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):
October 19, 1999
----------------------------------------
THE RANDERS KILLAM GROUP INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-18095 38-2788025
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
27 Bleeker Street
Millburn, New Jersey 07041
(Address of principal executive offices) (Zip Code)
(973) 912-2505
(Registrant's telephone number
including area code)
<PAGE>
This Form 8-K contains forward-looking statements that involve a number of
risks and uncertainties. Important factors that could cause actual results to
differ materially from those indicated by such forward-looking statements are
set forth under the heading "Forward-looking Statements" in Exhibit 13 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended April 3, 1999.
These include risks and uncertainties relating to: dependence of the
Registrant's business on sales to government entities, effects of intense
competition, dependence of the Registrant's business on environmental
regulation, potential environmental and regulatory liability, potential
professional liability, the effect of seasonal influences on the Registrant's
performance, the Registrant's acquisition strategy, the cash management
arrangement with Thermo Electron Corporation, and the potential impact of the
year 2000 on processing date-sensitive information.
Item 5. Other Events
On October 20, 1999, the Registrant issued a press release stating that it
has entered into a definitive agreement and plan of merger with its ultimate
parent corporation, Thermo Electron Corporation ("Thermo Electron"), under which
Thermo Electron would acquire all of the outstanding common stock, $.0001 par
value per share (the "Common Stock"), held by the stockholders of the Registrant
other than Thermo Electron and its affiliates. The Registrant's board of
directors approved the merger agreement based on a recommendation of its special
committee, which was charged with representing the interests of the Registrant's
public stockholders.
Under the terms of the merger agreement, each issued and outstanding share
of Common Stock not already owned by Thermo Electron or Thermo TerraTech Inc.,
the Registrant's direct parent corporation ("Thermo TerraTech"), would be
converted into the right to receive $4.50 in cash. Following the merger, the
shares of Common Stock would cease to be publicly traded.
The Registrant expects that the necessary filings with the Securities and
Exchange Commission (the "SEC") will be made shortly, and that proxy materials
for a special meeting will be mailed to stockholders of the Registrant promptly
after completion of SEC review. A copy of the merger agreement is filed as an
exhibit hereto. Thermo Electron and Thermo TerraTech, which together own
approximately 96% of the Common Stock, intend to vote all of their shares of
Common Stock in favor of approval of the merger agreement and, therefore,
stockholder approval is assured. The transaction is expected to close during the
first calendar quarter of 2000.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired: not
applicable.
(b) Pro Forma Financial Information: not applicable.
(c) Exhibits:
2.1 Agreement and Plan of Merger dated as of October 19, 1999 by
and among Thermo Electron Corporation, RK Acquisition
Corporation and The Randers Killam Group Inc.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 21st day of October, 1999.
THE RANDERS KILLAM GROUP INC.
By: /s/ Theo Melas-Kyriazi
-------------------------------
Theo Melas-Kyriazi
Chief Financial Officer
<PAGE>
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THERMO ELECTRON CORPORATION
RK ACQUISITION CORPORATION
AND
THE RANDERS KILLAM GROUP INC.
DATED AS OF OCTOBER 19, 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER......................................................2
1.1. The Merger...........................................................2
1.2. Effective Time; Closing..............................................2
1.3. Effect of the Merger.................................................2
1.4. Certificate of Incorporation; Bylaws.................................3
1.5. Directors and Officers...............................................3
1.6. Effect on Capital Stock..............................................3
1.7. Surrender of Certificates............................................4
1.8. No Further Ownership Rights in Randers/Killam Common Stock...........5
1.9. Lost, Stolen or Destroyed Certificates...............................5
1.10.Closing of Transfer Books............................................5
1.11.Dissenting Shares....................................................6
1.12.Taking of Necessary Action; Further Action...........................6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF RANDERS/KILLAM...............6
2.1. Organization of Randers/Killam.......................................6
2.2. Randers/Killam Capital Structure.....................................7
2.3. Authority............................................................7
2.4. Board Approval.......................................................8
2.5. Fairness Opinion.....................................................8
2.6. Schedule 13E-3; Proxy Statement......................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND
MERGER SUB................................................................8
3.1 Organization.........................................................8
3.2. Authority............................................................9
3.3. Merger Sub..........................................................10
3.4. Information Provided to Investment Bankers..........................10
3.5. Compliance with Agreements..........................................10
3.6. Schedule 13E-3; Proxy Statement.....................................10
3.7. Financial Resources.................................................11
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME...........................11
4.1. Conduct of Business by Randers/Killam...............................11
4.2. Conduct of Business by Thermo Electron..............................11
-i-
<PAGE>
ARTICLE V ADDITIONAL AGREEMENTS..........................................12
5.1. Schedule 13E-3; Proxy Statement; Other Filings......................12
5.2. Meeting of Randers/Killam Stockholders..............................13
5.3. Access to Information...............................................13
5.4. Public Disclosure...................................................14
5.5. Legal Requirements..................................................14
5.6. Notification of Certain Matters.....................................14
5.7. Best Efforts and Further Assurances.................................15
5.8. Stock Option Plans; Reservation of Shares...........................15
5.9. Thermo Electron Form S-8............................................15
5.10.Indemnification; Insurance..........................................16
5.11.Deferred Compensation Plan..........................................18
5.12.Compliance by Merger Sub............................................18
5.13.NYSE Listing........................................................18
ARTICLE VI CONDITIONS TO THE MERGER......................................18
6.1. Conditions to Obligations of Each Party to Effect the Merger........18
6.2. Additional Conditions to the Obligations of Randers/Killam..........18
6.3. Additional Conditions to the Obligations of Thermo Electron and
Merger Sub..........................................................19
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER............................20
7.1. Termination.........................................................20
7.2. Notice of Termination; Effect of Termination........................21
7.3. Fees and Expenses...................................................21
7.4. Amendment...........................................................21
7.5. Extension; Waiver...................................................21
-ii-
<PAGE>
ARTICLE VIII GENERAL PROVISIONS..........................................22
8.1. Non-Survival of Representations and Warranties......................22
8.2. Notices.............................................................22
8.3. Counterparts........................................................23
8.4. Entire Agreement....................................................23
8.5. Severability........................................................23
8.6. Other Remedies; Specific Performance................................23
8.7. Governing Law.......................................................24
8.8. Assignment..........................................................24
8.9. Headings............................................................24
-iii-
<PAGE>
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of October
19, 1999 is by and among Thermo Electron Corporation, a Delaware corporation
("Thermo Electron"), RK Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of TT Acquisition Corporation, a Delaware corporation
and wholly-owned subsidiary of Thermo Electron ("Merger Sub"), and The Randers
Killam Group Inc., a Delaware corporation ("Randers/Killam").
RECITALS
A. Thermo Electron and its majority-owned subsidiary, Thermo TerraTech
Inc. ("TerraTech"), own approximately 1% and 95%, respectively, of the
outstanding shares of common stock, par value $.0001 per share, of
Randers/Killam (the "Randers/Killam Common Stock"), and Thermo Electron desires
to acquire all of the outstanding shares of Randers/Killam Common
Stock not owned by Thermo Electron or TerraTech.
B. Thermo Electron has formed the Merger Sub as a subsidiary with the
intent of causing it to merge with Randers/Killam, as described in this
Agreement.
C. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL"), Thermo
Electron and Randers/Killam will enter into a business combination transaction
pursuant to which Merger Sub will merge with and into Randers/Killam (the
"Merger").
D. The Board of Directors of Thermo Electron (i) has determined that the
Merger is consistent with and in furtherance of the long-term business strategy
of Thermo Electron, and (ii) has approved this Agreement, the Merger and the
other transactions contemplated by this Agreement.
E. The Board of Directors of Randers/Killam, on the recommendation of a
special committee of the Board of Directors (the "Special Committee"),
consisting of a director of Randers/Killam who is not an officer or director of
Thermo Electron or TerraTech or an officer of Randers/Killam, (i) has determined
that this Agreement, including the Cash Merger Consideration (as defined below),
and the transactions contemplated by this Agreement, are fair to, and in the
best interests of, the stockholders of Randers/Killam (other than Thermo
Electron and TerraTech), (ii) has approved and declared the advisability of this
Agreement, the Merger and the other transactions contemplated by this Agreement
and (iii) has resolved to recommend the approval and adoption of this Agreement
by the stockholders of Randers/Killam.
F. Adams, Harkness & Hill ("AH&H") has delivered to the Special Committee,
for its consideration, and for delivery to the stockholders of Randers/Killam,
its written opinion that, subject to the various assumptions and limitations set
forth therein, as of the date of such opinion the consideration to be received
by the stockholders of Randers/Killam (other than TerraTech and Thermo Electron)
is fair to such stockholders from a financial point of view.
1
<PAGE>
G. Thermo Electron, Randers/Killam and Merger Sub desire to make certain
representations and warranties and other agreements in connection with the
Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1. The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the DGCL, Merger Sub shall be merged with and into
Randers/Killam, the separate corporate existence of Merger Sub shall cease and
Randers/Killam shall continue as the surviving corporation. Randers/Killam as
the surviving corporation after the Merger is hereinafter sometimes referred to
as the "Surviving Corporation."
1.2. Effective Time; Closing. Subject to the provisions of this Agreement,
the Surviving Corporation shall cause the Merger to be consummated by filing a
Certificate of Merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware in accordance with the relevant provisions of the DGCL
(the time of such filing, or such later time as may be agreed in writing by the
parties and specified in the Certificate of Merger, being the "Effective Time"
and the date on which the Effective Time occurs being the "Effective Date") as
soon as practicable on the Closing Date (as herein defined). Unless the context
otherwise requires, the term "Agreement" as used herein refers collectively to
this Agreement and the Certificate of Merger. The closing of the Merger (the
"Closing") shall take place at the executive offices of Thermo Electron at a
time and date to be specified by the parties, which shall be no later than the
second business day after the satisfaction or waiver of the conditions set forth
in Article VI, or at such other time, date and location as the parties hereto
agree in writing (the "Closing Date"). At the Closing, (i) Randers/Killam shall
deliver to Thermo Electron the various certificates and instruments required
under Article VI, (ii) Thermo Electron and Merger Sub shall deliver to
Randers/Killam the various certificates and instruments required under Article
VI and (iii) Randers/Killam shall execute and file the Certificate of Merger
with the Secretary of State of the State of Delaware, in accordance with the
applicable provisions of the DGCL.
1.3. Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of Randers/Killam and Merger Sub shall vest in the Surviving Corporation, and
all debts, liabilities and duties of Randers/Killam and Merger Sub shall become
the debts, liabilities and duties of the Surviving Corporation.
2
<PAGE>
1.4. Certificate of Incorporation; Bylaws.
(a) Subject to the requirements of Section 5.10 hereof, at the
Effective Time, the Certificate of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation.
(b) Subject to the requirements of Section 5.10 hereof, the Bylaws
of Merger Sub, as in effect immediately prior to the Effective Time, shall be,
at the Effective Time, the Bylaws of the Surviving Corporation until thereafter
amended.
1.5. Directors and Officers. The directors of Randers/Killam immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, to serve until their respective successors are duly elected or
appointed and qualified. The officers of Randers/Killam immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, to serve
until their successors are duly elected or appointed or qualified.
1.6. Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, Randers/Killam or the
holders of any of the following securities:
(a) Conversion of Randers/Killam Common Stock. Subject to the
balance of this Section 1.6, each share of Randers/Killam Common Stock issued
and outstanding immediately prior to the Effective Time will be automatically
converted into the right to receive Four Dollars and Fifty Cents in cash ($4.50)
(subject to adjustment pursuant to Section 1.6(g) hereof, the "Cash Merger
Consideration") upon surrender of the certificate representing such share of
Randers/Killam Common Stock in the manner provided in Section 1.7 (or in the
case of a lost, stolen or destroyed certificate, upon delivery of an affidavit
(and bond, if required) in the manner provided in Section 1.9). As of the
Effective Time, all such shares of Randers/Killam Common Stock shall no longer
be outstanding and shall be automatically canceled and retired and shall cease
to exist, and each holder of a certificate representing any such shares of
Randers/Killam Common Stock shall cease to have any rights with respect thereto,
except the right to receive the Cash Merger Consideration as described in this
subsection 1.6(a).
(b) Stock Option Plans. All options to purchase Randers/Killam
Common Stock outstanding immediately prior to the Effective Time under The
Randers Group Incorporated 1988 Stock Option Plan and The Randers Group
Incorporated Equity Incentive Plan, each as amended (together, the
"Randers/Killam Stock Option Plans"), shall be converted into options to
purchase shares of the common stock, $1.00 par value per share, of Thermo
Electron (the "Thermo Common Stock") in accordance with Section 5.8 hereof.
(c) Capital Stock of Merger Sub. Each share of common stock, par
value $.01 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into and become one validly issued, fully
paid and non-assessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
3
<PAGE>
(d) Treasury Stock; Affiliate Stock. Notwithstanding any other
provision of this Agreement, each share of Randers/Killam Common Stock issued
and outstanding and owned by Thermo Electron or any wholly owned subsidiary of
Thermo Electron, together with all treasury shares held by Randers/Killam
immediately prior to the Effective Time shall cease to be outstanding, and shall
automatically be cancelled and retired without payment of any consideration
therefor, cash or otherwise, and cease to exist.
(e) Adjustments to Cash Merger Consideration. The Cash Merger
Consideration shall be adjusted to reflect fully the effect of any stock split,
reverse stock split, stock dividend (including any dividend or distribution of
securities convertible into, or exercisable or exchangeable for, Randers/Killam
Common Stock), recapitalization or other like change without receipt of
consideration with respect to Randers/Killam Common Stock occurring on or after
the date hereof and prior to the Effective Time.
1.7. Surrender of Certificates.
(a) Payment Agent. Prior to the Effective Time, Thermo Electron
shall authorize American Stock Transfer & Trust Company to act as the payment
agent (the "Payment Agent") in the Merger. Immediately following the Effective
Time, Thermo Electron shall deposit with the Payment Agent, in trust for the
benefit of the holders of certificates (the "Certificates") representing shares
of Randers/Killam Common Stock converted pursuant to Section 1.6(a) for payment
in accordance with the provisions of this Article I, cash in an amount equal to
the product of the Cash Merger Consideration multiplied by the number of shares
of Randers/Killam Common Stock entitled to conversion for payment pursuant to
Section 1.6(a).
(b) Exchange Procedures. As soon as practicable after, and in no
event more than three business days after, the Effective Time, Thermo Electron
shall cause the Payment Agent to mail to each holder of record (as of the
Effective Time) of a Certificate (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Payment
Agent and shall otherwise be in such form and have such other provisions as
Thermo Electron may reasonably specify and as are reasonably acceptable to
Randers/Killam, with the approval of the Special Committee) and (ii)
instructions for effecting the exchange of the Certificates for the Cash Merger
Consideration. Upon surrender of a Certificate for cancellation to the Payment
Agent, together with such letter of transmittal duly completed and validly
executed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor payment of the
Cash Merger Consideration multiplied by the number of shares of Randers/Killam
Common Stock represented by such Certificate, without interest, and the
Certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of shares of Randers/Killam Common Stock which is not
registered in the transfer records of Randers/Killam as of the Effective Time,
the Cash Merger Consideration may be paid in accordance with this Article I to a
transferee if the Certificate evidencing such shares is presented to the Payment
Agent, accompanied by all documents required by law to evidence and effect such
transfer pursuant to this Section. Until so surrendered, each outstanding
Certificate will be deemed from and after the Effective Time, for all corporate
purposes, to evidence only the right to receive payment of the Cash Merger
Consideration for each share of Randers/Killam Common Stock represented on such
Certificate.
4
<PAGE>
(c) Transfers of Ownership. If payment of the Cash Merger
Consideration is to be made to any person other than the person in whose name
the Certificate surrendered in exchange therefor is registered, it will be a
condition of such payment that the Certificate so surrendered will be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such payment will have paid to Thermo Electron or any agent
designated by it any transfer or other taxes required by reason of payment to a
person other than the registered holder of the Certificate surrendered, or
established to the satisfaction of Thermo Electron or any agent designated by it
that such tax has been paid or is not payable.
(d) No Liability. Notwithstanding anything to the contrary in this
Section 1.7, neither the Payment Agent, Thermo Electron, the Surviving
Corporation nor any party hereto shall be liable to a holder of shares of
Randers/Killam Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(e) Responsibility; Term. During the term of its engagement, the
Payment Agent shall make the payments referred to in Section 1.6(a) out of the
funds supplied by Thermo Electron. Promptly following the date that is six
months after the Effective Date, the Payment Agent shall, upon request by Thermo
Electron, deliver to Thermo Electron all cash, Certificates and other documents
in its possession relating to the transactions described in this Agreement, and
the Payment Agent's duties shall terminate. Thereafter, each holder of a
Certificate formerly representing shares of Randers/Killam Common Stock may
surrender such Certificate to Thermo Electron and (subject to applicable
abandoned property, escheat and similar laws) receive in exchange therefor the
Cash Merger Consideration multiplied by the number of shares of Randers/Killam
Common Stock represented by such Certificate, without any interest thereon.
1.8. No Further Ownership Rights in Randers/Killam Common Stock. All
amounts paid upon the surrender of shares of Randers/Killam Common Stock in
accordance with the terms hereof shall be deemed to have been paid in full
satisfaction of all rights pertaining to such shares of Randers/Killam Common
Stock.
1.9. Lost, Stolen or Destroyed Certificates. In the event any Certificates
shall have been lost, stolen or destroyed, the Payment Agent shall pay the
aggregate Cash Merger Consideration in respect of such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the holder
thereof; provided, however, that, as a condition precedent to the payment
thereof, the owner of such lost, stolen or destroyed Certificates shall deliver
a bond in such sum as Thermo Electron or the Payment Agent may reasonably direct
as indemnity against any claim that may be made against Thermo Electron or the
Payment Agent with respect to the Certificates alleged to have been lost, stolen
or destroyed, unless Thermo Electron waives such requirement in writing.
1.10. Closing of Transfer Books. At the Effective Time, the stock transfer
books of Randers/Killam shall be closed and no transfer of Randers/Killam Common
Stock shall thereafter be made. If, after the Effective Time, Certificates are
presented to Thermo Electron, they shall be canceled and exchanged for rights to
receive the applicable Cash Merger Consideration as provided in this Article I.
5
<PAGE>
1.11. Dissenting Shares. Notwithstanding any other provision of this
Agreement, shares of Randers/Killam Common Stock that are outstanding
immediately prior to the Effective Time and which are held by stockholders (i)
who have not voted in favor of or consented to the Merger, (ii) who shall have
demanded properly in writing appraisal of such shares in accordance with DGCL
Section 262 and (iii) who shall not have withdrawn such demand or otherwise
forfeited appraisal rights (collectively, the "Dissenting Shares") shall not be
converted into or represent the right to receive the Cash Merger Consideration.
Such stockholders shall, as of the Effective Time, cease to retain any rights
with respect to the Randers/Killam Common Stock, except as provided in the DGCL,
including the right to receive payment of the appraised value of the shares held
by them in accordance with the provisions of Section 262, provided that all
Dissenting Shares held by stockholders (i) who shall have failed to perfect or
lost their rights to appraisal of such shares under Section 262, or (ii) who
have withdrawn their demand for appraisal within 60 days after the Effective
Date and accept the terms offered upon the Merger in accordance with Section
262(e), shall thereupon be, or be deemed to have been, converted into and to
have become exchangeable, as of the Effective Time, for the right to receive,
without any interest thereon, the Cash Merger Consideration, upon surrender, in
the manner provided in Section 1.7, of the Certificates that formerly evidenced
such shares without the prior consent of Thermo Electron.
1.12. Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Randers/Killam and Merger Sub, the officers and directors of
the Surviving Corporation are fully authorized in the name of Randers/Killam and
Merger Sub or otherwise to take, and will take, all such lawful and necessary
action, so long as such action is consistent with this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF RANDERS/KILLAM
Randers/Killam represents and warrants to Thermo Electron and Merger Sub
as follows:
2.1. Organization of Randers/Killam. Randers/Killam and each of its
subsidiaries is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, has the corporate or similar power to own, lease
and operate its property and to carry on its business as now being conducted and
as proposed by Randers/Killam to be conducted, and is duly qualified to do
business and in good standing as a foreign corporation or other legal entity in
each jurisdiction in which the failure to be so qualified would have a Material
Adverse Effect on Randers/Killam. In this Agreement, the term "Material Adverse
Effect" used in reference to Randers/Killam means any event, change or effect,
that is or is reasonably likely to be, individually or in the aggregate with
other events, changes or effects, materially adverse to the financial condition,
assets, liabilities, results of operations or business of Randers/Killam and its
subsidiaries, taken as a whole.
6
<PAGE>
2.2. Randers/Killam Capital Structure. The authorized capital stock of
Randers/Killam consists of 30,000,000 shares of Common Stock, par value $.0001
per share, of which there were 25,434,719 shares issued and outstanding as of
October 2, 1999, and no shares in treasury as of October 2, 1999. All
outstanding shares of Randers/Killam Common Stock are duly authorized, validly
issued, fully paid and non-assessable and are not subject to preemptive rights
created by statute, the Certificate of Incorporation or Bylaws of Randers/Killam
or any agreement or document to which Randers/Killam is a party or by which it
is bound. As of October 2, 1999, an aggregate of 2,097,175 shares of
Randers/Killam Common Stock, net of exercises, were reserved for issuance to
employees, consultants and non-employee directors pursuant to the Randers/Killam
Stock Option Plans, under which options were outstanding for an aggregate of
1,272,175 shares as of such date. All shares of Randers/Killam Common Stock
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, would be duly
authorized, validly issued, fully paid and non-assessable.
2.3. Authority.
(a) Randers/Killam has all requisite corporate power and authority
to enter into 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 authorized by all necessary
corporate action on the part of Randers/Killam, subject only to the adoption of
this Agreement by Randers/Killam's stockholders and the filing and recording of
the Certificate of Merger pursuant to the DGCL. Under the DGCL, Randers/Killam's
stockholders may adopt this Agreement by vote of the holders of a majority of
the outstanding shares of Randers/Killam Common Stock. This Agreement has been
duly executed and delivered by Randers/Killam, and assuming the due
authorization, execution and delivery by Thermo Electron and Merger Sub,
constitutes the valid and binding obligation of Randers/Killam, enforceable in
accordance with its terms. The execution and delivery of this Agreement by
Randers/Killam do not, and the performance of this Agreement by Randers/Killam
will not, (i) conflict with or violate the Certificate of Incorporation or
Bylaws of Randers/Killam or (ii) subject to obtaining the adoption by
Randers/Killam's stockholders of this Agreement as contemplated in Section 5.2
and compliance with the requirements set forth in Section 2.3(b) below, conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to Randers/Killam or any of its material subsidiaries or by which its or their
respective properties is bound, except, with respect to clause (ii), for any
such conflicts, violations, defaults or other occurrences that would not have a
Material Adverse Effect on Randers/Killam or the Surviving Corporation.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental or regulatory body or authority or
instrumentality ("Governmental Entity") is required by or with respect to
Randers/Killam in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby, except for (i) the
filing of the Certificate of Merger with the Secretary of State of Delaware,
(ii) the filing of the Proxy Statement and the Schedule 13E-3 (as defined in
Section 2.6) with the U.S. Securities and Exchange Commission ("SEC") in
accordance with the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and (iii) such other consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
federal and state securities laws.
7
<PAGE>
2.4. Board Approval. The Board of Directors of Randers/Killam, upon
recommendation of the Special Committee that this Agreement, including the Cash
Merger Consideration, is fair to, and in the best interests of, the stockholders
of Randers/Killam (other than Thermo Electron and TerraTech), has, as of the
date of this Agreement, unanimously (i) adopted a resolution approving this
Agreement and declaring its advisability, (ii) determined that the Merger is
fair to, and in the best interests of, Randers/Killam and its stockholders, and
(iii) determined to recommend that the stockholders of Randers/Killam approve
this Agreement.
2.5. Fairness Opinion. The Special Committee has received an opinion from
AH&H dated October 18, 1999 that, as of such date, the consideration to be
received by Randers/Killam's stockholders in the Merger is fair, from a
financial point of view, to Randers/Killam's stockholders other than Thermo
Electron and TerraTech.
2.6 Schedule 13E-3; Proxy Statement. The information supplied by
Randers/Killam for inclusion in the Rule 13e-3 Transaction Statement on Schedule
13E-3 (such Schedule, as amended or supplemented, is referred to herein as the
"Schedule 13E-3") (including any information incorporated by reference in the
Schedule 13E-3 from other filings made by Randers/Killam with the SEC) or (other
than with respect to the information supplied by Thermo Electron and/or Merger
Sub) the proxy statement to be sent to the stockholders of Randers/Killam in
connection with the meeting of Randers/Killam's stockholders to consider the
adoption of this Agreement and approval of the Merger (the "Randers/Killam
Stockholders' Meeting") (such proxy statement, as amended or supplemented, is
referred to herein as the "Proxy Statement") shall not, on the date the Proxy
Statement is first mailed to stockholders, at the time of the Randers/Killam
Stockholders' Meeting or at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading. The Proxy
Statement will comply (other than with respect to information relating to Thermo
Electron and/or Merger Sub) as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND MERGER SUB
Thermo Electron and Merger Sub, jointly and severally, represent and
warrant to Randers/Killam as follows:
3.1. Organization. Thermo Electron is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, each has the corporate power
to own, lease and operate its property and to carry on its business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would have a Material Adverse Effect on Thermo
8
<PAGE>
Electron. In this Agreement, the term "Material Adverse Effect" used in
reference to Thermo Electron means any event, change or effect, that is or is
reasonably likely to be, individually or in the aggregate with other events,
changes or effects, materially adverse to the financial condition, assets,
liabilities, results of operations or business of Thermo Electron and its
subsidiaries, taken as a whole.
3.2. Authority.
(a) Each of Thermo Electron and Merger Sub has all requisite
corporate power and authority to enter into 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
authorized by all necessary corporate action on the part of Thermo Electron and
Merger Sub, subject only to the filing and recording of the Certificate of
Merger pursuant to the DGCL. This Agreement has been duly executed and delivered
by each of Thermo Electron and Merger Sub and, assuming the due authorization,
execution and delivery of this Agreement by Randers/Killam, this Agreement
constitutes the valid and binding obligation of each of Thermo Electron and
Merger Sub, enforceable in accordance with its terms. The execution and delivery
of this Agreement by each of Thermo Electron and Merger Sub do not, and the
performance of this Agreement by each of Thermo Electron and Merger Sub will
not, (i) conflict with or violate the Certificate of Incorporation or Bylaws of
Thermo Electron or the Certificate of Incorporation or Bylaws of Merger Sub or
of any material subsidiary, direct or indirect, of Thermo Electron (each, a
"Material Thermo Subsidiary"), (ii) subject to compliance with the requirements
set forth in Section 3.2(b) below, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Thermo Electron or any
Material Thermo Subsidiaries (including Merger Sub, but excluding Randers/Killam
and its wholly owned subsidiaries) or by which its or any of their respective
properties is bound or affected, or (iii) result in any breach of or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or impair Thermo Electron's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Thermo
Electron or any Material Thermo Subsidiaries (including Merger Sub, but
excluding Randers/Killam and its wholly owned subsidiaries) pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Thermo Electron or any
Material Thermo Subsidiaries (including Merger Sub, but excluding Randers/Killam
and its wholly owned subsidiaries) is a party or by which Thermo Electron or any
Material Thermo Subsidiaries (including Merger Sub, but excluding Randers/Killam
and its wholly owned subsidiaries) or its or any of their respective properties
are bound or affected, except, with respect to clauses (ii) and (iii), for any
such conflicts, violations, defaults or other occurrences that would not have a
Material Adverse Effect on Thermo Electron.
(b) All shares of Thermo Common Stock which will be subject to
issuance pursuant to the Randers/Killam Stock Option Plans, each as assumed by
Thermo Electron pursuant to this Agreement will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of Thermo Electron or any other agreement or document to which Thermo Electron
is a party or by which it is bound.
9
<PAGE>
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is required by
or with respect to Thermo Electron or Merger Sub in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the Certificate of Merger with
the Secretary of State of Delaware, (ii) the filing of the Schedule 13E-3 with
the SEC in accordance with the Exchange Act, and (iii) such other consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal and state securities laws.
3.3 Merger Sub. Since the date of its incorporation, Merger Sub has not
engaged in any activities other than in connection with or as contemplated by
this Agreement.
3.4 Information Provided to Investment Bankers. To the knowledge of Thermo
Electron, the information provided by Thermo Electron and Randers/Killam to AH&H
in connection with the Merger does not contain any untrue statement of material
fact or omit 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. For purposes of the foregoing sentence, any
projections or forward-looking statements shall not be deemed to be statements
of material facts; however, the projections were prepared in good faith and
based on assumptions that were reasonable at the time such projections were
prepared, given the information known by management at such time. Furthermore,
it is recognized that such projections and forward-looking statements do not
constitute any warranty as to the future performance of Thermo Electron or
Randers/Killam and that actual results may vary from projected results.
3.5 Compliance with Agreements. The treatment provided for herein with
respect to outstanding options under the Randers/Killam Stock Option Plans is in
compliance with the applicable agreements and instruments governing such
securities. No consent or approval of the holders of such instruments is
required in connection with the transactions contemplated by this Agreement.
3.6 Schedule 13E-3; Proxy Statement. The information supplied by Thermo
Electron for inclusion in the Schedule 13E-3 (including any information
incorporated by reference in the Schedule 13E-3 from other filings made by
Thermo Electron with the SEC) or (other than with respect to the information
supplied by Randers/Killam) the Proxy Statement shall not, on the date the Proxy
Statement is first mailed to stockholders, at the time of the Randers/Killam
Stockholders' Meeting or at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading. The Proxy
Statement will comply (with respect to information relating to Thermo Electron)
as to form in all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder.
3.7. Financial Resources. Thermo Electron has the financial resources to
consummate the transactions contemplated by this Agreement and to pay the
consideration in the Merger provided for in Section 1.6(a).
10
<PAGE>
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1. Conduct of Business by Randers/Killam. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement pursuant to its terms or the Effective Time, Randers/Killam
shall, except for such actions which are contemplated by this Agreement or
reasonably appropriate in connection with the transactions contemplated by this
Agreement, and except as consented to by Thermo Electron, carry on its business
in the usual, regular and ordinary course, in substantially the same manner as
heretofore conducted, pay its debts and taxes when due subject to good faith
disputes over such debts or taxes, pay or perform other material obligations
when due, and use its commercially reasonable efforts consistent with past
practices and policies to preserve intact its present business organization,
keep available the services of its present officers and employees and preserve
its relationships with customers, suppliers, distributors, licensors, licensees,
and others with which it has business dealings.
4.2 Conduct of Business by Thermo Electron. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement pursuant to its terms or the Effective Time, Thermo Electron (i)
shall, except for such actions which are contemplated by this Agreement or
reasonably appropriate in connection with the transactions contemplated by this
Agreement, or which are undertaken in connection with the Merger or with the
reorganization of Thermo Electron and its subsidiaries as publicly announced or
as disclosed to AH&H prior to the date of this Agreement, carry on its business
materially in the usual, regular and ordinary course, in substantially the same
manner as heretofore conducted, pay its debts and taxes when due subject to good
faith disputes over such debts or taxes, pay or perform other material
obligations when due, and use its commercially reasonable efforts consistent
with past practices and policies to preserve intact its present business
organization, keep available the services of its present officers and employees
and preserve its relationships with customers, suppliers, distributors,
licensors, licensees, and others with which it has business dealings; and (ii)
shall not, and shall not permit any Material Thermo Subsidiary to, take any
action which would make any of the representations and warranties of Thermo
Electron contained herein untrue or cause Thermo Electron not to be in
compliance with any covenant set forth herein.
11
<PAGE>
ARTICLE V
ADDITIONAL AGREEMENTS
5.1. Schedule 13E-3; Proxy Statement; Other Filings
(a) As promptly as practicable after the execution of this
Agreement, Thermo Electron, TerraTech and Randers/Killam will jointly prepare
and file with the SEC the Schedule 13E-3 and the Proxy Statement. Thermo
Electron, TerraTech and Randers/Killam will cause the Proxy Statement to be
mailed to stockholders of Randers/Killam at the earliest practicable time. Each
party will notify the other promptly upon the receipt of any comments from the
SEC or its staff and of any request by the SEC or its staff or any other
government officials for amendments or supplements to the Schedule 13E-3 or the
Proxy Statement or any other filing or for additional information and will
supply the other party with copies of all correspondence between such party or
any of its representatives, on the one hand, and the SEC, or its staff or any
other government officials, on the other hand, with respect to the Proxy
Statement, the Schedule 13E-3 or the Merger. Whenever any event occurs that is
required to be set forth in an amendment or supplement to the Schedule 13E-3 or
the Proxy Statement, the relevant party will promptly inform the other party of
such occurrence and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of Randers/Killam, such
amendment or supplement.
(b) The information supplied by Randers/Killam for inclusion in the
Schedule 13E-3 or the Proxy Statement (including any information incorporated by
reference in the Schedule 13E-3 or the Proxy Statement from other filings made
by Randers/Killam with the SEC) will not, on the date the Proxy Statement (or
any amendment thereof or supplement thereto) is first mailed to Randers/Killam
stockholders, at the time of the Randers/Killam Stockholders' Meeting and at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with respect
to any material fact, or shall omit to state any material fact necessary in
order to make the statements made therein not false or misleading in light of
the circumstances under which they were made, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Randers/Killam Stockholders' Meeting which
has become false or misleading.
(c) The information supplied by Thermo Electron and Merger Sub for
inclusion in the Schedule 13E-3 or the Proxy Statement (including any
information incorporated by reference in the Schedule 13E-3 or the Proxy
Statement from other filings made by Thermo Electron with the SEC) will not, on
the date the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to Randers/Killam stockholders, at the time of the Randers/Killam
Stockholders' Meeting and at the Effective Time, contain any statement which, at
such time and in light of the circumstances under which it shall be made, is
false or misleading with respect to any material fact, or shall omit to state
any material fact necessary in order to make the statements made therein not
false or misleading in light of the circumstances under which they were made, or
omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the
Randers/Killam Stockholders' Meeting which has become false or misleading.
12
<PAGE>
(d) The Proxy Statement will include the recommendation of the
Special Committee in favor of approval of this Agreement (except that the
Special Committee may withdraw, modify or refrain from making such
recommendation to the extent that the Special Committee determines after
consultation with outside legal counsel that failure to do so would be
inconsistent with the Special Committee's fiduciary duties under applicable
law).
(e) The Proxy Statement will include the recommendation of the Board
of Directors of Randers/Killam in favor of approval of this Agreement (except
that the Board of Directors of Randers/Killam may withdraw, modify or refrain
from making such recommendation to the extent that the Board determines after
consultation with outside legal counsel that failure to do so would be
inconsistent with the Board's fiduciary duties under applicable law).
(f) To the extent that the Special Committee or the Board withdraws,
modifies or refrains from making their respective recommendations pursuant to
Sections 5.1(d) or (e) hereof, the Proxy Statement will reflect such action.
5.2. Meeting of Randers/Killam Stockholders. Promptly after the date
hereof, Randers/Killam will take all action necessary in accordance with the
DGCL and its Certificate of Incorporation and Bylaws to convene the
Randers/Killam Stockholders' Meeting to be held as promptly as practicable for
the purpose of voting upon this Agreement. Unless the Special Committee
determines after consultation with outside legal counsel that to do so would be
inconsistent with the Board's or the Special Committee's fiduciary duties under
applicable law, Randers/Killam will use its reasonable best efforts to solicit
from its stockholders proxies in favor of the approval of this Agreement and the
Merger, and will take all other action necessary or advisable to secure the vote
or consent of its stockholders required by the DGCL to obtain such approvals.
Thermo Electron shall vote, or cause to be voted, all of the Randers/Killam
Common Stock then owned by it and any of its subsidiaries in favor of the
approval of this Agreement and the Merger.
5.3. Access to Information. Subject to applicable legal restrictions, each
of the parties hereto will afford the other (including, in the case of
Randers/Killam, the Special Committee) and each of their respective accountants,
counsel and other representatives reasonable access during normal business hours
to the properties, books, records and personnel of each of them during the
period prior to the Effective Time to obtain all information concerning their
respective businesses, including the status of their respective product
development efforts, properties, results of operations and personnel, as each of
them may reasonably request. Each of the parties hereto agrees that it will, and
will cause its representatives and agents to, keep all such information
confidential and will not, and will cause its representatives or agents not to,
use any information obtained pursuant to this Section 5.3 for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement. Notwithstanding the foregoing, none of the parties hereto shall be
required to keep confidential any information (i) which is or becomes generally
available to the public, other than by wrongful disclosure by the disclosing
party in violation of this Agreement, or (ii) which becomes available to the
disclosing party on a nonconfidential basis from a source other than the
nondisclosing party or any officer or director of such party.
13
<PAGE>
5.4. Public Disclosure. Thermo Electron and Randers/Killam will consult
with each other before issuing any press release or otherwise making any public
statement with respect to the Merger or this Agreement and will not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with a national
securities exchange. Promptly upon the execution hereof, the parties shall
jointly make a press release with respect to the transactions contemplated by
this Agreement, in form reasonably satisfactory to the Special Committee, and
Randers/Killam shall, within five days after the execution hereof, file with the
SEC a Current Report on Form 8-K, which shall attach as an exhibit this
Agreement.
5.5. Legal Requirements. Subject to the terms of this Agreement, each of
Thermo Electron, Merger Sub and Randers/Killam will take all reasonable actions
necessary or desirable to comply promptly with all legal requirements that may
be imposed on them with respect to the consummation of the transactions
contemplated by this Agreement (including furnishing all information required in
connection with approvals of or filings with any Governmental Entity, and
including using its reasonable best efforts to defend any litigation prompted
hereby) and will promptly cooperate with and furnish information to any party
hereto necessary in connection with any such requirements imposed upon any of
them or their respective subsidiaries in connection with the consummation of the
transactions contemplated by this Agreement.
5.6. Notification of Certain Matters. Subject to the terms of this
Agreement, Thermo Electron and Merger Sub will give prompt notice to
Randers/Killam, and Randers/Killam will give prompt notice to Thermo Electron,
of the occurrence, or failure to occur, of any event, which occurrence or
failure to occur would be reasonably likely to cause (a) any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date of this Agreement to the Effective Time, or
(b) any material failure of Thermo Electron and Merger Sub or Randers/Killam, as
the case may be, or of 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 under this Agreement. From the date of this Agreement until
the Effective Time, Thermo Electron will give prompt notice to Randers/Killam
(including, without limitation, the Special Committee) of any written offers or
indications of interest it receives from a prospective purchaser of any material
properties or assets of Randers/Killam or its subsidiaries, which set forth a
proposed purchase price greater than $3 million or in which the book value of
the assets being sold is greater than $3 million, other than sales of assets and
services in the ordinary course of business. Notwithstanding the above, the
delivery of any notice pursuant to this section will not limit or otherwise
affect the remedies available hereunder to the party receiving such notice or
the conditions to such party's obligation to consummate the Merger.
5.7. Best Efforts and Further Assurances. Subject to the respective rights
and obligations of Thermo Electron and Randers/Killam under this Agreement, each
of the parties to this Agreement will use its reasonable best efforts to
effectuate the Merger and the other transactions contemplated hereby and to
fulfill and cause to be fulfilled the conditions to closing under this
Agreement, it being understood that such efforts shall not include any
obligation to settle any litigation prompted hereby. Subject to the terms
hereof, each party hereto, at the reasonable request of another party hereto,
will execute and deliver such other instruments and do and perform such other
acts and things as may be reasonably necessary or desirable for effecting
completely the consummation of the transactions contemplated hereby.
14
<PAGE>
5.8. Stock Option Plans; Reservation of Shares.
(a) At the Effective Time, each outstanding option to purchase
shares of Randers/Killam Common Stock (each a "Randers/Killam Stock Option")
under the Randers/Killam Stock Option Plans, whether or not exercisable, will be
assumed by Thermo Electron. Each Randers/Killam Stock Option so assumed by
Thermo Electron under this Agreement will continue to have, and be subject to,
the same terms and conditions set forth in the applicable Randers/Killam Stock
Option Plan immediately prior to the Effective Time (including, without
limitation, any repurchase rights), except that (i) each Randers/Killam Stock
Option will be exercisable (or will become exercisable in accordance with its
terms) for that number of whole shares of Thermo Common Stock equal to the
product of the number of shares of Randers/Killam Common Stock that were
issuable upon exercise of such Randers/Killam Stock Option immediately prior to
the Effective Time multiplied by a fraction (the "Exchange Ratio"), the
numerator of which is the Cash Merger Consideration and the denominator of which
is the closing price of the Thermo Common Stock on the day immediately preceding
the Effective Date as reported in the consolidated transaction reporting system,
rounded down to the nearest whole number of shares of Thermo Common Stock, and
(ii) the per share exercise price for the shares of Thermo Common Stock issuable
upon exercise of such assumed Randers/Killam Stock Option will be equal to the
quotient determined by dividing the exercise price per share of Randers/Killam
Common Stock at which such Randers/Killam Stock Option was exercisable
immediately prior to the Effective Time by the Exchange Ratio, rounded up to the
nearest whole cent. After the Effective Time, Thermo Electron will issue to each
holder of an outstanding Randers/Killam Stock Option a notice describing the
foregoing assumption of such Randers/Killam Stock Option by Thermo Electron.
(b) Thermo Electron will reserve sufficient shares of Thermo Common
Stock for issuance under this Section 5.8.
5.9. Thermo Electron Form S-8. Thermo Electron agrees to file a
registration statement on Form S-8 or, if possible, an amendment to Thermo
Electron's then effective registration statement on Form S-8, for the shares of
Thermo Common Stock issuable with respect to the assumed Randers/Killam Stock
Options within five (5) business days of the Effective Time, and shall keep such
registration statement effective for so long as any such options remain
outstanding.
5.10. Indemnification; Insurance.
(a) The Certificate of Incorporation and Bylaws of the Surviving
Corporation will contain the provisions with respect to indemnification and
elimination of liability for monetary damages set forth in the Certificate of
Incorporation and Bylaws of Randers/Killam, which provisions will not be
amended, repealed or otherwise modified for a period of six (6) years from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who, as of the date hereof and at any time from the date hereof
to the Effective Time, were directors or officers of Randers/Killam, unless such
modification is required by law. The Surviving Corporation shall, and Thermo
Electron will cause the Surviving Corporation to, fulfill and honor in all
respects the indemnification obligations of Randers/Killam pursuant to the
provisions of the Certificate of Incorporation and the Bylaws of Randers/Killam
as in effect on the date of this Agreement.
15
<PAGE>
(b) For a period of six (6) years after the Effective Time, Thermo
Electron shall cause the Surviving Corporation to, either directly or through
participation in Thermo Electron's umbrella policy, maintain in effect a
directors' and officers' liability insurance policy covering those
Randers/Killam directors and officers currently covered by Thermo Electron's
liability insurance policy with coverage no less favorable in amount and scope
than existing coverage for such Randers/Killam directors and officers (which
coverage may be an endorsement extending the period in which claims may be made
under such existing policy); provided, however, that in no event shall the
Surviving Corporation be required to expend to maintain or procure insurance
coverage pursuant to this Section 5.10, directly or through participation in
Thermo Electron's policy, an amount per annum in excess of 175% of the current
annual premiums, as adjusted for inflation each year, allocable and payable by
Randers/Killam (the "Maximum Premium") with respect to such insurance, or, if
the cost of such insurance exceeds the Maximum Premium, the maximum amount of
coverage that can be purchased or maintained for the Maximum Premium.
(c) Randers/Killam shall, to the fullest extent permitted under
applicable law and regardless of whether the Merger becomes effective, indemnify
and hold harmless Susan Tierney ("Tierney") against all costs and expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action or omission in
Tierney's capacity as a director (including, without limitation, as a member of
the Special Committee) or fiduciary of Randers/Killam (including, without
limitation, in connection with the transactions contemplated by this Agreement)
occurring on, before or after the Effective Time (or, if this Agreement is
terminated without the Merger becoming effective, occurring on, before or after
the date of such termination), until the expiration of the statute of
limitations relating thereto (and shall pay any expenses in advance of the final
disposition of such action or proceeding to Tierney to the fullest extent
permitted under applicable law, upon receipt from Tierney of an undertaking
(which need not be secured or subject to a bond or other requirement) to repay
any advanced expenses if it shall ultimately be determined that Tierney is not
entitled to be indemnified against such expenses). If the Merger becomes
effective, Thermo Electron shall be jointly and severally responsible, to the
fullest extent permitted by applicable law (it being understood that applicable
law may permit Thermo Electron to indemnify or advance expenses to Tierney under
circumstances in which Randers/Killam could not do so), for the indemnification
and advancement of expenses obligations provided for in the first sentence of
this Section 5.10(c). If the Merger does not become effective, Thermo Electron
shall have the same responsibilities set forth in the immediately preceding
sentence, except that Thermo Electron shall have no responsibility for
indemnifying or advancing expenses to Tierney with respect to matters that do
not arise out of or pertain to the work of the Special Committee, this Agreement
or the transactions contemplated hereby. In the event of any claim, action,
suit, proceeding or investigation covered by this Section 5.10(c), (i)
Randers/Killam, Thermo Electron and the Surviving Corporation, as the case may
be, shall pay the reasonable fees and expenses of counsel selected by Tierney,
promptly after statements therefor are received, and (ii) Randers/Killam, Thermo
Electron and the Surviving Corporation shall cooperate in the defense of any
16
<PAGE>
such matter; provided, however, that neither Randers/Killam nor Thermo Electron
nor the Surviving Corporation shall be liable for any settlement effected
without Thermo Electron's prior written consent (such consent not to be
unreasonably withheld or delayed); and provided, further, that, in the event any
claim for indemnification is asserted or made within the period prior to the
expiration of the applicable statute of limitations, all rights to
indemnification in respect of such claim shall continue until the disposition of
such claim. In connection with Thermo Electron or the Surviving Corporation
making any payment or advancing any funds pursuant to this Section 5.10(c),
Thermo Electron or the Surviving Corporation, as the case may be, shall be
entitled to require Tierney to use commercially reasonable efforts, at the cost
and expense of Thermo Electron and the Surviving Corporation, to cause Thermo
Electron or the Surviving Corporation, as the case may be, to be subrogated to
Tierney's rights under any insurance coverage maintained by the Surviving
Corporation, Thermo Electron or any of their respective affiliates with respect
to the underlying subject matter of, and to the extent of, such payment or
advance.
(d) In the event Randers/Killam, Thermo Electron or the Surviving
Corporation or any of their respective successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger, or (ii)
transfers all or substantially all of its properties or assets to any person,
then, and in each such case, proper provision shall be made so that the
successors and assigns of Randers/Killam, Thermo Electron and the Surviving
Corporation, as the case may be, shall assume the obligations set forth in this
Section 5.10.
(e) Heirs, representatives and estates of the officers and directors
of Randers/Killam (including, without limitation, Tierney) shall have the right
to enforce the obligations arising under this Section 5.10.
(f) The rights of the officers and directors of Randers/Killam
(including, without limitation, Tierney) under this Section 5.10 are in addition
to any rights of such persons under separate indemnification agreements any such
persons may have with Randers/Killam and/or Thermo Electron, under the
Certificate of Incorporation or Bylaws of Randers/Killam or Thermo Electron or
otherwise.
5.11. Deferred Compensation Plan. Subject to obtaining the consents of the
affected participants, at the Effective Time, the Randers/Killam Deferred
Compensation Plan for Directors (the "Deferred Compensation Plan") will
terminate, and Randers/Killam will distribute to each participant the sum in
cash equal to the balance of stock units credited to his or her deferred
compensation account under the Deferred Compensation Plan as of the Effective
Time multiplied by the Cash Merger Consideration.
5.12 Compliance by Merger Sub. Thermo Electron shall cause Merger Sub to
timely perform and comply with all of its obligations under or related to this
Agreement. Thermo Electron will ensure that Merger Sub has the financial
resources to consummate the transactions contemplated by this Agreement and to
pay the consideration in the Merger provided for in Section 1.6(a).
17
<PAGE>
5.13 NYSE Listing. Thermo Electron shall use its best efforts to cause all
shares of Thermo Common Stock which will be subject to issuance pursuant to the
Randers/Killam Stock Option Plans, each as assumed by Thermo Electron pursuant
to this Agreement, to be authorized for listing on the New York Stock Exchange.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1. Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) No Order. No Governmental Entity 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 has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
(b) NYSE Listing. The Thermo Common Stock which will be subject to
issuance pursuant to the Randers/Killam Stock Option Plans, each as assumed by
Thermo Electron pursuant to this Agreement, shall have been authorized for
listing on the New York Stock Exchange.
(c) Stockholder Approval. This Agreement shall have been approved
and adopted by the requisite vote under the DGCL by the stockholders of
Randers/Killam.
6.2. Additional Conditions to the Obligations of Randers/Killam. The
obligations of Randers/Killam to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of each of the
following conditions, any of which may be waived, in writing, exclusively by
Randers/Killam (provided that the Special Committee shall have consented in
writing to any such waiver):
(a) Representations and Warranties. The representations and
warranties of Thermo Electron and Merger Sub contained in this Agreement shall
be true and correct in all material respects (other than those already qualified
by a materiality standard, which shall be true and correct in all respects) on
and as of the Effective Time, except for changes expressly contemplated by this
Agreement and except for those representations and warranties that address
matters only as of a particular date (which shall remain true and correct as of
such particular date), with the same force and effect as if made on and as of
the Effective Time; and Randers/Killam shall have received a certificate to such
effect signed on behalf of Thermo Electron by the President, Chief Executive
Officer or Vice President of Thermo Electron; and
(b) Agreements and Covenants. Thermo Electron and Merger Sub shall
have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by them on
or prior to the Effective Time, and Randers/Killam shall have received a
certificate to such effect signed on behalf of Thermo Electron by the President,
Chief Executive Officer or Vice President of Thermo Electron.
18
<PAGE>
(c) Fairness Opinion. At the time of mailing of the Proxy Statement
to the stockholders of Randers/Killam and at the Effective Time, AHH shall have
reaffirmed orally the fairness opinion previously prepared and delivered by it
to the Special Committee and AHH shall not have withdrawn such opinion.
6.3. Additional Conditions to the Obligations of Thermo Electron and
Merger Sub. The obligations of Thermo Electron and Merger Sub to consummate and
effect the Merger shall be subject to the satisfaction at or prior to the
Effective Time of each of the following conditions, any of which may be waived,
in writing, exclusively by Thermo Electron:
(a) Representations and Warranties. The representations and
warranties of Randers/Killam contained in this Agreement shall be true and
correct in all material respects (other than those already qualified by a
materiality standard, which shall be true and correct in all respects) on and as
of the Effective Time, except for changes contemplated by this Agreement and
except for those representations and warranties that address matters only as of
a particular date (which shall remain true and correct as of such particular
date), with the same force and effect as if made on and as of the Effective
Time, except, in all such cases, where the failure to be so true and correct
would not have a Material Adverse Effect on Randers/Killam; and Thermo Electron
and Merger Sub shall have received a certificate to such effect signed on behalf
of Randers/Killam by the President, Chief Executive Officer or Vice President of
Randers/Killam; and
(b) Agreements and Covenants. Randers/Killam shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and Thermo Electron shall have received a certificate to such
effect signed on behalf of Randers/Killam by the President, Chief Executive
Officer or Vice President of Randers/Killam.
(c) No Withdrawal of Special Committee Recommendation. The Special
Committee shall not have withdrawn its recommendation to the Board of Directors
of Randers/Killam as set forth in Section 2.4 hereof.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time of the Merger, whether before or after approval of this
Agreement by the stockholders of Randers/Killam:
(a) by mutual written consent duly authorized by the Boards of
Directors of Merger Sub and Randers/Killam (upon approval of the Special
Committee);
(b) by either Randers/Killam (at the direction of the Special
Committee) or Merger Sub if the Merger shall not have been consummated by March
31, 2000; provided, however, that the right to terminate this Agreement under
this Section 7.1(b) shall not be available to any party whose action or failure
to act has been a principal cause of or resulted in the failure of the Merger to
occur on or before such date if such action or failure to act constitutes a
breach of this Agreement;
19
<PAGE>
(c) by either Randers/Killam (upon approval of the Special
Committee) or Merger Sub if a court of competent jurisdiction or governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action (an "Order"), in any case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which order, decree or ruling is final and nonappealable;
(d) by either Randers/Killam (upon approval of the Special
Committee) or Merger Sub if the required approval of the stockholders of
Randers/Killam contemplated by this Agreement shall not have been obtained by
reason of the failure to obtain the required vote upon a vote taken at a meeting
of stockholders duly convened therefor or at any adjournment thereof (provided
that the right to terminate this Agreement under this Section 7.1(d) shall not
be available to Randers/Killam where the failure to obtain stockholder approval
of Randers/Killam shall have been caused by the action or failure to act of
Randers/Killam in breach of this Agreement and the right to terminate this
Agreement under this Section 7.1(d) shall not be available to Merger Sub where
the failure to obtain the requisite vote by the stockholders of Randers/Killam
shall have been caused by the failure of Thermo Electron or any direct or
indirect subsidiary of Thermo Electron (whether or not wholly-owned) to vote its
shares of Randers/Killam Common Stock in favor of the Merger and this
Agreement);
(e) by Randers/Killam if the Special Committee determines after
consultation with outside legal counsel that failure to do so would be
inconsistent with the Board's or the Special Committee's fiduciary duties under
applicable law;
(f) by Randers/Killam (upon approval of the Special Committee), upon
a breach of any representation, warranty, covenant or agreement on the part of
Thermo Electron or Merger Sub set forth in this Agreement, if (i) as a result of
such breach the conditions set forth in Section 6.2(a) or Section 6.2(b) would
not be satisfied as of the time of such breach and (ii) such breach shall not
have been cured by Thermo Electron or Merger Sub within ten (10) business days
following receipt by Thermo Electron of written notice of such breach from
Randers/Killam; or
(g) by Merger Sub, upon a breach of any representation, warranty,
covenant or agreement on the part of Randers/Killam set forth in this Agreement,
if (i) as a result of such breach the conditions set forth in Section 6.3(a) or
Section 6.3(b) would not be satisfied as of the time of such breach and (ii)
such breach shall not have been cured by Randers/Killam within ten (10) business
days following receipt by Randers/Killam of written notice of such breach from
Merger Sub.
7.2. Notice of Termination; Effect of Termination. Any termination of this
Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice by the terminating party to the other parties hereto
(or, in the case of a termination pursuant to Section 7.1(f) or 7.1(g), the
expiration of the ten business day period referred to therein). In the event of
the termination of this Agreement as provided in Section 7.1, this Agreement
shall be of no further force or effect, except that (i) the confidentiality
obligations of each party hereto contained in Section 5.3, the obligations
contained in Section 5.10, and the provisions of Sections 7.2, 7.3 and 8.1 shall
survive any such termination and (ii) nothing herein shall relieve any party
from liability for any willful and material breach of this Agreement.
20
<PAGE>
7.3. Fees and Expenses. All fees and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses, whether or not the Merger is consummated.
7.4. Amendment. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of the parties hereto; provided, however, that
Randers/Killam may not amend this Agreement without the approval of the Special
Committee.
7.5. Extension; Waiver. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein; provided, however, that Randers/Killam may not take
any such actions without the approval of the Special Committee. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
8.1. Non-Survival of Representations and Warranties. The representations
and warranties of Randers/Killam, Thermo Electron and Merger Sub contained in
this Agreement shall terminate at the Effective Time, and only the covenants
that by their terms, or as the context requires, survive the Effective Time
shall survive the Effective Time.
8.2. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Thermo Electron or Merger Sub, to:
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: President
Telephone: (781) 622-1000
Facsimile: (781) 622-1283
21
<PAGE>
with a copy (which shall not constitute notice to Thermo Electron or
Merger Sub) to:
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: General Counsel
Telephone: (781) 622-1000
Facsimile: (781) 622-1283
(b) if to Randers/Killam, to:
The Randers Killam Group Inc.
27 Bleeker Street
Millburn, NJ 07041
Attention: President
Telephone: (973) 912-2505
Facsimile: (973) 912-2595
with a copy (which shall not constitute notice to
Randers/Killam) to:
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
Attention: William P. Gelnaw, Jr., Esq.
Telephone: (617) 248-5000
Facsimile: (617) 248-4000
8.3. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.4. Entire Agreement. This Agreement and the documents and instruments
and other agreements among the parties hereto as contemplated by or referred to
herein (a) constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, with the exception of the agreements relating to the Randers/Killam
Stock Option Plans, the Deferred Compensation Plan, and any agreements relating
to indemnification of members of the Board; and (b) are not intended to confer
upon any other person any rights or remedies hereunder, except as set forth or
otherwise contemplated herein. Notwithstanding the foregoing, Section 5.10
hereof is intended to be for the benefit of, and may be enforced by, those
individuals who, as of the date hereof and at any time from the date hereof to
the Effective Time, were directors or officers of Randers/Killam.
22
<PAGE>
8.5. Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.6. Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
8.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law
thereof, except to the extent that the DGCL applies.
8.8. Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties.
8.9 Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
23
<PAGE>
IN WITNESS WHEREOF, Thermo Electron, Merger Sub and Randers/Killam have
caused this Agreement to be signed by themselves or their duly authorized
respective officers, all as of the date first written above.
THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
-----------------------------
Name: Theo Melas-Kyriazi
Title: Vice President and
Chief Financial Officer
RK ACQUISITION CORPORATION
By: /s/ Theo Melas-Kyriazi
-----------------------------
Name: Theo Melas-Kyriazi
Title: President
THE RANDERS KILLAM GROUP INC.
By: /s/ Kenneth J. Apicerno
-----------------------------
Name: Kenneth J. Apicerno
Title: Treasurer
24
