<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 24, 1995
COMDATA HOLDINGS CORPORATION/COMDATA NETWORK, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware/Maryland 0-16151/2-66729 13-3396750/62-0813252
- -----------------------------------------------------------------------
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
5301 Maryland Way Brentwood, Tennessee 37027
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615) 370-7000
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events
On August 24, 1995, Ceridian Corporation ("Ceridian")
announced that it had entered into an Agreement and Plan of Merger dated as of
August 23, 1995 (the "Merger Agreement") with Comdata Holdings Corporation
("Comdata") pursuant to which Comdata will become a wholly-owned subsidiary of
Ceridian as a result of the merger of a newly created subsidiary of Ceridian
into Comdata (the "Merger"). The Merger Agreement provides that as a result of
the Merger, each outstanding share of common stock of Comdata will be converted
into the right to receive shares of stock of Ceridian common stock at an
exchange ratio (the "Exchange Ratio") of 0.57 shares of Ceridian common stock
for each share of Comdata common stock, and each share of Comdata's Series B
and C preferred stock will be converted into the right to receive the number of
shares of Ceridian common stock equal to the product of the Exchange Ratio and
the number of shares of Comdata common stock into which such Shares of Comdata
preferred stock are convertible. It is expected that approximately 21.6 million
shares of Ceridian common stock will be issued to effect the Merger, having a
value of approximately $900 million based on the closing price of Ceridian's
common stock on August 23, 1995. The Merger is intended to be tax free to
Comdata's shareholders and to be accounted for as a "pooling of interests."
The Merger is subject to the approval of the shareholders of
Comdata and Ceridian and to certain other conditions, including the approval of
the shareholders of each Company, the absence of changes in reported ownership
of Ceridian stock that would affect the continuing full availability of
Ceridian's net operating loss carryforwards, and certain regulatory approvals.
The Merger transaction is expected to be completed before the end of 1995. In
connection with the Merger and during the fourth quarter 1995, Ceridian expects
to refinance Comdata's outstanding indebtedness, consisting principally of
12.5% Senior Notes and 13.25% Senior Subordinated Debentures aggregating
approximately $205 million.
Item 7. Financial Statements and Exhibits.
c. Exhibits. Attached hereto.
2.1 Agreement and Plan of Merger, dated as of August 23,
1995, by and among Ceridian Corporation and Comdata
Holdings Corporation
99.1 Press Release, dated August 24, 1995.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange
Act of 1934, each of the undersigned has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
COMDATA HOLDINGS CORPORATION
By: /s/ George L. McTavish
------------------------------------
GEORGE L. McTAVISH
Its: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
COMDATA NETWORK, INC.
By: /s/ George L. McTavish
------------------------------------
GEORGE L. McTAVISH
Its: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Date: August 24, 1995
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EXHIBIT INDEX
2.1 Agreement and Plan of Merger, dated as of August 23,
1995, by and among Ceridian Corporation and Comdata
Holdings Corporation
99.1 Press Release, dated August 24, 1995.
<PAGE> 1
[CONFORMED COPY]
_____________________________________________________
AGREEMENT AND PLAN OF MERGER
by and among
CERIDIAN CORPORATION,
CONVOY ACQUISITION CORP.
and
COMDATA HOLDINGS CORPORATION
Dated as of August 23, 1995
_____________________________________________________
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<TABLE>
<CAPTION>
ARTICLE I
THE MERGER
<S> <C>
Section 1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2 By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3 Directors and Officers of Surviving
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
CONVERSION OF SHARES
Section 3.1 Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.2 Exchange of Company Stock; Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.3 Dividends; Transfer Taxes; Escheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.4 No Fractional Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.5 Closing of Company Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.3 Company Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.4 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.5 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.6 Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.7 Absence of Certain Changes or Events;
Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.9 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.10 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.12 Title to Properties; Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.13 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.14 Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.15 Information in Disclosure Documents and
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.16 Employee Benefit Plans; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.17 Environmental Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
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<CAPTION>
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Section 4.18 Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.19 Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.20 Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.21 DGCL Section 203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.22 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.23 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.24 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
Section 5.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.3 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.4 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.5 Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.6 Absence of Certain Changes or Events;
Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.8 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.9 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.11 Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.12 Information in Disclosure Documents and
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.13 Employee Benefit Plans; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.14 Environmental Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.15 Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.16 Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.17 Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.18 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by the Company
Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.2 Conduct of Business by Parent Pending the
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.3 Conduct of Business of Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE VII
ADDITIONAL AGREEMENTS
<S> <C>
Section 7.1 Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.2 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.3 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.4 Proxy Statements; Stockholder Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.5 Compliance with the Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.6 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.7 Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.8 Company Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.9 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.10 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.11 Directors' and Officers' Indemnification
and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 7.12 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 7.13 Company Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.14 Listing Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.15 Supplemental Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.16 Letters of Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.17 Directors of Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 8.1 Conditions to Each Party's Obligation
to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.2 Conditions to Obligations of Parent and
Sub to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.3 Conditions to Obligation of the Company
to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE IX
TERMINATION
Section 9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 10.2 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 10.3 Survivability; Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 10.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.5 Descriptive Headings; Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.6 Entire Agreement; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>
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Section 10.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Exhibits
Exhibit A Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B-1 Form of Parent Affiliate Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
Exhibit B-2 Form of Company Affiliate Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
</TABLE>
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Glossary of Defined Terms
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
Acquiring Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1(d)
Acquisition Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5(a)
Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5(b)
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.14
Bear Stearns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.16
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.13
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(b)
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Comdata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(a)
Company Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13
Company ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.16(a)
Company Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1
Company Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.14
Company Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.16(a)
Company Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Company SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6
Company Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
Company Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(e)
Computer Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.13(e)
Confidentiality Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
Debt Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13
Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.17(a)
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.16(a)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(a)
Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(a)
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.13(a)
Lazard Freres . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.19
Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
Maximum Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11(b)
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C>
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
NASD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
New Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8
NGCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
NJCCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Parent Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(a)
Parent ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13(a)
Parent Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1
Parent Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
Parent Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13(a)
Parent Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2(a)
Parent SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5
Parent Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2(a)
Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.15
Reboul MacMurray . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3(d)
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.15
Resumix Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2(c)
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(b)
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13
Series A Preferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a)
Series B Preferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a)
Series C Preferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a)
Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11(a)
Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Sub Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11(b)
Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11(b)
Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
</TABLE>
vi
<PAGE> 8
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 23, 1995
(this "Agreement"), by and among Ceridian Corporation, a Delaware corporation
("Parent"), Convoy Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Sub"), and Comdata Holdings Corporation, a Delaware
corporation (the "Company").
WHEREAS, the Boards of Directors of Parent and Sub and the
Company deem it advisable and in the best interests of their respective
stockholders that Parent acquire the Company pursuant to the terms and
conditions of this Agreement, and, in furtherance of such acquisition, such
Boards of Directors have approved the merger of Sub with and into the Company
in accordance with the terms of this Agreement and the General Corporation Law
of the State of Delaware (the "DGCL"); and
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to Parent's willingness to enter
into this Agreement, certain holders of shares of the Preferred Stock, par
value $.01 per share (the "Company Preferred Stock"), of the Company are
entering into an agreement with Parent and Sub in the form attached hereto as
Exhibit A (the "Voting Agreement") to vote such shares of the Company Preferred
Stock in accordance with the terms set forth in the Voting Agreement; and
WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for accounting purposes, it is intended that the
Merger shall be accounted for as a pooling of interests;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
<PAGE> 9
ARTICLE I
THE MERGER
Section 1.1 The Merger. In accordance with the
provisions of this Agreement and the DGCL, at the Effective Time (as defined in
Section 1.2), Sub shall be merged with and into the Company (the "Merger"), the
separate existence of Sub shall thereupon cease, and the Company shall be the
surviving corporation in the Merger (sometimes hereinafter called the
"Surviving Corporation") and shall continue its corporate existence under the
laws of the State of Delaware. The Merger shall have the effects set forth in
Section 259 of the DGCL.
Section 1.2 Effective Time of the Merger. The Merger
shall become effective at the time of filing of, or at such later time
specified in, a properly executed Certificate of Merger, in the form required
by and executed in accordance with the DGCL, filed with the Secretary of State
of the State of Delaware in accordance with the provisions of Section 251 of
the DGCL. Such filing shall be made as soon as practicable after the Closing
(as defined in Section 1.3). When used in this Agreement, the term "Effective
Time" shall mean the date and time at which the Merger shall become effective.
Section 1.3 Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York,
at 10:00 a.m., local time, on the day on which all of the conditions set forth
in Article VIII are satisfied or waived or on such other date and at such other
time and place as Parent and the Company shall agree (such date, the "Closing
Date").
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 Certificate of Incorporation. The
Certificate of Incorporation of Sub in effect at the Effective Time shall be
the Certificate of Incorporation of the Surviving Corporation until amended in
accordance with applicable law, except that the name of the Surviving
Corporation shall be "Comdata Holdings Corporation."
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<PAGE> 10
Section 2.2 By-Laws. The By-Laws of Sub as in effect at
the Effective Time shall be the By-Laws of the Surviving Corporation until
amended in accordance with applicable law.
Section 2.3 Directors and Officers of Surviving Corporation.
(a) The directors of Sub at the Effective Time
shall be the initial directors of the Surviving Corporation and shall hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualified in the manner provided in the Certificate of
Incorporation or By-Laws of the Surviving Corporation or as otherwise provided
by law.
(b) The officers of the Company at the Effective
Time shall be the initial officers of the Surviving Corporation and shall hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualified in the manner provided in the Certificate of
Incorporation or By-Laws of the Surviving Corporation, or as otherwise provided
by law.
ARTICLE III
CONVERSION OF SHARES
Section 3.1 Exchange Ratio. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof:
(a) Each share of Common Stock, par value $.01
per share (the "Company Common Stock"), of the Company issued and outstanding
immediately prior to the Effective Time (other than shares to be cancelled in
accordance with Section 3.1(c)) shall be converted into the right to receive
0.570 (the "Exchange Ratio") of a share of the Common Stock, par value $.50 per
share (the "Parent Common Stock"), of Parent, payable upon the surrender of the
certificate formerly representing such share of Company Common Stock;
(b) Each share of Company Preferred Stock issued
and outstanding immediately prior to the Effective Time (other than shares to
be cancelled in accordance with Section 3.1(c) and other than shares of Company
3
<PAGE> 11
Preferred Stock as to which appraisal rights shall have been duly demanded
under the DGCL ("Dissenting Shares")) shall be converted into the right to
receive a number of shares of Parent Common Stock equal to the product of (i)
the Exchange Ratio and (ii) the number of shares of Company Common Stock into
which such share of Company Preferred Stock was convertible immediately prior
to the Effective Time, payable upon the surrender of the certificate formerly
representing such share of Company Preferred Stock.
(c) All shares of Company Common Stock and all
shares of Company Preferred Stock (collectively sometimes hereinafter referred
to as "Company Stock") that, in either case, are (i) held by the Company as
treasury shares or (ii) owned by Parent or any wholly-owned Subsidiary of
Parent, shall be cancelled and retired and cease to exist, and no securities of
Parent or other consideration shall be delivered in exchange therefor. As used
in this Agreement, the term "Subsidiary" means, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated, of
which (x) such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by
such party or any Subsidiary of such party do not have a majority of the voting
interest in such partnership) or (y) at least a majority of the securities or
other interests having by their terms ordinary voting power to elect a majority
of the board of directors or others performing similar functions with respect
to such corporation or other organization is directly or indirectly owned or
controlled by such party and/or one or more of its Subsidiaries.
(d) Each share of Common Stock, par value $.01 per
share ("Sub Common Stock"), of Sub issued and outstanding immediately prior to
the Effective Time shall be converted into and become one fully paid and
nonassessable share of Common Stock, par value $.01 per share, of the Surviving
Corporation.
(e) Each outstanding option to purchase Company
Common Stock (each, a "Company Stock Option") shall be assumed by Parent as
more specifically provided in Section 7.8.
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<PAGE> 12
(f) The holders of Dissenting Shares, if any,
shall be entitled to payment by the Surviving Corporation of the appraised
value of such shares to the extent permitted by and in accordance with the
provisions of Section 262 of the DGCL; provided, however, that (i) if any
holder of the Dissenting Shares shall, under the circumstances permitted by the
DGCL, subsequently deliver a written withdrawal of such holder's demand for
appraisal of such shares, or (ii) if any holder fails to establish such
holder's entitlement to rights to payment as provided in such Section 262, or
(iii) if neither any holder of Dissenting Shares nor the Surviving Corporation
has filed a petition demanding a determination of the value of all Dissenting
Shares within the time provided in such Section 262, such holder or holders (as
the case may be) shall forfeit such right to payment for such shares and such
shares shall thereupon be deemed to have been converted into Parent Common
Stock pursuant to Section 3.1(b) as of the Effective Time. The Surviving
Corporation shall be solely responsible for, and shall pay out of its own
funds, any amounts which become due and payable to holders of Dissenting
Shares, and such amounts shall not be paid directly or indirectly by Parent.
Section 3.2 Exchange of Company Stock; Procedures.
(a) Prior to the Closing Date, Parent shall
designate a bank or trust company reasonably acceptable to the Company to act
as Exchange Agent hereunder (the "Exchange Agent"). As soon as practicable
after the Effective Time, Parent shall deposit with or for the account of the
Exchange Agent stock certificates representing the number of shares of Parent
Common Stock issuable pursuant to Section 3.1 in exchange for outstanding
shares of Company Stock, which shares of Parent Common Stock shall be deemed to
have been issued at the Effective Time.
(b) As soon as practicable after the Effective Time,
Parent shall cause the Exchange Agent to mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Stock (the "Certificates") that were
converted pursuant to Section 3.1 into the right to receive shares of Parent
Common Stock (i) a form of letter of transmittal specifying that
5
<PAGE> 13
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange Agent
and (ii) instructions for use in surrendering such Certificates in exchange for
certificates representing shares of Parent Common Stock. Upon surrender of a
Certificate for cancellation to the Exchange Agent, together with such letter
of transmittal, duly executed, the holder of such Certificate shall be entitled
to receive in exchange therefor (x) a certificate representing that number of
whole shares of Parent Common Stock which such holder has the right to receive
pursuant to the provisions of this Article III and (y) cash in lieu of any
fractional shares of Parent Common Stock to which such holder is entitled
pursuant to Section 3.4, after giving effect to any required tax withholdings,
and the Certificate so surrendered shall forthwith be cancelled. In the event
of a transfer of ownership of Company Stock which is not registered in the
transfer records of the Company, a certificate representing the proper number
of shares of Parent Common Stock may be issued to a transferee if the
Certificate representing such Company Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer, and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 3.2(b), each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender a certificate representing shares of Parent Common
Stock and cash in lieu of any fractional shares of Parent Common Stock as
contemplated by this Article III.
Section 3.3 Dividends; Transfer Taxes; Escheat. No
dividends or distributions that are declared on shares of Parent Common Stock
will be paid to persons entitled to receive certificates representing shares of
Parent Common Stock until such persons surrender their Certificates. Upon such
surrender, there shall be paid to the person in whose name the certificates
representing such shares of Parent Common Stock shall be issued, any dividends
or distributions with respect to such shares of Parent Common Stock which have
a record date after the Effective Time and shall have become payable between
the Effective Time and the time of such surrender. In no event shall the
person entitled to receive such dividends or distributions be entitled to
receive interest thereon. Promptly following the date which is six months
after the
6
<PAGE> 14
Effective Time, the Exchange Agent shall deliver to the Surviving Corporation
all cash, certificates and other documents in its possession relating to the
transactions described in this Agreement, and any holders of Company Stock who
have not theretofore complied with this Article III shall look thereafter only
to the Surviving Corporation for the shares of Parent Common Stock, any
dividends or distributions thereon, and any cash in lieu of fractional shares
thereof to which they are entitled pursuant to this Article III.
Notwithstanding the foregoing, neither the Exchange Agent nor any party hereto
shall be liable to a holder of Company Stock for any shares of Parent Common
Stock, any dividends or distributions thereon or any cash in lieu of fractional
shares thereof delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
Section 3.4 No Fractional Securities. No certificates or
scrip representing fractional shares of Parent Common Stock shall be issued
upon the surrender for exchange of Certificates, and such fractional interests
shall not entitle the owner thereof to vote or to any rights of a security
holder. In lieu of any such fractional securities, each holder of Company
Stock who would otherwise have been entitled to a fraction of a share of Parent
Common Stock upon surrender of such holder's Certificates will be entitled to
receive, and Parent will timely provide (or cause to be provided) to the
Exchange Agent sufficient funds to make, a cash payment (without interest)
determined by multiplying (i) the fractional interest to which such holder
would otherwise be entitled (after taking into account all shares of Company
Stock then held of record by such holder) and (ii) the average of the per share
closing prices for Parent Common Stock on the New York Stock Exchange (the
"NYSE") for the five trading days immediately preceding the Effective Time. It
is understood (i) that the payment of cash in lieu of fractional shares of
Parent Common Stock is solely for the purpose of avoiding the expense and
inconvenience to Parent of issuing fractional shares and does not represent
separately bargained-for consideration and (ii) that no holder of Company Stock
will receive cash in lieu of fractional shares of Parent Common Stock in an
amount greater than the value of one full share of Parent Common Stock.
Section 3.5 Closing of Company Transfer Books. At the
Effective Time, the stock transfer books
7
<PAGE> 15
of the Company shall be closed and no transfer of shares of Company Stock shall
thereafter be made. If, after the Effective Time, Certificates are presented
to the Surviving Corporation, they shall be cancelled and exchanged as provided
in this Article III.
Section 3.6 Further Assurances. If, at any time after
the Effective Time, the Surviving Corporation shall consider or be advised that
any deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm of record or
otherwise in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of either of Sub or the Company
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the
officers of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of each of Sub and the Company or otherwise,
all such deeds, bills of sale, assignments and assurances and to take and do,
in such names and on such behalves or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or assets in
the Surviving Corporation or otherwise to carry out the purposes of this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as
follows:
Section 4.1 Organization. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power to carry on its business as it is
now being conducted or presently proposed to be conducted. The Company is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified will not have a material adverse
effect, individually or in the aggregate, on the financial condi-
8
<PAGE> 16
tion, results of operations, business, assets, liabilities, prospects or
properties of the Company and its Subsidiaries taken as a whole, or the ability
of the Company to consummate the Merger and the other transactions contemplated
by this Agreement (a "Company Material Adverse Effect").
Section 4.2 Capitalization.
(a) The authorized capital stock of the Company
consists of 100,000,000 shares of Company Common Stock and 5,000,000 shares of
Company Preferred Stock. With respect to the Company Preferred Stock,
1,325,498 shares have been designated as Series A Convertible Preferred Stock
(the "Series A Preferred"), 572,226 shares have been designated as Series B
Convertible Preferred Stock (the "Series B Preferred"), and 250,500 shares have
been designated as Series C Convertible Preferred Stock (the "Series C
Preferred"). As of August 22, 1995, (i) 16,755,016 shares of Company Common
Stock were issued and outstanding, (ii) no shares of Series A Preferred were
issued and outstanding, (iii) 558,970 shares of Series B Preferred were issued
and outstanding, held by 21 holders of record and convertible into 12,935,020
shares of Company Common Stock, (iv) 247,975 shares of Series C Preferred were
issued and outstanding, held by 9 holders of record and convertible into
5,692,852 shares of Company Common Stock, (v) Company Stock Options to acquire
2,046,848 shares of Company Common Stock were outstanding under all stock
option plans of the Company, (vi) 3,250,000 shares of Company Common Stock were
reserved for issuance pursuant to the Company Stock Options and all other
employee benefit plans of the Company, and (vii) 18,627,872 shares of Company
Common Stock were reserved for issuance upon the conversion of the outstanding
Series B Preferred and Series C Preferred. All of the issued and outstanding
shares of Company Common Stock and Company Preferred Stock are validly issued,
fully paid and nonassessable. Schedule 4.2(a) sets forth the liquidation
values, as of each of June 15, 1995, September 15, 1995 and December 15, 1995,
for each share of the Series B Preferred and the Series C Preferred, and the
accretion of dividends payable per day per share on the Series B Preferred and
the Series C Preferred for each of the three quarterly dividend periods ending
September 15, 1995, December 15, 1995 and March 15, 1996.
9
<PAGE> 17
(b) Except as disclosed in this Section 4.2 or as
set forth on Schedule 4.2(b), (i) there is no outstanding right, subscription,
warrant, call, option or other agreement or arrangement of any kind
(collectively, "Rights") to purchase or otherwise to receive from the Company
or any of its Subsidiaries any of the outstanding authorized but unissued or
treasury shares of the capital stock or any other security of the Company or
any of its Subsidiaries, (ii) there is no outstanding security of any kind
convertible into or exchangeable for such capital stock, and (iii) there is no
voting trust or other agreement or understanding to which the Company or any of
its Subsidiaries is a party or is bound with respect to the voting of the
capital stock of the Company or any of its Subsidiaries.
(c) Since December 31, 1994, except as set forth on
Schedule 4.2(c), the Company has not in any manner accelerated or provided for
the acceleration of the vesting or exercisability of, or otherwise modified the
terms and conditions applicable to, any of the Company Stock Options, whether
set forth in the governing stock option plans of the Company, a stock option
grant, award or other agreement or otherwise. Except as set forth on Schedule
4.2(c), none of the awards, grants or other agreements pursuant to which
Company Stock Options were issued have provisions which accelerate the vesting
or right to exercise such options upon the execution of this Agreement
(including the documents attached as Exhibits hereto), the consummation of the
transactions contemplated hereby (or thereby) or any other "change of control"
events.
Section 4.3 Company Subsidiaries. Schedule 4.3(a)
contains a complete and accurate list of all Subsidiaries of the Company. Each
Subsidiary of the Company that is a corporation, including, without limitation,
Comdata Network, Inc. ("Comdata"), is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each Subsidiary of the Company that is a partnership is duly
formed and validly existing under the laws of its jurisdiction of formation.
Each Subsidiary of the Company has the corporate power or the partnership
power, as the case may be, to carry on its business as it is now being
conducted or presently proposed to be conducted. Each Subsidiary of the
Company is duly qualified as a foreign corporation or a foreign partnership, as
the case may be,
10
<PAGE> 18
authorized to do business, and is in good standing, in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be
so qualified will not have a Company Material Adverse Effect. All of the
outstanding shares of capital stock of the Subsidiaries of the Company that are
corporations are validly issued, fully paid and nonassessable. Except as set
forth on Schedule 4.3(b), all of the outstanding shares of capital stock of
Comdata are owned by the Company, free and clear of any liens, pledges,
security interests, claims, charges or other encumbrances of any kind
whatsoever ("Liens"). Except as set forth in the Company SEC Reports (as
hereinafter defined), all of the outstanding shares of capital stock of, or
other ownership interests in, each other Subsidiary of the Company are owned by
the Company or a Subsidiary of the Company free and clear of any Liens.
Section 4.4 Authority Relative to this Agreement. The
Company has the requisite 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 the Company and the consummation by
the Company of the transactions contemplated on its part hereby have been duly
authorized by the Company's Board of Directors and, except for the approval of
its stockholders to be sought at the stockholders meeting contemplated by
Section 7.4(a) with respect to this Agreement, no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or for the
Company to consummate the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by the Company and constitutes a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
Section 4.5 Consents and Approvals; No Violations.
Neither the execution, delivery and performance of this Agreement by the
Company, nor the consummation by the Company of the transactions contemplated
hereby, will (i) conflict with or result in any breach of any provisions of the
charter, by-laws or other organizational documents of the Company or any of its
Subsidiaries, (ii) require a filing with, or a permit, authorization, consent
or approval of, any federal, state, local or foreign court, arbitral tribunal,
administrative
11
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agency or commission or other governmental or other regulatory authority or
administrative agency or commission (a "Governmental Entity"), except in
connection with or in order to comply with the applicable provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the New
Jersey Casino Control Act (the "NJCCA"), the Nevada Gaming Control Act (the
"NGCA"), state banking laws, state laws governing the issuance of financial
instruments or the transfer of funds, state securities or "blue sky" laws, the
By-Laws of the National Association of Securities Dealers (the "NASD") and the
filing and recordation of a Certificate of Merger as required by the DGCL,
(iii) except as set forth on Schedule 4.5, result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration) under,
or result in the creation of a Lien on any property or asset of the Company or
any of its Subsidiaries pursuant to, any of the terms, conditions or provisions
of any material note, bond, mortgage, indenture, license, contract, agreement
or other instrument or obligation (each, a "Contract") to which the Company or
any of its Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound or (iv) violate any law, order, writ,
injunction, decree, statute, rule or regulation of any Governmental Entity
applicable to the Company, any of its Subsidiaries or any of their properties
or assets, except, in the case of clauses (ii), (iii) and (iv), where the
failure to make such filing or obtain such authorization, consent or approval
would not have, or where such violations, breaches or defaults or Liens would
not have, in any such case, a Company Material Adverse Effect.
Section 4.6 Reports and Financial Statements. The Company
has timely filed all reports required to be filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Exchange Act or the Securities
Act since January 1, 1994 (collectively, the "Company SEC Reports"), and has
previously made available to Parent true and complete copies of all such
Company SEC Reports. Such Company SEC Reports, as of their respective dates,
complied in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as the case may be, and none of such
Compa-
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ny 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 therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the
Company SEC Reports have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods indicated (except as otherwise noted therein or, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC) and fairly
present (subject, in the case of unaudited statements, to normal recurring
year-end adjustments and any other adjustments described therein) the
consolidated financial position of the Company and its consolidated
Subsidiaries as at the dates thereof and the consolidated results of operations
and cash flows of the Company and its consolidated Subsidiaries for the periods
then ended. Since January 1, 1994, there has been no change in any of the
significant accounting (including tax accounting) policies, practices or
procedures of the Company or any of its consolidated Subsidiaries. In
connection with the Company's revenue recognition policy for unsettled
transactions (the "Policy") that is described under the caption "Certain
Accounting Policies" in Item 7 of the Company's Report on Form 10-K for the
fiscal year ended December 31, 1994, (i) the Company has provided Parent with
true and complete copies of all legal and accounting assessments, reports,
memoranda and opinions it has obtained with respect to its adoption and
continuance of the Policy and (ii) the Company has not received or otherwise
become aware of any notices, inquiries or other communications from any
Governmental Entity alleging that, or seeking information in a context
suggesting an inquiry or investigation into whether, the Policy violates or
conflicts with any applicable abandoned property, escheat or similar laws or is
not in accordance with GAAP.
Section 4.7 Absence of Certain Changes or Events;
Material Contracts. Except as set forth on Schedule 4.7 or in the Company SEC
Reports, since December 31, 1994, (i) neither the Company nor any of its
Subsidiaries has conducted its business and operations other than in the
ordinary course of business and consistent with past practices or taken any
actions that, if it had been in effect, would have violated or been
inconsistent with the provisions of Section 6.1 and (ii) there has not
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been any fact, event, circumstance or change affecting or relating to the
Company or any of its Subsidiaries which has had or is reasonably likely to
have a Company Material Adverse Effect. Except as set forth on Schedule 4.7,
the transactions contemplated by this Agreement will not constitute a change of
control under or require the consent from or the giving of notice to a third
party pursuant to the terms, conditions or provisions of any material Contract
to which Parent or any of its Subsidiaries is a party.
Section 4.8 Litigation. Except for litigation disclosed
in the notes to the financial statements included in the Company's Annual
Report to Stockholders for the year ended December 31, 1994 or in the Company
SEC Reports filed subsequent thereto, there is no suit, action, proceeding or
investigation pending or, to the best knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, the outcome of
which, in the reasonable judgment of the Company, is likely to have a Company
Material Adverse Effect; nor is there any judgment, decree, injunction, ruling
or order of any Governmental Entity outstanding against the Company or any of
its Subsidiaries having, or which is reasonably likely to have a Company
Material Adverse Effect.
Section 4.9 Absence of Undisclosed Liabilities. Except
for liabilities or obligations which are accrued or reserved against in the
Company's financial statements (or reflected in the notes thereto) included in
the Company SEC Reports or which were incurred after June 30, 1995 in the
ordinary course of business and consistent with past practice, and except as
set forth on Schedule 4.9, none of the Company and its Subsidiaries has any
liabilities or obligations (whether absolute, accrued, contingent or otherwise)
of a nature required by GAAP to be reflected in a consolidated balance sheet
(or reflected in the notes thereto) or which would have a Company Material
Adverse Effect.
Section 4.10 No Default. Except as set forth on Schedule
4.10, neither the Company nor any Subsidiary of the Company is in default or
violation (and no event has occurred which with notice or the lapse of time or
both would constitute a default or violation) of any term, condition or
provision of (i) its charter, by-laws or comparable organizational documents,
(ii) any Contract
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<PAGE> 22
to which the Company or any of its Subsidiaries is a party or by which they or
any of their properties or assets may be bound, or (iii) any order, writ,
injunction, decree, statute, rule or regulation of any Governmental Entity
applicable to the Company or any of its Subsidiaries, except, in the cases of
clauses (ii) and (iii), for defaults or violations which would not have a
Company Material Adverse Effect.
Section 4.11 Taxes.
(a) The Company has heretofore delivered or will
make available to Parent true, correct and complete copies of the consolidated
federal, state, local and foreign income, franchise sales and other Tax Returns
(as hereinafter defined) filed by the Company and the Company Subsidiaries for
each of the Company's years ended December 31, 1994, 1993, 1992, 1991, 1990,
1989 and 1988 inclusive. Except as set forth on Schedule 4.11, the Company has
duly filed, and each Subsidiary has duly filed, all material federal, state,
local and foreign income, franchise, sales and other Tax Returns required to be
filed by the Company or any of its Subsidiaries. All such Tax Returns are
true, correct and complete, in all material respects, and the Company and any
of its Subsidiaries have duly paid, all Taxes (as hereinafter defined) shown on
such Tax Returns and has made adequate provision for payment of all accrued but
unpaid material Taxes anticipated in respect of all periods since the periods
covered by such Tax Returns. Except as set forth on Schedule 4.11, all
material deficiencies assessed as a result of any examination of Tax Returns of
the Company or any of its Subsidiaries by federal, state, local or foreign tax
authorities have been paid or reserved on the financial statements of the
Company in accordance with GAAP consistently applied, and true, correct and
complete copies of all revenue agent's reports, "30-day letters," or "90-day
letters" or similar written statements proposing or asserting any Tax
deficiency against the Company or any of its Subsidiaries for any open year
have been heretofore delivered to Parent. The Company has heretofore delivered
or will make available to Parent true, correct and complete copies of all
written tax-sharing agreements and written descriptions of all such unwritten
agreement or arrangements to which the Company or any of its Subsidiaries is a
party. Except as set forth in Schedule 4.11, no material issue has been raised
during the past five years by any federal, state, local or
15
<PAGE> 23
foreign taxing authority which, if raised with regard to any other period not
so examined, could reasonably be expected to result in a proposed material
deficiency for any other period not so examined. Except as disclosed in
Schedule 4.11 hereof, neither the Company nor any of its Subsidiaries has
granted any extension or waiver of the statutory period of limitations
applicable to any claim for any material Taxes. The consolidated federal
income tax returns of the Company and its Subsidiaries have been examined by
and settled with the Internal Revenue Service (the "Service") for all years
through 1987. Except as set forth in Schedule 4.11, (i) neither the Company
nor any of the Company Subsidiaries is a party to any agreement, contract or
arrangement that would result, separately or in the aggregate, in the payment
of any "excess parachute payments' within the meaning of Section 280G of the
Code; (ii) no consent has been filed under Section 341(f) of the Code with
respect to any of the Company or the Subsidiaries of the Company; (iii) neither
the Company nor any of the Subsidiaries of the Company has participated in, or
cooperated with, an international boycott within the meaning of Section 999 of
the Code; and (iv) neither the Company nor any of the Subsidiaries of the
Company has issued or assumed any corporate acquisition indebtedness, as
defined in Section 279(b) of the Code. The Company and each Subsidiary of the
Company have complied (and until the Effective Time will comply) in all
material respects with all applicable laws, rules and regulations relating to
the payment and withholding of Taxes (including, without limitation,
withholding of Taxes pursuant to Sections 1441 and 1442 of the Code or similar
provisions under any foreign laws) and have, within the time and in the manner
prescribed by law, withheld from employee wages and paid over to the proper
governmental authorities all amounts required to be so withheld and paid over
under all applicable laws.
(b) For purposes of this Agreement, the term
"Taxes" shall mean all taxes, charges, fees, levies, duties, imposts or other
assessments, including, without limitation, income, gross receipts, excise,
property, sales, use, transfer, gains, license, payroll, withholding, capital
stock and franchise taxes, imposed by the United States, or any state, local or
foreign government or subdivision or agency thereof, including any interest,
penalties or additions thereto. For purposes of this Agreement, the term "Tax
Return" shall mean any report,
16
<PAGE> 24
return or other information or document required to be supplied to a taxing
authority in connection with Taxes.
Section 4.12 Title to Properties; Encumbrances. Except as
described in the following sentence, each of the Company and its Subsidiaries
has good, valid and marketable title to, or a valid leasehold interest in, all
of its material properties and assets (real, personal and mixed, tangible and
intangible), including, without limitation, all the properties and assets
reflected in the consolidated balance sheet of the Company and its Subsidiaries
as of June 30, 1995 included in the Company's Quarterly Report on Form 10-Q for
the period ended on such date (except for properties and assets disposed of in
the ordinary course of business and consistent with past practices since June
30, 1995). None of such properties or assets are subject to any Liens (whether
absolute, accrued, contingent or otherwise), except (i) as specifically set
forth in the Company SEC Reports and (ii) minor imperfections of title and
encumbrances, if any, which are not substantial in amount, do not materially
detract from the value of the property or assets subject thereto and do not
impair the operations of any of the Company and its Subsidiaries.
Section 4.13 Intellectual Property. (a) Except as set
forth on Schedule 4.13(a), the Company and its Subsidiaries are the sole and
exclusive owners of all material patents, patent applications, patent rights,
trademarks, trademark rights, trade names, trade name rights, copyrights,
service marks, trade secrets, registrations for and applications for
registration of trademarks, service marks and copyrights, technology and
know-how, rights in Computer Software (as hereinafter defined) and other
proprietary rights and information and all technical and user manuals and
documentation made or used in connection with any of the foregoing, used or
held for use in connection with the businesses of the Company or any of its
Subsidiaries as currently conducted (collectively, the "Intellectual
Property"), free and clear of all Liens except as set forth on Schedule 4.13(a)
and except minor imperfections of title and encumbrances, if any, which are not
substantial in amount, do not materially detract from the value of the
Intellectual Property subject thereto and do not impair the operations of any
of the Company and its Subsidiaries.
(b) All grants, registrations and applications for
Intellectual Property that are used in and are material
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<PAGE> 25
to the conduct of the Business (as hereinafter defined) (i) are valid,
subsisting, in proper form and enforceable, and have been duly maintained,
including the submission of all necessary filings and fees in accordance with
the legal and administrative requirements of the appropriate jurisdictions and
(ii) have not lapsed, expired or been abandoned, and no application or regis-
tration therefor is the subject of any legal or governmental proceeding before
any registration authority in any jurisdiction.
(c) Each of the Company and its Subsidiaries owns or has
the right to use all of the material Intellectual Property used by it or held
for use by it in connection with its business. To the knowledge of the
Company, there are no conflicts with or infringements of any Intellectual
Property by any third party. The conduct of the businesses of the Company and
its Subsidiaries as currently conducted (collectively, the "Business") does not
conflict with or infringe in any way any proprietary right of any third party,
which conflict or infringement would have a Company Material Adverse Effect,
and there is no claim, suit, action or proceeding pending or, to the knowledge
of the Company, threatened against the Company or any of its Subsidiaries (i)
alleging any such conflict or infringement with any third party's proprietary
rights, or (ii) challenging the ownership, use, validity or enforceability of
the Intellectual Property.
(d) The Computer Software used by the Company or any of
its Subsidiaries in the conduct of the Business is either: (i) owned by the
Company or such Subsidiary of the Company, as the case may be, as the result of
internal development by an employee of the Company or such Subsidiary of the
Company; (ii) developed on behalf of the Company or any of its Subsidiaries by
a consultant or contractor and all ownership rights therein have been assigned
or otherwise transferred to or vested in the Company or such Subsidiary of the
Company, as the case may be; or (iii) licensed or acquired from a third party
pursuant to a written license, assignment, or other Contract which is in full
force and effect and of which neither the Company nor any of its Subsidiaries
is in material breach. Except as set forth on Schedule 4.13(d), (x) no third
party has had access to any of the source code for any of the Computer Software
described in clause (i) or (ii) hereof and (y) no act has been done or omitted
to be done by the Company or any of its Subsidiaries to impair or dedicate to
the public
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<PAGE> 26
or entitle any Governmental Entity to hold abandoned any of such Computer
Software.
(e) For purposes of this Agreement, the term "Computer
Software" shall mean (i) any and all computer programs consisting of sets of
statements and instructions to be used directly or indirectly in computer
software or firmware, (ii) databases and compilations, including without
limitation any and all data and collections of data, whether machine readable
or otherwise, (iii) all versions of the foregoing (x) including without
limitation all screen displays and designs thereof, and all component modules
of source code or object code or natural language code therefor, and (y)
whether recorded on papers, magnetic media or other electronic or
non-electronic device, (iv) all descriptions, flow-charts and other work
product used to design, plan, organize and develop any of the foregoing, and
(v) all documentation, including without limitation all technical and user
manuals and training materials, relating to the foregoing.
Section 4.14 Compliance with Applicable Law. Except as set
forth on Schedule 4.14 or as disclosed in the Company SEC Reports, (i) the
Company and its Subsidiaries hold, and are in compliance with the terms of, all
permits, licenses, exemptions, orders and approvals of all Governmental
Entities necessary for the current and proposed conduct of their respective
businesses ("Company Permits"), except for failures to hold or to comply with
such permits, licenses, exemptions, orders and approvals which would not have a
Company Material Adverse Effect, (ii) no fact exists or event has occurred, and
no action or proceeding is pending or, to the Company's knowledge, threatened,
that has a reasonable possibility of resulting in a revocation, non-renewal,
termination, suspension or other material impairment of any material Company
Permits, (iii) the businesses of the Company and its Subsidiaries are not being
conducted in violation of any applicable law, ordinance, regulation, judgment,
decree or order of any Governmental Entity ("Applicable Law"), except for
violations or possible violations which do not, and, insofar as reasonably can
be foreseen, in the future will not, have a Company Material Adverse Effect,
and (iv) to the knowledge of the Company, (x) no investigation or review by any
Governmental Entity with respect to the Company or its Subsidiaries is pending
or threatened and (y) no Governmental Entity has indicated an intention to
conduct the same, other than, in each case,
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those which the Company reasonably believes will not have a Company Material
Adverse Effect.
Section 4.15 Information in Disclosure Documents and
Registration Statement. None of the information to be supplied by the Company
or Comdata for inclusion in (i) the Registration Statement to be filed with the
SEC by Parent on Form S-4 under the Securities Act for the purpose of
registering the shares of Parent Common Stock to be issued in connection with
the Merger (the "Registration Statement") or (ii) the joint proxy statement to
be distributed in connection with Parent's and the Company's meetings of
stockholders to vote upon this Agreement (the "Proxy Statement") will, in the
case of the Registration Statement, at the time it becomes effective and at the
Effective Time, or, in the case of the Proxy Statement or any amendments
thereof or supplements thereto, at the time of the mailing of the Proxy
Statement and any amendments or supplements thereto, and at the time of the
meeting of stockholders of the Company to be held in connection with the
Merger, 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. The Proxy Statement will comply as to form in all material
respects with the applicable provisions of the Exchange Act, and the rules and
regulations promulgated thereunder, except that no representation is made by
the Company with respect to statements made therein based on information
supplied by Parent or its representatives for inclusion in the Proxy Statement
or with respect to information concerning Parent or any of its Subsidiaries
incorporated by reference in the Proxy Statement.
Section 4.16 Employee Benefit Plans; ERISA.
(a) Schedule 4.16 hereto sets forth a true and
complete list of each material employee benefit plan, arrangement or agreement
that is maintained, or was maintained at any time during the five (5) calendar
years preceding the date of this Agreement (the "Company Plans"), by the
Company or by any trade or business, whether or not incorporated (a "Company
ERISA Affiliate"), which together with the Company would be deemed a "single
employer" within the meaning of Section 4001 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
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(b) Each of the Company Plans that is subject to
ERISA is and has been in compliance with ERISA and the Code in all material
respects; each of the Company Plans intended to be "qualified" within the
meaning of Section 401(a) of the Code is so qualified; no Company Plan has an
accumulated or waived funding deficiency within the meaning of Section 412 of
the Code; neither the Company nor any Company ERISA Affiliate has incurred,
directly or indirectly, any material liability (including any material
contingent liability) to or on account of a Company Plan pursuant to Title IV
of ERISA; no proceedings have been instituted to terminate any Company Plan
that is subject to Title IV of ERISA; no "reportable event," as such term is
defined in Section 4043(b) of ERISA, has occurred with respect to any Company
Plan; and no condition exists that presents a material risk to the Company or
any Company ERISA Affiliate of incurring a liability to or on account of a
Company Plan pursuant to Title IV of ERISA.
(c) The current value of the assets of each of
the Company Plans that are subject to Title IV of ERISA, based upon the
actuarial assumptions (to the extent reasonable) presently used by the Company
Plans, exceeds the present value of the accrued benefits under each such
Company Plan; no Company Plan is a multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA) and no Company Plan is a multiple employer plan as
defined in Section 413 of the Code; and all material contributions or other
amounts payable by the Company as of the Effective Time with respect to each
Company Plan in respect of current or prior plan years have been either paid or
accrued on the balance sheet of the Company. To the best knowledge of the
Company, there are no material pending, threatened or anticipated claims (other
than routine claims for benefits) by, on behalf of or against any of the
Company Plans or any trusts related thereto.
(d) Neither the Company nor any Company ERISA
Affiliate, nor any Company Plan, nor any trust created thereunder, nor any
trustee or administrator thereof has engaged in a transaction in connection
with which the Company or any Company ERISA Affiliate, any Company Plan, any
such trust, or any trustee or administrator thereof, or any party dealing with
any Company Plan or any such trust could be subject to either a material civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA or a material tax
imposed pursuant to Section 4975 or 4976 of the Code. No Company Plan provides
death or medical bene-
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fits (whether or not insured), with respect to current or former employees of
the Company or any Company ERISA Affiliate beyond their retirement or other
termination of service other than (i) coverage mandated by applicable law or
(ii) death benefits under any "employee pension plan," as that term is defined
in Section 3(2) of ERISA).
Section 4.17 Environmental Laws and Regulations. (a)
Except as set forth on Schedule 4.17(a) and except for matters which would not,
individually or in the aggregate, be reasonably expected to result in a Company
Material Adverse Effect: (i) the Company and its Subsidiaries are and have been
in compliance with, and there are no outstanding allegations by any person or
entity that the Company or its Subsidiaries has not been in compliance with,
all applicable laws, rules, regulations, common law, ordinances, decrees,
orders or other binding legal requirements relating to pollution (including the
treatment, storage and disposal of wastes and the remediation of releases and
threatened of materials), the preservation of the environment, and the exposure
to materials in the environment or work place ("Environmental Laws") and (ii)
the Company and its Subsidiaries currently hold all permits, licenses,
registrations and other governmental authorizations (including exemptions,
waivers, and the like) and financial assurance required under Environmental
Laws for the Company and its Subsidiaries to operate their businesses as
currently conducted.
(b) Except as set forth on Schedule 4.17(b), (i) to
the knowledge of the Company, there is no friable asbestos-containing material
in or on any real property currently owned, leased or operated by the Company
or its Subsidiaries and (ii) there are and have been no underground storage
tanks (whether or not required to be registered under any applicable law),
dumps, landfills, lagoons, surface impoundments, injection wells or other land
disposal units in or on any property currently owned, leased or operated by the
Company or its Subsidiaries.
(c) Except as set forth on Schedule 4.17(c), (i)
neither the Company nor its Subsidiaries has received (x) any written
communication from any person stating or alleging that any of them may be a
potentially responsible party under any Environmental Law (including, without
limitation, the Federal Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended) with respect to any actual or alleged
environmen-
22
<PAGE> 30
tal contamination or (y) any request for information under any Environmental
Law from any Governmental Entity with respect to any actual or alleged material
environmental contamination; and (ii) none of the Company, its Subsidiaries or
any Governmental Entity is conducting or has conducted (or, to the knowledge of
the Company, is threatening to conduct) any environmental remediation or
investigation which could result in a material liability of the Company or its
Subsidiaries under any Environmental Law.
Section 4.18 Vote Required. The affirmative vote of (i)
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon, consisting of the Company Common Stock voting
together as a single class with the holders of the Series B Preferred and the
Series C Preferred (with such Series B Preferred and Series C Preferred holders
being entitled to one vote for each share of Company Common Stock into which
such shares of Company Preferred Stock so held would be convertible on the
record date set for the vote), (ii) the holders of a majority of the
outstanding shares of Series B Preferred, voting as a separate class, and (iii)
the holders of a majority of the outstanding shares of Series C Preferred,
voting as a separate class, are the only votes of the holders of any class or
series of the Company's capital stock necessary to approve the Merger. The
Board of Directors of the Company (at a meeting duly called and held) has
unanimously (i) approved this Agreement and the Voting Agreement, (ii)
determined that the transactions contemplated hereby and thereby are fair to
and in the best interests of the holders of Company Common Stock and Company
Preferred Stock and (iii) determined to recommend this Agreement, the Merger
and the other transactions contemplated hereby to such holders for approval and
adoption.
Section 4.19 Opinion of Financial Advisor. The Company
has received the opinion of Lazard Freres & Co LLC ("Lazard Freres"), dated
August 23, 1995, substantially to the effect that the consideration to be
received in the Merger by the holders of Company Common Stock and Company
Preferred Stock is fair to such holders from a financial point of view, a copy
of which opinion has been delivered to Parent.
Section 4.20 Accounting Matters. None of the Company, any
of its Subsidiaries or, to the knowledge of the Company, any of their
respective directors, officers or stockholders, has taken any action which
would prevent the
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accounting for the Merger as a pooling of interests in accordance with
Accounting Principles Board Opinion No. 16, the interpretative releases
pursuant thereto and the pronouncements of the SEC.
Section 4.21 DGCL Section 203. Prior to the date hereof,
the Board of Directors of the Company has approved this Agreement and the
Voting Agreement, and the Merger and the other transactions contemplated hereby
and thereby, and such approval is sufficient to render inapplicable to the
Merger and any of such other transactions the provisions of Section 203 of the
DGCL.
Section 4.22 Labor Matters. Neither the Company nor any
of its Subsidiaries is a party to, or bound by, any collective bargaining
agreement, contract or other understanding with a labor union or labor
organization and, to the knowledge of the Company, there is no activity
involving any employees of the Company or its Subsidiaries seeking to certify a
collective bargaining unit or engaging in any other organizational activity.
Section 4.23 Affiliate Transactions. Except as set forth
in Schedule 4.23 or as disclosed in the Company SEC Reports, there are no
material Contracts or other transactions between the Company or any of its
Subsidiaries, on the one hand, and any (i) officer or director of the Company
or any of its Subsidiaries, (ii) record or beneficial owner of five percent or
more of the voting securities of the Company or (iii) affiliate (as such term
is defined in Regulation 12b-2 promulgated under the Exchange Act) of any such
officer, director or beneficial owner, on the other hand.
Section 4.24 Brokers. Except for its financial advisor,
Lazard Freres, no broker, finder or financial advisor is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger or
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows:
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Section 5.1 Organization. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power to carry on its business as it is now
being conducted or presently proposed to be conducted. Parent is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities make such qualification necessary, except
where the failure to be so qualified will not have a material adverse effect
individually or in the aggregate, on the financial condition, results of
operations, business, assets, liabilities, prospects or properties of Parent
and its Subsidiaries taken as a whole or on the ability of Parent to consummate
the Merger and the other transactions contemplated by this Agreement (a "Parent
Material Adverse Effect"). Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Sub has
not engaged in any business (other than in connection with this Agreement and
the transactions contemplated hereby) since the date of its incorporation.
Schedule 5.1 contains a complete and accurate list of all Subsidiaries of
Parent.
Section 5.2 Capitalization.
(a) The authorized capital stock of Parent consists
of 100,000,000 shares of Parent Common Stock and 750,000 shares of Preferred
Stock, par value $100.00 per share ("Parent Preferred Stock"), of Parent. As
of August 22, 1995, (i) 45,694,208 shares of Parent Common Stock were issued
and outstanding, (ii) 50,600 shares of Parent Preferred Stock were designated
as a series of "5 1/2% Cumulative Convertible Exchangeable Preferred Stock," of
which 47,200 shares were issued and outstanding (with 4,720,000 depositary
shares, each representing a 1/100th interest in a share of such series of
Parent Preferred Stock, also issued and outstanding), (iii) options to acquire
3,802,072 shares of Parent Common Stock (the "Parent Stock Options") were
outstanding under all stock option plans of Parent, (iv) 3,545,129 shares of
Parent Common Stock were reserved for issuance pursuant to the Parent Stock
Options and all other employee benefit plans of Parent, and (v) 10,384,000
shares of Parent Common Stock were reserved for issuance upon the conversion of
the outstanding Parent Preferred Stock. All of the outstanding shares of
capital stock of Parent are, and the shares of Parent Common Stock issuable in
exchange for shares of Company Common Stock and Company Preferred
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Stock at the Effective Time in accordance with this Agreement will be, when so
issued, duly authorized, validly issued, fully paid and nonassessable.
(b) The authorized capital stock of Sub consists of
1,000 shares of Sub Common Stock, of which 1,000 shares, as of the date hereof,
were issued and outstanding. All of such outstanding shares are owned by
Parent, and are validly issued, fully paid and nonassessable.
(c) Except as disclosed in this Section 5.2, and
except for up to 1,100,000 shares of Parent Common Stock reserved for issuance
pending consummation of Parent's planned transaction with Resumix, Inc. (the
"Resumix Transaction"), (i) there are no outstanding Rights to purchase or
otherwise to receive from Parent or Sub any of the outstanding authorized but
unissued or treasury shares of the capital stock or any other security of
Parent or Sub, (ii) there is no outstanding security of any kind convertible
into or exchangeable for such capital stock, and (iii) there is no voting trust
or other agreement or understanding to which Parent or Sub is a party or is
bound with respect to the voting of the capital stock of Parent or Sub.
Section 5.3 Authority Relative to this Agreement. Each
of Parent and Sub has the requisite 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 each of Parent and Sub
and the consummation by Parent and Sub of the transactions contemplated on its
part hereby have been duly authorized by their respective Boards of Directors,
and by Parent as the sole stockholder of Sub, and, except for the approval of
Parent's stockholders to be sought at the stockholders' meeting contemplated by
Section 7.4(b), no other corporate proceedings on the part of Parent or Sub are
necessary to authorize this Agreement or for Parent and Sub to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Parent and Sub and constitutes a valid and
binding agreement of each of Parent and Sub, enforceable against Parent and Sub
in accordance with its terms.
Section 5.4 Consents and Approvals; No Violations.
Neither the execution, delivery and performance of this Agreement by Parent or
Sub, nor the consummation by
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Parent or Sub of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provisions of the Certificate of Incorporation or
By-Laws of Parent or of Sub, (ii) require a filing with, or a permit,
authorization, consent or approval of, any Governmental Entity except in
connection with or in order to comply with the applicable provisions of the HSR
Act, the Securities Act, the Exchange Act, the NJCCA, the NGCA, state banking
laws, state laws governing the issuance of financial instruments or the
transfer of funds, state or foreign laws relating to takeovers, if applicable,
state securities or "blue sky" laws, the By-Laws of the NYSE and other
exchanges on which the shares of Parent Common Stock are listed, and the filing
and recordation of a Certificate of Merger as required by the DGCL, (iii)
except as set forth on Schedule 5.4 hereto, result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration) under,
or result in the creation of a Lien on any property or asset of Parent or any
of its Subsidiaries pursuant to, any of the terms, conditions or provisions of
any material Contract to which Parent or Sub is a party or by which either of
them or any of their properties or assets may be bound or (iv) violate any law,
order, writ, injunction, decree, statute, rule or regulation of any
Governmental Entity applicable to Parent, Sub or any of their properties or
assets, except, in the case of clauses (ii), (iii) and (iv), where the failure
to make such filing or obtain such authorization, consent or approval would not
have, or where such violations, breaches or defaults or Liens would not have,
in any such case, a Parent Material Adverse Effect.
Section 5.5 Reports and Financial Statements. Parent has
timely filed all reports required to be filed with the SEC pursuant to the
Exchange Act or the Securities Act since January 1, 1994 (collectively, the
"Parent SEC Reports"), and has previously made available to the Company true
and complete copies of all such Parent SEC Reports. Such Parent SEC Reports,
as of their respective dates, complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as the case
may be, and none of such 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 therein, in light of the circumstances
under which they were made, not misleading. The financial statements of Parent
included in the Parent SEC Reports
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have been prepared in accordance with GAAP consistently applied throughout the
periods indicated (except as otherwise noted therein or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present
(subject, in the case of unaudited statements, to normal, recurring year-end
adjustments and any other adjustments described therein) the consolidated
financial position of Parent and its consolidated Subsidiaries as at the dates
thereof and the consolidated results of operations and cash flows of Parent and
its consolidated Subsidiaries for the periods then ended. Since January 1,
1994, there has been no change in any of the significant accounting (including
tax accounting) policies, practices or procedures of the Parent or, except as
set forth on Schedule 5.5, any of its consolidated Subsidiaries.
Section 5.6 Absence of Certain Changes or Events;
Material Contracts. Except as set forth in the Parent SEC Reports, and except
for the Resumix Transaction, since December 31, 1994, (i) Parent has not
conducted its business and operations other than in the ordinary course of
business and consistent with past practices or taken any of the actions set
forth in Section 6.2(b) and (ii) there has not been any fact, event,
circumstance or change affecting or relating to Parent and its Subsidiaries
which has had or is reasonably likely to have a Parent Material Adverse Effect.
Section 5.7 Litigation. Except for litigation disclosed
in the notes to the financial statements included in Parent's Annual Report to
Stockholders for the year ended December 31, 1994 or in the Parent SEC Reports
filed subsequent thereto, there is no suit, action, proceeding or investigation
pending or, to the best knowledge of Parent, threatened against or affecting
Parent or any of its Subsidiaries, the outcome of which, in the reasonable
judgment of Parent, is likely to have a Parent Material Adverse Effect; nor is
there any judgment, decree, injunction, ruling or order of any Governmental
Entity outstanding against Parent or any of its Subsidiaries having, or which
is reasonably likely to have, a Parent Material Adverse Effect.
Section 5.8 Absence of Undisclosed Liabilities. Except
for liabilities or obligations which are accrued or reserved against in
Parent's financial statements (or reflected in the notes thereto) included in
the Parent SEC Reports or which were incurred after June 30,
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1995 in the ordinary course of business and consistent with past practice none
of Parent and its Subsidiaries has any liabilities or obligations (whether
absolute, accrued, contingent or otherwise) of a nature required by GAAP to be
reflected in a consolidated balance sheet (or reflected in the notes thereto)
or which would have a Parent Material Adverse Effect.
Section 5.9 No Default. Neither Parent nor any
Subsidiary of Parent is in default or violation (and no event has occurred
which with notice or the lapse of time or both would constitute a default or
violation) of any term, condition or provision of (i) its charter, by-laws or
comparable organizational documents, (ii) Contracts to which Parent or its
Subsidiaries is a party or by which they or any of their properties or assets
may be bound, or (iii) any order, writ, injunction, decree, statute, rule or
regulation of any Governmental Entity applicable to Parent or any of its
Subsidiaries, except, in the case of clauses (ii) and (iii) above, for defaults
or violations which would not have a Parent Material Adverse Effect.
Section 5.10 Taxes. Parent has heretofore delivered or
will make available to the Company true, correct and complete copies of the
consolidated federal, state, local and foreign income, franchise, sales and
other Tax Returns filed by Parent and its Subsidiaries for each of the Parent's
years ended December 31, 1994, 1993, 1992, 1991, 1990, 1989 and 1988 inclusive.
Parent has duly filed, and each of its Subsidiaries has duly filed, all
material federal, state, local and foreign income, franchise, sales and other
Tax Returns required to be filed by Parent or the Subsidiaries of Parent. All
such Tax Returns are true, correct and complete, in all material respects, and
Parent and the Subsidiaries of Parent have duly paid all Taxes shown on such
Tax Returns and has paid or made adequate provision for payment of all accrued
but unpaid material Taxes in respect of all periods since the periods covered
by such Tax Returns. Parent has heretofore delivered or will make available to
the Company true, correct and complete copies of all written tax-sharing
agreements and written descriptions of all such unwritten agreements or
arrangements to which Parent or any Subsidiary of Parent is a party. All
material deficiencies assessed as a result of any examination of Tax Returns of
Parent or the Subsidiaries of Parent by federal, state, local or foreign tax
authorities have been paid or reserved on the financial statements of Parent in
accordance with GAAP consistently
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applied, and true, correct and complete copies of all revenue agent's reports,
"30-day letters," or "90-day letters" or similar written statements proposing
or asserting any Tax deficiency against Parent or the Subsidiaries of Parent
for any open year have been heretofore delivered to the Company. No material
issue has been raised during the past five years by any federal, state, local
or foreign taxing authority which, if raised with regard to any other period
not so examined, could reasonably be expected to result in a proposed material
deficiency for any other period not so examined. Neither Parent nor any of its
Subsidiaries has granted any extension or waiver of the statutory period of
limitations applicable to any claim for any material Taxes. The consolidated
federal income tax returns of Parent and the Subsidiaries of Parent have been
examined by and settled with the Service for all years through 1986. Neither
Parent nor any Subsidiary of Parent (i) is a party to any agreement, contract
or arrangement that would result, separately or in the aggregate, in the
payment of any "excess parachute payments" within the meaning of Section 280G
of the Code; (ii) has filed a consent under Section 341(f) of the Code with
respect to any of Parent or the Subsidiaries of Parent; (iii) has participated
in, or cooperated with, an international boycott within the meaning of Section
999 of the Code; or (iv) has issued or assumed any corporate acquisition
indebtedness, as defined in Section 279(b) of the Code. Parent and each of the
Subsidiaries of Parent have complied (and until the Closing will comply) in all
material respects with all applicable laws, rules and regulations relating to
the payment and withholding of Taxes (including, without limitation,
withholding of Taxes pursuant to Sections 1441 and 1442 of the Code or similar
provisions under any foreign laws) and have, within the time and in the manner
prescribed by law, withheld from employee wages and paid over to the proper
governmental authorities all amounts required to be so withheld and paid over
under all applicable laws.
Section 5.11 Compliance with Applicable Law. Except as
disclosed in the Parent SEC Reports, (i) Parent and its Subsidiaries hold, and
are in compliance with the terms of, all permits, licenses, exemptions, orders
and approvals of all Governmental Entities necessary for the current or
proposed conduct of their respective businesses ("Parent Permits"), except for
failures to hold or to comply with such permits, licenses, exemptions, orders
and approvals which would not have a Parent Material Adverse
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Effect, (ii) no fact exists or event has occurred, and no action or proceeding
is pending or, to Parent's knowledge, threatened, that has a reasonable
possibility of resulting in a revocation, non-renewal, termination, suspension
or other material impairment of any material Parent Permits, (iii) the
businesses of Parent and its Subsidiaries are not being conducted in violation
of any Applicable Law, except for violations or possible violations which do
not, and, insofar as reasonably can be foreseen, in the future will not, have a
Parent Material Adverse Effect, and (iv) to the knowledge of Parent, (x) no
investigation or review by any Governmental Entity with respect to Parent or
its Subsidiaries is pending or threatened and (y) no Governmental Entity has
indicated an intention to conduct the same, other than, in each case, those
which Parent reasonably believes will not have a Parent Material Adverse
Effect.
Section 5.12 Information in Disclosure Documents and
Registration Statement. None of the information to be supplied by Parent or
Sub for inclusion in (i) the Registration Statement or (ii) the Proxy Statement
will in the case of the Registration Statement, at the time it becomes
effective and at the Effective Time, or, in the case of the Proxy Statement or
any amendments thereof or supplements thereto, at the time of the mailing of
the Proxy Statement and any amendments or supplements thereto, and at the time
of the meeting of stockholders of Parent to be held in connection with the
Merger, 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. The Registration Statement and the Proxy Statement will comply
as to form in all material respects with the applicable provisions of the
Securities Act and the Exchange Act, and the rules and regulations promulgated
thereunder, except that no representation is made by Parent with respect to
statements made therein based on information supplied by the Company, Comdata
or their respective representatives for inclusion in the Registration Statement
or the Proxy Statement or with respect to information concerning the Company or
any of its Subsidiaries incorporated by reference in the Registration Statement
or the Proxy Statement.
Section 5.13 Employee Benefit Plans; ERISA.
(a) As used in this Agreement, the term "Parent
Plan" shall mean each material employee benefit
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plan, arrangement or agreement that is maintained, or was maintained at any
time during the five (5) calendar years preceding the date of this Agreement,
by Parent or by any trade or business, whether or not incorporated (a "Parent
ERISA Affiliate"), which together with Parent would be deemed a "single
employer" within the meaning of Section 4001 of ERISA.
(b) Except as set forth in the Parent SEC Reports
and except for matters which would not, individually or in the aggregate, be
reasonably expected to result in a Parent Material Adverse Effect: (i) each of
the Parent Plans that is subject to ERISA is and has been in compliance with
ERISA and the Code; (ii) no Parent Plan has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Code; (iii) neither Parent
nor a Parent ERISA Affiliate has incurred, directly or indirectly, any
liability to or on account of a Parent Plan pursuant to Title IV of ERISA and
no condition exists that presents a material risk of incurring such liability;
and (iv) no Parent Plan is a multiemployer plan (within the meaning of Section
4001(a)(3) of ERISA).
Section 5.14 Environmental Laws and Regulations. (a)
Except for matters which would not, individually or in the aggregate, be
reasonably expected to result in a Parent Material Adverse Effect: (i) the
Parent and its Subsidiaries are and have been in compliance with, and there are
no outstanding allegations by any person or entity that the Parent or its
Subsidiaries has not been in compliance with, Environmental Laws and (ii) the
Parent and its Subsidiaries currently hold all permits, licenses, registrations
and other governmental authorizations (including exemptions, waivers, and the
like) and financial assurance required under Environmental Laws for the Parent
and its Subsidiaries to operate their businesses as currently conducted.
(b) Except for matters which would not, individually
or in the aggregate, be reasonably expected to result in a Parent Material
Adverse Effect: (i) neither Parent nor its Subsidiaries has received (x) any
written communication from any person stating or alleging that any of them may
be a potentially responsible party under any Environmental Law (including,
without limitation, the Federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended) with respect to any actual
or alleged material environmental contamination or
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(y) any request for information under any Environmental Law from any
Governmental Entity with respect to any actual or alleged material
environmental contamination; and (ii) none of Parent, its Subsidiaries or any
Governmental Entity is conducting or has conducted (or, to the knowledge of
Parent, is threatening to conduct) any environmental remediation or
investigation which could result in a material liability of Parent or its
Subsidiaries under any Environmental Law.
Section 5.15 Vote Required. The affirmative vote of the
holders of a majority of the shares of Parent Common Stock present in person or
represented by proxy at the stockholders meeting of Parent described in Section
7.4(b) (provided that the shares so present or represented constitute a
majority of the outstanding shares of Parent Common Stock) is the only vote of
the holders of any class or series of Parent capital stock necessary to approve
the Merger and the issuance of shares of Parent Common Stock pursuant thereto.
The affirmative vote of Parent, as the sole stockholder of all outstanding
shares of Sub Common Stock, is the only vote of the holders of any class or
series of Sub capital stock necessary to approve the Merger. The Board of
Directors of Parent (at a meeting duly called and held) has by the unanimous
vote of the directors present (i) approved this Agreement and the Voting
Agreement, (ii) determined that the transactions contemplated hereby are fair
to and in the best interests of the holders of Parent Common Stock, (iii)
determined to recommend this Agreement, the Merger and the other transactions
contemplated hereby to such holders for approval and adoption and (iv) caused
Parent, as the sole stockholder of Sub, to approve and adopt this Agreement and
the Voting Agreement. The Board of Directors of Sub (by unanimous written
consent) has approved this Agreement and the Voting Agreement.
Section 5.16 Opinion of Financial Advisor. Parent has
received the opinion of Bear Stearns & Co. Inc. ("Bear Stearns"), dated August
23, 1995, substantially to the effect that the Exchange Ratio is fair to the
stockholders of Parent from a financial point of view, a copy of which opinion
has been delivered to the Company.
Section 5.17 Accounting Matters. None of Parent, any of its
Subsidiaries or, to the knowledge of Parent, any of their respective directors,
officers or stockholders, has taken any action which would prevent the
accounting for the Merger as a pooling of interests in accor-
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dance with Accounting Principles Board Opinion No. 16, the interpretative
releases pursuant thereto and the pronouncements of the SEC.
Section 5.18 Brokers. Except for its financial advisor,
Bear Stearns, no broker, finder or financial advisor is entitled to any
brokerage finder's or other fee or commission in connection with the Merger or
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Parent or Sub.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by the Company Pending
the Merger. Prior to the Effective Time, unless Parent shall otherwise agree
in writing, or as otherwise expressly contemplated by this Agreement:
(a) the Company shall conduct, and cause each of
its Subsidiaries to conduct, its business only in the ordinary and usual course
consistent with past practice, and the Company shall use, and cause each of its
Subsidiaries to use, its reasonable efforts to preserve intact the present
business organization, keep available the services of its present officers and
key employees, and preserve the goodwill of those having business relationships
with it;
(b) the Company shall not, nor shall it permit
any of its Subsidiaries to, (i) amend its charter, by-laws or other
organizational documents, (ii) split, combine or reclassify any shares of its
outstanding capital stock, (iii) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property, except for the accretion
of the regular dividends under the Series B Preferred and the Series C
Preferred to the liquidation value thereof, or (iv) directly or indirectly
redeem or otherwise acquire any shares of its capital stock or shares of the
capital stock of any of its Subsidiaries;
(c) the Company shall not, nor shall it permit
any of its Subsidiaries to, (i) authorize for issuance, issue or sell or agree
to issue or sell any shares of, or Rights to acquire or convertible into any
shares of, its capital stock or shares of the capital stock of any of
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its Subsidiaries (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise), except
for the issuance of shares of Company Common Stock (x) upon the exercise of
Company Stock Options outstanding on the date of this Agreement or (y) upon the
conversion of the Series B Preferred and the Series C Preferred in accordance
with their present terms; (ii) merge or consolidate with another entity; (iii)
acquire or purchase an equity interest in or a substantial portion of the
assets of another corporation, partnership or other business organization or
otherwise acquire any assets outside the ordinary and usual course of business
and consistent with past practice or otherwise enter into any material
contract, commitment or transaction outside the ordinary and usual course of
business consistent with past practice; (iv) sell, lease, license, waive,
release, transfer, encumber or otherwise dispose of any of its assets outside
the ordinary and usual course of business and consistent with past practice;
(v) incur, assume or prepay any material indebtedness or any other material
liabilities other than in the ordinary course of business and consistent with
past practice; (vi) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations
of any other person other than a Subsidiary of the Company or customers of the
funds transfer business, in each case in the ordinary course of business and
consistent with past practice; (vii) make any loans, advances or capital
contributions to, or investments in, any other person, other than to
Subsidiaries of the Company; (viii) authorize or make capital expenditures in
excess of the amounts currently budgeted therefor; (ix) permit any insurance
policy naming the Company or any Subsidiary of the Company as a beneficiary or
a loss payee to be cancelled or terminated other than in the ordinary course of
business; or (x) enter into any contract, agreement, commitment or arrangement
with respect to any of the foregoing;
(d) the Company shall not, nor shall it permit
its Subsidiaries to, (i) adopt, enter into, terminate or amend (except as may
be required by Applicable Law) any Company Plan or other arrangement for the
current or future benefit or welfare of any director, officer or current or
former employee, (ii) increase in any manner the compensation or fringe
benefits of, or pay any bonus to, any director, officer or employee (except for
normal increases in salaried compensation in the ordinary course of business
consistent with past practice, or (iii) take any
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action to fund or in any other way secure, or to accelerate or otherwise remove
restrictions with respect to, the payment of compensation or benefits under any
employee plan, agreement, contract, arrangement or other Company Plan
(including the Company Stock Options);
(e) the Company shall not, nor shall it permit
its Subsidiaries to, take any action with respect to, or make any material
change in, its accounting or tax policies or procedures, except as required by
law or to comply with GAAP;
(f) the Company shall not (i) knowingly take or
allow to be taken any action which would jeopardize the treatment of Parent's
acquisition of the Company as a pooling of interests for accounting purposes;
or (ii) knowingly take any action which would jeopardize qualification of the
Merger as a reorganization within the meaning of Section 368(a) of the Code.
Section 6.2 Conduct of Business by Parent Pending the
Merger. Prior to the Effective Time, unless the Company shall otherwise agree
in writing, or as otherwise expressly contemplated by this Agreement:
(a) the business of Parent shall be conducted only
in the ordinary and usual course consistent with past practice, and Parent
shall use its reasonable efforts to preserve intact the present business
organization, to keep available the services of its present officers and key
employees, and preserve the goodwill of those having business relationships
with it;
(b) Parent shall not (i) amend its Certificate of
Incorporation (other than to increase the number of authorized shares of Parent
Common Stock) or By-Laws; (ii) split, combine or reclassify any shares of its
outstanding capital stock; or (iii) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property (other than regular
dividends on the Parent Preferred Stock);
(c) Parent shall not authorize for issuance, issue
or sell or agree to issue or sell any shares of, or Rights to acquire or
convertible into any shares of, its capital stock, except for (i) the issuance
of shares of Parent Common Stock (x) upon the exercise of Parent Stock Options
or other Rights outstanding on the date of this
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Agreement (y) upon the exercise of Rights described in the immediately
following clause (ii) or (z) upon the conversion of the Parent Preferred Stock
in accordance with its present terms, (ii) the issuance of Rights pursuant to
existing employee benefit plans or arrangements in a manner consistent with
past practice, (iii) the issuance of 5 1/2% Convertible Subordinated Debentures
Due 2008 of Parent in exchange for Parent Preferred Stock (or the underlying
depositary shares), and (iv) the issuance of shares of Parent Common Stock in
connection with the Resumix Transaction;
(d) neither Parent nor Sub shall take any action
with respect to, or make any material change in, its accounting or tax policies
or procedures, except as required by law or to comply with GAAP;
(e) neither Parent nor Sub shall (i) knowingly take
or allow to be taken any action which would jeopardize the treatment of
Parent's acquisition of the Company as a pooling of interests for accounting
purposes; or (ii) knowingly take any action which would jeopardize
qualification of the Merger as a reorganization within the meaning of Section
368(a) of the Code.
Section 6.3 Conduct of Business of Sub. During the
period from the date of this Agreement to the Effective Time, Sub shall not
engage in any activities of any nature except as provided in or contemplated by
this Agreement. It is understood that Sub was formed by Parent solely for the
purpose of effecting the Merger, and that Sub will have no material assets and
no material liabilities prior to the Merger.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Access and Information. Each of the Company
and Parent shall (and shall cause its Subsidiaries and its and their respective
officers, directors, employees, auditors and agents to) afford to the other and
to the other's officers, employees, financial advisors, legal counsel,
accountants, consultants and other representatives reasonable access during
normal business hours throughout the period prior to the Effective Time to all
of its books and records (other than privileged documents and,
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in the case of Parent, documents relating to classified Department of Defense
matters) and its properties, plants and personnel and, during such period, each
shall furnish promptly to the other a copy of each report, schedule and other
document filed or received by it pursuant to the requirements of federal
securities laws, provided that no investigation pursuant to this Section 7.1
shall affect any representations or warranties made herein or the conditions to
the obligations of the respective parties to consummate the Merger. Unless
otherwise required by law, each party agrees that it (and its Subsidiaries and
its and their respective representatives) shall hold in confidence all
non-public information so acquired in accordance with the terms of the separate
confidentiality agreements, respectively dated August 9, 1995 and June 26,
1995, between Parent and the Company (the "Confidentiality Agreements").
Section 7.2 No Solicitation. Prior to the Effective
Time, the Company agrees that neither it, any of its Subsidiaries or its
affiliates, nor any of the respective directors, officers, employees, agents or
representatives of the foregoing will, directly or indirectly, solicit,
initiate, facilitate or encourage (including by way of furnishing or disclosing
non-public information) any inquiries or the making of any proposal with
respect to any merger, consolidation or other business combination involving
the Company, Comdata or any other Subsidiary of the Company or the acquisition
of all or any significant assets or capital stock of the Company, Comdata or
any other Subsidiary of the Company taken as a whole (an "Acquisition
Transaction") or negotiate, explore or otherwise engage in discussions with any
person (other than Parent and its representatives) with respect to any
Acquisition Transaction or enter into any agreement, arrangement or
understanding with respect to any such Acquisition Transaction or which would
require it to abandon, terminate or fail to consummate the Merger or any other
transaction contemplated by this Agreement; provided, however, that the Company
may, in response to an unsolicited written proposal from a third party, furnish
information to and engage in discussions with such third party, in each case
only if the Board of Directors of the Company determines in good faith by a
majority vote, after consultation with its financial advisors and based upon
the written opinion of outside counsel to the Company, that failing to take
such action would result in a breach of the fiduciary duties of the Board of
Directors. The Company agrees that as of the date hereof, it, its Subsidiaries
and affiliates, and the respective
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directors, officers, employees, agents and representatives of the foregoing,
shall immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any person (other than Parent and its
representatives) conducted heretofore with respect to any Acquisition
Transaction. The Company agrees to immediately advise Parent in writing of any
inquiries or proposals (or desire to make a proposal) received by (or indicated
to), any such information requested from, or any such negotiations or
discussions sought to be initiated or continued with, any of it, its
Subsidiaries or affiliates, or any of the respective directors, officers,
employees, agents or representatives of the foregoing, in each case from a
person (other than Parent and its representatives) with respect to an
Acquisition Transaction, and the terms thereof, including the identity of such
third party, and to update on an ongoing basis or upon Parent's request, the
status thereof, as well as any actions taken or other developments pursuant to
this Section 7.2.
Section 7.3 Registration Statement. As promptly as
practicable, Parent and the Company shall in consultation with each other
prepare and file with the SEC the Proxy Statement and Parent in consultation
with the Company shall prepare and file with the SEC the Registration
Statement. Each of Parent and the Company shall use its reasonable best
efforts to have the Registration Statement declared effective as soon as
practicable. Parent shall also use its reasonable best efforts to take any
action required to be taken under state securities or "blue sky" laws in
connection with the issuance of the shares of Parent Common Stock pursuant to
this Agreement in the Merger. The Company shall furnish Parent with all
information concerning the Company and the holders of its capital stock and
shall take such other action as Parent may reasonably request in connection
with the Registration Statement and the issuance of shares of Parent Common
Stock. If at any time prior to the Effective Time any event or circumstance
relating to Parent, any Subsidiary of Parent, the Company, any Subsidiary of
the Company, or their respective officers or directors, should be discovered by
such party which should be set forth in an amendment or a supplement to the
Registration Statement or Proxy Statement, such party shall promptly inform the
other thereof and take appropriate action in respect thereof.
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Section 7.4 Proxy Statements; Stockholder Approvals.
(a) The Company, acting through its Board of
Directors, shall, subject to and in accordance with applicable law and its
Certificate of Incorporation and By-Laws, promptly and duly call, give notice
of, convene and hold as soon as practicable following the date upon which the
Registration Statement becomes effective a meeting of the holders of Company
Common Stock and of Company Preferred Stock for the purpose of voting to
approve and adopt this Agreement and the transactions contemplated hereby, and,
subject to the fiduciary duties of the Board of Directors of the Company under
applicable law as advised by outside legal counsel, recommend approval and
adoption of this Agreement and the transactions contemplated hereby, by the
stockholders of the Company and include in the Proxy Statement such
recommendation and (ii) take all reasonable and lawful action to solicit and
obtain such approval.
(b) Parent, acting through its Board of
Directors, shall, subject to and in accordance with applicable law and its
Certificate of Incorporation and By-Laws, promptly and duly call, give notice
of, convene and hold as soon as practicable following the date upon which the
Registration Statement becomes effective a meeting of the holders of Parent
Common Stock for the purpose of voting to approve and adopt this Agreement and
the transactions contemplated hereby, and, subject to the fiduciary duties of
the Board of Directors of Parent under applicable law as advised by outside
counsel, (i) recommend approval and adoption of this Agreement and the
transactions contemplated hereby, by the stockholders of Parent and include in
the Proxy Statement such recommendation, and (ii) take all reasonable and
lawful action to solicit and obtain such approval.
(c) Parent and the Company, as promptly as
practicable (or with such other timing as they mutually agree), shall cause the
definitive Proxy Statement to be mailed to their stockholders.
(d) At or prior to the Closing, each of Parent and
the Company shall deliver to the other a certificate of its Secretary setting
forth the voting results from its stockholder meeting.
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Section 7.5 Compliance with the Securities Act.
(a) At least 45 days prior to the Effective Time,
each of Parent and the Company shall cause to be delivered to the other a list
identifying all persons who were, in its reasonable judgment, at the record
date for its stockholders' meeting convened in accordance with Section 7.4
hereof, "affiliates" of such party as that term is used in paragraphs (c) and
(d) of Rule 145 under the Securities Act (the "Affiliates").
(b) Each of Parent and the Company shall use its
reasonable best efforts to cause each person who is identified as one of its
Affiliates in its list referred to in Section 7.5(a) above to deliver to Parent
(with a copy to the Company), at least 30 days prior to the Effective Time, a
written agreement, in the form attached hereto as Exhibit B-1, in the case of
Affiliates of Parent, and in the form attached hereto as Exhibit B-2, in the
case of Affiliates of the Company (the "Affiliate Letters").
(c) If any Affiliate of the Company refuses to
provide an Affiliate Letter, Parent may place appropriate legends on the
certificates evidencing the shares of Parent Common Stock to be received by
such Affiliate pursuant to the terms of this Agreement and to issue appropriate
stop transfer instructions to the transfer agent for shares of Parent Common
Stock to the effect that the shares of Parent Common Stock received by such
Affiliate pursuant to this Agreement only may be sold, transferred or otherwise
conveyed (i) pursuant to an effective registration statement under the
Securities Act, (ii) in compliance with Rule 145 promulgated under the
Securities Act, or (iii) pursuant to another exemption under the Securities
Act.
Section 7.6 Reasonable Best Efforts. Subject to the
terms and conditions herein provided, 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, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation, the
obtaining of all necessary waivers, consents and approvals and the effecting of
all necessary registrations and filings. Without limiting the generality of
the foregoing, as promptly as practicable, the Company, Parent and Sub shall
make all filings and
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submissions under the HSR Act as may be reasonably required to be made in
connection with this Agreement and the transactions contemplated hereby.
Subject to the Confidentiality Agreements, the Company will furnish to Parent
and Sub, and Parent and Sub will furnish to the Company, such information and
assistance as the other may reasonably request in connection with the
preparation of any such filings or submissions. Subject to the Confidentiality
Agreements, the Company will provide Parent and Sub, and Parent and Sub will
provide the Company, with copies of all material written correspondence,
filings and communications (or memoranda setting forth the substance thereof)
between such party or any of its representatives and any Governmental Entity,
with respect to the obtaining of any waivers, consent or approvals and the
making of any registrations or filings, in each case that is necessary to
consummate the Merger and the other transactions contemplated hereby. In case
at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers or
directors of Parent and the Surviving Corporation shall take all such necessary
action.
Section 7.7 Voting Agreement. Concurrently herewith, and
as an essential inducement for Parent's entering into this Agreement, Parent
and Sub are entering into the Voting Agreement with certain holders of the
Series B Preferred and the Series C Preferred with respect to all such shares
of Company Preferred Stock held by such holders.
Section 7.8 Company Stock Options. At the Effective
Time, each of the Company Stock Options which is outstanding immediately prior
to the Effective Time shall be assumed by Parent and converted automatically
into an option to purchase shares of Parent Common Stock (a "New Option") in an
amount and at an exercise price determined as provided below:
(a) The number of shares of Parent Common Stock to
be subject to the New Option shall be equal to the product of
the number of shares of Company Common Stock remaining subject
(as of immediately prior to the Effective Time) to the
original option and the Exchange Ratio, provided that any
fractional shares of Parent Common Stock resulting from such
multiplication shall be rounded down to the nearest share; and
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(b) The exercise price per share of Parent Common
Stock under the New Option shall be equal to the exercise
price per share of Company Common Stock under the original
option divided by the Exchange Ratio, provided that such
exercise price shall be rounded down to the nearest cent.
The adjustment provided herein with respect to any options which are "incentive
stock options" (as defined in Section 422 of the Code) shall be and is intended
to be effected in a manner which is consistent with Section 424(a) of the Code.
After the Effective Time, each New Option shall be exercisable and shall vest
upon the same terms and conditions as were applicable to the related Company
Stock Option immediately prior to the Effective Time, except that all
references to the Company shall be deemed to be references to Parent. Parent
shall file with the SEC a registration statement on Form S-8 (or other
appropriate form) or a post-effective amendment to the Registration Statement
and shall take any action required to be taken under state securities "blue
sky" laws for purposes of registering all shares of Parent Common Stock
issuable after the Effective Time upon exercise of the New Options, and use all
reasonable efforts to have such registration statement or post-effective
amendment become effective with respect thereto as promptly as practicable
after the Effective Time.
Section 7.9 Employee Benefits. Parent agrees to cause
the Surviving Corporation, for not less than one year after the Effective Time,
(i) to continue to maintain the Company Plans listed on Schedule 4.16 that are
in effect as of the date hereof or (ii) to make available to employees of the
Surviving Corporation reasonably comparable benefits, considered in the
aggregate, under one or more employee benefit plans of Parent or any of its
Subsidiaries.
Section 7.10 Public Announcements. Each of Parent, Sub,
and the Company agrees that it will not issue any press release or otherwise
make any public statement with respect to this Agreement (including the
Exhibits hereto) or the transactions contemplated hereby (or thereby) without
the prior consent of the other party, which consent shall not be unreasonably
withheld or delayed; provided, however, that such disclosure can be made
without obtaining such prior consent if (i) the disclosure is required by law
or by obligations imposed pursuant to any listing agreement with any national
securities exchange and
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(ii) the party making such disclosure has first used its reasonable best
efforts to consult with (but not obtain the consent of) the other party about
the form and substance of such disclosure.
Section 7.11 Directors' and Officers' Indemnification and
Insurance. (a) All rights to indemnification, advancement of litigation
expenses and limitation of personal liability existing in favor of the
directors and officers of the Company and its Subsidiaries under the provisions
existing on the date hereof in the Company's Certificate of Incorporation or
By-Laws shall, with respect to any matter existing or occurring at or prior to
the Effective Time (including the transactions contemplated by this
Agreement), survive the Effective Time, and, as of the Effective Time, Parent
and the Surviving Corporation shall assume all obligations of the Company in
respect thereof as to any claim or claims asserted prior to or within a
six-year period immediately after the Effective Time.
(b) For a period of three years after the Effective
Time, the Surviving Corporation shall cause to be maintained in effect the
current policies of directors' and officers' liability insurance maintained by
the Company (provided that the Surviving Corporation may substitute therefor
polices of at least the same coverage and amounts containing terms and
conditions which are no less advantageous to former officers and directors of
the Company) with respect to claims arising from facts or events which occurred
before the Effective Time; provided, however, that in no event shall the
Surviving Corporation be required to expend pursuant to this Section 7.11(b)
more than an amount equal to 150% of current annual premiums paid by the
Company for such insurance (the "Maximum Amount") (which premiums the Company
represents and warrants to be $180,000 in the aggregate). If the amount of the
annual premiums necessary to maintain or procure such insurance coverage
exceeds the Maximum Amount, the Surviving Corporation during such three-year
period shall maintain or procure as much coverage as possible for an annual
premium not to exceed the Maximum Amount.
Section 7.12 Expenses. Except as otherwise set forth in
Section 9.2(b), whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement (including the Exhibits
hereto) and the transactions contemplated hereby (and thereby) shall be paid by
the party incurring such expenses, except that (i)
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the filing fee in connection with filings under the HSR Act, (ii) the expenses
incurred in connection with printing the Registration Statement and the Proxy
Statement and (iii) the filing fee with the SEC relating to the Registration
Statement or the Proxy Statement will be shared equally by Parent and the
Company.
Section 7.13 Company Debt. The Company (a) acknowledges
that it is aware that Parent may determine to commence or request Comdata to
commence, prior to the Effective Time, an offer to purchase (the "Debt Tender
Offer") at least a majority in principal amount of Comdata's outstanding 12.5%
Senior Notes due 1999 and 13.25% Senior Subordinated Debentures due 2002
(collectively, the "Senior Notes") and may solicit, or request Comdata to
solicit, consents to amend certain covenants contained in the indentures
relating to the Senior Notes and (b) agrees (i) that, if Parent determines to
so commence the Debt Tender Offer, the Company will reasonably cooperate, and
cause Comdata so to cooperate, with Parent in connection with the making of the
Debt Tender Offer (including in connection with any solicitation of consents)
and in connection with Parent's obtaining of financing therefor and for any
other refinancing of other outstanding debt of the Company or its Subsidiaries
(together with the Senior Notes, the "Company Debt"), (ii) that, if Parent so
requests, it will commence and make the Debt Tender Offer (and the solicitation
of consents) itself, upon terms and conditions as advised by Parent (it being
understood, however, that the prior occurrence of the Closing will be a
condition to the closing of the Debt Tender Offer) and (iii) that it will use,
and cause Comdata to use, its reasonable best efforts to prevent the
occurrence, as a result of the Merger and the other transactions contemplated
by this Agreement or otherwise, of any event which constitutes a default (or an
event which with notice or lapse of time or both would become a default) under
any of the Company Debt.
Section 7.14 Listing Application. Parent will use its
reasonable best efforts to cause the shares of Parent Common Stock to be issued
pursuant to this Agreement in the Merger (as well as the shares of Parent
Common Stock issuable after the Effective Time upon exercise of the New
Options) to be listed for trading on the NYSE.
Section 7.15 Supplemental Disclosure. The Company shall give
prompt notice to Parent, and Parent
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shall give prompt notice to the Company, of (i) the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence, of which would
be likely to cause (x) any representation or warranty contained in this
Agreement to be untrue or inaccurate or (y) any covenant, condition or
agreement contained in this Agreement not to be complied with or satisfied and
(ii) 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; provided, however, that the delivery of any notice
pursuant to this Section 7.15 shall not have any effect for the purpose of
determining the satisfaction of the conditions set forth in Article VIII of
this Agreement or otherwise limit or affect the remedies available hereunder to
any party.
Section 7.16 Letters of Accountants.
(a) Parent shall use all reasonable efforts to cause
to be delivered to the Company (i) a letter of KPMG Peat Marwick LLP, Parent's
independent auditors, dated a date within two business days before the date on
which the Registration Statement shall become effective and addressed to the
Company, in form and substance reasonably satisfactory to the Company and
customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the
Registration Statement, which letter shall be brought down to the Effective
Time, and (ii) the letter referred to in 8.1(g).
(b) The Company shall use all reasonable best
efforts to cause to be delivered to Parent (i) a letter of Arthur Andersen LLP,
the Company's independent auditors, dated a date within two business days
before the date on which the Registration State shall become effective and
addressed to Parent, in form and substance reasonably satisfactory to Parent
and customary in scope and substance for letters delivered by independent
public accountants in connection with registration statements similar to the
Registration Statement, which letter shall be brought down to the Effective
Time, and (ii) the letter referred to in 8.1(g).
Section 7.17 Directors of Parent. Parent agrees that,
promptly after the Effective Time, Parent shall take such action as may be
necessary to enable two non-management designees of the Company, which
designees shall be
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acceptable to Parent, to be appointed to the Board of Directors of Parent.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 8.1 Conditions to Each Party's Obligation to
Effect the Merger. 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) HSR Approval. Any waiting period applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated, and no action shall have been instituted by the Department of
Justice or Federal Trade Commission challenging or seeking to enjoin the
consummation of this transaction, which action shall have not been withdrawn or
terminated.
(b) Stockholder Approval. This Agreement and the
transactions contemplated hereby shall have been approved and adopted by (i)
the requisite vote (as described in Section 4.19) of the stockholders of the
Company and (ii) by the requisite vote (as described in Section 5.13) of the
stockholders of Parent, in each case, in accordance with applicable law.
(c) NYSE Listing. The shares of Parent Common
Stock issuable to the holders of Company Stock pursuant to this Agreement in
the Merger shall have been authorized for listing on the NYSE, upon official
notice of issuance.
(d) Registration Statement. The Registration
Statement shall have become effective under the Securities Act and shall not be
the subject of any stop order or proceeding by the SEC seeking a stop order.
(e) No Order. No Governmental Entity (including
a federal or state court) of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which materially restricts, prevents or
prohibits consummation of
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the Merger or any transaction contemplated by this Agreement; provided,
however, that the parties shall use their reasonable best efforts to cause any
such decree, judgment, injunction or other order to be vacated or lifted.
(f) Approvals. Other than the filing of Merger
documents in accordance with the DGCL, all authorizations, consents, waivers,
orders or approvals of, or declarations or filings with, or expirations of
waiting periods imposed by, any Governmental Entity that are listed on Schedule
8.1(f), or the failure of which to obtain, make or occur would have a material
adverse effect at or after the Effective Time on (i) Parent or (ii) the
Surviving Corporation and Comdata, taken as a whole shall have been obtained,
been filed or have occurred. Parent shall have received all state securities
or "blue sky" permits and other authorizations necessary to issue the shares of
Parent Common Stock pursuant to this Agreement in the Merger.
(g) "Pooling Letters." The Company and Parent
shall have each received from Arthur Andersen LLP and KPMG Peat Marwick LLP,
respectively, a letter, dated not earlier than five (5) days prior to the
Closing Date, to the effect that, subject to customary qualifications, the
Merger qualifies for pooling of interests treatment for financial reporting
purposes and that such treatment is in accordance with GAAP.
(h) No Ownership Change. Each of Parent and the
Company shall have determined (i) based on the existence (or absence) of
filings with the SEC on Schedules 13D, 13F, 13G (or any similar schedules),
that no "ownership change," within the meaning of Section 382(g) of the Code,
shall have occurred with respect to Parent after the date hereof and (ii) based
on the existence or absence of the aforesaid filings and the number of shares
of Parent Common Stock to be issued in connection with the Merger, that
effecting the Merger will not cause such an ownership change to occur with
respect to Parent.
Section 8.2 Conditions to Obligations of Parent and Sub
to Effect the Merger. The obligations of Parent and Sub to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following additional conditions, unless waived in writing by Parent:
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(a) Representations and Warranties. (i) The
aggregate effect of all inaccuracies in the representations and warranties of
the Company set forth in this Agreement does not and will not have a Company
Material Adverse Effect and (ii) the representations and warranties of the
Company that are qualified with reference to a Company Material Adverse Effect
or materiality shall be true and correct and the representations and warranties
that are not so qualified shall be true and correct in all material respects,
in each case as of the date hereof, and, except to the extent such
representations and warranties speak as of an earlier date, as of the Effective
Time as though made at and as of the Effective Time, and Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer or the chief financial officer of the Company to such effect.
(b) Performance of Obligations of the Company.
Each of the Company and its Subsidiaries shall have performed in all material
respects all obligations required to be performed by it under this Agreement at
or prior to the Effective Time, and Parent shall have received a certificate
signed on behalf of the Company by the chief executive officer or the chief
financial officer of the Company to such effect.
(c) Affiliate Letters. Parent shall have
received the Affiliate Letters from each of the Affiliates of the Company, as
contemplated in Section 7.5.
(d) Tax Opinion of Counsel. Parent shall have
received (i) an opinion of Hogan & Hartson, special tax counsel to Parent, in
form and substance reasonably satisfactory to Parent, dated as of the Effective
Time, substantially to the effect that no gain or loss will be recognized by
the Company, Parent or Sub as a result of the Merger and (ii) the opinion
provided for in Section 8.3(d) addressed to Parent, in form and substance
reasonably satisfactory to Parent, dated as of the Effective Time.
(e) Letters of Resignation. Parent and Sub shall
have received letters of resignation addressed to the Company from the members
of the Company's board of directors and letters of resignation addressed to
Comdata from the members of Comdata's board of directors, which resignations
shall be effective as of the Effective Time.
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(f) Dissenting Shares. The aggregate number of
shares of Company Common Stock into which all Dissenting Shares are convertible
shall not constitute more than 5% of the number of shares of Company Common
Stock outstanding as of immediately prior to the Effective Time (calculated
assuming full conversion of all then issued and outstanding shares of Company
Preferred Stock but no other dilution).
Section 8.3 Conditions to Obligation of the Company to
Effect the Merger. The obligation of the Company to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
additional conditions:
(a) Representations and Warranties. (i) The
aggregate effect of all inaccuracies in the representations and warranties of
Parent set forth in this Agreement does not and will not have a Parent Material
Adverse Effect and (ii) the representations and warranties of Parent contained
in this Agreement that are qualified with reference to a Parent Material
Adverse Effect or materiality shall be true and correct and the representations
and warranties that are not so qualified shall be true and correct in all
material respects as of the date hereof, and, except to the extent such
representations and warranties speak as of an earlier date, as of the Effective
Time as though made on and as of the Effective Time, and the Company shall have
received a certificate signed on behalf of Parent by the chief executive
officer or the chief financial officer of Parent to such effect.
(b) Performance of Obligations of Parent and Sub.
Each of Parent and Sub shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Effective Time, and the Company shall have received a certificate signed on
behalf of Parent by the chief executive officer or the chief financial officer
of Parent to such effect.
(c) Affiliate Letters. The Company shall have
received the Affiliate Letters from the Affiliates of Parent as contemplated in
Section 7.5.
(d) Tax Opinion of Counsel. The Company shall
have received an opinion of Reboul, MacMurray, Hewitt, Maynard & Kristol
("Reboul MacMurray") in form and
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substance reasonably satisfactory to the Company, dated as of the Effective
Time, substantially to the effect that the Merger will constitute a
reorganization for federal income tax purposes within the meaning of Section
368(a) of the Code and that accordingly:
(i) No gain or loss will be recognized by the
stockholders of the Company who exchange their Company Stock
solely for shares of Parent Common Stock pursuant to the
Merger (except to the extent that cash is received in lieu of
a fractional share interest);
(ii) The aggregate basis of the shares of Parent
Common Stock received by stockholders in the Merger will be
the same as the aggregate basis of the Company Stock
surrendered in exchange therefor (reduced by any amount
allocable to a fractional share interest for which cash is
received);
(iii) The holding period of the shares of Parent
Common Stock received by stockholders in the Merger will
include the period during which the shares of Company Stock
surrendered in exchange therefor were held, provided such
shares were held as a capital asset at the Effective Time; and
(iv) No gain or loss will be recognized by the
Company, Parent or Sub as a result of the Merger.
In rendering such opinion Reboul MacMurray may
require and rely upon representations contained in certificates of officers of
Parent, Sub and the Company, certain principal stockholders and others.
ARTICLE IX
TERMINATION
Section 9.1 Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether before or after
approval by the stockholders of Parent or the Company:
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(a) by mutual consent of Parent and the Company;
(b) by either Parent or the Company, if (i) the
Merger shall not have been consummated before February 29, 1996 or (ii) the
approval of the stockholders of each of Parent and the Company required by
Sections 5.15 and 4.18, respectively, shall not have been obtained at a meeting
duly convened therefor or any adjournment thereof (unless, in the case of any
such termination pursuant to this Section 9.1(b), the failure to so consummate
the Merger by such date or to obtain such stockholder approval shall have been
caused by the action or failure to act of the party (or its Subsidiaries)
seeking to terminate this Agreement, which action or failure to act constitutes
a breach of this Agreement);
(c) by either Parent or the Company, if any
permanent injunction or action by any Governmental Entity of competent
jurisdiction preventing the consummation of the Merger shall have become final
and nonappealable; provided, however, that the party seeking to terminate this
Agreement pursuant to this Section 9.1(c) shall have used all reasonable
efforts to remove such injunction or overturn such action;
(d) by Parent, if (i) there has been a breach of
any representations or warranties of the Company set forth herein the effect of
which is a Company Material Adverse Effect, (ii) there has been a breach in any
material respect of any of the covenants or agreements set forth in this
Agreement on the part of the Company, which breach is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by Parent to the Company, (iii) the Board of Directors of the Company
(x) withdraws or amends or modifies in a manner adverse to Parent or Sub its
recommendation or approval in respect of this Agreement or the Merger after the
Company (or any of its Subsidiaries or affiliates) has received, or there has
been publicly announced or otherwise made to the Company's stockholders, a bona
fide offer or proposal with respect to an Acquisition Transaction (it being
understood that a press release issued by the Company which merely indicates
the receipt and consideration of an Acquisition Transaction, in accordance with
the proviso to the first sentence of Section 7.2, shall not be deemed to be
such an amendment or modification or an action described in the parenthetical
in the immediately following clause (y)), (y) makes any
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recommendation with respect to an Acquisition Transaction (including making no
recommendation or stating an inability to make a recommendation), other than a
recommendation to reject such Acquisition Transaction, or (z) takes any action
that would be prohibited by Section 7.2, or (iv) any corporation, partnership,
person or other entity or group (as defined in Section 13(d)(3) of the Exchange
Act) ("Acquiring Person") other than Parent, or any affiliate or Subsidiary of
Parent, shall have become the beneficial owner of more than 15% of the
outstanding voting equity of the Company (either on a primary or a fully
diluted basis); provided, however that "Acquiring Person" shall not include any
corporation, partnership, person, other entity or group which beneficially owns
as of the date hereof (either on a primary or a fully diluted basis) more than
15% of the outstanding voting equity of the Company (either on a primary or a
fully diluted basis) and which has not after the date hereof increased such
ownership percentage by more than an additional 1% of the outstanding voting
equity of the Company (either on a primary or a fully diluted basis);
(e) by the Company, if (i) there has been a
breach of any representations or warranties of Parent set forth herein the
effect of which is a Parent Material Adverse Effect, (ii) there has been a
breach in any material respect of any of the covenants or agreements set forth
in this Agreement on the part of Parent, which breach is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by the Company to Parent or (iii) such termination is necessary to allow
the Company to enter into an Acquisition Transaction that its Board of
Directors has determined in good faith, by a majority vote after consultation
with its financial advisors and based upon the written opinion of outside
counsel to the Company, is more favorable to the stockholders of the Company
than the Merger contemplated by this Agreement (provided that the termination
described in this clause (iii) shall not be effective unless and until the
Company shall have paid to Parent in full the fee and expense reimbursement
described in Section 9.2(b)); and
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(f) by Parent, within thirty days of it having
determined that the condition set forth in Section 8.1(h) has become incapable
of satisfaction.
Section 9.2 Effect of Termination.
(a) In the event of termination of this Agreement
pursuant to this Article IX, the Merger shall be deemed abandoned and this
Agreement shall forthwith become void, without liability on the part of any
party hereto, except as provided in this Section 9.2, Section 7.1 and Section
7.12, and except that nothing herein shall relieve any party from liability for
any breach of this Agreement.
(b) If (x) Parent shall have terminated this
Agreement pursuant to Sections 9.1(d)(ii) or 9.1(d)(iii) or (y) either (1)
Parent or the Company shall have terminated this Agreement pursuant to Section
9.1(b) or (2) Parent shall have terminated this Agreement pursuant to Section
9.1(d)(iv) and, prior to or within one (1) year after any termination described
in this clause (y), the Company (or any of its Subsidiaries) shall have
directly or indirectly entered into a definitive agreement for, or shall have
consummated, an Acquisition Transaction or (z) the Company shall have
terminated this Agreement pursuant to Section 9.1(e)(iii), then, in any of such
cases, the Company shall pay Parent (A) a termination fee of twenty-five
million dollars ($25,000,000), plus (B) an amount, not in excess of two million
five hundred thousand dollars ($2,500,000), equal to Parent's actual,
documented out-of-pocket expenses directly attributable to the negotiation and
execution of this Agreement and the attempted financing and completion of the
Debt Tender Offer and the Merger; provided, however, that no fee or expense
reimbursement shall be paid pursuant to this Section 9.2(b) if Parent shall be
in material breach of its obligations hereunder. Any fees or amounts payable
under this Section 9.2(b) shall be paid in same day funds no later than (i) two
business days after a termination described in clause (x) of this Section
9.2(b), or (ii) concurrently with or prior to the entering into of the
definitive agreement for, or the consummation of, such Acquisition Transaction,
in the case of a termination described in clause (y) of this Section 9.2(b) or
(iii) concurrently with or prior to a termination described in clause (z) of
this Section 9.2(b).
(c) If Parent shall have terminated this
Agreement pursuant to Section 9.1(f), then Parent shall,
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within five business days after such termination, reimburse the Company for all
of its actual, documented out-of-pocket expenses directly attributable to the
negotiation and execution of this Agreement, up to a maximum reimbursement of
two million five hundred thousand dollars ($2,500,000).
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Amendment and Modification. At any time
prior to the Effective Time, this Agreement may be amended, modified or
supplemented only by written agreement (referring specifically to this
Agreement) of Parent, Sub and the Company with respect to any of the terms
contained herein; provided, however, that after any approval and adoption of
this Agreement by the stockholders of Parent or the Company, no such amendment,
modification or supplementation shall be made which under applicable law
requires the approval of such stockholders, without the further approval of
such stockholders.
Section 10.2 Waiver. At any time prior to the Effective
Time, Parent and Sub, on the one hand, and the Company, on the other hand, may
(i) extend the time for the performance of any of the obligations or other acts
of the other, (ii) waive any inaccuracies in the representations and warranties
of the other contained herein or in any documents delivered pursuant hereto and
(iii) waive compliance by the other with any of the agreements or conditions
contained herein which may legally be waived. Any such extension or waiver
shall be valid only if set forth in an instrument in writing specifically
referring to this Agreement and signed on behalf of such party.
Section 10.3 Survivability; Investigations. The
respective representations and warranties of Parent and the Company contained
herein or in any certificates or other documents delivered prior to or as of
the Effective Time (i) shall not be deemed waived or otherwise affected by any
investigation made by any party hereto and (ii) shall not survive beyond the
Effective Time. The covenants and agreements of the parties hereto (including
the Surviving Corporation after the Merger) shall survive the Effective Time
without limitation (except for those which, by their terms, contemplate a
shorter survival period).
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Section 10.4 Notices. All notices and other
communications hereunder shall be in writing and shall be delivered personally
or by next-day courier or telecopied with confirmation of receipt, to the
parties at the addresses specified below (or at such other address for a party
as shall be specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof). Any such notice shall
be effective upon receipt, if personally delivered or telecopied, or one day
after delivery to a courier for next-day delivery.
(a) If to Parent or Sub, to:
Ceridian Corporation
8100 34th Avenue South
Minneapolis, Minnesota 55425
Attention: Chief Executive Officer
with copies to:
Ceridian Corporation
8100 34th Avenue South
Minneapolis, Minnesota 55425
Attention: Office of General Counsel
and
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attention: Eileen Nugent Simon, Esq.
(b) if to the Company, to:
Comdata Holdings Corporation
5301 Maryland Way
Brentwood, Tennessee 37027
Attention: Chief Executive Officer
with copies to:
Comdata Holdings Corporation
5301 Maryland Way
Brentwood, Tennessee 37027
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Attention: General Counsel
and
Reboul, MacMurray, Hewitt, Maynard
& Kristol
45 Rockefeller Plaza
New York, New York 10111
Attention: Robert A. Schwed, Esq.
Section 10.5 Descriptive Headings; Interpretation. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
References in this Agreement to Sections, Schedules, Exhibits or Articles mean
a Section, Schedule, Exhibit or Article of this Agreement unless otherwise
indicated. References to this Agreement shall be deemed to include the
Exhibits and Schedules hereto, unless the context otherwise requires. The term
"person" shall mean and include an individual, a partnership, a joint venture,
a corporation, a trust, a Governmental Entity or an unincorporated
organization.
Section 10.6 Entire Agreement; Assignment. This Agreement
(including the Schedules and other documents and instruments referred to
herein), together with the Voting Agreement and the Confidentiality Agreements,
constitute the entire agreement 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. This Agreement is not intended to confer
upon any person not a party hereto any rights or remedies hereunder. This
Agreement shall not be assigned by operation of law or otherwise; provided that
Parent or Sub may assign its rights and obligations hereunder to a direct or
indirect subsidiary of Parent, but no such assignment shall relieve Parent or
Sub, as the case may be, of its obligations hereunder.
Section 10.7 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
without giving effect to the provisions thereof relating to conflicts of law.
Section 10.8 Severability. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect against
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a party hereto, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby and such invalidity, illegality or unenforceability shall only apply as
to such party in the specific jurisdiction where such judgment shall be made.
Section 10.9 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.
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IN WITNESS WHEREFORE, each of Parent, Sub and the Company has
caused this Agreement to be executed on its behalf by its officers thereunto
duly authorized, all as of the date first above written.
CERIDIAN CORPORATION
By:/s/ LAWRENCE PERLMAN
----------------------------
Name: Lawrence Perlman
Title: Chairman and Chief
Executive Officer
CONVOY ACQUISITION CORP.
By:/s/ JAMES D. MILLER
-------------------------
Name: James D. Miller
Title: President
COMDATA HOLDINGS CORPORATION
By:/s/ GEORGE L. MCTAVISH
----------------------------
Name: George L. McTavish
Title: Chairman and Chief
Executive Officer
<PAGE> 1
EXHIBIT 99.1
News Release
CERIDIAN TO ACQUIRE COMDATA HOLDINGS IN
$900 MILLION STOCK TRANSACTION
Acquisition Will Make Ceridian a $1.3 Billion Information Services Provider
Transaction Expected to Be Accretive to Ceridian's EPS
MINNEAPOLIS, MN./BRENTWOOD, TN., August 24, 1995 -- Ceridian Corporation (NYSE:
CEN) and Comdata Holdings Corporation (NASDAQ: CMDT) jointly announced today
that Ceridian has reached a definitive agreement to acquire Comdata, a leading
provider of transaction processing and information services to the
transportation and gaming industries. The Board of Directors of both companies
have unanimously approved the acquisition.
The combination creates a company that will have $1.3 billion of annual
revenue, primarily from information services. The transaction is expected to
be accretive to Ceridian's earnings per share in 1996, and to provide an
increasingly positive contribution to earnings thereafter. Under the terms of
the agreement, Comdata's common shareholders will receive 0.57 shares of
Ceridian common shares for each share of Comdata -- and Comdata preferred
shareholders will receive equivalent consideration -- for a total equity
consideration of approximately $900 million.
Lawrence Perlman, chairman and chief executive officer of Ceridian, said: "The
Comdata acquisition is a major step forward in Ceridian's strategy of
aggressively growing its information services business. Comdata has a strong
position in two large and growing markets. In Comdata, we are adding a third
leg to Ceridian's information services segment that has many important
characteristics in common with Ceridian's current businesses. These include
value-added services to customers, leadership in growing markets, a commitment
to revenue growth along with a high level of recurring revenues, predictable
earnings and cash flow, and strong customer relationships.
(more)
<PAGE> 2
"Comdata is a profitable, growing company, and the transaction will allow
Ceridian to accelerate utilization of its net operating loss carryforwards. In
addition, because of the strength of Ceridian's balance sheet, we will be able
to reduce the cost of Comdata's debt significantly."
George L. McTavish, chairman and chief executive officer of Comdata, said:
"This transaction will greatly enhance Comdata's operating and financial
flexibility, which we believe will translate into increased growth. We think
the operational model we have implemented so successfully in transportation and
gaming can be replicated in other large vertical markets. We also think there
are substantial opportunities for leveraging technology, cross-selling and
other forms of cooperation with Ceridian's businesses. With the financial
strength of Ceridian behind us, we are well positioned to pursue Comdata's
growth opportunities aggressively."
Under the terms of the agreement, Comdata will retain its name and operate as
an independent unit of Ceridian Corporation. Its management team and 1,850
employees will remain with the company, and McTavish will report to Perlman.
Ceridian expects certain one-time charges related to the refinancing of
Comdata's outstanding indebtedness and costs related to the acquisition to be
incurred in the quarter that the transaction closes.
The transaction is expected to be tax-free to Comdata's shareholders and to be
accounted for on a pooling-of-interests basis. Completion of the transaction
is expected to occur before the end of 1995 and is subject to a number of
conditions, including the approval of the shareholders of each company, no
changes in reported ownership of Ceridian stock that would affect the
continuing availability of its net operating loss carryforwards, and certain
regulatory matters, including completion of the Hart-Scott-Rodino process.
Details of the proposed transaction will be contained in a proxy statement to
be filed shortly with the Securities and Exchange Commission.
Welsh, Carson, Anderson & Stowe and Charterhouse, Inc., the holders of the
majority of the outstanding shares of Comdata's convertible preferred stock,
have separately agreed to vote in favor of the transaction.
The Comdata acquisition will mark the eleventh acquisition since Ceridian was
created in conjunction with the spin off of Control Data Systems, Inc. in 1992.
Upon completion of the transaction, Ceridian's market capitalization is
expected to have grown to over $3 billion from approximately $300 million in
September 1991, just before Control Data Corporation undertook its reshaping
plan.
(more)
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Comdata is a leading provider of funds transfer, fuel purchase, cash advance
and permit services, as well as fleet optimization and routing software, for
the transportation industry; point-of-sale and data collection services for the
truck stop industry; and cash advance services for the gaming industry. The
company, which was founded in 1969 and acquired in 1987 by a group of investors
in a leveraged transaction, has been growing substantially in recent years.
Revenue for the Brentwood, Tenn., based company is expected to total
approximately $300 million in 1995.
Ceridian, with estimated 1995 revenue of $1.0 billion, is a leading information
services and defense electronics company. Its largest businesses are Ceridian
Employer Services, the Arbitron Company and Computing Devices International.
Bear Stearns & Co. is acting as financial advisor to Ceridian. Comdata is
being advised by Lazard Freres & Co.
3
