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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(AMENDMENT NO. 4)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
RELIANCE ELECTRIC COMPANY
(Name of Subject Company)
RELIANCE ELECTRIC COMPANY
(Name of Person(s) Filing Statement)
Class A Common Stock, $.01 Par Value Per Share,
Including the Associated Series A Preferred Stock Purchase Rights
(Title of Class of Securities)
759458102
(CUSIP Number of Class of Securities)
William R. Norton, Esq.
Vice President, General Counsel and Secretary
Reliance Electric Company
6065 Parkland Boulevard
Cleveland, Ohio 44124
(216) 266-5800
(Name, address and telephone number of person(s) authorized
to receive notice and communications on behalf
of the person(s) filing statement)
Copies to:
Michael L. Miller, Esq. Joseph B. Frumkin, Esq.
Calfee, Halter & Griswold Sullivan & Cromwell
800 Superior Avenue, Suite 1800 125 Broad Street
Cleveland, Ohio 44114 New York, New York 10004
(216) 622-8200 (212) 558-4000
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This Amendment No. 4 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9, dated November 3, 1994, as amended (the "Schedule
14D-9"), filed by Reliance Electric Company, a Delaware corporation (the
"Company"), relating to the tender offer disclosed in the Schedule 14D-1, dated
October 21, 1994, as amended (the "Schedule 14D-1"), of the bidder, ROK
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary
of Rockwell International Corporation, a Delaware corporation ("Rockwell"), to
purchase all of the outstanding Shares upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated October 21, 1994, and the
related Letters of Transmittal (together, the "Offer"). Capitalized terms used
and not defined herein shall have the meanings set forth in the Schedule 14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Item 8 is hereby amended and supplemented by adding to subparagraph (f)
thereunder captioned "Additional Information" the following:
On November 16, 1994 Mr. Beall sent a letter (the "November 16 Letter")
to Messrs. Sherrill and Morley stating that Rockwell was delivering a revised
proposed merger agreement (the "Revised Rockwell Proposed Merger Agreement") to
the Company's counsel. In the November 16 Letter, Mr. Beall indicated that the
Revised Rockwell Proposed Merger Agreement would contain provisions requiring
the Company to redeem its Rights and take appropriate action to cause the
restrictions on business combinations pursuant to Section 203 of the Delaware
General Corporation Law to be inapplicable to the Proposed Rockwell Merger. The
November 16 Letter stated that pursuant to the Revised Rockwell Proposed Merger
Agreement, the Offer would be amended to eliminate all other conditions to the
Offer except for the tender of a majority of the Reliance Class A Shares (on a
fully diluted basis), the absence of an injunction or legal prohibition, the
termination of the Revised Proposed Merger Agreement or the termination of the
Offer by mutual agreement with the Company. Mr. Beall also reaffirmed
Rockwell's preparedness, in the alternative, to proceed without a merger
agreement, as outlined in the November 10 Letter from Mr. Beall to Messrs.
Sherrill and Morley.
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Copies of the November 16 Letter and the Revised Rockwell Proposed Merger
Agreement are filed as Exhibits 24 and 25, respectively, and are incorporated
herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended and supplemented by adding thereto the following:
Exhibit No. Exhibit Page No.
----------- ------- --------
Exhibit 24 -- Letter, dated November 16, 1994,
from Donald R. Beall to H. Virgil Sherrill
and John C. Morley
Exhibit 25 -- Revised Rockwell Proposed Merger Agreement
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 17, 1994
RELIANCE ELECTRIC COMPANY
By: /s/ John C. Morley
--------------------------
Name: John C. Morley
Title: President and Chief
Executive Officer
431\10226DSA.461
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Exhibit 24
Rockwell International Corporation
World Headquarters
2201 Seal Beach Boulevard
PO Box 4250
Seal Beach, California 90740-8250
310.797.5127
ROCKWELL
- ------------------------------------------------------------------------------
November 16, 1994
Donald R. Beall
Mr. H. Virgil Sherrill Chairman of the Board and
Chairman of the Board Chief Executive Officer
and
Mr. John C. Morley
President and Chief Executive Officer
Reliance Electric Company
6065 Parkland Boulevard
Cleveland, Ohio 44124
Gentlemen:
In response to your stated commitment to respond promptly to any revised
proposal with respect to Rockwell's $30 per share all-cash tender offer for all
Reliance shares, we are this afternoon delivering a copy of this letter
together with a revised proposed merger agreement to your counsel. The revised
merger agreement would provide for Reliance's removal of its poison pill and
waiver of Section 203 of the Delaware General Corporation Law, and would
eliminate all other conditions to our offer except for the tender of a majority
of the Reliance Class A shares (on a fully diluted basis), the absence of an
injunction or legal prohibition, the termination of our merger agreement or the
termination of the offer by mutual agreement with you. We are prepared to sign
this revised merger agreement now.
As an alternative, as stated in my letter last week, we remain prepared to
proceed without a merger agreement. Thus, if Reliance will announce now that
it will redeem its poison pill and satisfy Section 203 of the Delaware General
Corporation Law just prior to the expiration of our offer, we will amend our
offer to remove all the other conditions, except the tender of a majority of
the Reliance Class A shares (on a fully diluted basis) and the absence of an
injunction or legal prohibition. Rockwell will also commit to effect a
second-step merger as soon as possible following consummation of the offer at
the same price as paid in the offer.
As you know, we believe that our offer and the combination of Allen-Bradley and
Reliance are clearly in the best interests of Reliance, its shareowners and its
other constituencies. We urge you to act promptly either to enter into a
definitive merger agreement with us or to take the actions outlined above in
order to permit us to consummate the offer without a merger agreement.
I look forward to hearing from you.
Sincerely,
/s/ Donald R. Beall
Donald R. Beall
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Exhibit 25
[Draft of 11/16/94]
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November __, 1994
(the "Agreement"), by and between RELIANCE ELECTRIC COMPANY, a Delaware
corporation originally formed under the name Reliance Acquisition Corporation
("Reliance"), ROK ACQUISITION CORPORATION, a Delaware corporation (the
"Purchaser"), and ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation
("Rockwell"). Reliance and the Purchaser (or such other direct or indirect
subsidiary of Rockwell which is merged with and into Reliance) are hereinafter
sometimes collectively referred to as the "Constituent Corporations."
RECITALS
WHEREAS, the Boards of Directors of Rockwell, the Purchaser
and Reliance have each approved the acquisition of Reliance by Rockwell upon
the terms and subject to the conditions set forth herein;
WHEREAS, on October 21, 1994, the Purchaser commenced an offer
to purchase (the "Initial Offer"): (i) all outstanding shares of Class A Common
Stock, par value $.01 per share (the "Class A Shares"), of Reliance and the
associated Series A preferred stock purchase rights (the "Class A Rights")
issued pursuant to the Rights Agreement dated as of August 29, 1994 between
Reliance and Society National Bank, as Rights Agent (as the same may be
amended, the "Rights Agreement"), at a purchase price of $30 per Class A Share
(and associated Class A Right), (ii) all outstanding shares of Class B Common
Stock, par value $.01 per share (the "Class B Shares"), of Reliance and the
associated Series B preferred stock purchase rights (the "Class B Rights")
issued pursuant to the Rights Agreement at a purchase price of $30 per Class B
Share (and associated Class B Right), and (iii) all outstanding shares of Class
C Common Stock, par value $.01 per share (the "Class C Shares" and, together
with the Class A Shares and the Class B Shares, the "Shares"), of Reliance and
the associated Series C preferred stock purchase rights (the "Class C Rights"
and, together with the Class A Rights and the Class B Rights, the "Rights")
issued pursuant to the Rights Agreement at a purchase price of $81.24 per Class
C Share (and associated Class C Right), subject to certain conditions;
WHEREAS, the Boards of Directors of Rockwell, the Purchaser
and Reliance have each determined that it is in the best interests of their
respective stockholders for the Purchaser to acquire Reliance pursuant to the
Initial Offer, as amended pursuant to the terms of this Agreement (the "Amended
Offer");
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WHEREAS, in furtherance of such acquisition, the Boards of
Directors of Rockwell, the Purchaser and Reliance have each approved the merger
of the Purchaser with and into Reliance in accordance with the terms of this
Agreement and the General Corporation Law of the State of Delaware (the "DGCL")
and with any other applicable law; and
WHEREAS, the Board of Directors of Reliance (the "Board") has,
in light of and subject to the terms and conditions set forth herein, (i)
determined that the consideration to be paid for each Share in the Amended
Offer and the Merger (as hereinafter defined) is fair to, and in the best
interests of, the stockholders of Reliance and (ii) resolved to approve and
adopt this Agreement and the transactions contemplated hereby and to recommend
acceptance of the Amended Offer and approval and adoption by the stockholders
of Reliance of this Agreement and the Merger.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants, agreements and conditions
contained herein, the parties hereto agree as follows:
ARTICLE I
THE AMENDED OFFER
Section 1.01. THE AMENDED OFFER. (a) Rockwell and the
Purchaser have filed with the Securities and Exchange Commission (the "SEC") a
Tender Offer Statement on Schedule 14D-1 with respect to the Initial Offer
which contains (included as an exhibit) the Purchaser's Offer to Purchase dated
October 21, 1994 (the "Offer to Purchase") and forms of the related letters of
transmittal (collectively, the "Offer Documents"). As promptly as practicable,
Rockwell and the Purchaser shall file with the SEC an amendment to the Offer
Documents (as so amended and as the same may be further amended or
supplemented, the "Amended Offer Documents"). The Amended Offer Documents
shall contain a supplement to the Offer to Purchase, which shall be mailed to
the holders of Shares and which shall describe this Agreement and the
negotiations preceding this Agreement and shall amend Section 14 of the Offer
to Purchase to change the conditions set forth therein to those set forth in
Annex I hereto and no others; it being understood that, except for the
foregoing amendments or as otherwise provided herein, the Amended Offer shall
be on the same terms and subject to the same conditions as the Initial Offer.
Without the prior written consent of Reliance, the Purchaser shall not
decrease the price per Share or change the form of consideration payable in the
Amended Offer, decrease
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the number of Shares sought, waive the Minimum Condition (as defined in Annex
I), impose additional conditions to the Amended Offer or amend any other term
of the Amended Offer in any manner adverse to the holders of Shares. Upon the
terms and subject to the conditions of the Amended Offer, the Purchaser will
accept for payment and purchase, as soon as permitted under the terms of the
Amended Offer, all Shares validly tendered and not withdrawn prior to the
expiration of the Amended Offer. Reliance agrees that no Shares held by
Reliance or any of its wholly-owned subsidiaries will be tendered pursuant to
the Amended Offer.
(b) Each of Rockwell and the Purchaser, on the one hand,
and Reliance, on the other hand, agrees promptly to correct any information
provided by it for use in the Amended Offer Documents if and to the extent that
it shall have become false or misleading in any material respect, and Rockwell
and the Purchaser further agree to take all steps necessary to cause the
Amended Offer Documents as so corrected to be filed with the SEC and to be
disseminated to stockholders of Reliance, in each case as and to the extent
required by applicable federal securities laws.
Section 1.02. RELIANCE ACTIONS.
(a) Reliance hereby approves of and consents to the
Amended Offer and represents that (i) the Board, by vote of all directors at a
meeting duly called and held, has, in light of and subject to the terms and
conditions set forth herein, unanimously (x) determined that each of the
Amended Offer and the Merger is fair to, and in the best interests of, the
stockholders of Reliance and (y) approved and adopted this Agreement and the
transactions contemplated hereby, including the Amended Offer and the Merger,
and resolved to recommend acceptance of the Amended Offer and approval and
adoption of this Agreement and the Merger and the other transactions
contemplated hereby by the stockholders of Reliance and (ii) Goldman, Sachs &
Co. and Prudential Securities Incorporated, Reliance's financial advisors, have
rendered to the Board their opinions that the consideration to be received by
the stockholders of Reliance pursuant to the Amended Offer and the Merger is
fair to such stockholders from a financial point of view.
(b) Reliance hereby agrees promptly to prepare and, after
review by the Purchaser, to file with the SEC and to mail to its stockholders,
an amendment to Reliance's Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Amended Offer (together with any amendments or
supplements thereto, the "Amended Schedule 14D-9") containing the
recommendation described in Section 1.02(a) hereof and to
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disseminate the Amended Schedule 14D-9 as required by Rule 14d-9 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Each of Reliance, on the one hand, and Rockwell and the Purchaser, on the other
hand, agree promptly to correct any information provided by either of them for
use in the Amended Schedule 14D-9 if and to the extent that it shall have
become false or misleading in any material respect, and Reliance further agrees
to take all steps necessary to cause the Amended Schedule 14D-9 as so corrected
to be filed with the SEC and to be disseminated to the stockholders of
Reliance, in each case as and to the extent required by applicable federal
securities laws; PROVIDED, HOWEVER, that, subject to the provisions of Article
IX, such recommendation may be withdrawn, modified or amended to the extent
that the Board deems it necessary to do so in the exercise of its fiduciary and
other legal obligations after being so advised in writing by outside counsel.
(c) In connection with the Amended Offer, Reliance will
furnish the Purchaser with such information and assistance as the Purchaser or
its agents or representatives may reasonably request in connection with the
preparation of the Amended Offer and communicating the Amended Offer to the
record and beneficial holders of the Shares.
Section 1.03. DIRECTORS. (a) Subject to compliance with
applicable law, promptly upon the payment by the Purchaser for Shares purchased
pursuant to the Amended Offer, and from time to time thereafter, Rockwell shall
be entitled to designate such number of directors, rounded up to the next whole
number, on the Board as is equal to the product of the total number of
directors on the Board (determined after giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Class A Equivalent Shares (as hereinafter defined) beneficially owned
by Rockwell or its affiliates bears to the total number of Class A Equivalent
Shares then outstanding, and Reliance shall, upon request of Rockwell, promptly
take all actions necessary to cause Rockwell's designees to be so elected,
including accepting the resignations of those incumbent directors designated by
Rockwell or increasing the size of the Board. For purposes of this Agreement,
"Class A Equivalent Shares" shall mean Class A Shares, Class B Shares and Class
C Shares, where each Class A Share and Class B Share shall be deemed to equal
one Class A Equivalent Share and each Class C Share shall be deemed to equal
2.708 Class A Equivalent Shares.
(b) Reliance's obligations to appoint Rockwell's
designees to the Board shall be subject to Section 14(f) of the Exchange Act
and Rule 14f-1 thereunder, if applicable. Reliance shall promptly take all
actions required pursuant to
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such Section and Rule in order to fulfill its obligations under this Section
1.03 and shall include in the Amended Schedule 14D-9 such information with
respect to Reliance and its officers and directors as is required under such
Section and Rule in order to fulfill its obligations under this Section 1.03.
Rockwell will supply any information with respect to itself and its officers,
directors and affiliates required by such Section and Rule to Reliance.
(c) Following the election or appointment of Rockwell's
designees pursuant to this Section 1.03 and prior to the Effective Time (as
hereinafter defined), any amendment or termination of this Agreement by
Reliance, any extension by Reliance of the time for the performance of any of
the obligations or other acts of Rockwell or the Purchaser or waiver of any of
Reliance's rights hereunder, will require the concurrence of a majority of the
directors of Reliance then in office who were not designated by Rockwell.
ARTICLE II
THE MERGER
Section 2.01. THE MERGER. (a) In accordance with the
provisions of this Agreement and the DGCL, at the Effective Time, the Purchaser
(or another direct or indirect subsidiary of Rockwell) shall be merged with and
into Reliance (the "Merger"), and Reliance shall be the surviving corporation
(hereinafter sometimes called the "Surviving Corporation") and shall continue
its corporate existence under the laws of the State of Delaware. At the
Effective Time the separate existence of the Purchaser (or such other
subsidiary) shall cease.
(b) The name of the Surviving Corporation shall be
"Reliance Electric Company."
(c) The Merger shall have the effects on Reliance and the
Purchaser (or such other subsidiary) as Constituent Corporations of the Merger
as provided under the DGCL.
Section 2.02. EFFECTIVE TIME. The Merger shall become
effective at the time of filing of, or at such later time specified in, a
certificate of merger (the "Certificate of Merger") (or, if applicable, a
certificate of ownership and merger), in the form required by and executed in
accordance with the DGCL, filed with the Secretary of State of the State of
Delaware (the "Delaware Secretary of State") in accordance with the provisions
of Section 251 of the DGCL (or in the event Section 3.04 hereof is applicable,
Section 253 of the DGCL).
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The date and time when the Merger shall become effective is herein referred to
as the "Effective Time."
Section 2.03. CERTIFICATE OF INCORPORATION AND BY-LAWS OF
SURVIVING CORPORATION. The Certificate of Incorporation and By-Laws of the
Purchaser (or such other subsidiary of Rockwell which is merged with and into
Reliance) shall be the Certificate of Incorporation and By-Laws of the
Surviving Corporation until thereafter amended as provided by law.
Section 2.04. DIRECTORS AND OFFICERS OF SURVIVING
CORPORATION. (a) Subject to applicable law, the directors of the Purchaser
(or such other subsidiary of Rockwell which is merged with and into Reliance)
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation and shall hold office until their respective successors
are duly elected and qualified, or their earlier death, resignation or removal.
(b) The officers of Reliance immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation and
shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
Section 2.05. 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 the Constituent Corporations
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 the Constituent Corporations or
otherwise, all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of each of the Constituent Corporations
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 this Agreement.
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ARTICLE III
CONVERSION OF SHARES
Section 3.01. EFFECT ON RELIANCE SHARES AND THE PURCHASER'S
CAPITAL STOCK. (a) As of the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, each Share issued and
outstanding immediately prior to the Effective Time (other than any Shares held
by Rockwell, the Purchaser, any subsidiary of Rockwell or the Purchaser, in the
treasury of Reliance or by any subsidiary of Reliance, which Shares, by virtue
of the Merger and without any action on the part of the holder thereof, shall
be cancelled and retired and shall cease to exist with no payment being made
with respect thereto, and other than any Dissenting Shares (as hereinafter
defined)) shall be converted into the right to receive $30 in cash, in the case
of Class A Shares and Class B Shares (the "Class A Merger Price"), and $81.24
in cash, in the case of Class C Shares (the "Class C Merger Price"), payable to
the holder thereof, without interest thereon, upon surrender of the certificate
formerly representing such Share.
(b) As of the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, each share of capital
stock of the Purchaser (or such other subsidiary of Rockwell which is merged
with and into Reliance) 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 $1.00 per share, of the
Surviving Corporation.
Section 3.02. RELIANCE OPTION PLANS. (a) Reliance shall
take all actions necessary to provide that, immediately prior to the Effective
Time, (i) each outstanding option to purchase Class A Shares (the "Options")
granted under either Reliance's 1990 Key Employee Stock Option Plan or
Reliance's 1994 Outside Directors Stock Option Plan (collectively, the "Option
Plans"), whether or not then exercisable or vested, shall become fully
exercisable and vested, (ii) each Option which is then outstanding shall be
cancelled and (iii) in consideration of such cancellation, and except to the
extent that Rockwell or the Purchaser and the holder of any such Option
otherwise agree, Reliance (or, at Rockwell's option, Rockwell or the Purchaser)
shall pay to such holders of Options an amount in respect thereof equal to the
product of (A) the excess, if any, of the Class A Merger Price over the
exercise price thereof and (B) the number of Class A Shares subject thereto
(such payment to be net of withholding taxes); PROVIDED that the foregoing (x)
shall be subject to obtaining any necessary consents of holders of Options and
the making of any necessary amendments to the Option Plans, it being agreed
that
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Reliance will use its best efforts to obtain any such consents and make any
such amendments, and (y) shall not require any action which violates the Option
Plans; PROVIDED, FURTHER, that if it is determined that compliance with any of
the foregoing would cause any individual subject to Section 16 of the Exchange
Act to become subject to the profit recovery provisions thereof, any Options
held by such individual will be cancelled or purchased, as the case may be, as
promptly as possible so as not to subject such individual to any liability
pursuant to Section 16, but no later than at the Effective Time, and such
individual will be entitled to receive from Reliance or the Surviving
Corporation at the Effective Time or as soon as practicable thereafter (or, if
later, the date six months and one day following the grant of such option), for
each Share subject to an Option, an amount equal to the excess, if any, of the
Class A Merger Price over the per Class A Share exercise price of such Option.
(b) Except as provided herein or as otherwise agreed to
by the parties and to the extent permitted by the Option Plans, (i) the Option
Plans shall terminate as of the Effective Time and the provisions in any other
plan, program or arrangement, providing for the issuance or grant of any other
interest in respect of the capital stock of Reliance or any of its subsidiaries
shall be deleted as of the Effective Time and (ii) Reliance shall use all
reasonable efforts to ensure that following the Effective Time no holder of
Options or any participant in the Option Plans or any other plans, programs or
arrangements shall have any right thereunder to acquire any equity securities
of Reliance, the Surviving Corporation or any subsidiary thereof.
Section 3.03. STOCKHOLDERS' MEETING. (a) If required by
applicable law in order to consummate the Merger, Reliance, acting through the
Board, shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as soon as
practicable following the purchase of and payment for Shares by the
Purchaser pursuant to the Amended Offer for the purpose of considering
and taking action upon the Merger and this Agreement;
(ii) prepare and file with the SEC a preliminary proxy
statement relating to the Merger and this Agreement and use its
reasonable best efforts (x) to obtain and furnish the information
required to be included by the SEC in the Proxy Statement (as
hereinafter defined) and, after consultation with Rockwell, to respond
promptly to any comments made by the SEC with respect to the
preliminary
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proxy statement and to cause a definitive proxy statement (the
"Proxy Statement") to be mailed to its stockholders and (y) to obtain
the necessary approvals of the Merger and this Agreement by its
stockholders; and
(iii) subject to the fiduciary obligations of the Board
under applicable law as advised by outside counsel, include in the
Proxy Statement the recommendation of the Board that stockholders of
Reliance vote in favor of the approval of the Merger and the adoption
of this Agreement.
(b) Rockwell agrees that it will vote, or cause to be
voted, all of the Shares then owned by it, the Purchaser or any of its other
subsidiaries in favor of the approval of the Merger and the adoption of this
Agreement.
Section 3.04. MERGER WITHOUT MEETING OF STOCKHOLDERS.
Notwithstanding Section 3.03 hereof, in the event that Rockwell, the Purchaser
or any other subsidiary of Rockwell shall acquire at least 90% of the
outstanding Class A Shares, 90% of the outstanding Class B Shares and 90% of
the outstanding Class C Shares pursuant to the Amended Offer or otherwise, the
parties hereto agree, at the request of Rockwell or the Purchaser, to take all
necessary and appropriate action (including, without limitation, conversion of
any Class B Shares and Class C Shares into Class A Shares) to cause the Merger
to become effective as soon as practicable after the acceptance for payment and
purchase of Shares by the Purchaser pursuant to the Amended Offer without a
meeting of stockholders of Reliance in accordance with Section 253 of the DGCL.
Section 3.05. CONSUMMATION OF THE MERGER. As soon as
practicable after the satisfaction or waiver of the conditions set forth in
Article VIII hereof, the Surviving Corporation shall execute in the manner
required by the DGCL and file with the Delaware Secretary of State the
Certificate of Merger (or, in the event Section 3.04 hereof is applicable, the
Purchaser shall execute in the manner required by the DGCL and file with the
Delaware Secretary of State a certificate of ownership and merger), and the
parties shall take such other and further actions as may be required by law to
make the Merger effective.
ARTICLE IV
DISSENTING SHARES; PAYMENT FOR SHARES
Section 4.01. DISSENTING SHARES. Notwithstanding anything in
this Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by a holder
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who has not voted in favor of the Merger or consented thereto in writing and
who has demanded appraisal for such Shares in accordance with Section 262 of
the DGCL, if such Section 262 provides for appraisal rights for such Shares in
the Merger ("Dissenting Shares"), shall not be converted into the right to
receive the Class A Merger Price or Class C Merger Price, as provided in
Section 3.01 hereof, unless and until such holder fails to perfect or withdraws
or otherwise loses his right to appraisal and payment under the DGCL. If,
after the Effective Time, any such holder fails to perfect or withdraws or
loses his right to appraisal, such Dissenting Shares shall thereupon be treated
as if they had been converted as of the Effective Time into the right to
receive the Class A Merger Price or Class C Merger Price, if any, to which such
holder is entitled, without interest or dividends thereon. Reliance shall give
Rockwell prompt notice of any demands received by Reliance for appraisal of
Shares and Rockwell shall have the right to participate in all negotiations and
proceedings with respect to such demands. Reliance shall not, except with the
prior written consent of Rockwell, make any payment with respect to, or settle
or offer to settle, any such demands.
Section 4.02. PAYMENT FOR SHARES. (a) From and after the
Effective Time, a bank or trust company to be designated by Rockwell shall act
as paying agent (the "Paying Agent") in effecting the payment of the Class A
Merger Price or Class C Merger Price for certificates (the "Certificates")
formerly representing Shares and entitled to payment of the Class A Merger
Price or Class C Merger Price pursuant to Section 3.01 hereof. At the
Effective Time, Rockwell or the Purchaser shall deposit, or cause to be
deposited, in trust with the Paying Agent the aggregate Class A Merger Price
and Class C Merger Price to which holders of Shares shall be entitled at the
Effective Time pursuant to Section 3.01 hereof.
(b) Promptly after the Effective Time, the Paying Agent
shall mail to each record holder of Certificates that immediately prior to the
Effective Time represented Shares (other than Certificates representing Shares
held by Rockwell or the Purchaser, any subsidiary of Rockwell or the Purchaser,
in the treasury of Reliance or by any subsidiary of Reliance) a form of letter
of transmittal which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent and instructions for use in surrendering such
Certificates and receiving the Class A Merger Price or Class C Merger Price, as
the case may be, therefor. Upon the surrender of each such Certificate, the
Paying Agent shall pay the holder of such Certificate the Class A Merger Price
or Class C Merger Price, as the case may be, multiplied by the number of Class
A Shares, Class B Shares or Class C
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Shares, as appropriate, formerly represented by such Certificate, in
consideration therefor, and such Certificate shall forthwith be cancelled.
Until so surrendered, each such Certificate (other than Certificates
representing Dissenting Shares and Certificates representing Shares held by
Rockwell or the Purchaser, any subsidiary of Rockwell or the Purchaser, in the
treasury of Reliance or by any subsidiary of Reliance) shall represent solely
the right to receive the aggregate Class A Merger Price or Class C Merger
Price, as the case may be, relating thereto. No interest shall be paid or
accrued on the Class A Merger Price or Class C Merger Price.
(c) Promptly following the date which is one year after
the Effective Time, the Paying Agent shall deliver to Rockwell all cash,
Certificates and other documents in its possession relating to the transactions
described in this Agreement, and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate formerly representing a Share (other
than Certificates representing Dissenting Shares and Certificates representing
Shares held by Rockwell or the Purchaser, any subsidiary of Rockwell or the
Purchaser, in the treasury of Reliance or by any subsidiary of Reliance) may
surrender such Certificate to Rockwell and (subject to applicable abandoned
property, escheat and similar laws) receive in consideration therefor the
aggregate Class A Merger Price or Class C Merger Price, as the case may be,
relating thereto, without any interest or dividends thereon.
(d) The Class A Merger Price or the Class C Merger Price,
if applicable, shall be net to each holder of Certificates in cash, subject to
reduction only for any applicable federal back-up withholding or stock transfer
taxes payable by such holder.
(e) If payment of cash in respect of any Certificate is
to be made to a person other than the person in whose name such Certificate is
registered, it shall be a condition to such payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of such payment in a name other
than that of the registered holder of the Certificate surrendered or shall have
established to the satisfaction of Rockwell or the Paying Agent that such tax
either has been paid or is not payable.
(f) After the Effective Time, there shall be no transfers
on the stock transfer books of the Surviving Corporation of any Shares which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates formerly representing Shares (other than
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Certificates representing Shares held by Rockwell or the Purchaser, any
subsidiary of Rockwell or the Purchaser, in the treasury of Reliance or by any
subsidiary of Reliance) are presented to the Surviving Corporation or the
Paying Agent, they shall be surrendered and cancelled in return for the payment
of the aggregate Class A Merger Price or Class C Merger Price, as the case may
be, relating thereto, as provided in this Article IV, subject to applicable law
in the case of Dissenting Shares.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF RELIANCE
Reliance represents and warrants to Rockwell and the Purchaser
as follows:
Section 5.01. ORGANIZATION. Reliance and each of its
Significant Subsidiaries (as defined below) is a corporation duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation and Reliance and each of its Significant
Subsidiaries has all requisite corporate power and authority to own, lease and
operate their respective properties and to carry on their respective businesses
as now being conducted. Reliance and each of its subsidiaries is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing would not, individually or in the aggregate, have a material adverse
effect on the business, operations, assets, financial condition or results of
operations of Reliance and its subsidiaries taken as a whole (a "Reliance
Material Adverse Effect"). Reliance owns directly all of the outstanding
capital stock of each of its Significant Subsidiaries. As used in this
Agreement a "Significant Subsidiary" means a corporation which is a
"significant subsidiary" within the meaning of Rule 1-02(v) of Regulation S-X.
Section 5.02. CAPITALIZATION. The authorized capital stock
of Reliance consists of 100,000,000 Class A Shares, 100,000,000 Class B Shares,
12,000,000 Class C Shares and 15,000,000 shares of preferred stock, par value
$.10 per share ("Reliance Preferred Stock"). As of the date hereof, there are
[32,909,939] Class A Shares, [3,161,032] Class B Shares, [5,250,000] Class C
Shares and no shares of Reliance Preferred Stock issued and outstanding, and
there are no Shares or shares of Reliance Preferred Stock held in Reliance's
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treasury. All of the outstanding Class A Shares are convertible into Class B
Shares and vice versa on a share for share basis. Each Class C Share is
convertible into 2.708 Class A Shares under certain circumstances as set forth
in Reliance's certificate of incorporation. As of the date hereof, there were
outstanding options to purchase [ ] Class A Shares under the Option Plans
and [ ] Class A Shares may be issued upon achievement of certain
performance goals under Reliance's 1994 Executive Long-Term Incentive Plan.
Except for the conversion rights of holders of Shares with respect to
conversion of such Shares into other classes of Shares pursuant to the
certificate of incorporation of Reliance, the rights granted pursuant to the
Rights Agreement (which agreement has been amended as described in Section 5.09
hereof), and options and rights to receive Class A Shares under the Option
Plans (which shall be cancelled pursuant to Section 3.02(a) hereof), there are
not now, and at the Effective Time there will not be, any existing options,
warrants, calls, subscriptions, or other rights or other agreements or
commitments obligating Reliance or any of its subsidiaries to issue, transfer
or sell any shares of capital stock of Reliance or any of its subsidiaries or
any other securities convertible into or evidencing the right to subscribe for
any such shares. All issued and outstanding Shares are duly authorized and
validly issued, fully paid, non-assessable and free of preemptive rights with
respect thereto.
Section 5.03. AUTHORITY. Reliance has full corporate power
and authority to execute and deliver this Agreement and, subject to the
approval of its stockholders, if required, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized and approved by the Board, and other than the approval by its
stockholders, if required, no other corporate proceedings are necessary to
authorize this Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Reliance and, assuming this Agreement constitutes a legal, valid and binding
agreement of the other parties hereto, it constitutes a legal, valid and
binding agreement of Reliance, enforceable against it in accordance with its
terms.
Section 5.04. NO VIOLATIONS; CONSENTS AND APPROVALS. (a)
Neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby nor compliance by Reliance with any of the
provisions hereof will (i) violate any provision of its certificate of
incorporation or by-laws, (ii) 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,
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cancellation or acceleration or any right which becomes effective upon the
occurrence of a merger, consolidation or change in control, under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture or other
instrument of indebtedness for money borrowed to which Reliance or any of its
subsidiaries is a party, or by which Reliance or any of its subsidiaries or any
of their respective properties is bound, other than the Competitive Advance and
Revolving Credit Facility Agreement, dated as of April 21, 1993 among Reliance
and the Lenders named therein and Chemical Bank, as administrative agent, and
any violations, defaults, breaches of or rights under notes, bonds, mortgages,
indentures or other instruments of indebtedness related to indebtedness for
borrowed money amounting in the aggregate to less than $20,000,000, or (iii)
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 or any right which becomes effective upon the
occurrence of a merger, consolidation or change in control, under, any of the
terms, conditions or provisions of any license, franchise, permit or agreement
(other than those covered by the preceding clause (ii)) to which Reliance or
any of its subsidiaries is a party, or by which Reliance or any of its
subsidiaries or any of their respective properties is bound, or (iv) violate
any statute, rule, regulation, order or decree of any public body or authority
by which Reliance or any of its subsidiaries or any of their respective
properties is bound, excluding from the foregoing clauses (iii) and (iv)
violations, breaches, defaults or rights which, either individually or in the
aggregate, would not have a Reliance Material Adverse Effect or materially
impair Reliance's ability to consummate the transactions contemplated hereby or
for which Reliance has received or, prior to the consummation of the Amended
Offer, shall have received appropriate consents or waivers.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any governmental entity is required in
connection with the execution and delivery of this Agreement by Reliance, or
the consummation by Reliance of the transactions contemplated hereby, except
(i) expiration of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), which waiting period has
expired, (ii) in connection, or in compliance, with the provisions of the
Exchange Act, (iii) the filing of the Certificate of Merger with the Delaware
Secretary of State, (iv) such filings and consents as may be required under any
environmental law pertaining to any notification, disclosure or required
approval triggered by the Merger or the transactions contemplated by this
Agreement, (v) filing with, and approval of, the New York Stock Exchange,
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Inc. and the SEC with respect to the delisting and deregistration of the Class
A Shares, (vi) such consents, approvals, orders, authorizations, notifications,
registrations, declarations and filings as may be required under the
corporation, takeover or blue sky laws of various states and (vii) such other
consents, approvals, orders, authorizations, notifications, registrations,
declarations and filings not obtained prior to the consummation of the Amended
Offer the failure of which to be obtained or made would not, individually or in
the aggregate, have a Reliance Material Adverse Effect, or materially impair
Reliance's ability to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.
Section 5.05. SEC DOCUMENTS; FINANCIAL STATEMENTS. (a)
Reliance has made available to Rockwell and the Purchaser copies of each
registration statement, report, proxy statement or information statement filed
with the SEC by Reliance since January 1, 1992 (the "SEC Documents"). As of
their respective dates, Reliance's SEC Documents complied in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended, and the Exchange Act, as the case may be, none of such SEC Documents
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, and the Board consists of the directors identified in Reliance's
1994 proxy statement.
(b) Neither Reliance nor any of its subsidiaries, nor any
of their respective assets, businesses, or operations, is as of the date of
this Agreement a party to, or is bound or affected by, or receives benefits
under any contract or agreement or amendment thereto, that in each case would
be required to be filed as an exhibit to a Form 10-K as of the date of this
Agreement that has not been filed as an exhibit to an SEC Document filed prior
to the date of this Agreement.
(c) As of their respective dates, the consolidated
financial statements included in Reliance's SEC Documents complied as to form
in all material respects with then applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto) and fairly presented Reliance's consolidated
financial position and that of its consolidated subsidiaries as at the dates
thereof and the consolidated results of their operations and statements of cash
flows for the periods then ended (subject, in the case of unaudited statements,
to the lack of footnotes
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thereto, to normal year-end audit adjustments and to any other adjustments
described therein).
Section 5.06. ABSENCE OF CERTAIN CHANGES. Since September
30, 1994 to the date of this Agreement, Reliance has not (a) suffered any event
or occurrence which, individually or in the aggregate, would have a Reliance
Material Adverse Effect or (b) made any changes in accounting methods,
principles or practices or (c) declared, set aside or paid any dividend or
other distribution with respect to its capital stock. Since September 30, 1994
to the date of this Agreement, each of Reliance and its subsidiaries has
conducted its operations according to its ordinary course of business
consistent with past practice.
Section 5.07. RIGHTS AGREEMENT. The Rights Agreement has
been amended to provide that (i) neither Rockwell nor the Purchaser will become
an "Acquiring Person," that no "Trigger Event," "Shares Acquisition Date" or
"Distribution Date" (as such terms are defined in the Rights Agreement) will
occur and that Section 13 of the Rights Agreement will not be triggered, in
each case as a result of the announcement, commencement or consummation of the
Initial Offer or the Amended Offer, the execution or delivery of this Agreement
or any amendment hereto or the consummation of the transactions contemplated
hereby (including, without limitation, the Merger), with the effect that none
of such events will trigger the exercisability of the Rights, the separation of
the Rights from the stock certificates to which they attached or any other
provision of the Rights Agreement and (ii) the Rights will no longer be
outstanding upon the consummation of the Merger. Reliance has heretofore
furnished to Rockwell and the Purchaser a complete and correct copy of the
Rights Agreement, as so amended.
Section 5.08. INFORMATION. None of the Amended Schedule
14D-9, the Proxy Statement, if any, or any other document filed or to be filed
by or on behalf of Reliance with the SEC or any other governmental entity in
connection with the transactions contemplated by this Agreement contained when
filed or will, at the respective times filed with the SEC or other governmental
entity and, in addition, in the case of the Proxy Statement, if any, at the
date it or any amendment or supplement is mailed to stockholders and at the
time of any Special Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading; provided that the foregoing shall not
apply to information supplied by Rockwell or the Purchaser specifically for
inclusion or incorporation by reference in any
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such document. The Amended Schedule 14D-9 and the Proxy Statement, if any,
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder. None of the information
supplied by Reliance specifically for inclusion or incorporation by reference
in the Amended Offer Documents or in any other document filed or to be filed by
or on behalf of Rockwell or the Purchaser with the SEC or any other
governmental entity in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under which they
were made, not misleading.
Section 5.09. DELAWARE SECTION 203. The Board has taken all
appropriate and necessary action such that the provisions of Section 203 of the
DGCL will not apply to any of the transactions contemplated by this Agreement.
Section 5.10. BROKER'S FEES. Except for fees and expenses
not to exceed $[______] in the aggregate payable in connection with the
engagement of Goldman, Sachs & Co. and Prudential Securities Incorporated by
Reliance, neither Reliance nor any of its subsidiaries or any of its directors
or officers has incurred any liability for any broker's fees, commissions, or
financial advisory or finder's fees in connection with any of the transactions
contemplated by this Agreement, and neither Reliance nor any of its
subsidiaries or any of its directors or officers has employed any other broker,
finder or financial advisor in connection with any of the transactions
contemplated by this Agreement.
Section 5.11. TERMINATION OF GENERAL SIGNAL AGREEMENT. (a)
The Agreement and Plan of Merger, dated as of August 30, 1994, by and between
General Signal Corporation, a New York corporation ("General Signal"), and
Reliance (the "General Signal Agreement") has been terminated in accordance
with its terms, and Reliance has paid, or will pay, to General Signal the
break-up fee and expense reimbursement required by Section 9.05(b) thereof.
The aggregate amount of all fees and expenses paid or payable by Reliance to
General Signal as a result of such termination shall not exceed $52,500,000.
Reliance has not paid General Signal and is not required under the General
Signal Agreement (or under any other agreement or understanding between General
Signal and Reliance or otherwise) to pay to General Signal any amounts beyond
those specified in the immediately preceding sentence.
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(b) Rockwell and the Purchaser acknowledge and consent to
payment to General Signal of the amount set forth in paragraph (a) of this
Section 5.11.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF ROCKWELL AND THE PURCHASER
Rockwell and the Purchaser represent and warrant to Reliance
as follows:
Section 6.01. ORGANIZATION. Each of Rockwell and the
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and each of Rockwell and the Purchaser has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
Section 6.02. AUTHORITY. Each of Rockwell and the Purchaser
has full corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized and approved by the
Board of Directors of each of Rockwell and the Purchaser and by Rockwell as the
sole stockholder of the Purchaser and no other corporate proceedings are
necessary to authorize this Agreement or the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by each of Rockwell and the Purchaser and, assuming this Agreement
constitutes a legal, valid and binding agreement of Reliance, it constitutes a
legal, valid and binding agreement of each of Rockwell and the Purchaser,
enforceable against them in accordance with its terms.
Section 6.03. NO VIOLATIONS; CONSENTS AND APPROVALS. (a)
Neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby nor compliance by Rockwell or the
Purchaser with any of the provisions hereof will (i) violate any provision of
their respective certificates of incorporation or by-laws, (ii) 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 or any right which becomes effective upon the occurrence of a
merger, under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture or other instrument of indebtedness for money borrowed to
which Rockwell or the Purchaser is a party, or by which Rockwell or the
Purchaser or any of their respective properties is bound, (iii) result in a
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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 or any right which becomes effective upon the occurrence of a
merger, under, any of the terms, conditions or provisions of any license,
franchise, permit or agreement to which Rockwell or the Purchaser is a party,
or by which Rockwell or the Purchaser or any of their respective properties is
bound, or (iv) violate any statute, rule, regulation, order or decree of any
public body or authority by which Rockwell or the Purchaser or any of its
respective properties is bound, excluding from the foregoing clauses (ii),
(iii) and (iv) violations, breaches, defaults or rights which, either
individually or in the aggregate, would not have a material adverse effect on
Rockwell's ability to consummate the Amended Offer and the Merger (a "Rockwell
Material Adverse Effect") or for which Rockwell has received or, prior to the
Merger, shall have received appropriate consents or waivers.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any governmental entity is required by
Rockwell or the Purchaser in connection with the execution and delivery of this
Agreement, or the consummation by Rockwell or the Purchaser of the transactions
contemplated hereby, except (i) expiration of the waiting period under the HSR
Act, which waiting period has expired, (ii) in connection, or in compliance,
with the provisions of the Exchange Act, (iii) the filing of the Certificate of
Merger with the Delaware Secretary of State, (iv) such filings and consents as
may be required under any environmental law pertaining to any notification,
disclosure or required approval triggered by the Merger or the transactions
contemplated by this Agreement, (v) such consents, approvals, orders,
authorizations, notifications, approvals, registrations, declarations and
filings as may be required under the corporation, takeover or blue sky laws of
various states and (vi) such other consents, orders, authorizations,
registrations, declarations and filings not obtained prior to the Effective
Time the failure of which to be obtained or made would not, individually or in
the aggregate, have a Rockwell Material Adverse Effect.
Section 6.04. INFORMATION. Neither the Amended Offer
Documents nor any other document filed or to be filed by or on behalf of
Rockwell or the Purchaser with the SEC or any other governmental entity in
connection with the transactions contemplated by this Agreement contained when
filed or will, at the respective times filed with the SEC or other governmental
entity, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in
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light of the circumstances under which they were made, not misleading;
provided that the foregoing shall not apply to information supplied by Reliance
specifically for inclusion or incorporation by reference in any such document.
None of the information supplied by Rockwell or the Purchaser specifically for
inclusion or incorporation by reference in the Amended Schedule 14D-9, the
Proxy Statement, if any, or any other document filed or to be filed by or on
behalf of Reliance with the SEC or any other governmental entity in connection
with the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
Section 6.05. FINANCING. Rockwell or the Purchaser has or
will have at the time of acceptance for payment and purchase of Shares under
the Amended Offer and at the Effective Time, the funds necessary to consummate
the Amended Offer and the Merger and the transactions contemplated thereby and
to pay related fees and expenses.
ARTICLE VII
COVENANTS
Section 7.01. CONDUCT OF BUSINESS OF RELIANCE. Except as
contemplated by this Agreement or as expressly agreed to in writing by
Rockwell, during the period from the date of this Agreement to the Effective
Time, each of Reliance and its subsidiaries will conduct its operations
according to its ordinary course of business consistent with past practice, and
will use all commercially reasonable efforts to preserve intact its business
organization, to keep available the services of its employees and to maintain
satisfactory relationships with suppliers, distributors, customers and others
having business relationships with it and will take no action which would
materially adversely affect the ability of the parties to consummate the
transactions contemplated by this Agreement.
Section 7.02. ACQUISITIONS AND DIVESTITURES. Prior to the
Effective Time, Reliance shall keep Rockwell advised of the status of all
discussions and negotiations concerning possible acquisitions and divestitures
of any corporations or businesses, and Reliance agrees that without the prior
written consent of Rockwell it shall not make, or agree to make, any such
acquisition or divestiture.
Section 7.03. NO SOLICITATION. (a) Reliance agrees that,
prior to the Effective Time, it shall not, and shall not authorize or permit
any of its subsidiaries or any of its or
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its subsidiaries' directors, officers, employees, agents or representatives to,
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 Reliance or its subsidiaries or acquisition of
any kind of all or substantially all of the assets or capital stock of Reliance
and its subsidiaries taken as a whole (an "Acquisition Transaction") or
negotiate, explore or otherwise communicate in any way with any third party
(other than Rockwell or the Purchaser) with respect to any Acquisition
Transaction or enter into any agreement, arrangement or understanding requiring
it to abandon, terminate or fail to consummate the Merger or any other
transactions contemplated by this Agreement; provided that Reliance may, in
response to an unsolicited written proposal with respect to an Acquisition
Transaction from a financially capable third party that contains no financing
condition, (i) furnish or disclose non-public information to such third party
and (ii) negotiate, explore or otherwise communicate with such third party, in
each case only if the Board determines in good faith by a majority vote, after
consultation with its legal and financial advisors, and after receipt of the
written opinion of outside legal counsel of Reliance that failing to take such
action would constitute a breach of the fiduciary duties of the Board, that
taking such action is reasonably likely to lead to an Acquisition Transaction
that is more favorable to the stockholders of Reliance than the Amended Offer
and the Merger and that failing to take such action would constitute a breach
of the Board's fiduciary duties.
(b) Reliance shall immediately advise in writing Rockwell
of the receipt of any inquiries or proposals relating to an Acquisition
Transaction and any actions taken pursuant to Section 7.03(a).
Section 7.04. ACCESS TO INFORMATION. From the date of this
Agreement until the Effective Time, Reliance will give Rockwell and its
authorized representatives (including counsel, environmental and other
consultants, accountants and auditors) full access during normal business hours
to all facilities, personnel and operations and to all books and records of
Reliance and its subsidiaries, will permit Rockwell to make such inspections as
it may reasonably require and will cause its officers and those of its
subsidiaries to furnish Rockwell with such financial and operating data and
other information with respect to its business and properties as Rockwell may
from time to time reasonably request.
Section 7.05. BEST EFFORTS; OTHER ACTIONS. Subject to the
terms and conditions herein provided and applicable law,
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each of Reliance, Rockwell and the Purchaser shall use its best efforts
promptly to take, or cause to be taken, all other actions and do, or cause to
be done, all other things necessary, proper or appropriate under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, (i) the
obtaining of all necessary consents, approvals or waivers under its material
contracts and (ii) the lifting of any legal bar to the Merger.
Section 7.06. PUBLIC ANNOUNCEMENTS. Before issuing any press
release or otherwise making any public statements with respect to this
Agreement, the Amended Offer or the Merger, Rockwell, the Purchaser and
Reliance will consult with each other as to its form and substance and shall
not issue any such press release or make any such public statement prior to
such consultation, except as may be required by law.
Section 7.07. NOTIFICATION OF CERTAIN MATTERS. Each of
Reliance and Rockwell shall give prompt notice to the other party of (i) the
occurrence, or non-occurrence, of any event the occurrence, or non-occurrence,
of which would be likely to cause either (A) any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date hereof to the Effective Time, (B) any condition set
forth in Annex I to be unsatisfied in any material respect at any time from the
date hereof to the date the Purchaser purchases Shares pursuant to the Amended
Offer or (C) any condition set forth in Article VIII hereof to be unsatisfied
in any material respect at any time from the date hereof to the Effective Time,
and (ii) any material failure of Reliance or Rockwell, as the case may be, or
any officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; PROVIDED, HOWEVER, that the delivery of any notice pursuant to this
Section 7.07 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
Section 7.08. INDEMNIFICATION. (a) From and after the
Effective Time, Rockwell shall indemnify, defend and hold harmless the present
and former officers, directors, employees and agents of Reliance and its
subsidiaries against all losses, claims, damages, expenses or liabilities
arising out of actions or omissions or alleged actions or omissions occurring
at or prior to the Effective Time to the same extent and on the same terms and
conditions (including with respect to advancement of expenses) provided for in
Reliance's Certificate of Incorporation and By-Laws and agreements in effect at
the date hereof (to the extent consistent with applicable law).
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(b) For a period of six years after the Effective Time,
Rockwell shall cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by Reliance (provided
that Rockwell may substitute therefor policies of at least the same coverage
and amounts containing terms and conditions which are no less advantageous)
with respect to claims arising from facts or events which occurred before the
Effective Time; provided, however, that Rockwell shall not be obligated to make
annual premium payments for such insurance to the extent such premiums exceed
250% of the premiums paid as of the date hereof by Reliance for such insurance.
(c) The provisions of this Section 7.08 are intended to
be for the benefit of, and shall be enforceable by each indemnified party
hereunder, his or her heirs and his or her representatives.
Section 7.09. EXPENSES. Rockwell and Reliance shall bear
their respective expenses incurred in connection with this Agreement, the
Amended Offer and the Merger, including, without limitation, the preparation,
execution and performance of this Agreement and the transactions contemplated
hereby, and all fees and expenses of investment bankers, finders, brokers,
agents, representatives, counsel and accountants.
Section 7.10. RELIANCE RIGHTS AGREEMENT. Except as
contemplated by Section 5.07 hereof or the last sentence of this Section 7.10,
Reliance shall not redeem the Rights or amend or terminate the Rights Agreement
prior to the consummation of the Merger unless required to do so by order of a
court of competent jurisdiction or fiduciary obligations. Reliance will take
any necessary further actions to cause the Rights not to be outstanding upon
consummation of the Merger. If requested to do so by Rockwell or the
Purchaser, Reliance shall redeem all outstanding Rights at a redemption price
of $0.01 per Right effective immediately prior to the acceptance for payment of
any Shares by the Purchaser pursuant to the Amended Offer.
Section 7.11. STATE TAKEOVER LAWS. Reliance shall, upon the
request of Rockwell or the Purchaser, take all reasonable steps to assist in
any challenge by Rockwell or the Purchaser to the validity or applicability to
the transactions contemplated by this Agreement, including the Initial Offer,
the Amended Offer and the Merger, of any state takeover law.
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ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF ROCKWELL,
THE PURCHASER AND RELIANCE
The respective obligations of each party to effect the Merger
shall be subject to the fulfillment of each of the following conditions:
Section 8.01. PURCHASE OF SHARES. The Purchaser shall have
accepted for payment and paid for Shares pursuant to the Amended Offer in
accordance with the terms thereof; PROVIDED that this condition shall be deemed
to have been satisfied with respect to Rockwell and the Purchaser if the
Purchaser fails to accept for payment or pay for Shares pursuant to the Amended
Offer in violation of the terms of the Amended Offer.
Section 8.02. STOCKHOLDER APPROVAL. The vote of the
stockholders of Reliance necessary to consummate the transactions contemplated
by this Agreement shall have been obtained, if required by applicable law.
Section 8.03. NO LEGAL IMPEDIMENTS. No statute, rule,
regulation, judgment, writ, decree, order or injunction shall have been
promulgated, enacted, entered, enforced or deemed applicable to this Agreement
or the Merger, and no other action shall have been taken, by any domestic,
foreign or supranational government or governmental, administrative or
regulatory authority or agency or by any court or tribunal, domestic, foreign
or supranational, that has the effect of making illegal or directly or
indirectly restraining, prohibiting or restricting the consummation of the
Merger.
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.01. TERMINATION. This Agreement may be terminated
at any time prior to the Effective Time:
(a) by mutual consent of the Boards of Directors of
Rockwell and Reliance;
(b) by either Rockwell or Reliance if, without fault of
such terminating party, the purchase of Shares pursuant to the
Amended Offer shall not have occurred on or before March 31, 1995,
which date may be extended by mutual written consent of the parties
hereto;
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<PAGE> 25
(c) by Rockwell or Reliance if the Amended Offer expires
or is terminated or withdrawn pursuant to its terms without any Shares
being purchased thereunder; PROVIDED, HOWEVER, that Rockwell may not
terminate this Agreement pursuant to this Section 9.01(c) if
Rockwell's or the Purchaser's termination of, or failure to accept for
payment or pay for any Shares tendered pursuant to, the Amended Offer
does not follow the occurrence, or failure to occur, as the case may
be, of any condition set forth in Annex I hereto or is otherwise in
violation of the terms of the Amended Offer; or
(d) by either Rockwell or Reliance if any court of
competent jurisdiction in the United States or other governmental body
in the United States shall have issued an order (other than a
temporary restraining order), decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the purchase of
Shares pursuant to the Amended Offer or the Merger, and such order,
decree, ruling or other action shall have become final and
nonappealable; provided that the party seeking to terminate this
Agreement shall have used all commercially reasonable efforts to
remove or lift such order, decree or ruling.
Section 9.02. TERMINATION BY ROCKWELL. This Agreement may be
terminated and the Amended Offer and the Merger may be abandoned by action of
the Board of Directors of Rockwell, at any time prior to the purchase of Shares
pursuant to the Amended Offer, if the Board shall (a) withdraw, modify or
change its recommendation or approval in respect of this Agreement or the
Amended Offer in a manner adverse to Rockwell, (b) have recommended any
proposal in respect of an Acquisition Transaction, or (c) fail to reaffirm its
recommendation and approval in respect of this Agreement and the Amended Offer
promptly after any request therefor by Rockwell.
Section 9.03. TERMINATION BY RELIANCE. This Agreement may be
terminated and the Merger may be abandoned by action of the Board, at any time
prior to the Effective Time, (a) if there shall be a material breach of any of
Rockwell's or the Purchaser's representations, warranties or covenants
hereunder, which breach shall not be cured within ten days of notice thereof,
or (b) to allow Reliance to enter into an agreement which the Board determines
is more favorable to Reliance's stockholders from a financial point of view
than the transactions contemplated hereby (provided that, upon such
termination, Reliance shall pay to Rockwell the fee described in Section
9.05(b) hereof).
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<PAGE> 26
Section 9.04. PROCEDURE FOR TERMINATION. In the event of
termination and abandonment of the Merger and the Amended Offer by Rockwell or
the Merger by Reliance pursuant to this Article IX, written notice thereof
shall forthwith be given to the other.
Section 9.05. EFFECT OF TERMINATION AND ABANDONMENT. (a) In
the event of termination of this Agreement and abandonment of the Merger
pursuant to this Article IX, no party hereto (or any of its directors or
officers) shall have any liability or further obligation to any other party to
this Agreement, except as provided in this Section 9.05 and except that nothing
herein shall relieve any party from liability for any breach of this Agreement.
(b) If (i) after the date hereof and during the term of
this Agreement any corporation, partnership, person, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act) other than Rockwell or the
Purchaser or any of their respective subsidiaries or affiliates shall have
become the beneficial owner of more than 50% of the outstanding Class A Shares
(either on a primary or a fully diluted basis) or (ii) Rockwell shall have
terminated this Agreement pursuant to Section 9.02 hereof or (iii) Reliance
shall have terminated this Agreement pursuant to Section 9.03(b) hereof, then
Reliance shall promptly, but in no event later than two days after the date of
such termination or event, pay Rockwell a fee of $50,000,000, which amount
shall be payable in same day funds, PROVIDED, that no fee shall be paid
pursuant to this Section 9.05(b) if Rockwell shall be in material breach of its
obligations hereunder.
ARTICLE X
DEFINITIONS
Section 10.01. TERMS DEFINED IN THE AGREEMENT. The following
terms used herein shall have the meanings ascribed in the indicated sections.
<TABLE>
<S> <C>
Acquisition Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Amended Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Amended Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(a)
Amended Schedule 14D-9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02(b)
Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02(a)
Class A Equivalent Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
Class A Merger Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
Class A Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
</TABLE>
26
<PAGE> 27
<TABLE>
<S> <C>
Class A Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Class B Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Class B Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Class C Merger Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
Class C Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Class C Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Constituent Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Delaware Secretary of State . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02(b)
General Signal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11(a)
General Signal Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11(a)
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04(b)
Initial Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
Minimum Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex I
Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(a)
Offer to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(a)
Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02(a)
Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02(a)
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02(a)
person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.09
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(a)(ii)
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Reliance Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . 5.01
Reliance Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Rockwell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Rockwell Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . 6.03(a)
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(a)
SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05(a)
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01
Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(a)(i)
subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.09
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
</TABLE>
ARTICLE XI
MISCELLANEOUS
Section 11.01. AMENDMENT AND MODIFICATION. Subject to
applicable law, this Agreement may be amended, modified or supplemented only by
written agreement of Rockwell, the Purchaser and Reliance at any time prior to
the Effective Time with respect to any of the terms contained herein.
27
<PAGE> 28
Section 11.02. WAIVER OF COMPLIANCE; CONSENTS. Any failure
of Rockwell, the Purchaser or Reliance to comply with any obligation, covenant,
agreement or condition herein may be waived by Reliance, the Purchaser or
Rockwell, respectively, only by a written instrument signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
11.02.
Section 11.03. SURVIVABILITY; INVESTIGATIONS. The respective
representations and warranties of Rockwell, the Purchaser and Reliance
contained herein or in any certificates or other documents delivered prior to
or as of the Effective Time shall not be deemed waived or otherwise affected by
any investigation made by any party hereto and shall not survive the Merger.
Section 11.04. NOTICES. All notices and other communications
hereunder shall be in writing and shall be delivered personally, by next-day
courier or mailed by registered or certified mail (return receipt requested),
first class postage prepaid, 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, one day after
delivery to a courier for next-day delivery, or three days after mailing, if
deposited in the U.S. mail, first class postage prepaid.
(a) if to Reliance, to
Reliance Electric Company
6065 Parkland Avenue
Cleveland, Ohio 44124
Telecopy: (216) 266-5852
Attention: Vice President, General Counsel and Secretary
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<PAGE> 29
with a copy to
Calfee, Halter & Griswold
800 Superior Avenue
Suite 1800
Cleveland, Ohio 44114
Telecopy: (216) 241-0816
Attention: Michael L. Miller, Esq.
and
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
Attention: Joseph B. Frumkin, Esq.
(b) if to Rockwell or the Purchaser, to
Rockwell International Corporation
2201 Seal Beach Boulevard
Seal Beach, California 90740
Telecopy: (310) 797-5020
Attention: Senior Vice President,
General Counsel and Secretary
with a copy to:
Chadbourne & Parke
30 Rockefeller Plaza
New York, New York 10112
Telecopy: (212) 541-5369
Attention: Peter R. Kolyer, Esq.
and
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: (212) 403-2000
Attention: Steven A. Rosenblum, Esq.
Section 11.05. ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties, except that the Purchaser may assign its rights, interests and
obligations hereunder to any other direct or indirect subsidiary of Rockwell
without
29
<PAGE> 30
obtaining any such consent. This Agreement is not intended to confer any
rights or remedies hereunder upon any other person except the parties hereto
and, with respect to Section 7.08, the officers, directors and employees of
Reliance.
Section 11.06. GOVERNING LAW. Except as the laws of the
State of Delaware are by their terms applicable, this Agreement shall be
governed by the laws of the State of New York (regardless of the laws that
might otherwise govern under applicable New York principles of conflicts of
law) as to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
Section 11.07. COUNTERPARTS. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
Section 11.08. SEVERABILITY. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect against 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 11.09. INTERPRETATION. The article and section
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the parties and shall not in any way affect
the meaning or interpretation of this Agreement. As used in this Agreement,
(i) the term "person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof; and (ii) the term "subsidiary"
of any specified corporation shall mean any corporation of which a majority of
the outstanding securities having ordinary voting power to elect a majority of
the board of directors are directly or indirectly owned by such specified
corporation or any other person of which a majority of the equity interests
therein are, directly or indirectly, owned by such specified corporation.
Section 11.10. ENTIRE AGREEMENT. This Agreement, including
the schedules, annexes and exhibits hereto and the documents and instruments
referred to herein and therein, embodies the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein and
therein and supersedes all prior agreements and understandings between the
parties with respect to such subject matter. There
30
<PAGE> 31
are no representations, promises, warranties, covenants, or undertakings in
respect of such subject matter, other than those expressly set forth or
referred to herein and therein.
IN WITNESS WHEREOF, Rockwell, the Purchaser and Reliance have
caused this Agreement to be signed by their respective duly authorized officers
as of the date first above written.
ROCKWELL INTERNATIONAL CORPORATION
By:_______________________________
Name:
Title:
ROK ACQUISITION CORPORATION
By:_______________________________
Name:
Title:
RELIANCE ELECTRIC COMPANY
By:_______________________________
Name:
Title:
31
<PAGE> 32
ANNEX I
CONDITIONS TO THE AMENDED OFFER. Notwithstanding any other
provision of the Amended Offer, the Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-l(c) promulgated under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Amended Offer), pay for, and may delay the
acceptance for payment of any tendered Shares and amend or terminate the
Amended Offer as to any Shares not then paid for if (i) the condition that
there shall be validly tendered and not withdrawn prior to the expiration of
the Amended Offer a number of Shares which represents at least a majority of
the number of Class A Shares outstanding on a fully diluted basis (assuming
conversion of all Class B Shares and Class C Shares into Class A Shares and the
exercise of all outstanding Options) (the "Minimum Condition") shall not have
been satisfied or (ii) at any time after [the date of this Agreement] and
before the time of payment for any such Shares (whether or not any Shares have
theretofore been accepted for payment or paid for pursuant to the Offer), any
of the following events shall occur:
(a) there shall be in effect an injunction or
other order, decree, judgment or ruling by a court of competent jurisdiction or
by a governmental, regulatory or administrative agency or commission or a
statute, rule, regulation, executive order or other action shall have been
promulgated, enacted or taken by a governmental authority or a governmental,
regulatory or adminstrative agency or commission which in any such case (i)
restrains or prohibits the making or consummation of the Amended Offer or the
consummation of the Merger, (ii) prohibits or restricts the ownership or
operation by Rockwell or the Purchaser (or any of their respective affiliates
or subsidiaries) of any portion of its or Reliance's business or assets which
is material to the business of all such entities taken as a whole, or compels
Rockwell or the Purchaser (or any of their respective affiliates or
subsidiaries) to dispose of or hold separate any portion of its or Reliance's
business or assets which is material to the business of all such entities taken
as a whole, (iii) imposes material limitations on the ability of the Purchaser
effectively to acquire or to hold or to exercise full rights of ownership of
the Shares, including, without limitation, the right to vote the Shares
purchased by the Purchaser on all matters properly presented to the
stockholders of Reliance, (iv) imposes any material limitations on the ability
of Rockwell or the Purchaser or any of their respective affiliates or
subsidiaries effectively to control in any material respect the business and
operations of Reliance and its subidiaries, or (v) which otherwise would
materially
<PAGE> 33
adversely affect Reliance and its subsidiaries taken as a whole; or
(b) this Agreement shall have been terminated by
Reliance, Rockwell or the Purchaser in accordance with its terms; or
(c) the Board shall have failed to take all
appropriate and necessary action such that the provisions of Section 203 of the
DGCL will not apply to any of the transactions contemplated by this Agreement
or Reliance shall not have complied with the provisions of Sections 5.07 and
7.10 of this Agreement with respect to the Rights Agreement; or
(d) Rockwell, the Purchaser and Reliance shall
have agreed that the Purchaser shall amend the Amended Offer to terminate the
Amended Offer or postpone the payment for Shares pursuant thereto.
The foregoing conditions are for the sole benefit of
Rockwell and the Purchaser and may be asserted by Rockwell or the Purchaser
regardless of the circumstances (including any action or inaction by Rockwell
or the Purchaser) giving rise to any such conditions and may be waived by
Rockwell or the Purchaser in whole or in part at any time and from time to time
in their sole discretion, in each case, subject to the terms of this Agreement.
The failure by Rockwell or the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
2
