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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE SECURITIES ACT OF 1934
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BERG ELECTRONICS CORP.
(Name of Subject Company)
BERG ELECTRONICS CORP.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING IN EACH CASE THE ASSOCIATED RIGHTS TO PURCHASE SERIES A JUNIOR
PREFERRED STOCK)
(Title of Classes of Securities)
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COMMON STOCK -- 08372 L 10
CLASS A COMMON STOCK -- 08372 CLA
(CUSIP Number of Classes of Securities)
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DAVID J. WEBSTER
BERG ELECTRONICS CORP.
101 SOUTH HANLEY ROAD, SUITE 400
ST. LOUIS, MISSOURI 63105
(314) 726-1323
(Name and address and telephone number of person authorized to
receive notice and communications on behalf of the person(s) filing statement)
With a copy to:
R. SCOTT COHEN, ESQ.
WEIL, GOTSHAL & MANGES LLP
100 CRESCENT COURT, SUITE 1300
DALLAS, TEXAS 75201-6950
(214) 746-7700
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Berg Electronics Corp., a Delaware
corporation (the "Company"), and the address of the principal executive offices
of the Company is 101 South Hanley Road, Suite 400, St. Louis, Missouri 63105.
The titles of the classes of equity securities to which this statement relates
are Common Stock, par value $0.01 per share, including the associated rights to
purchase Series A Junior Preferred Stock ("Common Shares") of the Company, and
Class A Common Stock, par value $0.01 per share, including the associated rights
to purchase Series A Junior Preferred Stock ("Class A Shares" and, together with
the Common Shares, the "Shares") of the Company.
ITEM 2. TENDER OFFER OF PURCHASER.
This statement relates to a tender offer (the "Offer") by Berg Acquisition
Co. (f/k/a Bravo Acquisition Co.) ("Purchaser"), a Delaware corporation and
wholly-owned subsidiary of Framatome Connectors USA Holding Inc. ("FC USA"), a
New York corporation, and an indirect wholly-owned subsidiary of Framatome
Connectors International S.A. ("FCI"), a corporation organized under the laws of
the Republic of France and a direct and wholly-owned subsidiary of Framatome
S.A., a corporation organized under the laws of the Republic of France, to
purchase all issued and outstanding Common Shares at $35.00 per share (the
"Common Offer Price"), net to the seller in cash, and all issued and outstanding
Class A Shares at $32.965 per share (the "Class A Offer Price" and, together
with the Common Offer Price, the "Offer Price"), net to the seller in cash, upon
the terms and subject to the conditions set forth in the Agreement and Plan of
Merger, dated as of August 27, 1998 (the "Merger Agreement"), by and among the
Company, FCI and Purchaser, which Offer is disclosed in a Tender Offer Statement
on Schedule 14D-1, dated September 2, 1998 (the "Schedule 14D-1").
Based on the information contained in the Schedule 14D-1, the principal
executive offices of FCI are located at Tour Framatome, 1, Place de la Coupole,
92084 Paris La Defense, France, and the principal executive offices of FC USA
and Purchaser are located at 55 Walls Drive, Suite 304, Fairfield, Connecticut
06432-0599.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and address of the Company, which is the person filing this
statement, are set forth in Item 1 above.
(b)(1) Certain contracts, agreements, arrangements and understandings
between the Company or its affiliates and its executive officers, directors or
affiliates are set forth in the "Information Statement Pursuant to Section 14(f)
of the Securities and Exchange Act of 1934 and Rule 14f-1 Thereunder" dated
September 2, 1998 as attached hereto as Annex I and incorporated by reference in
its entirety (the "Information Statement"). Specifically, the Company has
entered into amendments to the Executive Employment Agreements with James N.
Mills, Chairman of the Board and Chief Executive Officer of the Company; Robert
N. Mills, Vice Chairman of the Company; Timothy L. Conlon, President and Chief
Operating Officer of the Company; David M. Sindelar, Senior Vice President and
Chief Financial Officer of the Company; W. Thomas McGhee, Secretary and General
Counsel of the Company; Larry S. Bacon, Senior Vice President of the Company;
and David J. Webster, Senior Vice President of the Company, which amendments are
filed as Exhibits (c)(4), (c)(5), (c)(6), (c)(7), (c)(8), (c)(9) and (c)(10),
respectively, hereto and are summarized below and incorporated herein by
reference in their entirety. The Company has also entered into (i) an amendment
to the Rights Agreement, dated as of December 22, 1997, between the Company and
Harris Trust and Savings Bank, which amendment was executed on August 27, 1998,
(ii) an amendment to the Registration Rights Agreement, dated as of March 1,
1993, between the Company and the securityholders of the Company listed therein,
which amendment was executed on August 27, 1998, (iii) a Termination Agreement,
dated as of August 27, 1998, relating to the Amended and Restated Monitoring and
Oversight Agreement, dated as of March 6, 1996, among the Company, Berg
Electronics Group, Inc., a wholly-owned subsidiary of the Company, and Hicks,
Muse & Co. Partners, L.P., (iv) an agreement with Mills & Partners, Inc., dated
as of August 31, 1998, pursuant to which Mills & Partners, Inc. has agreed,
among other things, not to compete with the Company for a period of two years
following the consummation of the Merger and
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(v) an agreement with Joseph S. Catanzaro, Chief Accounting Officer of the
Company, dated as of August 31, 1998, pursuant to which Mr. Catanzaro will be
entitled to receive a bonus from the Company upon the effective time of the
Merger. The foregoing agreements are filed as Exhibits (c)(11), (c)(12),
(c)(13), (c)(14) and (c)(15), respectively, hereto and are summarized below and
incorporated herein by reference in their entirety.
(b)(2) In addition to the Merger Agreement, the Company is party to a
Confidentiality Agreement, dated as of July 21, 1998, with FCI (the
"Confidentiality Agreement"). The Merger Agreement and Confidentiality Agreement
are filed as Exhibits (c)(1) and (c)(2) hereto and are summarized below and
incorporated herein by reference in their entirety. In connection with the
Merger Agreement, certain of the Company's stockholders (some of which are
directors of the Company; specifically, James N. Mills, Thomas O. Hicks and
Charles W. Tate) have entered into a Stockholders Agreement with Purchaser (the
"Stockholders Agreement"). The Stockholders Agreement is filed as Exhibit (c)(3)
hereto and is summarized below and incorporated herein by reference in its
entirety.
THE MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement.
The summary is not a complete description of the terms thereof and is qualified
in its entirety by reference to the Merger Agreement, which is incorporated
herein by reference and a copy of which has been filed as Exhibit (c)(1) hereto.
Capitalized terms used and not otherwise defined herein have the meanings
ascribed to them in the Merger Agreement.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as practicable after the public announcement of the execution of the
Merger Agreement, but in no event later than five business days thereafter. The
Merger Agreement provides that Purchaser cannot amend or waive the Minimum
Condition or decrease the Offer Price or the number of Shares sought, or impose
any additional conditions to the Offer, or amend any term of the Offer in any
manner adverse to the holders of Shares or extend the expiration date of the
Offer, in each case, without the prior written consent of the Company.
Notwithstanding the foregoing, Purchaser has agreed to extend the Offer from
time to time until the date that all conditions to the Offer have been satisfied
if, and to the extent that, at the initial expiration date of the Offer, or any
extension thereof, all conditions to the Offer have not been satisfied or
waived. In addition, the Offer Price may be increased and the Offer may be
extended to the extent required by law in connection with such increase, in each
case with or without the consent of the Company. In the event of any increase in
the Common Offer Price, the Class A Offer Price will be increased by an equal
amount, and in the event of any increase in the Class A Offer Price, the Common
Offer Price will be increased by an equal amount.
Conditions to Offer. Notwithstanding any other provision of the Offer,
subject to the provisions of the Merger Agreement, FCI and Purchaser shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the Securities and Exchange Commission (the "Commission"),
including Rule 14e-1(c) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (relating to Purchaser's obligation to pay for
or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and may
terminate the Offer and not accept for payment any tendered Shares if,
subsequent to December 31, 1998, (i) any applicable waiting period under the
Hart-Scott-Rodino Antitrust Act of 1976 (the "HSR Act") or under other
applicable antitrust or competition laws has not expired or been terminated
prior to the expiration of the Offer, (ii) the Minimum Condition has not been
satisfied, or (iii) at any time on or after August 27, 1998, and before the time
of acceptance of Shares for payment pursuant to the Offer, any of the following
shall exist: (a) there shall be instituted or pending any action or proceeding
by any government or governmental authority or agency, domestic or foreign,
before any court or governmental authority or agency, domestic or foreign, that
has reasonable likelihood of success (i) challenging or seeking to make illegal,
to delay materially or otherwise directly or indirectly to restrain or prohibit
the making of the Offer, the acceptance for payment of or payment for some of or
all the Shares by FCI or the consummation by FCI of the Merger, or seeking to
obtain material
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damages in connection with the transactions contemplated by the Offer or the
Merger, (ii) seeking to restrain or prohibit FCI's ownership or operation (or
that of its respective subsidiaries or affiliates) of all or any material
portion of the business or assets of the Company and its Subsidiaries, taken as
a whole, or of FCI and it subsidiaries, taken as a whole, or to compel FCI or
any of its subsidiaries or affiliates to dispose of or hold separate all or any
material portion of the business or assets of the Company and its subsidiaries,
taken as a whole, or of FCI and its subsidiaries, taken as a whole, (iii)
seeking to impose or confirm material limitations on the ability of FCI or any
of its subsidiaries or affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote any
Shares acquired or owned by FCI or any of its subsidiaries or affiliates on all
matters properly presented to the Company's stockholders, or (iv) seeking to
require divestiture by FCI or any of its subsidiaries or affiliates of all or
any material portion of the business or assets of the Company and its
subsidiaries, taken as a whole; (b) there shall be any statute, rule,
regulation, order, decree or injunction enacted, promulgated or issued by any
court, government or governmental authority or agency that is reasonably likely,
directly or indirectly, to result in any of the consequences referred to in
clauses (i) through (iv) of section (a) above; (c) the representations and
warranties of the Company set forth in the Merger Agreement shall not be true
and accurate in all material respects as of the date of consummation of the
Offer as though made on or as of such date (except for those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and accurate as of
such date or with respect to such period); (d) the Company shall have breached
or failed to perform or comply with, in any material respects, any obligation,
agreement or covenant under the Merger Agreement; (e) the Merger Agreement shall
have been terminated in accordance with its terms; or (f) the Board of Directors
of the Company shall have withdrawn or modified or changed in a manner adverse
to FCI or Purchaser its approval or recommendation of the Offer, the Merger
Agreement or the Merger or shall have recommended an Acquisition Proposal or
shall have executed an agreement in principle or definitive agreement relating
to an Acquisition Proposal or similar business combination with a person or
entity other than FCI, Purchaser or their affiliates or the Board of Directors
of the Company shall have adopted a resolution to do any of the foregoing.
The foregoing conditions are for the sole benefit of FCI and Purchaser (or
their assignees) and, subject to the Merger Agreement, may be asserted by either
of them or may be waived by FCI or Purchaser, in whole or in part at any time
and from time to time in the sole discretion of FCI or Purchaser. The failure by
FCI or Purchaser at any time to exercise any such rights shall not be deemed a
waiver of any right and each right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
Assuming the prior satisfaction or waiver of the conditions to the Offer,
Purchaser has agreed to accept for payment and pay for Shares tendered as soon
as it is legally permitted to do so under applicable law; provided that, if the
number of Shares that have been physically tendered and not withdrawn are more
than 50% but less than 90% of the outstanding Shares, Purchaser may extend the
Offer for up to 20 business days from the date that all conditions to the Offer
shall first have been satisfied or waived.
Directors. The Merger Agreement provides that promptly upon FCI's purchase
of and payment for Shares which represent at least a majority of the outstanding
Shares (on a fully diluted basis), FCI shall be entitled to designate a number
of directors, rounded up to the next whole number, on the Company's Board of
Directors, subject to compliance with Section 14(f) of the Exchange Act, and
Rule 14f-1 promulgated thereunder, as is equal to the product of the total
number of directors on such Board (giving effect to any additional directors
designated by FCI pursuant to this sentence) multiplied by the percentage that
the aggregate number of Shares beneficially owned by Purchaser, FCI and any of
their affiliates (including Shares accepted for payment) bears to the total
number of Shares then outstanding. The Company shall, upon request of Purchaser,
on the date of such request, either increase the size of its Board of Directors
or secure the resignations of such number of its incumbent directors as is
necessary to enable FCI's designees to be so elected or appointed.
Notwithstanding the foregoing, until the Effective Time, the Company shall
retain as members of its Board of Directors at least two directors who were
directors of the Company on the date of the Merger Agreement; provided, that
subsequent to the purchase of and payment for Shares pursuant to the Offer, FCI
shall always have its designees represent at least a majority of the entire
Board of Directors.
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The Merger Agreement also provides that from and after the time, if any,
that FCI's designees constitute a majority of the Board of Directors, any
amendment of the Merger Agreement, the Certificate of Incorporation or Bylaws of
the Company, any termination of the Merger Agreement by the Company, any
extension of time for performance of any of the obligations of FCI or Purchaser
under the Merger Agreement, and any waiver of any condition or any of the
Company's rights under the Merger Agreement or other action by the Company in
connection with the rights of the Company under the Merger Agreement may be
effected only with the concurrence of a majority of the directors of the Company
then in office who were directors on the date of the Merger Agreement, which
action shall be deemed to constitute the action of the full Board of Directors.
The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof, at the effective time (the "Effective Time") Purchaser will
be merged with and into the Company (the "Merger"), with the Company continuing
as the Surviving Corporation (the "Surviving Corporation") and a direct
wholly-owned subsidiary of FCI. At the Effective Time, by virtue of the Merger
and without any action on the part of the holders of any Shares, each issued and
outstanding Share (other than Shares owned by FCI, Purchaser or any other
wholly-owned subsidiary of FCI and Shares held by stockholders who have demanded
and perfected dissenters' rights under the General Corporation Law of the State
of Delaware (the "DGCL")), shall be converted into the right to receive the
Offer Price without interest (the "Merger Consideration"). Each issued and
outstanding share of common stock, par value $0.01 per share, of Purchaser
immediately prior to the Effective Time shall be converted into and become one
fully paid and non-assessable share of common stock of the Surviving
Corporation. The Merger Agreement also provides that (i) the Certificate of
Incorporation of Purchaser, as in effect immediately prior to the Effective Time
(the "Certificate of Incorporation"), will be the initial Certificate of
Incorporation of the Surviving Corporation and (ii) the Bylaws of Purchaser, as
in effect immediately prior to the Effective Time (the "Bylaws"), will be the
initial Bylaws of the Surviving Corporation.
Treatment of Options. The Merger Agreement provides that the options (the
"Options") to purchase Common Shares under the Company's 1993 Stock Option Plan,
as amended, the Company's 1998 Incentive Compensation Plan and the director
option to purchase 48,660 Common Shares (the "Options Plans"), whether or not
then exercisable or vested, shall be cancelled and shall represent the right to
receive cash in an amount equal to the product of (i) the number of Common
Shares subject to each such Option and (ii) the excess of (A) the Common Offer
Price over (B) the per share exercise price of such Option. Prior to the
Effective Time, the Company shall take all actions (including, if appropriate,
obtaining any consents from holders of Options or making any amendments to the
terms of the Option Plans) that are necessary to give effect to the transactions
contemplated by this paragraph. Notwithstanding any other provision of this
paragraph, payment may be withheld in respect of any stock option until
necessary consents are obtained.
Stockholders' Meeting. Pursuant to the Merger Agreement, if Purchaser owns
less than 90% of the Shares following the purchase of Shares by Purchaser
pursuant to the Offer, the Company, acting through its Board of Directors,
shall, in accordance with applicable law, duly call, give notice of, convene and
hold a special meeting of its stockholders as soon as practicable following the
acceptance for payment and purchase of Shares by Purchaser pursuant to the Offer
for the purpose of voting, considering and taking action upon the Merger
Agreement and the Merger.
The Merger Agreement also provides that the Company shall, in accordance
with applicable law, prepare and file with the Commission a preliminary proxy or
information statement relating to the Merger and the Merger Agreement, obtain
and furnish the information required by the Commission to be included in the
Proxy Statement (as hereinafter defined) and, after consultation with FCI,
respond promptly to any comments made by the Commission with respect to the
preliminary proxy or information statement and use its reasonable best efforts
to have cleared by the Commission and cause a definitive proxy or information
statement (the "Proxy Statement") to be mailed to its stockholders and use its
reasonable best efforts to obtain the necessary adoption of the Merger Agreement
by its stockholders. The Merger Agreement also provides that the Company shall,
subject to the fiduciary obligations of the Board of Directors under applicable
law as advised by the Company's outside counsel, include in the Proxy Statement
the recommendation of the Board of Directors that stockholders of the Company
vote in favor of the adoption of the Merger
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Agreement and the Merger. In the event that Purchaser shall acquire at least 90%
of the Shares, pursuant to the Offer or otherwise, the parties shall take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after such acquisition, without a meeting of the Company's
stockholders in accordance with Section 253 of the DGCL.
Representations and Warranties. The Merger Agreement contains
representations and warranties of the Company with respect to, among other
things (i) organization and good standing, certificate of incorporation, bylaws
and minute books, (ii) capitalization (including the ownership of subsidiaries),
(iii) authorization, validity of the Merger Agreement and Company action, (iv)
consents and approvals and absence of violations, (v) Commission reports and
financial statements, (vi) no undisclosed liabilities, (vii) absence of certain
changes (including material adverse changes), (viii) certain contracts
(including material agreements), (ix) employee benefit plans and ERISA, (x)
litigation, (xi) permits, absence of defaults and compliance with applicable
laws, (xii) taxes, (xiii) certain real and personal property, (xiv) intellectual
property, (xv) environmental matters, (xvi) employee and labor matters, (xvii)
information in Offer documents, (xviii) brokers and finders, (xix) insurance,
(xx) opinion of financial advisor, (xxi) the Rights Plans, (xxii) the
Termination Agreement, and (xxiii) Exon-Florio.
The Merger Agreement contains joint and several representations and
warranties of FCI and Purchaser with respect to, among other things (i)
organization and good standing, (ii) authorization, validity of the Merger
Agreement and necessary action, (iii) consents and approvals and absence of
violations, (iv) information in the Offer documents and the proxy statement
pertaining to the Merger, (v) sufficiency of funds, (vi) Share ownership, and
(vii) Purchaser's operations.
Interim Operations. In the Merger Agreement, the Company has agreed that,
among other things, between the date of the Merger Agreement and prior to the
time FCI's designees have been elected to, and constitute a majority of, the
Board of Directors, except (i) as contemplated by the Merger Agreement, (ii) as
disclosed in the Company Disclosure Schedule, and (iii) as agreed in writing by
FCI, (a) the business of the Company and its subsidiaries shall be conducted
only in the ordinary course of business and, to the extent consistent therewith,
each of the Company and its subsidiaries shall use its reasonable best efforts
to preserve in all material respects its business organization intact and
maintain its existing relations with customers, suppliers, employees and
business associates; (b) neither the Company nor any of its subsidiaries shall,
directly or indirectly, amend or propose any change to its certificate of
incorporation or bylaws or similar organizational documents or split, combine or
reclassify its outstanding capital stock; (c) neither the Company nor any of its
subsidiaries shall declare, set aside or pay any dividend or other distribution
(whether payable in cash, stock or property) with respect to its capital stock
(other than dividends from any subsidiary of the Company to the Company or any
other subsidiary of the Company); issue or sell any additional shares of, or
securities convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock of any
class of the Company or its subsidiaries, other than issuances pursuant to the
exercise of Options outstanding on the date of the Merger Agreement; sell,
lease, license or dispose of any assets or properties, other than in the
ordinary course of business which individually or in the aggregate are in an
amount in excess of $500,000; incur, assume, prepay or modify any debt, other
than in the ordinary course of business consistent with past practices; license
or sublicense any asset or property of the Company or any of its subsidiaries
except in the ordinary course of business consistent with past practices on a
basis that results in a positive current royalty net of any royalties due by the
Company or any of its subsidiaries on account of sales by the licensee or
sublicensee; or redeem, purchase or otherwise acquire, directly or indirectly,
any of its or its subsidiaries' capital stock (except as contemplated by any
employee benefit or stock plans or any employment or severance agreement as in
effect on the date of the Merger Agreement); (d) neither the company or any of
its subsidiaries shall acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership or other business organization or
division thereof; (e) neither the Company nor any of its subsidiaries shall make
any investment other than in readily marketable securities in an amount in
excess of $500,000 in the aggregate whether by purchase of stock or securities,
contributions to capital or any property transfer; (f) neither the Company nor
any of its subsidiaries shall waive, release, grant, or transfer any rights of
value material to the Company and its subsidiaries taken as a whole; (g) neither
the Company nor any of its subsidiaries shall, except as may be required or
contemplated by the Merger
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Agreement or applicable law, enter into, adopt or materially amend or terminate
any employee benefit plans, enter into or amend any retention plan or stay bonus
arrangement, employment or severance agreement or increase in any manner the
compensation or other benefits of its officers or directors or increase in any
manner the compensation of any other employees (except for normal increases in
the ordinary course of business, consistent with past practices); (h) neither
the Company nor any of its subsidiaries shall assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the material obligations of any other person (other than
subsidiaries of the Company), except pursuant to contractual indemnification
agreements entered into in the ordinary course of business, consistent with past
practices; make any loans, advances or capital contributions to, or investments
in, any other person (other than to subsidiaries of the Company and payroll,
travel and similar advances made in the ordinary course of business, consistent
with past practices); revalue in any material respect any of its assets,
including, without limitation, writing down the value of inventory in any
material manner or write-off of notes or accounts receivable in any material
manner; or authorize or make capital expenditures which exceed $2.5 million
individually or $20.0 million in the aggregate; (i) neither the Company nor any
of its subsidiaries shall pay, discharge or satisfy any material claims,
liabilities or obligations (whether absolute, accrued, asserted or unasserted,
contingent or otherwise) other than the payment, discharge or satisfaction in
the ordinary course of business, consistent with past practices, of liabilities
reflected or reserved against in the consolidated financial statements of the
Company or incurred since the most recent date thereof pursuant to an agreement
or transaction described in the Merger Agreement or incurred in the ordinary
course of business, consistent with past practices; (j) neither the Company nor
any of its subsidiaries shall change in any material respect any of the
accounting methods used by it unless required by generally accepted accounting
principles or applicable law; (k) the Company shall not amend, modify or
terminate in any material respect any material agreement or enter into any new
agreement material to the business of the Company other than in the ordinary
course of business consistent with past practices or without the prior written
consent of FCI, which consent shall not be unreasonably withheld; (l) neither
the Company nor any of its subsidiaries will amend or modify an existing
Affiliate Transaction or enter into any new Affiliate Transaction other than
with the prior written consent of FCI; (m) neither the Company nor any of its
Subsidiaries will take any action that would make any representation or warranty
of the Company under the Merger Agreement inaccurate in any respect; and (n)
neither the Company nor any of its subsidiaries shall authorize or enter into an
agreement to do any of the foregoing.
Pursuant to the Company Disclosure Schedule, in addition to the amended
employment agreements with respect to management of the Company described below
under "Amendments to Executive Employment Agreements with Certain Executive
Officers of the Company," the Company, in connection with the execution of the
Merger Agreement, is permitted to enter into employee agreements regarding
change of control with additional employees pursuant to which the Company may be
required to make certain payments to such employees upon the consummation of the
transactions contemplated by the Merger Agreement or thereafter. The amount of
such payments, other than those to the executives set forth under "Amendments to
Executive Employment Agreements with Certain Executive Officers of the Company,"
in the aggregate is $2,448,000.
Approvals and Consents; Cooperation; Notification. FCI, Purchaser and the
Company have agreed to use their respective reasonable best efforts, and
cooperate with each other, to (i) determine as promptly as practicable all
governmental and third party authorizations, approvals, consents or waivers,
including pursuant to the HSR Act or other applicable antitrust or competition
laws, advisable (in FCI's and Purchaser's discretion) or required in order to
consummate the transactions contemplated by the Merger Agreement, including, the
Offer and the Merger, (ii) obtain such authorizations, approvals, consents or
waivers as promptly as practicable and (iii) prepare the Proxy Statement and the
Offer Documents. The Company, FCI and Purchaser have agreed to take all actions
necessary to file as soon as practicable all notifications, filings and other
documents required to obtain all governmental authorizations, approvals,
consents or waivers, including under the HSR Act or other applicable antitrust
or competition laws, and to respond as promptly as practicable to any inquiries
received from the Federal Trade Commission, the Antitrust Division of the
Department of Justice and any other governmental entity for additional
information or documentation and to respond as promptly as practicable to all
inquiries and requests received from any governmental entity in
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connection therewith. The Company is required give prompt notice to FCI of (i)
the occurrence of any event, condition or development material to the Company
and its subsidiaries, taken as a whole, (ii) any notice or other communication
from any Person claiming its consent is required in connection with the
transactions contemplated by the Merger Agreement, (iii) any notice or other
communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated by the Merger Agreement and (iv)
any actions, suits, claims, investigations or proceedings commenced or, to the
best of its knowledge threatened against, relating to or involving or otherwise
affecting the Company or any of its subsidiaries which, if pending on the date
of the Merger Agreement, would have been required to have been disclosed
pursuant to the Merger Agreement or which relate to the consummation of the
transactions contemplated thereunder. Each of the Company and FCI have agreed to
give prompt notice to the other of the occurrence or failure to occur of an
event that would, or, with the lapse of time would cause any condition to the
consummation of the Offer or the Merger not to be satisfied.
Employee Benefits. FCI and Purchaser have agreed that during the period
commencing on the Effective Date and ending on the date that is one year from
the Effective Date, the Surviving Corporation and its subsidiaries and
successors shall provide those persons who, immediately prior to the Effective
Time, were employees of the Company or its subsidiaries ("Retained Employees")
with employee plans and programs that provide benefits substantially comparable
in the aggregate to those provided to such Retained Employees immediately prior
to the Effective Time (disregarding for this purpose any stock options or other
equity based compensation provided to such employees prior to the Effective
Time). With respect to such employee plans and programs provided by the
Surviving Corporation and its subsidiaries and successors, service accrued by
such Retained Employees during employment with the Company and its subsidiaries
prior to the Effective Time shall be recognized for all purposes, except to the
extent necessary to prevent duplication of benefits and except for benefit
accrual under any defined benefit pension plan maintained by Purchaser. Amounts
paid before the Effective Time by employees of the Company and its subsidiaries
under any medical plans of the Company shall after the Effective Time be taken
into account in applying deductible and out-of-pocket limits applicable under
any medical plan provided by FCI in substitution therefor to the same extent as
if such amounts had been paid under such FCI medical plan.
Non-Solicitation and Non-Competition Agreements. Pursuant to the terms of
the Merger Agreement, the Company has agreed that it shall, as soon as
practicable following the execution of the Merger Agreement, enter into
Non-Solicitation and Non-Competition Agreements substantially in the form of the
agreements or otherwise set forth in the Company Disclosure Schedule with the
individuals and the entities listed in the Company Disclosure Schedule.
No Solicitation. Pursuant to the Merger Agreement, the Company has agreed
that neither it nor any of its subsidiaries shall (whether directly or
indirectly through advisors, agents or other intermediaries), nor shall the
Company or any of its subsidiaries authorize or permit any of its or their
directors, officers, agents or representatives, to (i) initiate, solicit,
encourage or facilitate, directly or indirectly, any Acquisition Proposal (as
defined below); (ii) engage in negotiations or discussions (other than, upon
contact initiated by a third party, to advise such third party as to the
existence of the restrictions described in this paragraph) with, or furnish any
information or data to, any third party relating to an Acquisition Proposal; or
(iii) grant any waiver or release under any standstill or similar agreement with
respect to any class of equity securities of the Company or any of its
subsidiaries. Notwithstanding the foregoing or anything to the contrary in the
Merger Agreement, the Company and the Board of Directors may participate in
discussions or negotiations with or furnish information to any third party
making an Acquisition Proposal not solicited in violation of the foregoing (a
"Potential Acquiror") or approve such an Acquisition Proposal if the Board of
Directors is advised by its financial advisor that such Potential Acquiror has
the financial wherewithal to be reasonably capable of consummating such an
Acquisition Proposal, and the Board of Directors determines in good faith (a)
after receiving advice from its financial advisor, that such third party has
submitted to the Company an Acquisition Proposal which is a Superior Proposal
(as defined below), and (b) based upon advice of outside legal counsel, that the
failure to participate in such discussions or negotiations or to furnish such
information or approve an Acquisition Proposal would violate the Board of
Director's fiduciary duties under applicable law.
"Acquisition Proposal" means any inquiry, proposal or offer, whether in
writing or otherwise, made by a third party other than FCI relating to (i) any
acquisition or purchase of 20% or more of the consolidated assets
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<PAGE> 9
of the Company and its subsidiaries or of 20% or more of any class of equity
securities of the Company or any of its Subsidiaries, (ii) any tender offer
(including a self tender offer) or exchange offer that if consummated would
result in any third party beneficially owning 20% or more of any class of equity
securities of the Company or any of its subsidiaries, (iii) any merger,
consolidation, business combination, sale of assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its subsidiaries whose assets, individually or in the aggregate, constitute more
than 20% of the consolidated assets of the Company and its subsidiaries or (iv)
any other transaction the consummation of which would reasonably be expected to
interfere with in a material way, prevent or materially delay the Merger or
which would reasonably be expected to materially dilute the benefits to FCI of
the transactions contemplated by the Merger Agreement (but excluding, in each
case, the transactions contemplated by the Merger Agreement). "Superior
Proposal" means any bona fide Acquisition Proposal which was not solicited by
the Company after the date of the Merger Agreement, made by a third party to
acquire, directly or indirectly, for consideration consisting of cash and/or
securities, more than a majority of the Shares then outstanding or all or
substantially all the assets of the Company, and otherwise on terms which the
Board of Directors determines in good faith to be more favorable to the Company
and its stockholders than the Offer and the Merger (based on advice of the
Company's financial advisor that the value of the consideration provided for in
such proposal is superior to the value of the consideration provided for in the
Offer and the Merger).
The Merger Agreement also provides that the Company, in the event the
Company shall determine to provide any information as described above, or shall
receive any Acquisition Proposal, shall first promptly inform FCI in writing as
to the fact that information is to be provided and shall furnish to FCI the
identity of the recipient of such information and/or the Potential Acquiror and
the terms of such Acquisition Proposal and shall continue to advise FCI after
providing such information. The Company has agreed that any non-public
information furnished to a Potential Acquiror will be pursuant to a
confidentiality agreement containing confidentiality and standstill provisions
substantially similar to the confidentiality and standstill provisions of the
confidentiality agreement entered into between the Company and FCI and described
below, but in no event less favorable to the Company, in a material respect.
Pursuant to the Merger Agreement, the Company has agreed that the Board of
Directors shall not (i) withdraw or modify, or propose to withdraw or modify, in
any manner adverse to FCI, its approval or recommendation of the Merger
Agreement, the Offer or the Merger, (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Proposal or (iii) cause or agree to cause
the Company to enter any letter of intent, agreement in principle or agreement
related to any Acquisition Proposal unless, in each case, the Board of Directors
determines in good faith, after receiving advice from its financial advisor,
that such Acquisition Proposal is a Superior Proposal and, based upon advice of
its outside legal counsel, that the failure to take such action would violate
its fiduciary duties under applicable law.
Indemnification. The Company shall, and from and after the consummation of
the Offer, FCI and the Surviving Corporation shall jointly and severally,
indemnify, defend and hold harmless the present and former directors and
officers of the Company and its subsidiaries (the "Indemnified Parties") from
and against all losses, expenses, claims, damages or liabilities arising out of
the transactions contemplated by the Merger Agreement to the fullest extent
permitted or required under the Company's certificate of incorporation and
bylaws in effect on the date of the Merger Agreement; provided that such
indemnification shall be subject to any limitation imposed from time to time
under applicable law. All rights to indemnification and exculpation existing in
favor of the directors and officers of the Company as provided in the Company's
certificate of incorporation or bylaws, as in effect as of the date of the
Merger Agreement, with respect to matters occurring through the Effective Time,
including the right to the advancement of expenses, shall survive the Merger and
shall not be amended, repealed or otherwise modified for a period of six years
after the consummation of the Offer in any manner that would adversely affect
the rights of the individuals who at or prior to the consummation of the offer
were directors or officers of the Company with respect to occurrences at or
prior to the consummation of the Offer and FCI shall cause the Surviving
Corporation to honor all such rights to indemnification.
Shareholder Litigation. The Merger Agreement provides that in connection
with any litigation which may be brought against the Company or its directors
relating to the transactions contemplated thereby, the
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<PAGE> 10
Company will keep FCI, and any counsel which FCI may retain at its own expense,
informed of the course of such litigation, to the extent FCI is not otherwise a
party thereto. The Company has also agreed that it will consult with FCI prior
to entering into any settlement or compromise of any such shareholder
litigation; provided that, no such settlement or compromise will be entered into
without FCI's prior written consent, which consent shall not be unreasonably
withheld.
Further Assurances. Pursuant to the Merger Agreement, each of the parties
has agreed to use its respective reasonable best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Merger Agreement, including the
Offer and the Merger.
Conditions to the Merger. The Merger Agreement provides that the respective
obligation of each party to effect the Merger shall be subject to the
satisfaction, at or prior to the Effective Time, of the following conditions:
(i) the Merger Agreement shall have been adopted by the requisite vote of the
Company's stockholders, if required by applicable law and the Company's
certificate of incorporation; (ii) any waiting period applicable to the Merger
under the HSR Act or other applicable antitrust or competition laws shall have
expired or been terminated; (iii) no judgment, statute, rule, regulation, order,
decree or injunction shall have been enacted, promulgated or issued by any
Governmental Entity or court which prohibits consummation of the Merger; and
(iv) FCI, Purchaser or their affiliates shall have purchased Shares pursuant to
the Offer; provided that neither FCI nor Purchaser may invoke this condition if
Purchaser shall have failed to purchase Shares so tendered and not withdrawn in
violation of the terms of the Merger Agreement or the Offer.
The Merger Agreement provides that the obligation of the Company to effect
the Merger is further subject to the conditions that the representations and
warranties of FCI and Purchaser shall be true and accurate in all material
respects as of the Effective Date as if made at and as of such time, and that
each of FCI and Purchaser shall have performed in all material respects all of
the respective obligations required under the Merger Agreement to be performed
by FCI or Purchaser, as the case may be, at or prior to the Effective Time. The
Merger Agreement also provides that the obligations of FCI and Purchaser to
effect the Merger are further subject to the conditions that the Company's
representations and warranties shall be true and accurate in all material
respects as of the Effective Time as if made at and as of such time, and that
the Company shall have performed in all material respects all of the respective
obligations required under the Merger Agreement to be performed by the Company
at or prior to the Effective Time. The conditions described in the two preceding
sentences shall cease to be conditions if Purchaser shall have accepted for
payment and paid for Shares validly tendered pursuant to the Offer.
Termination. The Merger Agreement provides that it may be terminated and
the Merger abandoned at any time prior to the Effective Time: (i) by mutual
consent of FCI, Purchaser and the Company; (ii) by either the Company, on the
one hand, or FCI and Purchaser, on the other hand, (a) if the Shares shall not
have been purchased pursuant to the Offer on or prior to December 31, 1998;
provided further, however, that a party may not terminate the Merger Agreement
pursuant to this clause if such party's failure to fulfill any obligation under
the Merger Agreement was the cause of, or resulted in, the failure of FCI or
Purchaser, as the case may be, to purchase the Shares on or prior to such date
or (b) if there shall be any law or regulation that makes the consummation of
the Merger illegal or otherwise prohibited or if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties shall use their reasonable best
efforts to lift), in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by the Merger Agreement or prohibiting
FCI to acquire or hold or exercise rights of ownership of the Shares, and such
order, decree, ruling or other action shall have become final and
non-appealable; (iii) by the Company (a) if prior to the purchase of Shares
pursuant to the Offer, a third party shall have made an Acquisition Proposal
that the Board of Directors determines in good faith, after consultation with
its financial advisor, is a Superior Proposal and the Company shall have
executed a definitive agreement with such third party in respect of such
Superior Proposal, or (b) if FCI or Purchaser shall have terminated the Offer,
or the Offer shall have expired, without FCI or Purchaser, as the case may be,
purchasing any Shares pursuant thereto; provided that, the Company may not
terminate the Merger Agreement pursuant to the provision described in this
clause if the Company is in material breach of the
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<PAGE> 11
Merger Agreement; or (iv) by FCI and Purchaser if, prior to the purchase of
Shares pursuant to the Offer, the Board of Directors shall have withdrawn,
modified or changed in any manner adverse to FCI or Purchaser its approval or
recommendation of the Offer, the Merger Agreement or the Merger, the Board of
Directors shall have approved and recommended an Acquisition Proposal or shall
have executed an agreement in principle or definitive agreement relating to an
Acquisition Proposal or similar business combination with a person or entity
other than FCI, Purchaser or their affiliates (or the Board of Directors
resolves to do any of the foregoing), or any person or group (as defined in
Section 13(d)(3) of the Exchange Act) (other than FCI or any of its affiliates)
shall have become the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of at least 50% of the outstanding Shares or shall have
acquired, directly or indirectly, at least 50% of the assets of the Company.
Termination Fee. The Company has agreed to pay to FCI a termination fee of
$65.0 million if the Merger Agreement is terminated by the Company pursuant to
the provisions described in clause (iii)(a) under "Termination" above, or by FCI
and Purchaser pursuant to the provisions described above in clause (iv) under
"Termination" above.
Amendment. Subject to applicable law, the Merger Agreement may be amended,
modified and supplemented in any and all respects, whether before or after any
vote of the stockholders of the Company, by written agreement of the parties
thereto, by action taken by their respective Boards of Directors at any time
prior to the date of closing with respect to any of the terms contained therein;
provided, however, that after the approval of the Merger Agreement by the
stockholders of the Company, no such amendment, modification or supplement shall
reduce or change the Merger Consideration or adversely affects the rights of the
Company's stockholders under the Merger Agreement without the approval of such
stockholders.
CONFIDENTIALITY AGREEMENT
The following is a summary of certain provisions of the Confidentiality
Agreement, dated as of July 21, 1998, between FCI and the Company (the
"Confidentiality Agreement"). This summary is qualified in its entirety by
reference to the Confidentiality Agreement, which is incorporated herein by
reference and a copy of which has been filed as Exhibit (c)(2) hereto.
The Confidentiality Agreement contains customary provisions pursuant to
which, among other matters, FCI agreed to keep confidential all nonpublic,
confidential or proprietary information furnished to it by the Company relating
to the Company, subject to certain exceptions (the "Confidential Information"),
and to use the Confidential Information solely in connection with evaluating a
possible transaction involving the Company and FCI and not in any manner
detrimental to the Company. FCI has agreed in the Confidentiality Agreement that
for a period of eighteen months from the date of the Confidentiality Agreement,
neither it nor any of its affiliates will, among other things, directly or
indirectly, acquire or agree or offer to acquire any securities or assets of the
Company, solicit proxies with respect to the Company's securities, or propose to
enter into any transaction involving the Company unless such proposal is
directed and disclosed solely to the management of the Company. FCI further
agreed that, for a period of two years from the date of the Confidentiality
Agreement, neither FCI nor any of its affiliates will, without the written
consent of the Company, solicit the employment of any officer or general manager
of the Company, subject to certain exceptions.
STOCKHOLDERS AGREEMENT
The following is a summary of certain provisions of the Stockholders
Agreement, dated as of August 27, 1998, among Purchaser and certain stockholders
of the Company (the "Stockholders Agreement"). This summary is qualified in its
entirety by reference to the Stockholders Agreement, which is incorporated
herein by reference and a copy of which has been filed as Exhibit (c)(3) hereto.
Pursuant to the Stockholders Agreement, each of the stockholders party
thereto agrees to vote all Shares that such stockholder is entitled to vote at
the time of any vote to approve and adopt the Merger Agreement, the Merger and
all agreements related to the Merger and any actions related thereto at any
meeting of the
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stockholders of the Company, and at any adjournment thereof, at which such
Merger Agreement and other related agreements (or any amended version thereof),
or such other actions, are submitted for the consideration and vote of the
stockholders of the Company. Each such stockholder also agrees that it will not
vote any Shares in favor of the approval of any (i) Acquisition Proposal, (ii)
reorganization, recapitalization, liquidation or winding up of the Company or
any other extraordinary transaction involving the Company, (iii) corporate
action the consummation of which would frustrate the purposes, or prevent or
delay the consummation, of the transactions contemplated by the Merger Agreement
or (iv) other matter relating to, or in connection with, any of the foregoing
matters.
Furthermore, each such stockholder agrees to tender, upon the request of
Purchaser (and agrees that it will not withdraw), pursuant to and in accordance
with the terms of the Offer, the Shares. Within five business days after the
commencement of the Offer, each stockholder shall deliver to the depositary
designated in the Offer (i) a letter of transmittal with respect to the Shares
complying with the terms of the Offer, (ii) certificates representing the Shares
and (iii) all other documents or instruments required to be delivered pursuant
to the terms of the Offer.
In accordance with the Stockholders Agreement, each stockholder and its
subsidiaries shall not, and will use their reasonable best efforts to cause
their officers, directors, employees or other agents not to, directly or
indirectly, (i) take any action to solicit or initiate any Acquisition Proposal
or (ii) engage in negotiations with, or disclose any nonpublic information
relating to the Company or any of its Subsidiaries or afford access to the
properties, books or records of the Company or any of its subsidiaries to, any
Person that may be considering making, or has made, an Acquisition Proposal or
has agreed to endorse an Acquisition Proposal. Each such stockholder will
promptly notify Purchaser after receipt of an Acquisition Proposal or any
indication that any Person is considering making an Acquisition Proposal or any
request for nonpublic information relating to the Company or any of its
Subsidiaries or for access to the properties, books or records of the Company or
any of its Subsidiaries by any Person that may be considered making or has made,
an Acquisition Proposal and will keep Purchaser fully informed of the status and
details of any such Acquisition Proposal, indication or request.
Each stockholder has granted an irrevocable proxy appointing Purchaser as
such stockholder's attorney-in-fact and proxy, with full power of substitution,
for and in such stockholder's name, to vote, express consent or dissent, or
otherwise to utilize such voting power in the manner contemplated by the voting
agreement as Purchaser or its proxy or substitute shall, in Purchaser's sole
discretion, deem proper with respect to the Shares. The Stockholders Agreement
contains customary representations and warranties of the parties thereto. Except
pursuant to the terms of the Stockholders Agreement, each stockholder shall not,
without the prior written consent of Purchaser, directly or indirectly, (i)
grant any proxies or enter into any voting trust or other agreement or
arrangement with respect to the voting of any Shares or (ii) acquire, sell,
assign, transfer, encumber or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect in the direct or
indirect acquisition or sale, assignment, transfer, encumbrances or other
disposition of, any Shares during the term of the Stockholders Agreement.
Each stockholder shall not seek or solicit any such acquisition or sale,
assignment, transfer, encumbrance or other disposition or any such contract,
option or other arrangement or understanding and agrees to notify Purchaser
promptly, and to provide all details requested by Purchaser, if such stockholder
shall be approached or solicited, directly or indirectly, by any Person with
respect to any of the foregoing. Each stockholder agrees not to exercise any
rights (including, without limitation, under Section 262 of the DGCL) to demand
appraisal of any Shares which may arise with respect to the Merger. Any
provision of the Stockholders Agreement may be amended or waived if, but only if
such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to the Stockholders Agreement or, in the case of a
waiver, by the party against whom the waiver is to be effective. The
Stockholders Agreement shall terminate on the later to occur of the termination
of the Merger Agreement in accordance with its terms or April 1, 1999.
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AMENDMENTS TO EXECUTIVE EMPLOYMENT AGREEMENTS WITH CERTAIN EXECUTIVE OFFICERS OF
THE COMPANY
The following is a summary of certain provisions of the amendments to the
Executive Employment Agreements (collectively with the Executive Employment
Agreements, as amended, the "Amended Employment Agreements") with James N.
Mills, Chairman of the Board and Chief Executive Officer of the Company; Robert
N. Mills, Vice Chairman of the Company; Timothy L. Conlon, President and Chief
Operating Officer of the Company; David M. Sindelar, Senior Vice President and
Chief Financial Officer of the Company; W. Thomas McGhee, Secretary and General
Counsel of the Company; Larry S. Bacon, Senior Vice President of the Company;
and David J. Webster, Senior Vice President of the Company (each, an
"Executive"). This summary is qualified in its entirety by reference to the
Amended Employment Agreements, which are incorporated herein by reference and
copies of which have been filed as Exhibits (c)(4), (c)(5), (c)(6), (c)(7),
(c)(8), (c)(9) and (c)(10), respectively, hereto.
Pursuant to the Amended Employment Agreements, if an Executive elects to
retire from or terminate his employment with the Company within six months
following a Change in Control (as defined below), such retirement or termination
shall be deemed to constitute a termination of the Executive without cause and
the Executive shall be entitled to receive the compensation and other benefits
described below. "Change in Control" shall mean any of the following: (i) any
"person", within the meaning of Section 13(d)(3) of the Exchange Act, other than
any employee or subsidiary of the Company or any employee benefit plan (or
related trust) becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of securities of the Company representing
50% or more of the combined voting power of the Company's then outstanding
voting securities; (ii) the merger or consolidation of the Company with another
person and, as a result of such merger or consolidation, less than 70% of the
outstanding voting securities of the surviving or resulting person or parent
thereof shall then be owned in the aggregate by the stockholders of the Company
immediately prior to such merger or consolidation; (iii) at any time after the
date of the Amended Employment Agreement, the individuals who constituted the
Board of Directors on such date (including, for this purpose, any new director
whose election or nomination for election by the Company's stockholders was
approved by a vote of at least 75% of the directors in office on such date)
cease for any reason to constitute at least a majority of the Board of
Directors; (iv) the consummation of a sale of substantially all of the assets of
the Company; or (v) the Company's adoption of a plan of liquidation. A Change in
Control shall also include any series of transactions occurring during the term
of the Amended Employment Agreement which result in any of the changes described
above.
If an Executive (other than Timothy L. Conlon, who shall be entitled to the
benefits identified in clause (ii) below only) retires or terminates his
employment with the Company within six months following a Change in Control, he
shall be entitled to receive the following benefits from the Company: (i) the
product of (A) his current monthly salary under the Amended Employment Agreement
times (B) the number of months remaining in the Employment Period (as defined
below), in a cash lump sum, (ii) the medical benefits to which the Executive
would otherwise be entitled pursuant to his Amended Employment Agreement and
(iii) reimbursement for expenses incurred by the Executive in connection with
the ownership and maintenance of an automobile in an amount equal to the product
of (A) the Executive's monthly automobile allowance times (B) the number of
months remaining in the Employment Period, in a cash lump sum. For purposes of
the immediately preceding sentence, the current annual salaries and monthly
automobile allowances of James N. Mills, Robert N. Mills, David M. Sindelar, W.
Thomas McGhee, Larry S. Bacon and David J. Webster, respectively, are $685,000
and $3,600, $100,000 and $0, $230,000 and $1,500, $150,000 and $1,050, $122,500
and $1,050 and $116,667 and $750. In the case of a termination of the
Executive's employment by the Company or the Executive upon or immediately
following a Change in Control, in lieu of the benefits (other than the medical
benefits to which he may be entitled pursuant to Section 2(d) of his Amended
Employment Agreement) and payments set forth above, the Executive shall be
entitled to receive a lump sum cash equal to $2,974,647 (in the case of James N.
Mills), $408,493 (in the case of Robert N. Mills), $1,013,063 (in the case of
David M. Sindelar), $676,465 (in the case of W. Thomas McGhee), $653,135 (in the
case of Larry S. Bacon), $513,341 (in the case of David J. Webster) and $0 (in
the case of Timothy L. Conlon). For purposes of the Amended Employment
Agreements, references to the Employment
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<PAGE> 14
Period shall mean the stated unexpired term of the Amended Employment Agreement
without giving effect to the termination of the Executive thereunder, which in
all cases ends on October 30, 2002.
The Executives have agreed not to, among other things, (i) engage in the
connector business during the term of their employment with the Company and for
a period of two years thereafter (the "Non-Compete Term"), subject to certain
exceptions, or (ii) induce any current or former employee of the Company to
terminate his or her employment relationship with the Company or any of its
affiliates during the Non-Compete Term.
AMENDMENT TO THE RIGHTS AGREEMENT
The following is a summary of certain provisions of the First Amendment to
Rights Agreement, dated as of August 27, 1998, between the Company and Harris
Trust and Savings Bank (the "Amendment to Rights Agreement"). This summary is
qualified in its entirety by reference to the Amendment to Rights Agreement,
which is incorporated herein by reference and a copy of which has been filed as
Exhibit (c)(11) hereto.
The Amendment to Rights Agreement provides that neither the execution and
delivery of the Merger Agreement nor the consummation of the transactions
contemplated thereby will (i) cause any Rights (as defined) issued pursuant to
the Rights Agreement (the "Rights Agreement"), dated as of December 22, 1997,
between the Company and Harris Trust and Savings Bank, to become exercisable, to
be triggered or to separate from the Shares to which they are attached, (ii)
cause FCI or Purchaser or any of their affiliates to be an Acquiring Person (as
defined) in connection with the transactions contemplated by the Merger
Agreement or (iii) trigger other provisions of the Rights Agreement, including
giving rise to a Distribution Date (as defined) in connection with the
transactions contemplated by the Merger Agreement.
AMENDMENT TO THE REGISTRATION RIGHTS AGREEMENT
The following is a summary of certain provisions of the First Amendment to
Registration Rights Agreement, dated as of August 27, 1998, among the Company
and parties identified on the signature pages thereto (the "Amendment to
Registration Rights Agreement"). This summary is qualified in its entirety by
reference to the Amendment to Registration Rights Agreement, which is
incorporated herein by reference and a copy of which has been filed as Exhibit
(c)(12) hereto.
The Amendment to Registration Rights Agreement provides for the termination
of the Registration Rights Agreement, dated as of March 1, 1993, among the
Company and the parties identified on Exhibit A attached thereto, effective
immediately upon the execution of the Merger Agreement.
TERMINATION AGREEMENT
The following is a summary of certain provisions of the Termination
Agreement (the "Termination Agreement"), dated as of August 27, 1998, among the
Company, Berg Electronics Group, Inc. and Hicks, Muse & Co. Partners, L.P.
("HMCo"). This summary is qualified in its entirety by reference to the
Termination Agreement, which is incorporated herein by reference and a copy of
which has been filed as Exhibit (c)(13) hereto.
The Termination Agreement provides for the termination of the Amended and
Restated Monitoring and Oversight Agreement (the "Monitoring and Oversight
Agreement"), dated as of March 6, 1996, among the parties, effective immediately
upon the consummation of the Offer (the "Effective Date"); provided, that the
indemnification provisions of the Monitoring and Oversight Agreement shall
survive indefinitely. In addition, HMCo has acknowledged and agreed that (i) it
is not entitled to an Add-on Transaction Fee (as defined) in connection with the
transactions contemplated by the Merger Agreement and (ii) the Monitoring and
Oversight Agreement shall be terminated for all purposes without regard to the
Termination Option (as defined) set forth in the Monitoring and Oversight
Agreement and, in accordance with such termination, HMCo waived any amounts
payable to HMCo for the remainder of the Primary Term (as defined), other
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than amounts which have accrued to HMCo on or prior to the Effective Date and
remain unpaid as of the Effective Date.
NON-COMPETITION AGREEMENT
The following is a summary of certain provisions of the Agreement (the
"Non-Competition Agreement"), dated as of August 31, 1998, between the Company
and Mills & Partners, Inc. ("Mills & Partners"). This summary is qualified in
its entirety by reference to the Non-Competition Agreement, which is
incorporated herein by reference and a copy of which has been filed as Exhibit
(c)(14) hereto.
Pursuant to the Non-Competition Agreement, Mills & Partners has agreed not
to, among other things, (i) engage in the connector business for a period of two
years following the consummation of the Merger (the "Mills Non-Compete Term"),
subject to certain exceptions, or (ii) induce any current or former employee of
the Company to terminate his or her employment relationship with the Company or
any of its affiliates during the Mills Non-Compete Term.
CHANGE IN CONTROL AGREEMENT
The following is a summary of certain provisions of the Agreement (the
"Change in Control Agreement"), dated as of August 31, 1998, between the Company
and Joseph S. Catanzaro. This summary is qualified in its entirety by reference
to the Change in Control Agreement, which is incorporated herein by reference
and a copy of which has been filed as Exhibit (c)(15) hereto.
Pursuant to the Change in Control Agreement, Mr. Catanzaro will be entitled
to receive a bonus from the Company in the amount of $210,000 upon the effective
time of the Merger. In exchange therefor, Mr. Catanzaro has agreed not to, among
other things, (i) engage in the connector business during the Non-Compete Term,
subject to certain exceptions, or (ii) induce any current or former employee of
the Company to terminate his or her employment relationship with the Company or
any of its affiliates during the Non-Compete Term.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) RECOMMENDATION OF THE BOARD OF DIRECTORS.
For the reasons discussed in Item 4(b) below, the Company's Board of
Directors has approved the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger, has determined that the Merger
Agreement, the Offer and the Merger are fair to and in the best interests of the
holders of Shares and recommends that the stockholders of the Company accept the
Offer and tender their Shares thereunder to Purchaser.
(b) BACKGROUND; REASONS FOR RECOMMENDATION.
In December 1997, representatives of FCI met with representatives of the
Company, at which time FCI indicated that it was interested in pursuing a
business combination with the Company. The Company's representatives conveyed to
FCI that the Company was not for sale, but that an attractive offer for a
negotiated transaction would have to be considered by the Company's Board of
Directors. No material discussions were held as to any particular business
combination.
In June 1998, the representatives of the Company were again approached
about pursuing a potential business combination, this time by a party other than
FCI. As a result, the Company's Board of Directors began to seriously consider
possible strategic transactions involving the Company, including the possible
sale of the Company.
In June 1998, the Company's Board of Directors determined to retain an
independent financial advisor to investigate possible business combinations and
strategic alternatives and to advise the Board of Directors with respect
thereto. The Board of Directors selected Morgan Stanley & Co. Incorporated
("Morgan Stanley") to be retained as the Company's financial advisor.
Thereafter, at the direction of the Company, Morgan Stanley
14
<PAGE> 16
contacted 14 companies, including FCI, to determine the interest level in a
possible acquisition of the Company. All of the companies contacted were
industrial manufacturing companies, seven of which had electronic connector
manufacturing operations. Morgan Stanley requested the submission of a written
indication of interest from each of the companies contacted. FCI submitted its
indication of interest to the Company on July 28, 1998.
The Company entered into confidentiality agreements with seven parties for
the purpose of facilitating the delivery of information regarding the Company to
the interested parties. On July 21, 1998, the Company and FCI entered into the
Confidentiality Agreement for such purpose.
During the period following the execution of the confidentiality
agreements, representatives of the interested companies, including FCI,
conducted their due diligence investigations regarding the business and
properties of the Company. In addition, the Company made management
presentations to the possible transaction candidates.
On August 24, 1998, the Company received final bids from the possible
transaction candidates, including a letter from FCI proposing a cash tender
offer to purchase all of the outstanding Common Shares for $35.00 per share and
Class A Shares for $32.965 per share. FCI also submitted proposed revisions to
the draft Merger Agreement distributed to transaction candidates by the Company.
Shortly thereafter, the Company authorized its representatives to begin
negotiating with FCI with respect to the terms of a definitive Merger Agreement.
These negotiations continued through the afternoon of August 26, 1998.
At 5:00 p.m., Eastern Time, on August 26, 1998, the Board of Directors of
the Company met to consider and review the terms of the offers submitted by FCI
and other parties. At such meeting, Morgan Stanley made a presentation to the
Board of Directors and delivered its oral opinion, subsequently confirmed in
writing (the "Fairness Opinion"), that as of such date, and subject to the
assumptions made, matters considered and limitations on the review undertaken,
the consideration proposed to be received by the holders of Common Shares
pursuant to the Merger Agreement was fair from a financial point of view to such
holders. The full text of the Fairness Opinion is attached and filed as Exhibit
(a)(2) to this statement and incorporated herein by reference in its entirety.
STOCKHOLDERS ARE URGED TO AND SHOULD READ SUCH OPINION CAREFULLY AND IN ITS
ENTIRETY. After discussion, the Board of Directors approved the Merger Agreement
and the transactions contemplated thereby and resolved to recommend that holders
of Shares accept the Offer and tender their Shares pursuant thereto. The Merger
Agreement was executed by the Company and FCI on August 27, 1998. On that day,
the Company and FCI issued a joint press release announcing the execution of the
Merger Agreement. The full text of the joint press release is attached and filed
as Exhibit (a)(1) to this statement.
In arriving at its decision regarding its recommendation set forth above,
the Board of Directors considered (among other things) the following:
- The opinion of Morgan Stanley, dated August 27, 1998, to the effect that,
as of the date of the Fairness Opinion, and subject to the assumptions
made, matters considered and limitations on the review undertaken, the
consideration to be received by the holders of Common Shares pursuant to
the Offer and the Merger was fair to such holders from a financial point
of view. The full text of the Fairness Opinion is attached and filed as
Exhibit (a)(2) to this statement and incorporated herein by reference in
its entirety. STOCKHOLDERS ARE URGED TO AND SHOULD READ SUCH OPINION
CAREFULLY AND IN ITS ENTIRETY.
- The determination that the consideration offered fair value to the
Company's stockholders for their Shares and exceeded the market price
that the Company's stockholders could reasonably expect to realize in the
foreseeable future, taking into account the following factors: (i)
information presented to the Board of Directors relating to the recent
financial condition and results of operations of the Company and
management's evaluation of the Company's prospects, as well as the Board
of Directors' general familiarity with the Company's business,
operations, financial condition and earnings on both an historical and a
prospective basis; (ii) the relationship of the consideration to the
historical market prices for Common Shares, including that the
consideration represented a premium of approximately 75% over the closing
price of the Common Shares on the New York Stock Exchange on August 26,
15
<PAGE> 17
1998, the day on which the Board of Directors approved the Merger
Agreement; (iii) the vigorous arms-length nature of the negotiations that
resulted in FCI offering the consideration in the Offer and the Merger;
(iv) the results of the process undertaken by Morgan Stanley to approach
and contact potential transaction candidates; and (v) the superiority of
the offer proposed by FCI in comparison to available alternative
transactions.
- The terms and conditions of the Merger Agreement, including the amount
and form of the consideration being offered to the Company's
stockholders, the conditions to Purchaser's obligations to consummate the
Offer and the Merger, which the Board of Directors believes provides
greater, or no less, certainty to the Company's stockholders than
available alternative transactions.
The foregoing discussion of factors considered by the Board of Directors is
not intended to be exhaustive. It summarizes all material factors considered.
The Board of Directors did not assign any relative or specific weights to the
foregoing factors, nor did it specifically characterize any factor as positive
or negative (except as described above), and individual directors may have given
differing weights to differing factors and may have viewed certain factors more
positively or negatively than others. Throughout its deliberations, the Board of
Directors received the advice of its financial and legal advisors. The Board of
Directors viewed its recommendation as being based upon the totality of the
information presented and considered by it.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The Company has retained Morgan Stanley to act as financial advisor to the
Company in connection with the Offer and the Merger. As compensation for Morgan
Stanley's services as financial advisor, the Company has agreed to pay Morgan
Stanley an advisory fee of $250,000 if the transaction is not consummated and a
transaction fee of approximately $7.4 million upon consummation of the Merger,
against which any advisory fee paid would be credited. In addition, the Company
has agreed to reimburse Morgan Stanley for its reasonable out-of-pocket expenses
(including fees and expenses of its legal counsel) incurred in connection with
its engagement, and to indemnify Morgan Stanley and certain related persons
against certain liabilities and expenses arising out of or in conjunction with
its rendering of services under its engagement, including certain liabilities
under the federal securities laws.
Except as disclosed herein, neither the Company nor any person acting on
its behalf currently intends to employ, retain or compensate any other persons
to make solicitations or recommendations to securityholders on its behalf
concerning the Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) The following transactions in the Shares have been effected during the
past 60 days by the Company, or by any executive officer, director, affiliate or
subsidiary of the Company: (i) Thomas O. Hicks, a director of the Company,
transferred 285,000 Common Shares to TOH Investors, L.P., a limited partnership
of which the general partner is controlled by Mr. Hicks, on August 26, 1998;
(ii) John R. Muse, an affiliate of the Company, transferred 285,000 Common
Shares to JRM Interim Investors, L.P., a limited partnership of which the
general partner is controlled by Mr. Muse, on August 26, 1998; (iii) Charles W.
Tate, a director of the Company, transferred 140,000 Common Shares to CWT
Investors, L.P., a limited partnership of which the general partner is
controlled by Mr. Tate, on August 26, 1998; (iv) Jack D. Furst, an affiliate of
the Company, transferred 140,000 Common Shares to JF Investors, L.P., a limited
partnership of which the general partner is controlled by Mr. Furst, on August
26, 1998; and (v) the Company granted Timothy L. Conlon, President and Chief
Operating Officer of the Company, options to purchase 95,000 Common Shares
pursuant to the Company's 1998 Incentive Compensation Plan on August 26, 1998.
(b) To the best of the Company's knowledge, to the extent permitted by
applicable securities laws, rules or regulations, each executive officer,
director and affiliate of the Company presently intends to tender in the Offer
all Shares held of record or beneficially owned by him.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as set forth in Item 3(b) above, the Company is not engaged in
any negotiation in response to the Offer that relates to or would result in (1)
any extraordinary transaction, such as a merger or
16
<PAGE> 18
reorganization, involving the Company or any subsidiary of the Company; (2) a
purchase, sale or transfer of a material amount of assets by the Company or any
subsidiary or the Company; (3) a tender offer for or other acquisition of
securities by or of the Company; or (4) any material change in the present
capitalization or dividend policy of the Company.
(b) Except as described in Item 3(b) above, there are no transactions,
Board of Directors resolutions, agreements in principal or signed contracts in
response to the Offer that relate to or would result in one or more of the
events referred to in Item 7(a) above.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The Information Statement attached hereto as Annex I is being furnished
pursuant to Rule 14f-1 under the Exchange Act in connection with the possible
designation by FCI and Purchaser, pursuant to the Merger Agreement, of certain
persons to be appointed to the Board of Directors other than at a meeting of the
Company's stockholders.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER
- --------------
<S> <C>
Exhibit (a)(1) -- Joint Press Release, dated August 27, 1998, issued by
Framatome Connectors International S.A. and Berg
Electronics Corp.
Exhibit (a)(2) -- Opinion of Morgan Stanley & Co. Incorporated.*
Exhibit (a)(3) -- Form of Letter to Stockholders of Berg Electronics Corp.,
dated September 2, 1998.*
Exhibit (c)(1) -- Agreement and Plan of Merger, dated as of August 27,
1998, by and among Berg Electronics Corp., Framatome
Connectors International S.A. and Berg Acquisition Co.
(f/k/a Bravo Acquisition Co.).
Exhibit (c)(2) -- Confidentiality Agreement, dated as of July 21, 1998, by
and between Berg Electronics Corp. and Framatome
Connectors International.
Exhibit (c)(3) -- Stockholders Agreement, dated as of August 27, 1998, by
and among Berg Acquisition Co. (f/k/a Bravo Acquisition
Co.) and certain of the stockholders of Berg Electronics
Corp.
Exhibit (c)(4) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and James
N. Mills.
Exhibit (c)(5) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and Robert
N. Mills.
Exhibit (c)(6) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and
Timothy L. Conlon.
Exhibit (c)(7) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and David
M. Sindelar.
Exhibit (c)(8) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and W.
Thomas McGhee.
Exhibit (c)(9) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and Larry
S. Bacon.
Exhibit (c)(10) -- First Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and David
J. Webster.
</TABLE>
17
<PAGE> 19
<TABLE>
<CAPTION>
EXHIBIT NUMBER
- --------------
<S> <C>
Exhibit (c)(11) -- First Amendment to Rights Agreement, dated as of August
27, 1998, by and between Berg Electronics Corp. and
Harris Trust and Savings Bank.
Exhibit (c)(12) -- First Amendment to Registration Rights Agreement, dated
as of August 27, 1998, by and among Berg Electronics
Corp. and the parties identified on the signature pages
thereto.
Exhibit (c)(13) -- Termination Agreement, dated as of August 27, 1998, by
and among Berg Electronics Corp., Berg Electronics Group,
Inc., and Hicks, Muse & Co. Partners, L.P.
Exhibit (c)(14) -- Agreement, dated as of August 31, 1998, by and between
Berg Electronics Corp. and Mills & Partners, Inc.
Exhibit (c)(15) -- Agreement, dated as of August 31, 1998, by and between
Berg Electronics Corp. and Joseph S. Catanzaro.
</TABLE>
- ---------------
* Included with Schedule 14D-9 mailed to stockholder.
18
<PAGE> 20
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 2, 1998 BERG ELECTRONICS CORP.
By: /s/ JAMES N. MILLS
----------------------------------
James N. Mills
Chairman of the Board and
Chief Executive Officer
19
<PAGE> 21
ANNEX I
BERG ELECTRONICS CORP.
101 SOUTH HANLEY, SUITE 400
ST. LOUIS, MISSOURI 63105
---------------------
INFORMATION STATEMENT PURSUANT TO SECTION 14(f) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND RULE 14f-1 THEREUNDER
---------------------
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS
REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT.
NO PROXIES ARE BEING SOLICITED AND YOU ARE REQUESTED
NOT TO SEND THE COMPANY A PROXY.
---------------------
This information statement (this "Information Statement"), which is being
mailed on or about September 2, 1998, to the holders of record of shares of
Common Stock, par value $0.01 per share, including the associated rights to
purchase Series A Junior Preferred Stock ("Common Shares"), of Berg Electronics
Corp., a Delaware corporation (the "Company"), and Class A Common Stock, par
value $0.01 per share, including the associated rights to purchase Series A
Junior Preferred Stock ("Class A Shares" and, together with Common Shares, the
"Shares"), of the Company, is part of the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9"). Unless otherwise defined
herein, capitalized terms used herein are used as defined in the Schedule 14D-9.
You are receiving this Information Statement in connection with the possible
election of persons designated by Framatome Connectors International S.A., a
corporation organized under the laws of the Republic of France ("FCI") and a
wholly-owned subsidiary of Framatome S.A., a corporation organized under the
laws of the Republic of France, to the Board of Directors of the Company (the
"Board") and the Board's recommendation that you tender your Shares to Berg
Acquisition Co. ("Purchaser"), a Delaware corporation and a wholly-owned
subsidiary of Framatome Connectors USA Holding Inc., a New York corporation and
a wholly-owned subsidiary of FCI, pursuant to the Offer as set forth in the
Schedule 14D-9. The Company expects FCI's designees will constitute a majority
of the Board promptly following the purchase of Shares pursuant to the Offer,
which the Company anticipates will be on or after October 1, 1998. This
Information Statement is required by Section 14(f) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1 promulgated
thereunder. You are urged to and should read this Information Statement
carefully. You are not, however, required to take any action.
Pursuant to the Merger Agreement, Purchaser has commenced the Offer, which
is currently scheduled to expire on September 30, 1998, at which time, if the
Offer is not extended and all conditions of the Offer have been satisfied or
waived, Purchaser will be obligated to purchase all Shares validly tendered
pursuant to the Offer and not withdrawn; provided that, if the number of Shares
that have been physically tendered and not withdrawn are more than 50% but less
than 90% of the outstanding Shares determined on a fully diluted basis,
Purchaser may extend the Offer for up to twenty business days.
RIGHT TO DESIGNATE DIRECTORS
The Merger Agreement provides that, promptly upon the purchase of and
payment for Shares by FCI or any of its subsidiaries which represent at least a
majority of the outstanding Shares (on a fully diluted basis), FCI shall be
entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors of the Company as will give FCI, subject to
compliance with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, representation on the Board equal to the product of the total number
of directors on the Board (giving effect to any additional directors designated
by FCI pursuant to the Merger Agreement) multiplied by the percentage that the
aggregate number of Shares beneficially owned by FCI or any affiliate of FCI
(including Shares accepted for payment) bears to the total
A-1
<PAGE> 22
number of outstanding Shares. The Company shall, upon request by FCI, as
promptly as is reasonably practicable, increase the size of the Board of the
Company to the extent permissible, or exercise its best efforts to secure the
resignations of such number of directors as is necessary to enable FCI's
designees to be elected to the Company's Board of Directors and will cause FCI's
designees to be so elected or appointed. At such times, the Company will use its
reasonable best efforts to cause individuals designated by FCI to constitute the
same percentage as such individuals represent on the Company's Board of
Directors of each committee of the Board (other than any committee of the Board
established to take action under the Merger Agreement), each board of directors
of each subsidiary and each committee of such board.
The Merger Agreement provides that, notwithstanding FCI's right to
designate directors to the Company's Board of Directors as provided above, the
Company shall retain as members of the Board, until the Effective Time of the
Merger, at least two directors who were members of the Board of Directors on
August 27, 1998 (the "Berg Directors"). From and after the time, if any, that
FCI's designees constitute a majority of the Company's Board of Directors, any
action by the Company in connection with the rights of the Company under the
Merger Agreement or any amendment of the certificate of incorporation or bylaws
of the Company may be effected only with the concurrence of a majority of the
Berg Directors.
IN THE EVENT THAT FCI AND ITS SUBSIDIARIES DO NOT ACQUIRE ANY SHARES
PURSUANT TO THE OFFER, OR TERMINATE THE OFFER, OR IF THE MERGER AGREEMENT IS
TERMINATED PURSUANT TO ITS TERMS PRIOR TO THE ELECTION OR APPOINTMENT OF FCI'S
DESIGNEES, FCI WILL NOT HAVE ANY RIGHT UNDER THE MERGER AGREEMENT TO HAVE FCI'S
DESIGNEES ELECTED OR APPOINTED TO THE COMPANY'S BOARD OF DIRECTORS.
The information contained in this Information Statement concerning FCI,
Purchaser and FCI's designees has been furnished to the Company by FCI and
Purchaser. Although the Company does not have any knowledge that would indicate
that any statements contained herein based upon such reports and documents are
untrue, the Company assumes no responsibility for the accuracy or completeness
of such information.
THE FCI DESIGNEES
FCI's designees to the Company's Board of Directors, and certain
information about each, are described on Schedule A hereto. FCI has advised the
Company that all such persons have consented to act as directors of the Company
if so designated. FCI has informed the Company that, except as set forth in the
Offer to Purchase dated September 2, 1998, none of the designees (i)
beneficially owns, or has any right to acquire, directly or indirectly, any
Shares or has effected any transaction in the Shares during the past 60 days;
(ii) has any contract, arrangement, understanding or relationship with any other
person with respect to any of the securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or voting of such securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of loans, guarantees, division
of profits or loss or the giving or withholding of proxies; and (iii) has had
any business relationship or transaction with the Company or any of its
executive officers, directors, or affiliates that is required to be reported
under the rules and regulations of the Securities and Exchange Commission
applicable to the Offer.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
CURRENT BOARD OF DIRECTORS
Class III Directors -- Terms Expire 2001
JAMES N. MILLS (Age 60) is Chairman of the Board and Chief Executive
Officer of the Company and has held such positions since November 1992. Mr.
Mills also served as President of the Company from November 1992 through June
1995. Mr. Mills is the Chairman of the Board, President and Chief Executive
Officer of Mills & Partners, Inc., an investment and management services firm
headquartered in St. Louis.
A-2
<PAGE> 23
Mr. Mills is also Chairman of the Board and Chief Executive Officer of
International Wire Holding Company and Viasystems Group, Inc. Mr. Mills was
Chairman of the Board and Chief Executive Officer of Crain Holdings Corp. from
August 1995 through December 1997 and of Jackson Holding Company from February
1993 through August 1995. Mr. Mills was Chairman of the Board and Chief
Executive Officer of Thermadyne Holdings Corporation from February 1989 through
February 1995 and Chairman of the Board and Chief Executive Officer of
Thermadyne Industries, Inc. from 1987 to 1995. In December 1985, Mr. Mills,
together with Hicks & Haas Incorporated (a Dallas-based private investment
firm), formed and became Chairman of the Board, President and Chief Executive
Officer of Mills & Partners, Inc. (formerly the HHM Group, Inc.). Mr. Mills was
Executive Vice President of McGraw-Edison Company from 1978 to 1985, and served
as Industrial Group President and President of the Bussmann Division of the
McGraw-Edison Company from 1980 to 1984.
THOMAS O. HICKS (Age 52) is a director of the Company and has held such
position since November 1992. Mr. Hicks is Chairman of the Board and Chief
Executive Officer of Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse"), a
private investment firm headquartered in Dallas with offices in New York, St.
Louis, London and Mexico City, specializing in strategic investments, leveraged
acquisitions and real estate equity investments. From 1984 to May 1989, Mr.
Hicks was Co-Chairman of the Board and Co-Chief Executive Officer of Hicks &
Haas Incorporated, a Dallas-based private investment firm. Mr. Hicks serves as a
director of Chancellor Media Corporation, Sybron International Corporation,
International Home Foods, Inc., D.A.C. Vision, Inc., Capstar Broadcasting
Partners, Inc., Cooperative Computing Holding Company, Inc. and Viasystems
Group, Inc.
Class II Directors -- Terms Expire 1999
RICHARD W. VIESER (Age 70) is a director of the Company and has held such
position since April 1993. Mr. Vieser is the retired Chairman of the Board,
Chief Executive Officer and President of Lear Siegler, Inc. (a diversified
manufacturing company), the former Chairman of the Board and Chief Executive
Officer of FL Industries. Inc. and FL Aerospace (also diversified manufacturing
companies) and the former President and Chief Operating Officer of McGraw-Edison
Co. (a company engaged in the electronic, industrial, commercial and automotive
industries). He is also a director of Ceridian Corporation (formerly Control
Data Corporation), Dresser Industries, Inc., INDRESCO. Inc., Sybron
International Corporation, Varian Associates, Inc. and Viasystems Group, Inc.
KENNETH F. YONTZ (Age 53) is a director of the Company and has held such
position since March 1994. Mr. Yontz is the Chairman of the Board, President and
Chief Executive Officer of Sybron International Corporation, a manufacturer and
marketer of laboratory apparatus products, dental sundry supplies and
orthodontic appliances. Prior to joining Sybron International Corporation, Mr.
Yontz was Group Vice President and Executive Vice President of the Allen-Bradley
Corporation. Mr. Yontz also held various managerial and professional positions
with Chemetron Inc. from 1974 to 1980 and at Ford Motor Company from 1966 to
1974. Mr. Yontz is also a director of Playtex Products, Inc. and Viasystems
Group, Inc.
Class I Directors -- Terms Expire 2000
CHARLES W. TATE (Age 53) is a director of the Company and has held such
position since April 1993. Mr. Tate is a Managing Director and Principal of
Hicks Muse. Before Joining Hicks Muse in 1991, Mr. Tate had over 19 years of
experience in investment and merchant banking with Morgan Stanley & Co.
Incorporated, including ten years in the mergers and acquisitions department and
the last two and one-half years as a managing director in Morgan Stanley & Co.
Incorporated's merchant banking group. Mr. Tate serves as a director of
International Wire Holding Company, International Home Foods, Inc., Seguros
Comercial America S.A. de C.V. and Vidrio Formas, S.A.
TIMOTHY L. CONLON (Age 46) is a director of the Company and has held such
position since 1997. Mr. Conlon also serves as President and Chief Operating
Officer of the Company and has held such positions since January 1997. Mr.
Conlon also has served as Executive Vice President and Chief Operating Officer
of the Company's wholly-owned subsidiary, Berg Electronics Group, Inc. ("Berg"),
since October 1993 and was
A-3
<PAGE> 24
appointed President of Berg effective January 1, 1997. Prior to joining Berg,
Mr. Conlon was employed as President of the Cutting and Welding Division of
Thermadyne Industries, Inc. from April 1993 to October 1993. Mr. Conlon also
held various executive positions with Thermadyne Industries, Inc. from July 1992
through April 1993. Prior to joining Thermadyne Industries, Inc., Mr. Conlon
spent nine years in the connector industry including serving as General Manager
of the Information Technologies and Spectra Strip divisions of Amphenol
Corporation from 1990 through July 1992 and President of Cambridge Products from
1988 through 1989.
CURRENT EXECUTIVE OFFICERS
Set forth below is information regarding executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE OFFICES HELD
---- --- ------------
<S> <C> <C>
James N. Mills...................... 60 Chairman of the Board and Chief Executive Officer
Timothy L. Conlon................... 46 President and Chief Operating Officer
David M. Sindelar................... 41 Senior Vice President and Chief Financial Officer
Larry S. Bacon...................... 52 Senior Vice President -- Human Resources
Joseph S. Catanzaro................. 46 Chief Accounting Officer and Vice President -- Finance
W. Thomas McGhee.................... 62 Secretary and General Counsel
</TABLE>
DAVID M. SINDELAR (Age 41) is Senior Vice President and Chief Financial
Officer of the Company and Senior Vice President of Berg and has held such
positions since November 1992. Mr. Sindelar is also Senior Vice President and
Chief Financial Officer of Mills & Partners, Inc., International Wire Holding
Company and Viasystems Group, Inc. Mr. Sindelar was Senior Vice President and
Chief Financial Officer of Crain Holdings Corp. from August 1995 through
December 1997 and of Jackson Holding Company from February 1993 through August
1995. From 1987 to February 1995, Mr. Sindelar held various positions at
Thermadyne Holdings Corporation including Senior Vice President, Chief Financial
Officer and Vice President -- Corporate Controller and Controller.
LARRY S. BACON (Age 52) is Senior Vice President -- Human Resources of the
Company and Berg and has held such positions since March 1993. Mr. Bacon is also
Senior Vice President -- Human Resources of Mills & Partners, Inc.,
International Wire Group, Inc. and Viasystems Group, Inc. Mr. Bacon was Senior
Vice President -- Human Resources of Crain Holdings Corp. from August 1995
through December 1997 and of Jackson Holding Company from February 1993 through
August 1995. Previously, Mr. Bacon was Senior Vice President -- Human Resources
of Thermadyne Holdings Corporation from September 1987 until February 1995.
W. THOMAS MCGHEE (Age 62) is Secretary and General Counsel of the Company
and Berg and has held such positions since March 1993. Mr. McGhee is also a
partner in the law firm of Herzog, Crebs and McGhee where he has been a partner
since helping to found that firm in 1987. In addition, Mr. McGhee serves as
Secretary and General Counsel of Mills & Partners, Inc., International Wire
Holding Company and Viasystems Group, Inc. Mr. McGhee was Secretary and General
Counsel of Crain Holdings Corp. from August 1995 through December 1997 and of
Jackson Holding Company from March 1993 through August 1995. Mr. McGhee was
Secretary and General Counsel of Thermadyne Holdings Corporation from March 1993
through February 1995.
JOSEPH S. CATANZARO (Age 46) is Chief Accounting Officer of the Company and
Vice President -- Finance of Berg and has held such positions since June 1996
and April 1993, respectively. Prior to joining Berg, Mr. Catanzaro was employed
by a petroleum trading company subsidiary of Mitsui & Co. (USA), Inc. as
Controller from 1990 through April 1993. From 1980 through 1989, Mr. Catanzaro
held several positions at Apex Oil Co., including Corporate Controller.
Background information concerning Messrs. Mills and Conlon is set forth
under "Board of Directors and Executive Officers -- Current Board of Directors."
There are no family relationships among the foregoing persons or the FCI
designees to the Board of Directors.
A-4
<PAGE> 25
VOTING SECURITIES OUTSTANDING AND SECURITY OWNERSHIP OF
MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the voting securities of the Company as of September 1, 1998, by
(i) each person who is known by the Company to beneficially own more than 5% of
any class of the Company's voting securities; (ii) the directors and certain
executive officers of the Company, individually; and (iii) the directors and all
executive officers of the Company as a group. Except as otherwise indicated
below, the table set forth below does not give effect to the conversion of Class
A Shares into Common Shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
------------------------------------------------------------
COMMON SHARES CLASS A SHARES
---------------------- ----------------------
NUMBER OF PERCENT OF NUMBER OF PERCENT OF PERCENT OF
BENEFICIAL OWNER SHARES CLASS SHARES CLASS TOTAL
- ---------------- --------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
5% STOCKHOLDERS:
HM Parties(1)........................... 3,841,970 9.7% -- -- 9.3%
c/o Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
John R. Muse(2)......................... 2,013,794 5.1% -- -- 4.9%
c/o Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
DIRECTORS AND OFFICERS:
James N. Mills(3)....................... 38,600 * 1,908,554 100.0% 4.7%
Thomas O. Hicks(1)...................... 3,841,970 9.7% -- -- 9.3%
Charles W. Tate(4)...................... 1,242,793 3.1% -- -- 3.0%
Richard W. Vieser(5).................... 117,320 * -- -- *
Kenneth F. Yontz........................ 97,320 * -- -- *
Timothy L. Conlon(6).................... 79,124 * -- -- *
David M. Sindelar(7).................... 30,000 * 355,982 18.7% *
Joseph S. Cantanzaro(8)................. 39,496 * -- -- *
W. Thomas McGhee(9)..................... 2,000 * 70,992 3.7% *
All directors and executive officers
as a group (10 persons)(10)
c/o Berg Electronics Corp.
101 South Hanley Road
St. Louis, Missouri 63105............. 5,494,623 13.9% 1,908,554 100% 17.9%
</TABLE>
- ---------------
* Represents less than 1%
(1) Represents (i) 67,451 Common Shares owned of record by Hicks Muse Fund I
Incorporated ("Fund I"); (ii) 3,155,119 Common Shares owned of record by
Thomas O. Hicks; (iii) 331,968 Common Shares owned of record by six
children's trusts for which Mr. Hicks serves as trustee; (iv) 285,000
Common Shares owned by TOH Investors, L.P., a limited partnership whose
general partner is controlled by Mr. Hicks; and (v) 2,432 Common Shares
owned of record by an employee of Hicks Muse and subject to an irrevocable
proxy in favor of Mr. Hicks. Mr. Hicks is the controlling
A-5
<PAGE> 26
stockholder of Fund I and serves as Chairman of the Board, President and
Chief Executive Officer of Fund I. Accordingly, Mr. Hicks may be deemed to
be the beneficial owner of all of the Shares owned of record by Fund I.
Messrs. John R. Muse, Charles W. Tate and Jack D. Furst serve as officers,
directors and minority stockholders of Fund I and as such, may be deemed to
share the power to vote or dispose of shares of Common Stock held by Fund
I. Accordingly, Messrs. Hicks, Muse, Tate and Furst may be deemed to be the
beneficial owners of shares of Common Stock owned by Fund I. In addition,
Messrs. Muse and Furst own of record 1,721,496 and 971,865 Common Shares,
respectively, representing approximately 4.4% and 2.5% respectively, of the
outstanding Common Shares. Each of Messrs. Hicks, Muse, Tate and Furst
disclaims the existence of a group and disclaims beneficial ownership of
Common Shares not owned of record by him.
(2) Represents (i) 1,721,496 Common Shares owned of record by Mr. Muse; (ii)
7,298 Common Shares owned of record by a children's trust for which Mr.
Muse is the custodian; and (iii) 285,000 Common Shares owned by JRM Interim
Investors, L.P., a limited partnership whose general partner is controlled
by Mr. Muse.
(3) Represents 38,600 Common Shares and 960,568 Class A Shares owned of record
by James N. Mills, and 947,986 Class A Shares which Mr. Mills has the power
to vote by proxy.
(4) Represents (i) 1,050,079 Common Shares owned of record by Mr. Tate; (ii)
52,714 Common Shares owned of record by the Charles W. Tate 1992 Trust; and
(iii) 140,000 Common Shares owned by CWT Investors, L.P., a limited
partnership whose general partner is controlled by Mr. Tate.
(5) Represents 48,660 Common Shares owned of record by Mr. Vieser, 20,000
Common Shares owned of record by Mr. Vieser's spouse, and 48,660 Common
Shares subject to options that are exercisable within 60 days. Mr. Vieser
disclaims beneficial ownership of Common Shares not owned of record by him.
(6) Represents 3,000 Common Shares owned of record by three minor children of
which Mr. Conlon is the custodian, and 76,124 Common Shares subject to
options that are exercisable within 60 days.
(7) Represents 30,000 Common Shares and 282,990 Class A Shares owned of record
by Mr. Sindelar, and 72,992 Class A Shares owned of record by two
children's trusts of which Mr. Sindelar serves as trustee. Mr. Sindelar
disclaims beneficial ownership of Common Shares not owned of record by him.
(8) Represents 1,000 Common Shares owned of record by three children's trusts
of which Mr. Catanzaro serves as trustee and 38,496 Common Shares subject
to options that are exercisable within 60 days.
(9) Represents 2,000 Common Shares owned of record by the W. Thomas McGhee
Living Revocable Trust (the "McGhee Trust"), 24,992 Class A Shares owned of
record by a trust for which Mr. McGhee's spouse serves as trustee, 26,000
Class A Shares owned of record by the McGhee Trust, and 20,000 Class A
Shares owned of record by the McGhee Family L.P. of which Mr. McGhee and
his spouse are both general and limited partners with an aggregate
ownership interest of approximately 89%. Mr. McGhee disclaims beneficial
ownership of Class A Shares not owned of record by him.
(10) Represents 5,331,343 outstanding Common Shares, 1,908,554 outstanding Class
A Shares and 163,280 Common Shares subject to options that are exercisable
within 60 days, in each case owned beneficially by the directors and
executive officers.
A-6
<PAGE> 27
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The total number of meetings of the Board of Directors held during the year
ended December 31, 1997 was five. The Board of Directors voted by unanimous
written consent three times during the year ended December 31, 1997. During the
year ended December 31, 1997, no director of the Company attended less than 75%
of the total number of meetings of the Board of Directors and all committees on
which such director served.
The Company has a standing Audit Committee, the members of which are
Messrs. Vieser and Yontz. Two meetings were held by the Audit Committee during
the year ended December 31, 1997. The principal functions performed by the Audit
Committee are the nomination of the independent public accountants of the
Company, the review of the proposed scope of the independent audit and the
results thereof, the review with management personnel of the public accountants'
observations on financial policy, controls and personnel and consultation with
the Chief Financial Officer of the Company concerning the audit.
The Company has a standing Compensation and Stock Option Committee (the
"Compensation Committee"). The current members of the Compensation Committee are
Messrs. Hicks, Vieser and Yontz. During the year ended December 31, 1997, the
composition of the Compensation Committee consisted of Messrs. Vieser and Yontz.
In February 1998, Mr. Hicks was appointed to serve as Chairman of the
Compensation Committee. One meeting was held by the Compensation Committee
during the year ended December 31, 1997, and the Compensation Committee acted by
unanimous written consent three times during the year ended December 31, 1997.
The principal functions of the Compensation Committee are to review the
compensation arrangements of the Corporation's executive officers, to submit
recommendations to the Board of Directors with respect to such arrangements and
to administer the Company's executive compensation and stock option plans. See
"Report of the Compensation Committee on Executive Compensation."
A-7
<PAGE> 28
EXECUTIVE AND DIRECTOR COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation earned by
the Chief Executive Officer of the Company and the four other most highly
compensated executive officers of the Company during 1997, 1996 and 1995. As of
the date hereof, the Company has not granted any stock appreciation rights.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION(1) SECURITIES
----------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION DURING 1997 YEAR SALARY($) BONUS(2)($) OPTIONS(#) COMPENSATION(3)($)
- --------------------------------------- ---- --------- ----------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
James N. Mills...................... 1997 685,000 685,000 -- 25,900
Chairman of the Board and 1996 685,000 1,370,000 -- 23,000
Chief Executive Officer of 1995 685,000 800,000 -- 16,500
the Company
Timothy L. Conlon................... 1997 400,000 300,000 115,000 7,000
President and Chief 1996 311,250 404,625 48,660 11,000
Operating Officer of the 1995 290,000 225,000 -- 10,000
Company
David M. Sindelar................... 1997 194,800 126,620 -- 6,000
Senior Vice President and 1996 194,808 389,600 -- 10,000
Chief Financial Officer of 1995 193,000 200,000 -- 10,000
the Company
Joseph S. Catanzaro................. 1997 198,000 160,000 18,504 5,100
Chief Accounting Officer 1996 172,000 172,000 -- 4,700
of the Company 1995 154,000 100,000 -- 4,700
W. Thomas McGhee.................... 1997 153,000 99,450 -- 18,100
Secretary and General 1996 153,000 306,000 -- 17,000
Counsel of the Company 1995 152,000 120,000 -- 10,000
</TABLE>
- ---------------
(1) The Company provides to certain executive officers a car allowance,
reimbursement for club memberships, insurance and certain other benefits.
The aggregate incremental costs of these benefits to the Company for each
officer do not exceed the lesser of $50,000 or 10.0% of the total of annual
salary and bonus reported for each such officer.
(2) Bonuses earned in 1997, 1996 and 1995 were paid in 1998, 1997 and 1996,
respectively.
(3) All Other Compensation for the year ended December 31, 1997 includes the
following: (i) contributions made by the Company for the benefit of each of
the named executive officers of the Company in the amount of $4,800 to the
Company's 401(k) Savings Plan; (ii) the following amounts paid by the
Company as premiums for term life insurance policies: Mr. Mills $16,300, Mr.
Conlon $2,200, Mr. Sindelar $1,200, Mr. Catanzaro $300 and Mr. McGhee
$13,300; and (iii) $4,800 paid by the Company for the benefit of Mr. Mills
to the Company's 401(k) Savings Plan as "transition" payments related to a
pension plan formerly maintained by the Company and terminated in 1995.
A-8
<PAGE> 29
The following table summarizes option grants made during 1997 to the
executive officers named above.
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR GRANT DATE
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) DATE VALUE (2)($)
---- -------------- ---------------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
James N. Mills..................... -- -- -- -- --
Timothy L. Conlon.................. 40,000 4.8% 14.69 01/01/07 364,000
75,000 9.0% 20.75 12/18/07 937,500
David M. Sindelar.................. -- -- -- -- --
Joseph S. Catanzaro................ 10,000 1.2% 14.63 02/03/07 91,000
8,504 1.0% 20.75 12/18/07 106,300
W. Thomas McGhee................... -- -- -- -- --
</TABLE>
- ---------------
(1) The options to purchase Common Shares were granted under the Company's 1993
Stock Option Plan (the "1993 Plan") and become exercisable in five equal
annual installments commencing on the first anniversary of the date of
grant. All options become exercisable upon a change of control (as defined
in the 1993 Plan).
(2) The grant date present value was determined using the Black-Scholes option
pricing method with the following assumptions: (i) dividend yield of 0%;
(ii) expected volatility of 37.5%; (iii) risk free interest rate ranging
from 5.74% to 6.53%; and (iv) expected life of ten years. No adjustments
were made for non-transferability or risk of forfeiture.
There were no exercises of stock options by any of the named executive
officers during the fiscal year ended December 31, 1997. The table below lists
the number of Common Shares underlying each option held by the named executive
officers as of December 31, 1997.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)(1)
------------------------------ -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------------ -------------------------
<S> <C> <C>
James N. Mills................................. 0/0 0/0
Timothy L. Conlon.............................. 58,392/166,094 1,145,359/1,264,965
David M. Sindelar.............................. 0/0 0/0
Joseph S. Catanzaro............................ 29,196/25,804 609,685/254,170
W. Thomas McGhee............................... 0/0 0/0
</TABLE>
- ---------------
(1) Represents the difference between the market value at December 31, 1997 of
the Common Shares underlying the options and the exercise price of such
options.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS*
James N. Mills, David M. Sindelar and W. Thomas McGhee Employment
Agreements. James N. Mills, David M. Sindelar and W. Thomas McGhee entered into
employment agreements with the Company, Berg and each other subsidiary of the
Company on March 1, 1993. Such employment agreements were amended and restated
on February 1, 1996, further amended on August 5, 1996, amended and restated on
November 1, 1997 and amended on August 27, 1998 (as described below). Pursuant
to their respective employment
- ---------------
* It is expected that each of the following individuals will resign from his
position effective upon consummation of the Offer.
A-9
<PAGE> 30
agreements, as amended and restated, Mr. Mills will serve as the Chairman of the
Board of the Company, Mr. Sindelar will serve as Senior Vice President and Chief
Financial Officer of the Company and Mr. McGhee will serve as Secretary and
General Counsel of the Company through October 30, 2002 and for one-year periods
thereafter until terminated in accordance with the provisions thereof. Messrs.
Mills, Sindelar and McGhee are required to devote such business time and
attention to the transaction of the Company's business as is reasonably
necessary to discharge their duties under the employment agreements. Subject to
the foregoing limitation on their activities, Messrs. Mills, Sindelar and McGhee
are free to participate in other business endeavors.
The compensation provided to Messrs. Mills, Sindelar and McGhee under their
respective employment agreements includes annual base salaries of not less than
$685,000, $194,800 and $153,000, respectively, subject to adjustment at the sole
discretion of the Board of Directors of the Company, and such benefits as are
customarily accorded the executives of the Company and Berg for as long as the
employment agreements are in force. At a meeting of the Compensation Committee
held on February 4, 1998, the annual base salaries of Messrs. Sindelar and
McGhee were adjusted to $230,000 and $150,000, respectively, for the fiscal year
ending December 31, 1998. Messrs. Mills, Sindelar and McGhee are entitled to
annual bonuses pursuant to their respective employment agreements, in amounts to
be determined in accordance with the terms of the Company's Senior Executive
Incentive Compensation Plan.
Messrs. Mills', Sindelar's and McGhee's employment agreements also provide
that if Messrs. Mills', Sindelar's or McGhee's employment is terminated due to
disability or death, Messrs. Mills, Sindelar and McGhee or their estates, heirs
or beneficiaries, as the case may be, will receive, in addition to any other
benefits provided under any benefit plan of the Company, their then current
salary for a period of 18 months from their disability or death. In the event
that Messrs. Mills', Sindelar's or McGhee's employment is terminated for a
reason other than death, disability or cause, Messrs. Mills, Sindelar or McGhee
will continue to receive their then current salary (which will be not less than
$685,000, $230,000 and $150,000, respectively, per year) through October 30,
2002, or for one year, whichever is longer, and any other benefits to which they
would otherwise be entitled under the employment agreements.
Timothy L. Conlon Employment Agreement. Timothy L. Conlon entered into an
employment agreement with Berg on March 1, 1993, which was amended and restated
on February 1, 1996, further amended on January 1, 1997, amended and restated on
November 1, 1997 and amended on August 27, 1998 (as described below). Pursuant
to such amended and restated employment agreement, Mr. Conlon will serve as the
President and Chief Operating Officer of the Company and Berg through October
30, 2002 and for one-year periods thereafter until terminated in accordance with
the provisions thereof, and will receive an annual base salary of not less than
$400,000, subject to adjustment at the sole discretion of the Board of Directors
of the Company, and such benefits as are customarily accorded the executives of
Berg for as long as the employment agreement is in force. At a meeting of the
Compensation Committee held on February 4, 1998, Mr. Conlon's annual base salary
was adjusted to $425,000 for the fiscal year ending December 31, 1998. In
addition, Mr. Conlon's employment agreement currently provides that he is
entitled to annual bonuses in amounts to be determined in accordance with the
Company's Senior Executive Incentive Compensation Plan.
Mr. Conlon's employment agreement also provides that if his employment is
terminated due to disability or death, his estate, heirs or beneficiaries, as
the case may be, will receive, in addition to any other benefits provided him
under any benefit plan of the Company, Mr. Conlon's then current salary for a
period of 18 months from Mr. Conlon's disability or death. In the event that his
employment is terminated for a reason other than death, disability or cause, Mr.
Conlon will continue to receive his then current salary (which under the terms
of his current employment agreement will be not less than $425,000 per year)
through October 30, 2002, or for one year, whichever is longer, and any other
benefits to which he would otherwise be entitled under the employment agreement.
A-10
<PAGE> 31
AMENDMENTS TO EXECUTIVE EMPLOYMENT AGREEMENTS WITH CERTAIN EXECUTIVE OFFICERS OF
THE COMPANY
The information set forth under the section entitled "Amendments to
Executive Employment Agreements with Certain Executive Officers of the Company"
in the Schedule 14D-9 attached hereto is incorporated by reference herein in its
entirety.
CHANGE IN CONTROL AGREEMENT
The information set forth under the section entitled "Change in Control
Agreement" in the Schedule 14D-9 attached hereto is incorporated by reference
herein in its entirety.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1997, the members of the Compensation
Committee of the Board of Directors were Messrs. Vieser and Yontz. Neither Mr.
Vieser nor Mr. Yontz served as an officer or employee of the Company or any of
its subsidiaries during fiscal 1997. In February 1998, Mr. Hicks was appointed
to serve as Chairman of the Compensation Committee. Mr. Hicks is a principal of
Hicks Muse. See "Related Party Transactions -- Monitoring and Oversight
Agreement."
COMPENSATION OF DIRECTORS
Current directors who are officers, employees or affiliates of the Company
or Berg receive no additional compensation for their services as directors. Each
outside director (currently only Messrs. Vieser and Yontz) receives an annual
retainer of $12,000 and a fee of $1,000 for each meeting of the Board of
Directors at which such outside director is present. Each outside director who
is a member of a committee of the Board of Directors also receives a fee of $500
for each meeting of such committee at which such outside director is present.
Directors of the Company are entitled to reimbursement of their reasonable
out-of-pocket expenses in connection with their travel to and attendance at
meetings of the Board of Directors or committees thereof.
A-11
<PAGE> 32
PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on Common
Shares during the period beginning on March 1, 1996 (the date the Company went
public) and ending on December 31, 1997, with the cumulative total return on the
Standard & Poor's 500 Index and the Morgan Stanley High Tech Index over the same
period (assuming an investment of $100 in Common Shares, the Standard & Poor's
500 Index and the Morgan Stanley High Tech Index on March 1, 1996, and the
reinvestment of dividends). The Common Shares trade on the New York Stock
Exchange under the trading symbol "BEI."
<TABLE>
<CAPTION>
Morgan
Measurement Period Stanley High
(Fiscal Year Covered) BEI S&P 500 Tech 35
<S> <C> <C> <C>
3/1/96 100.00 100.00 100.00
12/31/96 139.88 115.66 114.71
12/31/97 218.45 151.53 141.36
</TABLE>
INFORMATION REGARDING INDEMNIFICATION
Section 145 of the DGCL provides that a corporation may indemnify any
person, including officers and directors, who are, or are threatened to be made,
parties to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person was an officer, director, employee or agent of such corporation, or
is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such officer, director, employee or agent acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, for criminal proceedings, had no reasonable
cause to believe that his conduct was unlawful. A Delaware corporation may
indemnify officers and directors in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually or reasonably incurred.
Pursuant to Section 102(b)(7) of the DGCL, the Certificate of Incorporation
of the Company eliminates the personal liability of the Company's directors to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liabilities related to the breach of duty of
loyalty, actions not
A-12
<PAGE> 33
in good faith and certain other liabilities. Additionally, the Company has
purchased a directors' and officers' liability insurance policy.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for the
Company's executive compensation programs. The Compensation Committee is
composed of three members of the Board of Directors, two of whom are neither
current employees nor officers of the Company (the "Outside Directors"). This
report is provided by the Compensation Committee to describe the philosophy and
objectives underlying the compensation of the Company's senior executives.
COMPENSATION POLICY
Under the direction of the Compensation Committee and in consultation with
an outside independent compensation consultant, the Company's senior executive
compensation program is based upon a "pay for performance" philosophy and is
designed to attract and retain highly qualified, key executives by offering
competitive base compensation supplemented with performance-based incentives
linked to corporate performance factors and position within the Company. The
Company has designed and administered its executive compensation programs so
that compensation is linked to the Company's performance and so that the
interests of senior executives are aligned with the interests of the Company's
stockholders. This philosophy is articulated in the following guiding principles
of the Company's compensation programs:
- A significant percentage of compensation will be determined by the
Company's annual and long term financial performance, including the
creation of stockholder value;
- Compensation programs will be designed to encourage and balance the
attainment of short term operational goals and long term strategic
goals;
- Total compensation will be targeted at competitive levels to allow
the Company to attract, retain and motivate highly qualified
employees; however, a greater percentage of compensation will be
performance-based and variable (versus fixed compensation) than
competitive practices might suggest; and
- Compensation programs will be designed to more closely align the
interests of senior executives with the interests of the Company's
stockholders by encouraging stock ownership by senior executives.
There are three elements to the Company's compensation program, each
consistent with its compensation philosophy: annual base salary, annual cash
bonus incentives and long term incentives. The total compensation package is
designed to be competitive with compensation programs offered to comparable
senior executive officers in a survey group of eighteen electronic equipment
manufacturers (the "Peer Group"). The Company believes that its total
compensation practices will be competitive if the Company performs within the
targets established by the Compensation Committee both on the basis of short
term and long term goals.
COMPLIANCE WITH CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), imposes a limit, with certain exceptions, on the amount that a publicly
held corporation may deduct in any year for the compensation paid or accrued
with respect to its Chief Executive Officer and four other most highly
compensated executive officers. However, to the extent compensation is
"performance-based compensation" within the meaning of Code Section 162(m), it
will not be subject to the Code Section 162(m) deduction limitation. As a newly
publicly traded company in 1996, the Company falls under certain transition
provisions that relieve it from compliance with Code Section 162(m) with respect
to certain agreements and plans that were in existence on the date the Company
became a publicly traded corporation. In formulating the Company's executive
compensation policies, the Compensation Committee considers the relevant
provisions
A-13
<PAGE> 34
of the Code that limit the deductibility of certain executive compensation and
the consequences to the Company if the compensation paid to the Company's
executive officers is not deductible.
All members of the Compensation Committee are involved in administering the
Company's executive compensation programs. However, with respect to incentive
compensation payable to the Company's Chief Executive Officer and four other
most highly compensated executive officers, which incentive compensation is
intended to comply with Code Section 162(m), the performance goals will be
established by the Outside Directors and subsequently submitted to the
Compensation Committee as a whole for ratification by a unanimous vote of all
members of the Compensation Committee. The Outside Directors are also solely
responsible for certifying the attainment of the performance goals with respect
to such executive officers and for issuing any and all stock options and other
Awards (as defined below) granted to such executive officers under the Company's
1998 Incentive Compensation Plan.
BASE SALARIES
All senior executive officer base salaries are reviewed and adjustments, if
any, are approved annually by the Compensation Committee. The Company's senior
executive officers' base salaries are targeted to be at the 50th percentile of
the base salaries of similarly situated executive officers within the Peer
Group. The Compensation Committee may choose to set salaries above or below the
50th percentile target based on an executive's position, contribution,
experience, etc. No specific weighting of these elements is used to determine
base salary levels.
ANNUAL INCENTIVE AWARDS
The annual incentive award component of the Company's senior executive
incentive compensation is determined pursuant to the terms of the Company's
Senior Executive Incentive Compensation Plan and is based on achieving certain
earnings per share objectives (determined without consideration of extraordinary
items) for the Company's consolidated fiscal year. The program provides for the
payment of cash incentive awards to participants to the extent that actual
consolidated earnings per share results meet or exceed certain pre-determined
levels. The Compensation Committee establishes pre-determined consolidated
earnings per share objectives at four distinct levels which trigger progressive
incentive payout. These objectives are based on profit levels for the fiscal
year. To the extent that the Company attains or exceeds a pre-determined
performance level, each participant is entitled to receive a cash incentive
award and, in the sole discretion of the Compensation Committee, such award may
be increased based upon exceptional performance by a participant. The maximum
annual incentive award under the Company's Senior Executive Incentive
Compensation Plan is 200% of base salary. The Compensation Committee generally
targets short term incentive compensation to the 50th percentile of the Peer
Group. However, exceptional earnings per share performance can produce an
exceptional short term incentive payout.
LONG TERM INCENTIVE AWARDS
Long term incentive awards in the form of stock options are granted by the
Compensation Committee to aid in the retention of key executives and to align
the interests of key executives with those of the stockholders of the Company.
Specifically, stock options directly link a portion of a key executive's
compensation to the interests of stockholders by providing an incentive to
maximize stockholder value.
Stock options have historically been granted under the Company's 1993 Stock
Option Plan which was approved by the Board of Directors and a majority of
stockholders on August 4, 1993. However, no further grants of stock options will
be made under the Company's 1993 Stock Option Plan since the approval by the
stockholders of the Company of the Company's 1998 Incentive Compensation Plan on
May 5, 1998. The Compensation Committee currently has the flexibility to grant
cash awards, stock options, stock appreciation rights, stock awards, stock
units, performance shares and/or performance units (the "Awards") to employees
of the Company and certain other persons identified in the Company's 1998
Incentive Compensation Plan.
A-14
<PAGE> 35
The Company has set guidelines to grants of long term incentive
compensation between the 50th and 75th percentiles of the Peer Group.
Additionally, the Compensation Committee grants Awards to employees based on
several factors, including:
- Current base pay and annual incentive opportunity as compared with the
Peer Group's total direct compensation levels (base, annual incentive and
long term incentive value);
- Position with the Company and ability to impact stockholder value; and
- Current holdings of the Company's stock.
No specific weighting of these factors is used to determine long term
incentive grants. However, grants of Awards are reviewed annually by the
Compensation Committee.
CEO COMPENSATION
Mr. Mills' base salary was set by the Board of Directors pursuant to Mr.
Mills' employment agreement on March 1, 1993, and has remained unchanged.
Pursuant to his employment agreement. Mr. Mills was paid a base salary in the
amount of $685,000 for the year ended December 31, 1997. The Compensation
Committee approved an annual incentive award under the Company's Senior
Executive Incentive Compensation Plan equal to 100% of the bonus target for Mr.
Mills (which was set at 100% of Mr. Mills' base salary for 1997) based on the
Company's achieving an increase in earnings per share in 1997, which increase
was over 20% compared with the Company's earnings per share for the year ended
December 31, 1996. Since Mr. Mills holds a large block of Class A Common Stock,
the Compensation Committee believes that his interests are clearly aligned with
the Company's stockholders, and, accordingly, no long term incentive
compensation was awarded in 1997.
Thomas O. Hicks, Chairman
Richard W. Vieser
Kenneth F. Yontz
RELATED PARTY TRANSACTIONS
MONITORING AND OVERSIGHT AGREEMENT
In February 1993, the Company entered into a Monitoring and Oversight
Agreement (herein so called) with Hicks Muse which provided for a payment from
the Company to Hicks Muse of approximately $400,000 per year for monitoring and
oversight services to the Company and its subsidiaries, such payment to be
adjusted annually for changes in the consumer price index. In March 1996, the
Company (pursuant to the approval of the Board of Directors in February 1996)
amended and restated such Monitoring and Oversight Agreement to increase the
annual fee payable thereunder to the greater of $700,000 or one-tenth of 1% of
net sales during such year. In addition, Hicks Muse is entitled to an
acquisition advisory fee equal to 1.5% of the purchase price of any acquisition
effected by the Company, Berg or any of their subsidiaries. Messrs. Hicks and
Tate, directors of the Company, are each principals of Hicks Muse. In connection
with the Monitoring and Oversight Agreement, the Company has agreed to indemnify
Hicks Muse, its affiliates and stockholders, and their respective directors,
officers, agents, employees and affiliates from and against any claims, actions,
proceedings, demands, liabilities, damages, judgments, assessments, losses and
costs, including fees and expenses, arising out of or in connection with the
services rendered by Hicks Muse in connection with the Monitoring and Oversight
Agreement. The primary term of the Monitoring and Oversight Agreement expires on
March 6, 2006.
The Monitoring and Oversight Agreement makes available to the Company the
resources of Hicks Muse concerning a variety of financial and operational
matters. The services that have been and will continue to be provided by Hicks
Muse could not otherwise be obtained by the Company without the addition of
personnel or the engagement of outside professional advisors. In management's
opinion, the fees provided for under this
A-15
<PAGE> 36
agreement reasonably reflect the benefits received by the Company and are no
less favorable to the Company than could be obtained by the Company with a
non-affiliated third party.
The Company did not effect any acquisitions in 1997 requiring the payment
of acquisition advisory fees to Hicks Muse.
TERMINATION OF MONITORING AND OVERSIGHT AGREEMENT
The information set forth under the section entitled "Termination
Agreement" in the Schedule 14D-9 attached hereto is incorporated herein by
reference in its entirety.
VIASYSTEMS RELATIONSHIP
The Company sells certain connectors and other products needed to
manufacture printed circuit boards and backpanel assemblies to Viasystems, Inc.
("Viasystems"). In December 1996, a wholly-owned subsidiary of Viasystems
acquired substantially all of the assets of the Interconnection Technologies
Unit of the Microelectronics Group (the "Lucent Division") of Lucent
Technologies Inc. Prior to the acquisition by Viasystems of the Lucent Division,
the Lucent Division purchased certain electronic connectors from the Company
pursuant to a written supply contract (the "Supply Agreement"). The Company and
Viasystems have continued to supply and purchase products on the same terms and
conditions as set forth in the Supply Agreement. Viasystems is controlled by
Hicks Muse, through its affiliates, and managed by Mills & Partners, Inc. In
addition, certain of the Company's directors and executive officers have
financial interests in Viasystems. For the year ended December 31, 1997, the
Company's net sales to Viasystems were approximately $41.0 million. The Company
expects to continue to sell products to Viasystems on terms and conditions
substantially similar to the terms and conditions of the Supply Agreement, which
the Company believes to be comparable to the terms that would be reached in an
arm's-length transaction.
AMENDMENTS TO EXECUTIVE EMPLOYMENT AGREEMENTS WITH CERTAIN EXECUTIVE OFFICERS OF
THE COMPANY
The information set forth under the section entitled "Amendments to
Executive Employment Agreements with Certain Executive Officers of the Company"
in the Schedule 14D-9 attached hereto is incorporated by reference herein in its
entirety.
CHANGE IN CONTROL AGREEMENT
The information set forth under the section entitled "Change in Control
Agreement" in the Schedule 14D-9 attached hereto is incorporated by reference
herein in its entirety.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of the Common Shares, to
file with the Commission initial reports of beneficial ownership and reports of
changes in beneficial ownership of Common Shares and other equity securities of
the Company. Officers, directors and greater than 10% beneficial owners are
required by the Commission to furnish the Company with copies of all Section
16(a) reports they file. Except for the late filing of a Form 4 by W. Thomas
McGhee, to the Company's knowledge, based solely on a review of the copies of
Section 16(a) reports furnished to the Company, all Section 16(a) filing
requirements applicable to its officers and directors were complied with for the
year ended December 31, 1997.
A-16
<PAGE> 37
SCHEDULE A
FRAMATOME CONNECTORS INTERNATIONAL S.A. DESIGNEES
FCI's designees to the Company's Board of Directors and certain information
about each are described below.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS AGE EMPLOYMENT HISTORY
------------------------- --- -------------------------------
<S> <C> <C>
Philippe Anglaret......................... 48 Chairman and President of FCI since June
Framatome Connectors International 1997. From June 1996 to June 1997, he
Tour Framatome served as Vice President of BES for
1, Place de la Coupole CEGELEC (a projects, services and
92084 Paris La Defense equipment manufacturing business). From
FRANCE January 1991 to June 1996, he served as
Vice President of BEI for CEGELEC.
Michel Cuilhe............................. 50 Chief Executive Officer of FCI since May
Framatome Connectors International 1997. From 1992 through May 1997, he
Tour Framatome served as Executive Vice President of FCI.
1, Place de la Coupole
92084 Paris La Defense
FRANCE
Alan H. Peltz............................. 54 Chairman of the Board and Chief Executive
Framatome Connectors USA Inc. Officer of Framatome Connectors USA Inc.
55 Walls Drive, Suite 304 since March 1997. From September 1993 to
Fairfield, CT 06432-0599 the present, he has served as Vice
President and Chief Financial Officer of
Framatome Connectors USA Inc.
B. Jill Steps............................. 53 Vice President, Counsel and Secretary of
Framatome Connectors USA Inc. Framatome Connectors USA Inc. since
55 Walls Drive, Suite 304 October 1994. From April 1989 to October
Fairfield, CT 06432-0599 1994, she served as Corporate Counsel and
Secretary of Framatome Connectors USA Inc.
John R. Mayo.............................. 62 General Manager, Electrical of FCI since
Framatome Connectors International April 1987 and President and Chief
Tour Framatome Operating Officer of Framatome Connectors
1, Place de la Coupole USA Inc. since April 1994.
92084 Paris La Defense
FRANCE
Bernard Brice............................. 49 Chief Operating Officer of FCI since
Framatome Connectors International January 1995. From October 1993 to
Tour Framatome December 1994, he served as Vice
1, Place de la Coupole President, Retail Delivery Systems for
92084 Paris La Defense Unisys France. From August 1990 to October
FRANCE 1993, he served as Vice President,
Personal Workstation Division for Unisys
USA.
</TABLE>
A-17
<PAGE> 38
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS AGE EMPLOYMENT HISTORY
------------------------- --- -------------------------------
<S> <C> <C>
Philippe de Dreuille...................... 49 Chief Administration Officer of FCI since
Framatome Connectors International April 1997. From January 1993 to April
Tour Framatome 1997, he served as Vice President, Human
1, Place de la Coupole Resources for FCI.
92084 Paris La Defense
FRANCE
Michel Safir.............................. 48 Vice President and General Manager,
Framatome Connectors International Electronics Division of FCI since 1997.
Tour Framatome From 1993 to 1997, he served as Vice
1, Place de la Coupole President and General Manager, Aerospace
92084 Paris La Defense Division for FCI.
FRANCE
Andre Louin............................... 55 Senior Vice President of FCI since January
Framatome Connectors International 1993.
Tour Framatome
1, Place de la Coupole
92084 Paris La Defense
FRANCE
</TABLE>
A-18
<PAGE> 39
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
Exhibit (a)(1) -- Joint Press Release, dated August 27, 1998, issued by
Framatome Connectors International S.A. and Berg
Electronics Corp.
Exhibit (a)(2) -- Opinion of Morgan Stanley & Co. Incorporated.*
Exhibit (a)(3) -- Form of Letter to Stockholders of Berg Electronics Corp.,
dated September 2, 1998.*
Exhibit (c)(1) -- Agreement and Plan of Merger, dated as of August 27,
1998, by and among Berg Electronics Corp., Framatome
Connectors International S.A. and Berg Acquisition Co.
(f/k/a Bravo Acquisition Co.).
Exhibit (c)(2) -- Confidentiality Agreement, dated as of July 21, 1998, by
and between Berg Electronics Corp. and Framatome
Connectors International.
Exhibit (c)(3) -- Stockholders Agreement, dated as of August 27, 1998, by
and among Berg Acquisition Co. (f/k/a Bravo Acquisition
Co.) and certain of the stockholders of Berg Electronics
Corp.
Exhibit (c)(4) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and James
N. Mills.
Exhibit (c)(5) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and Robert
N. Mills.
Exhibit (c)(6) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and
Timothy L. Conlon.
Exhibit (c)(7) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and David
M. Sindelar.
Exhibit (c)(8) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and W.
Thomas McGhee.
Exhibit (c)(9) -- Third Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and Larry
S. Bacon.
Exhibit (c)(10) -- First Amendment to the Amended and Restated Executive
Employment Agreement, dated as of August 31, 1998, by and
among Berg Electronics Corp., its subsidiaries and David
J. Webster.
Exhibit (c)(11) -- First Amendment to Rights Agreement, dated as of August
27, 1998, by and between Berg Electronics Corp. and
Harris Trust and Savings Bank.
Exhibit (c)(12) -- First Amendment to Registration Rights Agreement, dated
as of August 27, 1998, by and among Berg Electronics
Corp. and the parties identified on the signature pages
thereto.
Exhibit (c)(13) -- Termination Agreement, dated as of August 27, 1998, by
and among Berg Electronics Corp., Berg Electronics Group,
Inc., and Hicks, Muse & Co. Partners, L.P.
Exhibit (c)(14) -- Agreement, dated as of August 31, 1998, by and between
Berg Electronics Corp. and Mills & Partners, Inc.
Exhibit (c)(15) -- Agreement, dated as of August 31, 1998, by and between
Berg Electronics Corp. and Joseph S. Catanzaro.
</TABLE>
- ---------------
* Included with Schedule 14D-9 mailed to stockholder.
<PAGE> 1
EXHIBIT 99.(a)(1)
[BERG ELECTRONICS LOGO]
PRESS RELEASE
Corporate Headquarters
101 S. Hanley Road
St. Louis, MO 63105
CONTACT:
Gary D. Strong
Director, Investor Relations
(314) 746-2235
Internet IR site: www.berg.com
FOR IMMEDIATE RELEASE
THURSDAY, AUGUST 27, 1998
BERG ELECTRONICS AGREES TO BE ACQUIRED BY
FRAMATOME CONNECTORS INTERNATIONAL
ST. LOUIS, MISSOURI, AND PARIS, FRANCE, August 27, 1998 - Berg
Electronics Corp. (NYSE:BEI) and Framatome Connectors International (FCI) today
announced that they have entered into a definitive merger agreement pursuant to
which FCI will acquire all of the outstanding shares of Berg common stock at a
price of $35.00 per share in cash, representing an aggregate transaction value
of approximately $1.85 billion, including the assumption of outstanding debt.
Pursuant to the merger agreement, FCI will make a tender offer for all
of the outstanding Berg common stock. The tender offer will commence as soon as
practicable. Consummation of the tender offer is subject to U.S. and European
Union antitrust regulatory clearance and other customary conditions.
The Berg Board of Directors has unanimously approved the acquisition
and has recommended Berg stockholders accept the tender offer and approve and
adopt the merger agreement.
James N. Mills, Chairman and Chief Executive Officer of Berg
Electronics, stated, "The transaction represents a substantial premium to Berg's
stock price and represents an attractive value. We believe that our employees,
customers and suppliers will benefit from being a part of the new combined
entity. The Board of Berg is grateful to the employees of Berg who have worked
so successfully in building Berg. We expect our employees to play a significant
role in leading the new combined entity into the next century."
MORE. . .
<PAGE> 2
BERG ELECTRONICS
FRAMATOME ACQUISITION
Philippe Anglaret, FCI Chairman and President, stated that "the
combined companies will provide customers worldwide with value added products
and services while offering great opportunities for employees of both companies.
This acquisition is consistent with FCI's strategy of being a global leader in
the connector industry."
Berg Electronics Corp. is one of the world's four largest suppliers of
connector, socket and cable assembly products with 1997 sales of $785 million.
The company's broad range of products serve high-end data processing, personal
computing, all segments of telecommunications, as well as industrial and
instrumentation markets. Headquartered in St. Louis, Missouri, Berg employs
approximately 7,800 people worldwide at its 22 manufacturing and assembly
facilities and three product development and engineering centers located in the
United States, Mexico, the Netherlands, France, Ireland, Sweden, the United
Kingdom, Japan, Taiwan, Singapore, China, Korea, and India. The company's stock
trades on the New York Stock Exchange under the symbol "BEI."
FCI, a wholly-owned subsidiary of Framatome S.A. is the world's third
largest connector company with sales of over $1 billion, serving the electronic,
automotive, electrical and aerospace industries. Headquartered in Paris, France,
FCI employees 8,500 people and has operations in the Americas, Europe and Asia.
# # #
<PAGE> 1
EXHIBIT (a)(2)
[MORGAN STANLEY DEAN WITTER LETTERHEAD]
August 27, 1998
Board of Directors
Berg Electronics Corp.
101 South Hanley Road
St. Louis, MO 63105
Members of the Board:
We understand that Berg Electronics Corp. (the "Company"), Framatome
Connectors International (the "Buyer") and Bravo Acquisition Corp., a wholly
owned subsidiary of Buyer ("Acquisition Sub"), have entered into an Agreement
and Plan of Merger, dated as of August 27, 1998 (the "Merger Agreement"), which
provides, among other things, for (i) the commencement by Acquisition Sub of a
tender offer (the "Tender Offer") for all outstanding shares of common stock,
par value $0.01 per share (the "Common Stock") of the Company for $35.00 per
share net to the seller in cash, and (ii) the subsequent merger (the "Merger")
of Acquisition Sub with and into the Company. Pursuant to the Merger, the
Company will become a wholly owned subsidiary of the Buyer and each outstanding
share of Common Stock, other than shares held in treasury or held by the Buyer
or any affiliate of the Buyer or as to which dissenters' rights have been
perfected, will be converted into the right to receive $35.00 per share in cash.
The terms and conditions of the Tender Offer and the Merger are more fully set
forth in the Merger Agreement.
You have asked for our opinion as to whether the consideration to be
received by the holders of shares of Common Stock pursuant to the Merger
Agreement is fair from a financial point of view to such holders.
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of the Company;
(ii) reviewed certain internal financial statements and other
financial and operating data concerning the Company prepared by the
management of the Company;
(iii) analyzed certain financial projections prepared by the
management of the Company;
(iv) discussed the past and current operations and financial condition
and the prospects of the Company with senior executives of the Company;
(v) reviewed the reported prices and trading activity for the Common
Stock;
(vi) compared the financial performance of the Company and the prices
and trading activity of the Common Stock with that of certain other
comparable publicly-traded companies and their securities;
(vii) reviewed the financial terms, to the extent publicly available,
of certain comparable acquisition transactions;
(viii) participated in discussions and negotiations among
representatives of the Company and, the Buyer and their financial and legal
advisors;
(ix) reviewed the Merger Agreement and certain related documents; and
(x) performed such other analyses as we have deemed appropriate.
<PAGE> 2
[MORGAN STANLEY DEAN WITTER LETTERHEAD]
We have assumed and relied upon without independent verification the
accuracy and completeness of the information reviewed by us for the purposes of
this opinion. With respect to the financial projections, we have assumed that
they have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of the future financial performance of the
Company. We have not made any independent valuation or appraisal of the assets
or liabilities of the Company, nor have we been furnished with any such
appraisals. Our opinion is necessarily based on economic, market and other
conditions as in effect on, and the information made available to us as of, the
date hereof.
We have acted as financial advisor to the Board of Directors of the Company
in connection with this transaction and will receive a fee for our services. In
the past, Morgan Stanley & Co. Incorporated and its affiliates have provided
financial advisory and financing services for the Company, the Buyer and their
affiliates and have received fees for the rendering of these services.
It is understood that this letter is for the information of the Board of
Directors of the Company, except that this opinion may be included in its
entirety in any filing made by the Company in respect of the transaction with
the Securities and Exchange Commission. Morgan Stanley expresses no opinion or
recommendation as to whether the shareholders of the Company should accept the
Tender Offer.
Based on the foregoing, we are of the opinion on the date hereof that the
consideration to be received by the holders of shares of Common Stock pursuant
to the Merger Agreement is fair from a financial point of view to such holders.
Very truly yours,
MORGAN STANLEY & CO.
INCORPORATED
By: /s/ R. BRADFORD EVANS
----------------------------------
R. Bradford Evans
Managing Director
<PAGE> 1
EXHIBIT 99.(a)(3)
[BERG LOGO]
September 2, 1998
To Our Stockholders:
On behalf of the Board of Directors of Berg Electronics Corp. (the
"Company"), I am pleased to inform you that on August 27, 1998, the Company
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
Framatome Connectors International S.A. ("FCI") and Berg Acquisition Co., its
indirect wholly-owned subsidiary ("Purchaser"), pursuant to which Purchaser
today has commenced a cash tender offer (the "Offer") to purchase all issued and
outstanding shares of Common Stock of the Company ("Common Shares") at $35.00
per share, net to the seller in cash, and all issued and outstanding shares of
Class A Common Stock of the Company ("Class A Shares" and, together with the
Common Shares, the "Shares") at $32.965 per share, net to the seller in cash,
including in each case the associated rights to purchase Series A Junior
Preferred Stock of the Company. Pursuant to the Merger Agreement, upon
satisfaction of certain conditions, the Offer will be followed by a merger (the
"Merger") in which any Common Shares not tendered pursuant to the Offer will be
converted into the right to receive $35.00 per Share in cash, and any Class A
Shares not tendered pursuant to the Offer will be converted into the right to
receive $32.965 per Share in cash, in each case without interest (except any
Shares owned by FCI or any subsidiary of FCI and Shares as to which the holder
has properly exercised dissenter's rights of appraisal).
THE COMPANY'S BOARD OF DIRECTORS HAS (A) DETERMINED THAT THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, ARE FAIR TO AND IN THE BEST INTERESTS OF THE HOLDERS OF THE SHARES, (B)
APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, AND (C) RESOLVED TO RECOMMEND THAT THE STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES THEREUNDER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to the factors described in the attached
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
that is being filed today with the Securities and Exchange Commission. Among
other things, the Board of Directors considered the opinion of its financial
advisor, Morgan Stanley & Co. Incorporated, that the consideration to be
received by the holders of Common Shares pursuant to the Merger Agreement is
fair from a financial point of view, as of the date of such opinion and subject
to the assumptions made, matters considered and limitations on the review
undertaken, to such holders.
In addition to the attached Schedule 14D-9, enclosed also is the Offer to
Purchase dated September 2, 1998, together with related materials, including a
Letter of Transmittal, to be used for tendering your Shares in the Offer. These
documents state the terms and conditions of the Offer and the Merger and provide
instructions as to how to tender your Shares. We urge you to read these
documents carefully in making your decision with respect to tendering your
Shares pursuant to the Offer.
On behalf of the Board of Directors,
/s/ JAMES N. MILLS
James N. Mills
Chairman of the Board and Chief
Executive Officer
<PAGE> 1
EXHIBIT 99.(c)(1)
AGREEMENT AND PLAN OF MERGER
by and among
FRAMATOME CONNECTORS INTERNATIONAL S.A.
BRAVO ACQUISITION CO.
and
BERG ELECTRONICS CORP.
August 27, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I THE OFFER AND MERGER
Section 1.1 The Offer..............................................................2
Section 1.2 Company Actions........................................................4
Section 1.3 Directors..............................................................5
Section 1.4 The Merger.............................................................6
Section 1.5 Effective Time.........................................................6
Section 1.6 Closing................................................................7
Section 1.7 Directors and Officers of the Surviving Corporation....................7
Section 1.8 Stockholders' Meeting..................................................7
Section 1.9 Merger Without Meeting of Stockholders.................................8
ARTICLE II CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock............................................8
Section 2.2 Exchange of Certificates...............................................9
Section 2.3 Dissenting Shares.....................................................11
Section 2.4 Company Option Plans..................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization; Subsidiaries............................................11
Section 3.2 Capitalization........................................................12
Section 3.3 Authorization; Validity of Agreement; Company Action..................14
Section 3.4 Consents and Approvals; No Violations.................................14
Section 3.5 SEC Reports and Financial Statements..................................15
Section 3.6 No Undisclosed Liabilities............................................15
Section 3.7 Absence of Certain Changes............................................16
Section 3.8 Contracts.............................................................17
Section 3.9 Employee Benefit Plans; ERISA.........................................18
Section 3.10 Litigation............................................................19
Section 3.11 Permits; No Default; Compliance with Applicable Laws..................19
Section 3.12 Taxes.................................................................20
Section 3.13 Real and Personal Property............................................21
Section 3.14 Intellectual Property.................................................22
Section 3.15 Environmental Matters.................................................22
Section 3.16 Employee and Labor Matters............................................23
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 3.17 Information in Offer Documents........................................23
Section 3.18 Brokers or Finders....................................................24
Section 3.19 Insurance.............................................................24
Section 3.20 Opinion of Financial Advisor..........................................24
Section 3.21 Rights Plan; Takeover Laws............................................24
Section 3.22 Termination Agreement.................................................25
Section 3.23. Exon-Florio...........................................................25
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND THE
PURCHASER
Section 4.1 Organization..........................................................26
Section 4.2 Authorization; Validity of Agreement; Necessary Action................26
Section 4.3 Consents and Approvals; No Violations.................................26
Section 4.4 Information in Offer Documents; Proxy Statement.......................27
Section 4.5 Sufficient Funds......................................................27
Section 4.6 Share Ownership.......................................................27
Section 4.7 Purchaser's Operations................................................27
ARTICLE V COVENANTS
Section 5.1 Interim Operations of the Company.....................................28
Section 5.2 Access to Information.................................................30
Section 5.3 Employee Benefits.....................................................30
Section 5.4 No Solicitation.......................................................31
Section 5.5 Publicity.............................................................33
Section 5.6 Indemnification; D&O Insurance........................................33
Section 5.7 Approvals and Consents; Cooperation; Notification.....................34
Section 5.8 Reasonable Best Efforts; Further Assurances...........................35
Section 5.9 Shareholder Litigation................................................35
Section 5.10 Fair Price Statute....................................................35
Section 5.11 Non-Solicitation and Non-Competition Agreements.......................35
Section 5.12 Transition Services...................................................36
ARTICLE VI CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger............36
Section 6.2 Conditions to the Obligations of the Company to Effect the Merger.....36
Section 6.3 Conditions to the Obligations of Parent and the Purchaser to
Effect the Merger ..................................................37
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 6.4 Exception.............................................................37
ARTICLE VII TERMINATION
Section 7.1 Termination...........................................................37
Section 7.2 Effect of Termination.................................................39
ARTICLE VIII MISCELLANEOUS
Section 8.1 Amendment and Modification............................................39
Section 8.2 Nonsurvival of Representations and Warranties.........................40
Section 8.3 Notices...............................................................40
Section 8.4 Interpretation........................................................41
Section 8.5 Counterparts..........................................................41
Section 8.6 Entire Agreement; Third Party Beneficiaries...........................41
Section 8.7 Severability..........................................................42
Section 8.8 Governing Law.........................................................42
Section 8.9 Specific Performance..................................................42
Section 8.10 Assignment............................................................42
Section 8.11 Expenses..............................................................42
Section 8.12 Headings..............................................................42
Section 8.13 Waivers...............................................................42
Section 8.14 Disclosure Schedule...................................................43
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 27, 1998 (this
"Agreement"), by and among FRAMATOME CONNECTORS INTERNATIONAL S.A., a
corporation organized under the laws of the Republic of France ("Parent"), BRAVO
ACQUISITION CO., a Delaware corporation and an indirect wholly-owned subsidiary
of Parent (the "Purchaser"), and BERG ELECTRONICS CORP., a Delaware corporation
(the "Company").
RECITALS
WHEREAS, the Boards of Directors of Parent, the Purchaser and the
Company have approved, and deem it advisable and in the best interests of their
respective stockholders to consummate, the acquisition of the Company by Parent
and the Purchaser upon the terms and subject to the conditions set forth herein;
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement and to prescribe certain conditions to the transactions contemplated
hereby;
WHEREAS, to satisfy a condition to Parent and Purchaser entering
into this Agreement and incurring the obligations set forth herein, concurrently
with the execution and delivery of this Agreement, certain stockholders of the
Company have entered into a Stockholders Agreement (the "Stockholders
Agreement") with Purchaser pursuant to which such stockholders have agreed, on
the terms and subject to the conditions thereof, to tender their Shares in the
Offer (as defined below); and
WHEREAS, to satisfy a condition to Parent and Purchaser entering
into this Agreement and incurring the obligations set forth herein, as soon as
practicable following the execution and delivery of this Agreement, Mills &
Partners and certain employees of the Company will enter into Non-Competition
and Non-Solicitation Agreements (the "Non-Competition and Non-Solicitation
Agreements") with the Company pursuant to which such employees and Mills &
Partners will agree, on the terms and subject to the conditions thereof, to
certain non-competition and non-solicitation arrangements with the Company.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
<PAGE> 6
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer. (a) Provided that nothing shall have occurred
that, had the Offer referred to below been commenced, would give rise to a right
to terminate the Offer pursuant to any of the conditions set forth in Annex A
hereto, as promptly as practicable after the date hereof (but in no event later
than five business days from the public announcement of the execution hereof),
the Purchaser shall, and Parent shall cause the Purchaser to, commence (within
the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), an offer (the "Offer") to purchase for cash any and all
of the issued and outstanding shares of (i) Common Stock, par value $0.01 per
share, of the Company (referred to herein as either the "Common Shares" or
"Company Common Stock") at a price of $35.00 per Common Share, net to the seller
in cash (such price, or such higher price per Common Share as may be paid in the
Offer, being referred to herein as the "Common Offer Price," provided that
Purchaser shall not be required to increase the Common Offer Price) and (ii)
Class A Common Stock, par value $0.01 per share, of the Company (referred to
herein as either the "Class A Shares" or "Company Class A Common Stock" and,
together with the Common Shares, as the "Shares" or "Company Stock," which
references include for all purposes the related Preferred Stock Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement between the Company and
Harris Trust and Savings Bank, dated as of December 22, 1997) at a price of
$32.965 per Class A Share, net to the seller in cash (such price, or such higher
price per Class A Share as may be paid in the Offer, being referred to herein as
the "Class A Offer Price," provided that Purchaser shall not be required to
increase the Class A Offer Price, and, together with the Common Offer Price, as
the "Offer Price"). The Purchaser shall, on the terms and subject to the prior
satisfaction or waiver of the conditions of the Offer, accept for payment and
pay for Shares tendered as soon as it is legally permitted to do so under
applicable law; provided that, if the number of Shares that have been physically
tendered and not withdrawn are more than 50% of the Shares outstanding on a
fully diluted basis but less than 90% of the outstanding shares of each class of
capital stock of the Company, the Purchaser may extend the Offer for up to 20
business days from the date that all conditions to the Offer shall first have
been satisfied or waived. The obligations of the Purchaser to accept for payment
and to pay for any and all Shares validly tendered on or prior to the expiration
of the Offer and not withdrawn shall be subject only to there being validly
tendered in accordance with the terms of the Offer and not withdrawn prior to
the expiration date of the Offer, that number of Shares which, together with any
Shares beneficially owned by Parent or the Purchaser, represent at least a
majority of the Shares outstanding on a fully diluted basis (the "Minimum
Condition") and the other conditions set forth in Annex A hereto. The Offer
shall be made by means of an offer to purchase (the "Offer to Purchase")
containing the terms set forth in this Agreement, the Minimum Condition and the
other conditions set forth in Annex A hereto. The Purchaser shall not amend or
waive the Minimum Condition, decrease the Offer Price or decrease the number of
Shares sought, or impose any additional conditions to the Offer, or amend any
term of the Offer in any manner adverse to the holders of the Shares or extend
the expiration date of the Offer (except for such extensions as are
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contemplated below), in each case without the prior written consent of the
Company (such consent to be authorized by the Board of Directors of the Company
or a duly authorized committee thereof). Notwithstanding the foregoing, the
Purchaser shall, and Parent agrees to cause the Purchaser to, extend the Offer
from time to time until the date that all conditions to the Offer have been
satisfied, subject to the provisions of Section 7.1(b)(i) hereof if, and to the
extent that, at the initial expiration date of the Offer, or any extension
thereof, all conditions to the Offer have not been satisfied or waived. In
addition, the Offer Price may be increased and the Offer may be extended to the
extent required by law in connection with such increase, in each case without
the consent of the Company. In the event of any increase in the Common Offer
Price, the Class A Offer Price will be increased by an equal amount, and in the
event of any increase in the Class A Offer Price, the Common Offer Price will be
increased by an equal amount.
(b) As soon as practicable on the date the Offer is commenced,
Parent and the Purchaser shall file with the United States Securities and
Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 with
respect to the Offer (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-1"). The Schedule 14D-1 will
include, as exhibits, the Offer to Purchase and a form of letter of transmittal
and summary advertisement (collectively, together with any amendments and
supplements thereto, the "Offer Documents"). The Offer Documents when filed will
comply as to form in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the SEC and on the date
first published, sent or given to the Company's stockholders, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by Parent or the Purchaser
with respect to omissions or information supplied in writing for inclusion in
the Offer Documents, in each case by the Company. Each of Parent and the
Purchaser further agrees to take all steps necessary to cause the Offer
Documents to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. Each of Parent and the Purchaser, on the one hand, and the Company, on the
other hand, agrees promptly to correct any information provided by it for use in
the Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect and each of Parent and the Purchaser
further agrees to take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. The Company and its counsel shall be given a reasonable opportunity to
review the initial Schedule 14D-1 before it is filed with the SEC. In addition,
Parent and the Purchaser agree to provide the Company and its counsel in writing
with any comments or other communications that Parent, the Purchaser or their
counsel may receive from time to time from the SEC or its staff with respect to
the Offer Documents promptly after the receipt of such comments or other
communications.
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Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to the Offer and
represents that the Board of Directors, at a meeting duly called and held, has
with the affirmative vote of at least a majority of the members of the Board of
Directors (i) determined that this Agreement and the transactions contemplated
hereby, including the Offer and the Merger (as defined in Section 1.4), are fair
and in the best interests of the holders of the Shares and approved the
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, which approvals constitute approval of this Agreement, the Offer and the
Merger for purposes of Section 203 of the General Corporation Law of the State
of Delaware (the "DGCL"), and (ii) resolved to recommend that the stockholders
of the Company accept the Offer, tender their Shares thereunder to the Purchaser
and approve and adopt this Agreement and the Merger, which recommendation shall
not be withdrawn, modified or amended except as permitted by Section 5.4(b)
hereof.
(b) As soon as practicable after the time the Offer is commenced,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall, subject to
the provisions of Section 5.4(b) of this Agreement, contain the recommendation
referred to in clause (ii) of Section 1.2(a) hereof. The Company will use its
reasonable best efforts to cause the Schedule 14D-9 to be filed on the same date
that the Schedule 14D-1 is filed; provided, however, that in any event the
Schedule 14D-9 will be filed no later than ten business days following the
commencement of the Offer. The Schedule 14D-9 when filed will comply as to form
in all material respects with the provisions of applicable federal securities
laws and, on the date filed with the SEC and on the date first published, sent
or given to the Company's stockholders, shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to omissions or information
supplied in writing for inclusion in the Schedule 14D-9, in each case by Parent
or the Purchaser. The Company further agrees to take all steps necessary to
cause the Schedule 14D-9 to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. Each of the Company, on the one hand, and Parent and
the Purchaser, on the other hand, agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any material respect and
the Company further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to holders
of the Shares, in each case as and to the extent required by applicable federal
securities laws. Each of Parent, the Purchaser and its counsel shall be given a
reasonable opportunity to review the initial Schedule 14D-9 before it is filed
with the SEC. In addition, the Company agrees to provide Parent, the Purchaser
and their counsel in writing with any comments or other communications that the
Company or its counsel may receive from time to time from the SEC or its staff
with respect to the Schedule 14D-9 promptly after the receipt of such comments
or other communications.
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<PAGE> 9
(c) In connection with the Offer, the Company will promptly
furnish or cause to be furnished to the Purchaser mailing labels, security
position listings and any available listing or computer file containing the
names and addresses of the record holders of the Shares as of a recent date
(which shall in no event be more than ten days prior to the date hereof), and
shall furnish the Purchaser with such additional information (including updated
lists of holders of Shares and their addresses, mailing labels and lists of
security positions) and such other assistance as the Purchaser or its agents may
reasonably request in communicating the Offer to the record and beneficial
stockholders of the Company. Except for such steps as are necessary to
disseminate the Offer Documents, Parent and the Purchaser and each of their
affiliates, associates, partners, employees, agents and advisors shall hold in
confidence the information contained in any of such labels and lists and the
additional information referred to in the preceding sentence, will use such
information only in connection with the Offer, and, if this Agreement is
terminated, will upon request of the Company deliver or cause to be delivered to
the Company all copies of such information then in its possession or the
possession of its agents or representatives.
Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for Shares by
Parent or any of its subsidiaries which represent at least a majority of the
outstanding shares of Company Stock (on a fully diluted basis), Parent shall be
entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors of the Company as is equal to the product of
the total number of directors on such Board (giving effect to any additional
directors designated by Parent pursuant to this Section) multiplied by the
percentage that the aggregate number of Shares beneficially owned by the
Purchaser, Parent and any of their affiliates (including Shares accepted for
payment) bears to the total number of shares of Company Stock then outstanding.
The Company shall, upon request of and as specified by the Purchaser or Parent,
on the date of such request, either increase the size of its Board of Directors
or secure the resignations of such number of its incumbent directors as is
necessary, consistent with the request of Purchaser or Parent, to enable
Parent's designees to be so elected to the Company's Board of Directors, and
shall take all actions necessary to cause Parent's designees to be so elected or
appointed. At such times, the Company will use its reasonable best efforts to
cause individuals designated by Parent to constitute the same percentage as such
individuals represent on the Company's Board of Directors of each committee of
the Board (other than any committee of the Board established to take action
under this Agreement), each board of directors of each Subsidiary (as defined in
Section 3.1) and each committee of each such board. Notwithstanding the
foregoing, until the Effective Time, the Company shall retain as members of its
Board of Directors at least two directors who are directors of the Company on
the date hereof; provided, that subsequent to the purchase of and payment for
Shares pursuant to the Offer, Parent shall always have its designees represent
at least a majority of the entire Board of Directors. The Company's obligations
under this Section 1.3(a) shall be subject to Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to such Section 14(f) and Rule 14f-1
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<PAGE> 10
in order to fulfill its obligations under this Section 1.3(a), including without
limitation mailing to stockholders the information required by such Section
14(f) and Rule 14f-1 as is necessary to enable Parent's designees to be elected
to the Company's Board of Directors. Parent or the Purchaser will supply the
Company any information with respect to either of them and their nominees,
officers, directors and affiliates required by such Section 14(f) and Rule
14f-1.
(b) From and after the time, if any, that Parent's designees
constitute a majority of the Company's Board of Directors, any amendment of this
Agreement or the Certificate of Incorporation or By-Laws of the Company, any
termination of this Agreement by the Company, any extension of time for
performance of any of the obligations of Parent or the Purchaser hereunder, any
waiver of any condition or any of the Company's rights hereunder or other action
by the Company in connection with the rights of the Company hereunder may be
effected only with the concurrence of a majority of the directors of the Company
then in office who were directors of the Company on the date hereof.
Section 1.4 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.5 hereof) the Company
and the Purchaser shall consummate a merger (the "Merger") pursuant to which (a)
the Purchaser shall be merged with and into the Company and the separate
corporate existence of the Purchaser shall thereupon cease, (b) the Company
shall be the successor or surviving corporation in the Merger (the "Surviving
Corporation") and shall continue to be organized under the laws of the State of
Delaware, and (c) the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger. Should the merger of the Purchaser with and into the Company give
rise to any material tax liability, at the election of Parent and subject to the
consent of the Company, such consent not to be unreasonably withheld, the Merger
may be structured so that the Company shall be merged with and into Purchaser
with the result that Purchaser shall be the Surviving Corporation. Pursuant to
the Merger, (x) the Certificate of Incorporation of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation, and (y) the By-laws of the
Purchaser, as in effect immediately prior to the Effective Time, shall be the
By-laws of the Surviving Corporation until thereafter amended as provided by
law, the Certificate of Incorporation and such By-laws. The Merger shall have
the effects set forth in the DGCL.
Section 1.5 Effective Time. On the date of the Closing (as defined in
Section 1.6 hereof) (or on such other date as the parties may agree), the
Company and Purchaser shall file with the Delaware Secretary of State a
certificate of merger or other appropriate document (in any such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL, and shall make all other filings, recordings and publications required
by the DGCL with respect to the Merger. The Merger shall become effective at
such time as the certificate of merger is duly filed with the Delaware Secretary
of State or such later time as is specified in the Certificate of Merger (the
time the Merger becomes effective is hereinafter referred to as the "Effective
Time").
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Section 1.6 Closing. The closing of the Merger (the "Closing") will
take place at 11:00 a.m. on a date to be specified by the parties, which shall
be no later than the second business day after satisfaction or waiver of all of
the conditions set forth in Article VI hereof (the "Closing Date"), at the
offices of Weil, Gotshal & Manges LLP, 100 Crescent Court, Suite 1300, Dallas,
Texas 75201, unless another date or place is agreed to in writing by the parties
hereto.
Section 1.7 Directors and Officers of the Surviving Corporation. The
directors of the Purchaser immediately prior to the Effective Time shall, from
and after the Effective Time, be the directors of the Surviving Corporation
until their successors shall have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and By-laws. The officers
of the Company immediately prior to the Effective Time shall, from and after the
Effective Time, be the officers of the Surviving Corporation until their
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-laws.
Section 1.8 Stockholders' Meeting.
(a) If the Purchaser owns less than 90% of the Shares following
the purchase of Shares by the Purchaser pursuant to the Offer, the Company,
acting through its Board of Directors, shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as soon as
practicable following the acceptance for payment and purchase of
Shares by the Purchaser pursuant to the Offer for the purpose of
voting, considering and taking action upon this Agreement and the
Merger;
(ii) promptly prepare and file with the SEC a preliminary
proxy or information statement relating to the Merger and this
Agreement, obtain and furnish the information required by the SEC
to be included in the Proxy Statement (as hereinafter defined)
and, after consultation with Parent, respond promptly to any
comments made by the SEC with respect to the preliminary proxy or
information statement, use its reasonable best efforts to have
cleared by the SEC and cause a definitive proxy or information
statement and all other proxy materials for such meeting (the
"Proxy Statement") to be mailed to its stockholders and use its
reasonable best efforts to obtain the necessary adoption of this
Agreement and the transactions contemplated hereby by its
stockholders and will otherwise comply with all legal
requirements applicable to such meeting; and
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(iii) subject to the fiduciary obligations of the Board
under applicable law as advised by the Company's outside counsel
and subject to Section 5.4(b) hereof, include in the Proxy
Statement the recommendation of the Board that stockholders of
the Company approve and vote in favor of the adoption of this
Agreement and the Merger.
(b) Parent agrees that it will provide the Company with the
information concerning Parent and the Purchaser required to be included in the
Proxy Statement and will vote, or cause to be voted, all of the Shares then
owned by Parent, the Purchaser or any of its other subsidiaries and affiliates
in favor of the approval of the Merger and the adoption of this Agreement.
Section 1.9 Merger Without Meeting of Stockholders. Notwithstanding
Section 1.8 hereof, in the event that the Purchaser shall acquire at least 90%
of the outstanding shares of each class of capital stock of the Company,
pursuant to the Offer or otherwise, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after such acquisition, without a meeting of stockholders of the
Company.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of Company Common Stock or common stock of the Purchaser (the "Purchaser
Common Stock"):
(a) Each share of the Purchaser Common Stock issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one fully paid and nonassessable share of common stock of the Surviving
Corporation and shall constitute the only outstanding shares of capital stock of
the Surviving Corporation.
(b) Any shares of Company Stock held by the Company as treasury
stock and any shares of Company Stock owned by Parent, the Purchaser or any
other wholly owned Subsidiary (as defined in Section 3.1 hereof) of Parent
immediately prior to the Effective Time shall be cancelled and retired and shall
cease to exist and no consideration shall be delivered in exchange therefor.
(c) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than Common Shares to be
cancelled in accordance with Section 2.1(b) hereof and any Dissenting Shares (if
applicable and as defined in Section 2.3 hereof)) shall be converted into the
right to receive the Common Offer Price, payable to the holder thereof, without
interest (the "Common Stock Merger Consideration"),
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<PAGE> 13
upon surrender of the certificate formerly representing such share of Company
Common Stock in the manner provided in Section 2.2 hereof.
(d) Each share of Company Class A Common Stock issued and
outstanding immediately prior to the Effective Time (other than Class A Shares
to be cancelled in accordance with Section 2.1(b) hereof and any Dissenting
Shares (if applicable and as defined in Section 2.3 hereof)) shall be converted
into the right to receive the Class A Offer Price, payable to the holder
thereof, without interest (the "Class A Common Stock Merger Consideration" and,
together with the Common Stock Merger Consideration, the "Merger
Consideration"), upon surrender of the certificate formerly representing such
share of Company Class A Common Stock in the manner provided in Section 2.2
hereof.
(e) All such shares of Company Stock, when so converted in
accordance with Sections 2.1(c) and 2.1(d) hereof, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such certificate in accordance with
Section 2.2 hereof, without interest, or to perfect any rights of appraisal as a
holder of Dissenting Shares (as hereinafter defined) that such holder may have
pursuant to Section 262 of the DGCL.
Section 2.2 Exchange of Certificates.
(a) Parent shall designate a bank or trust company, or an
affiliate thereof, of nationally recognized standing to act as agent for the
holders of shares of Company Stock in connection with the Merger (the "Paying
Agent") for the purpose of exchanging certificates representing Shares and to
receive the funds to which holders of shares of Company Stock shall become
entitled pursuant to Sections 2.1(c) and 2.1(d) hereof. Prior to the Effective
Time, Parent shall take all steps necessary to deposit or cause to be deposited
with the Paying Agent such funds for timely payment hereunder. Such funds shall
be invested by the Paying Agent as directed by Parent or the Surviving
Corporation.
(b) As soon as reasonably practicable after the Effective Time
but in no event more than three business days thereafter, the Paying Agent shall
mail to each holder of record of a certificate or certificates, which
immediately prior to the Effective Time represented outstanding shares of
Company Stock (the "Certificates"), whose shares were converted pursuant to
Section 2.1 hereof into the right to receive the Merger Consideration (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for payment of the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed and
properly completed, the
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<PAGE> 14
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each share of Company Stock formerly represented by
such Certificate and the Certificate so surrendered shall forthwith be
cancelled. If payment of any portion of the Merger Consideration is to be made
to a person other than the person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.2.
(c) At the Effective Time, the stock transfer books of the
Company shall be closed and thereafter there shall be no further registration of
transfers of shares of Company Stock on the records of the Company. From and
after the Effective Time, the holders of Certificates evidencing ownership of
shares of Company Stock outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Shares, except as otherwise
provided for herein or by applicable law. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be cancelled and exchanged as provided in this Article II.
(d) At any time following six months after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds (including any interest received with respect thereto)
which had been made available to the Paying Agent and which have not been
disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof with respect to
the Merger Consideration payable upon due surrender of their Certificates,
without any interest thereon. Notwithstanding the foregoing, neither the
Surviving Corporation nor the Paying Agent shall be liable to any holder of a
Certificate for Merger Consideration delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. Any amounts remaining
unclaimed by holders of Shares two years after the Effective Time (or such
earlier date immediately prior to such time as such amounts would otherwise
escheat to or become property of any governmental entity) shall, to the extent
permitted by applicable law, become the property of Parent free and clear of any
claims or interest of any person previously entitled thereto.
(e) Any portion of the Merger Consideration made available to the
Paying Agent pursuant to Section 2.2(a) hereof to pay for Shares for which
appraisal rights have been perfected shall be returned to Parent upon demand.
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Section 2.3 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the Effective
Time and held by a holder who has not voted in favor of the Merger or consented
thereto in writing and who has demanded appraisal for such Shares in accordance
with the DGCL ("Dissenting Shares") shall not be converted into a right to
receive the Merger Consideration, unless and until such holder fails to perfect
or withdraws or otherwise loses his or her right to appraisal. If after the
Effective Time such holder fails to perfect or withdraws or loses his right to
appraisal, such Shares shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration, without
interest thereon. The Company shall give Parent prompt notice of any demands
received by the Company for appraisal of Shares, and Parent shall have the right
to participate in all negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.
Section 2.4 Company Option Plans. At the Effective Time, each then
outstanding option (collectively, the "Options") to purchase or acquire shares
of Company Common Stock under the Company's 1993 Stock Option Plan, as amended,
the Company's 1998 Incentive Compensation Plan and the director option to
purchase 48,660 shares of Company Common Stock (collectively, the "Option
Plans"), whether or not then exercisable or vested, shall be cancelled and shall
represent the right to receive in cash an amount equal to the product of (i) the
number of shares of Company Common Stock subject to each such Option and (ii)
the excess of (A) the Common Stock Merger Consideration over (B) the per share
exercise price of such Option. Prior to the Effective Time, the Company shall
take all actions (including, if appropriate, obtaining any consents from holders
of Options or making any amendments to the terms of the Option Plans) that are
necessary to give effect to the transactions contemplated by this Section.
Notwithstanding any other provision of this Section, payment may be withheld in
respect of any stock option until necessary consents are obtained.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser as
follows:
Section 3.1 Organization; Subsidiaries. (a) Each of the Company and
its Subsidiaries is a corporation or other entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be in good standing
would not reasonably be expected to have a Company Material Adverse Effect (as
hereinafter defined). Each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the property owned or leased by it or the
nature of the business conducted by it makes such
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<PAGE> 16
qualification necessary, except where the failure to be so duly qualified and in
good standing would not reasonably be expected to have a Company Material
Adverse Effect. As used in this Agreement, the word "Subsidiary" means, with
respect to any party, any corporation, partnership or other entity or
organization, whether incorporated or unincorporated, of which (i) such party or
any other Subsidiary of such party is a general partner (excluding such
partnerships where such party or any Subsidiary of such party does not have a
majority of the voting interest in such partnership) or (ii) at least a majority
of the securities or other interests having by their terms ordinary voting power
to elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries. As used in
this Agreement, "Company Material Adverse Effect" means any change in or effect
on the business of the Company and its Subsidiaries that is materially adverse
to the business, financial condition, assets or results of operations of the
Company and its Subsidiaries taken as a whole, but excluding (i) any change
resulting from general economic or industry conditions and (ii) any circumstance
arising from any act or omission on the part of the Parent or the Purchaser not
otherwise contemplated by this Agreement. Section 3.1 of the disclosure
schedules delivered to Parent by the Company on or prior to entering into this
Agreement (the "Company Disclosure Schedule") sets forth a complete and correct
list of all of the Company's Subsidiaries and their respective jurisdictions of
incorporation or organization. Except as set forth in Section 3.1 of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary holds any
interest in a partnership or joint venture of any kind.
(b) Except as set forth in Section 3.1(b) of the Company
Disclosure Schedule, the Company has heretofore delivered to Parent a complete
and correct copy of each of its Certificate of Incorporation and By-laws, as
currently in effect, and has heretofore made available to Parent a complete and
correct copy of the charter and by-laws of each of its Subsidiaries, as
currently in effect. In all material respects, the minute books of the Company
and the Company Subsidiaries contain accurate records of all meetings and
accurately reflect all other actions taken by the stockholders, the boards of
directors and all committees of the boards of directors of the Company and the
Company Subsidiaries. Complete and accurate copies of all such minute books and
of the stock register of the Company and each Company Subsidiary have been made
available by the Company to Parent.
(c) To the knowledge of the Company, Substrate Technologies Inc.
and TVS Berg Ltd. are currently operating with all necessary permits and
licenses and are in compliance with all applicable laws and regulations, except
where the failure to be in compliance with such laws and regulations would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
Section 3.2 Capitalization. (a) As of the date hereof, the authorized
capital stock of the Company consists of 120,000,000 shares of Company Common
Stock, 7,000,000 shares of Company Class A Common Stock, and 28,500,000 shares
of preferred stock, par value $.01 per share (the "Company Preferred Stock"), of
which 670,000 shares are designated as Series A
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<PAGE> 17
Junior Preferred Stock. As of August 24, 1998, (i) 39,398,204 shares of Company
Common Stock were issued and outstanding, (ii) 2,348,497 shares of Company
Common Stock were reserved for issuance upon exercise of Options granted
pursuant to the Option Plans, (iii) 1,440,784 Options were granted and remained
unexercised pursuant to the Option Plans, (iv) 1,908,554 shares of Company
Common Stock were reserved for issuance upon conversion of outstanding shares of
Company Class A Common Stock, (v) 255,500 shares of Company Common Stock were
issued and held in the treasury of the Company, (vi) 1,908,554 shares of Company
Class A Common Stock were issued and outstanding, (vii) there were no shares of
Company Preferred Stock issued and outstanding and (viii) 670,000 shares of
Series A Junior Preferred Stock were reserved for issuance upon exercise of the
Rights. All the outstanding shares of the Company's capital stock are duly
authorized, validly issued, fully paid, non-assessable and free of preemptive
rights. Since August 24, 1998, no additional shares of capital stock or
securities convertible into or exchangeable for such capital stock, have been
issued other than any shares of Company Common Stock issued upon exercise of the
Options granted under the Option Plans or upon conversion of outstanding shares
of Company Class A Common Stock, and no shares of Company Preferred Stock have
been issued. Section 3.2(a) of the Company Disclosure Schedule identifies (i)
the holders of each of the Options, (ii) the number of Options vested for each
holder, (iii) the Option Plan under which each Option was issued, (iv) the
number of Options held by such holder and (v) the exercise price of each of the
Options. All shares of Company Common Stock subject to issuance as aforesaid,
upon issuance prior to the Effective Time on the terms and conditions specified
in the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights. Except
for shares of Company Common Stock issuable upon exercise of the Options
described in Section 3.2(a) of the Company Disclosure Schedule or upon
conversion of outstanding shares of Company Class A Common Stock, or as
otherwise set forth in Section 3.2(a) of the Company Disclosure Schedule, there
are no (i) options, warrants, calls, subscriptions or other rights, convertible
securities, agreements or commitments of any character obligating the Company or
any Company Subsidiary to issue, transfer or sell any shares of capital stock or
other equity interest in, the Company or any Company Subsidiary or securities
convertible into or exchangeable for such shares or equity interests, (ii)
outstanding contractual obligations or commitments of any character of the
Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any
capital stock of the Company or any Company Subsidiary, (iii) outstanding
contractual obligations or commitments of any character restricting the transfer
of, or requiring the registration for sale of, any capital stock of the Company
or any Company Subsidiary, (iv) outstanding contractual obligations or
commitments of any character granting any preemptive or antidilutive right with
respect to, any capital stock of the Company or any Company Subsidiary or (v)
voting trusts or similar agreements to which the Company or any Company
Subsidiary is a party with respect to the voting of the capital stock of the
Company or any Company Subsidiary. Except as set forth in Section 3.2(a) of the
Company Disclosure Schedule, there are no outstanding contractual obligations of
the Company or any Company Subsidiary to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
Company Subsidiary or any other person, other than guarantees by the Company of
any indebtedness of any Company Subsidiary.
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<PAGE> 18
(b) Each outstanding share of capital stock of each Company
Subsidiary is duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights. Except as disclosed in Section 3.2(b) of the Company
Disclosure Schedule, all of the outstanding shares of capital stock of each
Company Subsidiary are owned of record and beneficially, directly or indirectly,
by the Company, free and clear of all mortgages, security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
the Company's or such other Company Subsidiary's voting rights, charges and
other material encumbrances of any nature whatsoever.
Section 3.3 Authorization; Validity of Agreement; Company Action. The
Company has full corporate power and authority to execute and deliver, and to
perform its obligations under, this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by the Company of
this Agreement, and the consummation by it of the transactions contemplated
hereby, have been duly authorized by its Board of Directors and no other
corporate action on the part of the Company is necessary to authorize the
execution and delivery by the Company of this Agreement and the consummation by
it of the transactions contemplated hereby, except, in the case of the Merger,
for the requisite approval of stockholders contemplated by Section 1.8 hereof,
if applicable. This Agreement has been duly executed and delivered by the
Company and (assuming due and valid authorization, execution and delivery hereof
by Parent and Purchaser) is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 3.4 Consents and Approvals; No Violations. Except as
disclosed in Section 3.4 of the Company Disclosure Schedule and except, with
respect to paragraphs (iv) and (v) hereof, for (a) filings pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and other applicable antitrust or competition laws, (b) applicable
requirements under the Exchange Act, (c) the filing of the Certificate of
Merger, (d) applicable requirements under "takeover" or "blue sky" laws of
various states, and (e) matters specifically described in this Agreement,
neither the execution, delivery or performance of this Agreement by the Company
nor the consummation by the Company of the transactions contemplated hereby will
(i) violate or conflict with any provision of the Certificate of Incorporation
or By-laws of the Company or the charter or by-laws of any of its Subsidiaries,
(ii) result in a violation or breach of, or result in any loss of benefit or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation, acceleration or
modification) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, permit, contract, agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound,
(iii) violate or conflict
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<PAGE> 19
with any order, writ, judgment, injunction or decree binding upon or applicable
to the Company, any of its Subsidiaries or any of their properties or assets,
(iv) violate or conflict with any law, statute, rule or regulation binding upon
or applicable to the Company, any of its Subsidiaries or any of their properties
or assets, (v) require on the part of the Company or any of its Subsidiaries any
action by or in respect of any filing or registration with, notification to, or
authorization, consent or approval of, any court, legislative, executive or
regulatory authority or agency (a "Governmental Entity") or (vi) result in the
creation or imposition of any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind on any asset of the Company or any of its
Subsidiaries, except in the case of clauses (ii), (iv), (v) or (vi) for such
violations, breaches or defaults which, or filings, registrations,
notifications, authorizations, consents or approvals the failure of which to
obtain, would not reasonably be expected to have a Company Material Adverse
Effect or would not materially adversely affect the ability of the Company to
consummate the transactions contemplated by this Agreement.
Section 3.5 SEC Reports and Financial Statements. The Company has
filed all reports required to be filed by it with the SEC pursuant to the
Exchange Act and the Securities Act of 1933, as amended (the "Securities Act"),
since January 1, 1997 (as such documents have been amended since the date of
their filing, collectively, the "Company SEC Documents"). The Company SEC
Documents (a) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (b) as of their
respective filing dates, or if amended, as of the date of the last such
amendment, did not contain any untrue statement of a material fact or omit 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. Each of the historical consolidated balance sheets
(including the related notes) included in the Company SEC Documents fairly
presents in all material respects the financial position of the Company and its
consolidated Subsidiaries as of the date thereof, and the other related
historical statements (including the related notes) included in the Company SEC
Documents fairly present in all material respects the results of operations and
cash flows of the Company and its consolidated Subsidiaries for the respective
periods or as of the respective dates set forth therein. Each of the historical
consolidated balance sheets and historical statements of operations and cash
flow (including the related notes) included in the Company SEC Documents has
been prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved,
except as otherwise noted therein and, in the case of unaudited interim
financial statements, subject to normal year-end adjustments and except as
permitted by Form 10-Q of the SEC. The books and records of the Company and its
Subsidiaries have been, and are being, maintained, in all material respects, in
accordance with GAAP and any other applicable legal and accounting requirements.
Section 3.6 No Undisclosed Liabilities. Except (a) for liabilities
and obligations incurred in the ordinary course of business consistent with past
practices since December 31, 1997, (b) for liabilities and obligations disclosed
in the Company SEC Documents filed prior to the date hereof, (c) for liabilities
and obligations incurred in connection with the Offer and the Merger or
otherwise as contemplated by this Agreement and (d) as disclosed in Section 3.6
of
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the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries
has incurred any liabilities or obligations of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, except for
such liabilities or obligations which would not have a Company Material Adverse
Effect.
Section 3.7 Absence of Certain Changes. Except as (a) disclosed in
the Company SEC Documents filed prior to the date hereof, (b) disclosed in
Section 3.7 of the Company Disclosure Schedule, or (c) contemplated by this
Agreement, since December 31, 1997, the Company has conducted its business in
the ordinary and usual course, consistent with past practices, and there has not
been:
(i) any transaction, commitment, dispute or other event,
occurrence, development of a state of circumstances or facts or
condition (financial or otherwise) of any character (whether or
not in the ordinary course of business consistent with past
practices) which, alone or in the aggregate, has had or would
reasonably be expected to have a Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of
capital stock of the Company or any repurchase, redemption or
other acquisition by the Company or any of its Subsidiaries of
any outstanding shares of capital stock or other securities of,
or other ownership interests in, the Company or such Subsidiary;
(iii) any amendment of any material term of any outstanding
security of the Company or any of its Subsidiaries;
(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 consistent with
past practices and in amounts and on terms consistent with past
practices;
(v) any acquisition, sale or transfer of any material assets
of the Company or any of its Subsidiaries;
(vi) any creation or assumption by the Company or any of its
Subsidiaries of any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind on any material asset other
than in the ordinary course of business consistent with past
practices;
(vii) any transaction or commitment made or any contract or
agreement entered into by the Company or any of its Subsidiaries
or any relinquishment by the Company or any of its Subsidiaries
of any contract or other right or any amendment or termination
of, or default under, any Material Agreement (as defined in
Section 3.8), in each case, material to the Company and its
Subsidiaries, taken as a whole, other than
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<PAGE> 21
transactions and commitments in the ordinary course of business
consistent with past practices;
(viii) any making of any loan, advance or capital
contribution to or investment in any Person other than loans,
advances or capital contributions to or investments in
wholly-owned Subsidiaries of the Company made in the ordinary
course of business consistent with past practices and payroll,
travel and similar advances made in the ordinary course of
business consistent with past practices;
(ix) any damage, destruction or other casualty loss (whether
or not covered by insurance) affecting the business or assets of
the Company or any of its Subsidiaries which, individually or in
the aggregate, has had or would reasonably be expected to have a
Company Material Adverse Effect;
(x) any transaction, agreement or understanding between the
Company or its Subsidiaries on the one hand and any current
director or officer of the Company or any Subsidiary or any
transaction which would be subject to proxy statement disclosure
under the Exchange Act pursuant to the requirements of Item 404
of Regulation S-K (an "Affiliate Transaction");
(xi) any material change in any method of accounting or
accounting practice by the Company or any of its Subsidiaries,
except as required by reason of a concurrent change in GAAP; or
(xii) any (x) increase in compensation, bonus or other
benefits payable (including any retention or stay bonus) to
directors, officers or employees of the Company or any of its
Subsidiaries, other than in the ordinary course of business
consistent with past practices, (y) grant of, or increase in
benefits payable under, any severance or termination pay to any
director, officer or employee of the Company or any of its
Subsidiaries or (z) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any
such existing agreement) with any director, officer or employee
of the Company or any of its Subsidiaries.
Section 3.8 Contracts. Except as disclosed in or attached as exhibits
to the Company SEC Documents or as disclosed in Section 3.8(a) of the Company
Disclosure Schedule, neither the Company nor any of the Company Subsidiaries is
a party to or bound by any contract required to be described in or filed as an
exhibit to the Company's SEC filings (collectively with the documents disclosed
in Section 3.8(b) of the Company Disclosure Schedule, the "Material
Agreements"). The Company has previously made available to Parent true and
correct copies of the Material Agreements. Neither the Company nor any Company
Subsidiary knows of, or has received notice of, any violation or default under
(nor does there exist any condition which with the passage of time or the giving
of notice would cause such a violation of or default under) any Material
Agreement except for violations or defaults that would not,
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<PAGE> 22
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect.
Section 3.9 Employee Benefit Plans; ERISA.
(a) Pension and Multiemployer Plans. The Company and its
Subsidiaries have not during the preceding six years made or had an obligation
to make contributions to any pension plan subject to Title IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or described in
Section 3(37), 4063 or 4064 of ERISA with respect to their employees. With
respect to any Benefit Plan that is a defined benefit plan, as of the date
hereof, all funding requirements have been met in accordance with the law of the
relevant jurisdiction, and the Company has accounted for such plans in
accordance with GAAP, except as would not have a Company Material Adverse
Effect.
(b) Tax Qualification. The Benefit Plans (as defined below) and
their related trusts intended to qualify under Sections 401 and 501(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), respectively, have been
determined by the Internal Revenue Service (the "IRS") to qualify under such
sections, as amended by the Tax Reform Act of 1986, and to the knowledge of the
Company nothing has occurred since the date of such determination letters which
could not be corrected or otherwise remedied without having a Company Material
Adverse Effect.
(c) Compliance with Laws. The Benefit Plans have been maintained
in accordance with their terms and applicable laws, except for any noncompliance
as would not reasonably be expected to result in a Company Material Adverse
Effect.
(d) Claims. Except as disclosed in Section 3.9(d) of the Company
Disclosure Schedule, there are no pending or to the knowledge of the Company
threatened actions, claims or proceedings against any Benefit Plan or its
assets, plan sponsor, plan administrator or fiduciaries with respect to the
operation of such plan (other than routine benefit claims) which would
reasonably be expected to have a Company Material Adverse Effect.
(e) Change in Control. Except as disclosed in Section 3.9(e) of
the Company Disclosure Schedule or in connection with the Options, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any employee (current, former or retired) of the Company and its Subsidiaries,
(ii) increase any benefits under any Benefit Plan or (iii) result in the
acceleration of the time of payment or vesting of any such benefits.
(f) Benefit Plans. For purposes hereof, "Benefit Plans" means all
"employee benefit plans," as defined in Section 3(3) of ERISA, and all bonus or
other incentive compensation, deferred compensation, disability, severance,
stock award, stock option, stock purchase, tuition assistance plans or policies
and each employment or other similar contract,
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<PAGE> 23
each plan or arrangement providing for insurance coverage (including any
self-insured arrangements), supplemental unemployment benefits, vacation
benefits, retirement benefits, profit-sharing, stock appreciation or
post-retirement insurance or benefits, in each case which the Company or any of
its affiliates maintains or to which the Company or any of its affiliates makes
or has an obligation to make contributions with respect to current or former
employees or directors of the Company or any of its affiliates. For purposes of
this Section 3.9, "affiliate" of any Person means any other Person which,
together with such Person, would be treated as a single employer under Section
414 of the Code.
(g) Disclosure. Section 3.9(g) of the Company Disclosure Schedule
contains a list of all of the Benefit Plans. Other than Benefit Plans for
foreign Subsidiaries, copies of the Benefit Plans (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations thereof
have been made available to Purchaser together with, if applicable, (A) the most
recent annual reports (Form 5500 including, if applicable, Schedule B thereto)
prepared in connection with any such plan and (B) the most recent actuarial
valuation report prepared in connection with any such plan. The Company has made
available to the Purchaser copies of the most recent Internal Revenue Service
determination letters with respect to each Benefit Plan which is intended to be
qualified under Section 401(a) of the Code.
(h) Unions. Except as set forth in Section 3.9(h) of the Company
Disclosure Schedule, neither the Company nor any Subsidiary is a party to or
subject to any union contract or collective bargaining agreement for U.S.
employees.
Section 3.10 Litigation. Except as disclosed in Section 3.10 of the
Company Disclosure Schedule or as disclosed in the Company SEC Documents filed
prior to the date hereof or for shareholder suits against the Company related
to, arising out of or resulting from the transactions contemplated by this
Agreement, there is no action, suit, proceeding, audit or investigation pending
or, to the knowledge of the Company, threatened against or involving the Company
or any of its Subsidiaries or any of their respective properties, by or before
any court, governmental or regulatory authority, arbitrator or by any third
party that could prevent, enjoin, or materially alter or delay any of the
transactions contemplated by this Agreement or that, if adversely determined,
would reasonably be expected to have a Company Material Adverse Effect. Except
as disclosed in Section 3.10 of the Company Disclosure Schedule or as disclosed
in the Company SEC Documents filed prior to the date hereof, neither the Company
nor any of its Subsidiaries is subject to any outstanding order, writ,
injunction or decree which has had or, individually or in the aggregate, would
reasonably be expected to have a Company Material Adverse Effect.
Section 3.11 Permits; No Default; Compliance with Applicable Laws.
Each of the Company and the Company Subsidiaries is in possession of all
material franchises, grants, authorizations, licenses, permits, easements,
variances, exceptions, consents, certificates, approvals, clearances and orders
of any Governmental Entity necessary for the Company or any Company Subsidiary
to own, lease and operate its properties or to carry on their respective
businesses substantially in the manner described in the Company SEC Documents
and as it is
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now being conducted (the "Company Permits"), and all such Company Permits are
valid, and in full force and effect, and no suspension or cancellation of any of
the Company Permits is pending or, to the knowledge of the Company, threatened
and no condition exists that with notice or lapse of time or both would
constitute a material default under the Company Permits, and none of the Company
Permits will be terminated or impaired or become terminable, in whole or in
part, as a result of the transactions contemplated hereby. The business of the
Company and each of its Subsidiaries is not in default or violation of, and has
not since January 1, 1998 defaulted on or violated, and to the knowledge of the
Company none is under investigation with respect to or has been threatened to be
charged with or given notice of any default or violation of, any term, condition
or provision of any statute, law, rule, regulation, judgment, decree, order,
permit, license or other governmental authorization or approval (including any
Company Permit) applicable to the Company or any of its Subsidiaries or by which
any property, asset or operation of the Company or any of its Subsidiaries is
bound or affected, including, laws, rules and regulations relating to
occupational health and safety, employee benefits, wages, workplace safety,
equal employment opportunity and race, religious or sex discrimination,
excluding defaults or violations which are disclosed in the Company SEC
Documents or which would not reasonably be expected to have a Company Material
Adverse Effect.
Section 3.12 Taxes. (a) Except as disclosed in Section 3.12 of the
Company Disclosure Schedule: (i) all material Tax Returns required to be filed
by or with respect to the Company and each of its Subsidiaries have been filed
and such Tax Returns were true and correct in all material respects; (ii) the
Company and each of its Subsidiaries has paid (or there has been paid on its
behalf) all material Taxes that are due whether or not shown on any Tax Return,
except for Taxes being contested in good faith by appropriate proceedings and
for which adequate reserves have been established in the Company's financial
statements (as of the date thereof); and (iii) none of the material Tax Returns
filed by the Company and its Subsidiaries is currently the subject of an audit.
(b) Except as disclosed in Section 3.12 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries, (i) currently is the
beneficiary of any extension of time within which to file any material Tax
Return; (ii) has filed a consent under Section 341(f) of the Code concerning
collapsible corporations; (iii) has made any payments, is obligated to make any
payments, or is a party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible under Section 280G
of the Code; (iv) has been a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code during the five-year period
ending on the date the Offer commences; (v) neither the Company nor any of its
Subsidiaries is a party to any material tax allocation or sharing agreement;
(vi) has any liability for the taxes of any person (other than any of the
Company and its Subsidiaries) under Treasury Regulation 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise; or (vii) has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a tax
assessment or deficiency.
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(c) Section 3.12 of the Company Disclosure Schedule lists all
material federal, state, local, and foreign Tax Returns filed with respect to
any of the Company and its Subsidiaries for taxable periods ending after
December 31, 1992, indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject of audit. The Company
has delivered to Purchaser correct and complete copies of all Tax Returns,
examination reports, and statements of deficiencies assessed against or agreed
to by any of the Company and its Subsidiaries for taxable periods ending after
December 31, 1992.
(d) Prior to the Closing Date, the Company shall provide
Purchaser with a U.S. tax balance sheet for the Company for the taxable periods
ending December 31, 1997, such U.S. tax balance sheet having been prepared in a
manner consistent with the U.S. tax balance sheet for the Company for the
taxable period ending December 31, 1996 that was previously provided to
Purchaser by the Company.
(e) As soon as practicable after the execution of this Agreement,
the Company shall provide to Purchaser the taxable income and net operating loss
carryovers to 1998 that the Company expects to report on its Tax Returns for the
taxable periods ending December 31, 1997 and such reported amounts will not
differ materially from those amounts actually reported on the Company's Tax
Returns for the taxable periods ending December 31, 1997.
(f) The term "Taxes" shall mean all taxes, charges, fees, levies,
or other similar assessments or liabilities imposed by the United States of
America, or by any state, local, or foreign government, or any subdivision,
agency, or other similar person of the United States or any such government,
including without limitation (i) income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, and estimated taxes
and (ii) any interest, penalties or additions thereto, whether disputed or not.
(g) The term "Tax Returns" shall mean any report, return,
declaration, claim for refund, or information return or statement relating to
Taxes, including any schedule or attachment thereto, and including any amendment
thereof.
Section 3.13 Real and Personal Property. The Company and its
Subsidiaries, as the case may be, have good and marketable title to all of their
respective real property and good title to all of their respective leasehold
interests and other properties, as reflected in the most recent balance sheet
included in the Company SEC Documents, except for properties and assets that
have been disposed of in the ordinary course of business consistent with past
practices since the date of such balance sheet, free and clear of all mortgages,
liens, pledges, charges or encumbrances of any nature whatsoever, except (i) any
lien for current Taxes, payments of which are not yet delinquent, (ii) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use of the property subject
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thereto or affected thereby, or otherwise materially impair the Company's
business operations (in the manner presently carried on by the Company) or (iii)
as disclosed in the Company SEC Documents. All leases under which the Company
leases any real or personal property are in good standing, valid and effective
in accordance with their respective terms, and there is not, under any of such
leases, any existing default, breach or event which with notice or lapse of time
or both would become a default or breach which could reasonably be expected to
have a Company Material Adverse Effect.
Section 3.14 Intellectual Property. The Company and the Subsidiaries
own or possess adequate licenses or other rights to use all Intellectual
Property Rights necessary to conduct the business now operated by them, except
where the failure to own or possess such licenses or rights has not had and
would not reasonably be expected to have a Company Material Adverse Effect. To
the knowledge of the Company, the Intellectual Property Rights of the Company
and the Subsidiaries do not conflict with or infringe upon any Intellectual
Property Rights of others to the extent that, if sustained, such conflict or
infringement has had and would reasonably be expected to have a Company Material
Adverse Effect. For purposes of this Agreement, "Intellectual Property Right"
means any trademark, service mark, trade name, copyright, patent, software
license, invention, trade secret, know-how or other similar proprietary
intellectual property right (including any registrations or applications for
registration of any of the foregoing).
Section 3.15 Environmental Matters. Except as disclosed in Section
3.15 of the Company Disclosure Schedule or as disclosed in the Company SEC
Documents:
(i) the Company and its Subsidiaries are in compliance with
applicable laws, regulations, judicial decisions, ordinances,
judgments, orders, permits, rules or governmental requirements
relating to the environment, the effect of the environment on
human health and safety, or pollutants, contaminants or any
toxic, radioactive, ignitable, corrosive, reactive or otherwise
hazardous substances, wastes or materials (collectively,
"Environmental Laws"), except for any noncompliance that
individually or in the aggregate would not reasonably be expected
to have a Company Material Adverse Effect;
(ii) there are no outstanding notices of violation, notices,
requests for information, orders, complaints, or penalties
against the Company or any of its Subsidiaries under or pursuant
to Environmental Laws which individually or in the aggregate
would reasonably be expected to have a Company Material Adverse
Effect;
(iii) there are no judicial or administrative proceedings,
investigations or actions pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened, which allege the
violation of or liability under any Environmental Law which
individually or in the aggregate would have reasonably be
expected to have a Company Material Adverse Effect;
(iv) there are no liabilities of or relating to the Company
or any of its Subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, determined,
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determinable or otherwise, arising under or relating to any
Environmental Law which individually or in the aggregate would
reasonably be expected to have a Company Material Adverse Effect,
and there are no known facts, conditions, situations or sets of
circumstances which could reasonably be expected to result in or
be the basis for any such liability which would have a Company
Material Adverse Effect;
(v) any operations conducted in, and each facility or real
property owned, leased or operated by the Company or any of its
Subsidiaries in the State of New Jersey satisfy the requirements
of the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6
et seq. ("ISRA"), and the regulations implemented thereunder,
including but not limited to N.J.A.C. 7:26B-2.3, except where the
failure to satisfy such requirements would not reasonably be
expected to have a Company Material Adverse Effect; and
(vi) consummation of the Offer, the Merger and the
transactions contemplated by this Agreement will not require
compliance with the Connecticut Hazardous Waste Establishment
Transfer Act (General Statutes Section 22a-134, et seq.), as
amended, and any rules or regulations promulgated thereunder
("CTA"), except for any non-compliance that would not reasonably
be expected to have a Company Material Adverse Effect.
Section 3.16 Employee and Labor Matters. (a) Except as set forth in
Section 3.16 of the Company Disclosure Schedule: (i) since January 1, 1997 there
has been no labor strike or work stoppage against, or lockout by, the Company or
any of its Subsidiaries or, to the Company's knowledge, any activity or
proceeding by a labor union or representative thereof to organize any employees
of the Company or any of its Subsidiaries, which employees were not subject to
collective bargaining agreement at December 31, 1997, (ii) there is no unfair
labor practice charge or complaint against the Company or any of its
Subsidiaries pending before, or, to the knowledge of the Company, threatened by,
the National Labor Relations Board, and (iii) there is no pending or, to the
knowledge of the Company, threatened union grievance against the Company or any
of its Subsidiaries that would reasonably be expected to have a Company Material
Adverse Effect.
Section 3.17 Information in Offer Documents. None of the information
supplied or to be supplied by the Company or any of its Subsidiaries, or any of
their officers, directors, employees, representatives or agents for inclusion or
incorporation by reference in the Offer Documents or the Schedule 14D-9,
including any amendments or supplements thereto, contains or, with respect to
the information included or incorporated by reference into the Offer Documents
or the Schedule 14D-9, will contain at the respective times the Offer Documents
and the Schedule 14D-9 are filed with the SEC or first published, sent or given
to the Company's stockholders, any statement which, at such time and in light of
the circumstances under which it is made, is false or misleading with respect to
any material fact, or omit to state any material fact necessary in order to make
the statements therein not false or misleading. Notwithstanding the foregoing,
the Company does not make any representation or warranty with respect to the
information that has been or will be supplied by Parent or the Purchaser or
their officers, directors, employees, representatives or agents for inclusion or
incorporation by
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reference in any of the foregoing documents. The Schedule 14D-9 and any
amendments or supplements thereto will comply in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder.
Section 3.18 Brokers or Finders. The Company represents, as to
itself, its Subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except Morgan
Stanley Dean Witter ("Morgan Stanley"), the fees and expenses of which will be
paid by the Company in accordance with the Company's agreement with such firm, a
true and complete copy of which has heretofore been furnished to Parent. The
Company has no obligations or commitments to any investment banker or financial
advisor in connection with any future transactions that may be considered or
entered into by the Company after the Effective Time.
Section 3.19 Insurance. The Company maintains insurance coverage with
reputable insurers in such amounts and covering such risks as are in accordance
with normal industry practice for companies engaged in businesses similar to
that of the Company (taking into account the cost and availability of such
insurance).
Section 3.20 Opinion of Financial Advisor. The Company has received
the written opinion of Morgan Stanley to the effect that, as of the date hereof,
the consideration to be received by the holders of the Common Shares in the
Offer and the Merger is fair from a financial point of view to such holders. A
copy of such opinion has been provided to the Purchaser.
Section 3.21 Rights Plan; Takeover Laws. (a) The Company and its
Board of Directors have amended the Rights Agreement between the Company and
Harris Trust and Savings Bank dated December 22, 1997 (the "Rights Agreement")
(without redeeming the Rights issued thereunder), which amendment has been
provided to Parent, so that neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (i) cause any
Rights issued pursuant to the Rights Agreement to become exercisable, to be
triggered or to separate from the Shares to which they are attached, (ii) cause
the Parent or the Purchaser or any of their affiliates to be an Acquiring Person
(as defined in the Rights Agreement) in connection with the transactions
contemplated hereby or (iii) trigger other provisions of the Rights Agreement,
including giving rise to a Distribution Date (as defined in the Rights
Agreement) in connection with the transactions contemplated hereby, and such
amendment shall remain in full force and effect from and after the date hereof.
(b) The Company has taken all action required by it in order to
exempt this Agreement and the Stockholders Agreement and the transactions
contemplated hereby and thereby from, and this Agreement and the Stockholders
Agreement and the transactions contemplated hereby and thereby are exempt from,
the requirements of any "moratorium",
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"control share", "fair price" or other anti-takeover laws and regulations
(collectively, "Takeover Laws") of the State of Delaware and any other state.
Section 3.22. Termination Agreement. The Company has entered into a
Termination Agreement (the "Termination Agreement") with Hicks, Muse & Co.
Partners, L.P. Incorporated ("HM&Co") providing for the termination of that
certain Amended and Restated Monitoring and Oversight Agreement dated as of
March 6, 1996 among the Company, Berg Electronics Group, Inc. and HM&Co (the
"Oversight Agreement"). A copy of the Termination Agreement has been provided to
Parent.
Section 3.23. Exon-Florio. Except as disclosed in Section 3.23 of the
Company Disclosure Schedule, to the knowledge of the Company, neither the
Company nor any of its Subsidiaries:
(i) has, or has had within the past three yeas, any contract
with an agency of the Government of the United States with
national defense responsibilities, including any component of the
Department of Defense;
(ii) has, or has had within the past five years, any
contract with any agency of the Government of the United States
involving any information, technology or data which is classified
under Executive Order 12356 of April 2, 1982 or Executive Order
12958 of April 17, 1995;
(iii) is a supplier to any of the military services of the
United States or the Department of Defense of any products or
services (including research and development) as a prime
contractor or a first tier subcontractor or, if known, a
subcontractor at any level or a seller to any such prime
contractor or subcontractor;
(iv) has technology which has military applications;
(v) produces products or technical data subject to validated
licenses or under general license GTDR pursuant to the U.S.
Export Administration Regulations (15 C.F.R. Part 730 et seq.);
or
(vi) produces defense articles or technical data or defense
services subject to the International Traffic in Arms Regulations
(22 C.F.R. Subchapter M).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
AND THE PURCHASER
Parent and the Purchaser jointly and severally represent and warrant
to the Company as follows:
Section 4.1 Organization. Each of Parent and the Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted.
Section 4.2 Authorization; Validity of Agreement; Necessary Action.
Each of Parent and the Purchaser has full corporate power and authority to
execute and deliver, and to perform its obligations under, this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by Parent and the Purchaser of this Agreement, and the consummation
of the transactions contemplated hereby, have been duly authorized by their
respective Boards of Directors and no other corporate action on the part of
Parent and the Purchaser is necessary to authorize the execution and delivery by
Parent and the Purchaser of this Agreement and the consummation by them of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Parent and the Purchaser and (assuming due and valid authorization,
execution and delivery hereof by the Company) is a valid and binding obligation
of each of Parent and the Purchaser, enforceable against them in accordance with
its terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, affecting creditors' rights generally, and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
Section 4.3 Consents and Approvals; No Violations. Except, with
respect to paragraphs (iv) and (v) hereof, for (a) filings pursuant to the HSR
Act and other applicable antitrust or competition laws, (b) applicable
requirements under the Exchange Act, (c) the filing of the Certificate of
Merger, (d) applicable requirements under "takeover" or "blue sky" laws of
various states, and (e) as described in this Agreement, neither the execution,
delivery or performance of this Agreement by Parent and the Purchaser nor the
consummation by Parent and the Purchaser of the transactions contemplated hereby
will (i) violate or conflict with any provision of the charter or by-laws or
other comparable constituent documents of Parent or the Purchaser, (ii) result
in a violation or breach of, or result in any loss of benefit or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation, acceleration or modification) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
Parent or the Purchaser is a party or by which any of them or any of their
properties or assets may be bound, (iii) violate or conflict with any order,
writ, judgment, injunction or decree applicable to or binding upon Parent or the
Purchaser or any of their properties or assets, (iv) violate or conflict with
any law, statute, rule or regulation applicable to or binding upon Parent or the
Purchaser or any of their properties or assets, (v) require on the part of
Parent or the Purchaser any action by or in
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respect of filing or registration with, notification to, or authorization,
consent or approval of, any Governmental Entity or (vi) result in the creation
or imposition of any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind on any asset of the Parent or the Purchaser, except in
the case of clauses (ii), (iv), (v) or (vi) for such violations, breaches or
defaults which, or filings, registrations, notifications, authorizations,
consents or approvals the failure of which to obtain, would not materially
adversely affect the ability of Parent and the Purchaser to consummate the
transactions contemplated by this Agreement.
Section 4.4 Information in Offer Documents; Proxy Statement. None of
the information supplied or to be supplied by Parent or the Purchaser, or any of
their officers, directors, employees, representatives or agents for inclusion or
incorporation by reference in the Offer Documents, the Schedule 14D-9 or the
Proxy Statement, including any amendments or supplements thereto, will, in the
case of the Offer Documents and the Schedule 14D-9, at the respective times the
Offer Documents and the Schedule 14D-9 are filed with the SEC or first
published, sent or given to the Company's stockholders, or, 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 Special Meeting, contain any
statement which, at such time and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein not
false or misleading. Notwithstanding the foregoing, Parent and the Purchaser do
not make any representation or warranty with respect to the information that has
been supplied by the Company or any of its Subsidiaries or their officers,
directors, employees, representatives or agents for inclusion or incorporation
by reference in any of the foregoing documents. The Offer Documents and the
Proxy Statement, in each case, when filed, and any amendments or supplements
thereto, in each case, when filed, will comply in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder.
Section 4.5 Sufficient Funds. Either Parent or the Purchaser has
sufficient funds available to purchase all of the Shares outstanding on a fully
diluted basis, to repay all outstanding indebtedness of the Company and the
Company Subsidiaries that may become due in connection with the transaction
contemplated hereby and to pay all fees and expenses related to the transactions
contemplated by this Agreement.
Section 4.6 Share Ownership. None of Parent, the Purchaser or any of
their respective affiliates beneficially owns any Shares.
Section 4.7 Purchaser's Operations. The Purchaser is a wholly owned
Subsidiary of Parent which was formed solely for the purpose of engaging in the
transactions contemplated hereby and has not engaged in any business activities
or conducted any operations other than in connection with the transactions
contemplated hereby.
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ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company covenants
and agrees that, except (i) as contemplated by this Agreement, (ii) as disclosed
in Section 5.1 of the Company Disclosure Schedule or (iii) as agreed in writing
by Parent, after the date hereof, and prior to the time the directors of the
Purchaser have been elected to, and shall constitute a majority of, the Board of
Directors of the Company pursuant to Section 1.3 (the "Election Date"):
(a) the business of the Company and its Subsidiaries shall be
conducted only in the ordinary course of business, consistent with past
practices and, to the extent consistent therewith, each of the Company and its
Subsidiaries shall use its reasonable best efforts to preserve its business
organization intact and maintain its existing relations with customers,
suppliers and other third parties, and to keep available the services of their
present officers, employees and business associates;
(b) each of the Company and its Subsidiaries will not, directly
or indirectly, (i) amend or propose any change to its Certificate of
Incorporation or By-laws or similar organizational documents or (ii) split,
combine or reclassify its outstanding capital stock;
(c) neither the Company nor any of its Subsidiaries shall: (i)
declare, set aside or pay any dividend or other distribution (whether payable in
cash, stock or property or any combination thereof) with respect to its capital
stock (other than cash dividends from any wholly-owned Subsidiary of the Company
to the Company or any other Subsidiary of the Company all of the capital stock
of which is owned directly or indirectly by the Company); (ii) issue or sell any
additional shares of, or securities convertible into or exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire, any
shares of capital stock of any class of the Company or its Subsidiaries, other
than issuances pursuant to the exercise of Options outstanding on the date
hereof and disclosed on Schedule 3.2(a) hereto or conversion of Class A Shares
into Common Shares in accordance with the terms thereof; (iii) sell, lease,
license (subject to the further restrictions of paragraph (vi) hereof) or
dispose of any assets or properties other than in the ordinary course of
business consistent with past practices which individually or in the aggregate
are in an amount in excess of $500,000; (iv) incur, assume, prepay or modify any
debt, other than in the ordinary course of business consistent with past
practices; (v) license or sublicense (in each case subject to the further
restrictions of paragraph (vi) hereof) any asset or property of the Company or
any Subsidiary of the Company except in the ordinary course of business
consistent with past practice on a basis that results in a positive current
royalty net of any royalties due by the Company or any Subsidiary on account of
sales by the licensee or sublicensee; (vi) license or sublicense any
Intellectual Property of the Company or any Subsidiary; or (vii) redeem,
purchase or otherwise acquire, directly or indirectly, any of its or its
Subsidiaries' capital stock (except as contemplated by
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any employee benefit or stock plans or any employment or severance agreement as
in effect on the date hereof);
(d) neither the Company nor any of its Subsidiaries shall acquire
(by merger, consolidation or acquisition of stock or assets) any corporation,
partnership or other business organization or division thereof;
(e) neither the Company nor any of its Subsidiaries shall make
any investment other than in readily marketable securities in an amount in
excess of $500,000 in the aggregate whether by purchase of stock or securities,
contributions to capital or any property transfer;
(f) neither the Company nor any of its Subsidiaries shall waive,
release, grant, or transfer any rights of value material to the Company and its
Subsidiaries taken as a whole;
(g) neither the Company nor any of its Subsidiaries shall, except
as may be required or contemplated by this Agreement or by applicable law, (i)
enter into, adopt, materially amend or terminate any Benefit Plans, (ii) enter
into or amend any retention plan or stay bonus arrangement, employment or
severance agreement, (iii) increase in any manner the compensation or other
benefits of its officers or directors or (iv) increase in any manner the
compensation or other benefits of any other employees (except, in the case of
this clause (iv), for normal increases in the ordinary course of business,
consistent with past practices);
(h) neither the Company nor any of its Subsidiaries shall: (i)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
(other than Subsidiaries of the Company), except pursuant to contractual
indemnification agreements entered into in the ordinary course of business,
consistent with past practices; (ii) make any loans, advances or capital
contributions to, or investments in, any other person (other than to
Subsidiaries of the Company and payroll, travel and similar advances made in the
ordinary course of business consistent with past practices); (iii) revalue in
any material respect any of its assets, including, without limitation, writing
down the value of inventory in any material manner or write-off of notes or
accounts receivable in any material manner; or (iv) authorize or make capital
expenditures which exceed $2,500,000 individually or $20,000,000 in the
aggregate;
(i) neither the Company nor any of its Subsidiaries shall pay,
discharge or satisfy any material claims, liabilities or obligations (whether
absolute, accrued, asserted or unasserted, contingent or otherwise) other than
the payment, discharge or satisfaction in the ordinary course of business,
consistent with past practices, of liabilities reflected or reserved against in
the consolidated financial statements of the Company or incurred since the most
recent date thereof pursuant to an agreement or transaction described in this
Agreement (including the schedules hereto) or incurred in the ordinary course of
business, consistent with past practices;
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(j) neither the Company nor any of its Subsidiaries shall change
in any material respect any of the accounting methods, principles, policies or
procedures used by it unless required by GAAP or applicable law;
(k) the Company will not amend, modify or terminate any Material
Agreement or enter into any new agreement material to the business of the
Company, other than in the ordinary course of business consistent with past
practices or with the prior written consent of Parent, which consent shall not
be unreasonably withheld;
(l) neither the Company nor any Subsidiary will amend or modify
any existing Affiliate Transaction or enter into any new Affiliate Transaction
other than with the prior written consent of Parent;
(m) neither the Company nor any of its Subsidiaries will take or
commit to take any action that would make any representation or warranty of the
Company hereunder inaccurate in any respect at, or as of any time prior to, the
Election Date; and
(n) neither the Company nor any of its Subsidiaries will
authorize or enter into an agreement to do any of the foregoing.
Section 5.2 Access to Information. (a) Upon reasonable notice, the
Company shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financing sources and other
representatives of Parent, reasonable access, during the period prior to the
Closing Date, to all its offices, properties, books, contracts, commitments and
records and, during such period, the Company shall (and shall cause each of its
Subsidiaries to) furnish promptly to Parent, its officers, employees,
accountants, counsel, financing sources and other representatives (a) a copy of
each report, schedule, registration statement and other document filed or
received by it during such period pursuant to the requirements of federal
securities laws or regulatory boards or agencies and (b) all other information
concerning its business, properties and personnel as Parent may reasonably
request. Unless otherwise required by law and until the Closing Date, Parent
will hold any such information which is nonpublic in confidence in accordance
with the provisions of the Confidentiality Agreement between the Company and
Parent, dated as of July 21, 1998 (the "Confidentiality Agreement").
(b) The Company (i) shall confer on a regular and frequent basis
with one or more designated representatives of Parent to report operational
matters of materiality, the general status of ongoing operations and such other
matters as Purchaser may reasonably request and (ii) shall provide Parent access
to customers and suppliers of the Company and its Subsidiaries.
Section 5.3 Employee Benefits. Parent and the Purchaser agree that
during the period commencing on the Effective Date and ending on the date that
is one year from the
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Effective Date, the Surviving Corporation and its Subsidiaries and successors
shall provide those persons who, immediately prior to the Effective Time, were
employees of the Company or its Subsidiaries ("Retained Employees") with
employee plans and programs that provide benefits substantially comparable in
the aggregate to those provided to such Retained Employees immediately prior to
the Effective Time (disregarding for this purpose any stock options or other
equity based compensation provided to such employees prior to the Effective
Time). With respect to such employee plans and programs provided by the
Surviving Corporation and its Subsidiaries and successors, service accrued by
such Retained Employees during employment with the Company and its Subsidiaries
prior to the Effective Time shall be recognized for all purposes, except to the
extent necessary to prevent duplication of benefits and except for benefit
accrual under any defined benefit pension plan maintained by Purchaser. Amounts
paid before the Effective Time by employees of the Company and its Subsidiaries
under any medical plans of the Company shall after the Effective Time be taken
into account in applying deductible and out-of-pocket limits applicable under
any medical plan provided by Parent in substitution therefor to the same extent
as if such amounts had been paid under such Parent medical plan.
Section 5.4 No Solicitation. (a) From and after the date hereof,
neither the Company nor any of its Subsidiaries shall (whether directly or
indirectly through advisors, agents or other intermediaries), nor shall the
Company or any of its Subsidiaries authorize or permit any of its or their
directors, officers, advisors, agents or representatives, to (i) initiate,
solicit, encourage or facilitate, directly or indirectly, any Acquisition
Proposal (as defined in Section 5.4(c) hereof), (ii) engage in negotiations or
discussions (other than, upon contact initiated by a third party, to advise such
third party of the existence of the restrictions set forth in this Section 5.4)
with, or furnish any information or data to, any third party relating to an
Acquisition Proposal, or (iii) grant any waiver or release under any standstill
or similar agreement with respect to any class of equity securities of the
Company or any of its Subsidiaries. Notwithstanding anything to the contrary
contained in this Section 5.4 or in any other provision of this Agreement, the
Company and its Board of Directors may participate in discussions or
negotiations with or furnish information to any third party making an
Acquisition Proposal not solicited in violation of this Section 5.4 (a
"Potential Acquiror") or approve such an Acquisition Proposal if the Company's
Board of Directors is advised by its financial advisor that such Potential
Acquiror has the financial wherewithal to be reasonably capable of consummating
such an Acquisition Proposal, and the Board determines in good faith (A) after
receiving advice from its financial advisor, that such third party has submitted
to the Company an Acquisition Proposal which is a Superior Proposal (as defined
in Section 5.4(d) hereof), and (B) based upon advice of outside legal counsel,
that the failure to participate in such discussions or negotiations or to
furnish such information or approve an Acquisition Proposal would violate the
Board's fiduciary duties under applicable law. The Company agrees that any
non-public information furnished to a Potential Acquiror will be pursuant to a
confidentiality agreement containing confidentiality and standstill provisions
substantially similar to the confidentiality and standstill provisions of the
Confidentiality Agreement, but in no event less favorable to the Company, in a
material respect. A copy of the confidentiality agreement entered into with the
Potential Acquiror shall be provided to Parent for
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informational purposes only. In the event that the Company shall determine to
provide any information as described above, or shall receive any Acquisition
Proposal, it first shall promptly inform Parent in writing as to the fact that
information is to be provided and shall furnish to Parent the identity of the
recipient of such information and/or the Potential Acquiror and the terms of any
such Acquisition Proposal and shall continue to advise Parent after providing
such information. The Company will immediately cease and cause its advisors,
agents and other intermediaries to terminate any existing activities,
discussions and negotiations conducted heretofore with respect to any
Acquisition Proposal and shall use its reasonable best efforts to cause any
parties in possession of confidential information about the Company that was
furnished by or on behalf of the Company to return or destroy all such
information in the possession of any such party or in the possession of any
agent or advisor of such party.
(b) The Board of Directors of the Company shall not (i) withdraw
or modify or propose to withdraw or modify, in any manner adverse to Parent, the
approval or recommendation of such Board of Directors of this Agreement, the
Offer or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any Acquisition Proposal or (iii) cause or agree to cause the Company
to enter into any letter of intent, agreement in principle or agreement related
to any Acquisition Proposal unless, in each case, the Board determines in good
faith (A) after receiving advice from its financial advisor that such
Acquisition Proposal is a Superior Proposal and (B) based upon advice of outside
legal counsel that the failure to take such action would violate the Board's
fiduciary duties under applicable law.
(c) For purposes of this Agreement, "Acquisition Proposal" shall
mean any inquiry, proposal or offer, whether in writing or otherwise, made by a
third party (other than Parent) relating to (i) any acquisition or purchase of
20% or more of the consolidated assets of the Company and its Subsidiaries or of
20% or more of any class of equity securities of the Company or any of its
Subsidiaries, (ii) any tender offer (including a self tender offer) or exchange
offer that if consummated would result in any third party beneficially owning
20% or more of any class of equity securities of the Company or any of its
Subsidiaries, (iii) any merger, consolidation, business combination, sale of
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its Subsidiaries whose assets, individually or
in the aggregate, constitute more than 20% of the consolidated assets of the
Company and its Subsidiaries or (iv) any other transaction the consummation of
which would reasonably be expected to interfere with in a material way, prevent
or materially delay the Merger or which would reasonably be expected to
materially dilute the benefits to Parent of the transactions contemplated hereby
(but excluding, in each case, the transactions contemplated hereby).
(d) For purposes of the Agreement, the term "Superior Proposal"
means any bona fide Acquisition Proposal, which proposal was not solicited by
the Company after the date of this Agreement, made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than a majority of the Shares then
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outstanding or all or substantially all the assets of the Company, and otherwise
on terms which the Board of Directors of the Company determines in good faith to
be more favorable to the Company and its stockholders than the Offer and the
Merger (based on advice of the Company's financial advisor that the value of the
consideration provided for in such proposal is superior to the value of the
consideration provided for in the Offer and the Merger).
(e) For purposes of the Agreement, the term "third party" means
any person, corporation, entity or "group," as defined in Section 13(d) of the
Exchange Act and the rules of the Commission promulgated thereunder, other than
Parent or any of its affiliates.
(f) Notwithstanding the foregoing, nothing contained in this
Section 5.4 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 which
the Board of Directors of the Company determines in good faith, on the basis of
advice from outside legal counsel (who may be the Company's regularly engaged
outside legal counsel), that such action is required in order to comply with the
fiduciary duties of the Board of Directors to the stockholders of the Company
under applicable law. Notwithstanding anything contained in this Agreement to
the contrary, (i) any action by the Board of Directors permitted to be taken by
this Section 5.4 shall not constitute a breach of this Agreement by the Company
and (ii) any "stop-look-and-listen" communication with respect to the Offer, the
Merger or this Agreement solely of the nature contemplated by Rule 14d-9 under
the Exchange Act made by the Company as a result of an Acquisition Proposal
shall in no event be deemed a withdrawal or modification by the Board of
Directors of its approval or recommendation of the Offer, the Merger or this
Agreement.
Section 5.5 Publicity. The initial press releases with respect to the
execution of this Agreement shall be approved in advance by both Parent and the
Company. Thereafter, so long as this Agreement is in effect, neither the
Company, Parent nor any of their respective affiliates shall issue or cause the
publication of any press release or statement with respect to the Merger, this
Agreement or the other transactions contemplated hereby without prior
consultation with the other party, except as may be required by law or by any
listing agreement with a national securities exchange or national securities
quotation system.
Section 5.6 Indemnification; D&O Insurance. (a) The Company shall,
and from and after the consummation of the Offer, Parent shall or shall cause
the Surviving Corporation or an affiliate of Parent to indemnify, defend and
hold harmless the present and former directors and officers of the Company and
its Subsidiaries (the "Indemnified Parties") from and against all losses,
expenses, claims, damages or liabilities arising out of the transactions
contemplated by this Agreement to the fullest extent provided under the
Company's certificate of incorporation and bylaws in effect on the date hereof;
provided that such indemnification shall be subject to any limitation imposed
from time to time under applicable law. All rights to indemnification and
exculpation existing in favor of the directors and officers of the Company as
provided in the Company's Certificate of Incorporation or By-laws, as in effect
as of the date hereof, with respect to matters occurring through the Effective
Time (including the right
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to advancement of expenses), shall survive the Merger and shall not be amended,
repealed or otherwise modified for a period of six years after the consummation
of the Offer in any manner that would adversely affect the rights of the
individuals who at or prior to the consummation of the Offer were directors or
officers of the Company with respect to occurrences at or prior to the
consummation of the Offer and Parent shall cause the Surviving Corporation to
honor all such rights to indemnification.
(b) For a period of three years after the Effective Time, Parent
will cause the Surviving Corporation to use its reasonable best efforts to
provide directors and officers liability insurance issued by a reputable insurer
in respect of acts and omissions occurring prior to the Effective Time covering
each of the Indemnified Parties currently covered by the Company's officers' and
directors' liability insurance on terms with respect to coverage and amount no
less favorable than those of such policy in effect on the date hereof; provided
that in satisfying its obligation under this Section 5.6, Parent shall not be
obligated to cause the Surviving Corporation to pay premiums in excess of 200%
of the amount per annum the Company paid in its last full fiscal year, which
amount has been disclosed to Parent.
Section 5.7 Approvals and Consents; Cooperation; Notification. (a)
The parties hereto shall use their respective reasonable best efforts, and
cooperate with each other, to (i) determine as promptly as practicable all
governmental and third party authorizations, approvals, consents or waivers,
including, pursuant to the HSR Act and other applicable antitrust or competition
laws, advisable (in Parent's and Purchaser's discretion) or required in order to
consummate the transactions contemplated by this Agreement, including, the Offer
and the Merger, (ii) obtain such authorizations, approvals, consents or waivers
as promptly as practicable and (iii) prepare the Proxy Statement and the Offer
Documents.
(b) The Company, Parent and the Purchaser shall take all actions
necessary to file as soon as practicable all notifications, filings and other
documents required to obtain all governmental authorizations, approvals,
consents or waivers, including, under the HSR Act and other applicable antitrust
or competition laws, and to respond as promptly as practicable to any inquiries
received from the Federal Trade Commission, the Antitrust Division of the
Department of Justice and any other Governmental Entity for additional
information or documentation and to respond as promptly as practicable to all
inquiries and requests received from any Governmental Entity in connection
therewith.
(c) The Company shall give prompt notice to Parent of (i) the
occurrence of any event, condition or development material to the Company and
its Subsidiaries, taken as a whole, (ii) any notice or other communication from
any Person claiming its consent is or may be required in connection with the
transactions contemplated by this Agreement, (iii) any notice or other
communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated by this Agreement and (iv) any
actions, suits, claims, investigations or proceedings commenced or, to the best
of its knowledge threatened against, relating to or involving or otherwise
affecting the Company or any of its Subsidiaries which, if pending on the date
of this Agreement, would have been required to have been
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disclosed pursuant to Section 3.10 or which relate to the consummation of the
transactions contemplated by this Agreement. Each of the Company and Parent
shall give prompt notice to the other of the occurrence or failure to occur of
an event that would, or, with the lapse of time would cause any condition to the
consummation of the Offer or the Merger not to be satisfied.
Section 5.8 Reasonable Best Efforts; Further Assurances. (a) Each of
the parties hereto agrees to use its respective reasonable best efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including the Offer and the Merger.
(b) At and after the Effective Time, the officers and directors
of the Surviving Corporation will be authorized to execute and deliver, in the
name and on behalf of the Company or Purchaser, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of the
Company or Purchaser, any other actions and things to vest, perfect or confirm
of record or otherwise in the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets of the Company
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
Section 5.9 Shareholder Litigation. The Company and Parent agree that
in connection with any litigation which may be brought against the Company or
its directors relating to the transactions contemplated hereby, the Company will
keep Parent, and any counsel which Parent may retain at its own expense,
informed of the course of such litigation, to the extent Parent is not otherwise
a party thereto, and the Company agrees that it will consult with Parent prior
to entering into any settlement or compromise of any such shareholder
litigation; provided, that, no such settlement or compromise will be entered
into without Parent's prior written consent, which consent shall not be
unreasonably withheld.
Section 5.10 Fair Price Statute. If any "fair price" or "control
share acquisition" or "anti-takeover" statute, or similar statute or regulations
shall become applicable to the transactions contemplated by this Agreement or by
the Stockholders Agreement, the Company and the Board of Directors of the
Company shall grant such approvals and take such actions as are necessary so
that the transactions contemplated hereby and thereby may be consummated as
promptly as practicable on the terms contemplated hereby and thereby, and
otherwise to minimize the effects of such statute or regulation on the
transactions contemplated hereby or thereby.
Section 5.11 Non-Solicitation and Non-Competition Agreements. As soon
as practicable following the execution of this Agreement, the Company will enter
into Non-Solicitation and Non-Competition Agreements substantially in the form
of the agreements or as otherwise set forth in Section 5.11 of the Company
Disclosure Schedule with the individuals and the entities listed in such Section
of the Company Disclosure Schedule.
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Section 5.12 Transition Services. The Company shall enter into an
agreement with Mills & Partners pursuant to which, at the election of the
Company, Mills & Partners will provide transition services to the Surviving
Corporation for a period of up to six months (as determined by the Company)
following the Effective Time at a cost that is equal to the cost to Mills &
Partners of providing those services. For the purposes of this Section,
"transition services" means financial, treasury, accounting, tax, audit, benefit
administration, management information services and other related services, and
other similar administrative services currently provided to the Company or its
Subsidiaries by Mills & Partners.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) this Agreement shall have been adopted by the requisite vote
of the holders of Company Stock, if required by applicable law and the
Certificate of Incorporation (provided that Parent shall comply with its
obligations in respect of the voting of Shares set forth in Section 1.8(b));
(b) any waiting period applicable to the Merger under the HSR Act
and other applicable antitrust or competition laws shall have expired or been
terminated, as applicable;
(c) no judgment, statute, rule, regulation, order, decree or
injunction shall have been enacted, promulgated or issued by any Governmental
Entity or court which prohibits or restrains the consummation of the Merger; and
(d) Parent, the Purchaser or their affiliates shall have
purchased shares of Company Stock pursuant to the Offer; provided that neither
Parent nor the Purchaser may invoke this condition if Purchaser shall have
failed to purchase shares of Company Stock so tendered and not withdrawn in
violation of the terms of this Agreement or the Offer.
Section 6.2 Conditions to the Obligations of the Company to Effect
the Merger. The obligation of the Company to effect the Merger shall be further
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) the representations and warranties of Parent and the
Purchaser shall be true and accurate in all material respects as of the
Effective Time as if made at and as of such time (except for those
representations and warranties that address matters only as of a
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particular date or only with respect to a specific period of time which need
only be true and accurate as of such date or with respect to such period); and
(b) each of Parent and the Purchaser shall have performed in all
material respects all of the respective obligations hereunder required to be
performed by Parent or the Purchaser, as the case may be, at or prior to the
Effective Time.
Section 6.3 Conditions to the Obligations of Parent and the Purchaser
to Effect the Merger. The obligations of Parent and the Purchaser to effect the
Merger shall be further subject to the satisfaction at or prior to the Effective
Time of the following conditions:
(a) the representations and warranties of the Company shall be
true and accurate in all material respects as of the Effective Time as if made
at and as of such time (except for those representations and warranties that
address matters only as of a particular date or only with respect to a specific
period of time which need only be true and accurate as of such date or with
respect to such period); and
(b) the Company shall have performed in all material respects all
of the respective obligations hereunder required to be performed by the Company,
at or prior to the Effective Time.
Section 6.4 Exception. The conditions set forth in Section 6.2 and
6.3 hereof shall cease to be conditions to the obligations of the parties if the
Purchaser shall have accepted for payment and paid for Shares validly tendered
pursuant to the Offer.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the
Merger contemplated herein may be abandoned at any time prior to the Effective
Time, whether before or after stockholder approval thereof:
(a) By the mutual consent of Parent, the Purchaser and the
Company.
(b) By either of the Company, on the one hand, or Parent and the
Purchaser, on the other hand:
(i) if shares of Company Stock shall not have been purchased
pursuant to the Offer on or prior to December 31, 1998; provided
further, however, that the right to terminate this Agreement
under this Section 7.1(b)(i) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of Parent or the
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Purchaser, as the case may be, to purchase shares of Company
Stock pursuant to the Offer on or prior to such date; or
(ii) if there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or if
any Governmental Entity shall have issued an order, decree or
ruling or taken any other action (which order, decree, ruling or
other action the parties hereto shall use their respective
reasonable best efforts to lift), in each case restraining,
enjoining or otherwise prohibiting the transactions contemplated
by this Agreement or prohibiting Parent to acquire or hold or
exercise rights of ownership of the Shares, and such order,
decree, ruling or other action shall have become final and
non-appealable.
(c) By the Company:
(i) if, subject to the provisions of Section 5.4(b) hereof
and prior to the purchase of shares of Company Stock pursuant to
the Offer, a third party shall have made an Acquisition Proposal
that the Board of Directors of the Company determines in good
faith, after consultation with its financial advisor, is a
Superior Proposal and the Company shall have executed a
definitive agreement with such third party in respect of such
Superior Proposal; or
(ii) if Parent or the Purchaser shall have terminated the
Offer, or the Offer shall have expired, without Parent or the
Purchaser, as the case may be, purchasing any shares of Company
Stock pursuant thereto; provided that the Company may not
terminate this Agreement pursuant to this Section 7.1(c)(ii) if
the Company is in material breach of this Agreement.
(d) By Parent and the Purchaser if, prior to the purchase of
shares of Company Stock pursuant to the Offer, (i) the Board of Directors of the
Company shall have withdrawn, modified or changed in a manner adverse to Parent
or the Purchaser its approval or recommendation of the Offer, this Agreement or
the Merger; (ii) the Board of Directors of the Company shall have approved or
recommended an Acquisition Proposal or shall have executed an agreement in
principle or definitive agreement relating to an Acquisition Proposal or similar
business combination with a person or entity other than Parent, the Purchaser or
their affiliates (or the Board of Directors of the Company resolves to do any of
the foregoing); or (iii) any person or group (as defined in Section 13(d)(3) of
the Exchange Act) (other than Parent or any of its affiliates) shall have become
the beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange
Act) of at least 50% of the outstanding Shares or shall have acquired, directly
or indirectly, at least 50% of the assets of the Company.
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Section 7.2 Effect of Termination.
(a) In the event of the termination of this Agreement as provided
in Section 7.1, written notice thereof shall forthwith be given to the other
party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and void,
and there shall be no liability on the part of Parent, the Purchaser or the
Company or their respective directors, officers, employees, stockholders,
representatives, agents or advisors other than, with respect to Parent, the
Purchaser and the Company, the obligations pursuant to this Section 7.2,
Sections 5.12, 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.10, 8.11, 8.12, 8.13
and the last sentence of Section 5.2(a). Nothing contained in this Section 7.2
shall relieve Parent, the Purchaser or the Company from liability for willful
breach of this Agreement.
(b) In the event that this Agreement is terminated by the Company
pursuant to Section 7.1(c)(i) hereof or by Parent and the Purchaser pursuant to
Section 7.1(d) hereof, the Company shall pay to Parent by wire transfer of
immediately available funds to an account designated by Parent on the next
business day following such termination, an amount equal to $65,000,000 (the
"Termination Fee").
(c) The Company acknowledges that the agreements contained in
this Section 7.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent would not enter into this
Agreement; accordingly, if the Company fails to promptly pay any amount due
pursuant to this Section 7.2, and, in order to obtain such payment, the other
party commences a suit which results in a judgment against the Company for the
fee or fees and expenses set forth in this Section 7.2, the Company shall also
pay to Parent its costs and expenses incurred in connection with such
litigation.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the parties hereto, by action taken
by their respective Boards of Directors (which in the case of the Company shall
include approvals as contemplated in Section 1.3(b)), at any time prior to the
Closing Date with respect to any of the terms contained herein; provided,
however, that after the approval of this Agreement by the stockholders of the
Company, no such amendment, modification or supplement shall reduce or change
the Merger Consideration or adversely affect the rights of the Company's
stockholders hereunder without the further approval of such stockholders.
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Section 8.2 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time. This Section 8.2 shall not limit any covenant or agreement
contained in this Agreement which by its terms contemplates performance after
the Effective Time.
Section 8.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, with delivery by such service confirmed, 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 Parent or the Purchaser, to:
Tour Framatome
1, Place de la Coupole
92084 Paris La Defense
France
Telephone: 33 (0)1 47 96 14 43
Telecopy: 33 (0)1 47 96 33 88
Attention: Philippe Anglaret
with copies to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4334
Telecopy: (212) 450-5648
Attention: John J. McCarthy, Jr., Esq.
(b) if to the Company, to:
Berg Electronics Corp.
101 South Hanley Road
St. Louis, Missouri 63105
Telephone: (314) 746-2245
Telecopy: (314) 746-2299
Attention: David M. Sindelar
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with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Telephone: (214) 746-7738
Telecopy: (214) 746-7777
Attention: R. Scott Cohen, Esq.
Any notice which is not sent to the party's counsel in the manner and at the
address or telecopy number set forth above within 24 hours following the time
such notice is given to such party shall be deemed not to be validly delivered
to such party.
Section 8.4 Interpretation. The words "hereof", "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include", "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation". The words describing
the singular number shall include the plural and vice versa, and words denoting
any gender shall include all genders and words denoting natural persons shall
include corporations and partnerships and vice versa. The phrase "to the
knowledge of" or any similar phrase shall mean such facts and other information
which as of the date of determination are actually known to any senior or
executive vice president, chief financial officer, general counsel, chief
compliance officer, controller, and any officer superior to any of the
foregoing. The phrases "the date of this Agreement", "the date hereof" and terms
of similar import, unless the context otherwise requires, shall be deemed to
refer to August 27, 1998. As used in this Agreement, the term "affiliate(s)"
shall have the meaning set forth in Rule 12b-2 of the Exchange Act. The parties
have participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement. As used in this
Agreement, "Person" means an individual or corporation, partnership, limited
liability company, association, trust, unincorporated organization, joint
venture, estate, governmental entity or other legal entity.
Section 8.5 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
Section 8.6 Entire Agreement; Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement (a) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the
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subject matter hereof, and (b) except as provided in Section 5.6, are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
Section 8.7 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 8.8 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof or of any other
jurisdiction.
Section 8.9 Specific Performance. Each of the parties hereto
acknowledges and agrees that in the event of any breach of this Agreement, each
non-breaching party would be irreparably and immediately harmed and could not be
made whole by monetary damages. It is accordingly agreed that the parties hereto
(a) will waive, in any action for specific performance, the defense of adequacy
of a remedy at law and the posting of any bond in connection therewith and (b)
shall be entitled, in addition to any other remedy to which they may be entitled
at law or in equity, to compel specific performance of this Agreement in any
action instituted in a court of competent jurisdiction.
Section 8.10 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties hereto, except that Parent and Purchaser
may transfer or assign, in whole or from time to time in part, to one or more of
its affiliates, the right to purchase Shares pursuant to the Offer, but any such
transfer or assignment will not relieve Parent or Purchaser, as the case may be,
of its obligations under the Offer or prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective permitted successors and assigns.
Section 8.11 Expenses. Except as set forth in Section 7.2 hereof, all
costs and expenses incurred in connection with the Offer, the Merger, this
Agreement and the consummation of the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
Section 8.12 Headings. Headings of the Articles and Sections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretative effect whatsoever.
Section 8.13 Waivers. Except as otherwise provided in this Agreement,
any failure of any of the parties to comply with any obligation, covenant,
agreement or condition herein may
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be waived by the party or parties entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
Section 8.14 Disclosure Schedule. The Company Disclosure Schedule
shall be construed with and as an integral part of this Agreement to the same
extent as if the same had been set forth verbatim herein.
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
FRAMATOME CONNECTORS INTERNATIONAL S.A.
By: /s/ PHILIPPE ANGLARET
---------------------------------------
Name: Philippe Anglaret
Title: Chairman and President
BRAVO ACQUISITION CO.
By: /s/ PHILIPPE ANGLARET
---------------------------------------
Name: Philippe Anglaret
Title: Chairman and President
BERG ELECTRONICS CORP.
By: /s/ JAMES N. MILLS
---------------------------------------
Name: James N. Mills
Title: Chairman of the Board and
Chief Executive Officer
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, subject to the
provisions of the Merger Agreement, Parent and the Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to the Purchaser's obligation to pay for or return tendered Shares promptly
after termination or withdrawal of the Offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above, the
payment for, any tendered Shares, and may terminate the Offer and not accept for
payment any tendered Shares if (i) any applicable waiting period under the HSR
Act or other applicable antitrust or competition laws has not expired or been
terminated prior to the expiration of the Offer, (ii) the Minimum Condition has
not been satisfied, or (iii) at any time on or after August 27, 1998, and before
the time of acceptance of Shares for payment pursuant to the Offer, any of the
following shall exist:
(a) there shall be instituted or pending any action or proceeding by
any government or governmental authority or agency, domestic or foreign, before
any court or governmental authority or agency, domestic or foreign, that has
reasonable likelihood of success (i) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or prohibit the
making of the Offer, the acceptance for payment of or payment for some of or all
the Shares by Parent or the consummation by Parent of the Merger, or seeking to
obtain material damages in connection with the transactions contemplated by the
Offer or the Merger, (ii) seeking to restrain or prohibit Parent's ownership or
operation (or that of its respective subsidiaries or affiliates) of all or any
material portion of the business or assets of the Company and its Subsidiaries,
taken as a whole, or of Parent and its subsidiaries, taken as a whole, or to
compel Parent or any of its subsidiaries or affiliates to dispose of or hold
separate all or any material portion of the business or assets of the Company
and its Subsidiaries, taken as a whole, or of Parent and its subsidiaries, taken
as a whole, (iii) seeking to impose or confirm material limitations on the
ability of Parent or any of its subsidiaries or affiliates effectively to
exercise full rights of ownership of the Shares, including, without limitation,
the right to vote any Shares acquired or owned by Parent or any of its
subsidiaries or affiliates on all matters properly presented to the Company's
stockholders, or (iv) seeking to require divestiture by Parent or any of its
subsidiaries or affiliates of all or any material portion of the business or
assets of the Company and its Subsidiaries, taken as a whole; or
(b) there shall be any statute, rule, regulation, order, decree or
injunction enacted, promulgated or issued by any court, government or
governmental authority or agency that is reasonably likely, directly or
indirectly, to result in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;
(c) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and accurate in all material respects as of
the date of consummation of the Offer as though made on or as of such date
(except for those
A-1
<PAGE> 49
representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time which need only be true and
accurate as of such date or with respect to such period);
(d) the Company shall have breached or failed to perform or comply
with, in any material respects, any obligation, agreement or covenant under the
Merger Agreement;
(e) the Merger Agreement shall have been terminated in accordance with
its terms;
(f) the Board of Directors of the Company shall have withdrawn or
modified or changed in a manner adverse to Parent or the Purchaser its approval
or recommendation of the Offer, the Merger Agreement or the Merger or shall have
recommended an Acquisition Proposal or shall have executed an agreement in
principle or definitive agreement relating to an Acquisition Proposal or similar
business combination with a person or entity other than Parent, the Purchaser or
their affiliates or the Board of Directors of the Company shall have adopted a
resolution to do any of the foregoing.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent (subject to any assignment in accordance with Section 8.10 hereof) and,
subject to the Merger Agreement, may be asserted by either of them or may be
waived by Parent or the Purchaser, in whole or in part at any time and from time
to time in the sole discretion of Parent or the Purchaser. The failure by Parent
or the Purchaser at any time to exercise any such rights shall not be deemed a
waiver of any right and each right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
A-2
<PAGE> 1
EXHIBIT 99.(c)(2)
July 21, 1998
Framatome Connectors International
Tour Framatome 1, place de la Coupole
92084 PARIS LA DEFENSE CEDEX
Ladies and Gentlemen:
The purpose of this letter agreement is to reflect the basis upon
which Berg Electronics Corp. ("Company") is willing to provide certain
Information (hereinafter defined) to Framatome Connectors International
("Recipient") for use in connection with a possible transaction between
Recipient and the Company ("Possible Transaction").
For purposes of this letter agreement, "Information" shall mean
all information, documents, and materials that relate to the Possible
Transaction or to the Company or its businesses, operations, or other affairs
and that are furnished to Recipient or its representatives by or on behalf of
the Company, provided that the term "Information" shall not include any
information, documents, or materials that (i) are or become generally available
to the public other than as a result of a disclosure by Recipient or any of its
representatives in violation of this agreement or (ii) are or become available
to Recipient or its representatives on a non-confidential basis from a source
other than the Company or any of its representatives if such source is not known
by Recipient or any of its representatives to be (A) bound by a confidentiality
agreement with the Company or any of its representatives or (B) otherwise
prohibited from transmitting the affected information, documents, or materials
to Recipient or any of its representatives by any contractual, legal, or
fiduciary obligation.
All Information received by Recipient or its representatives shall
be used solely for the purpose of assisting Recipient in evaluating the Possible
Transaction and not in any manner detrimental to the Company. Except as required
by law, judicial or governmental order, or other legal process or pronouncement
(including any discovery request) (collectively, "Law"), neither Recipient nor
its representatives shall, without the Company's prior written consent, disclose
any Information to any person or entity other than Recipient's representatives
on a need to know basis. Recipient shall be liable to the Company for any
breaches of this letter agreement by any of Recipient's representatives.
In addition, without the prior written consent of the Company or
except as required by Law, Recipient will not, and will direct its
representatives not to, disclose to any person either the fact that discussions
with respect to the Possible Transaction are taking place or any of the terms,
conditions or other facts with respect to the Possible Transaction.
<PAGE> 2
Framatome Connectors International
July 21, 1998
Page 2
In the event Recipient or any of its representatives are requested
or required by Law to disclose any Information, Recipient will give the Company
prompt written notice of such request or requirement so that the Company may
seek an appropriate protective order or other remedy, and Recipient will
cooperate with the Company to obtain such protective order or other remedy. In
the event such protective order or other remedy is not obtained, Recipient and
its representatives will furnish only that portion of the Information that, in
the reasonable opinion of Recipient's counsel, is legally required to be
disclosed and will use Recipient's reasonable best efforts to obtain assurances
that confidential treatment will be accorded to such Information.
Recipient hereby acknowledges that the Information is being
furnished in consideration of Recipient's agreement that Recipient and
Recipient's affiliates, as defined in Rule 12b-2 under the Securities Exchange
Act of 1934, as amended ("Exchange Act"), will not (and Recipient and
Recipient's affiliates will not assist or encourage others to) directly or
indirectly, for a period of eighteen (18) months from the date hereof: (a) make
any public announcement with respect to, or submit any proposal for, a
transaction (excluding commercial transactions in the ordinary course of
business) between the Company and Recipient (and/or any of Recipient's
affiliates or any person acting in concert with Recipient) or any such
transaction involving the Company, unless such proposal is directed and
disclosed solely to the management of the Company or its designated
representatives; (b) by purchase or otherwise, acquire, offer to acquire, or
agree to acquire, ownership of any assets or businesses of the Company or its
affiliates or of any securities issued by the Company or its affiliates or any
direct or indirect rights (including convertible securities) or options to
acquire such ownership (or otherwise act in concert with any person which so
acquires, offers to acquire, or agrees to acquire); (c) make, or in any way
participate in, directly or indirectly, any "solicitation" of "proxies" (as such
terms are defined or used in Regulation 14A under the Exchange Act) with respect
to, or seek to advise or influence any person with respect to, the voting of any
securities issued by the Company; (d) initiate, propose or otherwise solicit
stockholders for the approval of one or more stockholder proposals with respect
to the Company as described in Rule 14a-8 under the Exchange Act or induce or
attempt to induce any other person to initiate any stockholder proposal; (e)
acquire or affect the control of the Company or directly or indirectly
participate in or encourage the formation of any "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) which owns or seeks to acquire ownership
of voting securities of the Company, or to acquire or affect control of the
Company; (f) call or seek to have called any meeting of the stockholders of the
Company or execute any written consent in lieu of a meeting of holders of any
securities of the Company; (g) seek election or seek to place a representative
on the Board of Directors of the Company or seek the removal of any member of
the Board of Directors; (h) otherwise, directly or indirectly, alone or in
concert with others, seek to influence or control the management, Board of
Directors or
<PAGE> 3
Framatome Connectors International
July 21, 1998
Page 3
policies of the Company or any of its affiliates; or (i) request any waiver,
modification, termination or amendment of this paragraph or the relinquishment
by the Company of any rights with respect thereto except in connection with a
proposal submitted in the manner contemplated by clause (a) of this paragraph.
Recipient acknowledges that it is aware, and that Recipient will
advise Recipient's representatives who are informed of the Possible Transaction,
that the United States securities laws prohibit any person who has material,
nonpublic information concerning a company from purchasing or selling securities
of that company or disclosing such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
Without the prior written consent of the Company, Recipient and
its affiliates will not, for a period of two (2) years from the date hereof,
solicit any officer or general manager of the Company to become employed or
otherwise retained by Recipient or any of its affiliates; provided, that nothing
herein shall prohibit any advertisement or general solicitation that is not
specifically targeted at such officers, managers or key employees nor shall it
prohibit the solicitation of any such officer, manager or key employee who (i)
initiates employment discussions with you or your affiliates or (ii) is not
employed by the Company on the date you first solicit such officer, manager or
key employee.
Recipient acknowledges that neither the Company nor any of its
representatives is making any representation or warranty, express or implied, as
to the accuracy or completeness of the Information and that the Company
expressly disclaims any and all liability that may be based on the Information,
errors therein and omissions therefrom, and Recipient expressly agrees that
neither the Company nor any of its representatives shall have any liability to
Recipient or any other person resulting from the use of the Information.
Neither the Company nor Recipient shall be under any obligation to
proceed with or consummate any Possible Transaction except as provided in a
definitive written agreement that is duly authorized, executed, and delivered by
both such parties.
Upon the request of the Company, Recipient shall return or
destroy, and shall cause its representatives to return or destroy (in each case
at the Company's option), all originals and copies of all Information held by
Recipient or its representatives.
Recipient agrees that money damages would not be sufficient remedy
for any breach of this letter agreement by Recipient or its representatives, and
that in addition to all other remedies, the Company shall be entitled to
specific performance and injunctive or other equitable relief as a remedy for
any such breach.
<PAGE> 4
Framatome Connectors International
July 21, 1998
Page 4
This letter agreement may be executed in one or more counterparts,
shall terminate on the third anniversary of the date hereof, and shall be
governed by the laws of the State of New York, without regard to principles of
conflicts of laws.
Very truly yours,
BERG ELECTRONICS CORP.
/s/ DAVID M. SINDELAR
--------------------------
David M. Sindelar
Senior Vice President and
Chief Financial Officer
Accepted and agreed to as of the date first set forth above:
FRAMATOME CONNECTORS INTERNATIONAL
By: /s/ MICHEL CUILHE'
--------------------------------
Name: Michel Cuilhe'
------------------------------
Title: Chief Executive Officer
-----------------------------
<PAGE> 1
EXHIBIT 99.(c)(3)
STOCKHOLDERS AGREEMENT
AGREEMENT, dated as of August 27, 1998 among Bravo Acquisition Co., a
Delaware corporation ("BUYER"), and the holders (the "STOCKHOLDERS") of the
shares of capital stock of Berg Electronics Corp., a Delaware corporation (the
"COMPANY"), listed on the signature pages hereof.
WHEREAS, in order to induce Buyer and Framatome Connectors
International S.A. ("PARENT") to enter into an agreement and plan of merger (the
"MERGER AGREEMENT") with the Company, Buyer has requested the Stockholders, and
the Stockholders have agreed, to enter into this Agreement with respect to all
shares of capital stock of the Company that Stockholders beneficially own (the
"SHARES"). Capitalized terms used but not separately defined herein shall have
the meanings assigned to such terms in the Merger Agreement; and
WHEREAS, subject to certain conditions and pursuant to the Merger
Agreement, Buyer shall commence an offer (the "OFFER") to purchase all of the
outstanding shares of Common Stock of the Company, par value $0.01 per share,
and Class A Common Stock of the Company, par value $0.01 per share.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
GRANT OF PROXY; VOTING AGREEMENT; AGREEMENT TO TENDER
SECTION 1.01. Voting Agreement. Each of the Stockholders hereby agrees
to vote all Shares that such Stockholder is entitled to vote at the time of any
vote to approve and adopt the Merger Agreement, the Merger and all agreements
related to the Merger and any actions related thereto at any meeting of the
stockholders of the Company, and at any adjournment thereof, at which such
Merger Agreement and other related agreements (or any amended version thereof),
or such other actions, are submitted for the consideration and vote of the
stockholders of the Company. Each Stockholder hereby agrees that it will not
vote any Shares in favor of the approval of any (i) Acquisition Proposal, (ii)
reorganization, recapitalization, liquidation or winding up of the Company or
any other extraordinary transaction involving the Company, (iii) corporate
action the consummation of which would frustrate the purposes, or prevent or
delay the consummation, of the transactions contemplated by the Merger Agreement
or (iv) other matter relating to, or in connection with, any of the foregoing
matters.
SECTION 1.02. Irrevocable Proxy. Each Stockholder hereby revokes any
<PAGE> 2
and all previous proxies granted with respect to the Shares. By entering into
this Agreement, each Stockholder hereby grants a proxy appointing Buyer as such
Stockholder's attorney-in-fact and proxy, with full power of substitution, for
and in the Stockholder's name, to vote, express, consent or dissent, or
otherwise to utilize such voting power in the manner contemplated by Section
1.01 above as Buyer or its proxy or substitute shall, in Buyer's sole
discretion, deem proper with respect to the Shares. The proxy granted by each
Stockholder pursuant to this Article 1 is irrevocable and is granted in
consideration of Buyer entering into this Agreement and the Merger Agreement and
incurring certain related fees and expenses. The proxy granted by each
Stockholder shall be revoked upon termination of this Agreement in accordance
with its terms. Each Stockholder shall use its best effort to cause any record
owner of Shares to grant to Buyer a proxy to the same effect as that contained
herein. Each Stockholder shall perform such further acts and execute such
further documents as may be required to vest in Buyer the sole power to vote the
Shares during the term of the proxy granted herein.
SECTION 1.03. Agreement to Tender. Each Stockholder hereby agrees to
tender, upon the request of Buyer (and agrees that it will not withdraw),
pursuant to and in accordance with the terms of the Offer, the Shares. Within
five business days after the commencement of the Offer, each Stockholder shall
deliver to the depositary designated in the Offer (i) a letter of transmittal
with respect to the Shares complying with the terms of the Offer, (ii)
certificates representing of the Shares and (iii) all other documents or
instruments required to be delivered pursuant to the terms of the Offer.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
Each Stockholder represents and warrants to Buyer that:
SECTION 2.01. Corporate Authorization. The execution, delivery and
performance by Stockholder of this Agreement and the consummation by Stockholder
of the transactions contemplated hereby are within the corporate powers of
Stockholder and have been duly authorized by all necessary corporate action.
This Agreement constitutes a valid and binding Agreement of Stockholder.
SECTION 2.02. Non-Contravention. The execution, delivery and
performance by Stockholder of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) violate the certificate
of incorporation or bylaws of Stockholder, (ii) violate any applicable law,
rule, regulation, judgment, injunction, order or decree, (iii) require any
consent or other action by any Person under, constitute a default under, or give
rise to any right of
<PAGE> 3
termination, cancellation or acceleration or to a loss of any benefit to which
Stockholder is entitled under any provision of any agreement or other instrument
binding on Stockholder or (iv) result in the imposition of any Lien on any asset
of Stockholder.
SECTION 2.03. Ownership of Shares. Stockholder is the beneficial owner
of the Shares, free and clear of any Lien and any other limitation or
restriction (including any restriction on the right to vote or otherwise dispose
of the Shares). None of the Shares is subject to any voting trust or other
agreement or arrangement with respect to the voting of such Shares.
SECTION 2.04. Total Shares. Except for the Shares set forth on the
signature page hereto, Stockholder does not beneficially own any (i) shares of
capital stock or voting securities of the Company, (ii) securities of the
Company convertible into or exchangeable for shares of capital stock or voting
securities of the Company or (iii) options or other rights to acquire from the
Company any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company.
SECTION 2.05. Finder's Fees. No investment banker, broker, finder or
other intermediary is entitled to a fee or commission from Buyer or the Company
in respect of this Agreement based upon any arrangement or agreement made by or
on behalf of Stockholder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each Stockholder:
SECTION 3.01. Corporate Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated hereby are within the corporate powers of Buyer and
have been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding Agreement of Buyer.
ARTICLE 4
COVENANTS OF STOCKHOLDERS
Each Stockholder hereby covenants and agrees that:
SECTION 4.01. No Proxies for or Encumbrances on Shares. Except pursuant
to the terms of this Agreement, Stockholder shall not, without the prior
<PAGE> 4
written consent of Buyer, directly or indirectly, (i) grant any proxies or enter
into any voting trust or other agreement or arrangement with respect to the
voting of any Shares or (ii) acquire, sell, assign, transfer, encumber or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the direct or indirect acquisition or sale,
assignment, transfer, encumbrance or other disposition of, any Shares during the
term of this Agreement. Stockholder shall not seek or solicit any such
acquisition or sale, assignment, transfer, encumbrance or other disposition or
any such contract, option or other arrangement or understanding and agrees to
notify Buyer promptly, and to provide all details requested by Buyer, if
Stockholder shall be approached or solicited, directly or indirectly, by any
Person with respect to any of the foregoing.
SECTION 4.02. Other Offers. Stockholder and its subsidiaries shall not,
and will use their reasonable best efforts to cause their officers, directors,
employees or other agents not to, directly or indirectly, (i) take any action to
solicit or initiate any Acquisition Proposal or (ii) engage in negotiations
with, or disclose any nonpublic information relating to the Company or any of
its Subsidiaries or afford access to the properties, books or records of the
Company or any of its Subsidiaries to, any Person that may be considering
making, or has made, an Acquisition Proposal or has agreed to endorse an
Acquisition Proposal. Stockholder will promptly notify Buyer after receipt of an
Acquisition Proposal or any indication that any Person is considering making an
Acquisition Proposal or any request for nonpublic information relating to the
Company or any of its Subsidiaries or for access to the properties, books or
records of the Company or any of its Subsidiaries by any Person that may be
considering making, or has made, an Acquisition Proposal and will keep Buyer
fully informed of the status and details of any such Acquisition Proposal,
indication or request. The provisions of this Section 4.02 shall not impose any
additional limitations upon the ability of Stockholder to exercise its fiduciary
duties as a director of the Company provided that Stockholder acts in accordance
with Section 5.4 of the Merger Agreement.
SECTION 4.03. Appraisal Rights. Stockholder agrees not to exercise any
rights (including, without limitation, under Section 262 of the General
Corporation Law of the State of Delaware) to demand appraisal of any Shares
which may arise with respect to the Merger.
ARTICLE 5
MISCELLANEOUS
SECTION 5.01. Further Assurances. Buyer and Stockholders will each
execute and deliver, or cause to be executed and delivered, all further
documents
<PAGE> 5
and instruments and use its reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations, to consummate and make
effective the transactions contemplated by this Agreement.
SECTION 5.02. Amendments; Termination. Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement or
in the case of a waiver, by the party against whom the waiver is to be
effective. This Agreement shall terminate on the later to occur of the
termination of the Merger Agreement in accordance with its terms or April 1,
1999.
SECTION 5.03. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
SECTION 5.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto, except that Buyer may transfer
or assign its rights and obligations to any Affiliate of Buyer.
SECTION 5.05. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware.
SECTION 5.06. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 5.07. Severability. If any term, provision or covenant of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions and
covenants of this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
SECTION 5.08. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement is
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy to which they are entitled at law or in equity.
SECTION 5.09. Capitalized Terms. Capitalized terms used but not defined
herein shall have the respective meanings set forth in the Merger Agreement.
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BRAVO ACQUISITION CO.
By: /s/ PHILIPPE ANGLARET
----------------------------------
Philippe Anglaret
Chairman of the Board and President
<PAGE> 7
STOCKHOLDERS
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ THOMAS O. HICKS
-----------------------------
CLASS OF SHARES Thomas O. Hicks
STOCK OWNED
Common 3,155,119
CLASS OF SHARES Catherine Forgrave Hicks 1993
STOCK OWNED Irrevocable Trust
Common 121,654 By: /s/ THOMAS O. HICKS
---------------------------
Thomas O. Hicks, Trustee
CLASS OF SHARES
STOCK OWNED John H. Hicks 1984 Trust
Common 9,732 By: /s/ THOMAS O. HICKS
---------------------------
Thomas O. Hicks, Trustee
CLASS OF SHARES
STOCK OWNED Mack H. Hicks 1984 Trust
Common 19,732 By: /s/ THOMAS O. HICKS
---------------------------
Thomas O. Hicks, Trustee
CLASS OF SHARES
STOCK OWNED Robert B. Hicks 1984 Trust
Common 19,732 By: /s/ THOMAS O. HICKS
---------------------------
Thomas O. Hicks, Trustee
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
<S> <C> <C>
CLASS OF SHARES
STOCK OWNED Thomas O. Hicks, Jr. 1984 Trust
Common 19,732 By: /s/ THOMAS O. HICKS
--------------------------
Thomas O. Hicks, Trustee
CLASS OF SHARES
STOCK OWNED William C. Hicks 1992 Trust
Common 131,386 By: /s/ THOMAS O. HICKS
--------------------------
Thomas O. Hicks, Trustee
CLASS OF SHARES
STOCK OWNED Hicks Muse Fund I Incorporated
Common 67,451 By: /s/ THOMAS O. HICKS
--------------------------
Thomas O. Hicks, Chairman
of the Board, President and
Chief Executive Officer
CLASS OF SHARES
STOCK OWNED TOH Investors, L.P.
Common 285,000 By: TOH Management
Company, LLC, its
General Partner
By: /s/ THOMAS O. HICKS
----------------------
Thomas O. Hicks,
President
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ JOHN R. MUSE
CLASS OF SHARES ------------------------------
STOCK OWNED John R. Muse
Common 1,721,496
CLASS OF SHARES
STOCK OWNED Muse Children's GS Trust
Common 7,298 By: /s/ THOMAS O. HICKS
---------------------------
Thomas O. Hicks, Trustee
By: /s/ H. RAND REYNOLDS
---------------------------
H. Rand Reynolds, Trustee
CLASS OF SHARES
STOCK OWNED JRM Interim Investors, L.P.
Common 285,000 By: JRM Management Company,
LLC, its General Partner
By: /s/ JOHN R. MUSE
-----------------------
John R. Muse, President
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ JAMES N. MILLS
----------------------------
CLASS OF SHARES James N. Mills
STOCK OWNED
Common 38,600
Class A 960,568
Common
Stock
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ JACK D. FURST
------------------------------
CLASS OF SHARES Jack D. Furst
STOCK OWNED
Common 971,865
CLASS OF SHARES
STOCK OWNED JF Investors, L.P.
Common 140,000 By: Oak Stream Ranch, Inc.,
its General Partner
By: /s/ JACK D. FURST
-----------------------
Jack D. Furst,
Chairman of the Board
</TABLE>
<PAGE> 12
/s/ CHARLES W. TATE
CLASS OF SHARES -------------------------------
STOCK OWNED Charles W. Tate
Common 1,050,079
CLASS OF SHARES
STOCK OWNED Charles W. Tate 1992 Trust
Common 52,714 By: /s/ CHARLES W. TATE
--------------------------
Charles W. Tate, Trustee
By: /s/ BRUCE SCHNITZER
--------------------------
Bruce Schnitzer, Trustee
CLASS OF SHARES
STOCK OWNED CWT Investors, L.P.
Common 140,000 By: CWT Management
Company, LLC, its
General Partner
By: /s/ CHARLES W. TATE
-------------------------
Charles W. Tate, President
<PAGE> 1
EXHIBIT 99.(c)(4)
THIRD AMENDMENT
TO
THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO THE AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of the 31st
day of August, 1998 by and among Berg Electronics Corp. ("Berg"); Berg
Electronics Group, Inc.; Harbor Electronics, Inc.; Berg Employment Company;
Specialty Connector Company; Socket Express, Inc.; Berg Technology, Inc.; Berg
Holdings U.S., Inc.; Berg Electronics Korea Ltd.; Berg Electronics B.V.; Berg
Electronics Manufacturing B.V.; Berg Electronics Distributor B.V.; Berg
Connector Systems S.L.; Berg Connector Systems GmbH; Bergtronics, O.y.; Berg
Electronics, s.r.l.; Berg Electronics Canada, Inc.; Berg Electronics Hong Kong
Limited; Berg Electronics Singapore PTE Ltd.; Berg Electronics S.A. (France);
CBOS Electronics, A.B.; Berg Electronics, S.A. (Switzerland); Connector Systems
Limited; TVS Berg Ltd.; Berg Electronics Taiwan Ltd.; Berg Electronics Japan
K.K.; Berg Electronics Engineering, K.K.; Berg Electronics China Ltd.; Berg
Electronics Nantong, Ltd.; Connector Systems (U.S.), Inc.; and Connector Systems
Technology, N.V. (collectively with Berg, "Employer"), and James N. Mills
("Employee").
WHEREAS, Employer and Employee have entered into that certain
Amended and Restated Executive Employment Agreement dated as of February 1,
1996, as amended by that certain First Amendment to the Amended and Restated
Executive Employment Agreement dated as of August 5, 1996, as further amended by
that certain Second Amended and Restated Executive Employment Agreement dated as
of November 1, 1997 (as so amended, the "Agreement"); and
WHEREAS, Employer and Employee desire to further amend the
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises, Employer and
Employee agree as follows:
<PAGE> 2
1. Section 3(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Without Cause. In the event that (i) Employer terminates
the employment of Employee under this Agreement without Cause or (ii) upon or
following a Change in Control of Berg, Employee elects to retire from or
terminate his employment under this Agreement within six months following such
Change in Control, such retirement or termination shall be deemed for all
purposes of this Agreement to constitute a termination of Employee without
Cause, and Employee shall be entitled to receive the compensation and other
benefits set forth in Section 4(c) below. As used herein, "Change in Control"
shall mean any of the following: (i) any "person", within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than any employee or subsidiary of Berg or any employee benefit
plan (or related trust) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of securities of Berg representing 50%
or more of the combined voting power of Berg's then outstanding voting
securities; (ii) the merger or consolidation of Berg with another person and, as
a result of such merger or consolidation, less than 70% of the outstanding
voting securities of the surviving or resulting person or parent thereof shall
then be owned in the aggregate by the stockholders of Berg immediately prior to
such merger or consolidation; (iii) at any time after the date hereof, the
individuals who constituted the Board of Directors on such date (including, for
this purpose, any new director whose election or nomination for election by
Berg's stockholders was approved by a vote of at least 75% of the directors in
office on such date) cease for any reason to constitute at least a majority of
the Board of Directors; (iv) the consummation of a sale of substantially all of
the assets of Berg; or (v) Berg's adoption of a plan of liquidation. A Change in
Control shall also include any series of transactions occurring during the term
of this Agreement which result in any of the changes described above."
2. Section 4(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Termination Without Cause. If the employment of Employee
under this Agreement is terminated pursuant to prong (i) of the first sentence
of Section 3(c) above, Employee shall be entitled to continue to receive from
Employer (i) Employee's then current salary hereunder, which shall be not less
than the amount specified in the second sentence of Section 2(a) above for the
remainder of the Employment Period or for one (1) year, whichever is longer,
such amount to continue
2
<PAGE> 3
to be paid in accordance with the payroll practices of Employer throughout the
Employment Period, (ii) the benefits to which Employee would otherwise be
entitled pursuant to Sections 2(c) and (d) above and (iii) reimbursement for
expenses incurred by Employee in connection with the ownership and maintenance
of an automobile as contemplated by Section 5 below. If Employee retires or
terminates his employment pursuant to prong (ii) of the first sentence of
Section 3(c) above, Employee shall be entitled to receive from Employer (i) the
product of (A) Employee's then current monthly salary hereunder times (B) the
number of months remaining in the Employment Period, in a cash lump sum, (ii)
the benefits to which Employee would otherwise be entitled pursuant to Sections
2(c) and (d) above and (iii) reimbursement for expenses incurred by Employee in
connection with the ownership and maintenance of an automobile in an amount
equal to the product of (A) $3,600 times (B) the number of months remaining in
the Employment Period, in a cash lump sum. Notwithstanding the foregoing, if
Employee's employment is terminated under either prong of the first sentence of
Section 3(c) hereof upon or immediately following a Change in Control, in lieu
of the benefits (other than the benefits to which he may be entitled pursuant
to Section 2(d) hereof) and payments set forth above, Employee shall receive a
lump sum cash payment equal to $2,974,647. For purposes of the foregoing,
references to the Employment Period shall mean the stated unexpired term of
this Agreement set forth in Section 1(a) above without giving effect to the
termination of Employee hereunder."
3. Non-Compete. (a) Employee, in acknowledgment and
recognition of the highly competitive nature of the business of the Company and
its affiliates, and in consideration of the benefits under this Agreement and
any consideration such Employee may receive in connection with the transactions
contemplated by the Agreement and Plan of Merger by and among Framatome
Connectors International S.A., Bravo Acquisition Co. and Berg dated August 27,
1998, during the term of Employee's employment and for two (2) years thereafter
(the "Non-Compete Term"), will not, directly or indirectly, engage in the
connector business, whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 5%
of the outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent, sales representative or other participant.
(b) During the Non-Compete Term, Employee will not directly or
indirectly induce any current or former employee of the Company or any of its
affiliates to engage in any activity in which such Employee is prohibited from
engaging by paragraph (a) hereof or to terminate his employment relationship, as
applicable, with the Company or any of its affiliates.
3
<PAGE> 4
(c) Employee acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
paragraphs (a) or (b) would be inadequate and, in recognition of this fact,
Employee agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
(d) Employee expressly acknowledges that the scope of the
foregoing covenants is reasonable and necessary in order to protect the
interests of the Company and its affiliates. Notwithstanding the foregoing, if a
final judicial determination is made by a court of competent jurisdiction or an
arbitrator that the time or territory or any other restriction contained in this
Agreement is an unenforceable restriction against Employee, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply
as to such maximum time and territory and to such maximum extent as such court
or arbitrator may determine or indicate to be enforceable. Alternatively, if any
court of competent jurisdiction or arbitrator finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
(e) Notwithstanding anything to the contrary contained in this
Section 3, Employee shall be entitled to engage in any business which derives
not more than 15% of its aggregate revenues from its connector business.
4. Except as expressly amended by this Amendment, the
Agreement shall continue in full force and effect in the form in which it
existed immediately prior to the execution and delivery of this Amendment.
5. The Agreement, as amended by this Amendment, contains the
entire agreement of the parties hereto with respect to the employment of
Employee by the Company.
6. This Amendment may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same document.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
BERG ELECTRONICS CORP.
BERG ELECTRONICS GROUP, INC.
HARBOR ELECTRONICS, INC.
BERG EMPLOYMENT COMPANY
SPECIALTY CONNECTOR COMPANY
SOCKET EXPRESS, INC.
BERG TECHNOLOGY, INC.
BERG HOLDINGS U.S., INC.
BERG ELECTRONICS KOREA LTD.
BERG ELECTRONICS B.V.
BERG ELECTRONICS MANUFACTURING B.V.
BERG ELECTRONICS DISTRIBUTOR B.V.
BERG CONNECTOR SYSTEMS S.L.
BERG CONNECTOR SYSTEMS GMBH
BERGTRONICS, O.Y.
BERG ELECTRONICS, S.R.L.
BERG ELECTRONICS CANADA, INC.
BERG ELECTRONICS HONG KONG LIMITED
BERG ELECTRONICS SINGAPORE PTE LTD.
BERG ELECTRONICS S.A. (FRANCE)
CBOS ELECTRONICS, A.B.
BERG ELECTRONICS, S.A. (SWITZERLAND)
CONNECTOR SYSTEMS LIMITED
TVS BERG LTD.
BERG ELECTRONICS TAIWAN LTD.
BERG ELECTRONICS JAPAN K.K.
BERG ELECTRONICS ENGINEERING, K.K.
BERG ELECTRONICS CHINA LTD.
BERG ELECTRONICS NANTONG, LTD.
CONNECTOR SYSTEMS (U.S.), INC.
CONNECTOR SYSTEMS TECHNOLOGY, N.V.
By: /s/ DAVID M. SINDELAR
----------------------------------------------
David M. Sindelar, Senior Vice President,
on behalf of Employer
/s/ JAMES N. MILLS
------------------------
James N. Mills
5
<PAGE> 1
EXHIBIT 99.(c)(5)
THIRD AMENDMENT
TO
THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO THE AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of the 31st
day of August, 1998 by and among Berg Electronics Corp. ("Berg"); Berg
Electronics Group, Inc.; Harbor Electronics, Inc.; Berg Employment Company;
Specialty Connector Company; Socket Express, Inc.; Berg Technology, Inc.; Berg
Holdings U.S., Inc.; Berg Electronics Korea Ltd.; Berg Electronics B.V.; Berg
Electronics Manufacturing B.V.; Berg Electronics Distributor B.V.; Berg
Connector Systems S.L.; Berg Connector Systems GmbH; Bergtronics, O.y.; Berg
Electronics, s.r.l.; Berg Electronics Canada, Inc.; Berg Electronics Hong Kong
Limited; Berg Electronics Singapore PTE Ltd.; Berg Electronics S.A. (France);
CBOS Electronics, A.B.; Berg Electronics, S.A. (Switzerland); Connector Systems
Limited; TVS Berg Ltd.; Berg Electronics Taiwan Ltd.; Berg Electronics Japan
K.K.; Berg Electronics Engineering, K.K.; Berg Electronics China Ltd.; Berg
Electronics Nantong, Ltd.; Connector Systems (U.S.), Inc.; and Connector Systems
Technology, N.V. (collectively with Berg, "Employer"), and Robert N. Mills
("Employee").
WHEREAS, Employer and Employee have entered into that certain
Amended and Restated Executive Employment Agreement dated as of February 1,
1996, as amended by that certain First Amendment to the Amended and Restated
Executive Employment Agreement dated as of August 5, 1996, as further amended by
that certain Second Amended and Restated Executive Employment Agreement dated as
of November 1, 1997 (as so amended, the "Agreement"); and
WHEREAS, Employer and Employee desire to further amend the
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises, Employer and
Employee agree as follows:
<PAGE> 2
1. Section 3(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Without Cause. In the event that (i) Employer terminates
the employment of Employee under this Agreement without Cause or (ii) upon or
following a Change in Control of Berg, Employee elects to retire from or
terminate his employment under this Agreement within six months following such
Change in Control, such retirement or termination shall be deemed for all
purposes of this Agreement to constitute a termination of Employee without
Cause, and Employee shall be entitled to receive the compensation and other
benefits set forth in Section 4(c) below. As used herein, "Change in Control"
shall mean any of the following: (i) any "person", within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than any employee or subsidiary of Berg or any employee benefit
plan (or related trust) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of securities of Berg representing 50%
or more of the combined voting power of Berg's then outstanding voting
securities; (ii) the merger or consolidation of Berg with another person and, as
a result of such merger or consolidation, less than 70% of the outstanding
voting securities of the surviving or resulting person or parent thereof shall
then be owned in the aggregate by the stockholders of Berg immediately prior to
such merger or consolidation; (iii) at any time after the date hereof, the
individuals who constituted the Board of Directors on such date (including, for
this purpose, any new director whose election or nomination for election by
Berg's stockholders was approved by a vote of at least 75% of the directors in
office on such date) cease for any reason to constitute at least a majority of
the Board of Directors; (iv) the consummation of a sale of substantially all of
the assets of Berg; or (v) Berg's adoption of a plan of liquidation. A Change in
Control shall also include any series of transactions occurring during the term
of this Agreement which result in any of the changes described above."
2. Section 4(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Termination Without Cause. If the employment of Employee
under this Agreement is terminated pursuant to prong (i) of the first sentence
of Section 3(c) above, Employee shall be entitled to continue to receive from
Employer (i) Employee's then current salary hereunder, which shall be not less
than the amount specified in the second sentence of Section 2(a) above for the
remainder of the Employment Period or for one (1) year, whichever is longer,
such amount to continue
2
<PAGE> 3
to be paid in accordance with the payroll practices of Employer throughout the
Employment Period, (ii) the benefits to which Employee would otherwise be
entitled pursuant to Sections 2(c) and (d) above and (iii) reimbursement for
expenses incurred by Employee in connection with the ownership and maintenance
of an automobile as contemplated by Section 5 below. If Employee retires or
terminates his employment pursuant to prong (ii) of the first sentence of
Section 3(c) above, Employee shall be entitled to receive from Employer (i) the
product of (A) Employee's then current monthly salary hereunder times (B) the
number of months remaining in the Employment Period, in a cash lump sum, and
(ii) the benefits to which Employee would otherwise be entitled pursuant to
Sections 2(c) and (d) above. Notwithstanding the foregoing, if Employee's
employment is terminated under either prong of the first sentence of Section
3(c) hereof upon or immediately following a Change in Control, in lieu of the
benefits (other than the benefits to which he may be entitled pursuant to
Section 2(d) hereof) and payments set forth above, Employee shall receive a
lump sum cash payment equal to $408,493. For purposes of the foregoing,
references to the Employment Period shall mean the stated unexpired term of this
Agreement set forth in Section 1(a) above without giving effect to the
termination of Employee hereunder."
3. Non-Compete. (a) Employee, in acknowledgment and
recognition of the highly competitive nature of the business of the Company and
its affiliates, and in consideration of the benefits under this Agreement and
any consideration such Employee may receive in connection with the transactions
contemplated by the Agreement and Plan of Merger by and among Framatome
Connectors International S.A., Bravo Acquisition Co. and Berg dated August 27,
1998, during the term of Employee's employment and for two (2) years thereafter
(the "Non-Compete Term"), will not, directly or indirectly, engage in the
connector business, whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 5%
of the outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent, sales representative or other participant.
(b) During the Non-Compete Term, Employee will not directly or
indirectly induce any current or former employee of the Company or any of its
affiliates to engage in any activity in which such Employee is prohibited from
engaging by paragraph (a) hereof or to terminate his employment relationship, as
applicable, with the Company or any of its affiliates.
(c) Employee acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
paragraphs (a) or (b)
3
<PAGE> 4
would be inadequate and, in recognition of this fact, Employee agrees that, in
the event of such a breach or threatened breach, in addition to any remedies at
law, the Company, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available.
(d) Employee expressly acknowledges that the scope of the
foregoing covenants is reasonable and necessary in order to protect the
interests of the Company and its affiliates. Notwithstanding the foregoing, if a
final judicial determination is made by a court of competent jurisdiction or an
arbitrator that the time or territory or any other restriction contained in this
Agreement is an unenforceable restriction against Employee, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply
as to such maximum time and territory and to such maximum extent as such court
or arbitrator may determine or indicate to be enforceable. Alternatively, if any
court of competent jurisdiction or arbitrator finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
(e) Notwithstanding anything to the contrary contained in this
Section 3, Employee shall be entitled to engage in any business which derives
not more than 15% of its aggregate revenues from its connector business.
4. Except as expressly amended by this Amendment, the
Agreement shall continue in full force and effect in the form in which it
existed immediately prior to the execution and delivery of this Amendment.
5. The Agreement, as amended by this Amendment, contains the
entire agreement of the parties hereto with respect to the employment of
Employee by the Company.
6. This Amendment may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same document.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
BERG ELECTRONICS CORP.
BERG ELECTRONICS GROUP, INC.
HARBOR ELECTRONICS, INC.
BERG EMPLOYMENT COMPANY
SPECIALTY CONNECTOR COMPANY
SOCKET EXPRESS, INC.
BERG TECHNOLOGY, INC.
BERG HOLDINGS U.S., INC.
BERG ELECTRONICS KOREA LTD.
BERG ELECTRONICS B.V.
BERG ELECTRONICS MANUFACTURING B.V.
BERG ELECTRONICS DISTRIBUTOR B.V.
BERG CONNECTOR SYSTEMS S.L.
BERG CONNECTOR SYSTEMS GMBH
BERGTRONICS, O.Y.
BERG ELECTRONICS, S.R.L.
BERG ELECTRONICS CANADA, INC.
BERG ELECTRONICS HONG KONG LIMITED
BERG ELECTRONICS SINGAPORE PTE LTD.
BERG ELECTRONICS S.A. (FRANCE)
CBOS ELECTRONICS, A.B.
BERG ELECTRONICS, S.A. (SWITZERLAND)
CONNECTOR SYSTEMS LIMITED
TVS BERG LTD.
BERG ELECTRONICS TAIWAN LTD.
BERG ELECTRONICS JAPAN K.K.
BERG ELECTRONICS ENGINEERING, K.K.
BERG ELECTRONICS CHINA LTD.
BERG ELECTRONICS NANTONG, LTD.
CONNECTOR SYSTEMS (U.S.), INC.
CONNECTOR SYSTEMS TECHNOLOGY, N.V.
By: /s/ DAVID M. SINDELAR
-----------------------------------------
David M. Sindelar, Senior Vice
President, on behalf of Employer
/s/ ROBERT N. MILLS
------------------------------------
Robert N. Mills
5
<PAGE> 1
EXHIBIT 99.(c)(6)
THIRD AMENDMENT
TO
THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO THE AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of the 31st
day of August, 1998 by and among Berg Electronics Corp. ("Berg"); Berg
Electronics Group, Inc.; Harbor Electronics, Inc.; Berg Employment Company;
Specialty Connector Company; Socket Express, Inc.; Berg Technology, Inc.; Berg
Holdings U.S., Inc.; Berg Electronics Korea Ltd.; Berg Electronics B.V.; Berg
Electronics Manufacturing B.V.; Berg Electronics Distributor B.V.; Berg
Connector Systems S.L.; Berg Connector Systems GmbH; Bergtronics, O.y.; Berg
Electronics, s.r.l.; Berg Electronics Canada, Inc.; Berg Electronics Hong Kong
Limited; Berg Electronics Singapore PTE Ltd.; Berg Electronics S.A. (France);
CBOS Electronics, A.B.; Berg Electronics, S.A. (Switzerland); Connector Systems
Limited; TVS Berg Ltd.; Berg Electronics Taiwan Ltd.; Berg Electronics Japan
K.K.; Berg Electronics Engineering, K.K.; Berg Electronics China Ltd.; Berg
Electronics Nantong, Ltd.; Connector Systems (U.S.), Inc.; and Connector Systems
Technology, N.V. (collectively with Berg, "Employer"), and Timothy L. Conlon
("Employee").
WHEREAS, Employer and Employee have entered into that certain
Amended and Restated Executive Employment Agreement dated as of February 1,
1996, as amended by that certain First Amendment to the Amended and Restated
Executive Employment Agreement dated as of August 5, 1996, as further amended by
that certain Second Amended and Restated Executive Employment Agreement dated as
of November 1, 1997 (as so amended, the "Agreement"); and
WHEREAS, Employer and Employee desire to further amend the
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises, Employer and
Employee agree as follows:
<PAGE> 2
1. Section 3(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Without Cause. In the event that (i) Employer terminates
the employment of Employee under this Agreement without Cause or (ii) upon or
following a Change in Control of Berg, Employee elects to retire from or
terminate his employment under this Agreement within six months following such
Change in Control, such retirement or termination shall be deemed for all
purposes of this Agreement to constitute a termination of Employee without
Cause, and Employee shall be entitled to receive the compensation and other
benefits set forth in Section 4(c) below. As used herein, "Change in Control"
shall mean any of the following: (i) any "person", within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than any employee or subsidiary of Berg or any employee benefit
plan (or related trust) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of securities of Berg representing 50%
or more of the combined voting power of Berg's then outstanding voting
securities; (ii) the merger or consolidation of Berg with another person and, as
a result of such merger or consolidation, less than 70% of the outstanding
voting securities of the surviving or resulting person or parent thereof shall
then be owned in the aggregate by the stockholders of Berg immediately prior to
such merger or consolidation; (iii) at any time after the date hereof, the
individuals who constituted the Board of Directors on such date (including, for
this purpose, any new director whose election or nomination for election by
Berg's stockholders was approved by a vote of at least 75% of the directors in
office on such date) cease for any reason to constitute at least a majority of
the Board of Directors; (iv) the consummation of a sale of substantially all of
the assets of Berg; or (v) Berg's adoption of a plan of liquidation. A Change in
Control shall also include any series of transactions occurring during the term
of this Agreement which result in any of the changes described above."
2. Section 4(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Termination Without Cause. If the employment of Employee
under this Agreement is terminated pursuant to prong (i) of the first sentence
of Section 3(c) above, Employee shall be entitled to continue to receive from
Employer (i) Employee's then current salary hereunder, which shall be not less
than the amount specified in the second sentence of Section 2(a) above for the
remainder of the Employment Period or for one (1) year, whichever is longer,
such amount to continue
2
<PAGE> 3
to be paid in accordance with the payroll practices of Employer throughout the
Employment Period, (ii) the benefits to which Employee would otherwise be
entitled pursuant to Sections 2(c) and (d) above and (iii) reimbursement for
expenses incurred by Employee in connection with the ownership and maintenance
of an automobile as contemplated by Section 5 below. If Employee retires or
terminates his employment pursuant to prong (ii) of the first sentence of
Section 3(c) above, Employee shall be entitled to receive from Employer the
benefits to which Employee would otherwise be entitled pursuant to Sections 2(c)
and (d) above. Notwithstanding the foregoing, if Employee's employment is
terminated under either prong of the first sentence of Section 3(c) hereof upon
or immediately following a Change in Control, Employee shall not be entitled to
any of the foregoing benefits or payments other than benefits to which he may be
entitled pursuant to Section 2(d) hereof. For purposes of the foregoing,
references to the Employment Period shall mean the stated unexpired term of this
Agreement set forth in Section 1(a) above without giving effect to the
termination of Employee hereunder."
3. Non-Compete. (a) Employee, in acknowledgment and
recognition of the highly competitive nature of the business of the Company and
its affiliates, and in consideration of the benefits under this Agreement and
any consideration such Employee may receive in connection with the transactions
contemplated by the Agreement and Plan of Merger by and among Framatome
Connectors International S.A., Bravo Acquisition Co. and Berg dated August 27,
1998, during the term of Employee's employment and for two (2) years thereafter
(the "Non-Compete Term"), will not, directly or indirectly, engage in the
connector business, whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 5%
of the outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent, sales representative or other participant.
(b) During the Non-Compete Term, Employee will not directly or
indirectly induce any current or former employee of the Company or any of its
affiliates to engage in any activity in which such Employee is prohibited from
engaging by paragraph (a) hereof or to terminate his employment relationship, as
applicable, with the Company or any of its affiliates.
(c) Employee acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
paragraphs (a) or (b) would be inadequate and, in recognition of this fact,
Employee agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
3
<PAGE> 4
(d) Employee expressly acknowledges that the scope of the
foregoing covenants is reasonable and necessary in order to protect the
interests of the Company and its affiliates. Notwithstanding the foregoing, if a
final judicial determination is made by a court of competent jurisdiction or an
arbitrator that the time or territory or any other restriction contained in this
Agreement is an unenforceable restriction against Employee, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply
as to such maximum time and territory and to such maximum extent as such court
or arbitrator may determine or indicate to be enforceable. Alternatively, if any
court of competent jurisdiction or arbitrator finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
(e) Notwithstanding anything to the contrary contained in this
Section 3, Employee shall be entitled to engage in any business which derives
not more than 15% of its aggregate revenues from its connector business.
4. Except as expressly amended by this Amendment, the
Agreement shall continue in full force and effect in the form in which it
existed immediately prior to the execution and delivery of this Amendment.
5. The Agreement, as amended by this Amendment, contains the
entire agreement of the parties hereto with respect to the employment of
Employee by the Company.
6. This Amendment may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same document.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
BERG ELECTRONICS CORP.
BERG ELECTRONICS GROUP, INC.
HARBOR ELECTRONICS, INC.
BERG EMPLOYMENT COMPANY
SPECIALTY CONNECTOR COMPANY
SOCKET EXPRESS, INC.
BERG TECHNOLOGY, INC.
BERG HOLDINGS U.S., INC.
BERG ELECTRONICS KOREA LTD.
BERG ELECTRONICS B.V.
BERG ELECTRONICS MANUFACTURING B.V.
BERG ELECTRONICS DISTRIBUTOR B.V.
BERG CONNECTOR SYSTEMS S.L.
BERG CONNECTOR SYSTEMS GMBH
BERGTRONICS, O.Y.
BERG ELECTRONICS, S.R.L.
BERG ELECTRONICS CANADA, INC.
BERG ELECTRONICS HONG KONG LIMITED
BERG ELECTRONICS SINGAPORE PTE LTD.
BERG ELECTRONICS S.A. (FRANCE)
CBOS ELECTRONICS, A.B.
BERG ELECTRONICS, S.A. (SWITZERLAND)
CONNECTOR SYSTEMS LIMITED
TVS BERG LTD.
BERG ELECTRONICS TAIWAN LTD.
BERG ELECTRONICS JAPAN K.K.
BERG ELECTRONICS ENGINEERING, K.K.
BERG ELECTRONICS CHINA LTD.
BERG ELECTRONICS NANTONG, LTD.
CONNECTOR SYSTEMS (U.S.), INC.
CONNECTOR SYSTEMS TECHNOLOGY, N.V.
By: /s/ DAVID M. SINDELAR
-----------------------------------------
David M. Sindelar, Senior Vice
President, on behalf of Employer
/s/ TIMOTHY L. CONLON
------------------------------------
Timothy L. Conlon
5
<PAGE> 1
EXHIBIT 99.(c)(7)
THIRD AMENDMENT
TO
THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO THE AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of the 31st
day of August, 1998 by and among Berg Electronics Corp. ("Berg"); Berg
Electronics Group, Inc.; Harbor Electronics, Inc.; Berg Employment Company;
Specialty Connector Company; Socket Express, Inc.; Berg Technology, Inc.; Berg
Holdings U.S., Inc.; Berg Electronics Korea Ltd.; Berg Electronics B.V.; Berg
Electronics Manufacturing B.V.; Berg Electronics Distributor B.V.; Berg
Connector Systems S.L.; Berg Connector Systems GmbH; Bergtronics, O.y.; Berg
Electronics, s.r.l.; Berg Electronics Canada, Inc.; Berg Electronics Hong Kong
Limited; Berg Electronics Singapore PTE Ltd.; Berg Electronics S.A. (France);
CBOS Electronics, A.B.; Berg Electronics, S.A. (Switzerland); Connector Systems
Limited; TVS Berg Ltd.; Berg Electronics Taiwan Ltd.; Berg Electronics Japan
K.K.; Berg Electronics Engineering, K.K.; Berg Electronics China Ltd.; Berg
Electronics Nantong, Ltd.; Connector Systems (U.S.), Inc.; and Connector Systems
Technology, N.V. (collectively with Berg, "Employer"), and David M. Sindelar
("Employee").
WHEREAS, Employer and Employee have entered into that certain
Amended and Restated Executive Employment Agreement dated as of February 1,
1996, as amended by that certain First Amendment to the Amended and Restated
Executive Employment Agreement dated as of August 5, 1996, as further amended by
that certain Second Amended and Restated Executive Employment Agreement dated as
of November 1, 1997 (as so amended, the "Agreement"); and
WHEREAS, Employer and Employee desire to further amend the
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises, Employer and
Employee agree as follows:
<PAGE> 2
1. Section 3(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Without Cause. In the event that (i) Employer terminates
the employment of Employee under this Agreement without Cause or (ii) upon or
following a Change in Control of Berg, Employee elects to retire from or
terminate his employment under this Agreement within six months following such
Change in Control, such retirement or termination shall be deemed for all
purposes of this Agreement to constitute a termination of Employee without
Cause, and Employee shall be entitled to receive the compensation and other
benefits set forth in Section 4(c) below. As used herein, "Change in Control"
shall mean any of the following: (i) any "person", within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than any employee or subsidiary of Berg or any employee benefit
plan (or related trust) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of securities of Berg representing 50%
or more of the combined voting power of Berg's then outstanding voting
securities; (ii) the merger or consolidation of Berg with another person and, as
a result of such merger or consolidation, less than 70% of the outstanding
voting securities of the surviving or resulting person or parent thereof shall
then be owned in the aggregate by the stockholders of Berg immediately prior to
such merger or consolidation; (iii) at any time after the date hereof, the
individuals who constituted the Board of Directors on such date (including, for
this purpose, any new director whose election or nomination for election by
Berg's stockholders was approved by a vote of at least 75% of the directors in
office on such date) cease for any reason to constitute at least a majority of
the Board of Directors; (iv) the consummation of a sale of substantially all of
the assets of Berg; or (v) Berg's adoption of a plan of liquidation. A Change in
Control shall also include any series of transactions occurring during the term
of this Agreement which result in any of the changes described above."
2. Section 4(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Termination Without Cause. If the employment of Employee
under this Agreement is terminated pursuant to prong (i) of the first sentence
of Section 3(c) above, Employee shall be entitled to continue to receive from
Employer (i) Employee's then current salary hereunder, which shall be not less
than the amount specified in the second sentence of Section 2(a) above for the
remainder of the Employment Period or for one (1) year, whichever is longer,
such amount to continue
2
<PAGE> 3
to be paid in accordance with the payroll practices of Employer throughout the
Employment Period, (ii) the benefits to which Employee would otherwise be
entitled pursuant to Sections 2(c) and (d) above and (iii) reimbursement for
expenses incurred by Employee in connection with the ownership and maintenance
of an automobile as contemplated by Section 5 below. If Employee retires or
terminates his employment pursuant to prong (ii) of the first sentence of
Section 3(c) above, Employee shall be entitled to receive from Employer (i) the
product of (A) Employee's then current monthly salary hereunder times (B) the
number of months remaining in the Employment Period, in a cash lump sum, (ii)
the benefits to which Employee would otherwise be entitled pursuant to Sections
2(c) and (d) above and (iii) reimbursement for expenses incurred by Employee in
connection with the ownership and maintenance of an automobile in an amount
equal to the product of (A) $1,500 times (B) the number of months remaining in
the Employment Period, in a cash lump sum. Notwithstanding the foregoing, if
Employee's employment is terminated under either prong of the first sentence of
Section 3(c) hereof upon or immediately following a Change in Control, in lieu
of the benefits (other than the benefits to which he may be entitled pursuant to
Section 2(d) hereof) and payments set forth above, Employee shall receive a
lump sum cash payment equal to $1,013,063. For purposes of the foregoing,
references to the Employment Period shall mean the stated unexpired term of this
Agreement set forth in Section 1(a) above without giving effect to the
termination of Employee hereunder."
3. Non-Compete. (a) Employee, in acknowledgment and
recognition of the highly competitive nature of the business of the Company and
its affiliates, and in consideration of the benefits under this Agreement and
any consideration such Employee may receive in connection with the transactions
contemplated by the Agreement and Plan of Merger by and among Framatome
Connectors International S.A., Bravo Acquisition Co. and Berg dated August 27,
1998, during the term of Employee's employment and for two (2) years thereafter
(the "Non-Compete Term"), will not, directly or indirectly, engage in the
connector business, whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 5%
of the outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent, sales representative or other participant.
(b) During the Non-Compete Term, Employee will not directly or
indirectly induce any current or former employee of the Company or any of its
affiliates to engage in any activity in which such Employee is prohibited from
engaging by paragraph (a) hereof or to terminate his employment relationship, as
applicable, with the Company or any of its affiliates.
3
<PAGE> 4
(c) Employee acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
paragraphs (a) or (b) would be inadequate and, in recognition of this fact,
Employee agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
(d) Employee expressly acknowledges that the scope of the
foregoing covenants is reasonable and necessary in order to protect the
interests of the Company and its affiliates. Notwithstanding the foregoing, if a
final judicial determination is made by a court of competent jurisdiction or an
arbitrator that the time or territory or any other restriction contained in this
Agreement is an unenforceable restriction against Employee, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply
as to such maximum time and territory and to such maximum extent as such court
or arbitrator may determine or indicate to be enforceable. Alternatively, if any
court of competent jurisdiction or arbitrator finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
(e) Notwithstanding anything to the contrary contained in this
Section 3, Employee shall be entitled to engage in any business which derives
not more than 15% of its aggregate revenues from its connector business.
4. Except as expressly amended by this Amendment, the
Agreement shall continue in full force and effect in the form in which it
existed immediately prior to the execution and delivery of this Amendment.
5. The Agreement, as amended by this Amendment, contains the
entire agreement of the parties hereto with respect to the employment of
Employee by the Company.
6. This Amendment may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same document.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
BERG ELECTRONICS CORP.
BERG ELECTRONICS GROUP, INC.
HARBOR ELECTRONICS, INC.
BERG EMPLOYMENT COMPANY
SPECIALTY CONNECTOR COMPANY
SOCKET EXPRESS, INC.
BERG TECHNOLOGY, INC.
BERG HOLDINGS U.S., INC.
BERG ELECTRONICS KOREA LTD.
BERG ELECTRONICS B.V.
BERG ELECTRONICS MANUFACTURING B.V.
BERG ELECTRONICS DISTRIBUTOR B.V.
BERG CONNECTOR SYSTEMS S.L.
BERG CONNECTOR SYSTEMS GMBH
BERGTRONICS, O.Y.
BERG ELECTRONICS, S.R.L.
BERG ELECTRONICS CANADA, INC.
BERG ELECTRONICS HONG KONG LIMITED
BERG ELECTRONICS SINGAPORE PTE LTD.
BERG ELECTRONICS S.A. (FRANCE)
CBOS ELECTRONICS, A.B.
BERG ELECTRONICS, S.A. (SWITZERLAND)
CONNECTOR SYSTEMS LIMITED
TVS BERG LTD.
BERG ELECTRONICS TAIWAN LTD.
BERG ELECTRONICS JAPAN K.K.
BERG ELECTRONICS ENGINEERING, K.K.
BERG ELECTRONICS CHINA LTD.
BERG ELECTRONICS NANTONG, LTD.
CONNECTOR SYSTEMS (U.S.), INC.
CONNECTOR SYSTEMS TECHNOLOGY, N.V.
By: /s/ JAMES N. MILLS
--------------------------------------------
James N. Mills, Chairman of the Board,
on behalf of Employer
/s/ DAVID M. SINDELAR
-----------------------------------
David M. Sindelar
5
<PAGE> 1
EXHIBIT 99.(c)(8)
THIRD AMENDMENT
TO
THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO THE AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of the 31st
day of August, 1998 by and among Berg Electronics Corp. ("Berg"); Berg
Electronics Group, Inc.; Harbor Electronics, Inc.; Berg Employment Company;
Specialty Connector Company; Socket Express, Inc.; Berg Technology, Inc.; Berg
Holdings U.S., Inc.; Berg Electronics Korea Ltd.; Berg Electronics B.V.; Berg
Electronics Manufacturing B.V.; Berg Electronics Distributor B.V.; Berg
Connector Systems S.L.; Berg Connector Systems GmbH; Bergtronics, O.y.; Berg
Electronics, s.r.l.; Berg Electronics Canada, Inc.; Berg Electronics Hong Kong
Limited; Berg Electronics Singapore PTE Ltd.; Berg Electronics S.A. (France);
CBOS Electronics, A.B.; Berg Electronics, S.A. (Switzerland); Connector Systems
Limited; TVS Berg Ltd.; Berg Electronics Taiwan Ltd.; Berg Electronics Japan
K.K.; Berg Electronics Engineering, K.K.; Berg Electronics China Ltd.; Berg
Electronics Nantong, Ltd.; Connector Systems (U.S.), Inc.; and Connector
Systems Technology, N.V. (collectively with Berg, "Employer"), and W. Thomas
McGhee ("Employee").
WHEREAS, Employer and Employee have entered into that certain
Amended and Restated Executive Employment Agreement dated as of February 1,
1996, as amended by that certain First Amendment to the Amended and Restated
Executive Employment Agreement dated as of August 5, 1996, as further amended
by that certain Second Amended and Restated Executive Employment Agreement
dated as of November 1, 1997 (as so amended, the "Agreement"); and
WHEREAS, Employer and Employee desire to further amend the
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises, Employer and
Employee agree as follows:
<PAGE> 2
1. Section 3(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Without Cause. In the event that (i) Employer terminates
the employment of Employee under this Agreement without Cause or (ii) upon or
following a Change in Control of Berg, Employee elects to retire from or
terminate his employment under this Agreement within six months following such
Change in Control, such retirement or termination shall be deemed for all
purposes of this Agreement to constitute a termination of Employee without
Cause, and Employee shall be entitled to receive the compensation and other
benefits set forth in Section 4(c) below. As used herein, "Change in Control"
shall mean any of the following: (i) any "person", within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than any employee or subsidiary of Berg or any employee
benefit plan (or related trust) becomes the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of securities of Berg
representing 50% or more of the combined voting power of Berg's then
outstanding voting securities; (ii) the merger or consolidation of Berg with
another person and, as a result of such merger or consolidation, less than 70%
of the outstanding voting securities of the surviving or resulting person or
parent thereof shall then be owned in the aggregate by the stockholders of Berg
immediately prior to such merger or consolidation; (iii) at any time after the
date hereof, the individuals who constituted the Board of Directors on such
date (including, for this purpose, any new director whose election or
nomination for election by Berg's stockholders was approved by a vote of at
least 75% of the directors in office on such date) cease for any reason to
constitute at least a majority of the Board of Directors; (iv) the consummation
of a sale of substantially all of the assets of Berg; or (v) Berg's adoption of
a plan of liquidation. A Change in Control shall also include any series of
transactions occurring during the term of this Agreement which result in any of
the changes described above."
2. Section 4(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Termination Without Cause. If the employment of Employee
under this Agreement is terminated pursuant to prong (i) of the first sentence
of Section 3(c) above, Employee shall be entitled to continue to receive from
Employer (i) Employee's then current salary hereunder, which shall be not less
than the amount specified in the second sentence of Section 2(a) above for the
remainder of the Employment Period or for one (1) year, whichever is longer,
such amount to continue
2
<PAGE> 3
to be paid in accordance with the payroll practices of Employer throughout the
Employment Period, (ii) the benefits to which Employee would otherwise be
entitled pursuant to Sections 2(c) and (d) above and (iii) reimbursement for
expenses incurred by Employee in connection with the ownership and maintenance
of an automobile as contemplated by Section 5 below. If Employee retires or
terminates his employment pursuant to prong (ii) of the first sentence of
Section 3(c) above, Employee shall be entitled to receive from Employer (i) the
product of (A) Employee's then current monthly salary hereunder times (B) the
number of months remaining in the Employment Period, in a cash lump sum, (ii)
the benefits to which Employee would otherwise be entitled pursuant to Sections
2(c) and (d) above and (iii) reimbursement for expenses incurred by Employee in
connection with the ownership and maintenance of an automobile in an amount
equal to the product of (A) $1,050 times (B) the number of months remaining in
the Employment Period, in a cash lump sum. Notwithstanding the foregoing, if
Employee's employment is terminated under either prong of the first sentence of
Section 3(c) hereof upon or immediately following a Change in Control, in lieu
of the benefits (other than the benefits to which he may be entitled pursuant to
Section 2(d) hereof) and payments set forth above, Employee shall receive a lump
sum cash payment equal to $676,465. For purposes of the foregoing, references
to the Employment Period shall mean the stated unexpired term of this Agreement
set forth in Section 1(a) above without giving effect to the termination of
Employee hereunder."
3. Non-Compete. (a) Employee, in acknowledgment and
recognition of the highly competitive nature of the business of the Company and
its affiliates, and in consideration of the benefits under this Agreement and
any consideration such Employee may receive in connection with the transactions
contemplated by the Agreement and Plan of Merger by and among Framatome
Connectors International S.A., Bravo Acquisition Co. and Berg dated August 27,
1998, during the term of Employee's employment and for two (2) years thereafter
(the "Non-Compete Term"), will not, directly or indirectly, engage in the
connector business, whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 5%
of the outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent, sales representative or other participant.
(b) During the Non-Compete Term, Employee will not directly or
indirectly induce any current or former employee of the Company or any of its
affiliates to engage in any activity in which such Employee is prohibited from
engaging by paragraph (a) hereof or to terminate his employment relationship,
as applicable, with the Company or any of its affiliates.
3
<PAGE> 4
(c) Employee acknowledges and agrees that the Company's remedies
at law for a breach or threatened breach of any of the provisions of paragraphs
(a) or (b) would be inadequate and, in recognition of this fact, Employee
agrees that, in the event of such a breach or threatened breach, in addition to
any remedies at law, the Company, without posting any bond, shall be entitled
to obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available.
(d) Employee expressly acknowledges that the scope of the
foregoing covenants is reasonable and necessary in order to protect the
interests of the Company and its affiliates. Notwithstanding the foregoing, if
a final judicial determination is made by a court of competent jurisdiction or
an arbitrator that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against Employee, the provisions
of this Agreement shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such maximum extent as such
court or arbitrator may determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction or arbitrator finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained
herein.
(e) Notwithstanding anything to the contrary contained in this
Section 3, Employee shall be entitled to engage in any business which derives
not more than 15% of its aggregate revenues from its connector business.
4. Except as expressly amended by this Amendment, the
Agreement shall continue in full force and effect in the form in which it
existed immediately prior to the execution and delivery of this Amendment.
5. The Agreement, as amended by this Amendment, contains the
entire agreement of the parties hereto with respect to the employment of
Employee by the Company.
6. This Amendment may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same document.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
BERG ELECTRONICS CORP.
BERG ELECTRONICS GROUP, INC.
HARBOR ELECTRONICS, INC.
BERG EMPLOYMENT COMPANY
SPECIALTY CONNECTOR COMPANY
SOCKET EXPRESS, INC.
BERG TECHNOLOGY, INC.
BERG HOLDINGS U.S., INC.
BERG ELECTRONICS KOREA LTD.
BERG ELECTRONICS B.V.
BERG ELECTRONICS MANUFACTURING B.V.
BERG ELECTRONICS DISTRIBUTOR B.V.
BERG CONNECTOR SYSTEMS S.L.
BERG CONNECTOR SYSTEMS GMBH
BERGTRONICS, O.Y.
BERG ELECTRONICS, S.R.L.
BERG ELECTRONICS CANADA, INC.
BERG ELECTRONICS HONG KONG LIMITED
BERG ELECTRONICS SINGAPORE PTE LTD.
BERG ELECTRONICS S.A. (FRANCE)
CBOS ELECTRONICS, A.B.
BERG ELECTRONICS, S.A. (SWITZERLAND)
CONNECTOR SYSTEMS LIMITED
TVS BERG LTD.
BERG ELECTRONICS TAIWAN LTD.
BERG ELECTRONICS JAPAN K.K.
BERG ELECTRONICS ENGINEERING, K.K.
BERG ELECTRONICS CHINA LTD.
BERG ELECTRONICS NANTONG, LTD.
CONNECTOR SYSTEMS (U.S.), INC.
CONNECTOR SYSTEMS TECHNOLOGY, N.V.
By: /s/ DAVID M. SINDELAR
-------------------------------------------------
David M. Sindelar, Senior Vice President,
on behalf of Employer
/s/ W. THOMAS MCGHEE
---------------------------------------------
W. Thomas McGhee
5
<PAGE> 1
EXHIBIT 99.(c)(9)
THIRD AMENDMENT
TO
THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO THE AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of the 31st
day of August, 1998 by and among Berg Electronics Corp. ("Berg"); Berg
Electronics Group, Inc.; Harbor Electronics, Inc.; Berg Employment Company;
Specialty Connector Company; Socket Express, Inc.; Berg Technology, Inc.; Berg
Holdings U.S., Inc.; Berg Electronics Korea Ltd.; Berg Electronics B.V.; Berg
Electronics Manufacturing B.V.; Berg Electronics Distributor B.V.; Berg
Connector Systems S.L.; Berg Connector Systems GmbH; Bergtronics, O.y.; Berg
Electronics, s.r.l.; Berg Electronics Canada, Inc.; Berg Electronics Hong Kong
Limited; Berg Electronics Singapore PTE Ltd.; Berg Electronics S.A. (France);
CBOS Electronics, A.B.; Berg Electronics, S.A. (Switzerland); Connector Systems
Limited; TVS Berg Ltd.; Berg Electronics Taiwan Ltd.; Berg Electronics Japan
K.K.; Berg Electronics Engineering, K.K.; Berg Electronics China Ltd.; Berg
Electronics Nantong, Ltd.; Connector Systems (U.S.), Inc.; and Connector Systems
Technology, N.V. (collectively with Berg, "Employer"), and Larry S. Bacon
("Employee").
WHEREAS, Employer and Employee have entered into that certain
Amended and Restated Executive Employment Agreement dated as of February 1,
1996, as amended by that certain First Amendment to the Amended and Restated
Executive Employment Agreement dated as of August 5, 1996, as further amended by
that certain Second Amended and Restated Executive Employment Agreement dated as
of November 1, 1997 (as so amended, the "Agreement"); and
WHEREAS, Employer and Employee desire to further amend the
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises, Employer and
Employee agree as follows:
<PAGE> 2
1. Section 3(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Without Cause. In the event that (i) Employer terminates
the employment of Employee under this Agreement without Cause or (ii) upon or
following a Change in Control of Berg, Employee elects to retire from or
terminate his employment under this Agreement within six months following such
Change in Control, such retirement or termination shall be deemed for all
purposes of this Agreement to constitute a termination of Employee without
Cause, and Employee shall be entitled to receive the compensation and other
benefits set forth in Section 4(c) below. As used herein, "Change in Control"
shall mean any of the following: (i) any "person", within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than any employee or subsidiary of Berg or any employee benefit
plan (or related trust) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of securities of Berg representing 50%
or more of the combined voting power of Berg's then outstanding voting
securities; (ii) the merger or consolidation of Berg with another person and, as
a result of such merger or consolidation, less than 70% of the outstanding
voting securities of the surviving or resulting person or parent thereof shall
then be owned in the aggregate by the stockholders of Berg immediately prior to
such merger or consolidation; (iii) at any time after the date hereof, the
individuals who constituted the Board of Directors on such date (including, for
this purpose, any new director whose election or nomination for election by
Berg's stockholders was approved by a vote of at least 75% of the directors in
office on such date) cease for any reason to constitute at least a majority of
the Board of Directors; (iv) the consummation of a sale of substantially all of
the assets of Berg; or (v) Berg's adoption of a plan of liquidation. A Change in
Control shall also include any series of transactions occurring during the term
of this Agreement which result in any of the changes described above."
2. Section 4(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Termination Without Cause. If the employment of Employee
under this Agreement is terminated pursuant to prong (i) of the first sentence
of Section 3(c) above, Employee shall be entitled to continue to receive from
Employer (i) Employee's then current salary hereunder, which shall be not less
than the amount specified in the second sentence of Section 2(a) above for the
remainder of the Employment Period or for one (1) year, whichever is longer,
such amount to continue
2
<PAGE> 3
to be paid in accordance with the payroll practices of Employer throughout the
Employment Period, (ii) the benefits to which Employee would otherwise be
entitled pursuant to Sections 2(c) and (d) above and (iii) reimbursement for
expenses incurred by Employee in connection with the ownership and maintenance
of an automobile as contemplated by Section 5 below. If Employee retires or
terminates his employment pursuant to prong (ii) of the first sentence of
Section 3(c) above, Employee shall be entitled to receive from Employer (i) the
product of (A) Employee's then current monthly salary hereunder times (B) the
number of months remaining in the Employment Period, in a cash lump sum, (ii)
the benefits to which Employee would otherwise be entitled pursuant to Sections
2(c) and (d) above and (iii) reimbursement for expenses incurred by Employee in
connection with the ownership and maintenance of an automobile in an amount
equal to the product of (A) $1,050 times (B) the number of months remaining in
the Employment Period, in a cash lump sum. Notwithstanding the foregoing, if
Employee's employment is terminated under either prong of the first sentence of
Section 3(c) hereof upon or immediately following a Change in Control, in lieu
of the benefits (other than the benefits to which he may be entitled pursuant to
Section 2(d) hereof) and payments set forth above, Employee shall receive a lump
sum cash payment equal to $653,135. For purposes of the foregoing, references to
the Employment Period shall mean the stated unexpired term of this Agreement set
forth in Section 1(a) above without giving effect to the termination of Employee
hereunder."
3. Non-Compete. (a) Employee, in acknowledgment and
recognition of the highly competitive nature of the business of the Company and
its affiliates, and in consideration of the benefits under this Agreement and
any consideration such Employee may receive in connection with the transactions
contemplated by the Agreement and Plan of Merger by and among Framatome
Connectors International S.A., Bravo Acquisition Co. and Berg dated August 27,
1998, during the term of Employee's employment and for two (2) years thereafter
(the "Non-Compete Term"), will not, directly or indirectly, engage in the
connector business, whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 5%
of the outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent, sales representative or other participant.
(b) During the Non-Compete Term, Employee will not directly or
indirectly induce any current or former employee of the Company or any of its
affiliates to engage in any activity in which such Employee is prohibited from
engaging by paragraph (a) hereof or to terminate his employment relationship, as
applicable, with the Company or any of its affiliates.
3
<PAGE> 4
(c) Employee acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
paragraphs (a) or (b) would be inadequate and, in recognition of this fact,
Employee agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
(d) Employee expressly acknowledges that the scope of the
foregoing covenants is reasonable and necessary in order to protect the
interests of the Company and its affiliates. Notwithstanding the foregoing, if a
final judicial determination is made by a court of competent jurisdiction or an
arbitrator that the time or territory or any other restriction contained in this
Agreement is an unenforceable restriction against Employee, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply
as to such maximum time and territory and to such maximum extent as such court
or arbitrator may determine or indicate to be enforceable. Alternatively, if any
court of competent jurisdiction or arbitrator finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
(e) Notwithstanding anything to the contrary contained in this
Section 3, Employee shall be entitled to engage in any business which derives
not more than 15% of its aggregate revenues from its connector business.
4. Except as expressly amended by this Amendment, the
Agreement shall continue in full force and effect in the form in which it
existed immediately prior to the execution and delivery of this Amendment.
5. The Agreement, as amended by this Amendment, contains the
entire agreement of the parties hereto with respect to the employment of
Employee by the Company.
6. This Amendment may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same document.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
BERG ELECTRONICS CORP.
BERG ELECTRONICS GROUP, INC.
HARBOR ELECTRONICS, INC.
BERG EMPLOYMENT COMPANY
SPECIALTY CONNECTOR COMPANY
SOCKET EXPRESS, INC.
BERG TECHNOLOGY, INC.
BERG HOLDINGS U.S., INC.
BERG ELECTRONICS KOREA LTD.
BERG ELECTRONICS B.V.
BERG ELECTRONICS MANUFACTURING B.V.
BERG ELECTRONICS DISTRIBUTOR B.V.
BERG CONNECTOR SYSTEMS S.L.
BERG CONNECTOR SYSTEMS GMBH
BERGTRONICS, O.Y.
BERG ELECTRONICS, S.R.L.
BERG ELECTRONICS CANADA, INC.
BERG ELECTRONICS HONG KONG LIMITED
BERG ELECTRONICS SINGAPORE PTE LTD.
BERG ELECTRONICS S.A. (FRANCE)
CBOS ELECTRONICS, A.B.
BERG ELECTRONICS, S.A. (SWITZERLAND)
CONNECTOR SYSTEMS LIMITED
TVS BERG LTD.
BERG ELECTRONICS TAIWAN LTD.
BERG ELECTRONICS JAPAN K.K.
BERG ELECTRONICS ENGINEERING, K.K.
BERG ELECTRONICS CHINA LTD.
BERG ELECTRONICS NANTONG, LTD.
CONNECTOR SYSTEMS (U.S.), INC.
CONNECTOR SYSTEMS TECHNOLOGY, N.V.
By: /s/ DAVID M. SINDELAR
----------------------------------------
David M. Sindelar, Senior Vice President,
on behalf of Employer
/s/ LARRY S. BACON
-----------------------------------------
Larry S. Bacon
5
<PAGE> 1
EXHIBIT 99.(c)(10)
FIRST AMENDMENT
TO
THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO THE AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of the 31st
day of August, 1998 by and among Berg Electronics Corp. ("Berg"); Berg
Electronics Group, Inc.; Harbor Electronics, Inc.; Berg Employment Company;
Specialty Connector Company; Socket Express, Inc.; Berg Technology, Inc.; Berg
Holdings U.S., Inc.; Berg Electronics Korea Ltd.; Berg Electronics B.V.; Berg
Electronics Manufacturing B.V.; Berg Electronics Distributor B.V.; Berg
Connector Systems S.L.; Berg Connector Systems GmbH; Bergtronics, O.y.; Berg
Electronics, s.r.l.; Berg Electronics Canada, Inc.; Berg Electronics Hong Kong
Limited; Berg Electronics Singapore PTE Ltd.; Berg Electronics S.A. (France);
CBOS Electronics, A.B.; Berg Electronics, S.A. (Switzerland); Connector Systems
Limited; TVS Berg Ltd.; Berg Electronics Taiwan Ltd.; Berg Electronics Japan
K.K.; Berg Electronics Engineering, K.K.; Berg Electronics China Ltd.; Berg
Electronics Nantong, Ltd.; Connector Systems (U.S.), Inc.; and Connector Systems
Technology, N.V. (collectively with Berg, "Employer"), and David J. Webster
("Employee").
WHEREAS, Employer and Employee have entered into that certain
Executive Employment Agreement dated as of November 1, 1997 (the "Agreement");
and
WHEREAS, Employer and Employee desire to further amend the
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises, Employer and
Employee agree as follows:
<PAGE> 2
1. Section 3(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Without Cause. In the event that (i) Employer terminates
the employment of Employee under this Agreement without Cause or (ii) upon or
following a Change in Control of Berg, Employee elects to retire from or
terminate his employment under this Agreement within six months following such
Change in Control, such retirement or termination shall be deemed for all
purposes of this Agreement to constitute a termination of Employee without
Cause, and Employee shall be entitled to receive the compensation and other
benefits set forth in Section 4(c) below. As used herein, "Change in Control"
shall mean any of the following: (i) any "person", within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than any employee or subsidiary of Berg or any employee benefit
plan (or related trust) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of securities of Berg representing 50%
or more of the combined voting power of Berg's then outstanding voting
securities; (ii) the merger or consolidation of Berg with another person and, as
a result of such merger or consolidation, less than 70% of the outstanding
voting securities of the surviving or resulting person or parent thereof shall
then be owned in the aggregate by the stockholders of Berg immediately prior to
such merger or consolidation; (iii) at any time after the date hereof, the
individuals who constituted the Board of Directors on such date (including, for
this purpose, any new director whose election or nomination for election by
Berg's stockholders was approved by a vote of at least 75% of the directors in
office on such date) cease for any reason to constitute at least a majority of
the Board of Directors; (iv) the consummation of a sale of substantially all of
the assets of Berg; or (v) Berg's adoption of a plan of liquidation. A Change in
Control shall also include any series of transactions occurring during the term
of this Agreement which result in any of the changes described above."
2. Section 4(c) of the Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Termination Without Cause. If the employment of Employee
under this Agreement is terminated pursuant to prong (i) of the first sentence
of Section 3(c) above, Employee shall be entitled to continue to receive from
Employer (i) Employee's then current salary hereunder, which shall be not less
than the amount specified in the second sentence of Section 2(a) above for the
remainder of the Employment Period or for one (1) year, whichever is longer,
such amount to continue
2
<PAGE> 3
to be paid in accordance with the payroll practices of Employer throughout the
Employment Period, (ii) the benefits to which Employee would otherwise be
entitled pursuant to Sections 2(c) and (d) above and (iii) reimbursement for
expenses incurred by Employee in connection with the ownership and maintenance
of an automobile as contemplated by Section 5 below. If Employee retires or
terminates his employment pursuant to prong (ii) of the first sentence of
Section 3(c) above, Employee shall be entitled to receive from Employer (i) the
product of (A) Employee's then current monthly salary hereunder times (B) the
number of months remaining in the Employment Period, in a cash lump sum, (ii)
the benefits to which Employee would otherwise be entitled pursuant to Sections
2(c) and (d) above and (iii) reimbursement for expenses incurred by Employee in
connection with the ownership and maintenance of an automobile in an amount
equal to the product of (A) $750 times (B) the number of months remaining in the
Employment Period, in a cash lump sum. Notwithstanding the foregoing, if
Employee's employment is terminated under either prong of the first sentence of
Section 3(c) hereof upon or immediately following a Change in Control, in lieu
of the benefits (other than the benefits to which he may be entitled pursuant to
Section 2(d) hereof) and payments set forth above, Employee shall receive a lump
sum cash payment equal to $513,341. For purposes of the foregoing, references to
the Employment Period shall mean the stated unexpired term of this Agreement set
forth in Section 1(a) above without giving effect to the termination of Employee
hereunder."
3. Non-Compete. (a) Employee, in acknowledgment and
recognition of the highly competitive nature of the business of the Company and
its affiliates, and in consideration of the benefits under this Agreement and
any consideration such Employee may receive in connection with the transactions
contemplated by the Agreement and Plan of Merger by and among Framatome
Connectors International S.A., Bravo Acquisition Co. and Berg dated August 27,
1998, during the term of Employee's employment and for two (2) years thereafter
(the "Non-Compete Term"), will not, directly or indirectly, engage in the
connector business, whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 5%
of the outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent, sales representative or other participant.
(b) During the Non-Compete Term, Employee will not directly or
indirectly induce any current or former employee of the Company or any of its
affiliates to engage in any activity in which such Employee is prohibited from
engaging by paragraph (a) hereof or to terminate his employment relationship, as
applicable, with the Company or any of its affiliates.
3
<PAGE> 4
(c) Employee acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
paragraphs (a) or (b) would be inadequate and, in recognition of this fact,
Employee agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
(d) Employee expressly acknowledges that the scope of the
foregoing covenants is reasonable and necessary in order to protect the
interests of the Company and its affiliates. Notwithstanding the foregoing, if a
final judicial determination is made by a court of competent jurisdiction or an
arbitrator that the time or territory or any other restriction contained in this
Agreement is an unenforceable restriction against Employee, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply
as to such maximum time and territory and to such maximum extent as such court
or arbitrator may determine or indicate to be enforceable. Alternatively, if any
court of competent jurisdiction or arbitrator finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
(e) Notwithstanding anything to the contrary contained in this
Section 3, Employee shall be entitled to engage in any business which derives
not more than 15% of its aggregate revenues from its connector business.
4. Except as expressly amended by this Amendment, the
Agreement shall continue in full force and effect in the form in which it
existed immediately prior to the execution and delivery of this Amendment.
5. The Agreement, as amended by this Amendment, contains the
entire agreement of the parties hereto with respect to the employment of
Employee by the Company.
6. This Amendment may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same document.
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4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
BERG ELECTRONICS CORP.
BERG ELECTRONICS GROUP, INC.
HARBOR ELECTRONICS, INC.
BERG EMPLOYMENT COMPANY
SPECIALTY CONNECTOR COMPANY
SOCKET EXPRESS, INC.
BERG TECHNOLOGY, INC.
BERG HOLDINGS U.S., INC.
BERG ELECTRONICS KOREA LTD.
BERG ELECTRONICS B.V.
BERG ELECTRONICS MANUFACTURING B.V.
BERG ELECTRONICS DISTRIBUTOR B.V.
BERG CONNECTOR SYSTEMS S.L.
BERG CONNECTOR SYSTEMS GMBH
BERGTRONICS, O.Y.
BERG ELECTRONICS, S.R.L.
BERG ELECTRONICS CANADA, INC.
BERG ELECTRONICS HONG KONG LIMITED
BERG ELECTRONICS SINGAPORE PTE LTD.
BERG ELECTRONICS S.A. (FRANCE)
CBOS ELECTRONICS, A.B.
BERG ELECTRONICS, S.A. (SWITZERLAND)
CONNECTOR SYSTEMS LIMITED
TVS BERG LTD.
BERG ELECTRONICS TAIWAN LTD.
BERG ELECTRONICS JAPAN K.K.
BERG ELECTRONICS ENGINEERING, K.K.
BERG ELECTRONICS CHINA LTD.
BERG ELECTRONICS NANTONG, LTD.
CONNECTOR SYSTEMS (U.S.), INC.
CONNECTOR SYSTEMS TECHNOLOGY, N.V.
By: /s/ DAVID M. SINDELAR
---------------------------------------------
David M. Sindelar, Senior Vice President,
on behalf of Employer
/s/ DAVID J. WEBSTER
-------------------------------
David J. Webster
5
<PAGE> 1
EXHIBIT 99.(c)(11)
FIRST AMENDMENT TO RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO RIGHTS AGREEMENT (this "Amendment") is made and
entered into as of August 27, 1998, by and between Berg Electronics Corp., a
Delaware corporation (the "Company"), and Harris Trust and Savings Bank (the
"Rights Agent"), at the Company's direction.
RECITALS
WHEREAS, the Company and the Rights Agent are parties to that certain
Rights Agreement dated December 22, 1997 (the "Rights Agreement");
WHEREAS, the Company has resolved and desires to amend certain
provisions of the Rights Agreement;
WHEREAS, Section 26 of the Rights Agreement provides that under
circumstances the Company may, in its sole and absolute discretion, supplement
or amend the Rights Agreement; and
WHEREAS, the Company has determined that it may amend the Rights
Agreement as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and in the Rights Agreement, the parties hereto
agree as follows:
ARTICLE I
AMENDMENT OF RIGHTS AGREEMENT
Section 1.1 Definition of Exempt Person. Section 1(k) of the Rights
Agreement is hereby amended to add the following sentence at the end of Section
1(k):
"Notwithstanding anything to the contrary contained in this
Agreement, the term "Exempt Person" shall additionally include
Framatome Connectors International S.A., a corporation organized
under the laws of the Republic of France ("FCI"), or
<PAGE> 2
any of its Affiliates or Associates in respect of all shares of
Voting Stock that FCI and its Affiliates or Associates
Beneficially Own as a result of the execution of, or consummation
of the transactions contemplated by, (i) that certain Agreement
and Plan of Merger, dated August 27, 1998 (the "Merger
Agreement"), among the Company, FCI and Bravo Acquisition Co., a
Delaware corporation and indirect subsidiary of FCI ("Bravo"), as
the same may be amended, supplemented or otherwise modified from
time to time and (ii) that certain Stockholders Agreement, dated
August 27, 1998 (the "Stockholders Agreement"), among Bravo and
certain stockholders of the Company, as the same may be amended,
supplemented or otherwise modified from time to time."
Section 1.2 Adjustment of Exercise Price or Number of Shares. Section
11 of the Rights Agreement is hereby amended to add the following paragraph at
the end of Section 11:
"(h) Notwithstanding the foregoing, the adjustments to the
Exercise Price and the number of shares of Preferred Stock which
may be purchased upon exercise of a Right shall not be applicable
to the transactions contemplated by the Merger Agreement, the
Stockholders Agreement or any financing or any issuance of
securities by FCI, the Company or any direct or indirect
subsidiary of any of the foregoing in connection with the
transactions contemplated by the Merger Agreement."
ARTICLE II
MISCELLANEOUS
Section 2.1 Defined Terms. All capitalized terms used and not defined
herein shall have the meanings ascribed to such terms in the Rights Agreement
as hereby amended.
Section 2.2 Reference to and Effect on the Rights Agreement.
(a) On and after the date hereof, each reference in the
Rights Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like
2
<PAGE> 3
import referring to the Rights Agreement shall mean and be a reference
to the Rights Agreement as hereby amended.
(b) Except as specifically amended by this Amendment,
the Rights Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
Section 2.3 Successors. All of the covenants and provisions of this
Amendment by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 2.4 Delaware Contract. This Amendment shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes
shall be governed by and construed and enforced in accordance with the laws of
such state applicable to contracts to be made and performed entirely within
such state.
Section 2.5 Counterparts. This Amendment may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 2.6 Descriptive Headings. Descriptive headings of the several
Sections of this Amendment are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 2.7 Severability. If any term, provision, covenant or
restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 2.8 Entire Agreement. This Amendment, together with the
unaltered portions of the Rights Agreement, embodies the entire agreement and
understanding of the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
BERG ELECTRONICS CORP.
By: /s/ DAVID J. WEBSTER
----------------------------------
Name: David J. Webster
--------------------------------
Title: Senior Vice President
-------------------------------
HARRIS TRUST AND SAVINGS BANK, AS
RIGHTS AGENT
By: /s/ TOD C. SHAFER
----------------------------------
Name: Tod C. Shafer
--------------------------------
Title: Vice President
-------------------------------
4
<PAGE> 1
EXHIBIT 99.(c)(12)
FIRST AMENDMENT
TO
REGISTRATION RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT (this
"Amendment") is made and entered into as of this 27th day of August, 1998, to be
effective as provided herein, by and among Berg Electronics Corp., a Delaware
corporation formerly known as Berg CS Holdings, Inc. (the "Company"), and the
parties identified on the signature pages hereto. Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them in the
Registration Rights Agreement, dated as of March 1, 1993 (the "Agreement"), by
and among the Company and the parties identified on Exhibit A attached thereto
(the "Original Holders").
WHEREAS, the Company and the Original Holders have entered into the
Agreement; and
WHEREAS, the Company and the Holders of at least a majority of the
Registrable Shares desire to amend the Agreement to provide for its termination.
NOW, THEREFORE, in consideration of the premises, the Company and the
Holders signatory hereto agree as follows:
1. Section 2.6 of the Agreement is hereby amended and restated in its
entirety to read as follows:
"2.6 Termination. The provisions of this Agreement shall
terminate effective immediately upon the execution of that certain
Agreement and Plan of Merger, dated the date hereof, among the Company,
Framatome Connectors International S.A., a corporation organized under
the laws of the Republic of France, and Bravo Acquisition Co., a
Delaware corporation."
2. This Amendment may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same document.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
BERG ELECTRONICS CORP.
By: /s/ DAVID J. WEBSTER
----------------------------------
Name: David J. Webster
--------------------------------
Title: Senior Vice President
-------------------------------
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
HICKS, MUSE & CO. INCORPORATED
By: /s/ JACK D. FURST
---------------------------------------
Jack D. Furst,
Executive Vice President and Managing
Director
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
/s/ THOMAS O. HICKS
-----------------------------------
Thomas O. Hicks
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
/s/ JOHN R. MUSE
-----------------------------------
John R. Muse
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
/s/ JACK D. FURST
-----------------------------------
Jack D. Furst
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
/s/ CHARLES W. TATE
-----------------------------------
Charles W. Tate
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
/s/ JAMES N. MILLS
-----------------------------------
James N. Mills
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
/s/ DAVID M. SINDELAR
-----------------------------------
David M. Sindelar
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
/s/ LARRY S. BACON
-----------------------------------
Larry S. Bacon
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the day and year first above written.
/s/ W. THOMAS MCGHEE
-----------------------------------
W. Thomas McGhee
<PAGE> 1
EXHIBIT 99.(c)(13)
TERMINATION AGREEMENT
This Termination Agreement (this "Termination Agreement") is made and
entered into as of this 27th day of August, 1998, to be effective as of the
Effective Date (as hereinafter defined), by and among Berg Electronics Corp., a
Delaware corporation ("Holdings"), Berg Electronics Group, Inc., a Delaware
corporation (the "Company"), and Hicks, Muse & Co. Partners, L.P., a Texas
limited partnership ("HMCo").
RECITALS:
WHEREAS, Holdings, the Company and HMCo entered into that certain
Amended and Restated Monitoring and Oversight Agreement dated as of March 6,
1996 (the "Oversight Agreement");
WHEREAS, the Oversight Agreement was supplemented by that certain
indemnification letter agreement, dated March 6, 1996, by and among Holdings,
the Company and HMCo (together with the Oversight Agreement, the "Agreement");
WHEREAS, Holdings is party to an Agreement and Plan of Merger (the
"Merger Agreement"), dated the date hereof, with Framatome Connectors
International S.A., a corporation organized under the laws of the Republic of
France ("FCI"), and Bravo Acquisition Co., a Delaware corporation; and
WHEREAS, in connection with the consummation of the transactions
contemplated under the Merger Agreement, Holdings, the Company and HMCo desire
to terminate the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Holdings, the Company and HMCo do
hereby agree as follows:
1. Termination of Agreement.
The Agreement shall terminate effective immediately upon the
consummation of the Offer (as defined in the Merger Agreement) (the "Effective
Date"), and thereafter shall be of no further force and effect; provided,
however, that the
<PAGE> 2
provisions of Section 5 of the Agreement shall survive indefinitely. Except as
otherwise set forth herein, each of the parties hereto releases and forever
discharges the other parties hereto from all obligations and liabilities arising
under any and all of the terms and conditions of the Agreement and any document
executed in connection therewith. Notwithstanding the foregoing, Holdings and
the Company shall continue to be obligated for the payment of any amounts which
have accrued to HMCo on or prior to the Effective Date under the Agreement and
remain unpaid as of the Effective Date.
2. Acknowledgements and Agreements.
Notwithstanding anything to the contrary contained in this Termination
Agreement, HMCo hereby acknowledges and agrees that (i) the consummation of the
transactions contemplated by the Merger Agreement, including without limitation
the Offer, shall not be deemed an Add-on Transaction for purposes of the
Agreement and, accordingly, HMCo is not entitled to an Add-on Transaction Fee in
connection therewith and (ii) the Agreement shall be terminated for all purposes
as of the Effective Date without regard to the Termination Option set forth in
Section 2 of the Agreement and, accordingly, HMCo hereby waives any amounts
payable to HMCo for the remainder of the Primary Term except for the amounts set
forth in Section 1 of this Termination Agreement.
3. Miscellaneous.
a. This Termination Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
b. The headings contained in this Termination Agreement
are for reference purposes only and will not affect in any way the meaning or
interpretation of this Termination Agreement.
c. If any provision of this Termination Agreement is held
to be invalid or unenforceable to any extent in any context, it shall
nevertheless be enforced to the maximum extent permitted by law and the parties'
fundamental intentions in that and other contexts, and the remainder of this
Termination Agreement shall not be affected thereby.
d. This Termination Agreement may be executed in one or
more counterparts, each of which will be deemed an original and all of which
together will constitute one instrument.
e. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Agreement.
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2
<PAGE> 3
IN WITNESS WHEREOF, Holdings, the Company and HMCo have executed this
Termination Agreement as of the date first written above.
BERG ELECTRONICS CORP.
By: /s/ DAVID M. SINDELAR
-------------------------------------------
Name: David M. Sindelar
-----------------------------------------
Title: Senior Vice President and Chief
Financial Officer
----------------------------------------
BERG ELECTRONICS GROUP, INC.
By: /s/ DAVID M. SINDELAR
-------------------------------------------
Name: David M. Sindelar
-----------------------------------------
Title: Senior Vice President and Chief
Financial Officer
----------------------------------------
HICKS, MUSE & CO. PARTNERS, L.P.
By: HM Partners Inc., its General Partner
By: /s/ LAWRENCE D. STUART
----------------------------------
Name: Lawrence D. Stuart
--------------------------------
Title: Managing Director and
Principal and Executive Vice
President
-------------------------------
<PAGE> 1
EXHIBIT (c)(14)
AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of
the 31st day of August, 1998 by and between BERG ELECTRONICS CORP., a Delaware
corporation with its principal office located in St. Louis, Missouri (together
with its successors and permitted assigns, the "Company"), and MILLS &
PARTNERS, INC., a Delaware corporation with its principal office located in St.
Louis, Missouri ("Mills & Partners").
W I T N E S S E T H:
WHEREAS, the Company has entered into that certain Agreement and
Plan of Merger (the "Merger Agreement"), dated as of August 27, 1998, with
Framatome Connectors International S.A. and Bravo Acquisition Co.
("Purchaser"), pursuant to which (i) Purchaser will commence a tender offer for
all of the issued and outstanding shares of capital stock of the Company and
(ii) Purchaser will merge (the "Merger") with and into the Company, with the
Company being the surviving corporation in the Merger;
WHEREAS, pursuant to the provisions of the Merger Agreement, the
Company has agreed to cause Mills & Partners to enter into this Agreement with
the Company;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and Mills
& Partners agree as follows:
<PAGE> 2
1. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Confidential Information" shall mean (i) information
about the Company or any of its Subsidiaries or their respective
businesses, products and practices, disclosed to or known or obtained by
Mills & Partners as a direct or indirect consequence of or through Mills
& Partners' relationship with the Company or any of its Subsidiaries,
which information is not generally known in the business in which the
Company or such Subsidiaries are or may be engaged or (ii) any trade
secrets, information, data or other confidential information relating to
the business or affairs of the Company or any affiliate or subsidiary of
the Company. Confidential Information shall not, however, include under
any circumstances any information with respect to the foregoing matters
which is (I) available to the public from a source other than Mills &
Partners, (II) released in writing by the Company to the public, (III)
required to be disclosed by any court process or any government or
agency or department of any government or agency or (IV) the subject of
a written waiver executed by the Company for the benefit of Mills &
Partners.
(c) "Subsidiary" shall mean any entity in which the Company
either (I) controls more than 50% of the voting power of all securities
of such entity or (II) owns more than 50% of the total value of all
equity securities of such entity.
(d) "Term" shall mean the term of this Agreement as described
in Section 13.
2. Non-Compete. (a) Mills & Partners, in acknowledgment and
recognition of the highly competitive nature of the business of the Company and
its affiliates, and in consideration of the benefits under this Agreement and
other good and valuable consideration, for a period of two (2) years from the
date the Merger is consummated (the "Non-Compete Term"), will not, directly or
indirectly, engage in the connector business, whether such engagement is as a
partner or investor (other than as a holder of less than 5% of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent,
sales representative or other participant.
(b) During the Non-Compete Term, Mills & Partners will not
directly or indirectly induce any current or former employee of the Company or
any of its
2
<PAGE> 3
affiliates to engage in any activity in which Mills & Partners is prohibited
from engaging by paragraph (a) hereof or to terminate his employment
relationship, as applicable, with the Company or any of its affiliates.
(c) Mills & Partners acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
paragraphs (a) or (b) would be inadequate and, in recognition of this fact,
Mills & Partners agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the Company, without posting any
bond, shall be entitled to obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available.
(d) Mills & Partners expressly acknowledges that the scope of the
foregoing covenants is reasonable and necessary in order to protect the
interests of the Company and its affiliates. Notwithstanding the foregoing, if
a final judicial determination is made by a court of competent jurisdiction or
an arbitrator that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against Mills & Partners, the
provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court or arbitrator may determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction or arbitrator finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained
herein.
(e) Notwithstanding anything to the contrary contained in this
Section 3, Mills & Partners shall be entitled to engage in any business which
derives not more than 15% of its aggregate revenues from its connector
business.
3. Assignability; Binding Nature. This Agreement shall be binding
upon and inure to the benefit of the Company and Mills & Partners and their
respective successors and permitted assigns. As used in this Agreement,
"Company" shall mean the Company and any successor to its business which
assumes and agrees to perform this Agreement, by operation of law or otherwise.
4. Representation. Mills & Partners represents and warrants that it
is authorized to enter into this Agreement and that the performance of its
obligations
3
<PAGE> 4
under this Agreement will not violate any material agreement between Mills &
Partners and any other person or entity.
5. Entire Agreement. Except to the extent otherwise provided
herein, this Agreement contains the entire understanding and agreement between
the parties concerning the subject matter hereof and supersedes any prior
agreement.
6. Amendment or Waiver. No provision in this Agreement may be
amended unless such amendment is agreed upon in writing and signed by both
Mills & Partners and an authorized officer of the Company. No waiver by either
party of any breach by the other party of any condition or provision contained
in this Agreement to be performed by such other party shall be deemed a waiver
of a similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by Mills & Partners
or an authorized representative of the Company, as the case may be.
7. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
8. Governing Law/Jurisdiction. This Agreement shall be governed by
and construed and interpreted in accordance with the laws of the State of
Missouri, without reference to principles of conflict of laws.
9. Notices. Any notice given to either party shall be in writing
and shall be deemed to have been given when delivered personally or sent by
certified or registered mail, postage prepaid, return receipt requested, duly
addressed to the other party at the address indicated below or to such changed
address as such party may subsequently give by like notice:
If to the Company or the Board:
Berg Electronics Corp.
101 South Hanley Road
St. Louis, Missouri 63105
ATTENTION: Chief Executive Officer
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<PAGE> 5
If to Mills & Partners:
Mills & Partners, Inc.
101 South Hanley Road, Suite 400
St. Louis, Missouri 63105
ATTENTION: James N. Mills
10. Non-Disclosure of Confidential Information. During the Term or
at any time thereafter, irrespective of the time, manner or cause of the
expiration of the Term, Mills & Partners will not directly or indirectly
reveal, divulge, disclose or communicate to any person or entity, other than
authorized officers, directors and employees of the Company or its
Subsidiaries, in any manner whatsoever, any Confidential Information without
the prior written consent of the Board.
11. Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
12. Counterparts. This Agreement may be executed in two or more
counterparts.
13. Term of Agreement. This Agreement shall remain in effect until
such time as is necessary to enforce the provisions hereof, including Sections
2 and 10. In addition, the respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to preserve such rights and obligations.
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5
<PAGE> 6
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first written above.
BERG ELECTRONICS CORP.
By: /s/ DAVID M. SINDELAR
----------------------------------
Name: David M. Sindelar
--------------------------------
Title: Senior Vice President
-------------------------------
MILLS & PARTNERS, INC.
By: /s/ DAVID M. SINDELAR
----------------------------------
Name: David M. Sindelar
--------------------------------
Title: Senior Vice President
-------------------------------
6
<PAGE> 1
EXHIBIT 99.(c)(15)
AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as
of the 31st day of August, 1998 by and between BERG ELECTRONICS CORP., a
Delaware corporation with its principal office located in St. Louis, Missouri
(together with its successors and permitted assigns, the "Company"), and Joseph
S. Catanzaro, an individual who resides at 177 Seabrook Drive, St. Louis,
Missouri 63017 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is employed by the Company or one or
more of its Subsidiaries;
WHEREAS, the Company has entered into that certain Agreement
and Plan of Merger (the "Merger Agreement"), dated as of August 27, 1998, with
Framatome Connectors International S.A. and Bravo Acquisition Co. ("Purchaser"),
pursuant to which (i) Purchaser will commence a tender offer (the "Tender
Offer") for all of the issued and outstanding shares of capital stock of the
Company and (ii) Purchaser will merge (the "Merger") with and into the Company,
with the Company being the surviving corporation in the Merger;
WHEREAS, the Company desires that the Employee (i) continue in
the employ of the Company and its Subsidiaries until the consummation of the
Merger and (ii) assist the Company if, as and when requested by the Company in
the transactions contemplated by the Merger Agreement; and
WHEREAS, the Company, in order to achieve its objectives as
set forth above and as an inducement for the Employee to continue in the employ
of the Company and its Subsidiaries to assist in the transactions contemplated
by the Merger Agreement, is desirous of providing a bonus to the Employee upon
the effective time of the Merger;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Employee agree as follows:
<PAGE> 2
1. Definitions.
(a) "Bonus" shall mean an amount equal to $210,000.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Confidential Information" shall mean (i) information
about the Company or any of its Subsidiaries or their respective
businesses, products and practices, disclosed to or known or obtained
by the Employee as a direct or indirect consequence of or through the
Employee's employment with the Company or any of its Subsidiaries,
which information is not generally known in the business in which the
Company or such Subsidiaries are or may be engaged or (ii) any trade
secrets, information, data or other confidential information relating
to the business or affairs of the Company or any affiliate or
subsidiary of the Company. Confidential Information shall not, however,
include under any circumstances any information with respect to the
foregoing matters which is (I) available to the public from a source
other than the Employee, (II) released in writing by the Company to the
public, (III) required to be disclosed by any court process or any
government or agency or department of any government or agency or (IV)
the subject of a written waiver executed by the Company for the benefit
of the Employee.
(d) "Subsidiary" shall mean any entity in which the Company
either (I) controls more than 50% of the voting power of all securities
of such entity or (II) owns more than 50% of the total value of all
equity securities of such entity.
(e) "Term" shall mean the term of this Agreement as described
in Section 17.
2. Bonus. Upon the effective time of the Merger, the Employee
shall be entitled to receive the Bonus from the Company. The Bonus shall be paid
immediately upon the effective time of the Merger in a cash lump sum. Upon
payment of the Bonus in accordance with this Section 2, all rights and
obligations of each of the parties to any employment agreement between the
Company or any subsidiary thereof and Employee (other than this Agreement) shall
cease and terminate immediately, and thereafter shall be of no further force or
effect.
2
<PAGE> 3
3. Non-Compete. (a) Employee, in acknowledgment and recognition
of the highly competitive nature of the business of the Company and its
affiliates, and in consideration of the benefits under this Agreement and other
good and valuable consideration, during the term of Employee's employment and
for two (2) years thereafter (the "Non-Compete Term"), will not, directly or
indirectly, engage in the connector business, whether such engagement is as an
officer, director, proprietor, employee, partner, investor (other than as a
holder of less than 5% of the outstanding capital stock of a publicly traded
corporation), consultant, advisor, agent, sales representative or other
participant.
(b) During the Non-Compete Term, Employee will not directly or
indirectly induce any current or former employee of the Company or any of its
affiliates to engage in any activity in which such Employee is prohibited from
engaging by paragraph (a) hereof or to terminate his employment relationship, as
applicable, with the Company or any of its affiliates.
(c) Employee acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
paragraphs (a) or (b) would be inadequate and, in recognition of this fact,
Employee agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
(d) Employee expressly acknowledges that the scope of the
foregoing covenants is reasonable and necessary in order to protect the
interests of the Company and its affiliates. Notwithstanding the foregoing, if a
final judicial determination is made by a court of competent jurisdiction or an
arbitrator that the time or territory or any other restriction contained in this
Agreement is an unenforceable restriction against Employee, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply
as to such maximum time and territory and to such maximum extent as such court
or arbitrator may determine or indicate to be enforceable. Alternatively, if any
court of competent jurisdiction or arbitrator finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
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<PAGE> 4
(e) Notwithstanding anything to the contrary contained in this
Section 3, Employee shall be entitled to engage in any business which derives
not more than 15% of its aggregate revenues from its connector business.
4. Effects of Agreement on Other Benefits and Rights of Employee.
Nothing in this Agreement shall prevent or limit the Employee's continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which the Employee may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Employee may have under any contract or agreement with the Company or any of its
affiliated companies.
5. Assignability; Binding Nature. This Agreement shall be binding
upon and inure to the benefit of the Company and the Employee and their
respective successors, heirs (in the case of the Employee) and permitted
assigns. As used in this Agreement, "Company" shall mean the Company and any
successor to its business which assumes and agrees to perform this Agreement, by
operation of law or otherwise.
6. Representation. The Company represents and warrants that it is
authorized to enter into this Agreement and that the performance of its
obligations under this Agreement will not violate any material agreement between
the Company and any other person or entity.
7. Entire Agreement. Except to the extent otherwise provided
herein, this Agreement contains the entire understanding and agreement between
the parties concerning the subject matter hereof and supersedes any prior
agreement.
8. Amendment or Waiver. No provision in this Agreement may be
amended unless such amendment is agreed upon in writing and signed by both the
Employee and an authorized officer of the Company. No waiver by either party of
any breach by the other party of any condition or provision contained in this
Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Employee or an
authorized representative of the Company, as the case may be.
9. Severability. In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason, in
4
<PAGE> 5
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
10. Beneficiaries/References. The Employee shall be entitled to
select (and change, to the extent permitted under any applicable law), by giving
the Company written notice thereof, a beneficiary or beneficiaries to receive
the Bonus payable hereunder following the Employee's death. In the event of the
Employee's death or a judicial determination of the Employee's incompetence,
reference in this Agreement to the Employee shall be deemed, where appropriate,
to refer to the Employee's beneficiary, estate or other legal representative.
11. Governing Law/Jurisdiction. This Agreement shall be governed
by and construed and interpreted in accordance with the laws of the State of
Missouri, without reference to principles of conflict of laws.
12. Disputes.
(a) All costs, fees and expenses, including attorneys' fees,
of any arbitration or litigation in connection with this Agreement
which results in any decision or settlement requiring the Company to
make a payment to the Employee, including, without limitation,
attorneys' fees of both the Employee and the Company, shall be borne
by, and be the obligation of, the Company. In no event shall the
Employee be required to reimburse the Company for any of the costs or
expenses, including attorneys' fees, incurred by the Company relating
to any arbitration or litigation hereunder. The obligation of the
Company under this Section 11 shall survive the termination of this
Agreement (whether such termination is by the Company or the Employee,
upon the expiration of this Agreement, or otherwise).
(b) Pending the outcome or resolution of any litigation or
arbitration hereunder, the Company shall pay all amounts due the
Employee without regard to any dispute.
13. Notices. Any notice given to either party shall be in writing
and shall be deemed to have been given when delivered personally or sent by
certified or registered mail, postage prepaid, return receipt requested, duly
addressed to the other party at the address indicated below or to such changed
address as such party may subsequently give by like notice:
5
<PAGE> 6
If to the Company or the Board:
Berg Electronics Corp.
101 South Hanley Road
St. Louis, Missouri 63105
ATTENTION: Chief Executive Officer
If to the Employee:
Joseph S. Catanzaro
177 Seabrook Drive
St. Louis, Missouri 63017
14. Confidential Information.
(a) Non-Disclosure. During the Term or at any time thereafter,
irrespective of the time, manner or cause of the expiration of the
Term, the Employee will not directly or indirectly reveal, divulge,
disclose or communicate to any person or entity, other than authorized
officers, directors and employees of the Company or its Subsidiaries,
in any manner whatsoever, any Confidential Information without the
prior written consent of the Board.
(b) Return of Property. Upon the termination of employment of
the Employee, the Employee will surrender to the Company all
Confidential Information, including, without limitation, all lists,
charts, schedules, reports, financial statements, books and records of
the Company, any Subsidiary or any affiliate, and all copies thereof,
and all other property belonging to the Company, any Subsidiary or any
affiliate; provided, however, the Employee shall be accorded reasonable
access to such Confidential Information subsequent to the termination
of employment of the Employee for any proper purpose as determined in
the reasonable judgment of the Company.
15. Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
16. Counterparts. This Agreement may be executed in two or more
counterparts.
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<PAGE> 7
17. Term of Agreement. This Agreement shall remain in effect until
the later of (i) the effective time of the Merger and (ii) such time as is
necessary to enforce the provisions hereof, including Sections 3 and 14. In
addition, the respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to preserve
such rights and obligations.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
BERG ELECTRONICS CORP.
By: /s/ TIMOTHY L. CONLON
--------------------------------
Name: Timothy L. Conlon
------------------------------
Title: President and Chief
Operating Officer
-----------------------------
EMPLOYEE
/s/ JOSEPH S. CATANZARO
-----------------------------------
Joseph S. Catanzaro
8
