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EXHIBIT 2.1
Execution Copy
AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 11, 2000,
among
PREMIER CONSTRUCTION PRODUCTS STATUTORY TRUST,
PREMIER CONSTRUCTION PRODUCTS ACQUISITION CORP.
and
REPUBLIC GROUP INCORPORATED
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of August 11, 2000, is among
PREMIER CONSTRUCTION PRODUCTS STATUTORY TRUST, a statutory trust ("the Trust"),
PREMIER CONSTRUCTION PRODUCTS ACQUISITION CORP., a Delaware corporation and a
wholly owned subsidiary of the Trust ("Acquisition Sub"), and REPUBLIC GROUP
INCORPORATED, a Delaware corporation (the "Company").
RECITALS:
WHEREAS, the trustees of the Trust and the Boards of Directors of
Acquisition Sub and the Company have approved the merger (the "Merger") of
Acquisition Sub with and into the Company upon the terms and subject to the
conditions set forth herein, whereby each issued and outstanding share of common
stock, par value $1.00 per share (other than shares owned by the Company and
other than Dissenting Shares (as defined in Section 2.1(d)) and the associated
Right (as defined herein) ("Company Common Stock"; shares of Company Common
Stock being hereinafter collectively referred to as the "Shares") will be
converted into the right to receive in cash $19.00 per Share, without interest;
and
WHEREAS, the trustees of the Trust and the respective Boards of Directors
of Acquisition Sub and the Company have each approved and adopted this Agreement
and the Merger upon the terms and subject to the conditions set forth herein;
and
WHEREAS, the Trust and Acquisition Sub have agreed to cause the Letter of
Credit (as defined below) to be issued on the date hereof as set forth in
Section 7.2(b) and have delivered same to the Company; and
WHEREAS, the Company's Board of Directors has unanimously determined that
the consideration to be paid for each Share in the Merger is fair to the holders
of such Shares and recommends that the holders of such Shares approve and adopt
this Agreement, the Merger and the other transactions contemplated hereby; and
WHEREAS, as an inducement to the willingness of each of the Trust and
Acquisition Sub to enter into this Agreement, each of the Company's executive
officers and directors (collectively, the "Officers and Directors") have entered
into an agreement with the Trust and Acquisition Sub (individually, a
"Stockholder Agreement" and collectively, the "Stockholders Agreements")
pursuant to which each such person (and any entity controlled by such person)
has agreed, among other things, (i) to vote their Shares for approval and
adoption of this Agreement and the transactions contemplated hereby at the
Company Stockholder Meeting (as defined below), (ii) to grant a proxy to certain
designated persons to so vote their Shares and (iii) to certain restrictions on
the transfer of their Shares; and
WHEREAS, the Trust, Acquisition Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
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NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE 1
THE MERGER
Section 1.1 The Merger.
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Upon the terms and subject to the conditions set forth in this Agreement,
and in accordance with the Delaware General Corporation Law (the "DGCL"), at the
Effective Time (as defined in Section 1.3) Acquisition Sub shall be merged with
and into the Company and the separate corporate existence of Acquisition Sub
shall cease. The Company shall continue as the surviving corporation (the
"Surviving Corporation") and shall possess all the rights, powers, privileges
and franchises, and be subject to all of the obligations, liabilities,
restrictions and disabilities, of the Company and Acquisition Sub in accordance
with the DGCL.
Section 1.2 Closing.
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Subject to the provisions of this Agreement, the closing of the Merger (the
"Closing") will take place at 10:00 a.m. on a date to be specified by the
parties (the "Closing Date"), which shall be no later than the second business
day after satisfaction or waiver of the conditions set forth in Article 6, at
the offices of Andrews & Kurth L.L.P., 4200 Chase Tower, Houston, Texas 77002,
unless another time, date or place is agreed to in writing by the parties
hereto.
Section 1.3 Effective Time.
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Subject to the provisions of this Agreement, on the Closing Date, the
Company and Acquisition Sub shall file a certificate of merger (the "Certificate
of Merger") executed in accordance with the relevant provisions of the DGCL and
shall make all other filings or recordings required under the DGCL. The Merger
shall become effective at such time as the Certificate of Merger is duly filed
with the Delaware Secretary of State, or at such subsequent time as the Trust
and the Company shall agree and as is specified in the Certificate of Merger
(the time the Merger becomes effective being hereinafter referred to as the
"Effective Time").
Section 1.4 Effects of the Merger.
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The Merger shall have the effects specified in Section 259 of the DGCL.
Section 1.5 Certificate of Incorporation and By-laws.
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(a) The certificate of incorporation of Acquisition Sub, as in effect
immediately prior to the Effective Time, shall be the certificate
of incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law,
except that (i) the name of the Surviving Corporation shall
continue to be Republic Group Incorporated and (ii) the terms of
Article TENTH
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of the Company's Second Restated Certificate of Incorporation
shall be included in the certificate of incorporation of the
Surviving Corporation (and shall supersede and replace in its
entirety any provision in the certificate of incorporation of
Acquisition Sub with respect to indemnification of directors or
officers or former directors or officers).
(b) The by-laws of Acquisition Sub as in effect immediately prior to
the Effective Time shall be the by-laws of the Surviving
Corporation until thereafter changed or amended as provided
therein or by applicable law, except that at the Effective Time
Article VI of the Company's by-laws shall replace the
provision(s), if any, on indemnification included in the by-laws
of Acquisition Sub.
Section 1.6 Directors.
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From and after the Effective Time, the directors of Acquisition Sub
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be. Each
of the members of the Board of Directors of the Company shall tender his
resignation to be effective immediately at the Effective Time.
Section 1.7 Officers.
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From and after the Effective Time, the officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE 2
EFFECT OF THE MERGER ON THE
CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS
Section 2.1 Effect on Capital Stock.
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As of the Effective Time, by virtue of the Merger and without any action on
the part of the holder of any shares of Company Common Stock:
(a) Capital Stock of Acquisition Sub. Each issued and outstanding
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share of capital stock of Acquisition Sub shall be converted into
and become one fully paid and non-assessable share of Common
Stock of the Surviving Corporation with the same rights, powers
and privileges as the share so converted and shall constitute the
only outstanding shares of capital stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock. Each share of Company Common
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Stock owned by the Company or any subsidiary of the Company shall
automatically be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.
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(c) Conversion of Company Common Stock. Except as otherwise provided
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herein, each share of Company Common Stock outstanding
immediately prior to the Effective Time (other than shares to be
cancelled in accordance with Section 2.1(b) and other than
Dissenting Shares) shall be cancelled and automatically converted
into the right to receive $19.00 in cash, without interest, from
the Trust or, in accordance with Section 2.1(f), the Surviving
Corporation.
(d) Shares of Dissenting Stockholders. Notwithstanding anything in
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this Agreement to the contrary but only to the extent required by
the DGCL, shares of Company Common Stock that are issued and
outstanding immediately prior to the Effective Time and held by a
person (a "Dissenting Stockholder") who shall not have voted to
approve and adopt this Agreement or consented thereto in writing
and who shall have complied with all of the provisions of the
DGCL to dissent from the Merger and to demand appraisal for such
shares in accordance with Section 262 of the DGCL ("Dissenting
Shares") shall not be converted as described in Section 2.1(c),
unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal, but shall instead become the right
to receive such consideration as may be determined to be due such
Dissenting Stockholder pursuant to the DGCL. If, after the
Effective Time, such Dissenting Stockholder fails to perfect or
withdraws or otherwise loses his right to appraisal, then such
Dissenting Stockholder's shares of Company Common Stock shall no
longer be considered Dissenting Shares for the purposes of this
Agreement and shall thereupon be deemed to have been converted
into and to have become exchangeable for, at the Effective Time,
the right to receive for each such share the amount in cash,
without interest, that a holder of a share (a "Nondissenting
Share") of Company Common Stock who had not demanded appraisal
would have received with respect to such Nondissenting Share. The
Company shall give Acquisition Sub (i) prompt notice of any
demands for appraisal of shares of Company Common Stock received
by the Company and (ii) the opportunity to participate in and
direct all negotiations and proceedings with respect to any such
demands. The Company shall not, without the prior written consent
of Acquisition Sub, make any payment with respect to, or settle,
offer to settle or otherwise negotiate, any such demands, or
agree or commit to do any of the foregoing.
(e) Cancellation of Company Common Stock. As of the Effective Time,
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all shares of Company Common Stock outstanding immediately prior
to the Effective Time shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each
holder of a certificate that immediately prior to the Effective
Time represented any such shares of Company Common Stock (a
"Certificate") shall cease to have any rights with respect
thereto, except the right to receive the amount per Share
specified in Section 2.1(c) upon surrender of such Certificate in
accordance with Section 2.2, without interest, or, in the case of
Dissenting Stockholders, if any, the rights, if any, accorded
under Section 262 of the DGCL.
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Section 2.2 Exchange of Certificates.
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(a) Prior to the mailing of the Proxy Statement (as defined in
Section 3.1(d)), the Trust shall enter into an agreement with a
bank or trust company mutually acceptable to the Company and the
Trust, to act as Paying Agent (the "Paying Agent") for the
payment of the amount per share specified in Section 2.1(c).
(b) Stock Options.
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(i) At or immediately prior to the Effective Time, each employee
or director stock option to purchase Company Common Shares
outstanding under any stock option or compensation plan or
arrangement of the Company shall be cancelled, and the
Company or the Surviving Corporation shall pay each holder
of any such option at or promptly after the Effective Time
for each such option an amount in cash determined by
multiplying (A) the excess, if any, of $19.00 over the
applicable exercise price of such option by (B) the number
of shares of Company Common Stock such holder could have
purchased (assuming full vesting and exercisability of all
options) had such holder exercised such option in full
immediately prior to the Effective Time.
(ii) Prior to the Effective Time, the Company shall (A) use its
best efforts to obtain any consents from holders of options
to purchase Company Common Stock granted under the Company's
stock option or compensation plans or arrangements and (B)
make any amendments to the terms of such stock option or
compensation plans or arrangements that, in the case of
either clauses (A) or (B), are necessary to give effect to
the transactions contemplated by part (b)(i) of this
Section. Notwithstanding any other provision of this
Section, payment may be withheld in respect of any employee
stock option until such necessary consents are obtained.
Except as provided in part (b)(i) of this Section 2.2, the
Company shall not make any payment in respect of or in
connection with the cancellation of any stock option.
(c) Deposit with the Paying Agent. Promptly after the Effective Time,
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the Trust shall deposit with the Paying Agent, for the benefit of
the holders of shares of Company Common Stock, for payment
through the Paying Agent, cash in such amounts and at times
necessary for the prompt payment of the per Share amount
specified in Section 2.1(c) (such cash being hereinafter referred
to as the "Exchange Fund") pursuant to Section 2.1 in exchange
for outstanding shares of Company Common Stock upon surrender of
Certificates therefor.
(d) Exchange Procedures. As soon as reasonably practical after the
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Effective Time, the Paying Agent shall mail to each holder of
record of a Certificate or Certificates, (i) a letter of
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to such Certificates shall pass, only
upon delivery of such Certificates to the Paying Agent, and which
letter shall be in such
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form and have such other provisions as the Trust and the Company
may reasonably specify) and (ii) instructions for use in
effecting the surrender of such Certificates in exchange for the
amount per Share specified in Section 2.1(c). Upon surrender of
such a Certificate for cancellation to the Paying Agent or to
such other agent or agents as may be appointed by the Trust,
together with such letter of transmittal, duly executed, and such
other documents as may reasonably be required by the Paying
Agent, the holder of such Certificate shall be entitled to
receive in exchange therefor cash which such holder has the right
to receive pursuant to this Article 2, and the Certificate so
surrendered shall forthwith be cancelled. Upon a transfer of
ownership of Company Common Stock that is not registered in the
transfer records of the Company, cash may be paid to a person
other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the
person requesting such cash to be paid shall (i) have paid any
transfer or other Taxes (as defined in Section 3.1(m)) required
by reason of the payment of cash to a person other than the
registered holder of such Certificate or (ii) establish to the
satisfaction of the Trust that such Tax has been paid or is not
applicable. Until surrendered as contemplated by this Section
2.2(d), each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such
surrender the amount per Share specified in Section 2.1(c) which
the holder thereof has the right to receive in respect of such
Certificate pursuant to the other provisions of this Article 2.
No interest will be paid or will accrue on any cash payable to
holders of Certificates pursuant to the provisions of this
Article 2. The Trust shall pay the charges and expenses of the
Paying Agent and of such other agent or agents as it may appoint.
(e) No Further Ownership Rights in Company Common Stock. All
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cash paid shall be deemed to have been paid and issued in full
satisfaction of all rights pertaining to the shares of Company
Common Stock theretofore represented by such Certificates,
subject, however, to the Surviving Corporation's obligation to
pay any dividends or make any other distributions with a record
date prior to the Effective Time that may have been declared or
made by the Company on such shares of Company Common Stock in
accordance with the terms of this Agreement or prior to the date
of this Agreement and which remain unpaid at the Effective Time,
and as of the Effective Time, the stock transfer books of the
Company shall be closed, and there shall be no further
registration of transfers of the shares of Company Common Stock.
If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent for any reason, then
they shall be canceled and exchanged as provided in this Article
2, except as otherwise provided by law.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
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that remains undistributed to the holders of the Certificates for
nine months after the Effective Time shall be delivered to the
Surviving Corporation, upon demand, and any holders of the
Certificates who have not theretofore complied with this Article
2 shall thereafter look only to the Surviving Corporation for
payment of the cash amount per Share due pursuant to this Article
2. Any amounts remaining
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unclaimed by holders of Company Common Stock three years after
the Effective Time (or such earlier date immediately prior to
such time when the amounts would otherwise escheat to or become
property of any governmental authority) shall become, to the
extent permitted by applicable law, the property of the Surviving
Corporation free and clear of any claims or interest of any
person previously entitled thereto. Any cash amounts made
available to the Paying Agent pursuant to Section 2.2(c) (or
otherwise constituting a part of the Exchange Fund) to pay for
shares of Company Common Stock constituting Dissenting Shares for
which appraisal rights have been perfected shall be returned to
the Surviving Corporation upon demand.
(g) No Liability. Notwithstanding any other provision of this
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Agreement, none of the Trust, the Company or the Paying Agent
shall be liable to any person in respect of any amount paid to a
public official pursuant to any applicable abandoned property,
escheat or similar law.
(h) Investment of Exchange Fund. The Paying Agent shall invest any
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cash included in the Exchange Fund, as directed by the Trust, on
a daily basis. Any interest and other income resulting from such
investments shall be paid to the Trust.
(i) Lost Certificates. If any Certificate shall have been lost,
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stolen or destroyed, then upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen
or destroyed and, if required by the Surviving Corporation, the
posting by such person of a bond in such reasonable amount as the
Surviving Corporation may direct as indemnity against any claim
that may be made against the Surviving Corporation with respect
to such Certificate, the Paying Agent will pay in exchange for
such lost, stolen or destroyed Certificate the amount per share
to be paid pursuant to Section 2.1(c) in respect of the shares of
Company Common Stock represented by such Certificate, as
contemplated by this Agreement.
(j) Withholding Rights. Each of the Trust, the Surviving Corporation
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and the Paying Agent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this
Agreement to a holder of shares of Company Common Stock such
amounts as the Trust, the Surviving Corporation or the Paying
Agent is required to deduct and withhold with respect to such
consideration under the Internal Revenue Code of 1986, as amended
(the "Code"), or any provision of Federal, state, local or
foreign tax law. To the extent that amounts are so withheld and
paid over to the appropriate taxing authority by the Trust, the
Surviving Corporation or the Paying Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Company Common Stock in
respect of which such deduction and withholding was made by the
Trust, the Surviving Corporation or the Paying Agent, as the case
may be.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company.
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Except as set forth with respect to an identified representation and
warranty on the Disclosure Schedule delivered by the Company to the Trust at the
execution of this Agreement (the "Company Disclosure Schedule"), the Company
represents and warrants to the Trust and Acquisition Sub as follows:
(a) Organization, Standing and Corporate Power. The Company is a
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corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite
corporate power and authority to carry on its business as now
being conducted. The Company is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified
or licensed or to be in good standing individually or in the
aggregate would not reasonably be expected to have a material
adverse effect (as defined in Section 9.3) on the Company. The
Company has heretofore made available to the Trust true and
correct copies of the certificate of incorporation and by-laws of
the Company, as currently in effect.
(b) Subsidiaries. The Company Disclosure Schedule sets forth a true
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and complete list of each subsidiary of the Company and its
respective jurisdiction of incorporation. Each such subsidiary is
a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority
to carry on its business as now being conducted. Each such
subsidiary is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed or
to be in good standing individually or in the aggregate would not
reasonably be expected to have a material adverse effect on the
Company. All the outstanding shares of capital stock of each such
subsidiary have been validly issued and are fully paid and non-
assessable and are owned directly or indirectly by the Company,
free and clear of all pledges, claims, mortgages, liens, charges,
encumbrances, adverse claims and security interests of any kind
or nature whatsoever (collectively, "Liens"). Except for the
capital stock of its subsidiaries, the Company does not own,
directly or indirectly, any capital stock or other ownership
interest in any corporation, limited liability company,
partnership, joint venture or other entity.
(c) Capital Structure. The authorized capital stock of the Company
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consists of 35,000,000 shares of Company Common Stock, par value
$1.00 per share, and 487,410 shares of Preferred Stock, without
par value. At the close of business on
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August 9, 2000, (i) 11,846,837 shares of Company Common Stock
were issued and outstanding, (ii) no shares of Company Common
Stock were held by the Company in its treasury, (iii) 1,811,307
shares of Company Common Stock were reserved for issuance
pursuant to the Company's 1989 Long-Term Incentive Plan (as
amended effective August 16, 1996), the Company's Non-Employee
Director Stock Option Plan, the Company's Employee Stock Purchase
Plan and the Company's Dividend Reinvestment Plan (collectively,
the "Company Stock Plans"), (iv) employee and director stock
options to purchase an aggregate of 600,843 shares of Company
Common Stock ("Outstanding Stock Options") were outstanding, (v)
rights (the "Rights") to purchase shares of Company Common Stock
(and in certain instances to receive fractional shares of
Preferred Stock of the Company in lieu of shares of Company
Common Stock) issuable pursuant to the Amended and Restated
Rights Agreement dated September 19, 1996 (as amended from time
to time, the "Rights Agreement") between the Company and UMB
Bank, N.A., as rights agent, were outstanding and (vi) 47,250
shares of Series C Junior Participating Preferred Stock,
constituting a series of Preferred Stock, have been designated
and authorized for issuance pursuant to the Rights Agreement, but
no shares of Preferred Stock were outstanding. Except as set
forth above, and for changes since the close of business on
August 9, 2000 resulting from the exercise or vesting of employee
and director stock options outstanding on such date, (i) no
shares of capital stock or other voting securities, of or
ownership interests in the Company were issued, reserved for
issuance or outstanding, (ii) there were no securities of the
Company convertible into or exchangeable for shares of capital
stock or voting securities and (iii) there were no outstanding
stock appreciation rights, stock options or rights to receive
shares of Company Common Stock on a deferred basis granted under
the Company Stock Plans or otherwise. All outstanding shares of
capital stock of the Company are, and all shares issuable upon
exercise of outstanding employee or director stock options will
be, when issued, duly authorized, validly issued, fully paid and
non-assessable and not subject to preemptive rights. There are no
notes, bonds, debentures or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which
stockholders of the Company may vote. Except as set forth above
and except for the Company's Dividend Reinstatement Plan and
Employee Stock Purchase Plan, as to which purchases of Shares
shall have been suspended pursuant to Section 4.1(d) hereof,
there are no outstanding securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings to
which the Company or any of its subsidiaries was a party or by
which any of them was bound obligating the Company or any of its
subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other
voting securities of the Company or of any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue,
grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking.
There are no outstanding contractual obligations of the Company
or any of its subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its
subsidiaries. There are no outstanding
<PAGE>
contractual obligations of the Company to vote or to dispose of
any shares of the capital stock of any of its subsidiaries.
(d) Authority; Noncontravention. The Company has all requisite
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corporate power and authority to enter into this Agreement and,
subject to the Company Stockholder Approval (as defined in
Section 3.1(n)), to consummate the transactions contemplated by
this Agreement. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of
the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of the
Company, subject, in the case of the approval and adoption of
this Agreement, to the Company Stockholder Approval. This
Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms. The execution, delivery and performance of this Agreement
and the Stockholders Agreements do not, and the consummation of
the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement and the Stockholders
Agreements will not, conflict with, or result in any violation
of, breach of or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation or imposition
of any Lien upon any of the properties or assets of the Company
or any of its subsidiaries under, (i) the certificate of
incorporation or by-laws of the Company or the comparable
organizational documents of any of its subsidiaries, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise or
license applicable to the Company or any of its subsidiaries or
their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any of
its subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Liens that individually
or in the aggregate would not have a material adverse effect on
the Company. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Federal, state or
local government or any court, administrative or regulatory
agency or commission or other governmental authority or agency,
domestic or foreign (a "Governmental Entity"), is required by or
with respect to the Company or any of its subsidiaries in
connection with the execution, delivery and performance of the
Stockholders Agreements by the Officers and Directors or of this
Agreement by the Company or the consummation by the Company of
the transactions contemplated by this Agreement, except for (1)
the filing of a premerger notification and report form by the
Company under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"); (2) the filing with the
Securities and Exchange Commission (the "SEC") of (A) a proxy
statement relating to the Company Stockholders Meeting (such
proxy statement (as provided for in Section 5.1(a)), as amended
or supplemented from time to time, being the "Proxy
<PAGE>
Statement"), and (B) such reports under Section 13(a), 13(d) or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be required in connection with the
Stockholders Agreements and this Agreement and the transactions
contemplated by this Agreement; (3) the filing of the Certificate
of Merger with the Delaware Secretary of State and appropriate
documents with the relevant authorities of other states in which
the Company is qualified to do business; (4) such filings as are
listed on Schedule 3.1(d) of the Company Disclosure Schedule; and
(5) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure to make or
obtain which would not reasonably be expected to have a material
adverse effect on the Company.
(e) SEC Documents. The Company has filed all required reports,
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schedules, forms, statements and other documents with the SEC
since July 1, 1997 (the "SEC Documents"). As of their respective
dates, the SEC Documents complied or will comply in all material
respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case
may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and, as of their
respective dates, none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. Except to the extent that
information contained in any SEC Document has been revised or
superseded by a later Filed SEC Document, none of the SEC
Documents contains, and no SEC Documents filed after the date of
this Agreement and prior to the Effective Time will contain, 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 therein, in light of the circumstances
under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents
(including, in each case, any notes thereto) comply or will
comply as to form in all material respects with applicable
accounting requirements of the SEC with respect thereto, have
been prepared or will be prepared in accordance with generally
accepted accounting principles as in effect at the time of
application thereof ("GAAP") (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC and other SEC
rules and regulations) applied on a consistent basis during the
periods involved (except as may be indicated in the notes
thereto) and fairly present in all material respects, or will
fairly present in all material respects, the consolidated
financial position of the Company and its subsidiaries as of the
dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments).
(f) Other Financial Statements. The consolidated financial
--------------------------
statements as of and for the year ended June 30, 2000 furnished
by the Company to the Trust and Acquisition Sub, which consist of
a balance sheet as of such date (the "Company Balance Sheet") and
a statement of operations and a statement of cash flows for the
year then ended (including the notes thereto), and the report of
Arthur Andersen LLP with respect thereto, was prepared in
accordance with GAAP
<PAGE>
applied on a consistent basis during the periods involved and
fairly presents in all material respects the consolidated
financial position of the Company and its subsidiaries as of the
dates thereof and the consolidated results of their operations
and cash flows for the period then ended.
(g) No Undisclosed Material Liabilities. At the date of this
-----------------------------------
Agreement, there are no liabilities or obligations of the Company
or any of its subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or
otherwise, other than (i) liabilities or obligations disclosed in
or reserved against in the Company Balance Sheet, (ii)
liabilities and obligations of a type not required to be
disclosed in or reserved against in the Company Balance Sheet
that are (A) referred to in the Company's Annual Report on Form
10-K for the year ended June 30, 1999 or any SEC Documents filed
thereafter (including obligations under agreements, plans and
other documents filed therewith or incorporated by reference
therein) or (B) contained in the Disclosure Schedule, and (iii)
liabilities or obligations incurred in the ordinary course of
business consistent with past practice that would not reasonably
be expected to have, individually or in the aggregate, a material
adverse effect on the Company.
(h) Information Supplied. None of the information included or
--------------------
incorporated by reference in any documents filed or to be filed
with the Commission or any other Governmental Entity in
connection with the transactions contemplated hereby, including
in the Proxy Statement will, the respective times such documents
are filed or are first published, sent or given to stockholders,
and also, in the case of the Proxy Statement, at the date such
document is first mailed to the Company's stockholders or at the
time of the Company Stockholders Meeting or at the Effective
Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading, and
the Proxy Statement and any such information statement will
comply at all relevant times in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by
the Company with respect to statements made or incorporated by
reference therein based on information supplied to the Company by
the Trust or Acquisition Sub in writing specifically for
inclusion or incorporation by reference in the Proxy Statement.
(i) Absence of Certain Changes or Events. Except as disclosed in the
------------------------------------
Company Disclosure Schedule and the SEC Documents filed and
publicly available after the date of the Company Balance Sheet,
since the date of the Company Balance Sheet, the Company has
conducted its business only in the ordinary course, consistent
with past practice and there has not been (i) any event,
occurrence, development or state of circumstances or facts that
has had or is reasonably likely to have a material adverse effect
on the Company, except for any such event, occurrence,
development or state of facts or circumstances attributable to
conditions affecting the paperboard or wallboard industries or
the U.S. economy as a whole, (ii) any declaration, setting aside
or payment of any dividend or other
<PAGE>
distribution (whether in cash, stock or property) with respect to
any of the Company's capital stock, (iii) any granting by the
Company or any of its subsidiaries to any director, officer or
other employee of the Company or any of its subsidiaries of (x)
any options or rights to acquire equity securities of the
Company, (y) any increase in compensation, bonuses or other
benefits, except the vesting of benefits and for normal awards,
increases and other payments in the ordinary course of business
consistent with past practice or as was required under employment
agreements and Company Plans in effect as of the date of the most
recent audited financial statements included in the Filed SEC
Documents or (z) severance or termination pay or increase
thereof, (iv) any incurrence, assumption or guarantee by the
Company or any of its subsidiaries of any indebtedness for
borrowed money other than in the ordinary course of business and
in amounts and on terms consistent with past practice (it being
agreed that the aggregate indebtedness for borrowed money of the
Company and its subsidiaries at any time will be no more than
$215 million), (v) any creation or other incurrence by the
Company or any of its subsidiaries of any Lien on any material
asset other than in the ordinary course of business consistent
with past practice, (vi) any damage, destruction or other
casualty loss (whether or not covered by insurance) affecting the
business or the assets of the Company or any of its subsidiaries
that has had or would reasonably be expected to have a material
adverse effect on the Company, (vii) any material labor dispute
involving the employees of the Company or any of its
subsidiaries, (viii) any transaction or commitment made, or any
contract or arrangement entered into, by the Company or any of
its subsidiaries (including the acquisition or disposition of any
assets) other than in the ordinary course of business consistent
with past practice except for the disposition of certain assets
of the Company as set forth on the Company Disclosure Schedule,
or (ix) any amendment of any term of any outstanding security of
the Company or any of its subsidiaries.
(j) Litigation. There is no suit, action, investigation or
----------
proceeding pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its
subsidiaries or any of their respective properties before any
court or arbitrator or before any foreign or domestic
Governmental Entity that individually or in the aggregate would
reasonably be expected to have a material adverse effect on the
Company, nor is there any judgment, order or decree of any
Governmental Entity outstanding against the Company or any of its
subsidiaries having, or which would reasonably be expected to
have, such a material adverse effect on the Company.
(k) Absence of Changes in Benefit Plans. Except as disclosed in the
-----------------------------------
Company Disclosure Schedule, since the date of the Company
Balance Sheet there has not been any adoption or amendment in any
material respect (except as required by applicable law), or any
agreement to adopt or amend in any material respect, by the
Company or any of its subsidiaries of any collective bargaining
agreement or employment contract or any bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit,
<PAGE>
hospitalization, medical or other plan, arrangement or
understanding (whether or not legally binding) providing benefits
to any current or former director, officer or employee of the
Company or any of its subsidiaries (the "Company Plans"). Without
limiting the foregoing, except as disclosed in the Company
Disclosure Schedule, since the date of the Company Balance Sheet,
there has not been any change in any actuarial or other
assumption used to calculate funding obligations with respect to
any Pension Plan (as defined in Section 3.1(l)) of the Company,
or in the manner in which contributions to any Pension Plan of
the Company are made or the basis on which such contributions are
determined. Except as disclosed in the Company Disclosure
Schedule, there exist no employment, consulting, severance,
termination or indemnification agreements, arrangements or
understandings between the Company or any of its subsidiaries and
any current or former director, officer or employee of the
Company or any of its subsidiaries.
(l) ERISA Compliance.
----------------
(i) The Company Disclosure Schedule contains a list of each
"employee pension benefit plan" (as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (sometimes referred to herein as a
"Pension Plan"), each "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA) (sometimes referred to
herein as a "Welfare Plan"), each employment contract, stock
option, stock purchase, deferred compensation plan or
arrangement and each other employee fringe benefit plan or
arrangement maintained, contributed to or required to be
maintained or contributed to by the Company, any of its
subsidiaries or any other person or entity that, together
with the Company, is or was treated as a single employer
under Section 414(b), (c), (m) or (o) of the Code (each, a
"Commonly Controlled Entity") for the benefit of any current
or former directors, officers, employees or independent
contractors of the Company or any of its subsidiaries
(collectively, "Company Benefit Plans"). The Company has
delivered or made available to the Trust true, complete and
correct copies of (w) each Company Benefit Plan, (x) the two
most recent annual reports on Form 5500 filed with the
Internal Revenue Service with respect to each Company
Benefit Plan (if any such report was required), (y) the most
recent summary plan description for each Company Benefit
Plan for which such summary plan description is required,
and (z) each currently effective trust agreement, insurance
or group annuity contract and each other funding or
financing arrangement relating to any Company Benefit Plan.
(ii) Except as disclosed on the Company Disclosure Schedule, (1)
each Company Benefit Plan has been administered in
accordance with its terms and the Company, its subsidiaries
and all the Company Benefit Plans are in compliance with the
applicable provisions of ERISA, the Code and all other
applicable laws and the terms of all applicable collective
bargaining agreements, except for any failure to so
administer or any non-compliance
<PAGE>
that has not and, if continued, would not, individually or
in the aggregate, have a material adverse effect on the
Company, (2) there are no pending or, to the Company's
knowledge, threatened, (A) investigations by any
Governmental Entity, (B) termination proceedings or other
claims (except routine claims for benefits payable under
the Company Benefit Plans), (C) suits or (D) proceedings
against or involving any Company Benefit Plan or asserting
any rights or claims to benefits under any Company Benefit
Plan, and (3) all reports, returns and similar documents
with respect to the Company Benefit Plans required to be
filed with any governmental agency or distributed to any
Company Benefit Plan Participant have been duly, timely,
and accurately filed or distributed.
(iii) Except as described on Schedule 3.1(l) of the Company
Disclosure Schedule, (1) all contributions to, and
payments from, the Company Benefit Plans that may have
been required to be made in accordance with the terms of
the Company Benefit Plans, any applicable collective
bargaining agreement and, when applicable, Section 302 of
ERISA or Section 412 of the Code, have been timely made,
except for any such untimely payment that has not and, if
continued, would not, individually or in the aggregate,
have a material adverse effect on the Company, (2) there
has been no application for waiver or waiver of the
minimum funding standards imposed by Section 412 of the
Code with respect to any Pension Plan of the Company, (3)
no Pension Plan of the Company has or had at any time
during the current plan year an "accumulated funding
deficiency" within the meaning of Section 412(a) of the
Code and (4) there is no liability under Title IV of ERISA
with respect to any Company Benefit Plan (except for
insurance premiums payable to the Pension Benefit Guaranty
Corporation which are not yet due) that has not been
satisfied as of the date hereof.
(iv) Each Pension Plan of the Company that is intended to be a
tax-qualified plan has been the subject of a determination
letter from the Internal Revenue Service to the effect
that such Pension Plan and related trust is qualified and
exempt from U.S. Federal income Taxes under Sections
401(a) and 501(a), respectively, of the Code; no such
determination letter has been revoked; and, to the
knowledge of the Company, no such revocation has been
threatened. No such Pension Plan has been amended since
the effective date of its most recent determination letter
in any respect that would adversely affect its
qualification, materially increase its costs or require
security under Section 307 of ERISA. Furthermore, each
Pension Plan of the Company that is intended to be tax
qualified has been timely and properly amended since each
respective Pension Plan's effective date to comport with
any changes in the Code, ERISA, or other applicable
federal or state law which might otherwise effect such
Pension Plan's tax qualified status. The Company has
delivered or made available to the Trust a copy of the
most recent determination letter received with respect to
each Pension Plan of the Company.
<PAGE>
(v) Each Welfare Plan of the Company may be amended or
terminated without material liability to the Surviving
Corporation at any time after the Effective Time.
(vi) Except as disclosed in Schedule 3.1(l) of the Company
Disclosure Schedule, no director, independent contractor
or employee of the Company will be entitled to any
additional benefits or any acceleration of the time of
payment or vesting of any benefits under any Company
Benefit Plan as a result of the transactions contemplated
by this Agreement.
(vii) Schedule 3.1(l) of the Company Disclosure Schedule
contains a list of all Company Benefit Plans which provide
for accelerated vesting or payment of any benefits as a
result of a change in control.
(m) Taxes.
-----
(i) Each of the Company and its subsidiaries has filed all
Federal and all material state and local Tax returns and
reports required to be filed by it or requests for
extensions to file such returns or reports have been
timely filed, granted and have not expired. All Federal
and all material state and local Tax returns and reports
filed by the Company and each of its subsidiaries are
complete and accurate in all material respects. The
Company and each of its subsidiaries has paid (or the
Company has paid on its behalf) all Taxes shown as due on
such returns and reports and all material Taxes otherwise
due, and the Company Balance Sheet adequately provides for
Taxes payable by the Company and its subsidiaries for
taxable periods and portions thereof accrued through the
date of such financial statements.
(ii) No deficiencies for any Taxes have been proposed, asserted
or assessed against the Company or any of its subsidiaries
that are not adequately provided for on the financial
statements, and no requests for waivers of the time to
assess any such Taxes have been granted or are pending.
There is no audit, examination, deficiency or refund
litigation pending with respect to Taxes and during the
past three years no taxing authority has given written
notice of the intent to commence any such examination,
audit deficiency or refund litigation. None of the assets
or properties of the Company or any of its subsidiaries is
subject to any material Tax lien, other than any such
liens for Taxes which are not due and payable, which may
thereafter be paid without penalty or the validity of
which are being contested in good faith by appropriate
proceedings and for which adequate provisions are being
maintained in accordance with generally accepted
accounting principles ("Permitted Tax Liens").
(iii) Schedule 3.1(m) of the Company Disclosure Schedule lists
all federal, state, local, and foreign income Tax returns
for which an extension to file has filed and for which the
related Tax return has not been filed.
<PAGE>
(iv) None of the payments or benefits which may be triggered
under any Company Benefit Plan or other agreement or
arrangement by the Merger or the other transactions
contemplated hereby (either alone or in combination with a
second event following the Merger such as termination of
employment) will not be deductible under Code (S)280G.
(v) As used in this Agreement, "Taxes" shall include all
Federal, state and local income, franchise, use, property,
sales, excise and other taxes, tariffs or governmental
charges of any nature whatsoever, domestic or foreign,
including any interest, penalties or additions with
respect thereto.
(n) Inapplicability of DGCL Section 203 and Article THIRTEENTH of the
-----------------------------------------------------------------
Company Charter; Voting Requirements. The Company's Board of
------------------------------------
Directors (including, without limitation the requisite approval
of "Continuing Directors" to the extent necessary under Article
THIRTEENTH of the Company's Second Restated Certificate of
Incorporation) has taken all actions necessary and appropriate to
render the limitations on business combinations contained in
Section 203 of the DGCL and the 66 2/3% voting provisions in
Article THIRTEENTH of the Company's Second Restated Certificate
of Incorporation inapplicable to this Agreement, the Stockholders
Agreements and the consummation of the Merger and the other
transactions contemplated hereby and thereby. The affirmative
vote of the holders of a majority of the outstanding shares of
the Company Common Stock (the "Company Stockholder Approval") is
the only vote of the holders of any class or series of the
Company's capital stock necessary to approve and adopt this
Agreement, the Merger and the other transactions contemplated by
this Agreement, and the Stockholders Agreements.
(o) Rights Agreement. The Rights Agreement has been amended as of
----------------
the date hereof (the "Rights Amendment") to the extent necessary
(i) to render the Rights Agreement inapplicable to this
Agreement, the Stockholders Agreements, the Merger, and the other
transactions contemplated by this Agreement and the Stockholders
Agreements (ii) to ensure that (y) neither the Trust nor any of
its subsidiaries (including Acquisition Sub) is an Acquiring
Person (as defined in the Rights Agreement) pursuant to the
Rights Agreement and (z) a Stock Acquisition Date or Distribution
Date (in each case as defined in the Rights Agreement) does not
occur solely by reason of the execution of this Agreement or the
Stockholders Agreements or the consummation of the Merger or the
other transactions contemplated by this Agreement and the
Stockholders Agreements and (iii) to terminate the Rights
Agreement effective as of the Effective Time.
(p) Brokers. No broker, investment banker, financial advisor or
-------
other person, other than J.P. Morgan & Co., Incorporated (copies
of whose engagement agreement have been provided to the Trust),
is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
<PAGE>
(q) Opinion of Financial Advisor; Board Findings and Recommendation. The
---------------------------------------------------------------
Company has received the opinion of J.P. Morgan & Co. Incorporated,
dated as of the date of this Agreement, to the effect that, as of such
date, the cash amount per Share specified in Section 2.1(c) to be paid
in accordance with Article 2 is fair to the holders of the Company's
Common Stock from a financial point of view. A copy of such opinion
has heretofore been delivered to the Trust. The Company has been
authorized by J. P. Morgan & Co. Incorporated to permit the inclusion
of such opinion in its entirety in the Proxy Statement, so long as
such inclusion is in form and substance reasonably satisfactory to J.
P. Morgan & Co. Incorporated and its counsel. The Company's Board of
Directors (i) has unanimously approved and adopted the Stockholders
Agreements, this Agreement and the transactions contemplated hereby,
including the Merger, and thereby, (ii) has unanimously determined
that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable, fair to and in the best interests
of the stockholders of the Company and (iii) unanimously recommends
(subject to Section 4.2(b)) that the stockholders of the Company
approve and adopt this Agreement and the transactions contemplated
hereby, including the Merger.
(r) Compliance with Applicable Laws. Each of the Company and its
-------------------------------
subsidiaries holds all Federal, state and local governmental
approvals, authorizations, certificates, permits, filings, franchises,
licenses, notices and rights, domestic or foreign ("Permits")
necessary for it to own, lease or operate its properties and assets
and to carry on its business as now conducted, and all such Permits
are valid and in full force and effect, except where the failure to
have, or the suppression or cancellation of, or the failure of any
such Permits to be valid and in full force and effect individually or
in the aggregate would not have a material adverse effect on the
Company. The Company and each of its subsidiaries are in compliance
with all applicable judgments, orders, decrees, statutes, laws,
ordinances, rules and regulations of any Governmental Entity, except
for possible noncompliance which individually or in the aggregate
would not have a material adverse effect on the Company. As of the
date hereof, no investigation or review by any Governmental Entity
with respect to the Company or any of its subsidiaries is pending, or
to the Company's knowledge threatened, other than those which
individually or in the aggregate would not have a material adverse
effect on the Company.
(s) No Default. Neither the Company nor any of its subsidiaries is in
----------
breach, default or violation (and no event has occurred, which, with
notice or the lapse of time or both, would constitute a breach,
default or violation) of any term, condition or provision of (i) the
certificate of incorporation or by-laws of the Company or the
comparable organizational documents of any of its subsidiaries, (ii)
any loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise or
license applicable to the Company or any of its subsidiaries or their
respective properties or assets, or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company
or any of its subsidiaries or their respective properties or assets,
except in the case of clauses (ii) and (iii) for breaches, defaults or
violations
AGREEMENT AND PLAN OF MERGER - Page 18
<PAGE>
which individually or in the aggregate would not have a material
adverse effect on the Company.
(t) Environmental Laws and Regulations. Except as described in Schedule
----------------------------------
3.1(t) of the Company Disclosure Schedule, the Company and each of its
subsidiaries are in compliance with all applicable Federal, state and
local laws and regulations (including common law) relating to
pollution or protection of human health or the environment (including
ambient air, surface water, ground water, land surface or subsurface
strata) (collectively, "Environmental Laws"), which, except for any
such non-compliance as has not and, if continued, would not,
individually or in the aggregate, have a material adverse effect on
the Company. For purposes of the immediately preceding sentence,
compliance with Environmental Laws includes, but is not limited to,
the possession by the Company and each of its subsidiaries of all
permits and other governmental authorizations required under
applicable Environmental Laws. The Company is in material compliance
with the terms and conditions thereof. Except as described in
Schedule 3.1(t) of the Company Disclosure Schedule, neither the
Company nor any of its subsidiaries has received written notice of, or
is the subject of any facts, circumstances or conditions that could
reasonably be expected to result in, any actions, causes of action,
claims, investigations, demands or notices by any person alleging
liability under or non-compliance with any Environmental Law
("Environmental Claims") that has had or, if continued, would have,
individually or in the aggregate, a material adverse effect on the
Company.
(u) Contracts; Indebtedness. (a) Except as disclosed in Schedule 3.1(u)
-----------------------
of the Company Disclosure Schedule, there are no contracts, agreements
that are material to the business, properties, assets, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole. All of such disclosed contracts are valid and
legally binding obligations of the Company or its subsidiaries, as the
case may be, and, to the knowledge of the Company, of each of the
other parties thereto, and are enforceable in accordance with the
terms thereof. No such contract contains any provision which
prohibits or restricts, or provides that the other party thereto may
terminate such contract in the event or by reason of, the Merger or
the other transactions contemplated by this Agreement, or contains any
other provision that would be altered or otherwise become applicable
by reason of such transaction. The Company has provided true and
correct copies of all such contracts to the Trust. Schedule 3.1(u) of
the Company Disclosure Schedule sets forth (i) a list of each
agreement, instruments and other obligation pursuant to which any
indebtedness of the Company or any of its subsidiaries in a principal
amount in excess of $1,000,000 is outstanding or may be incurred other
than any that may be entered into after the date of this Agreement in
compliance with Sections 4.1(a) and (ii) the respective principal
amounts outstanding thereunder as of June 30, 2000.
(v) Intellectual Property. The Company and its subsidiaries (i) own, or
---------------------
are validly licensed or otherwise have the right to use, all patents,
patent rights, trademarks, trade names, service marks, copyrights,
know how and other proprietary
AGREEMENT AND PLAN OF MERGER - Page 19
<PAGE>
intellectual property rights and computer programs (collectively,
"Intellectual Property Rights") that are material to the conduct of
the business of the Company and its subsidiaries taken as a whole, and
(ii) has taken such steps to preserve such Intellectual Property
Rights as the Company has determined to be appropriate. Schedule
3.1(v) of the Company Disclosure Schedule sets forth a description of
all Intellectual Property Rights that are material to the conduct of
the business of the Company and its subsidiaries taken as a whole,
and, to the Company's knowledge, all such Intellectual Property Rights
are valid and enforceable. No claims are pending or, to the knowledge
of the Company, threatened that the Company or any of its subsidiaries
is infringing or otherwise adversely affecting the intellectual
property rights of any person, and the Company is not aware of any
basis for any such claims. To the knowledge of the Company, no person
is infringing the rights of the Company or any of its subsidiaries
with respect to any Intellectual Property Right. None of the Company's
Intellectual Property Rights are licensed to any third party. Except
as disclosed in the Company Disclosure Schedule, no material
Intellectual Property Right is subject to any outstanding judgment,
injunction, order, decree, or agreement restricting the use thereof by
the Company or any of its subsidiaries or restricting the licensing
thereof by the Company or any of its subsidiaries.
(w) Labor Matters. Except as disclosed in Section 3.1(w) of the Company
-------------
Disclosure Schedule, neither the Company nor any of its subsidiaries
is party to any collective bargaining agreement, memorandum of
understanding, settlement or other labor agreement with any union or
labor organization and no union or labor organization has been
recognized by the Company or any of its subsidiaries as an exclusive
bargaining representative for employees of the Company or any of its
subsidiaries. Except as disclosed in Section 3.1(w) of the Company
Disclosure Schedule, to the Company's knowledge, there is no current
union representation question involving employees of the Company or
any of its subsidiaries, nor does the Company have knowledge of any
significant activity or proceeding of any labor organization (or
representative thereof) or employee group to organize any such
employees. Except as disclosed in Section 3.1(w) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries
has made any commitment that would require the application of the
terms of any collective bargaining agreements entered into by the
Company or any of its subsidiaries to the Trust, to any joint venture
of the Trust, or to any subsidiary of the Trust.
Except as disclosed in Section 3.1(w) of the Company Disclosure
Schedule there is no material labor dispute, strike, picketing or work
stoppage, or any lockout, involving employees of the Company or any of
its subsidiaries pending or, to the Company's knowledge, threatened
against or involving the Company or any of its subsidiaries.
Except as disclosed in Section 3.1(w) of the Company Disclosure
Schedule, (i) there is no grievance, arbitration, unfair labor
practice, investigation, employment discrimination or other labor or
employment related charge, complaint or claim against the Company or
any of its subsidiaries pending before
AGREEMENT AND PLAN OF MERGER - Page 20
<PAGE>
any court, arbitrator, mediator or governmental agency or tribunal,
or, to the Company's knowledge, threatened, and (ii) there has been no
adjudication by any court, arbitrator, mediator or governmental agency
or tribunal that, in the case of either (i) or (ii), has or that would
reasonably be expected to have a material adverse effect on the
Company or otherwise limit or affect the business operations of the
Company.
To the knowledge of the Company, none of the Company, any of its
subsidiaries or any of their respective representatives or employees
has committed any unfair labor practice in connection with the
operation of the respective businesses of the Company or any of its
subsidiaries that has not been resolved, and there is no charge or
complaint against the Company or any of its subsidiaries.
As of the date of this Agreement, (i) the Company is in
compliance with all applicable laws relating to the employment of
labor, including those related to wages, hours, collective bargaining
worker classification and the payment and withholding of taxes and
other sums as required by the appropriate governmental authority and
has withheld and paid to the appropriate governmental authority or is
holding for payment not yet due to such governmental authority all
amounts required to be withheld from employees of the Company and is
not liable for any arrears of wages, taxes, penalties or other sums
for failure to comply with any of the foregoing; (ii) the Company has
paid in full to all employees, or adequately accrued for in accordance
with GAAP, consistently applied, all wages, salaries, commissions,
bonuses, benefits and other compensation due to or on behalf of such
employees; (iii) there is no claim with respect to payment of wages,
salary or overtime pay that has been asserted or is now pending or
threatened before any governmental authority with respect to any
persons currently or formerly employed by the Company; (iv) the
Company is not a party to, or otherwise bound by, any consent decree
with, or citation by, any governmental authority relating to employees
or employment practices; and (v) there is no charge of discrimination
in employment or employment practices, for any reason, including,
without limitation, age, gender, race, religion or other legally
protected category, which has been asserted or is now pending or
threatened before the United States Equal Employment Opportunity
Commission, or any other governmental authority in any jurisdiction in
which the Company has employees except in the case of clauses (i),
(iii) and (v) above, where the same would not, individually or in the
aggregate, have a material adverse effect on the Company.
(x) Assets Other than Real Property Interests. The Company or a
-----------------------------------------
subsidiary of the Company has good and valid title to all material
assets owned by them, in each case free and clear of all pledges,
claims, charges, mortgages, liens, security interests or encumbrances
of any kind except (i) mechanics', carriers', workmen's, repairmen's
or other like liens arising or incurred in the ordinary course of
business, liens arising under original purchase price conditional
sales contracts and equipment leases with third parties entered into
in the ordinary course of business if the underlying obligations are
not overdue for a period of
AGREEMENT AND PLAN OF MERGER - Page 21
<PAGE>
more than 90 days, and liens for Taxes which are not yet due and
payable, (ii) mortgages, liens, security interests and encumbrances
which secure debt that is reflected as a liability on the Balance
Sheet and the existence of which is indicated in the notes thereto and
(iii) other imperfections of title or encumbrances, if any, which do
not, individually or in the aggregate, materially impair the continued
use and operation or the marketability of the assets to which they
relate in the business of the Company and its subsidiaries as
presently conducted (the mortgages, liens, security interests,
encumbrances and imperfections of title described in clauses (i), (ii)
and (iii) above are hereinafter referred to collectively as "Permitted
Liens").
All the material tangible personal property of the Company and
its subsidiaries has been maintained in all material respects in
accordance with the past practice of the Company and its subsidiaries
and generally accepted industry practice. Each item of material
tangible personal property of the Company and its subsidiaries is in
all material respects in good working order and is adequate and
sufficient for the Company's intended purposes, ordinary wear and tear
excepted.
This Section 3.1(x) does not relate to real property or interests
in real property, such items being the subject of Section 3.1(y).
(y) Title to Real Property. Schedule 3.1(y) sets forth a complete list of
----------------------
all real property owned in fee by the Company and its subsidiaries
other than any real property disposed of after the date of this
Agreement in compliance with Section 4.1(a) (individually, an "Owned
Property"). Schedule 3.1(y) sets forth a complete list of all real
property and interests in real property leased by the Company and its
subsidiaries (other than any real property disposed of after the date
of this Agreement in compliance with Section 4.1(a) (individually, a
"Leased Property") and identifies any material leases relating
thereto. The Company or a subsidiary has (i) good and marketable fee
title to all Owned Property insurable at regular rates and (ii) good
and valid title to the leasehold estates in all Leased Property (an
Owned Property or Leased Property being sometimes referred to herein,
individually, as a "Company Property" and, collectively, as "Company
Properties"), in each case free and clear of all mortgages, liens,
security interests, encumbrances, leases, assignments, subleases,
easements, covenants, rights-of-way and other similar restrictions of
any nature whatsoever, except (A) leases, subleases and similar
agreements set forth in Schedule 3.1(y), (B) Permitted Liens, (C)
easements, covenants, rights-of-way and other similar restrictions of
record, (D) any conditions that would be shown by a current, accurate
survey or physical inspection of any Company Property made prior to
Closing and (E) (I) zoning, building and other similar restrictions,
(II) mortgages, liens, security interests, encumbrances, easements,
covenants, rights-of-way and other similar restrictions that have been
placed by any developer, landlord or other third party on property
over which the Company or any subsidiary thereof has easement rights
or on any Leased Property and subordination or similar agreements
relating thereto, and (III) unrecorded easements, covenants, rights-
of-way and other similar restrictions, none of which items set forth
in clauses (C), (D) and (E),
AGREEMENT AND PLAN OF MERGER - Page 22
<PAGE>
individually or in the aggregate, materially impair the value or the
continued use and operation of the property to which they relate in
the business of the Company and its subsidiaries as presently
conducted. No local zoning or similar land use or government
regulations materially impairs the current use by the Company and its
subsidiaries of the plants, offices and other facilities located on
Company Property.
(z) Insurance. The Company and its subsidiaries maintain policies of
---------
directors' and officers' liability insurance, fire and casualty,
liability and other forms of insurance (including self-insurance) in
such amounts, with such deductibles and against such risks and losses
as are reasonable for the operation of the business and ownership of
assets of the Company and its subsidiaries. The insurance policies
owned and maintained by the Company and its subsidiaries are listed in
Schedule 3.1(z). All such policies are in full force and effect, all
premiums due and payable thereon have been paid (other than
retroactive or retrospective premium adjustments that are not yet, but
may be, required to be paid with respect to any period ending prior to
the Closing Date under comprehensive general liability and workmen's
compensation insurance policies), and no notice of cancellation or
termination has been received with respect to any such policy which
has not been replaced on substantially similar terms prior to the date
of such cancellation. To the knowledge of the Company, the activities
and operations of the Company and its subsidiaries have been conducted
in a manner so as to conform in all material respects to all
applicable provisions of such insurance policies. The coverages
provided by such policies of insurance with respect to events
occurring prior to the Effective Time will not be affected in any
manner by, and will not terminate or lapse by reason of, any of the
Merger or any other transaction contemplated by this Agreement.
(aa) Transactions with Affiliates. Except as set forth in Sections 3.1(k),
----------------------------
3.1(l), 3.1(u) and 3.1(aa) of the Company Disclosure Schedule, there
is no material agreement, contract or other arrangement between the
Company or any subsidiary, on the one hand, and any officer, director
or affiliate (other than the Company or a subsidiary), on the other
hand. Officer, director or affiliate of the Company or any subsidiary
(other than the Company or any subsidiary) has any material interest
in any property (real or personal, tangible or intangible) or contract
used in or pertaining to the business of the Company or a subsidiary.
No affiliate of the Company or any subsidiary (other than the Company
or any subsidiary) has any direct or indirect ownership interest in
any person in which the Company or a subsidiary has any direct or
indirect ownership interest or with which the Company or a subsidiary
competes or has a business relationship.
(bb) State Takeover Statutes. Except for Section 203 of the DGCL (which,
-----------------------
as described in Section 3.1(n), the Board of Directors of the Company
has taken all actions to render the limitations on business
combinations therein inapplicable to this Agreement, the Stockholders
Agreements and the consummation of the Merger and the other
transactions contemplated hereby and thereby), no other state takeover
statute or similar statute or regulation applies or purports to apply
AGREEMENT AND PLAN OF MERGER - Page 23
<PAGE>
to this Agreement, the Stockholders Agreements, the Merger or the
other transactions contemplated hereby or thereby.
Section 3.2 Representations and Warranties of the Trust.__
-------------------------------------------
Except as set forth with respect to an identified representation and
warranty on the Disclosure Schedule delivered by the Trust to the Company upon
the execution of this Agreement (the "Trust Disclosure Schedule"), the Trust
represents and warrants to the Company as follows:
(a) Organization, Standing and Corporate Power. The Trust is a
------------------------------------------
statutory trust duly formed and validly existing under the laws of
Connecticut and has the requisite power and authority to carry on
its business as now being conducted. Acquisition Sub is a
corporation duly organized, validly existing and in good standing
under the laws of Delaware and has the requisite corporate power
and authority to carry on its business as now being conducted. Each
of the Trust and Acquisition Sub is duly qualified or licensed to
do business and is in good standing (with respect to jurisdictions
which recognize such concept) in each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified or
licensed or to be in good standing individually or in the aggregate
would not have a material adverse effect on the Trust.
(b) Authority; Noncontravention. Each of the Trust and Acquisition Sub
----------------------------
has all requisite trust or corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated
by this Agreement. The execution, delivery and performance of this
Agreement by the Trust and Acquisition Sub and the consummation by
the Trust and Acquisition Sub of the transactions contemplated by
this Agreement have been duly authorized by all necessary trust or
corporate action (as the case may be) on the part of such person.
This Agreement has been duly executed and delivered by each of the
Trust and Acquisition Sub and constitutes the legal, valid and
binding obligation of such persons, enforceable against each such
person in accordance with its terms. The execution, delivery and
performance of this Agreement and the Stockholders Agreements do
not, and the consummation of the transactions contemplated by this
Agreement and compliance with the provisions of this Agreement and
the Stockholders Agreements by the Trust and Acquisition Sub will
not, conflict with, or result in any violation of, breach of, or
default (with or without notice or lapse of time, or both) under,
or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit
under (i) trust agreement of the Trust or the certificate of
incorporation or by-laws of Acquisition Sub, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license
applicable to the Trust or Acquisition Sub or their respective
AGREEMENT AND PLAN OF MERGER - Page 24
<PAGE>
properties or assets or (iii) subject to the governmental filings
and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Trust or Acquisition Sub or their
respective properties or assets, other than, in the case of clauses
(ii) and (iii), any such conflicts, violations, defaults, rights,
losses or Liens that individually or in the aggregate would not
have a material adverse effect on the Trust. No consent, approval,
order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to the
Trust or Acquisition Sub in connection with the execution, delivery
and performance of this Agreement or the Stockholders Agreements by
the Trust or Acquisition Sub or the consummation by the Trust and
Acquisition Sub of the transactions contemplated by this Agreement
or the Stockholders Agreements, except for (1) the filing of a
premerger notification and report form by the Trust or Acquisition
Sub under the HSR Act, to the extent required thereby; (2) the
filing of the Certificate of Merger with the Delaware Secretary of
State and appropriate documents with the relevant authorities of
other states in which the Trust is qualified to do business; and
(3) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure to make or
obtain which would not reasonably be expected to have a material
adverse effect on the Trust.
(c) Information Supplied. None of the information supplied or to be
--------------------
supplied by the Trust or Acquisition Sub in writing specifically
for inclusion or incorporation by reference in any documents filed
or to be filed with the SEC or any other governmental entity in
connection with the transactions contemplated hereby, including the
Proxy Statement will, at the respective times such document is
filed, and also, in the case of the Proxy Statement, at the date
the Proxy Statement is first mailed to the Company's stockholders
or at the time of the meeting of the Company's stockholders held to
vote upon the approval and adoption of this Agreement, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they are made, not misleading (or necessary to correct any
statement in any earlier communication).
(d) Brokers. No broker, investment banker, financial advisor or other
-------
person, other than Salomon Smith Barney, the fees and expenses of
which will be paid by the Trust, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Trust.
(e) Financing Commitment. The Trust has received an executed letter,
--------------------
dated as of August 8, 2000 (the "Lender Letter"), from Cooperative
Centrale Raiffeisen - Boeremleembank B.A., "Rabobank - Nederland",
New York (the "Lender"), a true and correct copy of which has been
furnished to the Company, indicating that the Lender, subject to
obtaining internal credit approval, is confident that it can
provide the funds necessary to fund in full the payment of the
merger consideration payable by the Trust in accordance with
Article 2. The Trust agrees that within 30 days after the execution
of this Agreement it will furnish to the Company an executed
commitment (the "Commitment") from the Lender or from another
financial institution(s) reasonably acceptable to the Company in a
form customary for a financial buyer under similar circumstances
with respect to the
AGREEMENT AND PLAN OF MERGER - Page 25
<PAGE>
funds required by the Trust to consummate the transactions
contemplated hereby, subject to customary conditions precedent for
such a commitment, including, without limitation, the negotiation
and execution of definitive documentation for such funding and
final Lender approvals. Concurrently with the execution of this
Agreement, the Trust has caused the Lender to issue an irrevocable
direct draw letter of credit in the form attached hereto as Annex I
(the "Letter of Credit"), pursuant to which the Company shall have
the right, on the terms and subject to the conditions set forth
therein, to draw in full to receive payment of $12,000,000 in
accordance with Section 7.2(b).
(f) No Prior Activities of the Trust and Acquisition Sub. Each of the
----------------------------------------------------
Trust and Acquisition Sub was formed solely for the purpose of
engaging in the transactions contemplated hereby, and has engaged
in no other business activities and has conducted its operations
only as contemplated hereby.
ARTICLE 4
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business.__
-------------------
(a) Conduct of Business by the Company. Except as set forth in Section
----------------------------------
4.1 of the Company Disclosure Schedule, and except with the written
consent of the Trust, during the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause
its subsidiaries to, carry on their respective businesses in the
usual, and ordinary course consistent with past practice and in
compliance in material respects with all applicable laws and
regulations and use reasonable best efforts to preserve intact
their current business organizations, keep available the services
of their current officers and employees and preserve their
relationships with those persons having business dealings with
them. Except as set forth in Section 4.1 of the Company Disclosure
Schedule, without limiting the generality of the foregoing, during
the period from the date of this Agreement to the Effective Time,
the Company shall not, and shall not permit any of its subsidiaries
to, without the written consent of the Trust:
(i) (x) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock,
other than dividends and distributions by a direct or
indirect wholly owned subsidiary of the Company to its
parent, (y) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for
shares of its capital stock or (z) purchase, redeem or
otherwise acquire any shares of capital stock of the Company
or any of its subsidiaries or any other securities thereof or
any rights, warrants or options to acquire any such shares or
other securities (except for the redemption of the Rights (as
defined in the Rights Agreement) as and in the manner
provided for in the Rights Agreement);
AGREEMENT AND PLAN OF MERGER - Page 26
<PAGE>
(ii) issue, deliver, sell, pledge or otherwise encumber any shares
of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or
convertible securities (other than the issuance of Company
Common Stock upon the exercise of stock options outstanding
on the date of this Agreement and in accordance with their
present terms or in accordance with the present terms of the
Stock Plans);
(iii) amend its certificate of incorporation, by-laws, articles of
incorporation, or other comparable organizational documents,
as applicable;
(iv) merge or consolidate with any other person or acquire any
interest in material assets of any other person other than
pursuant to existing contract or commitments which have been
disclosed to the Trust on the Company Disclosure Schedule;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to, or permit the creation or other incurrence of,
any material Lien or otherwise dispose of any material
properties or assets;
(vi) (x) incur indebtedness for borrowed money, assume or
guarantee any such indebtedness of another person, issue or
sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its
subsidiaries, guarantee any debt securities of another
person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another person
or enter into any arrangement having the economic effect of
any of the foregoing, except for working capital borrowings
or general corporate purpose borrowings under the Bank Credit
Agreement, in either case incurred in the ordinary course of
business in an aggregate amount not in excess of $115 million
less outstanding borrowings under the Bank Credit Agreement,
or (y) make any loans, advances or capital contributions to,
or investments in, any other person, other than to the
Company or any direct or indirect subsidiary of the Company
or to officers and employees of the Company or any of its
subsidiaries for travel, business or relocation expenses in
the ordinary course of business and for computer loans to
employees in the ordinary course of business pursuant to
existing programs;
(vii) make or agree to make any new capital expenditure or capital
expenditures other than capital expenditures which (a) are
the subject of contractually committed purchase orders as of
the date hereof with the Company or any of its subsidiaries,
or (b) individually are not in excess of $250,000 and in the
aggregate are not in excess of $3,000,000, provided that at
any time aggregate capital expenditures exceed $1,000,000 the
Company shall give written notice to the Trust at least 14
days in advance prior to the commitment for any capital
expenditures that individually will exceed $100,000, or (c)
constitute reasonable expenditures not to exceed $80,000
AGREEMENT AND PLAN OF MERGER - Page 27
<PAGE>
made by the Company or any of its subsidiaries in
connection with any emergency or other force majeure events
affecting the Company or any of its subsidiaries;
(viii) make any Tax election or settle or compromise any material
Tax liability or take any action with respect to the
computation of Taxes or the preparation of Tax returns or
reports that is inconsistent with past practice;
(ix) pay, discharge, settle or satisfy material claims,
liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the
payment, discharge, settlement or satisfaction, in the
ordinary course of business consistent with past practice
or in accordance with their terms, of liabilities (x)
reflected or reserved against in, or contemplated by, the
most recent consolidated financial statements (or the notes
thereto) of the Company included in the Filed SEC Documents
or (y) incurred since the date of such financial statements
in the ordinary course of business consistent with past
practice;
(x) (x) enter into or adopt any new Company Benefit Plan or
amend (other than as required by applicable law) any
Company Benefit Plan in any material respect, (y) increase
the compensation or bonus opportunity of any officer or
employee of the Company or its subsidiaries, except for
increases in the ordinary course of business consistent
with past practice and except for benefits required to be
paid under Company Benefit Plans as in effect on the date
of this Agreement, or (z) grant additional equity-based
compensation to any officer or employee of the Company or
its subsidiaries;
(xi) enter into any contracts or agreements in the ordinary
course of business requiring the payment, or receipt of
payment, of consideration in excess of $300,000, or modify,
amend or terminate any existing material contract that is
material to the business of the Company and its
subsidiaries, taken as a whole, other than (a)
modifications, amendments or terminations in the ordinary
course of business consistent with past practice, (b)
contracts, agreements or purchase orders for capital
expenditures permitted under this Section 4.1(a), and (c)
contracts, agreements or purchase orders entered into in
the ordinary course of business with customers and
suppliers for the sale of the Company's or any of its
subsidiary's products or the purchase of raw materials,
supplies, fuel, utilities and other goods or services, used
or consumed in the ordinary course of business.
(xii) settle any material action, suit, investigation or
proceeding other than any action, suit, investigation or
proceeding which involves only the payment of damages in an
immaterial amount and does not involve injunctive or other
equitable relief;
AGREEMENT AND PLAN OF MERGER - Page 28
<PAGE>
(xiii) fail to maintain with financially responsible insurers
insurance in such amounts and against such risks and losses
as are customary for companies engaged in their respective
businesses;
(xiv) fail to maintain in full force and effect all material
Permits that are required in connection with the conduct of
the businesses of the Company and its subsidiaries or sell,
transfer, license or otherwise dispose of any rights or
interests under such Permits;
(xv) make any change to its accounting methods, tax accounting
or accounting principles or practices, except as may be
required by GAAP; or
(xvi) authorize, or commit or agree to take, any of the foregoing
actions.
(b) Other Actions. The Company and the Trust shall not, and shall not
-------------
permit any of their respective subsidiaries to, take any action
that would, or that could reasonably be expected to, result in (i)
any of the representations and warranties of such party set forth
in this Agreement that are qualified as to materiality becoming
untrue, (ii) any of such representations and warranties that are
not so qualified becoming untrue in any material respect or (iii)
any of the conditions to the Merger set forth in Article 6 not
being satisfied.
(c) Advice of Changes. The Company and the Trust shall promptly advise
-----------------
the other party orally and in writing of (i) any representation or
warranty made by it contained in this Agreement becoming untrue or
inaccurate (ii) the failure by it to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied
by it under this Agreement or (iii) any change or event having, or
which could reasonably be expected to have, a material adverse
effect on such party or on the truth of their respective
representations and warranties or the ability of the conditions set
forth in Article 6 to be satisfied; provided, however, that no such
-------- -------
notification shall affect the representations, warranties,
covenants, Disclosure Schedules or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
(d) DRIP; ESPP. On the date of this Agreement, the Company shall cause
----------
purchases of Company Common Stock under the Dividend Reinvestment
Plan and its Employee Stock Purchase Plan to be suspended or
terminated and to continue such suspension or termination while
this Agreement is in effect. In connection with any such suspension
or termination, the Company may return any unspent contributed
funds to the contributing participants in such plans.
Section 4.2 No Solicitation.
---------------
(a) From the date hereof until the Effective Time, the Company shall
not, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any of its directors, officers or employees or
any investment banker, financial advisor, attorney, accountant or
other representative retained by it or any of its subsidiaries
AGREEMENT AND PLAN OF MERGER - Page 29
<PAGE>
(the "Representatives") to, directly or indirectly through another
person, (i) solicit or initiate (including by way of furnishing
information), or take any other action designed and intended to
facilitate or encourage, any inquiries or the making of any
proposal that constitutes any Takeover Proposal (as defined below),
(ii) participate or engage in any discussions or negotiations
regarding any Takeover Proposal, or (iii) disclose any nonpublic
information relating to the Company or any of its subsidiaries to
any person; provided, however, that if, at any time prior to the
--- ------
approval and adoption of this Agreement by the holders of
outstanding shares of Company Common Stock, the Board of Directors
of the Company determines in good faith, (i) after consultation
with outside counsel, that it is necessary to do so in order to
comply with its fiduciary duties to the Company's stockholders
under applicable law and (ii) after consultation with the Company's
financial advisors, that such Takeover Proposal, if consummated,
would be a Superior Proposal (as defined below), then the Company
may, in response to a bona fide written Takeover Proposal that was
not solicited by it, and subject to compliance with Section 4.2(c),
(x) furnish information with respect to the Company and its
subsidiaries to any person submitting such Takeover Proposal (which
person may also be a person who participated in discussions with
the Company prior to the execution of this Agreement and with whom
the Company ceased discussions in accordance with Section 4.2(e)),
provided such information is furnished pursuant to an existing
confidentiality agreement or a confidentiality agreement with terms
no less favorable to the Company than those contained in the
Confidentiality Agreement, dated as of August 3, 2000, between the
Company and Integrated Capital Associates, Inc., (including,
without limitation, the standstill provisions thereof) and (y)
participate in negotiations regarding such Takeover Proposal. For
purposes of this Agreement, "Takeover Proposal" means any inquiry,
proposal or offer from any person relating to any direct or
indirect acquisition or purchase of 15% or more of the assets of
the Company and its subsidiaries or 15% or more of any class of
equity securities of the Company or any of its subsidiaries, any
tender offer or exchange offer that if consummated would result in
any person beneficially owning 15% or more of any class of equity
securities of the Company or any of its subsidiaries, or any
merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries, in all cases other than the
transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 4.2, neither the
Board of Directors of the Company nor any committee thereof shall
(i) withdraw or modify, or propose publicly to withdraw or modify,
in a manner adverse to the Trust, the approval or recommendation by
such Board of Directors or such committee of this Agreement, the
Stockholders Agreements, the Merger and the other transactions
contemplated hereby or thereby, (ii) approve or recommend, or
propose publicly to approve or recommend, any Takeover Proposal
or (iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar
agreement or fee arrangement or other agreement (each, an
"Acquisition Agreement") related to any Takeover Proposal.
AGREEMENT AND PLAN OF MERGER - Page 30
<PAGE>
Notwithstanding the foregoing, if prior to the approval and
adoption of this Agreement by the holders of Company Common Stock,
the Board of Directors of the Company receives an unsolicited
Takeover Proposal which the Board of Directors determines in good
faith (i) after consultation with the Company's financial advisors,
constitutes a Superior Proposal, and (ii) after consultation with
outside counsel, that it is necessary to do so in order to comply
with its fiduciary duties to the Company's stockholders under
applicable law, the Board of Directors of the Company may (x)
withdraw or modify its approval or recommendation of this
Agreement, the Stockholders Agreements, the Merger or the
transactions contemplated hereby or thereby, (y) approve or
recommend such Superior Proposal or (z) terminate this Agreement
and concurrently with or after such termination, if it so chooses,
cause the Company to enter into any Acquisition Agreement with
respect to any Superior Proposal subject to payment of the
Termination Fee prior to or concurrently with the termination
hereof, but only (i) if the Company has complied with Section
4.2(a), (ii) if such action is taken at a time that is after the
third business day following the Trust's receipt of written notice
from the Company advising the Trust that the Board of Directors of
the Company has received a Superior Proposal, specifying the
material terms and conditions of such Superior Proposal and
identifying the person making such Superior Proposal and (iii) the
Trust does not make prior to the lapse of such time period a
definitive, binding offer which provides equal or greater value to
the stockholders of the Company as the Superior Proposal. For
purposes of this Agreement, a "Superior Proposal" means any bona
fide written Takeover Proposal made by a third party on terms that
the Board of Directors of the Company determines in its good faith
judgment, after consultation with its financial advisors and after
taking into account all the terms and conditions of such proposal,
provides greater value to the Company's stockholders than the
Merger and for which financing, to the extent required, is then
committed or which the Board of Directors of the Company has
reasonably determined can be obtained by such third party.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.2, the Company shall
immediately (within 24 hours) advise the Trust of any Takeover
Proposal or Superior Proposal, the material terms and conditions
known to the Company of such Takeover Proposal or Superior
Proposal, a copy of any offer or other written communications and
the identity of the person making such request, Takeover Proposal
or Superior Proposal. The Company shall keep the Trust fully
informed of the status and details of any such request or proposal
and the status of any discussions and negotiations in relation
thereto.
(d) Nothing contained in this Section 4.2 shall prohibit the Company
from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
from making any disclosure to the Company's stockholders if, in the
good faith judgment of the Board of Directors of the Company, after
consultation with outside counsel, failure so to disclose would be
a breach of its fiduciary duties to the Company's stockholders
under
AGREEMENT AND PLAN OF MERGER - Page 31
<PAGE>
applicable law; provided, however, that neither the Company nor its
Board of Directors nor any committee thereof shall, except as
permitted by Section 4.2(b), withdraw or modify, or propose
publicly to withdraw or modify, its position with respect to this
Agreement, the Merger or approve or recommend, or propose publicly
to approve or recommend, a Takeover Proposal.
(e) Without the prior consent of the Trust, the Company shall not (i)
except to the extent contemplated by this Agreement, amend or
modify the Rights Agreement or redeem or terminate the Rights
Agreement or (ii) modify or release any person from any
confidentiality or standstill agreement to which the Company is a
party if such action would have the purpose or effect of permitting
or facilitating the submission of a Takeover Proposal by such
person. Immediately upon the execution of this Agreement, the
Company shall, and the Company shall cause its subsidiaries and
Representatives to, cease and cause to be terminated all
activities, discussions and negotiations, if any, with any person
conducted prior to the date hereof with respect to, or seeking to
obtain, any Takeover Proposal.
ARTICLE 5
ADDITIONAL AGREEMENTS
Section 5.1 Preparation of the Proxy Statement; Company
-------------------------------------------
Stockholders Meeting. The Company, acting through its Board of Directors,
--------------------
shall, in accordance with applicable law, its Second Amended and Restated
Certificate of Incorporation and its Bylaws:
(a) As promptly as practicable following the date of this Agreement,
the Company shall prepare and file with the SEC the Proxy
Statement, use its reasonable best efforts to have the Proxy
Statement cleared by the SEC and thereafter mailed to the Company's
stockholders at the earliest practical date. The Trust and its
counsel shall be given the reasonable opportunity to review and
comment upon the Proxy Statement (and any supplements thereto)
prior to the time they are filed with the SEC. The Company shall
provide the Trust and its counsel with a copy of any written
comments or telephonic notification of any verbal comments that are
received by the Company from the SEC or its staff with respect to
the Proxy Statement and shall further provide the Trust and its
counsel with a copy of any written response and telephonic
notifications of any verbal responses by the Company. If at any
time prior to the Closing Date any fact, event or development is
discovered by the Company which is required under applicable law to
be set forth in a supplement to the Proxy Statement, the Company
shall prepare and file with the SEC any such supplement or
amendment and shall disseminate the same to its stockholders in the
manner required by applicable law.
(b) As promptly as practicable following the date of this Agreement,
subject to Section 4.2, the Company will, as soon as practicable
following the date of this Agreement, duly call, give notice of,
convene and hold a meeting of its
AGREEMENT AND PLAN OF MERGER - Page 32
<PAGE>
stockholders (the "Company Stockholders Meeting") for the purpose
of obtaining the Company Stockholder Approval. Subject to Section
4.2(b), the Company will, through its Board of Directors, recommend
to its stockholders the approval and adoption of this Agreement,
the Merger and the consummation of the other transactions
contemplated hereby and shall use its reasonable best efforts to
obtain such approval by its stockholders.
(c) The Trust shall vote, or cause to be voted, all of the Shares then
owned by it, Acquisition Sub or any of its other subsidiaries in
favor of the approval and adoption of this Agreement, the Merger
and the transactions contemplated hereby.
Section 5.2 Access to Information; Confidentiality
--------------------------------------
From the date of this Agreement until the Closing Date, the Company shall,
and shall cause each of its respective subsidiaries (i) to afford to the Trust
and to its officers, employees, financial advisors, attorneys, accountants and
other representatives and to any other person that the Trust or the Acquisition
Sub has advised the Company is or may be interested in purchasing from the
Surviving Corporation after the Merger any of the assets, facilities or
operations of the Company, or any of its subsidiaries, reasonable access during
normal business hours during the period prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records,
(ii) instruct its counsel, financial advisors, auditors and other authorized
representatives of the Company and its subsidiaries to cooperate with the Trust
in its investigation of the Company and its subsidiaries, and (iii) to furnish
promptly to the Trust (a) a copy of each report, schedule, form, statement and
other document filed by it during such period pursuant to the requirements of
U.S. Federal or state securities laws and (b) other information concerning its
business, properties and personnel as such other party may reasonably request.
The Trust will hold, and will cause its officers, employees, financial advisors,
attorneys, accountants and other representatives and affiliates to hold, any
nonpublic information in accordance with the terms of that certain
Confidentiality Agreement dated August 3, 2000 by and between Integrated Capital
Associates, Inc. and the Company (the "Confidentiality Agreement").
Section 5.3 Reasonable Best Efforts.
-----------------------
Subject to Section 4.2(b), upon the terms and subject to the conditions set
forth in this Agreement, each of the parties agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practical, the Merger and the other transactions contemplated
by this Agreement, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings (including filings with
Governmental Entities, such as those referred to in Sections 4.1(d)(1)-(4) and
4.2(b)(1)-(3)) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary waivers, consents or
approvals from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated by this
AGREEMENT AND PLAN OF MERGER - Page 33
<PAGE>
Agreement, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by, and to fully carry out the purposes of, this
Agreement.
Without limiting the generality of the foregoing, each of the Company and
the Trust shall, to the extent required under the HSR Act, promptly file or
cause to be filed with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust Division")
notification and report forms pursuant to the HSR Act relating to the merger and
the other transactions contemplated in this Agreement. The Company and the
Trust shall promptly respond to any request for additional information or
documenting material by the FTC or Antitrust Division and shall cooperate with
each other to effect the expiration of any waiting periods applicable thereto as
promptly as practicable. The Company and the Trust shall each consult with the
other and use their reasonable best efforts to coordinate any communications or
filings with the FTC and the Antitrust Division.
In connection with and without limiting the foregoing, the Company and its
Board of Directors shall (i) take all reasonable action necessary to ensure that
no state takeover statute or similar statute or regulation is or becomes
applicable to this Agreement, the Stockholders Agreements, the Merger or any of
the other transactions contemplated hereby or thereby and (ii) if any state
takeover statute or similar statute or regulation becomes applicable to this
Agreement, the Stockholders Agreements, the Merger or any other transaction
contemplated hereby or thereby, take all action necessary to ensure that the
Merger and the other transactions contemplated by this Agreement and the
Stockholders Agreements may be consummated as promptly as practical on the terms
contemplated herein and therein and otherwise to minimize the effect of such
statute or regulation on the Merger and the other transactions contemplated by
this Agreement and the Stockholders Agreements.
In addition, the Trust undertakes and agrees to use its reasonable best
efforts and to take all reasonable actions necessary to obtain the Commitment
within the 30-day period specified in Section 3.2(e), to finalize the definitive
documentation as promptly as practicable thereafter for the funding in full of
the merger consideration that will become payable at the Effective Time and to
cause the conditions to funding thereunder to be satisfied.
Section 5.4 Employee Matters
----------------
(a) The Trust agrees that the Company shall honor in accordance with
their respective terms and, on and after the Effective Time, the
Trust shall cause the Surviving Corporation to honor all Company
Benefit Plans and all other written employment, severance,
termination and retirement agreements to which the Company is a
party as of the Effective Time, and which are set forth on the
Company Disclosure Schedule. Subject to the preceding sentence, the
Trust agrees to cause the Surviving Corporation, after consummation
of the Merger, to pay all amounts provided under such Company
Benefit Plans and agreements in accordance with their respective
terms and to honor, and to cause the Surviving Corporation to
honor, all rights and privileges to or with respect to any such
AGREEMENT AND PLAN OF MERGER - Page 34
<PAGE>
Company Benefit Plans or agreements that are vested at the
Effective Time or vested as a result of the Merger.
(b) The Trust agrees that, for a period of no less than one year
after the Effective Time, it shall, and shall cause the Surviving
Corporation to, provide employee pension and welfare plans (other
than stock options, restricted stock units and other equity-based
or phantom equity-based awards) for the benefit of employees and
former employees of the Company, that, in the aggregate, are not
materially less favorable than the Pension Plans and Welfare
Plans in effect immediately prior to the Effective Time. To the
extent any benefit plan of the Trust (or any plan of the
Surviving Corporation) shall be made applicable to any employee
or former employee of the Company, the Trust shall, or shall
cause the Surviving Corporation to, grant to employees and former
employees of the Company credit for service with the Company
prior to the Effective Time for the purposes of determining
eligibility to participate and the employee's nonforfeitable
interest in benefits thereunder. In addition, to the extent any
benefit plan of the Trust (or any plan of the Surviving
Corporation) that constitutes a "Welfare Plan," as defined in
Section 4.1(l) hereof, shall be made applicable to any employee
or former employee of the Company, the Trust shall, or shall
cause the Surviving Corporation to, (i) waive all preexisting
condition exclusions and waiting periods otherwise applicable to
employees and former employees of the Company, except to the
extent any such limitations or waiting periods in effect under
comparable Welfare Plans have not been satisfied as of the date
such plan is made so applicable and (ii) credit each employee and
former employee of the Company for any co-payments and
deductibles paid by such employee or former employee under
comparable Welfare Plans during the current year. Nothing in this
Agreement shall be interpreted as limiting the power of the
Surviving Corporation to amend or terminate any Company Benefit
Plan or any other employee benefit plan, program, agreement or
policy or as requiring the Surviving Corporation or the Trust to
continue (other than as required by its terms) any written
employment contract.
Section 5.5 Rights Agreement.
----------------
The Board of Directors of the Company shall take all further action (in
addition to that referred to in Section 3.1(o)) necessary (including redeeming
the Rights immediately prior to the Effective Time or amending the Rights
Agreement) in order to render the Rights inapplicable to the execution of this
Agreement and the Stockholders Agreements and the consummation of the Merger and
the other transactions contemplated hereby and thereby.
Section 5.6 Continuance of Existing Indemnification Rights.
----------------------------------------------
(a) For six years after the Effective Time, and during the pendency
thereafter of any Claim (as defined below) asserted or made
within such six year period, the Surviving Corporation shall
indemnify, defend and hold harmless any person who is now, or has
been at any time prior to the date hereof, or who becomes prior
to the Effective Time, a director or officer (an "Indemnified
Person") of the
AGREEMENT AND PLAN OF MERGER - Page 35
<PAGE>
Company or any of its subsidiaries against all losses, claims,
damages, liabilities, costs and expenses (including attorneys' fees
and expenses), judgments, fines, losses and amounts paid in settlement
in connection with any actual or threatened action, suit, claim,
proceeding or investigation (each a "Claim") to the extent that any
such Claim directly or indirectly is based on, or arises out of the
fact that: such Indemnified Person is or was a director or officer of
the Company or any of its subsidiaries, including any claim based in
whole or in part on this Agreement or any of the transactions
contemplated hereby, in each case, to the extent that any such Claim
pertains to any matter or fact arising, existing or occurring prior to
or at the Effective Time, regardless of whether such Claim is asserted
or claimed prior to, at or after the Effective Time, to the fullest
extent permitted under the DGCL, the Company's Second Restated
Certificate of Incorporation and by-laws and any indemnification
agreement to which the Company and an Indemnified Party are parties,
including provisions relating to advancement of expenses incurred in
the defense of any such Claim; provided, however, that the Surviving
Corporation shall not be required to indemnify any Indemnified Person
in connection with any proceeding (or portion thereof) involving any
Claim initiated by such Indemnified Person unless the initiation of
such proceeding (or portion thereof) was authorized by the Board of
Directors of the Surviving Corporation or unless such proceeding is
brought by an Indemnified Person to enforce rights under this Section
5.6 and provided, further, that the Surviving Corporation shall not be
liable for any settlement effected without its prior written consent
(which consent shall not be unreasonably withheld). Any Indemnified
Party wishing to claim indemnification under this Section 5.6 upon
learning of any such Claim shall notify the Company (or after the
Effective Time, the Surviving Corporation), but the failure to so
notify shall not relieve a party from any liability that it may have
under this Section 5.6, except to the extent that such failure
prejudices such party. The Indemnified Parties as a group may retain
only one law firm to represent them with respect to each such matter
unless there is, under applicable standards of professional conduct, a
conflict or a potential conflict on any significant issue between the
positions of any two or more Indemnified Parties. Without limiting the
generality of the foregoing, if any Indemnified Person becomes
involved in any Claim, after the Effective Time, then the Surviving
Corporation shall periodically advance to such Indemnified Person its
legal and other expenses (including the cost of any investigation and
preparation incurred in connection therewith), subject to such
Indemnified Person providing an undertaking to reimburse all amounts
so advanced in the case of a final nonappealable determination by a
court of competent jurisdiction that such Indemnified Person is not
entitled to be indemnified therefor.
(b) The Trust and the Company agree that all rights to indemnification, to
defense, and being held harmless (including rights to advancement of
expenses), existing in favor of any Indemnified Person, as provided in
the Company's Second Restated Certificate of Incorporation or by-laws
and any indemnification agreement in effect at the date hereof, shall
survive the Merger and shall continue in full force and effect,
without any amendment thereto that would be adverse to
AGREEMENT AND PLAN OF MERGER - Page 36
<PAGE>
any Indemnified Person unless, as to any such Indemnified Person,
such Indemnified person consents thereto. The obligations of the
Surviving Corporation pursuant to Section 5.6(a) and this Section
5.6(B) shall be assigned in accordance with Section 8.10.
(c) The Surviving Corporation shall maintain the Company's existing
directors' and officers' liability insurance policy (the "D&O
Insurance") for a period of not less than six years after the
Effective Time; provided, however, that (i) upon the sale by the
Surviving Corporation of all or substantially all of its assets
to an unaffiliated person, which person provides a substitute
policy of similar coverage and amounts containing terms no less
advantageous to such former directors or officers than the D&O
Insurance and agrees to maintain such coverage for a period of
not less than six years after the Effective Time, the Surviving
Corporation's obligation hereunder shall cease, (ii) the Company
or such unaffiliated person, as the case may be, may substitute
therefor policies of similar coverage and amounts containing
terms no less advantageous to such former directors or officers
and (iii) if the existing D&O Insurance expires or is canceled
during such period, then the Surviving Corporation or such
unaffiliated person, as the case may be, shall use its reasonable
best efforts to obtain a directors' and officers' liability
insurance policy substantially similar to the D&O Insurance;
provided, further, that if the aggregate annual premiums for such
insurance pursuant to this Section 5.6(c) at any time during such
period shall exceed 100% of the per annum rate of premium paid by
the Company and its subsidiaries as of the date hereof for such
insurance, the Surviving Corporation shall provide only such
coverage as shall then be available for such amount.
Section 5.7 Fees and Expenses.
-----------------
(a) Except as set forth in this Section 5.7, all fees and expenses
incurred in connection with the Merger, this Agreement and the
other transactions contemplated by this Agreement shall be paid
by the party incurring such fees or expenses, whether or not the
Merger is consummated.
(b) If this Agreement is terminated by (i) either the Trust or the
Company pursuant to Section 7.1(b)(i) or Section 7.1(b)(ii) and
prior to the termination hereof a Takeover Proposal has been made
by any person or any person publicly announces its intent to make
a Takeover Proposal, unless, in the case of a termination by the
Company, the failure to consummate the Merger is the result of a
material breach of this Agreement by the Trust or Acquisition Sub
or a material failure by the Trust or Acquisition Sub to fulfill
any obligation under this Agreement, (ii) the Trust pursuant to
Section 7.1(b)(iv), 7.1(d), 7.1(e) or 7.1(h), or (iii) the
Company pursuant to Section 7.1(c), then the Company shall
promptly pay the Trust a fee equal to $10,000,000 (the
"Termination Fee"), which Termination Fee shall be payable by
wire transfer of same day funds not later than the date of
termination of this Agreement.
AGREEMENT AND PLAN OF MERGER - Page 37
<PAGE>
Section 5.8 Public Announcements.
--------------------
The Trust and the Company will consult with each other before issuing, and
provide each other the opportunity to review and comment upon, any press release
or other public statements with respect to the transactions contemplated by this
Agreement, including the Merger, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable law, stock exchange requirements or court process. If
either the Company or the Trust determines that a public announcement is
required by applicable law, stock exchange requirement or court process, prior
to making such announcement, it will consult and coordinate with the other party
regarding the substance thereof. The parties agree that the initial press
release to be issued with respect to the transactions contemplated by this
Agreement shall be in the form heretofore agreed upon by the parties.
Section 5.9 Stockholder Litigation.
----------------------
The Company shall give the Trust the opportunity to participate in the
defense or settlement of any stockholder litigation against the Company and its
directors relating to the transactions contemplated by this Agreement; provided,
however, that no such settlement shall be agreed to without the Trust's consent,
which consent shall not be unreasonably withheld.
Section 5.10 Bank Credit Agreement and Indenture.
-----------------------------------
The Surviving Corporation shall honor, on and after the Effective Time, the
obligations of the Company under the Bank Credit Agreement and the Indenture.
The Trust acknowledges that (a) under the Bank Credit Agreement the change in
beneficial ownership of the Company resulting from the Merger will constitute an
Event of Default (as defined in the Bank Credit Agreement) and (b) for purposes
of the Indenture, the Merger will constitute a Change of Control (as such term
is defined in Section 3.17 of the Indenture). The Surviving Corporation shall,
after consummation of the Merger, pay, as and when due, all amounts provided for
under the Bank Credit Agreement and the Senior Subordinated Note Indenture in
accordance with their respective terms (including by making a Change of Control
Offer (as defined in Section 3.17 of the Indenture) under the Indenture, to the
extent such offer is required by the Indenture).
Section 5.11 Amendment of Disclosure Schedules.
---------------------------------
Each party agrees that, with respect to the representations and warranties
of such party contained in this Agreement, such party shall have the continuing
obligation until the Effective Time to supplement or amend promptly the
Schedules to such party's Disclosure Schedule with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in such party's
Disclosure Schedule. For all purposes of this Agreement, including for purposes
of determining whether the conditions set forth in Article 6 have been
fulfilled, the Schedules to a party's Disclosure Schedule shall be deemed to
include only that information contained therein on the date of this Agreement
and shall be deemed to exclude all information contained in any supplement or
amendment thereto, but if the Effective Time shall occur, then all matters
disclosed pursuant to any such supplement or amendment at or prior to the
Effective Time shall be waived and no party shall be entitled to make a claim
thereon pursuant to the terms of this Agreement.
AGREEMENT AND PLAN OF MERGER - Page 38
<PAGE>
ARTICLE 6
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation To Effect the Merger.
----------------------------------------------------------
The respective obligation of each party to effect the Merger is subject to
the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approvals. The Company Stockholder Approval shall
---------------------
have been obtained to the extent required by the DGCL, the
Company's Second Restated Certificate of Incorporation and the
Company's by-laws.
(b) HSR Act. The waiting period (and any extension thereof)
-------
applicable to the Merger under the HSR Act shall have been
terminated or shall have expired.
(c) No Injunctions or Restraints. No judgment, decree, statute, law,
----------------------------
ordinance, rule, regulation, temporary restraining order,
preliminary or permanent injunction or other order enacted,
entered, promulgated, enforced or issued by any court of
competent jurisdiction or other Governmental Entity or other
legal restraint or prohibition (collectively, "Restraints")
preventing the consummation of the Merger shall be in effect;
provided, however, that each of the parties shall have used all
reasonable best efforts to prevent the enactment, promulgation,
entry, issuance or enforcement of any such Restraints and to
appeal as promptly as possible any such Restraints that may be
entered or issued.
Section 6.2 Conditions to Obligations of the Trust and Acquisition Sub.
----------------------------------------------------------
The obligations of the Trust and Acquisition Sub to effect the Merger are
further subject to satisfaction or waiver (by the Trust) on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company set forth in this Agreement shall be
true and correct (without regard to any materiality
qualifications or references to material adverse effect contained
in any specific representation or warranty) as of the date of
this Agreement and as of the Closing Date as though made on and
as of the Closing Date, except to the extent such representations
and warranties expressly relate to an earlier date (in which case
as of such date); provided, however, that this paragraph (a)
shall be deemed satisfied so long as the failure of all such
representations and warranties to be true and correct would,
collectively, not result in a material adverse effect on the
Company, and the Trust shall have received a certificate signed
on behalf of the Company by its chief executive officer and chief
financial officer to such effect.
(b) Performance of Obligations of the Company. The Company shall
-----------------------------------------
have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the
Closing Date, and the Trust shall have received a
AGREEMENT AND PLAN OF MERGER - Page 39
<PAGE>
certificate signed on behalf of the Company by its chief
executive officer and chief financial officer to such effect.
(c) No Litigation. There shall not be pending or threatened by any
-------------
Governmental Entity any suit, action or proceeding (i)
challenging the acquisition by the Trust or Acquisition Sub of
any shares of capital stock of the Company or the Surviving
Corporation, seeking to restrain or prohibit the consummation of
the Merger or any of the other transactions contemplated by this
Agreement, (ii) seeking to prohibit or limit the ownership or
operation by the Trust or any of its subsidiaries of any material
portion of the business or assets of the Company, or any of its
subsidiaries, or to compel the Trust or any of its subsidiaries
to dispose of or hold separate any material portion of the
business or assets of the Company or any of its subsidiaries, as
a result of the Merger or any of the other transactions
contemplated by this Agreement, (iii) seeking to impose
limitations on the ability of the Trust to acquire or hold, or
exercise full rights of ownership of, any shares of capital stock
of the Company or the Surviving Corporation, or (iv) seeking to
prohibit the Trust or any of its subsidiaries from effectively
controlling in any material respect the business or operations of
the Company or its subsidiaries. In addition there shall not be
any judgment, order, decrees, statute, law, ordinance, rule or
regulation, enacted, entered, promulgated or enforced that is
reasonably likely to result, directly or indirectly, in any of
the consequences referred to in clauses (ii) through (iv) of the
immediately preceding sentence.
Section 6.3 Conditions to Obligation of the Company.
---------------------------------------
The obligation of the Company to effect the Merger is further subject to
satisfaction or waiver (by the Company) on or prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Trust set forth in this Agreement shall be true
and correct (without regard to any materiality qualifications or
references to material adverse effect contained in any specific
representation or warranty) as of the Closing Date as though made
on and as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier
date (in which case as of such date); provided, however, that
this paragraph (a) shall be deemed satisfied so long as the
failure of all such representations and warranties to be true and
correct would, collectively, not result in a material adverse
effect on the Trust, and the Company shall have received a
certificate signed on behalf of the Trust by its trustee to such
effect.
(b) Performance of Obligations of the Trust. The Trust shall have
---------------------------------------
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing
Date, and the Company shall have received a certificate signed on
behalf of the Trust by its trustee to such effect.
(c) Commercial Production at Lawton Mill. On or before October 1,
------------------------------------
2000, the Company or its subsidiary Republic Paperboard Company
("RPC") shall have delivered to James Hardie Gypsum, Inc.
("Hardie"), the "Commencement Notice"
AGREEMENT AND PLAN OF MERGER - Page 40
<PAGE>
(as such term is defined in Section 3(b) of the Paperboard Supply
Agreement dated as of May 14, 1998, among RPC, the Company and
Hardie (the "Hardie Contract")).
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination.
-----------
This Agreement may be terminated at any time prior to the Effective Time,
whether before or after the Company Stockholder Approval:
(a) by mutual written consent of the Trust and the Company; or
(b) by either the Trust or the Company if:
(i) the Merger shall not have been consummated on or before
January 31, 2001, unless the failure to consummate the
Merger is the result of a material breach of this
Agreement or a material failure to fulfill any obligation
under the Agreement by the party seeking to terminate this
Agreement; provided, however, that the passage of such
period shall be tolled for any part thereof (but not
exceeding 20 calendar days in the aggregate) during which
any party shall be subject to a nonfinal order, decree,
ruling, injunction or action restraining, enjoining or
otherwise prohibiting the consummation of the Merger or
the calling or holding of the Company Stockholder Meeting;
(ii) the Company Stockholder Meeting has been duly convened but
the Company Stockholder Approval shall not have been
obtained at such Company Stockholder Meeting (or any
adjournment thereof);
(iii) any Governmental Entity shall have issued an order,
decree, ruling or injunction or taken any other action
permanently enjoining, restraining or otherwise
prohibiting the Merger and such order, decree, ruling,
injunction or other action shall have become final and
nonappealable;
(iv) the other party breaches any covenant or other agreement
contained in this Agreement that (A) would give rise to
the failure of such party to satisfy any condition set
forth in Section 6.2(a) or (b) or Section 6.3(a) or (b),
as applicable, and (B) cannot be or has not been cured
within 45 days after the giving of written notice to the
breaching party of such breach (a "Material Breach")
(provided that the terminating party is not then in breach
in any material respect of any obligation, covenant or
other agreement contained in this Agreement or in Material
Breach of any representation or warranty contained in this
Agreement); or
AGREEMENT AND PLAN OF MERGER - Page 41
<PAGE>
(c) by the Company in accordance with Section 4.2(b), provided that it has
complied with all provisions thereof and that it complies with the
requirements, if then applicable, of Section 5.7; or
(d) by the Trust if (i) the Board of Directors of the Company or any
committee thereof shall have failed to recommend, withdrawn, or
modified in a manner adverse to the Trust, its approval or
recommendation of this Agreement, the Merger and the other
transactions contemplated hereby or approved or recommended any
Superior Proposal, (ii) the Board of Directors of the Company or any
committee thereof shall have resolved to take any of the foregoing
actions or (iii) failed to affirm its recommendation of this
Agreement, the Merger or the other transactions contemplated hereby
within three Business Days of a request to do so by the Trust; or
(e) by the Trust, if the Company shall have entered into, or publicly
announced its intention to enter into, a definitive agreement or an
agreement in principle with respect to a Takeover Proposal or a
Superior Proposal; or
(f) by the Company if (i) the Trust fails to deliver a copy of the
Commitment to the Company during the 30-day period specified in
Section 3.2(e) (provided that as of the time of such termination
pursuant to this clause (f)(i) such failure is continuing); or (ii) as
of the date of the Company Stockholder Meeting, (A) the Trust has not
finalized the definitive loan agreements pursuant to which the Trust
will obtain the funds for the payment in full of the merger
consideration in accordance with Article 2 (and such loan documents
are not finalized as of the time of such termination pursuant to this
clause (f)(ii)), and (B) the Company is not then in breach of any of
its obligations, covenants or agreements hereunder, which breach has
had or, if continued, is likely to have a material adverse effect on
the Company; or (iii) not later than 48 hours after the Company's
stockholders have approved and adopted this Agreement, the Merger and
the consummation of the other transactions contemplated hereby at the
Company Stockholder Meeting, all conditions (other than consummation
of the Closing) to the Trust obtaining the funds necessary to pay in
full the merger consideration in accordance with Article 2 have not
been satisfied, provided that as of the time of such termination (A)
such conditions to obtaining the funds remain unsatisfied, (B) all of
the conditions to Closing set forth in Sections 6.1 and 6.2 have been
satisfied (and the officers of the Company specified in Section 6.2(a)
and (b) are prepared to deliver the certificates required thereby) and
(C) the Company is not then in breach of any of its obligations,
covenants or agreements hereunder, which breach has had or, if
continued, is likely to have a material adverse effect on the Company;
or
(g) by the Company if the Trust fails to close after the second business
day after (1) all of the conditions set forth in Sections 6.1 and 6.2
have been satisfied (and the officers of the Company specified in
Sections 6.2(a) and (b) are prepared to deliver the certificates
required thereby), (2) the Company is not then in breach in any
material respect of any of its obligations, covenants or agreements
hereunder and (3) the Company gives 2 business days' prior written
notice of its satisfaction
AGREEMENT OF PLAN MERGER - Page 42
<PAGE>
of all obligations under Sections 6.1 and 6.2 and the waiver by
the Company of any obligations of the Trust not satisfied under
Section 6.3; or
(h) by the Trust if the Company fails to close after the second
business day after (1) all of the conditions set forth in
Sections 6.1 and 6.3 have been satisfied (and the officers of the
Trust specified in Sections 6.3(a) and (b) are prepared to
deliver the certificates required thereby), (2) the Trust is not
then in breach in any material respect of any of its obligations,
covenants or agreements hereunder and (3) the Trust gives 2
business days' prior written notice of its satisfaction of all
obligations under Sections 6.1 and 6.3 and the waiver by the
Trust of any obligations of the Company not satisfied under
Section 6.2; or
(i) by the Trust at any time after October 1, 2000 if the
"Commencement Notice" (as such term is defined in Section 3(b) of
Hardie Contract) was not given in accordance with the Hardie
Contract on or before October 1, 2000.
Section 7.2 Effect of Termination.
---------------------
(a) Upon termination of this Agreement by either the Company or the
Trust as provided in Section 7.1, this Agreement shall forthwith
become void and have no effect, without any liability or
obligation on the part of the Trust, Acquisition Sub or the
Company, other than the provisions of Section 3.1(p), Section
3.2(d), the last sentence of Section 5.2, Section 5.7, this
Section 7.2 and Article 8.
(b) The Trust and Acquisition Sub agree that if this Agreement is
terminated by the Company in accordance with the terms of Section
7.1(b)(iv), Section 7.1(f) or Section 7.1(g), the Trust shall be
obligated to pay to the Company $12,000,000 as liquidated
damages, which payment (i) shall be funded by the Company drawing
such amount under the Letter of Credit, (ii) shall constitute the
exclusive remedy available to the Company at law or in equity in
respect of any such termination by the Company or any breach of
this Agreement by the Trust or Acquisition Sub, and (iii) shall
constitute payment for all claims, damages, out-of-pocket
expenses and fees arising out of or incurred by the Company in
connection with this transaction. The Letter of Credit furnished
to the Company by the Trust concurrently with the execution of
this Agreement shall constitute the source for funding the
$12,000,000 payment required from the Trust pursuant to this
Section 7.2(b).
Section 7.3 Amendment.
---------
This Agreement may be amended by the parties at any time before or after
the Company Stockholder Approval; provided, however, that after any such
approval, there shall not be made any amendment which by law requires further
approval by the stockholders of the Company without the further approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
AGREEMENT AND PLAN OF MERGER - Page 43
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Section 7.4 Extension; Waiver.
-----------------
At any time prior to the Effective Time, a party may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties of the
other parties contained in this Agreement or in any document delivered pursuant
to this Agreement or (c) subject to the proviso of Section 7.3, waive compliance
by the other parties with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.
ARTICLE 8
GENERAL PROVISIONS
Section 8.1 Nonsurvival of Representations and Warranties.
---------------------------------------------
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.1 shall not limit any covenant or agreement of the parties
that by its terms contemplates performance after the Effective Time.
Section 8.2 Notices.
-------
All notices, requests, claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), sent by overnight courier (providing proof of
delivery) or mailed by registered or certified mail (postage prepaid, return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to the Trust or Acquisition Sub, to
Premier Construction Products Statutory Trust
c/o First Union National Bank, as trustee
10 State House Square
Hartford, CT 06103
Fax: (860) 247-1356
Attention: W. Jeffrey Kramer
AGREEMENT AND PLAN OF MERGER - Page 44
<PAGE>
with a copy to:
Premier Construction Products Acquisition Corp.
220 Jackson Street
San Francisco, California 94111
Fax: 415-986-5511
Attention: General Counsel
and
Andrews & Kurth L.L.P.
4200 Chase Tower
Houston, Texas 77002
Fax: (713) 220-4285
Attention: G. Michael O'Leary
if to the Company, to
Republic Group Incorporated
811 East 30th Avenue
Hutchinson, Kansas 67502
Fax: (316) 727-2727
Attention: Doyle R. Ramsey
with a copy to:
Locke Liddell & Sapp LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
Attention: Bryan E. Bishop
Fax: 214-740-8800
Except as provided below, all such notices, requests and other communications
shall be deemed received on the date of receipt by the recipient thereof if
actually received prior to 5 p.m. in the place of receipt and such day is a
business day in the place or receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding business day in the place of receipt. Any notice given exclusively by
registered or certified mail as provided above shall be deemed received on the
fifth business day.
Section 8.3 Definitions.
-----------
For purposes of this Agreement:
(a) "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first
person;
AGREEMENT AND PLAN OF MERGER - Page 45
<PAGE>
(b) "Bank Credit Agreement" means that certain Credit Agreement dated
as of July 15, 1998 among the Company, the banks party thereto,
and Bank of America, N.A., as Administrative Agent, as amended;
(c) "Filed SEC Documents" means SEC Documents filed by the Company
pursuant to the Securities Exchange Act of 1934, as amended;
(d) "Indenture" means that certain Indenture dated as of July 15,
1998 between the Company and UMB Bank, N.A., as Trustee;
(e) "material adverse effect" means, when used in connection with a
party to this Agreement, any change, effect, event or occurrence
that (i) is or would reasonably be expected to be materially
adverse to the assets, business, condition (financial or
otherwise) or results of operations of such party and its
subsidiaries taken as a whole; (ii) impairs, or would reasonably
be expected to impair, the ability of such party to perform its
obligations under this Agreement in any material respect or (iii)
prevents or materially delays, or would reasonably be expected to
prevent or materially delay the consummation of any of the
transactions contemplated by this Agreement.
(f) "person" means an individual, corporation, limited liability
company, partnership, joint venture, association, trust,
unincorporated organization or other entity;
(g) "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of
its Board of Directors or other governing body (or, if there are
no such voting interests, 50% or more of the equity interests,
the holders of which are generally entitled to vote for the
election of the board of directors or other governing body) is
owned directly or indirectly by such first person;
(h) "significant subsidiary" of any person means any subsidiary of
such person that constitutes a significant subsidiary within the
meaning of Rule 1-02 of Regulation S-X promulgated by the SEC;
(i) "Takeover Proposal" has the meaning assigned thereto in Section
4.2(a);
(j) "Superior Proposal" has the meaning assigned thereto in Section
4.2(b); and
(k) "Taxes" has the meaning assigned thereto in Section 3.1(m)(iii).
Section 8.4 Interpretation.
--------------
When a reference is made in this Agreement to an Article, Section, Exhibit
or Schedule, such reference shall be to an Article or Section of, or an Exhibit
or Schedule to, this Agreement, respectively, unless otherwise indicated. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include," "includes" or "including" are
AGREEMENT AND PLAN OF MERGER - Page 46
<PAGE>
used in this Agreement, they shall be deemed to be followed by the words
"without limitation." The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. All terms defined
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined
herein. All monetary sums herein are in United States of America dollars. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
Section 8.5 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
(including by facsimile transmission) to the other parties.
Section 8.6 Entire Agreement; No Third-Party Beneficiaries.
-----------------------------------------------
This Agreement (including the documents and instruments referred to
herein), the Stockholders Agreements and the Confidentiality Agreement (a)
constitute the entire agreement, and supersede all prior written or oral and all
contemporaneous oral agreements and understandings, among the parties with
respect to the subject matter of this Agreement and (b) except for the
provisions of Article 2 and Section 5.6, are not intended to confer upon any
person other than the parties any rights or remedies.
Section 8.7 Governing Law.
-------------
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
Section 8.8 Jurisdiction.
------------
Any suit, action or proceeding seeking to enforce any provision of, or
based on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought in any federal court located
in the State of Delaware or any Delaware state court, and each of the parties
hereby consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding brought in any such court has been brought in an
AGREEMENT AND PLAN OF MERGER - Page 47
<PAGE>
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 8.2 shall be deemed
effective service of process on such party.
Section 8.9 Waiver of Jury Trial.
--------------------
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.10 Assignment.
----------
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or otherwise by a party without the prior written consent of each other party,
except that either the Trust or Acquisition Sub may transfer or assign, in whole
or from time to time in part, to one or more of its affiliates, the right to
enter into the transactions contemplated by this Agreement, but no such transfer
or assignment will relieve the Trust or Acquisition Sub of its obligations
hereunder. Notwithstanding the foregoing, the parties hereto agree that (i) the
Surviving Corporation shall, and the Trust shall cause the Surviving Corporation
to, assign the obligations of the Trust or the Surviving Corporation, as the
case may be, under Sections 5.4 and 5.6 to any person who acquires all or
substantially all of the assets of the Surviving Corporation, and the Surviving
Corporation shall cause, and the Trust shall cause the Surviving Corporation to
cause, such person to assume the obligations of the Surviving Corporation, and
any such assignment and assumption shall relieve the Trust and Surviving
Corporation of their obligations under Sections 5.4 and 5.6, or (ii) if the
Surviving Corporation sells or otherwise disposes of substantially all of its
assets in a manner or manners such that no person acquires all or substantially
all of such assets, then the Surviving Corporation shall, and the Trust shall
cause the Surviving Corporation to, make such provisions for the obligations of
the Trust and the Surviving Corporation under Sections 5.4 and 5.6 as the
Surviving Corporation and a majority of the persons presently serving as the
Chief Executive Officer, Chief Financial Officer and Vice President-Finance (or,
if any such person is unavailable due to illness or death, a majority of the
specified persons then available) determine to be appropriate, and upon making
such provisions the Trust and the Surviving shall be relieved of their
obligations under Sections 5.4 and 5.6. Any assignment in violation of the first
sentence of this Section 8.10 shall be void. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.
Section 8.11 Disclosure Schedules.
--------------------
Matters reflected on the Company Disclosure Schedule and the Trust
Disclosure Schedule are not necessarily limited to matters required by this
Agreement to be reflected therein and the inclusion of such matters shall not be
deemed an admission that such matters were required to be reflected on the
Company Disclosure Schedule or the Trust Disclosure Schedule,
AGREEMENT AND PLAN OF MERGER - Page 48
<PAGE>
as the case may be. Such additional matters are set forth for informational
purposes only and do not necessarily include other matters of a similar nature.
Section 8.12 Severability.
------------
If any provision of this Agreement or the application thereof to any person
or circumstance is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, then the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to
which it has been held invalid or unenforceable, shall remain in full force and
effect and shall in no way be affected, impaired or invalidated thereby. Upon
any such determination, the parties shall negotiate in good faith in an effort
to agree upon a mutually acceptable, suitable and equitable substitute provision
to effect the original intent of the parties.
Section 8.13 Payments Constitute Liquidated Damages.
--------------------------------------
The parties agree that the dollar amounts provided in Sections 5.7(b) and
7.2(b) payable upon the occurrence of the events specified therein have been
determined by negotiation and reflect their best estimate and judgement of the
monetary value of the losses and damages to be incurred in connection with, and
the time, effort, expense and cost of opportunity associated with, the
transactions contemplated in this Agreement, and the parties agree to accept
payment of such amount as liquidated damages in full and complete satisfaction
of all claims and expenses arising from the occurrence of such events
(including, but not limited to, claims for specific performance).
Section 8.14 Enforcement.
-----------
The parties agree that irreparable damage would occur and that the parties
would not have any adequate remedy at law if 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 will be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any Federal
court located in the State of Delaware or in Delaware state court, the foregoing
being in addition to any other remedy to which they are entitled at law or in
equity.
AGREEMENT AND PLAN OF MERGER - Page 49
<PAGE>
IN WITNESS WHEREOF, the Trust, Acquisition Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
PREMIER CONSTRUCTION PRODUCTS
STATUTORY TRUST
By: First Union National Bank, as Trustee
By: /s/ W. Jeffrey Kramer
---------------------------
W. Jeffrey Kramer
Vice President
PREMIER CONSTRUCTION PRODUCTS
ACQUISITION CORP.
By: /s/ Douglas H. Wolf
--------------------------------
Douglas H. Wolf
President
REPUBLIC GROUP INCORPORATED
By: /s/ Phil Simpson
--------------------------------
Phil Simpson
Chairman, President and
Chief Executive Officer
AGREEMENT AND PLAN OF MERGER - Page 50
<PAGE>
INDEX
TO
DISCLOSURE SCHEDULES
TO
AGREEMENT AND PLAN OF MERGER AMONG PREMIER CONSTRUCTION
PRODUCTS STATUTORY TRUST, PREMIER CONSTRUCTION PRODUCTS
ACQUISITION CORP. AND REPUBLIC GROUP INCORPORATED
3.1(a) Organization, Standing, and Corporate Power
3.1(b) Subsidiaries
3.1(c) Capital Structure
3.1(d) Authority; Non-contravention
3.1(g) Undisclosed Material Liabilities
3.1(i) Absence of Certain Changes or Events
3.1(j) Litigation
3.1(k) Changes in Benefit Plans
3.1(l) ERISA Compliance
3.1(m) Taxes
3.1(r) Licenses and Permits
3.1(s) Default
3.1(t) Environmental Laws and Regulations
3.1(u) Agreements
3.1(v) Intellectual Property
3.1(w) Labor Matters
3.1(x) Assets Other than Real Property Interests
3.1(y) Real Property
3.1(z) Insurance
3.1(aa) Transaction with Affiliates
4.1 Conduct of Business
