Smith Barney and its
directors, officers, agents, employees and controlling persons for certain
costs, expenses and liabilities, including liabilities under federal securities
laws, to which it might be subjected arising out of the agreements.
Except as disclosed herein, neither the Company nor any person acting on its
behalf has employed, retained or compensated any person to make solicitations or
recommendations to the Company's stockholders with respect to the Offer or the
Merger.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) Except for the donation to various charities of 1,000 shares of the
Company's stock by Bernard Bressler, Secretary and a director of the Company, no
transactions in the Shares have been effected during the past 60 days by the
Company or, to the best of the Company's knowledge, by any executive officer,
director, affiliate or Subsidiary of the Company.
(b) To the best knowledge of the Company, all of its executive officers,
directors, affiliates and subsidiaries currently intend to tender, pursuant to
the Offer, all Shares held of record or beneficially owned by them.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as set forth in this Schedule 14D-9, the Company is not engaged
in any negotiation in response to the Offer which relates to or would result in
(i) an extraordinary transaction, such as a merger or reorganization, involving
the Company or any subsidiary of the Company; (ii) a purchase, sale or transfer
of a material amount of assets by the Company or any Subsidiary of the Company;
(iii) a tender offer for or other acquisition of securities by or of the
Company; or (iv) any material change in the present capitalization or dividend
policy of the Company. The Company has not declared any dividend for the second
quarter of 1998.
18
<PAGE>
(b) Except as described in Item 3(b) and Item 4 above (the provisions of
which are hereby incorporated by reference), there are no transactions, board
resolutions, agreements in principle or signed contracts in response to the
Offer which relate to or would result in one or more of the matters referred to
in paragraph (a) of this Item 7.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The Company intends to file with the Commission and furnish to stockholders
an Information Statement pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder in connection with the possible designation by
Parent, pursuant to the Merger Agreement, of certain persons to be appointed to
the Company Board other than at a meeting of the Company's stockholders.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
Exhibit 1 Agreement and Plan of Merger dated as of June 10, 1998, by and among the
Company, Parent and Purchaser.
Exhibit 2 Stock Option Agreement between Parent and the Company dated June 10, 1998.
Exhibit 3 Confidentiality Agreement dated April 6, 1998 between the Company and Parent.
Exhibit 4 Stock Purchase Agreement, dated as of June 10, 1998, between Purchaser and
Martin Tash and Arlene Tash, together with a Guaranty of Parent.
Exhibit 5 Stock Purchase Agreement, dated as of June 10, 1998, between Purchaser and Mark
Shaw and Hally Shaw, together with a Guaranty of Parent.
Exhibit 6 Stock Purchase Agreement, dated as of June 10, 1998, between Purchaser and
Ghanshyam Patel and Anita Patel, together with a Guaranty of Parent.
Exhibit 7 Stock Purchase Agreement, dated as of June 10, 1998, between Purchaser and
Bernard Bressler, together with a Guaranty of Parent.
Exhibit 8 Stock Purchase Agreement, dated as of June 10, 1998, between Purchaser and
Teresa, Bressler, together with a Guaranty of Parent.
Exhibit 9 Letter from Wolters Kluwer U.S. to the Company dated June 10, 1998.
Exhibit Letter to Stockholders of the Company dated June 16, 1998.*
10
Exhibit Joint Press Release, issued by the Company and Wolters Kluwer on June 10, 1998.
11
Exhibit Opinion of Salomon Smith Barney dated June 10, 1998.*
12
</TABLE>
- ------------------------
* Included in copies of the Schedule 14D-9 mailed to stockholders.
19
<PAGE>
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.
<TABLE>
<S> <C> <C>
PLENUM PUBLISHING CORPORATION
</TABLE>
[LOGO]
<TABLE>
<S> <C> <C>
By: /s/ Martin E. Tash
-----------------------------------------
Name: MARTIN E. TASH
Title: PRESIDENT & CHIEF EXECUTIVE
OFFICER
</TABLE>
DATED: June 16, 1998
20
<PAGE>
AGREEMENT AND PLAN
OF
MERGER
----------
By and Among
PLENUM PUBLISHING CORPORATION,
KLUWER BOSTON, INC.
and
PPC ACQUISITION CORP.
June 10, 1998
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I THE OFFER........................................................1
SECTION 1.1 The Offer............................................1
SECTION 1.2 Company Action.......................................3
SECTION 1.3 Directors............................................4
ARTICLE II THE MERGER.......................................................5
SECTION 2.1 The Merger...........................................5
SECTION 2.2 Effective Time; Closing..............................5
SECTION 2.3 Effects of the Merger; Subsequent Actions............5
SECTION 2.4 Certificate of Incorporation and By-Laws of
the Surviving Corporation............................5
SECTION 2.5 Directors............................................6
SECTION 2.6 Officers.............................................6
SECTION 2.7 Conversion of Shares.................................6
SECTION 2.8 Conversion of Purchaser Common Stock.................6
SECTION 2.9 Stockholders' Meeting................................6
SECTION 2.10 Merger Without Meeting of Stockholders...............7
ARTICLE III DISSENTING SHARES; PAYMENT FOR SHARES............................7
SECTION 3.1 Dissenting Shares....................................7
SECTION 3.2 Exchange of Certificates.............................7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................9
SECTION 4.1 Organization and Qualification; Subsidiaries.........9
SECTION 4.2 Charter and By-laws..................................9
SECTION 4.3 Capitalization.......................................9
SECTION 4.4 Authority Relative to this Agreement................10
SECTION 4.5 No Conflict; Required Filings and Consents..........10
SECTION 4.6 SEC Reports and Financial Statements................11
SECTION 4.7 Information.........................................12
SECTION 4.8 Changes.............................................12
SECTION 4.9 Opinion of Financial Advisor........................13
SECTION 4.10 Takeover Statutes...................................13
SECTION 4.11 Litigation..........................................13
SECTION 4.12 Employee Plans and Arrangements.....................13
SECTION 4.13 Assets..............................................15
SECTION 4.14 Intellectual Property...............................15
SECTION 4.15 Taxes...............................................16
SECTION 4.16 Environmental Laws and Regulations..................16
SECTION 4.17 Insurance...........................................17
SECTION 4.18 Brokers.............................................17
<PAGE>
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT
AND PURCHASER...................................................18
SECTION 5.1 Organization and Qualification......................18
SECTION 5.2 Authority Relative to this Agreement and
the Stock Purchase Agreements.......................18
SECTION 5.3 No Conflict; Required Filings and Consents..........18
SECTION 5.4 Information.........................................19
SECTION 5.5 Financing...........................................19
SECTION 5.6 Brokers.............................................19
ARTICLE VI COVENANTS.......................................................19
SECTION 6.1 Conduct of Business of the Company..................19
SECTION 6.2 Access to Information...............................21
SECTION 6.3 Reasonable Best Efforts.............................22
SECTION 6.4 Consents............................................22
SECTION 6.5 Public Announcements................................23
SECTION 6.6 Indemnification.....................................23
SECTION 6.7 Notification of Certain Matters.....................24
SECTION 6.8 No Solicitation.....................................24
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER........................26
SECTION 7.1 Conditions to Each Party's Obligation
to Consummate the Merger............................26
ARTICLE VIII TERMINATION; AMENDMENTS; WAIVER...........................26
SECTION 8.1 Termination.........................................26
SECTION 8.2 Effect of Termination...............................27
SECTION 8.3 Fees and Expenses...................................27
SECTION 8.4 Amendment...........................................28
SECTION 8.5 Extension; Waiver...................................29
ARTICLE IX MISCELLANEOUS...................................................29
SECTION 9.1 Non-Survival of Representations and Warranties......29
SECTION 9.2 Entire Agreement; Assignment........................29
SECTION 9.3 Validity............................................29
SECTION 9.4 Notices.............................................29
SECTION 9.5 Governing Law.......................................31
SECTION 9.6 Consent to Jurisdiction; Waiver of Immunities.......31
SECTION 9.7 Descriptive Headings................................31
SECTION 9.8 Counterparts........................................31
SECTION 9.9 Parties in Interest.................................31
SECTION 9.10 Certain Definitions.................................31
SECTION 9.11 Specific Performance................................32
ii
<PAGE>
LIST OF SCHEDULES
Schedule 4.8 -- Material Changes
Schedule 4.11 -- Litigation
Schedule 4.12(a) -- Employee Benefit Plans
Schedule 4.12(i) -- Employment/Termination Agreements
Schedule 4.12(j) -- Labor Union
Schedule 4.14(b) -- Licenses
Schedule 4.16 -- Environmental Matters
Schedule 4.17 -- Insurance
iii
<PAGE>
LIST OF DEFINED TERMS
Page
----
Acquisition Proposal........................................................23
Affiliate...................................................................29
Agreement....................................................................1
Antitrust Laws..............................................................21
Benefit Plans...............................................................12
Board........................................................................1
Certificates.................................................................7
Closing......................................................................5
Closing Date.................................................................5
Code........................................................................12
Commonly Controlled Entity..................................................12
Company......................................................................1
Company Process Agent.......................................................28
Company Representatives.....................................................20
Confidentiality Agreement...................................................27
Consent.....................................................................10
Control.....................................................................29
Dissenting Shares............................................................7
Effective Time...............................................................5
Employee Pension Benefit Plan...............................................12
Employee Welfare Benefit Plan...............................................12
Environmental Claim.........................................................15
Environmental Laws..........................................................16
Environmental Permits.......................................................15
ERISA.......................................................................12
Exchange Act................................................................10
Executive Stock Purchase Agreement...........................................1
GAAP........................................................................11
GCL..........................................................................4
Governmental Entity.........................................................10
HSR Act.....................................................................10
Hazardous Materials.........................................................16
Indemnified Parties.........................................................21
Indemnified Party...........................................................21
Independent Directors........................................................4
Intellectual Property.......................................................14
Lien.........................................................................9
Material Adverse Effect on the Company.......................................8
Material Adverse Effect on Parent...........................................16
Merger.......................................................................4
Minimum Condition............................................................1
iv
<PAGE>
Offer........................................................................1
Offer Documents..............................................................1
Offer to Purchase............................................................1
Other Filings...............................................................11
Parent.......................................................................1
Parent Process Agent........................................................28
Parent Representatives......................................................20
Paying Agent.................................................................7
PBGC........................................................................13
Pension Plan................................................................12
Person......................................................................29
Preferred Stock..............................................................9
Prohibited Transaction......................................................13
Proxy Statement..............................................................6
Purchaser....................................................................1
Purchase Price...............................................................1
Reimbursable Expenses.......................................................26
Reportable Event............................................................13
Schedule 14D-1...............................................................2
Schedule 14D-9...............................................................3
SEC..........................................................................1
SEC Reports.................................................................10
Shares.......................................................................1
Significant Subsidiaries.....................................................8
Superior Proposal...........................................................23
Stockholders' Meeting........................................................6
Subsidiaries................................................................29
Subsidiary..................................................................29
Salomon Smith Barney........................................................12
Surviving Corporation........................................................4
Tax.........................................................................15
Taxes.......................................................................15
Tax Returns.................................................................15
Termination Fee.............................................................26
Violation...................................................................10
Voting Debt..................................................................9
Welfare Plan................................................................12
v
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of June 10,
1998, by and among Kluwer Boston, Inc., a Massachusetts corporation ("Parent"),
PPC Acquisition Corp., a Delaware corporation and subsidiary of Parent
("Purchaser"), and Plenum Publishing Corporation (the "Company"), a Delaware
corporation.
WHEREAS, the respective Boards of Directors of Parent, Purchaser and the
Company deem it advisable and in the best interests of the stockholders of such
corporations to effect the merger of Purchaser and the Company pursuant to this
Agreement;
WHEREAS, the respective Boards of Directors of Parent, Purchaser and the
Company have approved the acquisition of the Company by Parent and, in
furtherance of such acquisition, Parent proposes to make or to cause Purchaser
to make a cash tender offer (the "Offer") for all of the outstanding shares of
common stock of the Company, par value $.10 per share (the "Shares"), at a price
of $73.50 net to the seller per Share (the "Purchase Price") on the terms set
forth in the Offer Documents (as such term is defined below), and the Board of
Directors of the Company (the "Board") has unanimously approved the Offer and
resolved to recommend that it be accepted by the stockholders of the Company;
WHEREAS, certain stockholders of the Company and Parent are entering into
Stock Purchase Agreements, dated as of the date hereof ("Stock Purchase
Agreements"), pursuant to which the Company, and such stockholders will, among
other things, agree to sell Shares to Parent under certain circumstances; and
WHEREAS, the Company and Parent are entering into an Option Agreement,
dated as of the date hereof ("Option Agreement"), pursuant to which the Company
will grant to Parent an option to acquire an additional 19.9% of its Shares at
the Purchase Price.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer.
(a) Provided that nothing shall have occurred that would result in the
failure of any of the conditions set forth in Annex I hereto, Parent and
Purchaser shall, as promptly as practicable following the date hereof and in any
event not later than five (5) business days after the public announcement of the
execution hereof, commence their Offer to purchase the Shares at a price equal
to the Purchase Price. The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase" and, together with a letter of transmittal relating
thereto, the "Offer Documents") which shall be subject solely to the condition
that there be validly tendered and not withdrawn prior to the expiration of the
Offer that number of Shares
1
<PAGE>
which, when added to any Shares acquired pursuant to the Stock Purchase
Agreements simultaneously with the acceptance of Shares pursuant to the Offer,
represents at least a majority of the Shares outstanding on a fully diluted
basis (the "Minimum Condition") and to the other conditions set forth in Annex I
hereto (including the expiration of applicable waiting periods under the HSR Act
(as hereinafter defined)). As soon as practicable, Parent and Purchaser shall
file with the Securities and Exchange Commission (the "SEC") a Schedule 14D-1
(which schedule, together with all amendments and supplements thereto, is
hereinafter referred to as the "Schedule 14D-1") with respect to the Offer. The
Company and its counsel shall be given the opportunity to review the Schedule
14D-1 (as defined below) before it is filed with the SEC. In addition, Parent
and Purchaser agree to provide the Company and its counsel with any comments,
whether written or oral, that Parent and/or its counsel may receive from time to
time from the SEC or its staff with respect to the Schedule 14D-1 promptly after
the receipt of such comments or other communications. Without the prior written
consent of the Company, neither Parent nor Purchaser shall decrease the price
per Share or change the form of consideration payable in the Offer, decrease the
number of Shares sought to be purchased in the Offer, change the conditions set
forth in Annex I, impose additional conditions to the Offer or amend any other
term of the Offer in any manner materially adverse to the holders of the Shares.
Subject to the terms of the Offer and this Agreement and the satisfaction or
waiver of all the conditions of the Offer set forth in Annex I hereto as of any
expiration date of the Offer, Parent and/or Purchaser will accept for payment
and pay for all Shares validly tendered and not properly withdrawn pursuant to
the Offer as soon as practicable after such expiration date of the Offer.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, (i) extend the Offer on one or more occasions for up to ten business
days for each such extension beyond the then scheduled expiration date (the
initial scheduled expiration date being 20 business days following commencement
of the Offer), if at the then scheduled expiration date of the Offer any of the
conditions to Purchaser's obligation to accept for payment and pay for the
Shares shall not be satisfied or waived, until such time as such conditions are
satisfied or waived, (ii) increase the Purchase Price and extend the Offer for
any period required by any rule, regulation, interpretation or provision of the
SEC or the staff thereof applicable to the Offer and (iii) extend the Offer for
an aggregate period of not more than 10 business days beyond the latest
expiration date that would otherwise be permitted under clause (i) or (ii) of
this sentence if there shall not have been tendered and not withdrawn pursuant
to the Offer at least 90% of the outstanding Shares.
(b) The Offer Documents will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by Parent
or Purchaser with respect to information supplied by the Company in writing for
inclusion in the Offer Documents. Each of Parent and Purchaser, on the one hand,
and the Company, on the other hand, agrees to correct promptly any information
provided by it for use in the Offer Documents if and to the extent that it shall
have become false or misleading in any material respect and Parent and Purchaser
further agree to take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to stockholders of the
Company, in each case as and to the extent required by applicable federal
securities laws.
2
<PAGE>
SECTION 1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer and
represents that, at a meeting duly called and held, its Board of Directors has
(i) unanimously determined that this Agreement and the transactions contemplated
hereby and thereby, including, without limitation, the Offer and the Merger, are
fair to and in the best interest of the Company's stockholders, (ii) unanimously
approved this Agreement and the transactions contemplated hereby and thereby,
including, without limitation, the Offer and the Merger and (iii) unanimously
resolved to recommend that the stockholders of the Company accept the Offer,
tender their Shares thereunder to Purchaser and approve and adopt this Agreement
and the Merger; provided, that such recommendation may be withdrawn, modified or
amended if, in the good faith opinion of the Directors, only after receipt of
advice from legal counsel, the failure to withdraw, modify or amend such
recommendation would result in the Board violating its fiduciary duties to the
Company's stockholders under applicable law. The Company consents to the
inclusion of such recommendation and approval in the Offer Documents.
(b) Contemporaneously with the commencement of the Offer as provided for
in Section 1.1, the Company will file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (which schedule, together with all amendments and
supplements thereto, is hereafter referred to as the "Schedule 14D-9") which
shall reflect the recommendations and actions of the Company's Board of
Directors referred to above. The Company further agrees to take all steps
necessary to cause the Schedule 14D-9 to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws. Each of the Company, on the one
hand, and Parent and Purchaser, on the other hand, agrees to promptly correct
any information provided by it for use in the Schedule 14D-9 if and to the
extent that it shall have become false or misleading in any material respect and
the Company further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to
stockholders of the Company, in each case as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given the
opportunity to review the Schedule 14D-9 before it is filed with the SEC. In
addition, the Company agrees to provide Parent and its counsel with any
comments, whether written or oral, that the Company and/or its counsel may
receive from time to time from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments or other communications.
(c) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to Parent and Purchaser mailing labels, security position
listings and any available listing, or computer file containing the names and
addresses of all record holders of the Shares as of a recent date, and shall
furnish Parent and Purchaser with such additional information (including, but
not limited to, updated lists of holders of the Shares and their addresses,
mailing labels and lists of security positions) and assistance as Parent,
Purchaser or their respective agents may reasonably request in communicating the
Offer to the record and beneficial holders of the Shares. Except for such steps
as are necessary to disseminate the Offer Documents, Parent and Purchaser shall
hold in confidence the information contained in any of such labels and lists and
the additional information referred to in the preceding sentence, will use such
information in connection with the Offer, and, if this Agreement is terminated,
will upon request of the Company deliver or cause to be delivered to the Company
all copies of such information then in its possession or the possession of its
agents or representatives.
3
<PAGE>
SECTION 1.3 Directors.
(a) Promptly upon the purchase of Shares by Parent or Purchaser or any of
its Subsidiaries pursuant to the Offer and/or pursuant to any of the Stock
Purchase Agreements which represents at least a majority of the outstanding
Shares, Purchaser shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the Company as
is equal to the product of the total number of directors on such Board (giving
effect to the directors designated by Purchaser pursuant to this sentence)
multiplied by the percentage that the number of Shares so accepted for payment
bears to the total number of Shares then outstanding. In furtherance thereof,
the Company shall, upon request of the Purchaser, use its reasonable best
efforts promptly either to increase the size of its Board of Directors or secure
the resignations of such number of its incumbent directors, or both, as is
necessary to enable Purchaser's designees to be so elected to the Company's
Board of Directors, and shall take all actions available to the Company to cause
Purchaser's designees to be so elected. At such time, the Company shall, if
requested by Purchaser, also cause persons designated by Purchaser to constitute
at least the same percentage (rounded up to the next whole number) as is on the
Company's Board of Directors of (i) each committee of the Company's Board of
Directors, (ii) each board of directors (or similar body) of each Subsidiary of
the Company and (iii) each committee (or similar body) of each such board.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under Section 1.3(a), including mailing to
stockholders the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable Purchaser's designees to be elected to the Company's Board
of Directors. Purchaser or Parent will supply the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1. The provisions of this Section 1.3 are in addition to and shall not
limit any rights which Purchaser, Parent or any of their affiliates may have as
a holder or beneficial owner of Shares as a matter of law with respect to the
election of directors or otherwise.
(c) In the event Purchaser's designees are elected to the Company's Board
of Directors, until the Effective Time (as defined below), the Company's Board
shall have at least two directors who are directors on the date hereof
("Independent Directors"), provided that, in such event, if the number of
Independent Directors shall be reduced below two for any reason whatsoever, any
remaining Independent Directors (or Independent Director, if there be only one
remaining) shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Independent Directors for purposes of this Agreement or,
if no Independent Director then remains, the other directors shall designate two
persons to fill such vacancies who shall not be stockholders, affiliates or
associates of Purchaser or Parent and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Notwithstanding anything
in this Agreement to the contrary, in the event that Purchaser's designees are
elected to the Company's Board, after the acceptance for payment of Shares
pursuant to the Offer and prior to the Effective Time, the affirmative vote of a
majority of the Independent Directors shall be required to (i) amend or
terminate this Agreement by the Company, (ii) exercise or waive any of the
Company's rights, benefits or remedies hereunder or (iii) take any other action
by the Company's Board under or in connection with this Agreement.
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ARTICLE II
THE MERGER
SECTION 2.1 The Merger. Upon the terms and subject to the satisfaction or
waiver of the conditions hereof, and in accordance with the applicable
provisions of this Agreement and the General Corporation Law of the State of
Delaware (the "GCL"), at the Effective Time Purchaser shall be merged (the
"Merger") with and into the Company. Following the Merger, the separate
corporate existence of Purchaser shall cease and the Company shall continue as
the surviving corporation (the "Surviving Corporation"). At the option of Parent
and provided that such amendment does not delay the Effective Time, the Merger
may be structured so that, and this Agreement shall thereupon be amended to
provide that, the Company shall be merged with and into Purchaser or another
direct or indirect wholly-owned subsidiary of Parent with Purchaser or such
other subsidiary of Parent continuing as the Surviving Corporation; provided,
however, that the Company shall be deemed not to have breached any of its
representations and warranties herein if and to the extent such breach would
have been attributable to such election.
SECTION 2.2 Effective Time; Closing. As soon as practicable after the
satisfaction or waiver (to the extent permitted hereunder) of the conditions set
forth in Article VII, the Company shall execute in the manner required by the
GCL and deliver to the Secretary of State of the State of Delaware a duly
executed and verified certificate of merger, or, if permitted, a certificate of
ownership and merger, and the parties shall take such other and further actions
as may be required by law to make the Merger effective. The time the Merger
becomes effective in accordance with applicable law is referred to as the
"Effective Time." Prior to such filing, a closing (the "Closing") shall be held
at the offices of Bressler, Amery & Ross, 17 State Street, 34th Floor, New York,
New York 10004, or such other place as the parties hereto shall agree, for the
purpose of confirming the satisfaction or waiver of the conditions set forth in
Article VII. The date on which the Closing occurs is referred to herein as the
"Closing Date."
SECTION 2.3 Effects of the Merger; Subsequent Actions. The Merger shall
have the effects set forth in Section 259 of the GCL. Without limiting the
generality of the foregoing, and subject thereto and any other applicable laws,
at the Effective Time, all properties, rights, privileges, powers and franchises
of the Company and Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities, restrictions, disabilities and duties of the Company and
Purchaser shall become debts, liabilities, restrictions, disabilities and duties
of the Surviving Corporation.
SECTION 2.4 Certificate of Incorporation and By-Laws of the Surviving
Corporation.
(a) The Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter amended in
accordance with the provisions thereof and hereof and applicable law.
(b) The By-Laws of Purchaser in effect at the Effective Time shall be the
By-Laws of the Surviving Corporation, until thereafter amended in accordance
with the provisions thereof and hereof and applicable law.
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SECTION 2.5 Directors. Subject to applicable law, the directors of
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
SECTION 2.6 Officers. The officers of the Purchaser immediately prior to
the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
SECTION 2.7 Conversion of Shares. Subject to Section 3.1 below, at the
Effective Time, by virtue of the Merger and without any action on the part of
Parent, Purchaser, the Company or the holders of the following securities, each
Share issued and outstanding immediately prior to the Effective Time (other than
any Shares held by Parent, Purchaser, any wholly-owned subsidiary of Parent or
Purchaser, or in the treasury of the Company, which Shares, by virtue of the
Merger and without any action on the part of the holder thereof, shall be
cancelled and retired and shall cease to exist with no payment being made with
respect thereto, and other than Dissenting Shares) shall be converted into the
right to receive the Purchase Price, without interest thereon, upon surrender of
the certificate formerly representing such Share.
SECTION 2.8 Conversion of Purchaser Common Stock. At the Effective Time,
each share of common stock, par value $.01 per share, of Purchaser issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and become one validly issued, fully paid and non-assessable share of
common stock, par value $.10 per share, of the Surviving Corporation.
SECTION 2.9 Stockholders' Meeting.
(a) If required by the GCL in order to consummate the Merger, the Company,
acting through the Board, shall, in accordance with the GCL:
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Stockholders' Meeting") as soon as practicable following
the acceptance for payment of and payment for the Shares by Parent and/or
Purchaser pursuant to the Offer for the purpose of considering and taking action
upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and use its
reasonable best efforts (x) to obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter defined) and, after
consultation with Parent, to respond promptly to any comments made by the SEC
with respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement (including any amendment or supplement
thereto, the "Proxy Statement") to be mailed to its stockholders, provided that
no amendment or supplement to the Proxy Statement will be made by the Company
without consultation with Parent and its counsel and (y) to obtain the necessary
approvals of the Merger and this Agreement by its stockholders; and
(iii) subject to the fiduciary obligations of the Board under
applicable law, include in the
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Proxy Statement the recommendation of the Board that stockholders of the Company
vote in favor of the approval of the Merger and the adoption of this Agreement.
(b) At such meeting, each of Parent and Purchaser will vote (and will
cause each of their respective affiliates to vote), all of the Shares (if any)
then owned by them (or their respective affiliates) in favor of the approval of
the Merger and the adoption of this Agreement.
SECTION 2.10 Merger Without Meeting of Stockholders. Notwithstanding
Section 2.9, in the event that Parent, Purchaser or any other subsidiary of
Parent shall acquire at least 90% of the Shares pursuant to the Offer and the
Stock Tender Agreement, the parties hereto agree to take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the acceptance for payment of and payment for Shares by Parent
and/or Purchaser pursuant to the Offer without a meeting of stockholders of the
Company, in accordance with Section 253 of the GCL.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1 Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, Shares outstanding immediately prior to the Effective Time and
held by a holder who has not voted in favor of the Merger or consented thereto
in writing and who has demanded appraisal for such Shares in accordance with
Section 262 of the GCL, if such Section 262 provides for appraisal rights for
such Shares in the Merger ("Dissenting Shares"), shall not be converted into the
right to receive the Purchase Price as provided in Section 2.7, unless and until
such holder fails to perfect or withdraws or otherwise loses his right to
appraisal and payment under the GCL. If, after the Effective Time, any such
holder fails to perfect or withdraws or loses his right to appraisal, such
Dissenting Shares shall thereupon be treated as if they had been converted as of
the Effective Time into the right to receive the Purchase Price, if any, to
which such holder is entitled, without interest or dividends thereon. The
Company shall give Parent prompt notice of any demands received by the Company
for appraisal of Shares and, prior to the Effective Time, Parent shall have the
right to participate in all negotiations and proceedings with respect to such
demands. Prior to the Effective Time, the Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
SECTION 3.2 Exchange of Certificates.
(a) Prior to the Effective Time, Parent shall designate a bank or trust
company reasonably acceptable to the Company to act as paying agent (the "Paying
Agent") in effecting the exchange for the Purchase Price of certificates (the
"Certificates") that, prior to the Effective Time, represented Shares. Upon the
surrender of each such Certificate formerly representing Shares, together with a
properly completed letter of transmittal, the Paying Agent shall pay the holder
of such Certificate the Purchase Price multiplied by the number of Shares
formerly represented by each such Certificate, in exchange therefor, and each
such Certificate shall forthwith be cancelled. Until so surrendered and
exchanged, each such Certificate (other than Certificates representing
Dissenting Shares or Shares held by Parent, Purchaser or the Company, or any
direct or indirect subsidiary thereof, or in the treasury of the Company) shall
represent solely the right to receive the Purchase Price. No interest shall be
paid or accrue on the Purchase Price. If the Purchase Price (or any portion
thereof) is to be delivered to any
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person other than the person in whose name the Certificate formerly representing
Shares surrendered in exchange therefor is registered, it shall be a condition
to such exchange that the Certificate so surrendered shall be properly endorsed
or otherwise be in proper form for transfer and that the person requesting such
exchange shall pay to the Paying Agent any transfer or other Taxes required by
reason of the payment of the Purchase Price to a person other than the
registered holder of the Certificate surrendered, or shall establish to the
satisfaction of the Paying Agent that such Tax has been paid or is not
applicable.
(b) Prior to the Effective Time, Parent or Purchaser shall deposit, or
cause to be deposited, in trust with the Paying Agent such funds as needed for
timely payment hereunder; provided, however, that no such deposit shall relieve
Parent or Purchaser of their obligation to pay the Purchase Price pursuant to
Section 2.7.
(c) The Purchase Price shall be invested by the Paying Agent as directed
by Parent, provided that such investments shall be limited to direct obligations
of the United States of America, obligations for which the full faith and credit
of the United States of America is pledged to provide for the payment of
principal and interest, commercial paper rated of the highest quality by Moody's
Investors Services, Inc. or Standard & Poor's Corporation, or certificates of
deposit issued by a commercial bank having at least $1,000,000,000 in assets;
provided further that no loss on investment made pursuant to this Section 3.2(c)
shall relieve Parent or Purchaser of their obligation to pay the Purchase Price
pursuant to Section 2.7.
(d) Promptly after the Effective Time, the Paying Agent shall mail to each
record holder of Certificates that immediately prior to the Effective Time
represented Shares a form of letter of transmittal and instructions for use in
surrendering such Certificates and receiving the Purchase Price in exchange
therefor.
(e) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Shares. If, after the
Effective Time, Certificates formerly representing Shares are presented to the
Surviving Corporation or the Paying Agent, they shall be cancelled and exchanged
for the Purchase Price as provided in this Article III, subject to applicable
law in the case of Dissenting Shares.
(f) Promptly following the date which is six months after the Effective
Time, the Paying Agent shall deliver to Parent all cash and documents in its
possession relating to the transactions described in this Agreement, and the
Paying Agent's duties shall terminate. Thereafter, each holder of a Certificate
formerly representing a Share may surrender such Certificate to the Surviving
Corporation and (subject to applicable abandoned property, escheat and similar
laws) receive in exchange therefor the Purchase Price, without any interest
thereon.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser that:
SECTION 4.1 Organization and Qualification; Subsidiaries. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each entity which the Company owns, directly or
indirectly, a majority of the outstanding voting securities (each a "Subsidiary"
or collectively the "Subsidiaries") is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Each of the Company and its Subsidiaries has the requisite
corporate power and authority to own, operate or lease its properties and to
carry on its business as it is now being conducted, and is duly qualified or
licensed to do business, and is in good standing, in each jurisdiction in which
the nature of its business or the properties owned, operated or leased by it
makes such qualification, licensing or good standing necessary, except where the
failure to have such power or authority, or the failure to be so qualified,
licensed or in good standing, would not have a Material Adverse Effect on the
Company. The term "Material Adverse Effect on the Company," as used in this
Agreement, means any adverse change, circumstance or effect that, individually
or in the aggregate with all other adverse changes, circumstances and effects,
has had or will have a material adverse effect on the business, financial
condition, properties or results of operations of the Company and its
Subsidiaries taken as a whole, other than any adverse change, circumstance or
effect relating to or arising out of (i) the economy or securities markets in
general, (ii) the announcement of the Agreement or the transactions contemplated
hereby (including any impact on employees, vendors or customers resulting
therefrom) or (iii) the industry of the Company and its Subsidiaries in general,
and not specifically relating to the Company or its Subsidiaries.
SECTION 4.2 Charter and By-laws. The Company has heretofore made available
to Parent a complete and correct copy of the charter and the By-laws or
comparable organizational documents, each as amended as of the date hereof, of
the Company and each of its Subsidiaries.
SECTION 4.3 Capitalization.
(a) The authorized capital stock of the Company consists of 12,000,000
shares of Common Stock, $.10 par value per share ("Common Stock") and 1,000,000
shares of preferred stock, par value $1.00 per share ("Preferred Stock"). As of
the close of business on May 15, 1998, 3,510,251 shares of Common Stock were
issued and outstanding, excluding 2,336,990 shares of Common Stock in treasury.
As of the date hereof there were no shares of Preferred Stock issued and
outstanding. The Company has no shares of capital stock reserved for future
issuance. The Company has no outstanding options to purchase any shares of
capital stock. Since March 31, 1998 the Company has not issued any shares of
capital stock. There are no bonds, debentures, notes or other indebtedness
having general voting rights (or convertible into securities having such rights)
("Voting Debt") of the Company or any of its Subsidiaries issued and
outstanding. There are no existing options, warrants, calls, subscriptions or
other rights, convertible securities, agreements, arrangements or commitments of
any character, relating to the issued or unissued capital stock of the Company
or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to
issue, transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity interest in, the Company or any
of its Subsidiaries or securities
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convertible into or exchangeable for such shares or equity interests, and
neither the Company nor any of its Subsidiaries is obligated to grant, extend or
enter into any such option, warrant, call, subscription or other right,
convertible security, agreement, arrangement or commitment. There are no
outstanding contractual obligations of the Company or any of its Subsidiaries to
(i) repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its Subsidiaries or (ii) provide funds to or make any
investment in (in the form of a loan, capital contribution or otherwise) any
entity other than a wholly-owned Subsidiary.
(b) Each of the outstanding shares of capital stock of each of the Company
and its Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and such shares of capital stock of the Subsidiaries as are owned
by the Company or by a Subsidiary of the Company are owned in each case free and
clear of any lien, claim, option, charge, security interest, limitation,
encumbrance and restriction of any kind (any of the foregoing being a "Lien").
All outstanding shares of capital stock of each of the Subsidiaries are owned by
the Company.
(c) There are no voting trusts or other agreements or understandings to
which the Company or any of its Subsidiaries is a party with respect to the
voting of the capital stock of the Company or any of its Subsidiaries.
SECTION 4.4 Authority Relative to this Agreement.
The Company has all necessary corporate power and authority to execute and
deliver this Agreement, and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized and approved by the Board and no other corporate
proceedings on the part of the Company are necessary to authorize or approve
this Agreement, or to consummate the transactions contemplated hereby (other
than, with respect to the Merger, and subject to Section 2.10, the approval and
adoption of the Merger and this Agreement by the affirmative vote of the holders
of a majority of the Shares then outstanding). This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due and valid
authorization, execution and delivery of this Agreement by Parent and Purchaser,
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors' rights generally and (ii)
is subject to general principles of equity.
SECTION 4.5 No Conflict; Required Filings and Consents.
(a) None of the execution, delivery or performance of this Agreement by
the Company, the consummation by the Company of the transactions contemplated
hereby or the compliance by the Company with any of the provisions hereof will
(i) conflict with or violate the Certificate of Incorporation or By-Laws of the
Company or the comparable organizational documents of any of its Subsidiaries,
(ii) conflict with or violate any statute, ordinance, rule, regulation, order,
judgment or decree applicable to the Company or its Subsidiaries, or by which
any of them or any of their respective properties or assets may be bound or
affected, or (iii) result in a violation or breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in any loss of any material benefit, or
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the creation of any Lien on any of the property or assets of the Company or any
of its Subsidiaries (any of the foregoing referred to in clause (ii) or this
clause (iii) being a "Violation") pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any of their
respective properties may be bound or affected, except in the case of the
foregoing clauses (ii) or (iii) for any such Violations which would not in the
aggregate have a Material Adverse Effect on the Company or limit or restrict the
ability of the Company to consummate the transactions contemplated hereby or
thereby.
(b) None of the execution, delivery or performance of this Agreement by
the Company, the consummation by the Company of the transactions contemplated
hereby or the compliance by the Company with any of the provisions hereof will
require any consent, waiver, approval, authorization or permit of, or
registration or filing with or notification to (any of the foregoing being a
"Consent"), any government or subdivision thereof, domestic, foreign or
supranational or any administrative, governmental or regulatory authority,
agency, commission, tribunal or body, domestic, foreign or supranational (a
"Governmental Entity"), except for (i) compliance with any applicable
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (ii) the filing of a certificate of merger, or, if permitted, a
certificate of ownership and merger, pursuant to the GCL, (iii) notifications
required by certain state Blue Sky, takeover and environmental statutes, (iv)
compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") and any requirements of any foreign or supranational
Antitrust Laws, and (v) Consents, the failure of which to obtain or make would
not in the aggregate have a Material Adverse Effect on the Company or limit or
restrict the ability of the Company to consummate the transactions contemplated
hereby.
SECTION 4.6 SEC Reports and Financial Statements.
(a) The Company has filed with the SEC all forms, reports, schedules,
registration statements and definitive proxy statements required to be filed by
the Company with the SEC since January 1, 1997 (the "SEC Reports"). As of their
respective dates, the SEC Reports (including, without limitation, any financial
statements or schedules included therein) complied in all material respects with
the requirements of the Exchange Act or the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder applicable, as
the case may be, to such SEC Reports, and none of the SEC Reports contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
(b) The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company included in the SEC
Reports and the audited financial statements as of and for the year ended
December 31, 1997, which the Company has provided to Parent, present fairly in
all material respects the consolidated financial position and the consolidated
results of operations and cash flows of the Company and its consolidated
Subsidiaries as of the dates or for the periods presented therein in conformity
with United States generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved except as otherwise noted
therein, including the related notes. The Company has also provided to Parent
unaudited condensed consolidated financial statements for the period ending
March 31, 1998, filed with the SEC on May 15, 1998. Such statements were
prepared in accordance with generally accepted accounting principles for interim
financial information and with the
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instructions to SEC Form 10-Q and Article 10 of Regulation S-X promulgated under
the Exchange Act and, in the opinion of management, all adjustments consisting
of normal recurring accruals considered necessary for a fair presentation have
been included.
SECTION 4.7 Information. None of the information provided or that may be
provided by the Company for use in the Offer Documents, the Schedule 14D-1 or
any other document to be filed with the SEC or any other Governmental Entity in
connection with the transactions contemplated by this Agreement (the "Other
Filings"), and neither the Proxy Statement nor the Schedule 14D-9, shall, at the
time filed with the SEC or such other Governmental Entity, and, in the case of
the Proxy Statement, at the time mailed to the Company's stockholders, at the
time of the 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 light of
the circumstances under which they are made, not misleading. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to any
information provided or that may be provided by Parent or Purchaser specifically
for use in such documents. The Schedule 14D-9 and the Proxy Statement will
comply as to form in all material respects with the provisions of the Exchange
Act and the rules and regulations thereunder.
SECTION 4.8 Changes. Since December 31, 1997, except as set forth in the
SEC Reports filed prior to the date hereof or as otherwise disclosed in Schedule
4.8 hereto:
(a) there has been no event, effect or change (including the incurrence of
any liabilities or obligations of any nature whether or not accrued, contingent
or otherwise) having a Material Adverse Effect on the Company;
(b) the Company has not adopted any amendment to its Certificate of
Incorporation or By-laws;
(c) the Company has not issued, reissued, pledged or sold, or authorized
the issuance, reissuance, pledge or sale of (i) additional shares of capital
stock of any class, or securities convertible into, exchangeable for or
evidencing the right to substitute for, capital stock of any class, or any
rights, warrants, options, calls, commitments or any other agreements of any
character, to purchase or acquire any capital stock or any securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe for,
capital stock, or (ii) any other securities in respect of, in lieu of, or in
substitution for, Shares;
(d) neither the Company nor any of its Subsidiaries declared, set aside or
paid any dividend or other distribution (whether in cash, securities or property
or any combination thereof) in respect of any class or series of its capital
stock other than between the Company and any of its wholly-owned Subsidiaries,
or its regular quarterly dividend of $.32 per share of Common Stock to
stockholders of record on March 23, 1998;
(e) Neither the Company nor any of its Subsidiaries has split, combined,
subdivided, reclassified or redeemed, purchased or otherwise acquired or
proposed to redeem or purchased or otherwise acquired any shares of its capital
stock or any of its other securities; and
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(f) Neither the Company nor any of its Subsidiaries has taken or omitted
to take any action, nor has any event occurred, which (if taken, omitted or
occurring after the date hereof) would constitute a breach of Section 6.1 of
this Agreement.
SECTION 4.9 Opinion of Financial Advisor. The Company has received the
opinion of Salomon Brothers Inc and Smith Barney Inc. collectively doing
Business as "Salomon Smith Barney" ("Salomon Smith Barney"), dated the date
hereof, to the effect that, as of such date, the Purchase Price is fair to the
holders of Shares, a copy of which opinion has been delivered to Parent. The
Company has been authorized by Salomon Smith Barney to permit inclusion of such
opinion (and reference thereto) in the Offer Documents, the Schedule 14D-9 and
the Proxy Statement.
SECTION 4.10 Takeover Statutes. The Company is subject to Section 203 of
the GCL. By reason of action taken by the Company, such section is not
applicable to the transactions contemplated hereby.
SECTION 4.11 Litigation. Except as set forth in Schedule 4.11 there are no
suits, claims, actions, proceedings, including, without limitation, arbitration
proceedings or alternative dispute resolution proceedings, or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries not set forth in the SEC Reports filed prior to the date
hereof.
SECTION 4.12 Employee Plans and Arrangements.
(a) Schedule 4.12(a) lists each "employee pension benefit plan" (as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) (hereinafter a "Pension Plan") and "employee welfare
benefit plan" (as defined in Section 3 (i) of ERISA, (hereinafter a "Welfare
Plan") and each pension, retirement, bonus, incentive compensation, profit
sharing, stock option, stock purchase, stock bonus, phantom stock, deferred
compensation, hospitalization, medical, dental, vision, life insurance,
accidental death and dismemberment insurance, business travel insurance,
cafeteria and flexible spending, sick pay, disability, severance, golden
parachute, or other plans, policy, contract, fund or arrangement maintained or
contributed to, or required to be maintained or contributed to, by the Company,
any of its Subsidiaries or any other person that, together with the Company, is
treated as a single employer under Section 4.14(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended (the "Code") (each a "Commonly
Controlled Entity") for the benefit of any present or former employees of the
Company or any of its Subsidiaries. The Company has never maintained, or
incurred any liability whatsoever, with respect to a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA). The Company has made available to
Purchaser true, complete and correct copies of (i) each Pension Plan and Welfare
Plan collectively, the ("Benefit Plans") (ii) the most recent annual report on
Form 5500 as filed with the Internal Revenue Service with respect to, (iii) the
most recent summary plan description (or similar document) with respect to each
applicable Benefit Plan, and (iv) each trust agreement relating to the Pension
Plan.
(b) Except where a failure would not have a Material Adverse Effect on the
Company, each Benefit Plan has been administered in accordance with its terms.
Except where a failure would not have a Material Adverse Effect on the Company,
the Company, its Subsidiaries all the Benefit Plans are in compliance with the
applicable provisions of ERISA, the Code, and all other laws, ordinances or
regulations of any Governmental Entities. Except where a failure would not have
a Material Adverse
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Effect on the Company, there are no investigations by any Governmental Entities,
termination proceedings or other claims (except claims for benefits payable in
the normal operations of the Pension Plans), suits or proceedings against or
involving any Benefit Plan or asserting any rights to or claims for benefits
under any Benefit Plan.
(c) Except where a failure would not have a Material Adverse Effect on the
Company, (i) all contributions to the Benefit Plan required to be made by the
Company or any of its Subsidiaries in accordance with the terms of the Benefit
Plans, and, when applicable, Section 302 of ERISA or Section 412 of the Code,
have been timely made, (ii) there has been no application for or waiver of the
minimum funding standards imposed by Section 412 of the Code with respect to any
Benefit Plan that is a Pension Plan and (iii) no Pension Plan had an
"accumulated funding deficiency" within the meaning of Section 412(a) of the
Code as of the end of the most recently completed plan year.
(d) (i) Each Pension Plan that is intended to be a tax-qualified plan has
been the subject of a post Tax Reform Act of 1986 determination letter from the
Internal Revenue Service to the effect that such Company Pension Plan and each
related trust is qualified and exempt from Federal income taxes under Sections
401(a) and 501(a), respectively, of the Code; (ii) No such determination letter
has been revoked, and revocation has not been threatened; (iii) No event has
occurred and no circumstances exist that would adversely affect the
tax-qualification of such Pension Plan except for any events or circumstances
that would not have a Material Adverse Effect on the Company; and (iv) Such
Pension Plan has not been amended since the effective date of its most recent
determination letter in any respect that might adversely affect its
qualification, increase its cost or require security under Section 307 of ERISA.
The Company has made available to Purchaser a copy of the most recent
determination letter received with respect to each Pension Plan for which such a
letter has been issued, as well as a copy of any pending application for a
determination letter.
(e) Except where a failure would not have a Material Adverse Effect on the
Company: (i) no non-exempt "prohibited transaction" (as defined in Section 4975
of the Code or Section 406 of ERISA) has occurred that involves the assets of
any Benefit Plan; (ii) no Pension Plan has been terminated or has been the
subject of a "reportable event" (as defined in Section 4043 of ERISA and the
regulations thereunder) for which the 30-day notice requirement has not been
waived by the Pension Benefit Guaranty Corporation ("PBGC"); and (iii) none of
the Company, any of its Subsidiaries or any trustee, administrator or other
fiduciary of the Pension Plan has engaged in any transaction or acted in a
manner that could, or has failed to act so as to, subject the Company, any such
Subsidiary or any trustee, administrator or other fiduciary to any liability for
breach of fiduciary duty under ERISA or any other applicable law.
(f) No Commonly Controlled Entity has incurred any liability to a Pension
Plan (other than for contributions not yet due) or to the PBGC (other than for
the payment of premiums not yet due other than liabilities that would have a
Material Adverse Effect on the Company).
(g) Except where the failure would not have a Material Adverse Effect on
the Company, no Commonly Controlled Entity has (i) engaged in a transaction
described in Section 4069 of ERISA that could subject the Company to a liability
at any time after the date hereof or (ii) acted in a manner that could, or
failed to act so as to, result in fines, penalties, taxes or related charges
under (x) Section 502(c), (i) or (1) of ERISA, (y) Section 4071 of ERISA or (z)
Chapter 43 of the Code.
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(h) The Company and its Subsidiaries comply with the applicable
requirements of parts 6 and 7 of subtitle B of Title I of ERISA ((S)(S) 601 et
seq.) with respect to each Benefit Plan that is a group health plan, as such
term is defined in Section 5000(b)(1) of the Code and other than medical
continuation requirements mandated pursuant to (S)(S) 601 et seq. no Benefit
Plan that is a group health plan provides or is required to provide post
employment or post retirement medical or health benefits to any former employees
or employees of the Company or any Commonly Controlled Entity.
(i) Schedule 4.12(i) lists (i) all employment agreements between the
Company or any of its Subsidiaries and any of their respective directors or
officers and between the Company or any of its Subsidiaries and any of its or
their employees which is not terminable by the Company or its Subsidiaries on
less than 90 days' notice, and (ii) all agreements and plans pursuant to which
any director, officer or employee of the Company or any of its subsidiaries is
entitled to benefits upon termination of their employment or a change in control
of the Company.
(j) Except as set forth in Schedule 4.12(j), none of the employees of the
Company or any of its Subsidiaries is represented by a union or subject to a
collective bargaining agreement.
SECTION 4.13 Assets. The Company or one of its Subsidiaries has (a) good
and marketable title to or a valid leasehold interest under a capitalized lease
in all assets recorded on the Company's balance sheet as of December 31, 1997
included in the financial statements referred to in Section 4.6(b), except for
assets disposed of in the ordinary course of business since such date, and (b) a
valid leasehold or other interest in all other assets used by it in its
business, except in each case for exceptions to the foregoing that would not
have a Material Adverse Effect on the Company. The consummation of the
transactions contemplated hereby will not affect the ownership or right to use
any of the Company's assets, except for exceptions to the foregoing that would
not have a Material Adverse Effect on the Company.
SECTION 4.14 Intellectual Property.
(a) Except for any exceptions to the following that would not have a
Material Adverse Effect on the Company, the Company and its Subsidiaries own or
have the right to use the Intellectual Property used by it and reasonably
necessary for the Company and its Subsidiaries to conduct their business as it
is currently conducted or proposed to be conducted and consistent with past
practice.
(b) Except for any exceptions to the following that would not have a
Material Adverse Effect on the Company: (i) all of the registered Intellectual
Property owned by the Company and its Subsidiaries is subsisting and unexpired
(except as such has expired by the passing of time without the possibility of
extension or renewal), free of all Liens, has not been abandoned and, to the
knowledge of the Company, all Intellectual Property used by the Company whether
or not registered does not infringe the Intellectual Property rights of any
third party; (ii) none of the Intellectual Property owned by the Company and its
Subsidiaries is the subject of any license, security interest or other agreement
granting rights therein to any third party, except as set forth on Schedule
4.14(b), (iii) to the knowledge of the Company, no judgment, decree, injunction,
rule or order has been rendered by any Governmental Entity which would limit,
cancel or question the validity of, or the Company's or its Subsidiaries' rights
in and to, any Intellectual Property owned by the Company; and (iv) the Company
has not received notice of any pending or threatened suit,
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action or proceeding that seeks to limit, cancel or question the validity of, or
the Company's or its Subsidiaries' rights in and to, any Intellectual Property.
(c) For purposes of this Agreement "Intellectual Property" shall mean all
rights, privileges and priorities provided under U.S., state and foreign law
relating to intellectual property, including without limitation all (i)(A)
inventions, discoveries, processes, formulae, designs, methods, techniques,
procedures, concepts, developments, technology, new and useful improvements
thereof and know-how relating thereto, whether or not patented or eligible for
patent protections; (B) copyrights and copyrightable works, including computer
applications, programs, software, databases and related items; (C) trademarks,
service marks, trade names, and trade dress, the goodwill of any business
symbolized thereby, and all common-law rights relating thereto; and (D) trade
secrets and other confidential information; and (ii) all registrations,
applications, recordings, and licenses or other similar agreements related to
the foregoing.
SECTION 4.15 Taxes. The Company and each of its Subsidiaries have (i)
filed all Tax Returns which they are required to file under applicable laws and
regulations, (ii) paid all Taxes which have become due and payable, and (iii)
accrued as a liability on the balance sheet included in the Company's 1997
financial statements described in Section 4.6 all Taxes which were accrued but
not yet due and payable as of the date thereof, except for failures to take any
of such actions which, individually or in the aggregate, would not have a
Material Adverse Effect on the Company. For purposes of this Agreement, "Tax" or
"Taxes" shall mean any federal, state, local or foreign income, gross receipts,
franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax of any
kind, including any interest or penalties in respect of the foregoing, and "Tax
Returns" means returns, declarations, reports, information returns, or other
documents filed or required to be filed in connection with the determination,
assessment or collection of Taxes of any person or the administration of any
laws, regulations or administrative requirements relating to any Taxes.
SECTION 4.16 Environmental Laws and Regulations. Except as disclosed in
Schedule 4.16:
(i) The Company and its Subsidiaries hold and are in compliance with
all Environmental Permits (as defined below), and the Company and its
Subsidiaries are otherwise in compliance with all Environmental Laws (as defined
below) and there are no conditions that might prevent or interfere with such
compliance in the future, except where the failure to hold or to be in such
compliance would not reasonably be expected to have a Material Adverse Effect on
the Company;
(ii) As of the date hereof, neither the Company nor any of its
Subsidiaries has received any Environmental Claim (as defined below) and there
is no threatened Environmental Claim that would reasonably be expected to have a
Material Adverse Effect on the Company;
(iii) Neither the Company nor any of its Subsidiaries has entered
into any consent decree, order or agreement under any Environmental Law;
(iv) There are no (A) underground storage tanks, (B) polychlorinated
biphenyls,
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(C) friable asbestos or asbestos-containing materials, (D) sumps, (E) surface
impoundments, (F) landfills, or (G) sewers or septic systems present at any
facility currently owned by the Company or any of its Subsidiaries the presence
of which would reasonably be expected to have a Material Adverse Effect on the
Company;
(v) None of the Company or its Subsidiaries has contractually
assumed any liabilities or obligations under any Environmental Laws that would
reasonably be expected to have a Material Adverse Effect on the Company;
(vi) To the knowledge of the Company, there has not been any Release
of Hazardous Materials at any property currently or formerly owned or operated
by the Company, any of its Subsidiaries or predecessors in interest nor, to the
knowledge of the Company, at any disposal facility that may have received
Hazardous Materials generated by the Company, any of its Subsidiaries or a
predecessor in interest; and
(vii) For purposes of this Agreement, the following terms shall have
the following meanings: (A) "Environmental Claim" means any written or oral
notice, claim, demand, action, suit, complaint, proceeding or other
communication by any person alleging liability or potential liability (including
without limitation liability or potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resource damages, property
damage, personal injury, reasonable engineering and attorneys fees, fines or
penalties) arising out of, relating to, based on or resulting from (1) the
presence, discharge, emission, release or threatened release of any Hazardous
Materials at any location, whether or not owned, leased or operated by the
Company or any of its Subsidiaries or (2) circumstances forming the basis of any
violation or alleged violation of any Environmental Law or Environmental Permit
or (3) otherwise relating to obligations or liabilities under any Environmental
Laws; (B) "Environmental Permits" means all permits, licenses, registrations and
other governmental authorizations required under Environmental Laws for the
Company and its Subsidiaries to conduct their operations and businesses on the
date hereof and consistent with past practices; (C) "Environmental Laws" means
all applicable federal, state and local statutes, rules, regulations,
ordinances, orders, decrees and common law relating in any manner to
contamination, pollution or protection of the environment, including without
limitation the Comprehensive Environmental Response, Compensation and Liability
Act, the Solid Waste Disposal Act, the Clean Air Act, the Clean Water Act, the
Toxic Substances Control Act, the Occupational Safety and Health Act, the
Emergency Planning and Community-Right-to-Know Act, the Safe Drinking Water Act,
all as amended, and similar state laws; (D) "Hazardous Materials" means all
hazardous or toxic substances, wastes, materials or chemicals, petroleum
(including crude oil or any fraction thereof) and petroleum products, solid
waste, special waste, friable asbestos and asbestos-containing materials,
pollutants, contaminants and all other materials, and substances regulated
pursuant to, or that could reasonably be expected to provide the basis of
liability under, any Environmental Law and (E) "Release" means any spilling,
leaking, pumping, emitting, emptying, discharging, injecting, escaping,
leaching, migrating, dumping, or disposing of Hazardous Materials (including the
abandonment or discarding of barrels, containers or other closed receptacles
containing Hazardous Materials) into the environment.
SECTION 4.17 Insurance. Schedule 4.17 sets forth insurance policies in
force for the benefit of the Company as of April 15, 1998. All such policies
have been renewed in the ordinary course of business consistent with past
practice.
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SECTION 4.18 Brokers. Except for the engagement of Salomon Smith Barney,
whose fees will be paid by the Company and a copy of whose engagement letter has
been provided to Parent, none of the Company, any of its Subsidiaries, or any of
their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finder's
fees in connection with the transactions contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company that:
SECTION 5.1 Organization and Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the laws of Massachusetts
and each material subsidiary of Parent is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each of Parent and its
material subsidiaries (including Purchaser) has the requisite corporate power
and authority to own, operate or lease its properties and to carry on its
business as it is now being conducted, and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction in which the nature of
its business or the properties owned, operated or leased by it makes such
qualification, licensing or good standing necessary, except where the failure to
have such power or authority, or the failure to be so qualified, licensed or in
good standing, would not have a Material Adverse Effect on Parent. The term
"Material Adverse Effect on Parent," as used in this Agreement, means any
adverse change, circumstance or effect that, individually or in the aggregate
with all other adverse changes, circumstances and effects, has had or will have
a materially adverse effect on the business, financial condition, properties or
results of operations of Parent and its Subsidiaries taken as a whole.
SECTION 5.2 Authority Relative to this Agreement and the Stock Purchase
Agreements. Each of Parent and Purchaser has all necessary corporate power and
authority to execute and deliver this Agreement, and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and Purchaser and the consummation by Parent and Purchaser of the
transactions contemplated hereby have been duly and validly authorized and
approved by the Boards of Directors of Parent and Purchaser and by Parent as
stockholder of Purchaser, and no other corporate proceedings on the part of
Parent or Purchaser are necessary to authorize or approve this Agreement, or to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by each of Parent and Purchaser and, assuming the due and
valid authorization, execution and delivery by the Company, constitutes a valid
and binding obligation of each of Parent and Purchaser enforceable against each
of them in accordance with its terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to the enforcement of creditors' rights generally and (ii) is subject
to general principles of equity.
SECTION 5.3 No Conflict; Required Filings and Consents.
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(a) None of the execution, delivery or performance of this Agreement by
Parent or Purchaser, the consummation by Parent or Purchaser of the transactions
contemplated hereby or compliance by Parent or Purchaser with any of the
provisions hereof will (i) conflict with or violate the organizational documents
of Parent or Purchaser, (ii) conflict with or violate any statute, ordinance,
rule, regulation, order, judgment or decree applicable to Parent or Purchaser,
or any of their subsidiaries, or by which any of them or any of their respective
properties or assets may be bound or affected, or (iii) result in a violation
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Parent or
Purchaser, or any of their subsidiaries, is a party or by which any of their
respective properties or assets may be bound or affected, except in the case of
the foregoing clauses (ii) and (iii) for any such violations which would not
have a Material Adverse Effect on Parent or limit or restrict the ability of
Parent or Purchaser to consummate the transactions contemplated hereby.
(b) None of the execution and delivery of this Agreement by Parent and
Purchaser, the consummation by Parent and Purchaser of the transactions
contemplated hereby or compliance by Parent and Purchaser with any of the
provisions hereof will require any Consent of any Governmental Entity, except
for (i) compliance with any applicable requirements of the Exchange Act, (ii)
the filing of a certificate of merger, or, if permitted, a certificate of
ownership and merger, pursuant to the GCL, (iii) notifications required by
certain state Blue Sky, takeover and environmental statutes, (iv) compliance
with the HSR Act and any requirements of any foreign or supranational Antitrust
Laws and (v) Consents the failure of which to obtain or make would not have a
Material Adverse Effect on Parent or limit or restrict the ability of Parent or
Purchaser to consummate the transactions contemplated hereby.
SECTION 5.4 Information. None of the information provided or that may be
provided by Parent or Purchaser for use in the Proxy Statement, the Schedule
14D-9 or the Other Filings, and neither the Offer Documents nor the Schedule
14D-1, shall, at the time filed with the SEC or any other Governmental Entity,
and, in the case of the Proxy Statement, at the time mailed to the Company's
stockholders, at the time of the 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 light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, neither Parent nor Purchaser makes
any representation or warranty with respect to any information provided or that
may be provided by the Company specifically for use in such documents. The
Schedule 14D-1 and the Offer Documents will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder.
SECTION 5.5 Financing. Parent or Purchaser will have available to it at
the time required the funds necessary to consummate the Merger and the
transactions contemplated hereby.
SECTION 5.6 Brokers. Except for Credit Suisse First Boston Corporation,
whose fees will be paid by Parent, none of Parent, Purchaser, any of their
Subsidiaries, or any of their respective officers, directors or employees has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement.
ARTICLE VI
COVENANTS
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SECTION 6.1 Conduct of Business of the Company. Except as expressly
contemplated by this Agreement or with the prior written consent of Parent,
during the period from the date of this Agreement to the Effective Time, the
Company will, and will cause each of its Subsidiaries to, conduct its operations
only in the ordinary and usual course of business consistent with past practice
and will use its reasonable best efforts, and will cause each of its
Subsidiaries to use its reasonable best efforts, to preserve intact the business
organization of the Company and each of its Subsidiaries, to keep available the
services of its and their present officers and key employees, and to preserve
the good will of those having business relationships with it. Without limiting
the generality of the foregoing, and except as otherwise expressly contemplated
by this Agreement, the Company will not, and will not permit any of its
Subsidiaries to, prior to the Effective Time, without the prior written consent
of Parent:
(a) adopt any amendment to its Certificate of Incorporation or By-laws or
comparable organizational documents;
(b) except for issuances of capital stock of the Company's Subsidiaries to
the Company or a wholly-owned Subsidiary of the Company, issue, reissue, pledge
or sell, or authorize the issuance, reissuance, pledge or sale of (i) additional
shares of capital stock of any class, or securities convertible into,
exchangeable for or evidencing the right to substitute for, capital stock of any
class, or any rights, warrants, options, calls, commitments or any other
agreements of any character, to purchase or acquire any capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the right
to subscribe for, capital stock, or (ii) any other securities in respect of, in
lieu of, or in substitution for, Shares outstanding on the date hereof;
(c) declare, set aside or pay any dividends or other distribution (whether
in cash, securities or property or any combination thereof) in excess of the
regular quarterly dividend in an amount equal to the last paid regular quarterly
cash dividend paid by the Company which would normally be paid approximately
three months after such last paid regular quarterly dividend was paid, if any
such dividends are declared and paid;
(d) split, combine, subdivide, reclassify or redeem, purchase or otherwise
acquire, or propose to redeem or purchase or otherwise acquire, any shares of
its capital stock, or any of its other securities; (e) except for (i) increases
in salary and wages granted to officers and employees of the Company or its
Subsidiaries in conjunction with promotions or other changes in job status or
normal compensation reviews (within the amounts projected in the Company's 1998
operating plan previously provided to Parent) in the ordinary course of business
consistent with past practice, or (ii) increases in salary, wages and benefits
to employees of the Company pursuant to collective bargaining agreements in
effect on the date hereof, increase the compensation or fringe benefits payable
or to become payable to its directors, officers or employees (whether from the
Company or any of its Subsidiaries), or pay or award any benefit not required by
any existing plan or arrangement (including, without limitation, the granting of
stock options, stock appreciation rights, shares of restricted stock or
performance units) or grant any additional severance or termination pay to
(other than as required by existing agreements or policies listed on Schedule
4.12(i) hereto), or enter into any employment or severance agreement with, any
director, officer or other employee of the Company or any of its Subsidiaries
or, except pursuant to arrangements disclosed in Schedule 4.12(i), establish,
adopt, enter into, amend, accelerate any rights or benefits or
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waive any performance or vesting criteria under any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, savings, welfare, deferred compensation, "golden
parachute", employment, termination, severance or other employee benefit plan,
agreement, trust, fund, policy or arrangement for the benefit or welfare of any
directors, officers or current or former employees (any of the foregoing being
an "Employee Benefit Arrangement"), except in each case to the extent required
by applicable law or regulation; provided, however, that nothing herein will be
deemed to prohibit the payment of benefits as they become payable;
(f) acquire, sell, lease or dispose of any assets or securities which are
material to the Company and its Subsidiaries, or enter into any commitment to do
any of the foregoing or enter into any material commitment or transaction, other
than transactions between a wholly owned Subsidiary of the Company and the
Company or another wholly owned Subsidiary of the Company;
(g) (i) incur, assume or pre-pay any long-term debt or incur or assume any
short-term debt, (ii) assume except in the ordinary course of business
consistent with past practice, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person or (iii) make any advances except in the ordinary course of
business consistent with past practice (other than advances to Salomon Smith
Barney required under a letter Agreement between Salomon Smith Barney and the
Company dated February 24, 1998), loans or capital contributions to, or
investments in, any other person (except for investments in short term interest
bearing instruments purchased with excess cash of the Company, and for loans,
advances, capital contributions or investments between any wholly owned
Subsidiary of the Company and the Company or another wholly owned Subsidiary of
the Company);
(h) settle or compromise any material suit or claim or material threatened
suit or claim;
(i) other than in the ordinary course of business consistent with past
practice, (i) modify, amend or voluntarily terminate any contract, (ii) waive,
release, relinquish or assign any contract (or any rights of the Company or any
of its Subsidiaries thereunder), right or claim, or (iii) cancel or forgive any
indebtedness owed to the Company or any of its Subsidiaries except for any
indebtedness relating to goods properly returned to the Company;
(j) make any tax election not required by law or settle or compromise any
tax liability, in either case that is material to the Company and its
Subsidiaries;
(k) make any material change, other than in the ordinary course of
business and consistent with past practice or as required by applicable law,
regulation or change in generally accepted accounting principles, applied by the
Company (including tax accounting principles);
(l) release any person or entity from, or waive any provision of, any
standstill agreement to which it is a party or any confidentiality agreement
between it and another person or entity; or
(m) agree in writing or otherwise to take any of the foregoing actions
prohibited under Section 6.1 or any action which would cause any representation
or warranty in this Agreement to be or become untrue or incorrect in any
material respect.
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SECTION 6.2 Access to Information. From the date of this Agreement until
the Effective Time, the Company will, and will cause its Subsidiaries, and each
of their respective officers, directors, employees, counsel, advisors and
representatives (collectively, the "Company Representatives"), to give Parent
and Purchaser and their respective officers, employees, counsel, advisors and
representatives (collectively, the "Parent Representatives") reasonable access,
during normal business hours, to the offices and other facilities and to the
books and records of the Company and its Subsidiaries and will cause the Company
Representatives and the Company's Subsidiaries to furnish Parent, Purchaser and
Parent Representatives to the extent available with such financial and operating
data and such other information with respect to the business and operations of
the Company and its Subsidiaries as Parent and Purchaser may from time to time
reasonably request. Parent will comply with the terms of the Confidentiality
Agreement (as hereinafter defined).
SECTION 6.3 Reasonable Best Efforts. Subject to the terms and conditions
herein provided and to applicable legal requirements, each of the parties hereto
agrees to use its reasonable best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, and to assist and cooperate with the
other parties hereto in doing, as promptly as practicable, all things necessary,
proper or advisable under applicable laws and regulations to ensure that the
conditions set forth in Annex I and Article VII are satisfied, to remove any
injunctions or other impediments or delays, legal or otherwise and to consummate
and make effective the transactions contemplated by this Agreement.
In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Parent and/or Purchaser or any of
their respective subsidiaries, should be discovered by the Company or Parent, as
the case may be, which should be set forth in the Offer Documents, the Proxy
Statement, the Other Filings, Schedule 14D-1 or Schedule 14D-9, the discovering
party will promptly inform the other parties of such event or circumstance. If
at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, including the execution
of additional instruments, the proper officers and directors of each party to
this Agreement shall take all such necessary or desirable action.
SECTION 6.4 Consents.
(a) Each of the parties will, and will cause its Subsidiaries to, use its
reasonable best efforts to obtain as promptly as practicable all Consents of any
Governmental Entity or any other public or private person required in connection
with, and waivers of any Violations that may be caused by, the consummation of
the transactions contemplated by this Agreement.
(b) The Company shall obtain as promptly as practicable either a letter of
Non-Applicability from the New Jersey Department of Environmental Protection
indicating that the transactions contemplated hereby do not trigger the
Industrial Site Recovery Act or a Negative Declaration letter indicating that no
remedial actions have to be taken at the New Jersey warehouse in connection with
the transactions contemplated hereby.
(c) Each of the Company and Parent shall use its reasonable best efforts
to file as soon as practicable notifications under the HSR Act and to respond as
promptly as practicable to any inquiries received from the Federal Trade
Commission and the Antitrust Division of the Department of Justice for
additional information or documentation and to respond as promptly as
practicable to all inquiries and
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requests received from any State Attorney General or other Governmental Entity
in connection with antitrust matters. Each of the Company and Parent shall
further take all reasonable actions necessary to file any other forms or
notifications which may be required by any foreign Governmental Entity and to
obtain any approvals which may be required in connection therewith.
(d) In furtherance and not in limitation of the foregoing, each of Parent
and the Company shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any antitrust, competition or trade
regulatory laws, rules or regulations of any domestic or foreign government or
Governmental Entity or any multinational authority ("Antitrust Laws"); provided,
however, that nothing in this Agreement shall require, or be construed to
require, Purchaser or any of its affiliates to proffer to, or agree to, sell or
hold separate and agree to sell, before or after the Effective Time, any
material assets, businesses, or interest in any assets or businesses of
Purchaser, the Company or any of their respective affiliates (or to consent to
any sale, or agreement to sell, by the Company of any of its material assets or
businesses) or to agree to any material changes or restrictions in the
operations of any such assets or businesses.
(e) Any party hereto shall promptly inform the others of any material
communication from the United States Federal Trade Commission, the Department of
Justice or any other domestic or foreign government or governmental or
multinational authority regarding any of the transactions contemplated by this
Agreement. If any party or any affiliate thereof receives a request for
additional information or documentary material from any such government or
authority with respect to the transactions contemplated by this Agreement, then
such party will endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other party, an
appropriate response in compliance with such request. Parent will advise the
Company promptly in respect of any understandings, undertakings or agreements
(oral or written) which Parent proposes to make or enter into with the Federal
Trade Commission, the Department of Justice or any other domestic or foreign
government or governmental or multinational authority in connection with the
transactions contemplated by this Agreement.
SECTION 6.5 Public Announcements. The mutual press release with respect to
the execution of this Agreement shall be a joint press release acceptable to
Parent and the Company. Thereafter, so long as this Agreement is in effect,
neither Parent and Purchaser, on the one hand, nor the Company, on the other,
shall issue any press release or otherwise make any public statement with
respect to the transactions contemplated by this Agreement without prior
consultation with the other party, except as may be required by law or as
contemplated by the first clause of Section 6.8(a)(ii) (it being understood and
agreed that the Company intends to file a Current Report on Form 8-K with
respect to the transaction contemplated hereby promptly after the date hereof).
SECTION 6.6 Indemnification.
(a) From and after the date hereof, Parent and Purchaser shall indemnify
and hold harmless each person who is, or has been at any time prior to the date
hereof or who becomes prior to the Effective Time, an officer, director or
employee of the Company or any of its Subsidiaries (collectively, the
"Indemnified Parties" and individually, the "Indemnified Party") against all
losses, liabilities, expenses, claims or damages in connection with any claim,
suit, action, proceeding or investigation based in whole or in part on the fact
that such Indemnified Party is or was a director, officer or employee of the
Company
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or any of its Subsidiaries and arising out of acts or omissions occurring prior
to and including the Effective Time (including but not limited to the
transactions contemplated by this Agreement) to the fullest extent permitted by
the GCL, for a period of not less than six years following the Effective Time;
provided, however, that in the event any claim or claims are asserted or made
within such six-year period, all rights to indemnification in respect of any
such claim or claims shall continue until final disposition of any and all such
claims.
(b) Parent shall cause the Certificate of Incorporation and By-Laws of the
Surviving Corporation and its Subsidiaries to include provisions for the
limitation of liability of directors and indemnification of the Indemnified
Parties to the fullest extent permitted under applicable law and shall not
permit the amendment of such provisions in any manner adverse to the Indemnified
Parties, as the case may be, without the prior written consent of such persons,
for a period of six years from and after the date hereof.
(c) Without limitation of the foregoing, in the event any such Indemnified
Party is or becomes involved in any capacity in any action, proceeding or
investigation in connection with any matter, including, without limitation, the
transactions contemplated by this Agreement, occurring prior to, and including,
the Effective Time, Parent will pay as incurred such Indemnified Party's legal
and other expenses (including the cost of any investigation and preparation)
incurred in connection therewith, subject to the provision by such Indemnified
Party of an undertaking to reimburse such payments in the event of a final
determination by a court of competent jurisdiction that such Indemnified Party
is not entitled thereto. Subject to the undertaking to reimburse referred to in
the previous sentence, Parent shall pay all expenses, including attorneys' fees,
that may be incurred by any Indemnified Party in enforcing the indemnity and
other obligations provided for in this Section 6.6 or any action involving an
Indemnified Party resulting from the transactions contemplated by this
Agreement.
(d) Any determination to be made as to whether any Indemnified Party has
met any standard of conduct imposed by law shall be made by legal counsel
reasonably acceptable to such Indemnified Party, Parent and the Surviving
Corporation, retained at Parent's and the Surviving Corporation's expense.
(e) This Section 6.6 is intended to benefit the Indemnified Parties and
their respective heirs, executors and personal representatives and shall be
binding on the successors and assigns of Parent, Purchaser and the Surviving
Corporation.
SECTION 6.7 Notification of Certain Matters. Parent and the Company shall
promptly notify each other of (a) the occurrence or non-occurrence of any fact
or event which would be reasonably likely (i) to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time or (ii) to cause
any material covenant, condition or agreement under this Agreement not to be
complied with or satisfied in all material respects and (b) any failure of the
Company or Parent, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder in any
material respect; provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the obligations
of any party hereunder.
SECTION 6.8 No Solicitation.
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(a) The Company and its Subsidiaries shall not, and the Company and its
Subsidiaries shall ensure that their respective officers, directors and
consultants (including, but not limited to, investment bankers, attorneys and
accountants) and will use its best efforts to ensure that its employees,
representatives and agents do not, directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with, or provide any
information to, any corporation, partnership, person or other entity or group
(other than Purchaser, any of its affiliates or representatives) concerning any
proposal or offer to acquire all or a substantial part of the business or
properties of the Company or any of its Subsidiaries or any capital stock of the
Company or any of its Subsidiaries, whether by merger, tender offer, exchange
offer, sale of assets or similar transaction involving the Company or any
Subsidiary, division or operating or principal business unit of the Company (an
"Acquisition Proposal"), except that nothing contained in this Section 6.8 or
any other provision hereof shall prohibit the Company or the Company's Board
from (i) taking and disclosing to the Company's stockholders a position with
respect to a tender or exchange offer by a third party pursuant to Rules 14d-9
and 14e-2 promulgated under the Exchange Act, or (ii) making such disclosure to
the Company's stockholders as, in the good faith judgment of the Board, after
receiving advice from Company counsel, is required under applicable law;
provided that the Company may not, except as permitted by Section 6.8(b),
withdraw or modify its position with respect to the Offer or the Merger or
approve or recommend, or propose to approve or recommend any Acquisition
Proposal, or enter into any agreement with respect to any Acquisition Proposal.
Except as permitted by Section 6.8(b), the Company shall, and shall cause each
of its Subsidiaries to, immediately cease and cause to be terminated any
existing activities, discussions or negotiations by the Company, any of its
Subsidiaries or any officer, director, employee or affiliate of, or investment
banker, attorney, accountant or other advisor or representative of, the Company
or any of its Subsidiaries with parties conducted heretofore with respect to any
of the foregoing.
(b) Notwithstanding the foregoing, the Company may furnish information
concerning the Company and its Subsidiaries to any corporation, partnership,
person or other entity or group pursuant to appropriate confidentiality
agreements with terms substantially similar to those contained in the
Confidentiality Agreement, and may negotiate and participate in discussions and
negotiations with such entity or group concerning an Acquisition Proposal if (i)
such entity or group, which has not been solicited by or on behalf of the
Company after the date hereof, has submitted a bona fide written proposal to the
Company relating to the acquisition of all or substantially all of the business
or properties of the Company and its subsidiaries or the acquisition of all of
the capital stock of the Company with respect to which the Board concludes in
good faith, after consulting with a nationally recognized investment banking
firm (including but not limited to Salomon Smith Barney), (A) the proposal is
more favorable to the Company's stockholders (in their capacities as
stockholders), from a financial point of view, than the Offer and the Merger and
(B) the bidder is fully capable of completing the transaction in accordance with
the terms of such proposal, and (ii) in the good faith opinion of the Board of
Directors of the Company, only after receipt of written advice from legal
counsel to the Company, the failure to provide such information or access or to
engage in such discussions or negotiations would cause the Board of Directors to
violate its fiduciary duties to the Company's stockholders under applicable law
(an Acquisition Proposal which satisfies clauses (i) and (ii) being referred to
herein as a "Superior Proposal"). The Company shall provide reasonable notice to
Purchaser to the effect that it has received an Acquisition Proposal, including
its terms and conditions (but excluding the identity of the party or parties
making such Acquisition Proposal, unless the terms and conditions of such
Acquisition Proposal contains a purchase price that includes stock of such party
or parties). At any time after 48 hours following notification to Purchaser of
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the Company's intent to do so (which notification shall include the identity of
the bidder and the material terms and conditions of the proposal) and if the
Company has otherwise complied with the terms of this Section 6.8(b), the Board
of Directors may withdraw or modify its approval or recommendation of the Offer
and may cause the Company to enter into an agreement with respect to a Superior
Proposal, provided it shall concurrently with entering into such agreement pay
or cause to be paid to Purchaser the Termination Fee (as defined below) plus any
amount payable at the time for reimbursement of expenses pursuant to Section
8.3(b). If the Company shall have notified Purchaser of its intent to enter into
an agreement with respect to a Superior Proposal in compliance with the
preceding sentence and has otherwise complied with such sentence, the Company
may enter into an agreement with respect to such Superior Proposal (with the
bidder and on terms no less favorable than those specified in such notification
to Purchaser) after the expiration of such 48 hour period.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1 Conditions to Each Party's Obligation to Consummate the
Merger. The respective obligations of Parent, Purchaser and the Company to
consummate the Merger and the transactions contemplated hereby are subject to
the satisfaction, at or before the Effective Time, of each of the following
conditions:
(a) Stockholder Approval. If required by the GCL, the stockholders of the
Company shall have duly approved the transactions contemplated by this
Agreement.
(b) Injunctions, Illegality. The consummation of the Merger shall not be
restrained, enjoined or prohibited by any order, judgment, decree, injunction or
ruling of a court of competent jurisdiction or any Governmental Entity and there
shall not have been any statute, rule or regulation enacted, promulgated or
deemed applicable to the Merger by any Governmental Entity which prevents the
consummation of the Merger.
(c) Purchase of Shares. Parent and/or Purchaser shall have purchased all
Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however, that this condition shall not be applicable to the obligations of
Parent or Purchaser if Parent and/or Purchaser fails to purchase Shares tendered
pursuant to the Offer in violation of the terms of this Agreement or the Offer.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time,
notwithstanding approval thereof by the stockholders of the Company (with any
termination by Parent also being an effective termination by Purchaser):
(a) by mutual consent of Parent and the Company;
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(b) by Parent or the Company:
(i) if any court or Governmental Entity shall have issued an order, decree
or ruling or taken any other action (which order, decree, ruling or other action
the parties hereto shall use their reasonable best efforts to lift) restraining,
enjoining or otherwise prohibiting the Merger and such order, decree, ruling or
other action shall have become final and nonappealable; or
(ii) if (x) the Offer shall have expired without any Shares being
purchased therein or (y) Purchaser shall not have accepted for payment all
Shares tendered pursuant to the Offer by March 31, 1999; provided, however, that
the right to terminate this Agreement under this Section 8.1(b)(ii) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of Purchaser, to
purchase the Shares pursuant to the Offer on or prior to such date; or
(iii) if the Supervisory Board of Wolters Kluwer nv shall not have
approved the transactions contemplated hereby by June 10, 1998.
(c) by the Company:
(i) if Parent and/or Purchaser fails to commence the Offer as
provided in Section 1.1 hereof; provided, that the Company may not terminate
this Agreement pursuant to this Section 8.1(c)(i) if the Company is at such time
in breach of its obligations under this Agreement such as to cause a Material
Adverse Effect on the Company;
(ii) in connection with entering into a definitive agreement in
accordance with Section 6.8(b), provided it has complied with all provisions of
such section, including the notice provisions therein, and that it makes
simultaneous payment of the Termination Fee plus any amounts then due as a
reimbursement of expenses; or
(iii) if Parent or Purchaser shall have made a material
misrepresentation or have breached in any material respect any of their
respective representations, covenants or other agreements contained in this
Agreement, which breach (a) cannot be or has not been cured, in all material
respects, within 30 days after the giving of written notice to Parent or
Purchaser, as applicable, and (b) limits or restricts the ability of Parent or
Purchaser to consummate the transactions contemplated hereby.
(d) by Parent:
(i) if prior to the purchase of Shares pursuant to the Offer, the
Company shall have breached any representation, warranty, covenant or other
agreement contained in this Agreement which (A) would give rise to the failure
of a condition set forth in paragraph (e) or (f) of Annex I hereto and (B)
cannot be or has not been cured, in all material respects, within 30 days after
the giving of written notice to the Company; or
(ii) if any event set forth in paragraph (d) of Annex I hereto shall
have occurred.
SECTION 8.2 Effect of Termination. In the event of the termination of this
Agreement
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pursuant to Section 8.1, this Agreement shall forthwith become void and have no
effect, without any liability on the part of any party or its directors,
officers or stockholders, other than the provisions of this Section 8.2, Section
8.3 and the last sentence of Section 6.2, which shall survive any such
termination. Nothing contained in this Section 8.2 shall relieve any party from
liability for any breach of this Agreement or the Confidentiality Agreement.
SECTION 8.3 Fees and Expenses.
(a) Except as contemplated by this Agreement, each party hereto shall bear
its own expenses and costs in connection with this Agreement and the
transactions contemplated hereby.
(b) If
(w) the Company shall terminate this Agreement pursuant to Section
8.1(c)(ii) hereof,
(x) Parent shall terminate this Agreement pursuant to Section
8.1(d)(ii) hereof,
(y) either the Company or Parent terminates this Agreement pursuant
to Section 8.1(b)(ii) and (a) prior thereto there shall have been publicly
announced another Acquisition Proposal (provided, however, that solely for
purposes of this clause (a), the term Acquisition Proposal shall not include (1)
the purchase of less than 5% of any class or series of capital stock of the
Company if such purchase does not involve an offer to acquire additional shares
of capital stock of the Company that could cause any person, entity or "group"
(as defined in Section 13(d)(3) of the Exchange Act), other than Purchaser or
its affiliates or any group of which any of them is a member, to beneficially
own 5% or more of any such class or series or (2) any purchase of 5% or more of
any class or series of capital stock of the Company which can properly be
reported on a Schedule 13G and (b) an Acquisition Proposal pursuant to which any
Person acquires all or a substantial part of the business or properties of the
Company or any of its Subsidiaries, any of the capital stock (or securities
exercisable for or convertible into such capital stock) of any of the
Subsidiaries of the Company or any capital stock (or securities exercisable for
or convertible into such capital stock) of the Company which represents 20% or
more of the equity interest or voting power of the Company shall be consummated
on or prior to March 31, 1999, or
(z) Parent shall terminate this Agreement pursuant to Section
8.1(d)(i) hereof and an Acquisition Proposal pursuant to which any Person
acquires all or a substantial part of the business or properties of the Company
or any of its Subsidiaries, any of the capital stock (or securities exercisable
for or convertible into such capital stock) of any of the Subsidiaries of the
Company or any capital stock (or securities exercisable for or convertible into
such capital stock) of the Company which represents 20% or more of the equity
interest or voting power of the Company shall be consummated on or prior to
March 31, 1999,
then, the Company shall pay to Purchaser an amount equal to Seven Million Five
Hundred Thousand Dollars ($7,500,000)(the "Termination Fee"), plus an amount
equal to Purchaser's actual documented reasonable out-of-pocket fees and
expenses (including, without limitation, reasonable legal, investment banking,
financing commitment fees and commercial banking fees and expenses) incurred by
Purchaser and Parent in connection with the due diligence investigation, the
Offer, the Merger, this Agreement and
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the consummation of the transactions contemplated hereby (the "Reimbursable
Expenses"), which shall be payable by wire transfer of same day funds to an
account designated by Purchaser. The Company shall also be obligated to pay to
Purchaser the Reimbursable Expenses in such manner if Parent shall terminate
this Agreement pursuant to Section 8.1(d)(i) hereof (regardless of whether an
Acquisition Proposal is consummated thereafter). The Termination Fee and
Purchaser's good faith estimate of its Reimbursable Expenses shall be paid
concurrently with any such termination, together with delivery of a written
acknowledgment by the Company of its obligation to reimburse Purchaser for its
actual expenses in excess of such estimated expenses payment, except that the
Termination Fee and such expenses shall be payable in connection with a
termination described in clauses (y) or (z) above upon the consummation of an
Acquisition Proposal referenced in such clauses. All fees and expenses paid
pursuant to this Section shall constitute liquidated damages and the Company
shall have no further liability to Purchaser or Parent under this Agreement
after the payment of such fees and expenses, provided that nothing in this
sentence shall affect any liability the Company may have to Purchaser or Parent
under Stock Purchase Agreements (if any) and the Option Agreement.
SECTION 8.4 Amendment. This Agreement may be amended by Parent and the
Company at any time before or after any approval of this Agreement by the
stockholders of the Company but, after any such approval, no amendment shall be
made which decreases the Purchase Price or changes the form thereof without the
approval of such stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties.
SECTION 8.5 Extension; Waiver. At any time prior to the Effective Time,
any party hereto may (i) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (ii) waive any inaccuracies
in the representations and warranties contained herein by any other party or in
any document, certificate or writing delivered pursuant hereto by any other
party or (iii) waive compliance with any of the agreements of any other party or
with any conditions to its own obligations. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Non-Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. The covenants and other agreements contained herein shall
survive in accordance with their respective terms.
SECTION 9.2 Entire Agreement; Assignment.
(a) This Agreement (including the documents and the instruments referred
to herein) and the letter agreement between Salomon Smith Barney, on behalf of
the Company, and Wolters Kluwer U.S. Corporation, on its own behalf and for
Parent and its other affiliates, dated April 6, 1998 (the "Confidentiality
Agreement"), constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or obligations
hereunder will be assigned by any of the parties hereto (whether by operation of
law or otherwise) without the prior written consent of the other party (except
that Parent may assign its rights and Purchaser may assign its rights,
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interest and obligations to any affiliate or direct or indirect subsidiary of
Parent without the consent of the Company). Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
SECTION 9.3 Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
SECTION 9.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or facsimile to the
respective parties as follows:
If to Parent or Purchaser:
Kluwer Boston, Inc.
c/o Kluwer Academic Publishers bv
Spuiboulevard 50, 311GR Dordrecht
3300 AZ Dordrecht, The Netherlands
Attention: Jeffrey K. Smith
Fax #: (011)(31)(78) 639-2268
with a copy to:
Wolters Kluwer U.S. Corporation
161 North Clark Street, 48th Floor
Chicago, Illinois 60601-3221
Attention: Bruce C. Lenz
Fax #: (312) 425-02[cad 220]33 or 0234
and to:
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Attention: Arnold J. Schaab, Esq.
Fax #: (212) 326-0806
If to the Company:
Plenum Publishing Corporation
233 Spring Street
New York, New York 10013
Attention: Martin E. Tash
Fax #: (212) 463-0742
with copies to:
Bressler, Amery & Ross, P.C.
17 State Street
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New York, New York 10004
Attention: Bernard Bressler
Fax #: (212) 425-9337
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 9.6 Consent to Jurisdiction; Waiver of Immunities. The Company,
Parent and Purchaser irrevocably submit to the jurisdiction of any Delaware
state or federal court thereof in any action or proceeding arising out of or
relating to this Agreement, and the Company, Parent and Purchaser hereby
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such Delaware court or in such federal court. Parent and
Purchaser hereby irrevocably appoint The Corporation Trust Company (the "Parent
Process Agent"), with an office on the date hereof at Corporation Trust Center,
1209 Orange Street, Wilmington, Delaware, as its agent to receive on behalf of
Parent or Purchaser service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding. Such service may
be made by mailing or delivering a copy of such process to Parent or Purchaser
in care of Parent Process Agent at Parent Process Agent's above address, and
Parent and/or Purchaser hereby irrevocably authorize and direct Parent Process
Agent to accept such service on their behalf. The Company hereby irrevocably
appoints The Corporation Trust Company (the "Company Process Agent"), with an
office on the date hereof at Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware, as its agent to receive on behalf of the Company service
of copies of the summons and complaint and any other process which may be served
in any such action or proceeding. Such service may be made by mailing or
delivering a copy of such process to the Company in care of the Company Process
Agent at the Company Process Agent's above address, and the Company hereby
irrevocably authorizes and directs the Company Process Agent to accept such
service on its behalf. As an alternative method of service, the Company, Parent
and Purchaser also irrevocably consent to the service of any and all process in
any such action or proceeding by the mailing of copies of such process to the
respective party at its address specified in Section 9.4. The Company, Parent
and Purchaser agree that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
SECTION 9.7 Descriptive Headings. The descriptive headings and captions
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
SECTION 9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 9.9 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and, except with respect to
Sections 2.9 and 6.6, nothing in this Agreement, express or implied, is intended
to confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement.
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SECTION 9.10 Certain Definitions. As used in this Agreement:
(a) the term "Affiliate," as applied to any person, shall mean any other
person directly or indirectly controlling, controlled by, or under common
control with, that person. For the purposes of this definition, "Control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "Person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act); and
(c) the term "Subsidiary", "Subsidiaries" or "subsidiaries" means, with
respect to Parent, the Company or any other person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company or
such other person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
SECTION 9.11 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that 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 shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
* * * * *
IN WITNESS WHEREOF, each of the parties has caused this Agreement and Plan
of Merger to be executed on its behalf by its respective officer thereunto duly
authorized, all as of the day and year first above written.
KLUWER BOSTON, INC.
By: /s/ Jeffrey K. Smith
-------------------------------
Name: Jeffrey K. Smith
Title: President
PPC ACQUISITION CORP.
By: /s/ Jeffrey K. Smith
-------------------------------
Name: Jeffrey K. Smith
Title: President
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PLENUM PUBLISHING CORPORATION
By: /s/ Martin E. Tash
-------------------------------
Name: Martin E. Tash
Title: President and Chairman of the Board
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ANNEX I
Certain Conditions of the Offer. Notwithstanding any other provisions of
the Offer, and in addition to (and not in limitation of) Purchaser's rights to
extend and amend the Offer at any time in its sole discretion (subject to the
provisions of the Merger Agreement), Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-l(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate or amend the Offer as to any Shares not then paid for,
if (i) any applicable waiting period under the HSR Act has not expired or
terminated, (ii) the Minimum Condition has not been satisfied, or (iii) at any
time on or after the date of the Merger Agreement and before the time of
acceptance for payment for any such Shares, any of the following events shall
have occurred:
(a) there shall be threatened or pending any suit, action or proceeding by
any Governmental Entity against Purchaser, Parent, the Company or any Subsidiary
of the Company (i) seeking to prohibit or impose any material limitations on
Purchaser's or Parent's ownership or operation (or that of any of their
respective Subsidiaries or affiliates) of all or a material portion of their or
the Company's businesses or assets (or that of any of its Subsidiaries), or to
compel Purchaser or Parent or their respective Subsidiaries and affiliates to
dispose of or hold separate any material portion of the business or assets of
the Company or Parent and their respective Subsidiaries, in each case taken as a
whole, (ii) challenging the acquisition by Purchaser or Parent of any Shares
under the Offer, seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or the performance of any of the other transactions
contemplated by the Agreement or the Stock Purchase Agreements, or seeking to
obtain from the Company, Purchaser or Parent any damages that are material in
relation to the Company and its Subsidiaries taken as a whole, (iii) seeking to
impose material limitations on the ability of Purchaser, or render Purchaser
unable, to accept for payment, pay for or purchase some or all of the Shares
pursuant to the Offer and the Merger or (iv) seeking to impose material
limitations on the ability of Purchaser or Parent effectively to exercise full
rights of ownership of the Shares, including, without limitation, the right to
vote the Shares purchased by it on all matters properly presented to the
Company's stockholders or there shall be pending any suit, action or proceeding
by any Governmental Entity against Purchaser, Parent, the Company or any
Subsidiary of the Company which is reasonably likely to have a Material Adverse
Effect on the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Government
Entity, to the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, other than the application to the Offer or the Merger of
applicable waiting periods under HSR Act, that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;
(c) there shall have occurred any events after the date of the Agreement
which have or will have a Material Adverse Effect on the Company;
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or Purchaser its
approval or recommendation of the Offer, the Merger or the Agreement, or
approved or recommended any Acquisition Proposal or (ii) the Company shall have
entered into any agreement with respect to any Superior Proposal in accordance
with Section 6.8(b) of the Agreement;
34
<PAGE>
(e) the representations and warranties of the Company set forth in the
Agreement shall not be true and correct, in each case (i) as of the date
referred to in any representation or warranty which addresses matters as of a
particular date, or (ii) as to all other representations and warranties, as of
the date of the Agreement and as of the scheduled expiration of the Offer unless
the inaccuracies without giving effect to any materiality or material adverse
effect qualifications or materiality exceptions contained therein under such
representations and warranties, taking all the inaccuracies under all such
representations and warranties together in their entirety, do not result in
Material Adverse Effect on the Company;
(f) the Company shall have failed to perform any obligation or to comply
with any agreement or covenant to be performed or complied with by it (i) under
Section 6.1 or 6.8 of the Agreement or (ii) under any other agreement or
covenant to be performed or complied with by it under the Agreement, unless the
failure to so perform or comply would not have a Material Adverse Effect on the
Company;
(g) the Agreement shall have been terminated in accordance with its terms;
The foregoing conditions are for the benefit of Parent and Purchaser, may
be asserted by Parent or Purchaser regardless of the circumstances giving rise
to any such conditions and may be waived by Parent or Purchaser in whole or in
part at any time and from time to time in their reasonable discretion, in each
case, subject to the terms of the Merger Agreement. The failure by Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
appended.
35
<PAGE>
SCHEDULE 4.8
MATERIAL CHANGES
After March 31, 1998, the Company realized losses of approximately $3.4
million dollars as a result of liquidating its securities portfolio. The only
remaining investments are 34,825 shares of Gradco Systems, Inc. and an
investment of $1.1 million dollars at cost in Tutor Time Learning Systems stock
and a note receivable.
36
<PAGE>
SCHEDULE 4.11
LITIGATION
None.
37
<PAGE>
SCHEDULE 4.12(a)
EMPLOYEE BENEFIT PLANS
1. Profit Sharing Plan (effective 1/1/89, as amended on 3/20/92, 3/17/93,
5/16/94 and 12/13/94).
2. Incentive Compensation Plan for Executive Officers and Key Employees.
3. Employee Medical Benefit Plan managed by Corporate Healthcare Financing,
Inc.
4. Group Insurance Program providing term life and accidental death and
dismemberment coverage - Fortis Benefits Insurance Company (Policy 65121).
5. See Schedule 4.12(i) for "golden parachute" agreements.
6. Sick pay policy for hourly personnel - 7 days per year.
7. Severance pay: seven months to one year - 1 week; one year or more - 2
weeks.
8. Travel Insurance - $500,000 Hartford Insurance Co. Policy No. 12ETB108204,
Expires May 1, 2000.
38
<PAGE>
SCHEDULE 4.12(i)
EMPLOYMENT/TERMINATION AGREEMENTS
1. Second Amended Contingent Compensation Agreements dated 8/1/96 with
the following persons:
a. Martin E. Tash;
b. Mark Shaw;
c. Harry Allcock;
d. Ken Derham;
e. Ghanshyam Patel.
2. Contingent Compensation Contracts dated 8/1/96 with the following
persons:
a. John Hwang;
b. Carol Bischoff;
c. Tom Mulak.
39
<PAGE>
SCHEDULE 4.12(j)
LABOR UNION
At the Company warehouse in Edison, New Jersey the hourly workers are
represented by Local 29, Retail/Wholesale & Deparment Store Union, AFL-CIO.
40
<PAGE>
SCHEDULE 4.14(b)
LICENSES
1. Translation Rights Agreement dated March 3, 1998 between Plenum Publishing
Corporation ("Plenum") and Editoriale Armenia (granting license to publish
Tao of Immunology).
2. Firstsearch Electronic Collections Online Agreement dated September 2,
1997 between Plenum and OCLC Online Computer Library Center, Incorporated
(granting right to make journals available online).
3. Agreement dated June 17, 1997 between Plenum and Blackwells (granting
access to CatchWord journals).
4. General Agreement dated April 16, 1997 between Plenum and UMI Company
(granting license to reproduce and distribute various works).
5. Rights Agreement dated January 1, 1997 between Plenum and The British
Library Board (granting license to use material in journals and other
works).
6. Agreement dated October 31, 1996 between Plenum and Kenneth Marshall
(granting license to publish paperback editions of A Sexual Odyssey).
7. Comprehensive Publisher Photocopy Agreement dated June 28, 1995 between
Plenum and Copyright Clearance Center, Inc. (granting right to reproduce
and distribute substantially all print publications of Plenum).
8. Agreement dated March 30, 1990 between Plenum and University Microfilms,
Inc. (granting license to reproduce and distribute various works in
microform).
9. Agreement dated April 10, 1989 between Plenum and MacMillan Book Clubs,
Inc. (granting book club rights in Comprehensive Handbook of Cognitive
Therapy).
10. Agreement dated February 6, 1986 between Plenum and the Institute for
Scientific Information, Inc. (granting license reproduce and distribute
two journals).
11. License Agreement between Plenum and Information Access Company (granting
license reproduce and distribute two journals).
12. Miscellaneous agreements in which Plenum grants permission to reprint a
certain number of copies of material owned by Plenum.
13. License Agreement dated January 21, 1994 between IFI/Plenum Data
Corporation ("IFI") and The American Chemical Society (granting license to
utilize computer databases).
14. Database License Agreement dated November 1, 1991 between Maxwell Online,
Inc. and IFI (granting license to utilize computer databases).
41
<PAGE>
SCHEDULE 4.16
ENVIRONMENTAL MATTERS
Set forth below is a summary of the file maintained by the New Jersey
Department of Environmental Protection ("NJDEP") with respect to real property
located at 200 and 220 McGaw Drive, Edison Township, New Jersey, which Plenum
purchased on November 16, 1990. The NJDEP file was generated in connection with
the action taken by a prior owner, L. Perrigo Company ("Perrigo"), to comply
with the requirements of the Environmental Cleanup Responsibility Act ("ECRA").
This Act was subsequently amended and is now known as the Industrial Site
Recovery Act ("ISRA").
Prior Owners and Operators
On December 31, 1983, Albert Frassetto purchased the property from I.C.E.
Associates. He owned the property until it was sold to Plenum Publishing
Corporation ("Plenum"). The site consists of a warehousing space and two office
areas located on the main floor and on a mezzanine. From September 1979 through
August 1994 First National State Bank leased the mezzanine area for office
space. Thereafter, from September 1984 through December 1989 the New Jersey
Teachers Academy leased this space.
ECRA
The requirements of ECRA are triggered when an "industrial establishment"
terminates, transfers or closes its business activities. Industrial
establishments are defined in the statute as places of business which utilize
hazardous substances and have an Standard Industrial Classification Code ("SIC")
set out in the statute. The statute covers all manufacturing operations and
certain other activities. Perrigo intially took the position that the property
was not subject to the requirements of ECRA because of the owner's SIC code.
However, this analysis was incorrect because the SIC code of the property is
based upon the business operations undertaken at the facility. In this case,
NJDEP decided that the SIC code for Perrigo, the tenant was 51, an ECRA subject
activity.
In July 1990, Perrigo submitted a request for an Administrative Consent
Order ("ACO") allowing the termination of activities before the ECRA
investigation and cleanup was completed. The company agreed to establish a
$500,000 financial assurance to secure its cleanup obligation.
In October 1990, Perrigo submitted its General Information Submission
("GIS") and Site Evaluation Submission ("SES") forms to the NJDEP. These forms
generally discussed the business activities conducted at the site. In addition,
they showed that the primary environmental concern for the property was the
existence of two 4,000 gallon underground storage tanks ("USTs"). These USTs
were used for storage of No. 2 heating oil. No other environmental concerns
existed because the facility was used primarily for storage of finished and
packaged goods.
Perrigo hired an environmental consultant to handle the closure of the
USTs and post-excavation sampling. In its report, the consultant stated that no
holes were noted in the tanks after they were removed from the ground. Further,
all post-excavation soil samples were well below the NJDEP's existing cleanup
limits. Based on this information, no further action was approved for these
areas of concern.
42
<PAGE>
In a Report of Inspection, the NJDEP case manager also requested further
information concerning a hole observed in the facility's wall and floor drains.
Perrigo was able to resolve these issues by showing that the hole was related to
stormwater runoff from the roof, and the floor drains emptied to the sanitary
sewer line.
Sale of Property to Plenum
In October 1990, Frassetto advised the NJDEP that a contract to sell the
property to Plenum had been executed. An amendment to the ACO was executed. This
amendment authorized the transaction to close. However, no substantive cleanup
requirements were imposed because of its execution.
On March 26, 1991, Perrigo submitted a Negative Declaration Affidavit
stating that the cleanup for the property was complete and performed in
accordance with NJDEP regulatory requirements. This Negative Declaration was
approved by NJDEP on April 3, 1991. With the issuance of this letter, the ECRA
review was closed.
43
<PAGE>
SCHEDULE 4.17
INSURANCE
Policy Number 488-30-26-58
- -------------------------------------------------------------------------------
COMMON POLICY DECLARATIONS
PREMIUM STATEMENT
- -------------------------------------------------------------------------------
NAMED INSURED: PRODUCER:
PLENUM PUBLISHING CORP. HARVEY DANN CO INC
(SEE AIL 03 #2) 122 EAST 42ND STREET
233 SPRING STREET SUITE 1013
NEW YORK, NY 10013 NEW YORK, NY
10168
Premium Statement for the period from 05/15/97 to 05/15/98
This policy consists of the following coverage parts for which a premium is
indicated. This premium may be subject to adjustment.
<TABLE>
<CAPTION>
COVERAGE SECTION PREMIUM
- -------------------------------------- --------------------------------------------------
At Inception 1st Anniversary 2nd Anniversary
------------ --------------- ---------------
<S> <S> <C> <C>
Commercial Property Coverage Part $22.128
Commercial General Liability Coverage Part $17.253
Commercial Crime Coverage Part
Commercial Auto Coverage Part $6.272
Commercial Umbrella Coverage Part $7.302
Commercial Inland Marine Coverage Part $1.540
Boiler and Machinery Coverage Part
LIBEL COVERAGE PART $21.000
Total Advance Premium $75.495
------------ --------------- ---------------
STATE CHARGES $96.35
(SEE AIL 03 07 86 $003)
</TABLE>
- -------------------------------------------------------------------------------
SCHEDULE OF PAYMENTS
- -------------------------------------------------------------------------------
SEE CONTINUATION OF PREMIUM STATEMENT. AIL03. FOR SCHEDULE OF PAYMENTS
C P W
AIL 02 07 95 INSURED PREMIUM STATEMENT
44
<PAGE>
Policy Number 298-50-09-89
- -------------------------------------------------------------------------------
COMMON POLICY DECLARATIONS
PREMIUM STATEMENT
- -------------------------------------------------------------------------------
NAMED INSURED: PRODUCER:
PLENUM PUBLISHING CORP. HARVEY DANN CO INC
(SEE AIL 03 #2) 122 EAST 42ND STREET
233 SPRING STREET SUITE 1013
NEW YORK, NY 10013 NEW YORK, NY
10168
Premium Statement for the period from 05/15/97 to 05/15/98
This policy consists of the following coverage parts for which a premium is
indicated. This premium may be subject to adjustment.
<TABLE>
<CAPTION>
COVERAGE SECTION PREMIUM
- -------------------------------------- --------------------------------------------------
At Inception 1st Anniversary 2nd Anniversary
------------ --------------- ---------------
<S> <S> <C> <C>
Commercial Property Coverage Part
Commercial General Liability Coverage Part
Commercial Crime Coverage Part
Commercial Auto Coverage Part $2.874
Commercial Umbrella Coverage Part
Commercial Inland Marine Coverage Part
Boiler and Machinery Coverage Part
Total Advance Premium $2.874
------------ --------------- ---------------
NY VEHICLE FEE $1.00
</TABLE>
- -------------------------------------------------------------------------------
SCHEDULE OF PAYMENTS
- -------------------------------------------------------------------------------
C P W
AIL 02 07 86 INSURED PREMIUM STATEMENT
45
<PAGE>
Centennial WORKERS COMPENSATION AND EMPLOYERS LIABILITY
Commercial INSURANCE POLICY
Insurance Company
NCII #12149 Information Page
Rewrite of No. Policy Number
Renewal of No. 401-51-41-93 401-70-91-24
(INTRASTATE G16908)
Item 1. INSURED. The Insured and Malling Address: ID # 910743759
PLENUM PUBLISHING CORP. FEIN 135648711
233 SPRING STREET
NEW YORK, NY 10013 Other workplaces not shown at left:
/ / INDIVIDUAL / / PARTNERSHIP /X/ CORPORATION / / OTHER
- -------------------------------------------------------------------------------
Item 2. POLICY PERIOD. From: May 15, 1997 To: May 15, 1998 12:01 A.M.
STANDARD TIME AT THE SCHEDULED
MAILING ADDRESS
- -------------------------------------------------------------------------------
Item 3. COVERAGE
A. Workers Compensation Insurance: Part One of the policy applies to the
Workers Compensation Law of the states listed here:
DELAWARE NEW JERSEY NEW YORK
NORTH CAROLINA
B. Employers Liability Insurance: Part Two of the policy applies to work in
each state listed in item 3A.
The Limits of our liability under Part Two are:
Bodily injury by Accident Bodily Injury by Disease Bodily Injury by Disease
$100,000 each accident $500,000 policy limit $100,000 each employee
C. Other States Insurance: Part Three of the policy applies to the states,
if any, listed here: All states except Nevada, North Dakota, Ohio,
Washington, West Virginia and states designated in Item 3.A. of the
Information Page.
D. This policy includes these endorsements and schedules: SEE G1690B
SCHEDULE OF ENDORSEMENTS
- -------------------------------------------------------------------------------
Item 4. PREMIUM. The premium for this policy will be determined by our
Manuals of Rules, Classifications, Rates and Rating Plans.
All information required below is subject to verification
and change by audit.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Price Per
Code Total Estimated %100 of Estimated ANNUAL
Classifications No. ANNUAL Products
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
See Extension of information Page 38,172.0
Surcharges and Assessments 3,796.0
and/or Filing Fees (SEE G16908)
Expense Constant Charge INCLUDE
- -----------------------------------------------------------------------------------------------------------
Minimum Interim Deposit Total
Premium $850 (NJ) Adjustments Premium Estimated $41,968.0
Cost
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Representative Agent or Broker HARVEY DANN CO INC
Office Address
122 EAST 42ND STREET
SUITE 1013
City, State, Zip Code NEW YORK, NY 10168
- -------------------------------------------------------------------------------
DATE OF ISSUE: JPS: 05/27/97 SERVICING OFFICE: NEW YORK
/ / This is a Three Year Fixed Rate Plicy
RENEWED BY POLICY NUMBER
CPW Corporated by /s/ Dennis J. Sellers
- ------------------------ ---------------------------------
Authorized Signature Date
2Q 44191-1 (11/96) Copyright 1987 National Council on Compensation Insurance
WC 00 00 01A INSURED
46
<PAGE>
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated June 10, 1998, by and between Plenum
Publishing Corporation, a Delaware corporation (the "Company"), and Kluwer
Boston, Inc., a Massachusetts corporation (the "Purchaser").
WHEREAS, as a condition to its willingness to enter into the Agreement and
Plan of Merger, dated as of June 10, 1998, among the Company, the Purchaser and
PPC Acquisition Corp., a Delaware corporation ("Acquisition Corp.") (the "Merger
Agreement"), Purchaser has required that the Company agree, and the Company has
agreed, to grant the Purchaser the option as set forth herein to purchase up to
698,540 shares of the common stock, $.10 par value per share, of the Company
(the "Common Stock").
NOW, THEREFORE, to induce Purchaser to enter into the Merger Agreement,
and in consideration of Purchaser doing so and of the mutual covenants and
agreements set forth herein, the parties agree as follows:
1. Grant of Option. The Company hereby grants to the Purchaser an
irrevocable option (the "Stock Option") to purchase up to 698,540 shares of
Common Stock ("Option Shares") at a price per share of $73.50 ("Option Price")
payable in cash.
2. Exercise of the Stock Option. (a) The Stock Option may be exercised, in
whole or in part, at any time and from time to time after any Triggering Event
(as defined in Section 3) shall have occurred and prior to the expiration
thereof, provided that (i) all waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act") required for the purchase of
the Option Shares shall have expired or been waived, (ii) no breach by Purchaser
or Acquisition Corp. shall have occurred and be continuing under this Agreement
or the Merger Agreement and (iii) there shall not be in effect any preliminary
or final injunction or other order issued by any court or governmental,
administrative or regulatory agency or authority, prohibiting the issuance of
the Option Shares pursuant to this Agreement. The Stock Option shall expire upon
the earlier of (I) the date of consummation of the merger with Acquisition Corp.
contemplated by the Merger Agreement, (II) twenty (20) days after the date of
consummation of any Superior Proposal or Acquisition Proposal (as such terms are
defined in the Merger Agreement) under circumstances which obligate the Company
to pay the Termination Fee (as defined in the Merger Agreement) under the terms
of the Merger Agreement, or (III) the date upon which the Merger Agreement is
terminated other than in connection with the occurrence of a Triggering Event.
(b) If the Purchaser wishes to exercise the Stock Option for all or
some of the Option Shares, the Purchaser shall send a written notice (the
"Notice") to the
<PAGE>
Company specifying the number of Option Shares it will purchase pursuant to such
exercise and the place and date not less than three (3) nor more than twenty
(20) days from the date of the Notice for the closing of such purchase.
3. Triggering Event. For purposes of this Agreement, a "Triggering Event"
shall mean the occurrence of an event which requires the payment of the
Termination Fee (as defined in the Merger Agreement) by the Company to
Acquisition Corp. in accordance with the provisions of Section 6.8, 8.1 or 8.3
of the Merger Agreement.
4. Closing. (a) At any closing on the date specified under Section 2
hereof, (i) the Purchaser will make payment to the Company of the aggregate
price for the Option Shares being purchased upon exercise of the Stock Option by
wire transfer in immediately available funds and (ii) the Company will deliver
to the Purchaser a certificate or certificates representing the number of shares
of Common Stock so purchased in the denominations designated by the Purchaser
and receipt evidencing payment of any requisite stock transfer taxes. At any
such closing, the Company shall deliver a certificate to the Purchaser
certifying that the representations and warranties made in Section 6 herein are
true and correct as of the date of such closing, and the Purchaser shall deliver
a letter to the Company agreeing that the Purchaser will not offer to sell, or
otherwise dispose of, any Option Shares acquired by it pursuant to this
Agreement in violation of the Securities Act of 1933, as amended (the "1933
Act"), and applicable state securities laws.
(b) The closing shall take place at the location set forth in the
Notice delivered in accordance with Section 2 hereof.
5. Covenants. (a) Upon the request of the Purchaser, the Company agrees to
file, as promptly as practicable, a registration statement and use its best
efforts to cause such registration statement to become effective, as
expeditiously as possible, under the 1933 Act and any applicable state
securities laws with respect to any proposed disposition by the Purchaser of the
Option Shares, or any portion thereof, unless, in the written opinion of counsel
to the Company, addressed to the Purchaser, registration is not required for the
proposed disposition of such Option Shares; provided, however, that the Company
shall not be obligated to file more than one registration statement (under
federal and, if applicable, state law) with respect to the Option Shares
pursuant to this paragraph. The Company agrees further to cause such
registration statement to remain effective for a reasonable period of time
required for the disposition by the Purchaser of the Option Shares in a public
offering thereof (provided, that the effectiveness of the registration statement
may be delayed or suspended for a reasonable period of time, but not in excess
of 180 days, to permit the Company to consummate (i) an offering of securities,
or (ii) extraordinary transactions that it would otherwise be precluded from
completing due to the obligations of the Company under this Section 5(a)), to
prepare and file such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the 1933
Act with respect to the sale or other
2
<PAGE>
disposition of all securities covered by such registration statement, and to
enter into customary agreements for a secondary offering of shares (including an
underwriting agreement for a secondary offering of shares in customary form
containing customary indemnification provisions). The registration effected
under this paragraph 5(a) shall be effected at the Company's expense.
(b) Upon the request of the Purchaser, the Company agrees that it
will promptly file applications to list any Option Shares, whether issued or
unissued, on the NASDAQ National Market System and will use its best efforts to
obtain approval of such listing.
(c) Upon the request of Purchaser prior to Purchaser's exercise of
the Stock Option, the Company shall use its reasonable best efforts to file as
soon as practicable notifications under the HSR Act with respect to Purchaser's
exercise of the Stock Option and to respond as promptly as practicable to any
inquiries received from the Federal Trade Commission and the Antirust Division
of the Department of Justice for additional information or documentation and to
respond as promptly as practicable to all inquiries and requests received from
any State Attorney General or other Governmental Entity (as defined in the
Merger Agreement) in connection with antitrust matters. Each of the Company and
Purchaser shall further take all reasonable actions necessary to file any other
forms or notifications which may be required by any foreign Governmental Entity
and to obtain any approvals which may be required in connection therewith.
(d) In furtherance and not in limitation of the foregoing, each of
Purchaser and the Company shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any antitrust, competition or trade
regulatory laws, rules or regulations of any domestic or foreign government or
Governmental Entity or any multinational authority ("Antitrust Laws"); provided,
however, that nothing in this Agreement shall require, or be construed to
require, Purchaser or the Company or any of their respective affiliates to
proffer to, or agree to, sell or hold separate and agree to sell, before or
after the exercise of the Stock Option, any material assets, business, or
interest in any assets or businesses of Purchaser, the Company or any of their
respective affiliates (or to consent to any sale, or agreement to sell, by the
Company of any of its material assets or businesses) or to agree to any material
changes or restrictions in the operations of any such assets or businesses.
(e) Any party hereto shall promptly inform the other of any material
communication from the United States Federal Trade Commission, the Department of
Justice or any other domestic or foreign government or Governmental Entity or
multinational authority regarding any of the transactions contemplated by this
Agreement. If any party or any affiliate thereof receives a request for
additional information or documentary material from any such government or
authority with respect to the transactions contemplated by this Agreement, then
such party will endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other party, an
appropriate response in compliance with such
3
<PAGE>
request. Purchaser will advise the Company promptly in respect of any
understandings, undertakings or agreements (oral or written) which Purchaser
proposes to make or enter into with the Federal Trade Commission, the Department
of Justice or any other domestic or foreign government or Governmental Entity or
multinational authority in connection with the transactions contemplated by this
Agreement.
6. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) The Company is a corporation duly organized and validly existing
in good standing under the laws of Delaware. The Company has all requisite
corporate power and authority to enter into and perform all of its obligations
under this Agreement. The execution, delivery and performance of this Agreement
and all the transactions contemplated hereby have been duly authorized by the
Company's Board of Directors and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or any of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by a
duly authorized officer of the Company, and constitutes a legal, valid and
binding agreement of the Company, and assuming this Agreement is a legal, valid
and binding obligation of the Purchaser, this Agreement is enforceable against
it in accordance with its terms.
(b) Except for compliance with the requirements of the HSR Act, no
consent of any court or governmental authority, national securities exchange
automated securities quotation system or other person is necessary for the
execution, delivery and performance of this Agreement by the Company.
(c) The Company has taken all necessary corporate action to
authorize and reserve for issuance upon exercise of the Stock Option 698,540
authorized but unissued Common Shares. The Option Shares have been duly
authorized and, when issued and paid for in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable. Upon delivery
of the Option Shares to the Purchaser upon the exercise of the Option granted
under this Agreement, the Purchaser will receive good and marketable title to
the Option Shares, free and clear of any pledge, lien, security interest,
charge, preemptive right, claim, equity or encumbrance of any kind.
(d) The execution and delivery of this Agreement do not, and the
performance of this Agreement will not, (i) violate the certificate of
incorporation or by-laws of the Company, or (ii) conflict with or result in a
breach of any terms or provisions of, or constitute a default or give rise to a
right of acceleration under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company under any
indenture, mortgage, loan agreement or other agreement or instrument to which
the Company is a party or by which any of its property is bound or any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
instrumentality, court or national securities exchange having jurisdiction over
the Company or any of its property.
4
<PAGE>
7. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company that it is a corporation duly organized
and validly existing in good standing under the laws of the State of
Massachusetts and has all requisite corporate power and authority to enter into
and perform all of its obligations under this Agreement; the execution, delivery
and performance of this Agreement by it and all of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on its part,
and this Agreement has been duly executed and delivered by it.
8. Representations and Warranties to Survive Delivery. All representations
and warranties contained in this Agreement, or contained in certificates of
officers of the Company submitted pursuant to this Agreement, shall survive
delivery of and payment for the Option Shares for a period expiring on the
earlier of (a) the first anniversary of the date of delivery and payment for the
Option Shares and (b) the date upon which Purchaser shall have sold or otherwise
disposed of all of the Option Shares (other than to a direct or indirect
majority-owned subsidiary of Purchaser).
9. Adjustment Upon Changes in Capitalization. In the event of any change
in the Common Shares by reason of stock dividends, split-ups, recapitalizations,
combinations, exchanges of shares or the like, the number of Option Shares and
the purchase price per share shall be adjusted appropriately.
10. No Assignment. Neither the rights nor the obligations of any party
hereto may be transferred or assigned without the written consent of the other
parties, except that Purchaser may assign its rights and obligations to any
direct or indirect majority-owned subsidiary of Purchaser.
11. Specific Performance. The parties hereto acknowledge that damages
would be an inadequate remedy for a breach of this Agreement and that the
obligations of the parties hereto shall be specifically enforceable.
12. Entire Agreement. This Agreement and the Merger Agreement constitute
the entire agreement among the parties with respect to the subject matter hereof
and supersede all other prior agreements and understandings, both written and
oral, among the parties or any of them with respect to the subject matter
hereof.
13. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
14. Further Assurances. Each party will execute and deliver all such
further documents and instruments and take all such further action as may be
necessary in order to consummate the transactions contemplated hereby.
5
<PAGE>
15. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or facsimile to the
respective parties as follows:
If to Purchaser:
Kluwer Boston, Inc.
c/o Kluwer Academic Publishers bv
Spuiboulevard 50
3300 AZ Dordrecht, the Netherlands
Attention: Jeffrey K. Smith
Facsimile: 011-31-78-63-92-268
with a copy to:
Wolters Kluwer U.S. Corporation
161 North Clark Street
48th Floor
Chicago, Illinois 60601-3221
Attention: Bruce C. Lenz
Facsimile: (312) 425-0233
and to:
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Attention: Arnold J. Schaab, Esq.
Facsimile: (212) 326-0806
If to the Company:
Plenum Publishing Corporation
233 Spring Street
New York, New York 10013
Attention: Martin E. Tash
Facsimile: (212) 463-0742
with copies to:
Bressler, Amery & Ross, P.C.
17 State Street
New York, New York 10004
Attention: Bernard Bressler, Esq.
Facsimile: (212) 425-9337
6
<PAGE>
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflict of laws thereof.
17. Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
18. Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
20. Expenses. Except as otherwise provided in Section 5, all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.
7
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized as of the day
and year first above written.
PLENUM PUBLISHING CORPORATION
By: /s/ Martin E. Tash
-------------------------------------------
Martin E. Tash
President and Chairman of the Board
KLUWER BOSTON, INC.
By: /s/ Jeffrey K. Smith
-------------------------------------------
Name: Jeffrey K. Smith
Title: President
8
<PAGE>
April 8, 1998
Mr. Bruce Lenz
Executive Vice President & CFO (WK USA)
Wolters Kluwer US Corporation
161 North Clark Street
48th Flr.
Chicago, IL 60601
Dear Mr. Lenz:
You have requested information from Plenum Publishing Corporation (the
"Company") in connection with your consideration of a possible acquisition by
you of the Company (an "Acquisition Transaction"). As a condition to our
furnishing such information to you, we are requiring that you agree, as set
forth below, to treat confidentially such information, whether written or oral,
and any other information that the Company, its agents or its representatives
(including attorneys and financial advisors) furnishes to you or your directors,
officers, employees, agents, advisors, prospective bank or institutional
lenders, affiliates or representatives of your agents, advisors or prospective
lenders (all of the foregoing collectively referred to as "your
Representatives"), whether furnished before or after the date of this letter,
and all notes, analyses, compilations, studies or other documents, whether
prepared by you or others, which contain or otherwise reflect such information
(collectively, the "Evaluation Material").
The term "Evaluation Material" does not include information which (i)
becomes generally available to the public other than as a result of a disclosure
by you or your Representatives, (ii) was available to you on a non-confidential
basis prior to its disclosure to you by the Company, its representatives or its
agent, or (iii) becomes available to you on a non-confidential basis from a
source other than the Company
<PAGE>
("Source"), its representatives or its agents, provided that such Source is not,
to your knowledge after due inquiry, bound by a confidentiality agreement with
the Company, its representatives or its agents or otherwise, to your knowledge
after due inquiry, prohibited from transmitting the information to you or your
Representatives by a contractual, legal or fiduciary obligation and provided
that the existence of such Source is not disclosed to you in the Evaluation
Material.
It is understood that you may disclose any of the Evaluation Material to
those of your Representatives who require such material for the purpose of
evaluating a possible Acquisition Transaction (provided that such
Representatives shall be informed by you of the confidential nature of the
Evaluation Material). You agree that the Evaluation Material will be kept
confidential by you and your Representatives and, except with the specific prior
written consent of the Company or as expressly otherwise permitted by the terms
hereof, will not be disclosed by you or your Representatives. You further agree
that you and your Representatives will not use any of the Evaluation Material or
any information obtained from the Evaluation Material for any reason or purpose
other than to evaluate a possible Acquisition Transaction.
Without the prior written consent of the Company, you and your
Representatives will not disclose to any person (1) the fact that the Evaluation
Material has been made available to you or that you have inspected any portion
of the Evaluation Material, (2) the fact that any discussions or negotiations
are taking place concerning a possible Acquisition Transaction, or (3) any of
the terms, conditions or other facts with respect to any possible Acquisition
Transaction, including the status thereof, unless and only to the extent that
such disclosure (after making reasonable efforts to avoid such disclosure and
after advising and consulting with the Company about your intention to make, and
the proposed contents of such disclosure) is, in the opinion of your counsel,
required by applicable United States securities laws. The term "person" as used
in this letter shall be broadly interpreted to include without limitation any
corporation, company, partnership and individual.
In the event that you or any of your Representatives are requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoena, Civil Investigative Demand or similar process) to disclose
any of the Evaluation Material, it is agreed that you or such Representative, as
the case may be, will provide the Company with prompt notice of such request(s)
so that it may seek an appropriate protective order or other appropriate remedy
and/or waive your or such Representative's compliance with the provisions of
this Agreement. In the event that such protective order or other remedy is not
obtained, or that the Company grants a waiver hereunder, you or such
Representative may furnish that portion (and only that portion) of the
Evaluation Material which, in the written opinion of your counsel, you are
legally compelled to disclose and will exercise your best efforts to obtain
reliable assurance that confidential treatment will
<PAGE>
be accorded any Evaluation Material so furnished.
In addition, you hereby acknowledge that you are aware (and that your
Representatives who are apprised of this matter have been or will be advised)
that the United States securities laws restrict persons with material non-public
information about a company obtained directly or indirectly from that company
from purchasing or selling securities of such company, or from communicating
such information to any other person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such
securities.
You agree that for a period of one year from the date of this letter
agreement, neither you nor any of your affiliates, alone or with others, will in
any manner (1) acquire, agree to acquire, or make any proposal (or request
permission to make any proposal) to acquire any securities (or direct or
indirect rights, warrants or options to acquire any securities) or property of
the Company (other than property transferred in the ordinary course of the
Company's business), unless such acquisition, agreement or making of a proposal
shall have been expressly first approved (or in the case of a proposal,
expressly first invited) by the Company's Board of Directors, (2) except at the
specific written request of the Company, propose to enter into, directly or
indirectly, any merger or business combination involving the Company or any of
its subsidiaries, (3) solicit proxies from shareholders of the Company or
otherwise seek to influence or control the management or policies of the Company
or any of its affiliates, (4) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934)
with respect to any voting securities of the Company or any of its subsidiaries,
(5) otherwise act, alone or in concert with others, to seek to control or
influence the management, Board of Directors or policies of the Company, (6)
disclose any intention, plan or arrangement inconsistent with the foregoing or
(7) assist, advise or encourage (including by knowingly providing or arranging
financing for that purpose) any other person in doing any of the foregoing. You
also agree during such period not to (1) request the Company (or its directors,
officers, employees or agents), directly or indirectly, to amend or waive any
provisions of this paragraph (including this sentence), or (2) take any action
which might require the Company to make a public announcement regarding the
possibility of a business combination, merger or extraordinary transaction. You
hereby represent that neither you nor your affiliates beneficially own any
shares of the Common Stock of the Company.
You agree that, without the prior written consent of the Company,
neither you nor those of your Representatives who are aware of the Evaluation
Material and/or the possibility of an Acquisition Transaction will initiate or
cause to be initiated or maintain (other than through Salomon Brothers Inc and
Smith Barney Inc. doing business as "Salomon Smith Barney") any communications
with any officer, director, agent or employee of the Company concerning the
Company's business, operations, prospects or
<PAGE>
finances or the Evaluation Material or any possible Acquisition Transaction.
Moreover, you further agree that Salomon Smith Barney will arrange for
appropriate contacts for due diligence purposes and that all (a) communications
regarding any possible Acquisition Transaction, (b) requests for additional
information, (c) requests for facility tours or management meetings and (d)
discussions or questions regarding procedures, will be submitted or directed to
Salomon Smith Barney.
You agree that, for a period of six months from the date hereof, without
the prior written consent of the Company, you will not solicit or cause to be
solicited any person employed by the Company or its subsidiaries or affiliates
at any time during such period and to whom you had been directly or indirectly
introduced or otherwise had contact with during or as the result of your review
of the Evaluation Material or your consideration of an Acquisition Transaction.
You will promptly upon the written request of the Company deliver to the
Company all documents or other matter furnished by the Company to you or your
Representatives constituting Evaluation Material, together with all copies
thereof in the possession of you or your Representatives. In the event of such
request, all other documents or other matter constituting Evaluation Material,
or any analyses, compilations, studies or other documents containing or
reflecting your use of the Evaluation Material, in the possession of you or your
Representatives will be destroyed, with any such destruction confirmed by you in
writing to the Company.
Although you understand that the Company has endeavored to include in
the Evaluation Material information known to it which it believes to be relevant
for the purpose of your investigation, you further understand that neither the
Company nor its agents or its representatives makes any representation or
warranty, express or implied, as to the accuracy or completeness of the
Evaluation Material. You agree that neither the Company nor its officers,
directors, stockholders, owners, affiliates, agents or representatives shall
have any liability to you or any of your Representatives or any other person
resulting from the use of the Evaluation Material by you or such
representatives. Only those representations and warranties that may be made to
you or affiliates in definitive written agreement for an Acquisition
Transaction, when, as and if executed and subject to such limitations and
restrictions as may be specified therein, shall have any legal effect, and you
agree that if you determine to engage in an Acquisition Transaction such
determination will be based solely on the terms of such written agreement and on
your own investigation, analysis and assessment of the business to be acquired.
You also hereby agree that no contract or agreement providing for an
Acquisition Transaction will be deemed to exist between you and the Company
and/or the owners or stockholders of the Company unless and until a definitive
written agreement has been signed, executed and delivered by you and the Company
and/or
<PAGE>
such owners or stockholders. Moreover, unless and until such a definitive
written agreement is entered into, executed and delivered, none of the Company,
its stockholders or its affiliates or you will be under any legal obligation of
any kind whatsoever with respect to any Acquisition Transaction except for the
matters specifically agreed to in this Agreement. You also hereby waive, in
advance, any claims (including, without limitation, claims for breach of
contract) in connection with any Acquisition Transaction or any other
transaction unless and until such a definitive, written agreement is entered
into, executed and delivered. For the purposes of this paragraph, a "definitive
written agreement" does not include an executed letter of intent or any other
preliminary written agreement, nor does it include any written or oral
acceptance of any offer or bid.
You understand that (a) the Company shall be free to conduct any process
with respect to a possible Acquisition Transaction as the Company in its sole
discretion shall determine (including, without limitation, by negotiating with
any prospective party and entering into a definitive written agreement without
prior notice to you or any other person), (b) any procedures relating to such
Acquisition Transaction may be changed at any time without notice to you or any
other person and (c) you shall not have any claim whatsoever against the Company
or Salomon Smith Barney or any of their respective directors, officers,
stockholders, owners, affiliates, agents or representatives, arising out of or
relating to any possible or actual Acquisition Transaction (other than those as
against parties to a definitive written agreement with you in accordance with
the terms thereof).
You hereby agree to indemnify and hold harmless the Company from any
damage, loss, cost or liability arising out of or resulting from any
unauthorized use or disclosure by you or your Representatives of the Evaluation
Material or any information obtained from the Evaluation Material.
You also acknowledge that money damages would be both incalculable and
an insufficient remedy for any breach of this Agreement by you or your
Representatives and that any such breach would cause the Company irreparable
harm. Accordingly, you agree that in the event of any breach of threatened
breach of this Agreement, the Company, in addition to any other remedies at law
or in equity it may have, shall be entitled, without the requirement of posting
a bond or other security, to equitable relief, including injunctive relief and
specific performance.
You also hereby irrevocably and unconditionally consent to submit to
the exclusive jurisdiction of the courts of the State of New York and of the
United States of America located in the City of New York for any actions,
suits or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby (and you agree not to commence any action,
suit or proceeding relating thereto except in such courts), and further agree
that service of any process, summons, notice or document by U.S.
<PAGE>
registered mail to your address set forth above shall be effective service of
process for any action, suit or proceeding brought against you in any such
court. You hereby irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby in the courts of the State of New York
or the United States of America located in the City of New York, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
The agreements set forth in this Agreement may be modified or waived
only by a separate writing signed by the Company and you expressly so modifying
or waiving such agreements.
It is understood and agreed that no failure or delay by the Company in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provisions of this
letter agreement, which shall remain in full force and effect.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
<PAGE>
If you are in agreement with the foregoing, please sign and return one
copy of this letter, which thereupon will constitute our Agreement with respect
to the subject matter hereof.
Very truly yours,
Plenum Publishing Corporation
By /s/ Katherine A. Brown
----------------------------
Title: Vice President
Salomon Brothers Inc
Smith Barney Inc.
on behalf of
Plenum Publishing Corporation
Confirmed and agreed to as of
the date first above written:
Wolters Kluwer U.S. Corporation
- -----------------------------------
By /s/ Bruce C. Lenz
--------------------------------
Title: Executive Vice President
<PAGE>
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement (this "Agreement"), dated as of June 10, 1998,
between PPC Acquisition Corp. ("Purchaser") and Martin Tash and Arlene Tash
(together called "Shareholder").
WHEREAS, Shareholder owns (beneficially) 423,485 shares of common stock,
par value $.10 per share ("Common Stock") of Plenum Publishing Corp. (the
"Company")(including shares as to which Shareholder has voting power pursuant to
the terms of the Company Qualified Profit Sharing Plan) all as set forth on
Schedule A hereto (the "Shares").
WHEREAS, concurrently herewith, Kluwer Boston Inc. ("Parent") and
Purchaser, a wholly owned subsidiary of Parent, are entering into an agreement
and plan of merger with the Company, dated as of June 10, 1998 (the "Merger
Agreement"), pursuant to which Purchaser has agreed to make a cash tender offer
(the "Offer") for, among other things, all outstanding shares of Common Stock of
the Company at $73.50 per share (or any higher price paid in the Offer, the
"Offer Price"), net to the seller in cash, to be followed by a merger of
Purchaser with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and Parent to
enter into the Merger Agreement, Purchaser, whose performance hereunder is
guaranteed by Parent, has required that Shareholder agree, and in order to
induce Purchaser and Parent to enter into the Merger Agreement, Shareholder has
agreed, among other things, (i) to sell the Shares; (ii) to tender the Shares
into the Offer; (iii) to appoint Purchaser as Shareholder's proxy to vote the
Shares under certain circumstances, and (iv) with respect to certain questions
put to stockholders of the Company for a vote, to vote the Shares, in each case,
in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Purchase and Sale of Shares.
1.1 Tender of Shares; Purchase of Shares.
(a) Shareholder agrees to tender and sell to Purchaser all of the
Shares pursuant to the terms of the Offer. Shareholder agrees that Shareholder
shall deliver to the depository for the Offer for receipt prior to the
Expiration Date (as defined in the Offer) of the Offer, either a letter of
transmittal together with the certificates for the Shares, if available, or a
"Notice of Guaranteed Delivery", if the Shares are not available. Unless an
election is made by Purchaser under Section 1.1(b), Shareholder agrees not to
withdraw any Shares tendered into the Offer. Upon such tender Shareholder will
be relieved of any obligation under Sec. 1.1(b) hereof.
<PAGE>
(b) Upon the election of Purchaser on the terms and subject to the
conditions set forth in this Agreement, on (and assuming the occurrence of) the
Closing Date (as defined herein), Purchaser will purchase from the Shareholder,
and the Shareholder will sell and transfer to the Purchaser, all of the Shares,
free and clear of all mortgages, pledges, security interest, encumbrances,
liens, options, debts, charges, claims and restrictions of any kind, at a
purchase price per share equal to the Offer Price.
1.2 Conditions to the Closing.
Subject to the provisions of the first sentence of Section 1.3
hereof, the obligations of the parties to consummate the transactions
contemplated by Section 1.1(b) hereof are subject to the following conditions:
(a) any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") applicable to the delivery of the Shares and
the consummation of the Offer shall have expired or been terminated; and (b)
there shall be no preliminary or permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
delivery of the Shares. Purchaser and Shareholder shall each promptly after the
date hereof make such filings and provide such information as may be required
under the HSR Act with respect to the sale of the Shares.
1.3 Closing.
Subject to the conditions contained in this Agreement and subject to
Sections 1.4 through 1.8, the closing of the transactions contemplated by
Section 1.1(b) hereof (the "Closing") shall occur at a site designated by
Purchaser simultaneously with the acceptance by Purchaser of the shares of
Common Stock validly tendered and not withdrawn pursuant to the terms of the
Offer in accordance with the terms and conditions of the Offer and the Merger
Agreement (the "Closing Date"). At the Closing and subject to the conditions
contained in this Agreement, Purchaser hereby directs Shareholder to deliver to
Purchaser a certificate or certificates evidencing the Shares, each such
certificate being duly endorsed in blank and accompanied by such stock powers
and such other documents as may be necessary in Purchaser's judgment to transfer
record ownership of the Shares into Purchaser's name on the stock transfer books
of the Company, and Purchaser will purchase the Shares at a purchase price equal
to the Offer Price. All payments made by Purchaser to Shareholder pursuant to
this Section 1.3 shall be made by wire transfer of immediately available funds
to an account designated by Shareholder, or by certified bank check payable to
Shareholder, in an amount equal to the sum of the product of (i) the Offer Price
and (ii) the total number of Shares delivered at the Closing.
1.4 Stock Option.
Effective upon expiration or termination of the Offer for the
reasons set forth in Section 1.5 below, Purchaser shall have an irrevocable
option (the "Stock Option") exercisable on the terms and conditions set forth in
Section 1.5 below to purchase the Shares, at a purchase
-2-
<PAGE>
price equal to the Offer Price.
1.5 Termination or Expiration of Offer and Exercise of Stock Option.
(a)(i) If the Offer is terminated by Purchaser for the reasons set
forth in paragraph (d) of Annex I to the Merger Agreement or (ii) in the case of
the expiration of the Offer, if the Offer expires without the purchase of Shares
thereunder and either without satisfaction of the Minimum Condition (as defined
in the Merger Agreement) or after the occurrence of circumstances giving rise to
a right of termination by Purchaser for the reasons set forth in paragraph (d)
of Annex I to the Merger Agreement, in each case without any violation of the
Offer or the Merger Agreement by Purchaser or Parent, then the Stock Option may
be exercised by Purchaser, in whole and for all of Shareholder's Shares but not
in part or for less than all of Shareholder's Shares. Notice of exercise may be
given at any time during the period (the "Exercise Period") commencing on the
date on which the Offer is terminated or expires (under the circumstances
provided in this Section 1.5) and ending on March 31, 1999, whichever is later.
In addition, Purchaser may also exercise the Stock Option if the Merger
Agreement shall terminate by reason of the Company's exercise of its termination
rights pursuant to Section 8.1(c)(ii) of the Merger Agreement, whereupon the
Exercise Period shall commence on the date such termination rights are exercised
and end on March 31, 1999, whichever is later.
(b) In the event Purchaser wishes to exercise the Stock Option,
Purchaser shall send a written notice (an "Exercise Notice") during the Exercise
Period to the Shareholder specifying that Purchaser shall purchase the Shares
held by Shareholder and a date, which shall be a business day, and a place,
which shall be in the city of New York, for the closing of such purchase (the
"Stock Option Closing").
(c) Upon receipt of the Exercise Notice, Shareholder shall be
obligated to deliver to Purchaser a certificate or certificates representing the
Shares held by Shareholder (or to direct the depositary for the Offer to so
deliver such certificates or certificates), in accordance with the terms of this
Agreement, on the later of the date specified in such Exercise Notice or the
first business day on which the conditions specified in Section 1.6 shall be
satisfied. The date specified in such Exercise Notice may be as early as one
business day after the date of such Exercise Notice but shall not be later than
five (5) business days after the later of (i) the date of such Exercise Notice,
or (ii) the date all conditions under Section 1.6 are satisfied.
1.6 Conditions to Delivery of the Shares.
The obligation of the Shareholder to deliver, and of the Purchaser
to pay for, the Shares upon exercise of the Stock Option is subject to the
following conditions:
(a) All waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, applicable to the exercise of the Stock
Option and the delivery of the Shares shall have expired or been terminated; and
-3-
<PAGE>
(b) There shall be no permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
exercise of the Stock Option or the delivery of the Shares in respect of such
exercise.
1.7 Stock Option Closing.
At the Stock Option Closing, the Shareholder will deliver to
Purchaser a certificate or certificates evidencing the Shares owned by
Shareholder, each such certificate being duly endorsed in blank and accompanied
by such stock powers and such other documents as may be necessary in Purchaser's
judgment to transfer record ownership of the Shares into Purchaser's name on the
stock transfer books of the Company, and Purchaser will purchase the delivered
Shares at the Offer Price. All payments made by Purchaser to Shareholder
pursuant to this Section 1.7 shall be made by wire transfer of immediately
available funds or by certified bank check payable to Shareholder, in an amount
equal to the product of (a) the Offer Price and (b) the Shares delivered by
Shareholder in respect of the Stock Option Closing.
1.8 Adjustments Upon Changes in Capitalization.
In the event of any change in the number of issued and outstanding
shares of Common Stock by reason of any stock dividend, subdivision, merger,
recapitalization, combination, conversion or exchange of shares, or any other
change in the corporate or capital structure of the Company (including, without
limitation, the declaration of payment of an extraordinary dividend of cash or
securities) which would have the effect of diluting or otherwise adversely
affecting Purchaser's rights and privileges under this Agreement, the number and
kind of the shares and the consideration payable in respect to the Shares shall
be appropriately and equitably adjusted to restore to Purchaser its rights and
privileges under this Agreement. Without limiting the scope of the foregoing, in
any such event, at the option of Purchaser, the Stock Option shall represent the
right to purchase, in addition to the number and kind of Shares which Purchaser
would be entitled to purchase pursuant to the immediately preceding sentence,
whatever securities, cash or other property the Shares subject to the Stock
Option shall have been converted into or otherwise exchanged for, together with
any securities, cash or other property which shall have been distributed with
respect to such Shares.
-4-
<PAGE>
2. Representations and Warranties of Shareholder.
Shareholder hereby represents and warrants to Purchaser as follows:
2.1 Title.
Shareholder is the owner (both beneficially and of record, or
beneficially as respects the interest of Shareholder in shares held in the
Profit Sharing Plan) of the Shares as set forth on Schedule A. Except for the
Shares Shareholder is not the record or beneficial owner of, and does not have
any other rights of any nature to acquire any additional shares of, any shares
of capital stock of the Company. Shareholder will deliver in accordance with the
terms of this Agreement, all of the Shares, free and clear of all security
interests, liens, claims, pledges, options, restrictions, rights of first
refusal, agreements, limitations on Shareholder's voting rights, charges and
other encumbrances of any nature whatsoever, and, except as provided in this
Agreement, Shareholder has not appointed or granted any proxy, which appointment
or grant is still effective, with respect to any of the Shares. The Shareholder
has sole power of disposition (or to direct disposition with respect to Shares
in the Profit Sharing Plan) with respect to all of the Shares and sole voting
power with respect to the matters set forth in Section 6 hereof with respect to
the Shares.
2.2 Authority Relative to This Agreement.
Shareholder has all necessary power and authority to execute and
deliver this Agreement, to perform Shareholder's obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Shareholder and, assuming the due
authorization, execution and delivery by Purchaser, constitutes a legal, valid
and binding obligation of Shareholder enforceable against Shareholder in
accordance with its terms.
2.3 No Conflict.
The execution and delivery of this Agreement by Shareholder does
not, and the performance of this Agreement by Shareholder will not, (a) except
for any filings required under the HSR Act and for requirements of federal and
state securities laws, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, or (b) conflict with, violate or result in any breach of or
constitute a default under (or an event which with notice or lapse of time or
both would become a default under) any agreement, judgment, injunction, order,
law, rule, regulation, decree or arrangement to which Shareholder is a party or
is bound.
-5-
<PAGE>
2.4 Brokers.
Except for Salomon Smith Barney, whose fees will be paid by the
Company and a true and correct copy of whose engagement letter has been provided
by the Company, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Shareholder or the Company.
3. Representations and Warranties of Purchaser and Parent.
3.1 Authority Relative to This Agreement.
Purchaser and Parent have all necessary power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Purchaser and Parent. This Agreement
has been duly and validly executed and delivered by Purchaser and Parent as
Guarantor, assuming the due authorization, execution and delivery by
Shareholder, constitutes a legal, valid and binding obligation of Purchaser and
Parent, enforceable against Purchaser and Parent in accordance with its terms.
3.2 No Conflict.
The execution and delivery of this Agreement by Purchaser and Parent
does not, and the performance of this Agreement by Purchaser and Parent will
not, (a) except for any filings required under the HSR Act and for requirements
of federal and state securities laws, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, (b) conflict with or violate the
certificate of incorporation or bylaws of Purchaser or Parent, (c) conflict
with, violate or result in any breach of or constitute a default under (or an
event which with notice or lapse of time or both would become a default under)
any agreement, judgment, injunction, order, law, rule, regulation, decree or
arrangement applicable to Purchaser or Parent or by which any property or asset
of Purchaser or Parent is bound or affected, other than, in the case of clause
(c), any such conflicts, violations, breaches or defaults that, individually or
in the aggregate, would not materially impair the ability of Purchaser or Parent
to perform its obligations hereunder.
3.3 Brokers.
Except for Credit Suisse First Boston, whose fees will be paid by
Purchaser, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission from Shareholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Purchaser.
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<PAGE>
3.4 Investment Intent.
Purchaser hereby represents that any securities it purchases
pursuant to this Agreement are being purchased for its own account for
investment and not with a view to, or for sale in connection with, any public
distribution thereof.
4. Covenant of Shareholder.
No Solicitation of Transactions. Shareholder and his affiliates shall not,
and Shareholder and his affiliates shall use their best efforts to ensure that
Shareholder's representatives and agents (including, but not limited to,
investment bankers, attorneys and accountants) and his affiliates' officers,
directors, employees, representatives and agents do not, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with,
or provide any information to, any corporation, partnership, person or other
entity or group (other than Purchaser or any of its affiliates or
representatives) concerning any proposal or offer to acquire all or a
substantial part of the business or properties of the Company or any of its
subsidiaries, whether by merger, tender offer, exchange offer, sale of assets or
similar transaction involving the Company or any subsidiary, division or
operating or principal business unit of the Company (an "Acquisition Proposal"),
except that the provisions of this Section 4 shall not restrict the
Shareholder's ability to act in such Shareholder's capacity as a director of the
Company in accordance with Section 6.8 of the Merger Agreement. Shareholder
shall immediately cease and cause to be terminated any existing activities,
discussions or negotiations by Shareholder or his affiliates or any investment
banker, attorney, accountant or other advisor or representative of Shareholder
or his affiliates with parties conducted heretofore with respect to any of the
foregoing.
5. Additional Covenants of Shareholder.
5.1 No Disposition. Shareholder hereby covenants and agrees that, except
as contemplated by this Agreement and except pursuant to the Offer, Shareholder
shall not, and shall not offer or agree to, sell, transfer, tender, assign, or
otherwise dispose of, or create or permit to exist any restriction, right of
first refusal, agreement or limitation on Shareholder's voting rights, with
respect to, the Shares now owned or any other shares that may hereafter be
acquired by Shareholder.
5.2 Compliance of Shareholder with this Agreement. Shareholder shall take
all actions and forbear from all actions, in each case, necessary in order that
(a) all of Shareholder's representations and warranties hereunder are true and
correct and (b) Shareholder fulfills all of its obligations hereunder.
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<PAGE>
6. Voting Agreement; Proxy of Shareholder.
6.1 Voting Agreement.
Shareholder hereby agrees that, during the time this Agreement is in
effect, at any meeting of the stockholders of the Company, however called, and
in any action by written consent of the stockholders of the Company, Shareholder
shall, to the extent applicable, (a) vote (or execute a consent in respect of)
all of the Shares in favor of the Merger, the Merger Agreement (as amended from
time to time) and any of the transactions contemplated by the Merger Agreement;
(b) vote (or execute a consent in respect of) the Shares against any action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation of the Company under the Merger Agreement; and
(c) vote (or execute a consent in respect of) the Shares against any action or
agreement that would reasonably be expected to impede, interfere with, delay or
attempt to discourage the Offer or the Merger, including, but not limited to:
(i) any extraordinary corporate transaction (other than the Merger), such as a
merger, reorganization, recapitalization or liquidation involving the Company or
any of its Subsidiaries (as defined in the Merger Agreement) or any proposal
made in opposition to or in competition with the Merger; (ii) a sale or transfer
of a material amount of assets of the Company or any of its Subsidiaries; (iii)
any change in the management or board of directors of the Company, except as
otherwise agreed to in writing by Purchaser or Purchaser; (iv) any material
change in the present capitalization or dividend policy of the Company; or (v)
any other material change in the corporate structure or business of the Company
or any of its Subsidiaries.
6.2 Irrevocable Proxy.
Shareholder agrees that, in the event Shareholder shall fail to
comply with the provisions of Section 6.1 hereof as determined by Purchaser in
its sole discretion, such failure shall result, without any further action by
Shareholder, in the irrevocable appointment of Purchaser as the attorney and
proxy of Shareholder, with full power of substitution, to vote, and otherwise
act (by written consent or otherwise) with respect to all of the Shares that
Shareholder is entitled to vote at any meeting of stockholders of the Company
(whether annual or special and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise, on the matters and in the
manner specified in Section 6.1. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE
AND COUPLED WITH AN INTEREST AND IS EXECUTED AND INTENDED TO BE IRREVOCABLE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 212(e) OF THE DELAWARE GENERAL
CORPORATION LAW ("DGCL"). Shareholder hereby revokes, effective upon the
execution and delivery of the Merger Agreement by the parties thereto, all other
proxies and powers of attorney with respect to the Shares that Shareholder may
have heretofore appointed or granted, and no subsequent proxy or power of
attorney (except in furtherance of Shareholder's obligations under Section 6.1
hereof) shall be given or written consent executed (and if given or executed,
shall not be effective) by Shareholder with respect thereto so long as this
Agreement remains in effect.
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<PAGE>
7. Termination.
Other than the Stock Option which shall be governed by Section 1.4(a)
hereof, this Agreement shall terminate automatically in the event that the
Merger Agreement is terminated in accordance with the terms and conditions
thereof.
8. Miscellaneous.
8.1 Expenses.
All costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
8.2 Further Assurances.
Shareholder and Purchaser shall execute and deliver all such further
documents and instruments and take all such further action as may be necessary
in order to consummate the transactions contemplated hereby.
8.3 Specific Performance.
The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement were not performed in accordance with the
terms hereof and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or in equity.
8.4 Entire Agreement.
This Agreement constitutes the entire agreement between Purchaser
and Shareholder with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, between Purchaser
and Shareholder with respect to the subject matter hereof.
8.5 Assignment.
This Agreement shall not be assigned by operation of law or
otherwise, except that Purchaser may assign all or any of its rights hereunder
except that such assignment shall not relieve Purchaser of its obligations
hereunder if such assignee does not perform such obligations.
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<PAGE>
8.6 Parties in Interest.
This Agreement shall be binding upon, inure solely to the benefit
of, and be enforceable by, the parties hereto and their successors and permitted
assigns. 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.
8.7 Amendment; Waiver.
This Agreement may not be amended except by an instrument in writing
signed by the parties hereto. Any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any agreement
or condition contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be bound
thereby.
8.8 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 this Agreement is
not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent possible.
8.9 Notices.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by overnight courier or facsimile to the respective parties
as follows:
If to Purchaser:
PPC Acquisition Corp.
c/o Kluwer Academic Publishers bv
Spuiboulevard 50, 311GR Dordrecht
3300 AZ Dordrecht, The Netherlands
Attention: Jeffrey K. Smith
Fax #: (011)(31)(78) 639-2268
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<PAGE>
with a copy to:
Wolters Kluwer U.S. Corporation
161 North Clark Street
48th Floor
Chicago, Illinois 60601-3221
Attention: Bruce C. Lenz
Fax #: (312) 425-0233
and to:
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Attention: Arnold J. Schaab, Esq.
Fax #: (212) 326-0806
if to Shareholder:
Martin and Arlene Tash
17049 Northway Circle
Boca Raton, Florida 33496
Fax #: (561) 852-1559
with a copy to:
BRESSLER, AMERY & ROSS, P.C.
17 State Street
New York, New York 10004
Attention: Bernard Bressler, Esq.
Fax #: (212) 425-9337
8.10 Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed in Delaware without regard to any principles of choice of law or
conflicts of law of such State. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any state or federal
court sitting in Delaware. Each of the parties hereto (i) consents to submit
such
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<PAGE>
party to the personal jurisdiction of any Federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that such
party will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees that such party will
not bring any action relating to this Agreement or the transactions contemplated
hereby in any court other than a Federal court sitting in the state of Delaware
or a Delaware state court and (iv) waives any right to trial by jury with
respect to any claim or proceeding related to or arising out of this Agreement
or any of the transactions contemplated hereby.
8.11 Headings.
The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.12 Counterparts.
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when as executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered as of the date first written above.
PPC ACQUISITION CORP.
By: /s/ Jefrey K. Smith
----------------------------
Name: Jeffrey K. Smith
Title: President
Shareholder
/s/ Martin Tash
-------------------------------
Martin Tash
/s/ Arlene Tash
-------------------------------
Arlene Tash
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<PAGE>
Kluwer Boston, Inc. in consideration of the undertakings hereunder by
Shareholder does hereby guaranty performance of the obligations undertake herein
by Purchaser and to the extent that such guarantee shall relate to the payment
of moneys, such guaranty shall be a guaranty of performance and not a guaranty
of collection.
KLUWER BOSTON, INC.
By: /s/ Jeffrey K. Smith
----------------------------
Name: Jeffrey K. Smith
Title: President
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<PAGE>
SCHEDULE A
MARTIN AND ARLENE TASH
Shares Owned Of Record and Beneficially
By Martin Tash Individually 12,920
Shares Owned In Account Designated For
Martin Tash In Plenum Publishing Profit
Sharing Plan 112,336
Shares Owned Jointly of Record and Beneficially
By Martin Tash and Arlene Tash 298,229
-------
423,485
<PAGE>
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement (this "Agreement"), dated as of June 10, 1998,
between PPC Acquisition Corp. ("Purchaser") and Mark Shaw and Hally Shaw
(together called "Shareholder").
WHEREAS, Shareholder owns (both beneficially and as trustee FBO u/a Dtd.
8/25/76 FBO Jared Roger Shaw and Scott Harlan Shaw ("Trustee") total of 80,667
shares of common stock, par value $.10 per share ("Common Stock") of Plenum
Publishing Corp. (the "Company") all as set forth on Schedule A hereto (the
"Shares").
WHEREAS, concurrently herewith, Kluwer Boston Inc. ("Parent") and
Purchaser, a wholly owned subsidiary of Parent, are entering into an agreement
and plan of merger with the Company, dated as of June 10, 1998 (the "Merger
Agreement"), pursuant to which Purchaser has agreed to make a cash tender offer
(the "Offer") for, among other things, all outstanding shares of Common Stock of
the Company at $73.50 per share (or any higher price paid in the Offer, the
"Offer Price"), net to the seller in cash, to be followed by a merger of
Purchaser with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and Parent to
enter into the Merger Agreement, Purchaser, whose performance hereunder is
guaranteed by Parent, has required that Shareholder agree, and in order to
induce Purchaser and Parent to enter into the Merger Agreement, Shareholder has
agreed, among other things, (i) to sell the Shares; (ii) to appoint Purchaser as
Shareholder's proxy to vote the Shares under certain circumstances, and (iii)
with respect to certain questions put to stockholders of the Company for a vote,
to vote the Shares, in each case, in accordance with the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Purchase and Sale of Shares.
1.1 Tender of Shares; Purchase of Shares.
(a) Shareholder agrees to tender and sell to Purchaser all of the
Shares pursuant to the terms of the Offer. Shareholder agrees that Shareholder
shall deliver to the depository for the Offer for receipt prior to the
Expiration Date (as defined in the Offer) of the Offer, either a letter of
transmittal together with the certificates for the Shares, if available, or a
"Notice of Guaranteed Delivery", if the Shares are not available. Unless an
election is made by Purchaser under Section 1.1(b), Shareholder agrees not to
withdraw any Shares tendered into the Offer. Upon such tender Shareholder will
be relieved of any obligation under Sec. 1.1(b) hereof.
(b) Upon the election of Purchaser on the terms and subject to the
conditions
<PAGE>
set forth in this Agreement, on (and assuming the occurrence of) the Closing
Date (as defined herein), Purchaser will purchase from the Shareholder, and the
Shareholder will sell and transfer to the Purchaser, all of the Shares, free and
clear of all mortgages, pledges, security interest, encumbrances, liens,
options, debts, charges, claims and restrictions of any kind, at a purchase
price per share equal to the Offer Price.
1.2 Conditions to the Closing.
Subject to the provisions of the first sentence of Section 1.3
hereof, the obligations of the parties to consummate the transactions
contemplated by Section 1.1 hereof are subject to the following conditions: (a)
any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") applicable to the delivery of the Shares and
the consummation of the Offer shall have expired or been terminated; and (b)
there shall be no preliminary or permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
delivery of the Shares. Purchaser and Shareholder shall each promptly after the
date hereof make such filings and provide such information as may be required
under the HSR Act with respect to the sale of the Shares.
1.3 Closing.
Subject to the conditions contained in this Agreement and subject to
Sections 1.4 through 1.8, the closing of the transactions contemplated by
Section 1.1 hereof (the "Closing") shall occur at a site designated by Purchaser
simultaneously with the acceptance by Purchaser of the shares of Common Stock
validly tendered and not withdrawn pursuant to the terms of the Offer in
accordance with the terms and conditions of the Offer and the Merger Agreement
(the "Closing Date"). At the Closing and subject to the conditions contained in
this Agreement, Purchaser hereby directs Shareholder to deliver to Purchaser a
certificate or certificates evidencing the Shares, each such certificate being
duly endorsed in blank and accompanied by such stock powers and such other
documents as may be necessary in Purchaser's judgment to transfer record
ownership of the Shares into Purchaser's name on the stock transfer books of the
Company, and Purchaser will purchase the Shares at a purchase price equal to the
Offer Price. All payments made by Purchaser to Shareholder pursuant to this
Section 1.3 shall be made by wire transfer of immediately available funds to an
account designated by Shareholder, or by certified bank check payable to
Shareholder, in an amount equal to the sum of the product of (i) the Offer Price
and (ii) the total number of Shares delivered at the Closing.
1.4 Stock Option.
Effective upon expiration or termination of the Offer for the
reasons set forth in Section 1.5 below, Purchaser shall have an irrevocable
option (the "Stock Option") exercisable on the terms and conditions set forth in
Section 1.5 below to purchase the Shares, at a purchase price equal to the Offer
Price.
1.5 Termination or Expiration of Offer and Exercise of Stock Option.
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<PAGE>
(a)(i) If the Offer is terminated by Purchaser for the reasons set
forth in paragraph (d) of Annex I to the Merger Agreement or (ii) in the case of
the expiration of the Offer, if the Offer expires without the purchase of Shares
thereunder and either without satisfaction of the Minimum Condition (as defined
in the Merger Agreement) or after the occurrence of circumstances giving rise to
a right of termination by Purchaser for the reasons set forth in paragraph (d)
of Annex I to the Merger Agreement, in each case without any violation of the
Offer or the Merger Agreement by Purchaser or Parent, then the Stock Option may
be exercised by Purchaser, in whole and for all of Shareholder's Shares but not
in part or for less than all of Shareholder's Shares. Notice of exercise may be
given at any time during the period (the "Exercise Period") commencing on the
date on which the Offer is terminated or expires (under the circumstances
provided in this Section 1.5) and ending on March 31, 1999, whichever is later.
In addition, Purchaser may also exercise the Stock Option if the Merger
Agreement shall terminate by reason of the Company's exercise of its termination
rights pursuant to Section 8.1(c)(ii) of the Merger Agreement, whereupon the
Exercise Period shall commence on the date such termination rights are exercised
and end on July 1, 1999, whichever is later.
(b) In the event Purchaser wishes to exercise the Stock Option,
Purchaser shall send a written notice (an "Exercise Notice") during the Exercise
Period to the Shareholder specifying that Purchaser shall purchase the Shares
held by Shareholder and a date, which shall be a business day, and a place,
which shall be in the city of New York, for the closing of such purchase (the
"Stock Option Closing").
(c) Upon receipt of the Exercise Notice, Shareholder shall be
obligated to deliver to Purchaser a certificate or certificates representing the
Shares held by Shareholder (or to direct the depositary for the Offer to so
deliver such certificates or certificates), in accordance with the terms of this
Agreement, on the later of the date specified in such Exercise Notice or the
first business day on which the conditions specified in Section 1.6 shall be
satisfied. The date specified in such Exercise Notice may be as early as one
business day after the date of such Exercise Notice but shall not be later than
five (5) business days after the later of (i) the date of such Exercise Notice,
or (ii) the date all conditions under Section 1.6 are satisfied.
1.6 Conditions to Delivery of the Shares.
The obligation of the Shareholder to deliver, and of the Purchaser
to pay for, the Shares upon exercise of the Stock Option is subject to the
following conditions:
(a) All waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, applicable to the exercise of the Stock
Option and the delivery of the Shares shall have expired or been terminated; and
(b) There shall be no permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
exercise of the Stock Option or
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<PAGE>
the delivery of the Shares in respect of such exercise.
1.7 Stock Option Closing.
At the Stock Option Closing, the Shareholder will deliver to
Purchaser a certificate or certificates evidencing the Shares owned by
Shareholder, each such certificate being duly endorsed in blank and accompanied
by such stock powers and such other documents as may be necessary in Purchaser's
judgment to transfer record ownership of the Shares into Purchaser's name on the
stock transfer books of the Company, and Purchaser will purchase the delivered
Shares at the Offer Price. All payments made by Purchaser to Shareholder
pursuant to this Section 1.7 shall be made by wire transfer of immediately
available funds or by certified bank check payable to Shareholder, in an amount
equal to the product of (a) the Offer Price and (b) the Shares delivered by
Shareholder in respect of the Stock Option Closing.
1.8 Adjustments Upon Changes in Capitalization.
In the event of any change in the number of issued and outstanding
shares of Common Stock by reason of any stock dividend, subdivision, merger,
recapitalization, combination, conversion or exchange of shares, or any other
change in the corporate or capital structure of the Company (including, without
limitation, the declaration of payment of an extraordinary dividend of cash or
securities) which would have the effect of diluting or otherwise adversely
affecting Purchaser's rights and privileges under this Agreement, the number and
kind of the shares and the consideration payable in respect to the Shares shall
be appropriately and equitably adjusted to restore to Purchaser its rights and
privileges under this Agreement. Without limiting the scope of the foregoing, in
any such event, at the option of Purchaser, the Stock Option shall represent the
right to purchase, in addition to the number and kind of Shares which Purchaser
would be entitled to purchase pursuant to the immediately preceding sentence,
whatever securities, cash or other property the Shares subject to the Stock
Option shall have been converted into or otherwise exchanged for, together with
any securities, cash or other property which shall have been distributed with
respect to such Shares.
1.9 Tender of Shares.
Upon the request of Purchaser, Shareholder agrees to tender and sell
to Purchaser all of the Shares pursuant to the terms of the Offer. If requested
by Purchaser to so tender and sell the Shares, Shareholder agrees that
Shareholder shall deliver to the depository for the Offer for receipt prior to
the Expiration Date (as defined in the Offer) of the Offer, either a letter of
transmittal together with the certificates for the Shares, if available, or a
"Notice of Guaranteed Delivery", if the Shares are not available. Shareholder
agrees not to withdraw any Shares tendered into the Offer. Upon such tender
Shareholder will be relieved of any obligation under Sec. 1.1 hereof.
2. Representations and Warranties of Shareholder.
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<PAGE>
Shareholder hereby represents and warrants to Purchaser as follows:
2.1 Title.
Shareholder is the owner (both beneficially as to Shares held other
than as Trustee and of record only as Trustee) of the Shares as set forth on
Schedule A. Except for the Shares Shareholder is not the record or beneficial
owner of, and does not have any other rights of any nature to acquire any
additional shares of, any shares of capital stock of the Company. Shareholder
will deliver, in accordance with the terms of this Agreement, all of the Shares,
free and clear of all security interests, liens, claims, pledges, options,
restrictions, rights of first refusal, agreements, limitations on Shareholder's
voting rights, charges and other encumbrances of any nature whatsoever, and,
except as provided in this Agreement, Shareholder has not appointed or granted
any proxy, which appointment or grant is still effective, with respect to any of
the Shares. The Shareholder has sole power of disposition with respect to all of
the Shares and sole voting power with respect to the matters set forth in
Section 6 hereof with respect to the Shares.
2.2 Authority Relative to This Agreement.
Shareholder has all necessary power and authority to execute and
deliver this Agreement, to perform Shareholder's obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Shareholder and, assuming the due
authorization, execution and delivery by Purchaser, constitutes a legal, valid
and binding obligation of Shareholder enforceable against Shareholder in
accordance with its terms.
2.3 No Conflict.
The execution and delivery of this Agreement by Shareholder does
not, and the performance of this Agreement by Shareholder will not, (a) except
for any filings required under the HSR Act and for requirements of federal and
state securities laws, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, or (b) conflict with, violate or result in any breach of or
constitute a default under (or an event which with notice or lapse of time or
both would become a default under) any agreement, judgment, injunction, order,
law, rule, regulation, decree or arrangement to which Shareholder is a party or
is bound.
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<PAGE>
2.4 Brokers.
Except for Salomon Smith Barney, whose fees will be paid by the
Company and a true and correct copy of whose engagement letter has been provided
by the Company, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Shareholder or the Company.
3. Representations and Warranties of Purchaser and Parent.
3.1 Authority Relative to This Agreement.
Purchaser and Parent have all necessary power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Purchaser and Parent. This Agreement
has been duly and validly executed and delivered by Purchaser and Parent as
Guarantor, assuming the due authorization, execution and delivery by
Shareholder, constitutes a legal, valid and binding obligation of Purchaser and
Parent, enforceable against Purchaser and Parent in accordance with its terms.
3.2 No Conflict.
The execution and delivery of this Agreement by Purchaser and Parent
does not, and the performance of this Agreement by Purchaser and Parent will
not, (a) except for any filings required under the HSR Act and for requirements
of federal and state securities laws, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, (b) conflict with or violate the
certificate of incorporation or bylaws of Purchaser or Parent, (c) conflict
with, violate or result in any breach of or constitute a default under (or an
event which with notice or lapse of time or both would become a default under)
any agreement, judgment, injunction, order, law, rule, regulation, decree or
arrangement applicable to Purchaser or Parent or by which any property or asset
of Purchaser or Parent is bound or affected, other than, in the case of clause
(c), any such conflicts, violations, breaches or defaults that, individually or
in the aggregate, would not materially impair the ability of Purchaser or Parent
to perform its obligations hereunder.
3.3 Brokers.
Except for Credit Suisse First Boston, whose fees will be paid by
Purchaser, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission from Shareholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Purchaser.
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<PAGE>
3.4 Investment Intent.
Purchaser hereby represents that any securities it purchases
pursuant to this Agreement are being purchased for its own account for
investment and not with a view to, or for sale in connection with, any public
distribution thereof.
4. Covenant of Shareholder.
No Solicitation of Transactions. Shareholder and his affiliates shall not,
and Shareholder and his affiliates shall use their best efforts to ensure that
Shareholder's representatives and agents (including, but not limited to,
investment bankers, attorneys and accountants) and his affiliates' officers,
directors, employees, representatives and agents do not, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with,
or provide any information to, any corporation, partnership, person or other
entity or group (other than Purchaser or any of its affiliates or
representatives) concerning any proposal or offer to acquire all or a
substantial part of the business or properties of the Company or any of its
subsidiaries, whether by merger, tender offer, exchange offer, sale of assets or
similar transaction involving the Company or any subsidiary, division or
operating or principal business unit of the Company (an "Acquisition Proposal"),
except that the provisions of this Section 4 shall not restrict the
Shareholder's ability to act in such Shareholder's capacity as a director of the
Company in accordance with Section 6.8 of the Merger Agreement. Shareholder
shall immediately cease and cause to be terminated any existing activities,
discussions or negotiations by Shareholder or his affiliates or any investment
banker, attorney, accountant or other advisor or representative of Shareholder
or his affiliates with parties conducted heretofore with respect to any of the
foregoing.
5. Additional Covenants of Shareholder.
5.1 No Disposition. Shareholder hereby covenants and agrees that, except
as contemplated by this Agreement and except pursuant to the Offer, Shareholder
shall not, and shall not offer or agree to, sell, transfer, tender, assign, or
otherwise dispose of, or create or permit to exist any option, restriction,
right of first refusal, agreement or limitation on Shareholder's voting rights
with respect to, the Shares now owned or any other shares that may hereafter be
acquired by Shareholder.
5.2 Compliance of Shareholder with this Agreement. Shareholder shall take
all actions and forbear from all actions, in each case, necessary in order that
(a) all of Shareholder's representations and warranties hereunder are true and
correct and (b) Shareholder fulfills all of its obligations hereunder.
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<PAGE>
6. Voting Agreement; Proxy of Shareholder.
6.1 Voting Agreement.
Shareholder hereby agrees that, during the time this Agreement is in
effect, at any meeting of the stockholders of the Company, however called, and
in any action by written consent of the stockholders of the Company, Shareholder
shall, to the extent applicable, (a) vote (or execute a consent in respect of)
all of the Shares in favor of the Merger, the Merger Agreement (as amended from
time to time) and any of the transactions contemplated by the Merger Agreement;
(b) vote (or execute a consent in respect of) the Shares against any action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation of the Company under the Merger Agreement; and
(c) vote (or execute a consent in respect of) the Shares against any action or
agreement that would reasonably be expected to impede, interfere with, delay or
attempt to discourage the Offer or the Merger, including, but not limited to:
(i) any extraordinary corporate transaction (other than the Merger), such as a
merger, reorganization, recapitalization or liquidation involving the Company or
any of its Subsidiaries (as defined in the Merger Agreement) or any proposal
made in opposition to or in competition with the Merger; (ii) a sale or transfer
of a material amount of assets of the Company or any of its Subsidiaries; (iii)
any change in the management or board of directors of the Company, except as
otherwise agreed to in writing by Purchaser or Purchaser; (iv) any material
change in the present capitalization or dividend policy of the Company; or (v)
any other material change in the corporate structure or business of the Company
or any of its Subsidiaries.
6.2 Irrevocable Proxy.
Shareholder agrees that, in the event Shareholder shall fail to
comply with the provisions of Section 6.1 hereof as determined by Purchaser in
its sole discretion, such failure shall result, without any further action by
Shareholder, in the irrevocable appointment of Purchaser as the attorney and
proxy of Shareholder, with full power of substitution, to vote, and otherwise
act (by written consent or otherwise) with respect to all of the Shares that
Shareholder is entitled to vote at any meeting of stockholders of the Company
(whether annual or special and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise, on the matters and in the
manner specified in Section 6.1. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE
AND COUPLED WITH AN INTEREST AND IS EXECUTED AND INTENDED TO BE IRREVOCABLE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 212(e) OF THE DELAWARE GENERAL
CORPORATION LAW ("DGCL"). Shareholder hereby revokes, effective upon the
execution and delivery of the Merger Agreement by the parties thereto, all other
proxies and powers of attorney with respect to the Shares that Shareholder may
have heretofore appointed or granted, and no subsequent proxy or power of
attorney (except in furtherance of Shareholder's obligations under Section 6.1
hereof) shall be given or written consent executed (and if given or executed,
shall not be effective) by Shareholder with respect thereto so long as this
Agreement remains in effect.
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<PAGE>
7. Termination.
Other than the Stock Option which shall be governed Section by 1.4(a)
hereof, this Agreement shall terminate automatically in the event that the
Merger Agreement is terminated in accordance with the terms and conditions
thereof.
8. Miscellaneous.
8.1 Expenses.
All costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
8.2 Further Assurances.
Shareholder and Purchaser shall execute and deliver all such further
documents and instruments and take all such further action as may be necessary
in order to consummate the transactions contemplated hereby.
8.3 Specific Performance.
The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement were not performed in accordance with the
terms hereof and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or in equity.
8.4 Entire Agreement.
This Agreement constitutes the entire agreement between Purchaser
and Shareholder with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, between Purchaser
and Shareholder with respect to the subject matter hereof.
8.5 Assignment.
This Agreement shall not be assigned by operation of law or
otherwise, except that Purchaser may assign all or any of its rights hereunder
except that such assignment shall not relieve Purchaser of its obligations
hereunder if such assignee does not perform such obligations.
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<PAGE>
8.6 Parties in Interest.
This Agreement shall be binding upon, inure solely to the benefit
of, and be enforceable by, the parties hereto and their successors and permitted
assigns. 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.
8.7 Amendment; Waiver.
This Agreement may not be amended except by an instrument in writing
signed by the parties hereto. Any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any agreement
or condition contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be bound
thereby.
8.8 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 this Agreement is
not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent possible.
8.9 Notices.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by overnight courier or facsimile to the respective parties
as follows:
If to Purchaser:
PBC Acquisition Corp.
c/o Kluwer Academic Publishers bv
Spuilboulevard 50, 311GR Dordrecht
3300 AZ Dordrecht
Attention: Jeffrey K. Smith
Fax #: (011)(31)(78) 639-2268
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<PAGE>
with a copy to:
Wolters Kluwer U.S. Corporation
161 North Clark Street
48th Floor
Chicago, Illinois 60601-3221
Attention: Bruce C. Lenz
Fax #: (312) 425-0233
and to:
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Attention: Arnold J. Schaab, Esq.
Fax #: (212) 326-0806
if to Shareholder:
Mark and Hally Shaw
6884 Queenferry Circle
Boca Raton, Florida 33469
Fax #: (561) 487-4137
with a copy to:
BRESSLER, AMERY & ROSS, P.C.
17 State Street
New York, New York 10004
Attention: Bernard Bressler, Esq.
Fax #: (212) 425-9337
8.10 Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed in Delaware without regard to any principles of choice of law or
conflicts of law of such State. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any state or federal
court sitting in Delaware. Each of the parties hereto (i) consents to submit
such
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<PAGE>
party to the personal jurisdiction of any Federal court located in the
State of Delaware or any Delaware state court in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, (iii)
agrees that such party will not bring any action relating to this Agreement or
the transactions contemplated hereby in any court other than a Federal court
sitting in the state of Delaware or a Delaware state court and (iv) waives any
right to trial by jury with respect to any claim or proceeding related to or
arising out of this Agreement or any of the transactions contemplated hereby.
8.11 Headings.
The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.12 Counterparts.
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when as executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered as of the date first written above.
PPC ACQUISITION CORP.
By: /s/ Jeffrey K. Smith
----------------------------
Name: Jeffrey K. Smith
Title: President
Shareholder
/s/ Mark Shaw
-------------------------------
Mark Shaw
/s/ Hally Shaw
-------------------------------
Hally Shaw
/s/ Mark Shaw
-------------------------------
Mark Shaw, Trustee
u/a Dtd. 8/25/76 FBO Jared Roger
Shaw and Scott Harlen Shaw
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<PAGE>
Kluwer Boston, Inc. in consideration of the undertakings hereunder by
Shareholders does hereby guaranty performance of the obligations undertake
herein by Purchaser and to the extent that such guarantee shall relate to the
payment of moneys, such guaranty shall be a guaranty of performance and not a
guaranty of collection.
KLUWER BOSTON, INC.
By: /s/ Jeffrey K. Smith
----------------------------
Name: Jeffrey K. Smith
Title: President
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<PAGE>
SCHEDULE A
MARK AND HALLY SHAW
Mark Shaw In Trust For Adult Children 50,625
Shares Owned Of Record and Beneficially
By Mark Shaw Individually 16,460
Shares Owned Of Record and Beneficially
Jointly By Mark and Hally Shaw 13,582
------
80,667
<PAGE>
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement (this "Agreement"), dated as of June 10, 1998,
between PPC Acquisition Corp. ("Purchaser") and Ghanshyam Patel and Anila Patel
(together called "Shareholder").
WHEREAS, Shareholder owns (beneficially) 10,554 shares of common stock,
par value $.10 per share ("Common Stock") of Plenum Publishing Corp. (the
"Company")(including shares as to which Shareholder has voting power pursuant to
the terms of the Company Qualified Profit Sharing Plan) all as set forth on
Schedule A hereto (the "Shares").
WHEREAS, concurrently herewith, Kluwer Boston Inc. ("Parent") and
Purchaser, a wholly owned subsidiary of Parent are entering into an agreement
and plan of merger with the Company, dated as of June 10, 1998 (the "Merger
Agreement"), pursuant to which Purchaser has agreed to make a cash tender offer
(the "Offer") for, among other things, all outstanding shares of Common Stock of
the Company at $73.50 per share (or any higher price paid in the Offer, the
"Offer Price"), net to the seller in cash, to be followed by a merger of
Purchaser with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and Parent to
enter into the Merger Agreement, Purchaser, whose performance hereunder is
guaranteed by Parent, has required that Shareholder agree, and in order to
induce Purchaser and Parent to enter into the Merger Agreement, Shareholder has
agreed, among other things, (i) to sell the Shares; (ii) to tender the Shares
into the Offer; (iii) to appoint Purchaser as Shareholder's proxy to vote the
Shares under certain circumstances, and (iv) with respect to certain questions
put to stockholders of the Company for a vote, to vote the Shares, in each case,
in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Purchase and Sale of Shares.
1.1 Tender of Shares; Purchase of Shares.
(a) Shareholder agrees to tender and sell to Purchaser all of the
Shares pursuant to the terms of the Offer. Shareholder agrees that Shareholder
shall deliver to the depository for the Offer for receipt prior to the
Expiration Date (as defined in the Offer) of the Offer, either a letter of
transmittal together with the certificates for the Shares, if available, or a
"Notice of Guaranteed Delivery", if the Shares are not available. Unless an
election is made by Purchaser under Section 1.1(b), Shareholder agrees not to
withdraw any Shares tendered into the Offer. Upon such tender Shareholder will
be relieved of any obligation under Sec. 1.1(b) hereof.
(b) Upon the election of Purchaser on the terms and subject to the
conditions
<PAGE>
set forth in this Agreement, on (and assuming the occurrence of) the Closing
Date (as defined herein), Purchaser will purchase from the Shareholder, and the
Shareholder will sell and transfer to the Purchaser, all of the Shares, free and
clear of all mortgages, pledges, security interest, encumbrances, liens,
options, debts, charges, claims and restrictions of any kind, at a purchase
price per share equal to the Offer Price.
1.2 Conditions to the Closing.
Subject to the provisions of the first sentence of Section 1.3
hereof, the obligations of the parties to consummate the transactions
contemplated by Section 1.1(b) hereof are subject to the following conditions:
(a) any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") applicable to the delivery of the Shares and
the consummation of the Offer shall have expired or been terminated; and (b)
there shall be no preliminary or permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
delivery of the Shares. Purchaser and Shareholder shall each promptly after the
date hereof make such filings and provide such information as may be required
under the HSR Act with respect to the sale of the Shares.
1.3 Closing.
Subject to the conditions contained in this Agreement and subject to
Sections 1.4 through 1.8, the closing of the transactions contemplated by
Section 1.1(b) hereof (the "Closing") shall occur at a site designated by
Purchaser simultaneously with the acceptance by Purchaser of the shares of
Common Stock validly tendered and not withdrawn pursuant to the terms of the
Offer in accordance with the terms and conditions of the Offer and the Merger
Agreement (the "Closing Date"). At the Closing and subject to the conditions
contained in this Agreement, Purchaser hereby directs Shareholder to deliver to
Purchaser a certificate or certificates evidencing the Shares, each such
certificate being duly endorsed in blank and accompanied by such stock powers
and such other documents as may be necessary in Purchaser's judgment to transfer
record ownership of the Shares into Purchaser's name on the stock transfer books
of the Company, and Purchaser will purchase the Shares at a purchase price equal
to the Offer Price. All payments made by Purchaser to Shareholder pursuant to
this Section 1.3 shall be made by wire transfer of immediately available funds
to an account designated by Shareholder, or by certified bank check payable to
Shareholder, in an amount equal to the sum of the product of (i) the Offer Price
and (ii) the total number of Shares delivered at the Closing.
1.4 Stock Option.
Effective upon expiration or termination of the Offer for the
reasons set forth in Section 1.5 below, Purchaser shall have an irrevocable
option (the "Stock Option") exercisable on the terms and conditions set forth in
Section 1.5 below to purchase the Shares, at a purchase price equal to the Offer
Price.
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<PAGE>
1.5 Termination or Expiration of Offer and Exercise of Stock Option.
(a)(i) If the Offer is terminated by Purchaser for the reasons set
forth in paragraph (d) of Annex I to the Merger Agreement or (ii) in the case of
the expiration of the Offer, if the Offer expires without the purchase of Shares
thereunder and either without satisfaction of the Minimum Condition (as defined
in the Merger Agreement) or after the occurrence of circumstances giving rise to
a right of termination by Purchaser for the reasons set forth in paragraph (d)
of Annex I to the Merger Agreement, in each case without any violation of the
Offer or the Merger Agreement by Purchaser or Parent, then the Stock Option may
be exercised by Purchaser, in whole and for all of Shareholder's Shares but not
in part or for less than all of Shareholder's Shares. Notice of exercise may be
given at any time during the period (the "Exercise Period") commencing on the
date on which the Offer is terminated or expires (under the circumstances
provided in this Section 1.5) and ending on March 31, 1999, whichever is later.
In addition, Purchaser may also exercise the Stock Option if the Merger
Agreement shall terminate by reason of the Company's exercise of its termination
rights pursuant to Section 8.1(c)(ii) of the Merger Agreement, whereupon the
Exercise Period shall commence on the date such termination rights are exercised
and end on March 31, 1999, whichever is later.
(b) In the event Purchaser wishes to exercise the Stock Option,
Purchaser shall send a written notice (an "Exercise Notice") during the Exercise
Period to the Shareholder specifying that Purchaser shall purchase the Shares
held by Shareholder and a date, which shall be a business day, and a place,
which shall be in the city of New York, for the closing of such purchase (the
"Stock Option Closing").
(c) Upon receipt of the Exercise Notice, Shareholder shall be
obligated to deliver to Purchaser a certificate or certificates representing the
Shares held by Shareholder (or to direct the depositary for the Offer to so
deliver such certificates or certificates), in accordance with the terms of this
Agreement, on the later of the date specified in such Exercise Notice or the
first business day on which the conditions specified in Section 1.6 shall be
satisfied. The date specified in such Exercise Notice may be as early as one
business day after the date of such Exercise Notice but shall not be later than
five (5) business days after the later of (i) the date of such Exercise Notice,
or (ii) the date all conditions under Section 1.6 are satisfied.
1.6 Conditions to Delivery of the Shares.
The obligation of the Shareholder to deliver, and of the Purchaser
to pay for, the Shares upon exercise of the Stock Option is subject to the
following conditions:
(a) All waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, applicable to the exercise of the Stock
Option and the delivery of the Shares shall have expired or been terminated; and
(b) There shall be no permanent injunction or other order by any
court of
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<PAGE>
competent jurisdiction restricting, preventing or prohibiting the exercise of
the Stock Option or the delivery of the Shares in respect of such exercise.
1.7 Stock Option Closing.
At the Stock Option Closing, the Shareholder will deliver to
Purchaser a certificate or certificates evidencing the Shares owned by
Shareholder, each such certificate being duly endorsed in blank and accompanied
by such stock powers and such other documents as may be necessary in Purchaser's
judgment to transfer record ownership of the Shares into Purchaser's name on the
stock transfer books of the Company, and Purchaser will purchase the delivered
Shares at the Offer Price. All payments made by Purchaser to Shareholder
pursuant to this Section 1.7 shall be made by wire transfer of immediately
available funds or by certified bank check payable to Shareholder, in an amount
equal to the product of (a) the Offer Price and (b) the Shares delivered by
Shareholder in respect of the Stock Option Closing.
1.8 Adjustments Upon Changes in Capitalization.
In the event of any change in the number of issued and outstanding
shares of Common Stock by reason of any stock dividend, subdivision, merger,
recapitalization, combination, conversion or exchange of shares, or any other
change in the corporate or capital structure of the Company (including, without
limitation, the declaration of payment of an extraordinary dividend of cash or
securities) which would have the effect of diluting or otherwise adversely
affecting Purchaser's rights and privileges under this Agreement, the number and
kind of the shares and the consideration payable in respect to the Shares shall
be appropriately and equitably adjusted to restore to Purchaser its rights and
privileges under this Agreement. Without limiting the scope of the foregoing, in
any such event, at the option of Purchaser, the Stock Option shall represent the
right to purchase, in addition to the number and kind of Shares which Purchaser
would be entitled to purchase pursuant to the immediately preceding sentence,
whatever securities, cash or other property the Shares subject to the Stock
Option shall have been converted into or otherwise exchanged for, together with
any securities, cash or other property which shall have been distributed with
respect to such Shares.
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<PAGE>
2. Representations and Warranties of Shareholder.
Shareholder hereby represents and warrants to Purchaser as follows:
2.1 Title.
Shareholder is the owner (both beneficially and of record, or
beneficially as respects the interest of Shareholder in shares held in the
Profit Sharing Plan) of the Shares set forth on Schedule A. Except for the
Shares and except for the interest of Shareholder in shares held for his account
in the Profit Sharing Plan, Shareholder is not the record or beneficial owner
of, and does not have any other rights of any nature to acquire any additional
shares of, any shares of capital stock of the Company. Shareholder will deliver,
in accordance with the terms of this Agreement, all of the Shares, free and
clear of all security interests, liens, claims, pledges, options, restrictions,
rights of first refusal, agreements, limitations on Shareholder's voting rights,
charges and other encumbrances of any nature whatsoever, and, except as provided
in this Agreement, Shareholder has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to any of the Shares. The
Shareholder has sole power of disposition with respect to all of the Shares and
sole voting power with respect to the matters set forth in Section 6 hereof with
respect to the Shares.
2.2 Authority Relative to This Agreement.
Shareholder has all necessary power and authority to execute and
deliver this Agreement, to perform Shareholder's obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Shareholder and, assuming the due
authorization, execution and delivery by Purchaser, constitutes a legal, valid
and binding obligation of Shareholder enforceable against Shareholder in
accordance with its terms.
2.3 No Conflict.
The execution and delivery of this Agreement by Shareholder does
not, and the performance of this Agreement by Shareholder will not, (a) except
for any filings required under the HSR Act and for requirements of federal and
state securities laws, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, or (b) conflict with, violate or result in any breach of or
constitute a default under (or an event which with notice or lapse of time or
both would become a default under) any agreement, judgment, injunction, order,
law, rule, regulation, decree or arrangement to which Shareholder is a party or
is bound.
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<PAGE>
2.4 Brokers.
Except for Salomon Smith Barney, whose fees will be paid by the
Company and a true and correct copy of whose engagement letter has been provided
by the Company, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Shareholder.
3. Representations and Warranties of Purchaser and Parent.
3.1 Authority Relative to This Agreement.
Purchaser and Parent have all necessary power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Purchaser and Parent. This Agreement
has been duly and validly executed and delivered by Purchaser and Parent as
Guarantor, assuming the due authorization, execution and delivery by
Shareholder, constitutes a legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms.
3.2 No Conflict.
The execution and delivery of this Agreement by Purchaser does not,
and the performance of this Agreement by Purchaser and Parent will not, (a)
except for any filings required under the HSR Act and for requirements of
federal and state securities laws, require any consent, approval, authorization
or permit of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, (b) conflict with or violate the certificate of
incorporation or bylaws of Purchaser or Parent, (c) conflict with, violate or
result in any breach of or constitute a default under (or an event which with
notice or lapse of time or both would become a default under) any agreement,
judgment, injunction, order, law, rule, regulation, decree or arrangement
applicable to Purchaser or Parent or by which any property or asset of Purchaser
or Parent is bound or affected, other than, in the case of clause (c), any such
conflicts, violations, breaches or defaults that, individually or in the
aggregate, would not materially impair the ability of Purchaser or Parent to
perform its obligations hereunder.
3.3 Brokers.
Except for Credit Suisse First Boston, whose fees will be paid by
Purchaser, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission from Shareholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Purchaser.
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<PAGE>
3.4 Investment Intent.
Purchaser hereby represents that any securities it purchases
pursuant to this Agreement are being purchased for its own account for
investment and not with a view to, or for sale in connection with, any public
distribution thereof.
4. Covenant of Shareholder.
No Solicitation of Transactions. Shareholder and his affiliates shall not,
and Shareholder and his affiliates shall use their best efforts to ensure that
Shareholder's representatives and agents (including, but not limited to,
investment bankers, attorneys and accountants) and his affiliates' officers,
directors, employees, representatives and agents do not, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with,
or provide any information to, any corporation, partnership, person or other
entity or group (other than Purchaser or any of its affiliates or
representatives) concerning any proposal or offer to acquire all or a
substantial part of the business or properties of the Company or any of its
subsidiaries, whether by merger, tender offer, exchange offer, sale of assets or
similar transaction involving the Company or any subsidiary, division or
operating or principal business unit of the Company (an "Acquisition Proposal").
Shareholder shall immediately cease and cause to be terminated any existing
activities, discussions or negotiations by Shareholder or his affiliates or any
investment banker, attorney, accountant or other advisor or representative of
Shareholder or his affiliates with parties conducted heretofore with respect to
any of the foregoing.
5. Additional Covenants of Shareholder.
5.1 No Disposition. Shareholder hereby covenants and agrees that, except
as contemplated by this Agreement and except pursuant to the Offer, Shareholder
shall not, and shall not offer or agree to, sell, transfer, tender, assign, or
otherwise dispose of, or create or permit to exist any option, restriction,
right of first refusal, agreement or limitation on Shareholder's voting rights,
with respect to, the Shares now owned or any other shares that may hereafter be
acquired by Shareholder.
5.2 Compliance of Shareholder with this Agreement. Shareholder shall take
all actions and forbear from all actions, in each case, necessary in order that
(a) all of Shareholder's representations and warranties hereunder are true and
correct and (b) Shareholder fulfills all of its obligations hereunder.
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6. Voting Agreement; Proxy of Shareholder.
6.1 Voting Agreement.
Shareholder hereby agrees that, during the time this Agreement is in
effect, at any meeting of the stockholders of the Company, however called, and
in any action by written consent of the stockholders of the Company, Shareholder
shall, to the extent applicable, (a) vote (or execute a consent in respect of)
all of the Shares in favor of the Merger, the Merger Agreement (as amended from
time to time) and any of the transactions contemplated by the Merger Agreement;
(b) vote (or execute a consent in respect of) the Shares against any action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation of the Company under the Merger Agreement; and
(c) vote (or execute a consent in respect of) the Shares against any action or
agreement that would reasonably be expected to impede, interfere with, delay or
attempt to discourage the Offer or the Merger, including, but not limited to:
(i) any extraordinary corporate transaction (other than the Merger), such as a
merger, reorganization, recapitalization or liquidation involving the Company or
any of its Subsidiaries (as defined in the Merger Agreement) or any proposal
made in opposition to or in competition with the Merger; (ii) a sale or transfer
of a material amount of assets of the Company or any of its Subsidiaries; (iii)
any change in the management or board of directors of the Company, except as
otherwise agreed to in writing by Purchaser or Purchaser; (iv) any material
change in the present capitalization or dividend policy of the Company; or (v)
any other material change in the corporate structure or business of the Company
or any of its Subsidiaries.
6.2 Irrevocable Proxy.
Shareholder agrees that, in the event Shareholder shall fail to
comply with the provisions of Section 6.1 hereof as determined by Purchaser in
its sole discretion, such failure shall result, without any further action by
Shareholder, in the irrevocable appointment of Purchaser as the attorney and
proxy of Shareholder, with full power of substitution, to vote, and otherwise
act (by written consent or otherwise) with respect to all of the Shares that
Shareholder is entitled to vote at any meeting of stockholders of the Company
(whether annual or special and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise, on the matters and in the
manner specified in Section 6.1. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE
AND COUPLED WITH AN INTEREST AND IS EXECUTED AND INTENDED TO BE IRREVOCABLE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 212(e) OF THE DELAWARE GENERAL
CORPORATION LAW ("DGCL"). Shareholder hereby revokes, effective upon the
execution and delivery of the Merger Agreement by the parties thereto, all other
proxies and powers of attorney with respect to the Shares that Shareholder may
have heretofore appointed or granted, and no subsequent proxy or power of
attorney (except in furtherance of Shareholder's obligations under Section 6.1
hereof) shall be given or written consent executed (and if given or executed,
shall not be effective) by Shareholder with respect thereto so long as this
Agreement remains in effect.
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<PAGE>
7. Termination.
Other than the Stock Option which shall be governed by Section 1.4(a)
hereof, this Agreement shall terminate automatically in the event that the
Merger Agreement is terminated in accordance with the terms and conditions
thereof.
8. Miscellaneous.
8.1 Expenses.
All costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
8.2 Further Assurances.
Shareholder and Purchaser shall execute and deliver all such further
documents and instruments and take all such further action as may be necessary
in order to consummate the transactions contemplated hereby.
8.3 Specific Performance.
The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement were not performed in accordance with the
terms hereof and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or in equity.
8.4 Entire Agreement.
This Agreement constitutes the entire agreement between Purchaser
and Shareholder with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, between Purchaser
and Shareholder with respect to the subject matter hereof.
8.5 Assignment.
This Agreement shall not be assigned by operation of law or
otherwise, except that Purchaser may assign all or any of its rights hereunder
except that such assignment shall not relieve Purchaser of its obligations
hereunder if such assignee does not perform such obligations.
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<PAGE>
8.6 Parties in Interest.
This Agreement shall be binding upon, inure solely to the benefit
of, and be enforceable by, the parties hereto and their successors and permitted
assigns. 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.
8.7 Amendment; Waiver.
This Agreement may not be amended except by an instrument in writing
signed by the parties hereto. Any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any agreement
or condition contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be bound
thereby.
8.8 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 this Agreement is
not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent possible.
8.9 Notices.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by overnight courier or facsimile to the respective parties
as follows:
If to Purchaser:
PPC Acquisition Corp.
c/o Kluwer Academic Publishers bv
Spuilboulevard 50, 311GR Dordrecht
3300 AZ Dordrecht, The Netherlands
Attention: Jeffrey K. Smith
Fax #: (011)(31)(78) 639-2268
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<PAGE>
with a copy to:
Wolters Kluwer U.S. Corporation
161 North Clark Street
48th Floor
Chicago, Illinois 60601-3221
Attention: Bruce C. Lenz
Fax #: (312) 425-0233
and to:
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Attention: Arnold J. Schaab, Esq.
Fax #: (212) 326-0806
if to Shareholder:
Ghanshyam and Anila Patel
9 Jeffrey Court
Syosset, New York 11791
Fax #: (516) 921-3263
with a copy to:
BRESSLER, AMERY & ROSS, P.C.
17 State Street
New York, New York 10004
Attention: Bernard Bressler, Esq.
Fax #: (212) 425-9337
8.10 Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed in Delaware without regard to any principles of choice of law or
conflicts of law of such State. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any
-11-
<PAGE>
state or federal court sitting in Delaware. Each of the parties hereto (i)
consents to submit such party to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated
hereby, (ii) agrees that such party will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
(iii) agrees that such party will not bring any action relating to this
Agreement or the transactions contemplated hereby in any court other than a
Federal court sitting in the state of Delaware or a Delaware state court and
(iv) waives any right to trial by jury with respect to any claim or proceeding
related to or arising out of this Agreement or any of the transactions
contemplated hereby.
8.11 Headings.
The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.12 Counterparts.
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when as executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered as of the date first written above.
PPC ACQUISITION CORP.
By: /s/ Jeffrey K. Smith
----------------------------
Name: Jeffrey K. Smith
Title: President
Shareholder
/s/ Ghanshyam Patel
-------------------------------
Ghanshyam Patel
/s/ Anila Patel
-------------------------------
Anila Patel
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<PAGE>
Kluwer Boston, Inc. in consideration of the undertakings hereunder by
Shareholder does hereby guaranty performance of the obligations undertake herein
by Purchaser and to the extent that such guarantee shall relate to the payment
of moneys, such guaranty shall be a guaranty of performance and not a guaranty
of collection.
KLUWER BOSTON, INC.
By: /s/ Jeffrey K. Smith
----------------------------
Name: Jeffrey K. Smith:
Title: President
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<PAGE>
SCHEDULE A
GHANSHYAM AND ANILA PATEL
Shares Owned In Account Designated
For Ghanshyam Patel In Plenum Publishing
Profit Sharing Plan 5,204
Shares Owned Jointly By Ghanshyam and
Anila Patel 5,350
-----
10,554
<PAGE>
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement (this "Agreement"), dated as of June 10, 1998,
between PPC Acquisition Corp. ("Purchaser") and Bernard Bressler
("Shareholder").
WHEREAS, Shareholder owns (both beneficially and of record) 11,757
shares(1) of common stock, par value $.10 per share ("Common Stock") of Plenum
Publishing Corp. (the "Company")(including shares as to which Shareholder has
power pursuant to the terms of a self directed IRA Plan)(the "Shares").
WHEREAS, concurrently herewith, Kluwer Boston Inc. ("Parent") and
Purchaser, a wholly owned subsidiary of Parent, are entering into an agreement
and plan of merger with the Company, dated as of June 10, 1998 (the "Merger
Agreement"), pursuant to which Purchaser has agreed to make a cash tender offer
(the "Offer") for, among other things, all outstanding shares of Common Stock of
the Company at $73.50 per share (or any higher price paid in the Offer, the
"Offer Price"), net to the seller in cash, to be followed by a merger of
Purchaser with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and Parent to
enter into the Merger Agreement, Purchaser, whose performance hereunder is
guaranteed by Parent, has required that Shareholder agree, and in order to
induce Purchaser and Parent to enter into the Merger Agreement, Shareholder has
agreed, among other things, (i) to sell the Shares; (ii) to tender the Shares
into the Offer; (iii) to appoint Purchaser as Shareholder's proxy to vote the
Shares under certain circumstances, and (iv) with respect to certain questions
put to stockholders of the Company for a vote, to vote the Shares, in each case,
in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Purchase and Sale of Shares.
1.1 Tender of Shares; Purchase of Shares.
(a) Shareholder agrees to tender and sell to Purchaser all of the
Shares pursuant to the terms of the Offer. Shareholder agrees that Shareholder
shall deliver to the depository for the Offer for receipt prior to the
Expiration Date (as defined in the Offer) of the Offer, either a letter of
transmittal together with the certificates for the Shares, if available, or a
"Notice of Guaranteed Delivery", if the Shares are not available. Unless an
election is made by Purchaser under Section 1.1(b), Shareholder agrees not to
withdraw any Shares tendered into the
- ------------
(1) Shareholder anticipates contributing 1000 shares to charities before
June 30, 1998 and such shares are not subject to this Agreement and are not
included in the total set forth. To the extent not contributed they will
constitute additional shares subject to this Agreement.
<PAGE>
Offer. Upon such tender Shareholder will be relieved of any obligation under
Sec. 1.1(b) hereof.
(b) Upon the election of Purchaser on the terms and subject to the
conditions set forth in this Agreement, on (and assuming the occurrence of) the
Closing Date (as defined herein), Purchaser will purchase from the Shareholder,
and the Shareholder will sell and transfer to the Purchaser, all of the Shares,
free and clear of all mortgages, pledges, security interest, encumbrances,
liens, options, debts, charges, claims and restrictions of any kind, at a
purchase price per share equal to the Offer Price.
1.2 Conditions to the Closing.
Subject to the provisions of the first sentence of Section 1.3
hereof, the obligations of the parties to consummate the transactions
contemplated by Section 1.1(b) hereof are subject to the following conditions:
(a) any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") applicable to the delivery of the Shares and
the consummation of the Offer shall have expired or been terminated; and (b)
there shall be no preliminary or permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
delivery of the Shares. Purchaser and Shareholder shall each promptly after the
date hereof make such filings and provide such information as may be required
under the HSR Act with respect to the sale of the Shares.
1.3 Closing.
Subject to the conditions contained in this Agreement and subject to
Sections 1.4 through 1.8, the closing of the transactions contemplated by
Section 1.1(b) hereof (the "Closing") shall occur at a site designated by
Purchaser simultaneously with the acceptance by Purchaser of the shares of
Common Stock validly tendered and not withdrawn pursuant to the terms of the
Offer in accordance with the terms and conditions of the Offer and the Merger
Agreement (the "Closing Date"). At the Closing and subject to the conditions
contained in this Agreement, Purchaser hereby directs Shareholder to deliver to
Purchaser a certificate or certificates evidencing the Shares, each such
certificate being duly endorsed in blank and accompanied by such stock powers
and such other documents as may be necessary in Purchaser's judgment to transfer
record ownership of the Shares into Purchaser's name on the stock transfer books
of the Company, and Purchaser will purchase the Shares at a purchase price equal
to the Offer Price. All payments made by Purchaser to Shareholder pursuant to
this Section 1.3 shall be made by wire transfer of immediately available funds
to an account designated by Shareholder, or by certified bank check payable to
Shareholder, in an amount equal to the sum of the product of (i) the Offer Price
and (ii) the total number of Shares delivered at the Closing.
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<PAGE>
1.4 Stock Option.
Effective upon expiration or termination of the Offer for the
reasons set forth in Section 1.5 below, Purchaser shall have an irrevocable
option (the "Stock Option") exercisable on the terms and conditions set forth in
Section 1.5 below to purchase the Shares, at a purchase price equal to the Offer
Price.
1.5 Termination or Expiration of Offer and Exercise of Stock Option.
(a)(i) If the Offer is terminated by Purchaser for the reasons set
forth in paragraph (d) of Annex I to the Merger Agreement or (ii) in the case of
the expiration of the Offer, if the Offer expires without the purchase of Shares
thereunder and either without satisfaction of the Minimum Condition (as defined
in the Merger Agreement) or after the occurrence of circumstances giving rise to
a right of termination by Purchaser for the reasons set forth in paragraph (d)
of Annex I to the Merger Agreement, in each case without any violation of the
Offer or the Merger Agreement by Purchaser or Parent, then the Stock Option may
be exercised by Purchaser, in whole and for all of Shareholder's Shares but not
in part or for less than all of Shareholder's Shares. Notice of exercise may be
given at any time during the period (the "Exercise Period") commencing on the
date on which the Offer is terminated or expires (under the circumstances
provided in this Section 1.5) and ending on March 31, 1999, whichever is later.
In addition, Purchaser may also exercise the Stock Option if the Merger
Agreement shall terminate by reason of the Company's exercise of its termination
rights pursuant to Section 8.1(c)(ii) of the Merger Agreement, whereupon the
Exercise Period shall commence on the date such termination rights are exercised
and end on March 31, 1999, whichever is later.
(b) In the event Purchaser wishes to exercise the Stock Option,
Purchaser shall send a written notice (an "Exercise Notice") during the Exercise
Period to the Shareholder specifying that Purchaser shall purchase the Shares
held by Shareholder and a date, which shall be a business day, and a place,
which shall be in the city of New York, for the closing of such purchase (the
"Stock Option Closing").
(c) Upon receipt of the Exercise Notice, Shareholder shall be
obligated to deliver to Purchaser a certificate or certificates representing the
Shares held by Shareholder (or to direct the depositary for the Offer to so
deliver such certificates or certificates), in accordance with the terms of this
Agreement, on the later of the date specified in such Exercise Notice or the
first business day on which the conditions specified in Section 1.6 shall be
satisfied. The date specified in such Exercise Notice may be as early as one
business day after the date of such Exercise Notice but shall not be later than
five (5) business days after the later of (i) the date of such Exercise Notice,
or (ii) the date all conditions under Section 1.6 are satisfied.
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<PAGE>
1.6 Conditions to Delivery of the Shares.
The obligation of the Shareholder to deliver, and of the Purchaser
to pay for, the Shares upon exercise of the Stock Option is subject to the
following conditions:
(a) All waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, applicable to the exercise of the Stock
Option and the delivery of the Shares shall have expired or been terminated; and
(b) There shall be no permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
exercise of the Stock Option or the delivery of the Shares in respect of such
exercise.
1.7 Stock Option Closing.
At the Stock Option Closing, the Shareholder will deliver to
Purchaser a certificate or certificates evidencing the Shares owned by
Shareholder, each such certificate being duly endorsed in blank and accompanied
by such stock powers and such other documents as may be necessary in Purchaser's
judgment to transfer record ownership of the Shares into Purchaser's name on the
stock transfer books of the Company, and Purchaser will purchase the delivered
Shares at the Offer Price. All payments made by Purchaser to Shareholder
pursuant to this Section 1.7 shall be made by wire transfer of immediately
available funds or by certified bank check payable to Shareholder, in an amount
equal to the product of (a) the Offer Price and (b) the Shares delivered by
Shareholder in respect of the Stock Option Closing.
1.8 Adjustments Upon Changes in Capitalization.
In the event of any change in the number of issued and outstanding
shares of Common Stock by reason of any stock dividend, subdivision, merger,
recapitalization, combination, conversion or exchange of shares, or any other
change in the corporate or capital structure of the Company (including, without
limitation, the declaration of payment of an extraordinary dividend of cash or
securities) which would have the effect of diluting or otherwise adversely
affecting Purchaser's rights and privileges under this Agreement, the number and
kind of the shares and the consideration payable in respect to the Shares shall
be appropriately and equitably adjusted to restore to Purchaser its rights and
privileges under this Agreement. Without limiting the scope of the foregoing, in
any such event, at the option of Purchaser, the Stock Option shall represent the
right to purchase, in addition to the number and kind of Shares which Purchaser
would be entitled to purchase pursuant to the immediately preceding sentence,
whatever securities, cash or other property the Shares subject to the Stock
Option shall have been converted into or otherwise exchanged for, together with
any securities, cash or other property which shall have been distributed with
respect to such Shares.
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<PAGE>
2. Representations and Warranties of Shareholder.
Shareholder hereby represents and warrants to Purchaser as follows:
2.1 Title.
Shareholder is the owner (both beneficially and of record or
beneficially as respects the interest of Shareholder in shares held in the
Shareholder's IRA) of the Shares. Except for the Shares and shares described in
footnote 1 on page one hereof, Shareholder is not the record or beneficial owner
of, and does not have any other rights of any nature to acquire any additional
shares of, any shares of capital stock of the Company. Shareholder will deliver,
in accordance with the terms of this Agreement, all of the Shares, free and
clear of all security interests, liens, claims, pledges, options, restrictions,
rights of first refusal, agreements, limitations on Shareholder's voting rights,
charges and other encumbrances of any nature whatsoever, and, except as provided
in this Agreement, Shareholder has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to any of the Shares. The
Shareholder has sole voting power with respect to the matters set forth in
Section 6 hereof with respect to the Shares.
2.2 Authority Relative to This Agreement.
Shareholder has all necessary power and authority to execute and
deliver this Agreement, to perform Shareholder's obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Shareholder and, assuming the due
authorization, execution and delivery by Purchaser, constitutes a legal, valid
and binding obligation of Shareholder enforceable against Shareholder in
accordance with its terms.
2.3 No Conflict.
The execution and delivery of this Agreement by Shareholder does
not, and the performance of this Agreement by Shareholder will not, (a) except
for any filings required under the HSR Act and for requirements of federal and
state securities laws, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, or (b) conflict with, violate or result in any breach of or
constitute a default under (or an event which with notice or lapse of time or
both would become a default under) any agreement, judgment, injunction, order,
law, rule, regulation, decree or arrangement to which Shareholder is a party or
is bound.
-5-
<PAGE>
2.4 Brokers.
Except for Salomon Smith Barney, whose fees will be paid by the
Company and a true and correct copy of whose engagement letter has been provided
by the Company, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Shareholder or the Company.
3. Representations and Warranties of Purchaser and Parent.
3.1 Authority Relative to This Agreement.
Purchaser and Parent have all necessary power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Purchaser and Parent. This Agreement
has been duly and validly executed and delivered by Purchaser and Parent as
Guarantor, assuming the due authorization, execution and delivery by
Shareholder, constitutes a legal, valid and binding obligation of Purchaser and
Parent, enforceable against Purchaser and Parent in accordance with its terms.
3.2 No Conflict.
The execution and delivery of this Agreement by Purchaser and Parent
does not, and the performance of this Agreement by Purchaser and Parent will
not, (a) except for any filings required under the HSR Act and for requirements
of federal and state securities laws, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, (b) conflict with or violate the
certificate of incorporation or bylaws of Purchaser or Parent, (c) conflict
with, violate or result in any breach of or constitute a default under (or an
event which with notice or lapse of time or both would become a default under)
any agreement, judgment, injunction, order, law, rule, regulation, decree or
arrangement applicable to Purchaser or Parent or by which any property or asset
of Purchaser or Parent is bound or affected, other than, in the case of clause
(c), any such conflicts, violations, breaches or defaults that, individually or
in the aggregate, would not materially impair the ability of Purchaser or Parent
to perform its obligations hereunder.
3.3 Brokers.
Except for Credit Suisse First Boston, whose fees will be paid by
Purchaser, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission from Shareholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Purchaser.
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<PAGE>
3.4 Investment Intent.
Purchaser hereby represents that any securities it purchases
pursuant to this Agreement are being purchased for its own account for
investment and not with a view to, or for sale in connection with, any public
distribution thereof.
4. Covenant of Shareholder.
No Solicitation of Transactions. Shareholder and his affiliates shall not,
and Shareholder and his affiliates shall use their best efforts to ensure that
Shareholder's representatives and agents (including, but not limited to,
investment bankers, attorneys and accountants) and his affiliates' officers,
directors, employees, representatives and agents do not, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with,
or provide any information to, any corporation, partnership, person or other
entity or group (other than Purchaser or any of its affiliates or
representatives) concerning any proposal or offer to acquire all or a
substantial part of the business or properties of the Company or any of its
subsidiaries, whether by merger, tender offer, exchange offer, sale of assets or
similar transaction involving the Company or any subsidiary, division or
operating or principal business unit of the Company (an "Acquisition Proposal"),
except that the provisions of this Section 4 shall not restrict the
Shareholder's ability to act in such Shareholder's capacity as a director of the
Company in accordance with Section 6.8 of the Merger Agreement. Shareholder
shall immediately cease and cause to be terminated any existing activities,
discussions or negotiations by Shareholder or his affiliates or any investment
banker, attorney, accountant or other advisor or representative of Shareholder
or his affiliates with parties conducted heretofore with respect to any of the
foregoing.
5. Additional Covenants of Shareholder.
5.1 No Disposition. Shareholder hereby covenants and agrees that, except
as contemplated by this Agreement and except pursuant to the Offer, Shareholder
shall not, and shall not offer or agree to, sell, transfer, tender, assign, or
otherwise dispose of, or create or permit to exist any restriction, right of
first refusal, agreement or limitation on Shareholder's voting rights, with
respect to, the Shares now owned or any other shares that may hereafter be
acquired by Shareholder.
5.2 Compliance of Shareholder with this Agreement. Shareholder shall take
all actions and forbear from all actions, in each case, necessary in order that
(a) all of Shareholder's representations and warranties hereunder are true and
correct and (b) Shareholder fulfills all of its obligations hereunder.
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<PAGE>
6. Voting Agreement; Proxy of Shareholder.
6.1 Voting Agreement.
Shareholder hereby agrees that, during the time this Agreement is in
effect, at any meeting of the stockholders of the Company, however called, and
in any action by written consent of the stockholders of the Company, Shareholder
shall, to the extent applicable, (a) vote (or execute a consent in respect of)
all of the Shares in favor of the Merger, the Merger Agreement (as amended from
time to time) and any of the transactions contemplated by the Merger Agreement;
(b) vote (or execute a consent in respect of) the Shares against any action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation of the Company under the Merger Agreement; and
(c) vote (or execute a consent in respect of) the Shares against any action or
agreement that would reasonably be expected to impede, interfere with, delay or
attempt to discourage the Offer or the Merger, including, but not limited to:
(i) any extraordinary corporate transaction (other than the Merger), such as a
merger, reorganization, recapitalization or liquidation involving the Company or
any of its Subsidiaries (as defined in the Merger Agreement) or any proposal
made in opposition to or in competition with the Merger; (ii) a sale or transfer
of a material amount of assets of the Company or any of its Subsidiaries; (iii)
any change in the management or board of directors of the Company, except as
otherwise agreed to in writing by Purchaser or Purchaser; (iv) any material
change in the present capitalization or dividend policy of the Company; or (v)
any other material change in the corporate structure or business of the Company
or any of its Subsidiaries.
6.2 Irrevocable Proxy.
Shareholder agrees that, in the event Shareholder shall fail to
comply with the provisions of Section 6.1 hereof as determined by Purchaser in
its sole discretion, such failure shall result, without any further action by
Shareholder, in the irrevocable appointment of Purchaser as the attorney and
proxy of Shareholder, with full power of substitution, to vote, and otherwise
act (by written consent or otherwise) with respect to all of the Shares that
Shareholder is entitled to vote at any meeting of stockholders of the Company
(whether annual or special and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise, on the matters and in the
manner specified in Section 6.1. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE
AND COUPLED WITH AN INTEREST AND IS EXECUTED AND INTENDED TO BE IRREVOCABLE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 212(e) OF THE DELAWARE GENERAL
CORPORATION LAW ("DGCL"). Shareholder hereby revokes, effective upon the
execution and delivery of the Merger Agreement by the parties thereto, all other
proxies and powers of attorney with respect to the Shares that Shareholder may
have heretofore appointed or granted, and no subsequent proxy or power of
attorney (except in furtherance of Shareholder's obligations under Section 6.1
hereof) shall be given or written consent executed (and if given or executed,
shall not be effective) by Shareholder with respect thereto so long as this
Agreement remains in effect.
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<PAGE>
7. Termination.
Other than the Stock Option which shall be governed by Section 1.4(a)
hereof, this Agreement shall terminate automatically in the event that the
Merger Agreement is terminated in accordance with the terms and conditions
thereof.
8. Miscellaneous.
8.1 Expenses.
All costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
8.2 Further Assurances.
Shareholder and Purchaser shall execute and deliver all such further
documents and instruments and take all such further action as may be necessary
in order to consummate the transactions contemplated hereby.
8.3 Specific Performance.
The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement were not performed in accordance with the
terms hereof and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or in equity.
8.4 Entire Agreement.
This Agreement constitutes the entire agreement between Purchaser
and Shareholder with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, between Purchaser
and Shareholder with respect to the subject matter hereof.
8.5 Assignment.
This Agreement shall not be assigned by operation of law or
otherwise, except that Purchaser may assign all or any of its rights hereunder
except that such assignment shall not relieve Purchaser of its obligations
hereunder if such assignee does not perform such obligations.
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8.6 Parties in Interest.
This Agreement shall be binding upon, inure solely to the benefit
of, and be enforceable by, the parties hereto and their successors and permitted
assigns. 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.
8.7 Amendment; Waiver.
This Agreement may not be amended except by an instrument in writing
signed by the parties hereto. Any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any agreement
or condition contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be bound
thereby.
8.8 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 this Agreement is
not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent possible.
8.9 Notices.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by overnight courier or facsimile to the respective parties
as follows:
If to Purchaser:
PPC Acquisition Corp.
c/o Kluwer Academic Publishers bv
Spuiboulevard 50, 311GR Dordrecht
3300 AZ Dordrecht, The Netherlands
Attention: Jeffrey K. Smith
Fax #: (011)(31)(78) 639-2268
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<PAGE>
with a copy to:
Wolters Kluwer U.S. Corporation
161 North Clark Street
48th Floor
Chicago, Illinois 60601-3221
Attention: Bruce C. Lenz
Fax #: (312) 425-0233
and to:
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Attention: Arnold J. Schaab, Esq.
Fax #: (212) 326-0806
if to Shareholder:
Bernard Bressler
3 Kimberwick Court
Morristown, New Jersey 07960
Fax #: (973) 984-1545
with a copy to:
BRESSLER, AMERY & ROSS, P.C.
17 State Street
New York, New York 10004
Attention: Bernard Bressler, Esq.
Fax #: (212) 425-9337
8.10 Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed in Delaware without regard to any principles of choice of law or
conflicts of law of such State. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any
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state or federal court sitting in Delaware. Each of the parties hereto (i)
consents to submit such party to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated
hereby, (ii) agrees that such party will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
(iii) agrees that such party will not bring any action relating to this
Agreement or the transactions contemplated hereby in any court other than a
Federal court sitting in the state of Delaware or a Delaware state court and
(iv) waives any right to trial by jury with respect to any claim or proceeding
related to or arising out of this Agreement or any of the transactions
contemplated hereby.
8.11 Headings.
The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.12 Counterparts.
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when as executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered as of the date first written above.
PPC ACQUISITION CORP.
By: /s/ Jeffrey K. Smith
----------------------------
Name: Jeffrey K. Smith
Title: President
Shareholder
/s/ Bernard Bressler
-------------------------------
Bernard Bressler
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<PAGE>
Kluwer Boston, Inc. in consideration of the undertakings hereunder by
Shareholder does hereby guaranty performance of the obligations undertake herein
by Purchaser and to the extent that such guarantee shall relate to the payment
of moneys, such guaranty shall be a guaranty of performance and not a guaranty
of collection.
KLUWER BOSTON, INC.
By: /s/ Jeffrey K. Smith
----------------------------
Name: Jeffrey K. Smith
Title: President
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<PAGE>
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement (this "Agreement"), dated as of June 10, 1998,
between PPC Acquisition Corp. ("Purchaser") and Teresa Bressler ("Shareholder").
WHEREAS, Shareholder owns (both beneficially and of record) 10,497 shares
of common stock, par value $.10 per share ("Common Stock") of Plenum Publishing
Corp. (the "Company")(the "Shares").
WHEREAS, concurrently herewith, Kluwer Boston Inc. ("Parent") and
Purchaser, a wholly owned subsidiary of Parent, are entering into an agreement
and plan of merger with the Company, dated as of June 10, 1998 (the "Merger
Agreement"), pursuant to which Purchaser has agreed to make a cash tender offer
(the "Offer") for, among other things, all outstanding shares of Common Stock of
the Company at $73.50 per share (or any higher price paid in the Offer, the
"Offer Price"), net to the seller in cash, to be followed by a merger of
Purchaser with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and Parent to
enter into the Merger Agreement, Purchaser, whose performance hereunder is
guaranteed by Parent, has required that Shareholder agree, and in order to
induce Purchaser and Parent to enter into the Merger Agreement, Shareholder has
agreed, among other things, (i) to sell the Shares; (ii) to tender the Shares
into the Offer; (iii) to appoint Purchaser as Shareholder's proxy to vote the
Shares under certain circumstances, and (iv) with respect to certain questions
put to stockholders of the Company for a vote, to vote the Shares, in each case,
in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Purchase and Sale of Shares.
1.1 Tender of Shares; Purchase of Shares.
(a) Shareholder agrees to tender and sell to Purchaser all of the
Shares pursuant to the terms of the Offer. Shareholder agrees that Shareholder
shall deliver to the depository for the Offer for receipt prior to the
Expiration Date (as defined in the Offer) of the Offer, either a letter of
transmittal together with the certificates for the Shares, if available, or a
"Notice of Guaranteed Delivery", if the Shares are not available. Unless an
election is made by Purchaser under Section 1.1(b), Shareholder agrees not to
withdraw any Shares tendered into the Offer. Upon such tender Shareholder will
be relieved of any obligation under Sec. 1.1(b) hereof.
(b) Upon the election of Purchaser on the terms and subject to the
conditions set forth in this Agreement, on (and assuming the occurrence of) the
Closing Date (as defined herein), Purchaser will purchase from the Shareholder,
and the Shareholder will sell and transfer
<PAGE>
to the Purchaser, all of the Shares, free and clear of all mortgages, pledges,
security interest, encumbrances, liens, options, debts, charges, claims and
restrictions of any kind, at a purchase price per share equal to the Offer
Price.
1.2 Conditions to the Closing.
Subject to the provisions of the first sentence of Section 1.3
hereof, the obligations of the parties to consummate the transactions
contemplated by Section 1.1(b) hereof are subject to the following conditions:
(a) any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") applicable to the delivery of the Shares and
the consummation of the Offer shall have expired or been terminated; and (b)
there shall be no preliminary or permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
delivery of the Shares. Purchaser and Shareholder shall each promptly after the
date hereof make such filings and provide such information as may be required
under the HSR Act with respect to the sale of the Shares.
1.3 Closing.
Subject to the conditions contained in this Agreement and subject to
Sections 1.4 through 1.8, the closing of the transactions contemplated by
Section 1.1(b) hereof (the "Closing") shall occur at a site designated by
Purchaser simultaneously with the acceptance by Purchaser of the shares of
Common Stock validly tendered and not withdrawn pursuant to the terms of the
Offer in accordance with the terms and conditions of the Offer and the Merger
Agreement (the "Closing Date"). At the Closing and subject to the conditions
contained in this Agreement, Purchaser hereby directs Shareholder to deliver to
Purchaser a certificate or certificates evidencing the Shares, each such
certificate being duly endorsed in blank and accompanied by such stock powers
and such other documents as may be necessary in Purchaser's judgment to transfer
record ownership of the Shares into Purchaser's name on the stock transfer books
of the Company, and Purchaser will purchase the Shares at a purchase price equal
to the Offer Price. All payments made by Purchaser to Shareholder pursuant to
this Section 1.3 shall be made by wire transfer of immediately available funds
to an account designated by Shareholder, or by certified bank check payable to
Shareholder, in an amount equal to the sum of the product of (i) the Offer Price
and (ii) the total number of Shares delivered at the Closing.
1.4 Stock Option.
Effective upon expiration or termination of the Offer for the
reasons set forth in Section 1.5 below, Purchaser shall have an irrevocable
option (the "Stock Option") exercisable on the terms and conditions set forth in
Section 1.5 below to purchase the Shares, at a purchase price equal to the Offer
Price.
1.5 Termination or Expiration of Offer and Exercise of Stock Option.
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(a)(i) If the Offer is terminated by Purchaser for the reasons set
forth in paragraph (d) of Annex I to the Merger Agreement or (ii) in the case of
the expiration of the Offer, if the Offer expires without the purchase of Shares
thereunder and either without satisfaction of the Minimum Condition (as defined
in the Merger Agreement) or after the occurrence of circumstances giving rise to
a right of termination by Purchaser for the reasons set forth in paragraph (d)
of Annex I to the Merger Agreement, in each case without any violation of the
Offer or the Merger Agreement by Purchaser or Parent, then the Stock Option may
be exercised by Purchaser, in whole and for all of Shareholder's Shares but not
in part or for less than all of Shareholder's Shares. Notice of exercise may be
given at any time during the period (the "Exercise Period") commencing on the
date on which the Offer is terminated or expires (under the circumstances
provided in this Section 1.5) and ending on March 31, 1999, whichever is later.
In addition, Purchaser may also exercise the Stock Option if the Merger
Agreement shall terminate by reason of the Company's exercise of its termination
rights pursuant to Section 8.1(c)(ii) of the Merger Agreement, whereupon the
Exercise Period shall commence on the date such termination rights are exercised
and end on March 31, 1999, whichever is later.
(b) In the event Purchaser wishes to exercise the Stock Option,
Purchaser shall send a written notice (an "Exercise Notice") during the Exercise
Period to the Shareholder specifying that Purchaser shall purchase the Shares
held by Shareholder and a date, which shall be a business day, and a place,
which shall be in the city of New York, for the closing of such purchase (the
"Stock Option Closing").
(c) Upon receipt of the Exercise Notice, Shareholder shall be
obligated to deliver to Purchaser a certificate or certificates representing the
Shares held by Shareholder (or to direct the depositary for the Offer to so
deliver such certificates or certificates), in accordance with the terms of this
Agreement, on the later of the date specified in such Exercise Notice or the
first business day on which the conditions specified in Section 1.6 shall be
satisfied. The date specified in such Exercise Notice may be as early as one
business day after the date of such Exercise Notice but shall not be later than
five (5) business days after the later of (i) the date of such Exercise Notice,
or (ii) the date all conditions under Section 1.6 are satisfied.
1.6 Conditions to Delivery of the Shares.
The obligation of the Shareholder to deliver, and of the Purchaser
to pay for, the Shares upon exercise of the Stock Option is subject to the
following conditions:
(a) All waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, applicable to the exercise of the Stock
Option and the delivery of the Shares shall have expired or been terminated; and
(b) There shall be no permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
exercise of the Stock Option or the delivery of the Shares in respect of such
exercise.
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<PAGE>
1.7 Stock Option Closing.
At the Stock Option Closing, the Shareholder will deliver to
Purchaser a certificate or certificates evidencing the Shares owned by
Shareholder, each such certificate being duly endorsed in blank and accompanied
by such stock powers and such other documents as may be necessary in Purchaser's
judgment to transfer record ownership of the Shares into Purchaser's name on the
stock transfer books of the Company, and Purchaser will purchase the delivered
Shares at the Offer Price. All payments made by Purchaser to Shareholder
pursuant to this Section 1.7 shall be made by wire transfer of immediately
available funds or by certified bank check payable to Shareholder, in an amount
equal to the product of (a) the Offer Price and (b) the Shares delivered by
Shareholder in respect of the Stock Option Closing.
1.8 Adjustments Upon Changes in Capitalization.
In the event of any change in the number of issued and outstanding
shares of Common Stock by reason of any stock dividend, subdivision, merger,
recapitalization, combination, conversion or exchange of shares, or any other
change in the corporate or capital structure of the Company (including, without
limitation, the declaration of payment of an extraordinary dividend of cash or
securities) which would have the effect of diluting or otherwise adversely
affecting Purchaser's rights and privileges under this Agreement, the number and
kind of the shares and the consideration payable in respect to the Shares shall
be appropriately and equitably adjusted to restore to Purchaser its rights and
privileges under this Agreement. Without limiting the scope of the foregoing, in
any such event, at the option of Purchaser, the Stock Option shall represent the
right to purchase, in addition to the number and kind of Shares which Purchaser
would be entitled to purchase pursuant to the immediately preceding sentence,
whatever securities, cash or other property the Shares subject to the Stock
Option shall have been converted into or otherwise exchanged for, together with
any securities, cash or other property which shall have been distributed with
respect to such Shares.
2. Representations and Warranties of Shareholder.
Shareholder hereby represents and warrants to Purchaser as follows:
2.1 Title.
Shareholder is the owner (both beneficially and of record) of the
Shares. Except for the Shares, Shareholder is not the record or beneficial owner
of, and does not have any other rights of any nature to acquire any additional
shares of, any shares of capital stock of the Company. Shareholder will deliver
in accordance with the terms of this Agreement all of the Shares, free and clear
of all security interests, liens, claims, pledges, options, restrictions, rights
of first refusal, agreements, limitations on Shareholder's voting rights,
charges and other encumbrances of any nature whatsoever, and, except as provided
in this Agreement, Shareholder
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has not appointed or granted any proxy, which appointment or grant is still
effective, with respect to any of the Shares. The Shareholder has sole voting
power with respect to the matters set forth in Section 6 hereof with respect to
the Shares.
2.2 Authority Relative to This Agreement.
Shareholder has all necessary power and authority to execute and
deliver this Agreement, to perform Shareholder's obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Shareholder and, assuming the due
authorization, execution and delivery by Purchaser, constitutes a legal, valid
and binding obligation of Shareholder enforceable against Shareholder in
accordance with its terms.
2.3 No Conflict.
The execution and delivery of this Agreement by Shareholder does
not, and the performance of this Agreement by Shareholder will not, (a) except
for any filings required under the HSR Act and for requirements of federal and
state securities laws, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, or (b) conflict with, violate or result in any breach of or
constitute a default under (or an event which with notice or lapse of time or
both would become a default under) any agreement, judgment, injunction, order,
law, rule, regulation, decree or arrangement to which Shareholder is a party or
is bound.
2.4 Brokers.
Except for Salomon Smith Barney, whose fees will be paid by the
Company and a true and correct copy of whose engagement letter has been provided
by the Company, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Shareholder or the Company.
3. Representations and Warranties of Purchaser and Parent.
3.1 Authority Relative to This Agreement.
Purchaser has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Purchaser and the consummation by Purchaser of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of Purchaser and Parent. This Agreement has been
duly and validly executed and delivered by Purchaser and Parent as Guarantor,
assuming the due authorization, execution and delivery by Shareholder,
constitutes a
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legal, valid and binding obligation of Purchaser and Parent, enforceable against
Purchaser and Parent in accordance with its terms.
3.2 No Conflict.
The execution and delivery of this Agreement by Purchaser and Parent
does not, and the performance of this Agreement by Purchaser and Parent will
not, (a) except for any filings required under the HSR Act and for requirements
of federal and state securities laws, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, (b) conflict with or violate the
certificate of incorporation or bylaws of Purchaser or Parent, (c) conflict
with, violate or result in any breach of or constitute a default under (or an
event which with notice or lapse of time or both would become a default under)
any agreement, judgment, injunction, order, law, rule, regulation, decree or
arrangement applicable to Purchaser or Parent or by which any property or asset
of Purchaser or Parent is bound or affected, other than, in the case of clause
(c), any such conflicts, violations, breaches or defaults that, individually or
in the aggregate, would not materially impair the ability of Purchaser or Parent
to perform its obligations hereunder.
3.3 Brokers.
Except for Credit Suisse First Boston, whose fees will be paid by
Purchaser, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission from Shareholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Purchaser.
3.4 Investment Intent.
Purchaser hereby represents that any securities it purchases
pursuant to this Agreement are being purchased for its own account for
investment and not with a view to, or for sale in connection with, any public
distribution thereof.
4. Covenant of Shareholder.
No Solicitation of Transactions. Shareholder and his affiliates shall not,
and Shareholder and his affiliates shall use their best efforts to ensure that
Shareholder's representatives and agents (including, but not limited to,
investment bankers, attorneys and accountants) and his affiliates' officers,
directors, employees, representatives and agents do not, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with,
or provide any information to, any corporation, partnership, person or other
entity or group (other than Purchaser or any of its affiliates or
representatives) concerning any proposal or offer to acquire all or a
substantial part of the business or properties of the Company or any of its
subsidiaries, whether by merger, tender offer, exchange offer, sale of assets or
similar transaction involving the Company or any subsidiary, division or
operating or principal business unit of the Company
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(an "Acquisition Proposal"). Shareholder shall immediately cease and cause to be
terminated any existing activities, discussions or negotiations by Shareholder
or his affiliates or any investment banker, attorney, accountant or other
advisor or representative of Shareholder or his affiliates with parties
conducted heretofore with respect to any of the foregoing.
5. Additional Covenants of Shareholder.
5.1 No Disposition. Shareholder hereby covenants and agrees that, except
as contemplated by this Agreement and except pursuant to the Offer, Shareholder
shall not, and shall not offer or agree to, sell, transfer, tender, assign,
hypothecate or otherwise dispose of, or create or permit to exist any option,
restriction, right of first refusal, agreement or limitation on Shareholder's
voting rights, with respect to, the Shares now owned or any other shares that
may hereafter be acquired by Shareholder.
5.2 Compliance of Shareholder with this Agreement. Shareholder shall take
all actions and forbear from all actions, in each case, necessary in order that
(a) all of Shareholder's representations and warranties hereunder are true and
correct and (b) Shareholder fulfills all of its obligations hereunder.
6. Voting Agreement; Proxy of Shareholder.
6.1 Voting Agreement.
Shareholder hereby agrees that, during the time this Agreement is in
effect, at any meeting of the stockholders of the Company, however called, and
in any action by written consent of the stockholders of the Company, Shareholder
shall, to the extent applicable, (a) vote (or execute a consent in respect of)
all of the Shares in favor of the Merger, the Merger Agreement (as amended from
time to time) and any of the transactions contemplated by the Merger Agreement;
(b) vote (or execute a consent in respect of) the Shares against any action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation of the Company under the Merger Agreement; and
(c) vote (or execute a consent in respect of) the Shares against any action or
agreement that would reasonably be expected to impede, interfere with, delay or
attempt to discourage the Offer or the Merger, including, but not limited to:
(i) any extraordinary corporate transaction (other than the Merger), such as a
merger, reorganization, recapitalization or liquidation involving the Company or
any of its Subsidiaries (as defined in the Merger Agreement) or any proposal
made in opposition to or in competition with the Merger; (ii) a sale or transfer
of a material amount of assets of the Company or any of its Subsidiaries; (iii)
any change in the management or board of directors of the Company, except as
otherwise agreed to in writing by Purchaser or Purchaser; (iv) any material
change in the present capitalization or dividend policy of the Company; or (v)
any other material change in the corporate structure or business of the Company
or any of its Subsidiaries.
6.2 Irrevocable Proxy.
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Shareholder agrees that, in the event Shareholder shall fail to
comply with the provisions of Section 6.1 hereof as determined by Purchaser in
its sole discretion, such failure shall result, without any further action by
Shareholder, in the irrevocable appointment of Purchaser as the attorney and
proxy of Shareholder, with full power of substitution, to vote, and otherwise
act (by written consent or otherwise) with respect to all of the Shares that
Shareholder is entitled to vote at any meeting of stockholders of the Company
(whether annual or special and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise, on the matters and in the
manner specified in Section 6.1. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE
AND COUPLED WITH AN INTEREST AND IS EXECUTED AND INTENDED TO BE IRREVOCABLE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 212(e) OF THE DELAWARE GENERAL
CORPORATION LAW ("DGCL"). Shareholder hereby revokes, effective upon the
execution and delivery of the Merger Agreement by the parties thereto, all other
proxies and powers of attorney with respect to the Shares that Shareholder may
have heretofore appointed or granted, and no subsequent proxy or power of
attorney (except in furtherance of Shareholder's obligations under Section 6.1
hereof) shall be given or written consent executed (and if given or executed,
shall not be effective) by Shareholder with respect thereto so long as this
Agreement remains in effect.
7. Termination.
Other than the Stock Option which shall be governed by Section 1.4(a)
hereof, this Agreement shall terminate automatically in the event that the
Merger Agreement is terminated in accordance with the terms and conditions
thereof.
8. Miscellaneous.
8.1 Expenses.
All costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
8.2 Further Assurances.
Shareholder and Purchaser shall execute and deliver all such further
documents and instruments and take all such further action as may be necessary
in order to consummate the transactions contemplated hereby.
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8.3 Specific Performance.
The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement were not performed in accordance with the
terms hereof and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or in equity.
8.4 Entire Agreement.
This Agreement constitutes the entire agreement between Purchaser
and Shareholder with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, between Purchaser
and Shareholder with respect to the subject matter hereof.
8.5 Assignment.
This Agreement shall not be assigned by operation of law or
otherwise, except that Purchaser may assign all or any of its rights hereunder
except that such assignment shall not relieve Purchaser of its obligations
hereunder if such assignee does not perform such obligations.
8.6 Parties in Interest.
This Agreement shall be binding upon, inure solely to the benefit
of, and be enforceable by, the parties hereto and their successors and permitted
assigns. 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.
8.7 Amendment; Waiver.
This Agreement may not be amended except by an instrument in writing
signed by the parties hereto. Any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any agreement
or condition contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be bound
thereby.
8.8 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 this Agreement is
not affected in any manner materially adverse to any party. Upon
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such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the terms of
this Agreement remain as originally contemplated to the fullest extent possible.
8.9 Notices.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by overnight courier or facsimile to the respective parties
as follows:
If to Purchaser:
PPC Acquisition Corp.
c/o Kluwer Academic Publishers bv
Spuiboulevard 50, 311GR Dordrecht
3300 AZ Dordrecht, The Netherlands
Attention: Jeffrey K. Smith
Fax #: (011)(31)(78) 639-2268
with a copy to:
Wolters Kluwer U.S. Corporation
161 North Clark Street
48th Floor
Chicago, Illinois 60601-3221
Attention: Bruce C. Lenz
Fax #: (312) 425-0233
-10-
<PAGE>
and to:
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
Attention: Arnold J. Schaab, Esq.
Fax #: (212) 326-0806
if to Shareholder:
Teresa Bressler
3 Kimberwick Court
Morristown, New Jersey 07960
Fax #: (973) 984-1545
with a copy to:
BRESSLER, AMERY & ROSS, P.C.
17 State Street
New York, New York 10004
Attention: Bernard Bressler, Esq.
Fax #: (212) 425-9337
8.10 Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed in Delaware without regard to any principles of choice of law or
conflicts of law of such State. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any state or federal
court sitting in Delaware. Each of the parties hereto (i) consents to submit
such party to the personal jurisdiction of any Federal court located in the
State of Delaware or any Delaware state court in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, (iii)
agrees that such party will not bring any action relating to this Agreement or
the transactions contemplated hereby in any court other than a Federal court
sitting in the state of Delaware or a Delaware state court and (iv) waives any
right to trial by jury with respect to any claim or proceeding related to or
arising out of this Agreement or any of the transactions contemplated hereby.
-11-
<PAGE>
8.11 Headings.
The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.12 Counterparts.
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when as executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
-12-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered as of the date first written above.
PPC ACQUISITION CORP.
By: /s/ Jeffrey K. Smith
----------------------------
Name: Jeffrey K. Smith
Title: President
Shareholder
/s/ Teresa Bressler
-------------------------------
Teresa Bressler
-13-
<PAGE>
Kluwer Boston, Inc. in consideration of the undertakings hereunder by
Shareholder does hereby guaranty performance of the obligations undertake herein
by Purchaser and to the extent that such guarantee shall relate to the payment
of moneys, such guaranty shall be a guaranty of performance and not a guaranty
of collection.
KLUWER BOSTON, INC.
By: /s/ Jeffrey K. Smith
----------------------------
Name: Jeffrey K. Smith
Title: President
-14-
<PAGE>
[LETTERHEAD OF WOLTERS KLUWER U.S. CORPORATION]
Bruce C. Lenz
Executive Vice President
Chief Financial Officer
June 10, 1998
Mr. Martin E. Tash
President
Plenum Publishing Corporation
233 Spring Street
New York, New York 10013
Dear Mr. Tash:
In consideration of the execution today of an agreement and plan merger by
and among our wholly owned subsidiary Kluwer Boston, Inc. and Plenum Publishing
Corporation which agreement is intended to result in the acquisition of all the
shares of Plenum Publishing Corporation at 73.50 per share for a total purchase
of approximately $258 million dollars, we hereby agree that we will fund the
obligations of our subsidiary and of PPC Acquisition Corp., our indirect
subsidiary, through available cash balances and existing bank credit lines of
Wolters Kluner nv. We hereby represent and warrant that there are available cash
balances and exiting bank credit lines which will enable us to meet this
obligation.
Yours sincerely,
WOLTERS KLUWER U.S. CORPORATION
By: /s/ Bruce C. Lenz
---------------------------
Bruce C. Lenz
Executive Vice President and
Chief Financial Officer
<PAGE>
[LOGO]
June 16, 1998
To the Stockholders of
PLENUM PUBLISHING CORPORATION:
We are pleased to inform you that on June 10, 1998, Plenum Publishing
Corporation ("Plenum" or the "Company") entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Kluwer Boston, Inc. ("Parent") and PPC
Acquisition Corp. ("Purchaser"), a direct wholly owned subsidiary of Parent,
pursuant to which Purchaser has today commenced a tender offer (the "Offer") to
purchase all of the outstanding shares of Common Stock, $.10 par value per share
(the "Shares"), of the Company for $73.50 per Share in cash. Under the terms of
the Merger Agreement, following the successful completion of the Offer,
Purchaser will be merged (the "Merger") with and into the Company and all Shares
not purchased in the Offer (other than Shares held by Parent, or Purchaser) will
be converted into the right to receive $73.50 per Share in cash.
Your Board of Directors has unanimously approved the Merger Agreement, the
Offer and the Merger and has determined that the Offer and the Merger are fair
to and in the best interest of Plenum's stockholders. The Board unanimously
recommends that the Company's stockholders accept the Offer and tender their
Shares in the Offer.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors described in the attached Schedule 14D-9
that is being filed today with the Securities and Exchange Commission (the
"Commission"), including, among other things, the opinion of Salomon Smith
Barney, the Company's financial advisor, that the consideration to be received
by the holders of Shares in the Offer is fair, from a financial point of view,
to the stockholders of Plenum. Certain exhibits to such schedule have been filed
with the Commission, where they are available, and are not being forwarded
herewith.
In addition to the attached Schedule 14D-9 relating to the Offer, also
enclosed is the Offer to Purchase, dated June 16, 1998, of Purchaser, together
with related materials, including a Letter of Transmittal to be used for
tendering your Shares. These documents set forth the terms and conditions of the
Offer and the Merger and provide instructions as to how to tender your Shares.
We urge you to read the enclosed materials carefully.
Sincerely,
/s/ Martin E. Tash
Martin E. Tash
President and Chairman of the Board
<PAGE>
June 10, 1998 PRESS RELEASE
For Immediate Release: For more information, contact:
Plenum Publishing Corporation Wolters Kluwer U.S.
Bernard Bressler, Esq. Mary Dale Walters
Secretary and Counsel Director, Public Relations
Phone: (973) 514-1200 Phone: (312) 425-7014
Fax: (973) 514-1660 Fax: (312) 425-0232
PLENUM AGREES TO BE ACQUIRED BY WOLTERS KLUWER.
TENDER OFFER AT $73.50 TO COMMENCE
New York, N.Y. Plenum Publishing Corporation (NASDAQ: PLEN) and Wolters Kluwer
N.V., Amsterdam, announced today that they have reached a definitive merger
agreement through which Plenum would be acquired by Wolters Kluwer in a
transaction valued at approximately $258 million. As previously announced,
Plenum has been exploring the possible sale of the Company.
Under the agreement, Wolters Kluwer will promptly commence a tender offer for
all of the outstanding shares of Plenum common stock at $73.50 per share, net to
the seller in cash. The tender offer is conditioned on Wolters Kluwer receiving
tenders of at least 51% of Plenum's outstanding common stock and the expiration
of any waiting periods under applicable law. Shareholders consisting of Martin
Tash, President and CEO, Mark Shaw, Executive Vice President, Ghanshyam Patel,
the Company's Chief Financial Officer and one other director, representing 15.3%
of the outstanding shares of Plenum have entered into a definitive agreement to
sell their shares for the tender price and vote for the merger.
Martin Tash, President and CEO of Plenum, stated that the Board of Directors of
Plenum believes that this transaction constitutes the achievement of a value for
the stockholders of the Company which reflects the accomplishments of the
management and employees of the Company.
Plenum will form an important further addition to Kluwer Academic Publishers,
the wholly owned subsidiary of Wolters Kluwer specializing in research level
scientific publishing.
Jeffrey Smith, President of Kluwer Academic Publishers, stated that the
acquisition of Plenum is an important further step in Wolters Kluwer's expansion
in science publishing. He added that Plenum's established programs of
high-quality journals, books and databases expand and complement Kluwer
Academic's own programs. Plenum's journals will also provide important
additional content to Kluwer Academic's web-based electronic publishing system
Kluwer On-Line (http://www.wkap.nl).
<PAGE>
Wolters Kluwer also does business in the USA through its subsidiaries Aspen
Publishers, Gaithersburg, Md.; CCH Incorporated, Riverwoods, Ill.; Legal
Information Services, New York City; Lippincott Raven Publishers, Philadelphia;
Facts & Comparisons, St. Louis; and Blessing/White, Princeton, NJ.
Wolters Kluwer is a multidomestic publishing company active in 26 countries.
Core activities are legal and tax publishing, business publishing,
medical/scientific publishing, educational publishing/professional training and
trade publishing for select markets. Wolters Kluwer has a sales level of
approximately Dfl. 5 billion and has some 14,000 employees. The corporate
website of Wolters Kluwer on the Internet can be accessed at
http://www.wolters-kluwer.com.
<PAGE>
June 10, 1998
Board of Directors
Plenum Publishing Corporation
233 Spring Street
New York, NY 10013
Dear Sirs:
You have requested our opinion as to the fairness, from a financial point of
view, to the holders of common stock, par value $.10 per share ("Common Stock"),
of Plenum Publishing Corporation, a Delaware corporation (the "Company"), of the
consideration to be received by such holders pursuant to the Agreement and Plan
of the Merger dated as of June 10, 1998 (the "Agreement"), among the Company,
Kluwer Boston, Inc., a Massachusetts corporation ("Parent"), and PPC Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of Parent ("Sub").
In accordance with the Agreement, (i) Parent will cause Sub to make a tender
offer (the "Offer") to purchase all the outstanding shares of Common Stock at a
purchase price of $73.50 per share, net to the seller in cash (the "Cash
Consideration") and (ii) thereafter Sub will be merged with and into the Company
(the "Merger" and, together with the Offer, the "Transaction"), with the Company
continuing as the surviving corporation. In the Merger, shareholders of the
Company will receive the Cash Consideration.
In arriving at our opinion, we have reviewed the Agreement. We have also
reviewed certain publicly available business and financial information relating
to the Company, as well as certain other information, including financial
forecasts, provided to us by the Company. We have discussed the past and current
operations and financial condition and prospects of the Company with its senior
management. We have also considered such other information, financial studies,
analyses, investigations, and financial, economic, market and trading criteria
which we deemed relevant.
We have assumed and relied on the accuracy and completeness of the
information reviewed by us for the purpose of this opinion and we have not
assumed any responsibility for independent verification of such information or
for any independent evaluation or appraisal of the assets of the Company. With
respect to the financial forecasts of the Company, management of the Company has
informed us that such forecasts have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the Company's
management, and we express no opinion with respect to such forecasts or the
assumptions on which they are based.
Our opinion is necessarily based upon conditions as they exist and can be
evaluated on the date hereof. Our opinion does not address the Company's
underlying business decision to effect the Transaction, and we express no view
on the effect on the Company of the Transaction. Our opinion does not constitute
a recommendation to the Company's holders of Common Stock as to whether they
should tender their shares in the Offer or as to how such holders should vote
with respect to the Merger.
As you are aware, Salomon Brothers Inc and Smith Barney Inc. doing business
as Salomon Smith Barney (collectively with all other entities doing business as
Salomon Smith Barney, "Salomon Smith Barney") are acting as financial advisors
to the Board of Directors of the Company in connection with the Transaction and
will receive a fee for their services, portions of which will be paid following
(i) the execution of the Agreement and (ii) the delivery of this opinion and the
remainder of which is contingent upon consummation of the Offer. In the ordinary
course of business, Salomon Smith Barney and its affiliates may hold or actively
trade the securities of the Company for its own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities. In addition, Salomon Smith Barney and its affiliates have
previously rendered certain investment banking and financial advisory services
to the Company for which Salomon Smith Barney has received customary
compensation. Salomon Smith Barney and its current and future affiliates
(including Travelers Group Inc.) may have other business relationships with the
Company and its affiliates.
<PAGE>
Based upon and subject to the foregoing, it is our opinion that, as of the
date of this letter, the Cash Consideration is fair, from a financial point of
view, to the holders of Common Stock.
Very truly yours,
SALOMON SMITH BARNEY
