SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
October 19, 1999
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THERMORETEC CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-12636 59-3203761
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
Damonmill Square
9 Pond Lane, Suite 5A
Concord, Massachusetts 01742-2851
(Address of principal executive offices) (Zip Code)
(978) 371-3200
(Registrant's telephone number
including area code)
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This Form 8-K contains forward-looking statements that involve a number of
risks and uncertainties. Important factors that could cause actual results to
differ materially from those indicated by such forward-looking statements are
set forth under the heading "Forward-looking Statements" in Exhibit 13 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended April 3, 1999.
These include risks and uncertainties relating to: dependence of the
Registrant's businesses on environmental regulation, potential environmental and
regulatory liability, the availability of government funding, intense
competition, the effect of seasonal influences on the Registrant's performance,
possible obsolescence of the Registrant's services due to technological change,
the Registrant's acquisition strategy, development and commercialization of
technology, the cash management arrangement with Thermo Electron Corporation,
and the potential impact of the year 2000 on processing date-sensitive
information.
Item 5. Other Events
On October 20, 1999, the Registrant issued a press release stating that it
has entered into a definitive agreement and plan of merger with its ultimate
parent corporation, Thermo Electron Corporation ("Thermo Electron"), under which
Thermo Electron would acquire all of the outstanding common stock, $.01 par
value per share (the "Common Stock"), held by the public stockholders of the
Registrant. The Registrant's board of directors approved the merger agreement
based on a recommendation from a Special Committee of its board of directors
formed to evaluate Thermo Electron's offer.
Under the terms of the merger agreement, each issued and outstanding share
of Common Stock not already owned by Thermo Electron or Thermo TerraTech Inc.,
the Registrant's direct parent corporation ("Thermo TerraTech"), would be
converted into the right to receive $7.00 in cash. Following the merger, the
shares of Common Stock would cease to be publicly traded.
The Registrant expects that the necessary filings with the Securities and
Exchange Commission (the "SEC") will be made shortly, and that proxy materials
for a special meeting will be mailed to stockholders of the Registrant promptly
after completion of SEC review. Thermo Electron and Thermo TerraTech intend to
vote all of their shares of Common Stock in favor of approval of the merger
agreement and, therefore, approval is assured. The transaction is expected to
close during the first calendar quarter of 2000.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired: not applicable.
(b) Pro Forma Financial Information: not applicable.
(c) Exhibits:
2.1 Agreement and Plan of Merger dated as of October 19, 1999 by and
among Thermo Electron Corporation, Retec Acquisition Corporation and
ThermoRetec Corporation.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 21st day of October, 1999.
THERMORETEC CORPORATION
By: /s/ Theo Melas-Kyriazi
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Theo Melas-Kyriazi
Chief Financial Officer
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THERMO ELECTRON CORPORATION
RETEC ACQUISITION CORPORATION
AND
THERMORETEC CORPORATION
DATED AS OF OCTOBER 19, 1999
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TABLE OF CONTENTS
Page
ARTICLE I THE MERGER.......................................................2
1.1. The Merger............................................................2
1.2. Effective Time; Closing...............................................2
1.3. Effect of the Merger..................................................2
1.4. Certificate of Incorporation; Bylaws..................................3
1.5. Directors and Officers................................................3
1.6. Effect on Capital Stock...............................................3
1.7. Surrender of Certificates.............................................4
1.8. No Further Ownership Rights in Retec Common Stock.....................6
1.9. Lost, Stolen or Destroyed Certificates................................6
1.10.Closing of Transfer Books.............................................6
1.11.Dissenting Shares.....................................................6
1.12.Taking of Necessary Action; Further Action............................6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF RETEC.........................7
2.1. Organization of Retec.................................................7
2.2. Retec Capital Structure...............................................7
2.3. Authority.............................................................7
2.4. Board Approval........................................................8
2.5. Fairness Opinion......................................................8
2.6. Schedule 13E-3; Proxy Statement.......................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON
AND MERGER SUB.............................................................9
3.1. Organization..........................................................9
3.2. Authority.............................................................9
3.3. Merger Sub............................................................10
3.4. Information Provided to Investment Bankers............................10
3.5. Compliance with Agreements............................................10
3.6. Schedule 13E-3; Proxy Statement.......................................11
3.7. Financial Resources...................................................11
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ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME.............................11
4.1. Conduct of Business by Retec..........................................11
4.2. Conduct of Business by Thermo Electron................................11
ARTICLE V ADDITIONAL AGREEMENTS............................................13
5.1. Schedule 13E-3; Proxy Statement; Other Filings........................13
5.2. Meeting of Retec Stockholders.........................................14
5.3. Access to Information.................................................14
5.4. Public Disclosure.....................................................15
5.5. Legal Requirements....................................................15
5.6. Notification of Certain Matters.......................................15
5.7. Best Efforts and Further Assurances...................................16
5.8. Stock Option and Employee Stock Purchase Plans; Reservation of Shares.16
5.9. Thermo Electron Form S-8..............................................17
5.10.Indemnification; Insurance............................................17
5.11.Deferred Compensation Plan............................................19
5.12.Compliance by Merger Sub..............................................19
5.13.NYSE Listing..........................................................19
ARTICLE VI CONDITIONS TO THE MERGER........................................19
6.1. Conditions to Obligations of Each Party to Effect the Merger..........19
6.2. Additional Conditions to the Obligations of Retec.....................20
6.3. Additional Conditions to the Obligations of Thermo Electron
and Merger Sub........................................................20
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER..............................21
7.1. Termination...........................................................21
7.2. Notice of Termination; Effect of Termination..........................22
7.3. Fees and Expenses.....................................................22
7.4. Amendment.............................................................22
7.5. Extension; Waiver.....................................................23
ARTICLE VIII GENERAL PROVISIONS............................................23
8.1. Non-Survival of Representations and Warranties........................23
8.2. Notices...............................................................23
8.3. Counterparts..........................................................24
8.4. Entire Agreement......................................................24
8.5. Severability..........................................................24
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8.6. Other Remedies; Specific Performance..................................25
8.7. Governing Law.........................................................25
8.8. Assignment............................................................25
8.9. Headings..............................................................25
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of October
19, 1999 is by and among Thermo Electron Corporation, a Delaware corporation
("Thermo Electron"), Retec Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of TT Acquisition Corporation, a Delaware corporation
and wholly-owned subsidiary of Thermo Electron ("Merger Sub"), and ThermoRetec
Corporation, a Delaware corporation ("Retec").
RECITALS
A. Thermo Electron and its majority-owned subsidiary, Thermo TerraTech
Inc. ("TerraTech"), own approximately 2% and 70%, respectively, of the
outstanding shares of common stock, par value $.01 per share, of Retec (the
"Retec Common Stock"), and Thermo Electron desires to acquire all of the
outstanding shares of Retec Common Stock not owned by Thermo Electron or
TerraTech.
B. Thermo Electron has formed the Merger Sub as a subsidiary with the
intent of causing it to merge with Retec, as described in this Agreement.
C. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL"), Thermo
Electron and Retec will enter into a business combination transaction pursuant
to which Merger Sub will merge with and into Retec (the "Merger").
D. The Board of Directors of Thermo Electron (i) has determined that the
Merger is consistent with and in furtherance of the long-term business strategy
of Thermo Electron, and (ii) has approved this Agreement, the Merger and the
other transactions contemplated by this Agreement.
E. The Board of Directors of Retec, on the recommendation of a special
committee of the Board of Directors (the "Special Committee"), consisting of a
director of Retec who is not an officer or director of Thermo Electron or
TerraTech or an officer of Retec, (i) has determined that this Agreement,
including the Cash Merger Consideration (as defined below), and the transactions
contemplated by this Agreement, are fair to, and in the best interests of, the
stockholders of Retec (other than Thermo Electron and TerraTech), (ii) has
approved and declared the advisability of this Agreement, the Merger and the
other transactions contemplated by this Agreement and (iii) has resolved to
recommend the approval and adoption of this Agreement by the stockholders of
Retec.
F. Adams, Harkness & Hill ("AH&H") has delivered to the Special Committee,
for its consideration, and for delivery to the stockholders of Retec, its
written opinion that, subject to the various assumptions and limitations set
forth therein, as of the date of such opinion the consideration to be received
by the stockholders of Retec (other than TerraTech and Thermo Electron) is fair
to such stockholders from a financial point of view.
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G. Thermo Electron, Retec and Merger Sub desire to make certain
representations and warranties and other agreements in connection with the
Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1. The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the DGCL, Merger Sub shall be merged with and into
Retec, the separate corporate existence of Merger Sub shall cease and Retec
shall continue as the surviving corporation. Retec as the surviving corporation
after the Merger is hereinafter sometimes referred to as the "Surviving
Corporation."
1.2. Effective Time; Closing. Subject to the provisions of this Agreement,
the Surviving Corporation shall cause the Merger to be consummated by filing a
Certificate of Merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware in accordance with the relevant provisions of the DGCL
(the time of such filing, or such later time as may be agreed in writing by the
parties and specified in the Certificate of Merger, being the "Effective Time"
and the date on which the Effective Time occurs being the "Effective Date") as
soon as practicable on the Closing Date (as herein defined). Unless the context
otherwise requires, the term "Agreement" as used herein refers collectively to
this Agreement and the Certificate of Merger. The closing of the Merger (the
"Closing") shall take place at the executive offices of Thermo Electron at a
time and date to be specified by the parties, which shall be no later than the
second business day after the satisfaction or waiver of the conditions set forth
in Article VI, or at such other time, date and location as the parties hereto
agree in writing (the "Closing Date"). At the Closing, (i) Retec shall deliver
to Thermo Electron the various certificates and instruments required under
Article VI, (ii) Thermo Electron and Merger Sub shall deliver to Retec the
various certificates and instruments required under Article VI and (iii) Retec
shall execute and file the Certificate of Merger with the Secretary of State of
the State of Delaware, in accordance with the applicable provisions of the DGCL.
1.3. Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of Retec and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Retec and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
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1.4. Certificate of Incorporation; Bylaws.
(a) Subject to the requirements of Section 5.10 hereof, at the
Effective Time, the Certificate of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation.
(b) Subject to the requirements of Section 5.10 hereof, the Bylaws
of Merger Sub, as in effect immediately prior to the Effective Time, shall be,
at the Effective Time, the Bylaws of the Surviving Corporation until thereafter
amended.
1.5. Directors and Officers. The directors of Retec immediately prior to
the Effective Time shall be the initial directors of the Surviving Corporation,
to serve until their respective successors are duly elected or appointed and
qualified. The officers of Retec immediately prior to the Effective Time shall
be the officers of the Surviving Corporation, to serve until their successors
are duly elected or appointed or qualified.
1.6. Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, Retec or the holders of
any of the following securities:
(a) Conversion of Retec Common Stock. Subject to the balance of
this Section 1.6, each share of Retec Common Stock issued and outstanding
immediately prior to the Effective Time will be automatically converted into the
right to receive Seven Dollars in cash ($7.00) (subject to adjustment pursuant
to Section 1.6(g) hereof, the "Cash Merger Consideration") upon surrender of the
certificate representing such share of Retec Common Stock in the manner provided
in Section 1.7 (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided in
Section 1.9). As of the Effective Time, all such shares of Retec Common Stock
shall no longer be outstanding and shall be automatically canceled and retired
and shall cease to exist, and each holder of a certificate representing any such
shares of Retec Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Cash Merger Consideration as described
in this subsection 1.6(a).
(b) Stock Options and Employee Stock Purchase Plan. All options to
purchase Retec Common Stock outstanding immediately prior to the Effective Time
under the Remediation Technologies, Inc. Amended and Restated 1986 Stock Option
Plan, the Thermo Remediation Inc. Equity Incentive Plan, the ThermoRetec
Corporation Employees Equity Incentive Plan and the Thermo Remediation Inc.
Directors Stock Option Plan, each as amended (together, the "Retec Stock Option
Plans"), shall be converted into options to purchase shares of the common stock,
$1.00 par value per share, of Thermo Electron (the "Thermo Common Stock") in
accordance with Section 5.8 hereof. All options to purchase shares of Retec
Common Stock under the Amended and Restated ThermoRetec Corp. Employees' Stock
Purchase Plan (the "Retec ESPP") shall be converted into options to purchase
Thermo Common Stock in accordance with Section 5.8 hereof.
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(c) Warrants. All warrants to purchase Retec Common Stock
outstanding immediately prior to the Effective Time shall be converted at the
Effective Time into warrants to purchase Thermo Common Stock. The number of
whole shares of Thermo Common Stock for which each warrant will be exercisable
(or will become exercisable in accordance with its terms) and the per share
exercise price for the shares of Thermo Common Stock issuable upon exercise of
such Retec warrant will be determined in accordance with the terms of such
warrants.
(d) Convertible Debentures. As a result of the Merger, a Redemption
Event (as defined in the Fiscal Agency Agreement dated as of May 5, 1995, by and
among Retec, Thermo Electron and Chase Manhattan Bank (formerly Chemical Bank)
as Fiscal Agent (the "Fiscal Agency Agreement")) shall be deemed to have
occurred with respect to the convertible debentures issued by Retec under the
Fiscal Agency Agreement (the "Convertible Debentures"). Holders of the
Convertible Debentures will therefore have the right to present their
Convertible Debentures to Retec for redemption, in accordance with the terms of
the Fiscal Agency Agreement. Retec's 3-7/8% Convertible Debentures issued to
TerraTech shall not be redeemed as a result of the Merger.
(e) Capital Stock of Merger Sub. Each share of common stock, par
value $.01 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into and become one validly issued, fully
paid and non-assessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
(f) Treasury Stock; Affiliate Stock. Notwithstanding any other
provision of this Agreement, each share of Retec Common Stock issued and
outstanding and owned by Thermo Electron or any wholly owned subsidiary of
Thermo Electron, together with all treasury shares held by Retec immediately
prior to the Effective Time shall cease to be outstanding, and shall
automatically be cancelled and retired without payment of any consideration
therefor, cash or otherwise, and cease to exist.
(g) Adjustments to Cash Merger Consideration. The Cash Merger
Consideration shall be adjusted to reflect fully the effect of any stock split,
reverse stock split, stock dividend (including any dividend or distribution of
securities convertible into, or exercisable or exchangeable for, Retec Common
Stock), recapitalization or other like change without receipt of consideration
with respect to Retec Common Stock occurring on or after the date hereof and
prior to the Effective Time.
1.7. Surrender of Certificates.
(a) Payment Agent. Prior to the Effective Time, Thermo Electron
shall authorize American Stock Transfer & Trust Company to act as the payment
agent (the "Payment Agent") in the Merger. Immediately following the Effective
Time, Thermo Electron shall deposit with the Payment Agent, in trust for the
benefit of the holders of certificates (the "Certificates") representing shares
of Retec Common Stock converted pursuant to Section 1.6(a) for payment in
accordance with the provisions of this Article I, cash in an amount equal to
the product of the Cash Merger Consideration multiplied by the number of
shares of Retec Common Stock entitled to conversion for payment pursuant to
Section 1.6(a).
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(b) Exchange Procedures. As soon as practicable after, and in no
event more than three business days after, the Effective Time, Thermo Electron
shall cause the Payment Agent to mail to each holder of record (as of the
Effective Time) of a Certificate (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Payment
Agent and shall otherwise be in such form and have such other provisions as
Thermo Electron may reasonably specify and as are reasonably acceptable to
Retec, with the approval of the Special Committee) and (ii) instructions for
effecting the exchange of the Certificates for the Cash Merger Consideration.
Upon surrender of a Certificate for cancellation to the Payment Agent, together
with such letter of transmittal duly completed and validly executed in
accordance with the instructions thereto, the holder of such Certificate shall
be entitled to receive in exchange therefor payment of the Cash Merger
Consideration multiplied by the number of shares of Retec Common Stock
represented by such Certificate, without interest, and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of shares of Retec Common Stock which is not registered in the
transfer records of Retec as of the Effective Time, the Cash Merger
Consideration may be paid in accordance with this Article I to a transferee if
the Certificate evidencing such shares is presented to the Payment Agent,
accompanied by all documents required by law to evidence and effect such
transfer pursuant to this Section. Until so surrendered, each outstanding
Certificate will be deemed from and after the Effective Time, for all corporate
purposes, to evidence only the right to receive payment of the Cash Merger
Consideration for each share of Retec Common Stock represented on such
Certificate.
(c) Transfers of Ownership. If payment of the Cash Merger
Consideration is to be made to any person other than the person in whose name
the Certificate surrendered in exchange therefor is registered, it will be a
condition of such payment that the Certificate so surrendered will be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such payment will have paid to Thermo Electron or any agent
designated by it any transfer or other taxes required by reason of payment to a
person other than the registered holder of the Certificate surrendered, or
established to the satisfaction of Thermo Electron or any agent designated by it
that such tax has been paid or is not payable.
(d) No Liability. Notwithstanding anything to the contrary in this
Section 1.7, neither the Payment Agent, Thermo Electron, the Surviving
Corporation nor any party hereto shall be liable to a holder of shares of Retec
Common Stock for any amount properly paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(e) Responsibility; Term. During the term of its engagement, the
Payment Agent shall make the payments referred to in Section 1.6(a) out of the
funds supplied by Thermo Electron. Promptly following the date that is six
months after the Effective Date, the Payment Agent shall, upon request by Thermo
Electron, deliver to Thermo Electron all cash, Certificates and other documents
in its possession relating to the transactions described in this Agreement, and
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the Payment Agent's duties shall terminate. Thereafter, each holder of a
Certificate formerly representing shares of Retec Common Stock may surrender
such Certificate to Thermo Electron and (subject to applicable abandoned
property, escheat and similar laws) receive in exchange therefor the Cash Merger
Consideration multiplied by the number of shares of Retec Common Stock
represented by such Certificate, without any interest thereon.
1.8. No Further Ownership Rights in Retec Common Stock. All amounts paid
upon the surrender of shares of Retec Common Stock in accordance with the terms
hereof shall be deemed to have been paid in full satisfaction of all rights
pertaining to such shares of Retec Common Stock.
1.9. Lost, Stolen or Destroyed Certificates. In the event any Certificates
shall have been lost, stolen or destroyed, the Payment Agent shall pay the
aggregate Cash Merger Consideration in respect of such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the holder
thereof; provided, however, that, as a condition precedent to the payment
thereof, the owner of such lost, stolen or destroyed Certificates shall deliver
a bond in such sum as Thermo Electron or the Payment Agent may reasonably direct
as indemnity against any claim that may be made against Thermo Electron or the
Payment Agent with respect to the Certificates alleged to have been lost, stolen
or destroyed, unless Thermo Electron waives such requirement in writing.
1.10. Closing of Transfer Books. At the Effective Time, the stock transfer
books of Retec shall be closed and no transfer of Retec Common Stock shall
thereafter be made. If, after the Effective Time, Certificates are presented to
Thermo Electron, they shall be canceled and exchanged for rights to receive the
applicable Cash Merger Consideration as provided in this Article I.
1.11. Dissenting Shares. Notwithstanding any other provision of this
Agreement, shares of Retec Common Stock that are outstanding immediately prior
to the Effective Time and which are held by stockholders (i) who have not voted
in favor of or consented to the Merger, (ii) who shall have demanded properly in
writing appraisal of such shares in accordance with DGCL Section 262 and (iii)
who shall not have withdrawn such demand or otherwise forfeited appraisal rights
(collectively, the "Dissenting Shares") shall not be converted into or represent
the right to receive the Cash Merger Consideration. Such stockholders shall, as
of the Effective Time, cease to retain any rights with respect to the Retec
Common Stock, except as provided in the DGCL, including the right to receive
payment of the appraised value of the shares held by them in accordance with the
provisions of Section 262, provided that all Dissenting Shares held by
stockholders (i) who shall have failed to perfect or lost their rights to
appraisal of such shares under Section 262, or (ii) who have withdrawn their
demand for appraisal within 60 days after the Effective Date and accept the
terms offered upon the Merger in accordance with Section 262(e), shall thereupon
be, or be deemed to have been, converted into and to have become exchangeable,
as of the Effective Time, for the right to receive, without any interest
thereon, the Cash Merger Consideration, upon surrender, in the manner provided
in Section 1.7, of the Certificates that formerly evidenced such shares without
the prior consent of Thermo Electron.
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1.12. Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Retec and Merger Sub, the officers and directors of the
Surviving Corporation are fully authorized in the name of Retec and Merger Sub
or otherwise to take, and will take, all such lawful and necessary action, so
long as such action is consistent with this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF RETEC
Retec represents and warrants to Thermo Electron and Merger Sub as
follows:
2.1. Organization of Retec. Retec and each of its subsidiaries is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, has the corporate or similar power to own, lease and operate its
property and to carry on its business as now being conducted and as proposed by
Retec to be conducted, and is duly qualified to do business and in good standing
as a foreign corporation or other legal entity in each jurisdiction in which the
failure to be so qualified would have a Material Adverse Effect on Retec. In
this Agreement, the term "Material Adverse Effect" used in reference to Retec
means any event, change or effect, that is or is reasonably likely to be,
individually or in the aggregate with other events, changes or effects,
materially adverse to the financial condition, assets, liabilities, results of
operations or business of Retec and its subsidiaries, taken as a whole.
2.2. Retec Capital Structure. The authorized capital stock of Retec
consists of 50,000,000 shares of Common Stock, par value $.01 per share, of
which there were 13,599,360 shares issued and outstanding as of October 2, 1999,
and 648,212 shares in treasury as of October 2, 1999. All outstanding shares of
Retec Common Stock are duly authorized, validly issued, fully paid and
non-assessable and are not subject to preemptive rights created by statute, the
Certificate of Incorporation or Bylaws of Retec or any agreement or document to
which Retec is a party or by which it is bound. As of October 2, 1999, an
aggregate of 2,086,222 shares of Retec Common Stock, net of exercises, were
reserved for issuance to employees, consultants and non-employee directors
pursuant to the Retec Stock Option Plans, under which options were outstanding
for an aggregate of 1,337,865 shares as of such date. As of October 2, 1999, an
aggregate of 75,750 shares of Retec Common Stock were reserved for issuance upon
the exercise of warrants and an aggregate of 2,153,977 shares of Retec Common
Stock were reserved for issuance upon the conversion of the Convertible
Debentures. All shares of Retec Common Stock subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, would be duly authorized, validly issued, fully paid
and non-assessable.
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2.3. Authority.
(a) Retec has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Retec, subject only to the adoption of this
Agreement by Retec's stockholders and the filing and recording of the
Certificate of Merger pursuant to the DGCL. Under the DGCL, Retec's stockholders
may adopt this Agreement by vote of the holders of a majority of the outstanding
shares of Retec Common Stock. This Agreement has been duly executed and
delivered by Retec, and assuming the due authorization, execution and delivery
by Thermo Electron and Merger Sub, constitutes the valid and binding obligation
of Retec, enforceable in accordance with its terms. The execution and delivery
of this Agreement by Retec do not, and the performance of this Agreement by
Retec will not, (i) conflict with or violate the Certificate of Incorporation or
Bylaws of Retec or (ii) subject to obtaining the adoption by Retec's
stockholders of this Agreement as contemplated in Section 5.2 and compliance
with the requirements set forth in Section 2.3(b) below, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to Retec
or any of its material subsidiaries or by which its or their respective
properties is bound, except, with respect to clause (ii), for any such
conflicts, violations, defaults or other occurrences that would not have a
Material Adverse Effect on Retec or the Surviving Corporation.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental or regulatory body or authority or
instrumentality ("Governmental Entity") is required by or with respect to Retec
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, except for (i) the filing
of the Certificate of Merger with the Secretary of State of Delaware, (ii) the
filing of the Proxy Statement and the Schedule 13E-3 (as defined in Section 2.6)
with the U.S. Securities and Exchange Commission ("SEC") in accordance with the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and (iii) such
other consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable federal and state securities
laws.
2.4. Board Approval. The Board of Directors of Retec, upon recommendation
of the Special Committee that this Agreement, including the Cash Merger
Consideration, is fair to, and in the best interests of, the stockholders of
Retec (other than Thermo Electron and TerraTech), has, as of the date of this
Agreement, unanimously (i) adopted a resolution approving this Agreement and
declaring its advisability, (ii) determined that the Merger is fair to, and in
the best interests of, Retec and its stockholders, and (iii) determined to
recommend that the stockholders of Retec approve this Agreement.
2.5. Fairness Opinion. The Special Committee has received an opinion from
AH&H dated October 18, 1999 that, as of such date, the consideration to be
received by Retec's stockholders in the Merger is fair, from a financial point
of view, to Retec's stockholders other than Thermo Electron and TerraTech.
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2.6 Schedule 13E-3; Proxy Statement. The information supplied by Retec for
inclusion in the Rule 13e-3 Transaction Statement on Schedule 13E-3 (such
Schedule, as amended or supplemented, is referred to herein as the "Schedule
13E-3") (including any information incorporated by reference in the Schedule
13E-3 from other filings made by Retec with the SEC) or (other than with respect
to the information supplied by Thermo Electron and/or Merger Sub) the proxy
statement to be sent to the stockholders of Retec in connection with the meeting
of Retec's stockholders to consider the adoption of this Agreement and approval
of the Merger (the "Retec Stockholders' Meeting") (such proxy statement, as
amended or supplemented, is referred to herein as the "Proxy Statement") shall
not, on the date the Proxy Statement is first mailed to stockholders, at the
time of the Retec Stockholders' Meeting or at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not false or misleading.
The Proxy Statement will comply (other than with respect to information relating
to Thermo Electron and/or Merger Sub) as to form in all material respects with
the provisions of the Exchange Act and the rules and regulations thereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND MERGER SUB
Thermo Electron and Merger Sub, jointly and severally, represent and
warrant to Retec as follows:
3.1. Organization. Thermo Electron is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, each has the corporate power
to own, lease and operate its property and to carry on its business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would have a Material Adverse Effect on Thermo
Electron. In this Agreement, the term "Material Adverse Effect" used in
reference to Thermo Electron means any event, change or effect, that is or is
reasonably likely to be, individually or in the aggregate with other events,
changes or effects, materially adverse to the financial condition, assets,
liabilities, results of operations or business of Thermo Electron and its
subsidiaries, taken as a whole.
3.2. Authority.
(a) Each of Thermo Electron and Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Thermo Electron and
Merger Sub, subject only to the filing and recording of the Certificate of
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Merger pursuant to the DGCL. This Agreement has been duly executed and delivered
by each of Thermo Electron and Merger Sub and, assuming the due authorization,
execution and delivery of this Agreement by Retec, this Agreement constitutes
the valid and binding obligation of each of Thermo Electron and Merger Sub,
enforceable in accordance with its terms. The execution and delivery of this
Agreement by each of Thermo Electron and Merger Sub do not, and the performance
of this Agreement by each of Thermo Electron and Merger Sub will not, (i)
conflict with or violate the Certificate of Incorporation or Bylaws of Thermo
Electron or the Certificate of Incorporation or Bylaws of Merger Sub or of any
material subsidiary, direct or indirect, of Thermo Electron (each, a "Material
Thermo Subsidiary"), (ii) subject to compliance with the requirements set forth
in Section 3.2(b) below, conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Thermo Electron or any Material Thermo
Subsidiaries (including Merger Sub, but excluding Retec and its wholly owned
subsidiaries) or by which its or any of their respective properties is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair Thermo Electron's rights or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Thermo Electron or any
Material Thermo Subsidiaries (including Merger Sub, but excluding Retec and its
wholly owned subsidiaries) pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Thermo Electron or any Material Thermo Subsidiaries
(including Merger Sub, but excluding Retec and its wholly owned subsidiaries) is
a party or by which Thermo Electron or any Material Thermo Subsidiaries
(including Merger Sub, but excluding Retec and its wholly owned subsidiaries) or
its or any of their respective properties are bound or affected, except, with
respect to clauses (ii) and (iii), for any such conflicts, violations, defaults
or other occurrences that would not have a Material Adverse Effect on Thermo
Electron.
(b) All shares of Thermo Common Stock which will be subject to
issuance pursuant to the Retec Stock Option Plans, the Retec ESPP and the
warrants issued by Retec, each as assumed by Thermo Electron pursuant to this
Agreement will, upon issuance, be duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights created by statute, the
Certificate of Incorporation or Bylaws of Thermo Electron or any other agreement
or document to which Thermo Electron is a party or by which it is bound.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is required by
or with respect to Thermo Electron or Merger Sub in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the Certificate of Merger with
the Secretary of State of Delaware, (ii) the filing of the Schedule 13E-3 with
the SEC in accordance with the Exchange Act, and (iii) such other consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal and state securities laws.
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3.3 Merger Sub. Since the date of its incorporation, Merger Sub has not
engaged in any activities other than in connection with or as contemplated by
this Agreement.
3.4 Information Provided to Investment Bankers. To the knowledge of Thermo
Electron, the information provided by Thermo Electron and Retec to AH&H in
connection with the Merger does not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. For purposes of the foregoing sentence, any
projections or forward-looking statements shall not be deemed to be statements
of material facts; however, the projections were prepared in good faith and
based on assumptions that were reasonable at the time such projections were
prepared, given the information known by management at such time. Furthermore,
it is recognized that such projections and forward-looking statements do not
constitute any warranty as to the future performance of Thermo Electron or Retec
and that actual results may vary from projected results.
3.5 Compliance with Agreements. The treatment provided for herein with
respect to outstanding Convertible Debentures, options (both under the Retec
Stock Option Plans and the Retec ESPP) and warrants of Retec is in compliance
with the applicable agreements and instruments governing such securities. No
consent or approval of the holders of such instruments is required in connection
with the transactions contemplated by this Agreement.
3.6 Schedule 13E-3; Proxy Statement. The information supplied by Thermo
Electron for inclusion in the Schedule 13E-3 (including any information
incorporated by reference in the Schedule 13E-3 from other filings made by
Thermo Electron with the SEC) or (other than with respect to the information
supplied by Retec) the Proxy Statement shall not, on the date the Proxy
Statement is first mailed to stockholders, at the time of the Retec
Stockholders' Meeting or at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading. The Proxy
Statement will comply (with respect to information relating to Thermo Electron)
as to form in all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder.
3.7. Financial Resources. Thermo Electron has the financial resources to
consummate the transactions contemplated by this Agreement and to pay the
consideration in the Merger provided for in Section 1.6(a).
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1. Conduct of Business by Retec. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Retec shall, except for such
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actions which are contemplated by this Agreement or reasonably appropriate in
connection with the transactions contemplated by this Agreement, and except as
consented to by Thermo Electron, carry on its business in the usual, regular and
ordinary course, in substantially the same manner as heretofore conducted (it
being expressly understood that Retec may declare and pay cash dividends in
customary amounts at customary times), pay its debts and taxes when due subject
to good faith disputes over such debts or taxes, pay or perform other material
obligations when due, and use its commercially reasonable efforts consistent
with past practices and policies to preserve intact its present business
organization, keep available the services of its present officers and employees
and preserve its relationships with customers, suppliers, distributors,
licensors, licensees, and others with which it has business dealings.
4.2 Conduct of Business by Thermo Electron. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement pursuant to its terms or the Effective Time, Thermo Electron (i)
shall, except for such actions which are contemplated by this Agreement or
reasonably appropriate in connection with the transactions contemplated by this
Agreement, or which are undertaken in connection with the Merger or with the
reorganization of Thermo Electron and its subsidiaries as publicly announced or
as disclosed to AH&H prior to the date of this Agreement, carry on its business
materially in the usual, regular and ordinary course, in substantially the same
manner as heretofore conducted, pay its debts and taxes when due subject to good
faith disputes over such debts or taxes, pay or perform other material
obligations when due, and use its commercially reasonable efforts consistent
with past practices and policies to preserve intact its present business
organization, keep available the services of its present officers and employees
and preserve its relationships with customers, suppliers, distributors,
licensors, licensees, and others with which it has business dealings; and (ii)
shall not, and shall not permit any Material Thermo Subsidiary to, take any
action which would make any of the representations and warranties of Thermo
Electron contained herein untrue or cause Thermo Electron not to be in
compliance with any covenant set forth herein.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1. Schedule 13E-3; Proxy Statement; Other Filings.
(a) As promptly as practicable after the execution of this
Agreement, Thermo Electron, TerraTech and Retec will jointly prepare and file
with the SEC the Schedule 13E-3 and the Proxy Statement. Thermo Electron,
TerraTech and Retec will cause the Proxy Statement to be mailed to stockholders
of Retec at the earliest practicable time. Each party will notify the other
promptly upon the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff or any other government officials for amendments
or supplements to the Schedule 13E-3 or the Proxy Statement or any other filing
or for additional information and will supply the other party with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the SEC, or its staff or any other government officials, on the other
hand, with respect to the Proxy Statement, the Schedule 13E-3 or the Merger.
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Whenever any event occurs that is required to be set forth in an amendment or
supplement to the Schedule 13E-3 or the Proxy Statement, the relevant party will
promptly inform the other party of such occurrence and cooperate in filing with
the SEC or its staff or any other government officials, and/or mailing to
stockholders of Retec, such amendment or supplement.
(b) The information supplied by Retec for inclusion in the
Schedule 13E-3 or the Proxy Statement (including any information incorporated by
reference in the Schedule 13E-3 or the Proxy Statement from other filings made
by Retec with the SEC) will not, on the date the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to Retec stockholders,
at the time of the Retec Stockholders' Meeting and at the Effective Time,
contain any statement which, at such time and in light of the circumstances
under which it shall be made, is false or misleading with respect to any
material fact, or shall omit to state any material fact necessary in order to
make the statements made therein not false or misleading in light of the
circumstances under which they were made, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Retec Stockholders' Meeting which has become
false or misleading.
(c) The information supplied by Thermo Electron and Merger Sub for
inclusion in the Schedule 13E-3 or the Proxy Statement (including any
information incorporated by reference in the Schedule 13E-3 or the Proxy
Statement from other filings made by Thermo Electron with the SEC) will not, on
the date the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to Retec stockholders, at the time of the Retec Stockholders'
Meeting and at the Effective Time, contain any statement which, at such time and
in light of the circumstances under which it shall be made, is false or
misleading with respect to any material fact, or shall omit to state any
material fact necessary in order to make the statements made therein not false
or misleading in light of the circumstances under which they were made, or omit
to state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Retec
Stockholders' Meeting which has become false or misleading.
(d) The Proxy Statement will include the recommendation of the
Special Committee in favor of approval of this Agreement (except that the
Special Committee may withdraw, modify or refrain from making such
recommendation to the extent that the Special Committee determines after
consultation with outside legal counsel that failure to do so would be
inconsistent with the Special Committee's fiduciary duties under applicable
law).
(e) The Proxy Statement will include the recommendation of the
Board of Directors of Retec in favor of approval of this Agreement (except that
the Board of Directors of Retec may withdraw, modify or refrain from making such
recommendation to the extent that the Board determines after consultation with
outside legal counsel that failure to do so would be inconsistent with the
Board's fiduciary duties under applicable law).
(f) To the extent that the Special Committee or the Board
withdraws, modifies or refrains from making their respective recommendations
pursuant to Sections 5.1(d) or (e) hereof, the Proxy Statement will reflect such
action.
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5.2. Meeting of Retec Stockholders. Promptly after the date hereof, Retec
will take all action necessary in accordance with the DGCL and its Certificate
of Incorporation and Bylaws to convene the Retec Stockholders' Meeting to be
held as promptly as practicable for the purpose of voting upon this Agreement.
Unless the Special Committee determines after consultation with outside legal
counsel that to do so would be inconsistent with the Board's or the Special
Committee's fiduciary duties under applicable law, Retec will use its reasonable
best efforts to solicit from its stockholders proxies in favor of the approval
of this Agreement and the Merger, and will take all other action necessary or
advisable to secure the vote or consent of its stockholders required by the DGCL
to obtain such approvals. Thermo Electron shall vote, or cause to be voted, all
of the Retec Common Stock then owned by it and any of its subsidiaries in favor
of the approval of this Agreement and the Merger.
5.3. Access to Information. Subject to applicable legal restrictions, each
of the parties hereto will afford the other (including, in the case of Retec,
the Special Committee) and each of their respective accountants, counsel and
other representatives reasonable access during normal business hours to the
properties, books, records and personnel of each of them during the period prior
to the Effective Time to obtain all information concerning their respective
businesses, including the status of their respective product development
efforts, properties, results of operations and personnel, as each of them may
reasonably request. Each of the parties hereto agrees that it will, and will
cause its representatives and agents to, keep all such information confidential
and will not, and will cause its representatives or agents not to, use any
information obtained pursuant to this Section 5.3 for any purpose unrelated to
the consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing, none of the parties hereto shall be required to
keep confidential any information (i) which is or becomes generally available to
the public, other than by wrongful disclosure by the disclosing party in
violation of this Agreement, or (ii) which becomes available to the disclosing
party on a nonconfidential basis from a source other than the nondisclosing
party or any officer or director of such party.
5.4. Public Disclosure. Thermo Electron and Retec will consult with each
other before issuing any press release or otherwise making any public statement
with respect to the Merger or this Agreement and will not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by law or any listing agreement with a national securities
exchange. Promptly upon the execution hereof, the parties shall jointly make a
press release with respect to the transactions contemplated by this Agreement,
in form reasonably satisfactory to the Special Committee, and Retec shall,
within five days after the execution hereof, file with the SEC a Current Report
on Form 8-K, which shall attach as an exhibit this Agreement.
5.5. Legal Requirements. Subject to the terms of this Agreement, each of
Thermo Electron, Merger Sub and Retec will take all reasonable actions necessary
or desirable to comply promptly with all legal requirements that may be imposed
on them with respect to the consummation of the transactions contemplated by
this Agreement (including furnishing all information required in connection with
approvals of or filings with any Governmental Entity, and including using its
reasonable best efforts to defend any litigation prompted hereby) and will
promptly cooperate with and furnish information to any party hereto necessary in
connection with any such requirements imposed upon any of them or their
respective subsidiaries in connection with the consummation of the transactions
contemplated by this Agreement.
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5.6. Notification of Certain Matters. Subject to the terms of this
Agreement, Thermo Electron and Merger Sub will give prompt notice to Retec, and
Retec will give prompt notice to Thermo Electron, of the occurrence, or failure
to occur, of any event, which occurrence or failure to occur would be reasonably
likely to cause (a) any representation or warranty contained in this Agreement
to be untrue or inaccurate in any material respect at any time from the date of
this Agreement to the Effective Time, or (b) any material failure of Thermo
Electron and Merger Sub or Retec, as the case may be, or of any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement. From the date of this Agreement until the Effective Time, Thermo
Electron will give prompt notice to Retec (including, without limitation, the
Special Committee) of any written offers or indications of interest it receives
from a prospective purchaser of any material properties or assets of Retec or
its subsidiaries, which set forth a proposed purchase price greater than $3
million or in which the book value of the assets being sold is greater than $3
million, other than sales of assets and services in the ordinary course of
business. Notwithstanding the above, the delivery of any notice pursuant to this
section will not limit or otherwise affect the remedies available hereunder to
the party receiving such notice or the conditions to such party's obligation to
consummate the Merger.
5.7. Best Efforts and Further Assurances. Subject to the respective rights
and obligations of Thermo Electron and Retec under this Agreement, each of the
parties to this Agreement will use its reasonable best efforts to effectuate the
Merger and the other transactions contemplated hereby and to fulfill and cause
to be fulfilled the conditions to closing under this Agreement, it being
understood that such efforts shall not include any obligation to settle any
litigation prompted hereby. Subject to the terms hereof, each party hereto, at
the reasonable request of another party hereto, will execute and deliver such
other instruments and do and perform such other acts and things as may be
reasonably necessary or desirable for effecting completely the consummation of
the transactions contemplated hereby.
5.8. Stock Option and Employee Stock Purchase Plans; Reservation of
Shares.
(a) At the Effective Time, each outstanding option to purchase
shares of Retec Common Stock (each a "Retec Stock Option") under the Retec Stock
Option Plans, whether or not exercisable, will be assumed by Thermo Electron.
Each Retec Stock Option so assumed by Thermo Electron under this Agreement will
continue to have, and be subject to, the same terms and conditions set forth in
the applicable Retec Stock Option Plan immediately prior to the Effective Time
(including, without limitation, any repurchase rights), except that (i) each
Retec Stock Option will be exercisable (or will become exercisable in accordance
with its terms) for that number of whole shares of Thermo Common Stock equal to
the product of the number of shares of Retec Common Stock that were issuable
upon exercise of such Retec Stock Option immediately prior to the Effective Time
multiplied by a fraction (the "Exchange Ratio"), the numerator of which is the
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Cash Merger Consideration and the denominator of which is the closing price of
the Thermo Common Stock on the day immediately preceding the Effective Date as
reported in the consolidated transaction reporting system, rounded down to the
nearest whole number of shares of Thermo Common Stock, and (ii) the per share
exercise price for the shares of Thermo Common Stock issuable upon exercise of
such assumed Retec Stock Option will be equal to the quotient determined by
dividing the exercise price per share of Retec Common Stock at which such Retec
Stock Option was exercisable immediately prior to the Effective Time by the
Exchange Ratio, rounded up to the nearest whole cent. After the Effective Time,
Thermo Electron will issue to each holder of an outstanding Retec Stock Option a
notice describing the foregoing assumption of such Retec Stock Option by Thermo
Electron.
(b) At the Effective Time, each outstanding option to purchase
shares of Retec Common Stock (each, a "Retec ESPP Stock Option") under the Retec
ESPP will be assumed by Thermo Electron. Each Retec ESPP Stock Option so assumed
by Thermo Electron will continue to have, and be subject to, the same terms and
conditions as are set forth in the Retec ESPP immediately prior to the Effective
Time except that (i) the assumed option shall be exercisable (or will become
exercisable in accordance with its terms) for that number of whole shares of
Thermo Common Stock equal to the product of the number of shares of Retec Common
Stock that would have been issuable upon exercise of such Retec ESPP Stock
Option multiplied by the Exchange Ratio; (ii) the purchase price per share of
Thermo Common Stock shall be the lower of (A) eighty-five percent (85%) of (x)
the per-share Market Value of Retec Common Stock on the Grant Date divided by
(y) the Exchange Ratio, with the resulting price rounded up to the nearest whole
cent, and (B) eighty-five percent (85%) of the Market Value of Thermo Common
Stock as of the Exercise Date; and (iii) the $25,000 limit under Section 9.2(i)
of the Retec ESPP shall be applied by taking into account Thermo Electron's
assumption of the Retec ESPP Stock Options in accordance with the Internal
Revenue Code of 1986, as amended, and applicable regulations. For purposes of
this subsection, "Market Value," "Grant Date," and "Exercise Date" shall have
the meaning given them in the Retec ESPP.
(c) Thermo Electron will reserve sufficient shares of Thermo Common
Stock for issuance under this Section 5.8 and pursuant to the exercise of
warrants issued by Retec.
5.9. Thermo Electron Form S-8. Thermo Electron agrees to file a
registration statement on Form S-8 or, if possible, an amendment to Thermo
Electron's then effective registration statement on Form S-8, for the shares of
Thermo Common Stock issuable with respect to the assumed Retec Stock Options and
the assumed Retec ESPP Stock Options within five (5) business days of the
Effective Time, and shall keep such registration statement effective for so long
as any such options remain outstanding.
5.10. Indemnification; Insurance.
(a) The Certificate of Incorporation and Bylaws of the Surviving
Corporation will contain the provisions with respect to indemnification and
elimination of liability for monetary damages set forth in the Certificate of
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Incorporation and Bylaws of Retec, which provisions will not be amended,
repealed or otherwise modified for a period of six (6) years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals who, as of the date hereof and at any time from the date hereof to
the Effective Time, were directors or officers of Retec, unless such
modification is required by law. The Surviving Corporation shall, and Thermo
Electron will cause the Surviving Corporation to, fulfill and honor in all
respects the indemnification obligations of Retec pursuant to the provisions of
the Certificate of Incorporation and the Bylaws of Retec as in effect on the
date of this Agreement.
(b) For a period of six (6) years after the Effective Time, Thermo
Electron shall cause the Surviving Corporation to, either directly or through
participation in Thermo Electron's umbrella policy, maintain in effect a
directors' and officers' liability insurance policy covering those Retec
directors and officers currently covered by Thermo Electron's liability
insurance policy with coverage no less favorable in amount and scope than
existing coverage for such Retec directors and officers (which coverage may be
an endorsement extending the period in which claims may be made under such
existing policy); provided, however, that in no event shall the Surviving
Corporation be required to expend to maintain or procure insurance coverage
pursuant to this Section 5.10, directly or through participation in Thermo
Electron's policy, an amount per annum in excess of 175% of the current annual
premiums, as adjusted for inflation each year, allocable and payable by Retec
(the "Maximum Premium") with respect to such insurance, or, if the cost of such
insurance exceeds the Maximum Premium, the maximum amount of coverage that can
be purchased or maintained for the Maximum Premium.
(c) Retec shall, to the fullest extent permitted under applicable
law and regardless of whether the Merger becomes effective, indemnify and hold
harmless Fred Holubow ("Holubow") against all costs and expenses (including
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation, whether civil, criminal, administrative or investigative,
arising out of or pertaining to any action or omission in Holubow's capacity as
a director (including, without limitation, as a member of the Special Committee)
or fiduciary of Retec (including, without limitation, in connection with the
transactions contemplated by this Agreement) occurring on, before or after the
Effective Time (or, if this Agreement is terminated without the Merger becoming
effective, occurring on, before or after the date of such termination), until
the expiration of the statute of limitations relating thereto (and shall pay any
expenses in advance of the final disposition of such action or proceeding to
Holubow to the fullest extent permitted under applicable law, upon receipt from
Holubow of an undertaking (which need not be secured or subject to a bond or
other requirement) to repay any advanced expenses if it shall ultimately be
determined that Holubow is not entitled to be indemnified against such
expenses). If the Merger becomes effective, Thermo Electron shall be jointly and
severally responsible, to the fullest extent permitted by applicable law (it
being understood that applicable law may permit Thermo Electron to indemnify or
advance expenses to Holubow under circumstances in which Retec could not do so),
for the indemnification and advancement of expenses obligations provided for in
the first sentence of this Section 5.10(c). If the Merger does not become
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effective, Thermo Electron shall have the same responsibilities set forth in the
immediately preceding sentence, except that Thermo Electron shall have no
responsibility for indemnifying or advancing expenses to Holubow with respect to
matters that do not arise out of or pertain to the work of the Special
Committee, this Agreement or the transactions contemplated hereby. In the event
of any claim, action, suit, proceeding or investigation covered by this Section
5.10(c), (i) Retec, Thermo Electron and the Surviving Corporation, as the case
may be, shall pay the reasonable fees and expenses of counsel selected by
Holubow, promptly after statements therefor are received, and (ii) Retec, Thermo
Electron and the Surviving Corporation shall cooperate in the defense of any
such matter; provided, however, that neither Retec nor Thermo Electron nor the
Surviving Corporation shall be liable for any settlement effected without Thermo
Electron's prior written consent (such consent not to be unreasonably withheld
or delayed); and provided, further, that, in the event any claim for
indemnification is asserted or made within the period prior to the expiration of
the applicable statute of limitations, all rights to indemnification in respect
of such claim shall continue until the disposition of such claim. In connection
with Thermo Electron or the Surviving Corporation making any payment or
advancing any funds pursuant to this Section 5.10(c), Thermo Electron or the
Surviving Corporation, as the case may be, shall be entitled to require Holubow
to use commercially reasonable efforts, at the cost and expense of Thermo
Electron and the Surviving Corporation, to cause Thermo Electron or the
Surviving Corporation, as the case may be, to be subrogated to Holubow's rights
under any insurance coverage maintained by the Surviving Corporation, Thermo
Electron or any of their respective affiliates with respect to the underlying
subject matter of, and to the extent of, such payment or advance.
(d) In the event Retec, Thermo Electron or the Surviving Corporation
or any of their respective successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger, or (ii) transfers all or
substantially all of its properties or assets to any person, then, and in each
such case, proper provision shall be made so that the successors and assigns of
Retec, Thermo Electron and the Surviving Corporation, as the case may be, shall
assume the obligations set forth in this Section 5.10.
(e) Heirs, representatives and estates of the officers and
directors of Retec (including, without limitation, Holubow) shall have the right
to enforce the obligations arising under this Section 5.10.
(f) The rights of the officers and directors of Retec (including,
without limitation, Holubow) under this Section 5.10 are in addition to any
rights of such persons under separate indemnification agreements any such
persons may have with Retec and/or Thermo Electron, under the Certificate of
Incorporation or Bylaws of Retec or Thermo Electron or otherwise.
5.11. Deferred Compensation Plan. Subject to obtaining the consents of the
affected participants, at the Effective Time, the Thermo Remediation Inc.
Deferred Compensation Plan for Directors (the "Deferred Compensation Plan") will
terminate, and Retec will distribute to each participant the sum in cash equal
to the balance of stock units credited to his or her deferred compensation
account under the Deferred Compensation Plan as of the Effective Time multiplied
by the Cash Merger Consideration.
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5.12 Compliance by Merger Sub. Thermo Electron shall cause Merger Sub to
timely perform and comply with all of its obligations under or related to this
Agreement. Thermo Electron will ensure that Merger Sub has the financial
resources to consummate the transactions contemplated by this Agreement and to
pay the consideration in the Merger provided for in Section 1.6(a).
5.13 NYSE Listing. Thermo Electron shall use its best efforts to cause all
shares of Thermo Common Stock which will be subject to issuance pursuant to the
Retec Stock Option Plans, the Retec ESPP and the warrants issued by Retec, each
as assumed by Thermo Electron pursuant to this Agreement, to be authorized for
listing on the New York Stock Exchange.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1. Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) No Order. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
(b) NYSE Listing. The Thermo Common Stock which will be subject to
issuance pursuant to the Retec Stock Option Plans, the Retec ESPP and the
warrants issued by Retec, each as assumed by Thermo Electron pursuant to this
Agreement, shall have been authorized for listing on the New York Stock
Exchange.
(c) Stockholder Approval. This Agreement shall have been approved
and adopted by the requisite vote under the DGCL by the stockholders of Retec.
6.2. Additional Conditions to the Obligations of Retec. The obligations of
Retec to consummate and effect the Merger shall be subject to the satisfaction
at or prior to the Effective Time of each of the following conditions, any of
which may be waived, in writing, exclusively by Retec (provided that the Special
Committee shall have consented in writing to any such waiver):
(a) Representations and Warranties. The representations and
warranties of Thermo Electron and Merger Sub contained in this Agreement shall
be true and correct in all material respects (other than those already qualified
by a materiality standard, which shall be true and correct in all respects) on
and as of the Effective Time, except for changes expressly contemplated by this
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Agreement and except for those representations and warranties that address
matters only as of a particular date (which shall remain true and correct as of
such particular date), with the same force and effect as if made on and as of
the Effective Time; and Retec shall have received a certificate to such effect
signed on behalf of Thermo Electron by the President, Chief Executive Officer or
Vice President of Thermo Electron; and
(b) Agreements and Covenants. Thermo Electron and Merger Sub shall
have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by them on
or prior to the Effective Time, and Retec shall have received a certificate to
such effect signed on behalf of Thermo Electron by the President, Chief
Executive Officer or Vice President of Thermo Electron.
(c) Fairness Opinion. At the time of mailing of the Proxy Statement
to the stockholders of Retec and at the Effective Time, AHH shall have
reaffirmed orally the fairness opinion previously prepared and delivered by it
to the Special Committee and AHH shall not have withdrawn such opinion.
6.3. Additional Conditions to the Obligations of Thermo Electron and
Merger Sub. The obligations of Thermo Electron and Merger Sub to consummate and
effect the Merger shall be subject to the satisfaction at or prior to the
Effective Time of each of the following conditions, any of which may be waived,
in writing, exclusively by Thermo Electron:
(a) Representations and Warranties. The representations and
warranties of Retec contained in this Agreement shall be true and correct in all
material respects (other than those already qualified by a materiality standard,
which shall be true and correct in all respects) on and as of the Effective
Time, except for changes contemplated by this Agreement and except for those
representations and warranties that address matters only as of a particular date
(which shall remain true and correct as of such particular date), with the same
force and effect as if made on and as of the Effective Time, except, in all such
cases, where the failure to be so true and correct would not have a Material
Adverse Effect on Retec; and Thermo Electron and Merger Sub shall have received
a certificate to such effect signed on behalf of Retec by the President, Chief
Executive Officer or Vice President of Retec; and
(b) Agreements and Covenants. Retec shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and Thermo Electron shall have received a certificate to such
effect signed on behalf of Retec by the President, Chief Executive Officer or
Vice President of Retec.
(c) No Withdrawal of Special Committee Recommendation. The
Special Committee shall not have withdrawn its recommendation to the Board of
Directors of Retec as set forth in Section 2.4 hereof.
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ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time of the Merger, whether before or after approval of this
Agreement by the stockholders of Retec:
(a) by mutual written consent duly authorized by the Boards of
Directors of Merger Sub and Retec (upon approval of the Special Committee);
(b) by either Retec (at the direction of the Special Committee) or
Merger Sub if the Merger shall not have been consummated by March 31, 2000;
provided, however, that the right to terminate this Agreement under this Section
7.1(b) shall not be available to any party whose action or failure to act has
been a principal cause of or resulted in the failure of the Merger to occur on
or before such date if such action or failure to act constitutes a breach of
this Agreement;
(c) by either Retec (upon approval of the Special Committee) or
Merger Sub if a court of competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an order, decree or ruling
or taken any other action (an "Order"), in any case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger, which
order, decree or ruling is final and nonappealable;
(d) by either Retec (upon approval of the Special Committee) or
Merger Sub if the required approval of the stockholders of Retec contemplated by
this Agreement shall not have been obtained by reason of the failure to obtain
the required vote upon a vote taken at a meeting of stockholders duly convened
therefor or at any adjournment thereof (provided that the right to terminate
this Agreement under this Section 7.1(d) shall not be available to Retec where
the failure to obtain stockholder approval of Retec shall have been caused by
the action or failure to act of Retec in breach of this Agreement and the right
to terminate this Agreement under this Section 7.1(d) shall not be available to
Merger Sub where the failure to obtain the requisite vote by the stockholders of
Retec shall have been caused by the failure of Thermo Electron or any direct or
indirect subsidiary of Thermo Electron (whether or not wholly-owned) to vote its
shares of Retec Common Stock in favor of the Merger and this Agreement);
(e) by Retec if the Special Committee determines after
consultation with outside legal counsel that failure to do so would be
inconsistent with the Board's or the Special Committee's fiduciary duties under
applicable law;
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(f) by Retec (upon approval of the Special Committee), upon a
breach of any representation, warranty, covenant or agreement on the part of
Thermo Electron or Merger Sub set forth in this Agreement, if (i) as a result of
such breach the conditions set forth in Section 6.2(a) or Section 6.2(b) would
not be satisfied as of the time of such breach and (ii) such breach shall not
have been cured by Thermo Electron or Merger Sub within ten (10) business days
following receipt by Thermo Electron of written notice of such breach from
Retec; or
(g) by Merger Sub, upon a breach of any representation, warranty,
covenant or agreement on the part of Retec set forth in this Agreement, if (i)
as a result of such breach the conditions set forth in Section 6.3(a) or Section
6.3(b) would not be satisfied as of the time of such breach and (ii) such breach
shall not have been cured by Retec within ten (10) business days following
receipt by Retec of written notice of such breach from Merger Sub.
7.2. Notice of Termination; Effect of Termination. Any termination of this
Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice by the terminating party to the other parties hereto
(or, in the case of a termination pursuant to Section 7.1(f) or 7.1(g), the
expiration of the ten business day period referred to therein). In the event of
the termination of this Agreement as provided in Section 7.1, this Agreement
shall be of no further force or effect, except that (i) the confidentiality
obligations of each party hereto contained in Section 5.3, the obligations
contained in Section 5.10, and the provisions of Sections 7.2, 7.3 and 8.1 shall
survive any such termination and (ii) nothing herein shall relieve any party
from liability for any willful and material breach of this Agreement.
7.3. Fees and Expenses. All fees and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses, whether or not the Merger is consummated.
7.4. Amendment. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of the parties hereto; provided, however, that Retec
may not amend this Agreement without the approval of the Special Committee.
7.5. Extension; Waiver. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein; provided, however, that Retec may not take any such
actions without the approval of the Special Committee. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
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ARTICLE VIII
GENERAL PROVISIONS
8.1. Non-Survival of Representations and Warranties. The representations
and warranties of Retec, Thermo Electron and Merger Sub contained in this
Agreement shall terminate at the Effective Time, and only the covenants that by
their terms, or as the context requires, survive the Effective Time shall
survive the Effective Time.
8.2. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Thermo Electron or Merger Sub, to:
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: President
Telephone: (781) 622-1000
Facsimile: (781) 622-1283
with a copy (which shall not constitute notice to Thermo
Electron or Merger Sub) to:
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: General Counsel
Telephone: (781) 622-1000
Facsimile: (781) 622-1283
(b) if to Retec, to:
ThermoRetec Corporation
Damonmill Square
9 Pond Lane, Suite 5A
Concord, MA 01742
Attention: President
Telephone: (978) 371-3200
Facsimile: (978) 371-9124
with a copy (which shall not constitute notice to
Retec) to:
Altheimer & Gray
10 South Wacker Drive, Suite 4000
Chicago, Illinois 60606
Attention: Peter H. Lieberman, Esq.
Telephone: (312) 715-4000
Facsimile: (312) 715-4800
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8.3. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.4. Entire Agreement. This Agreement and the documents and instruments
and other agreements among the parties hereto as contemplated by or referred to
herein (a) constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, with the exception of the agreements relating to the Convertible
Debentures, the Retec ESPP, the Retec Stock Option Plans, the warrants issued by
Retec, the Deferred Compensation Plan, and any agreements relating to
indemnification of members of the Board; and (b) are not intended to confer upon
any other person any rights or remedies hereunder, except as set forth or
otherwise contemplated herein. Notwithstanding the foregoing, Section 5.10
hereof is intended to be for the benefit of, and may be enforced by, those
individuals who, as of the date hereof and at any time from the date hereof to
the Effective Time, were directors or officers of Retec.
8.5. Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.6. Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
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8.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.8. Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties.
8.9 Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
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IN WITNESS WHEREOF, Thermo Electron, Merger Sub and Retec have caused this
Agreement to be signed by themselves or their duly authorized respective
officers, all as of the date first written above.
THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
------------------------------
Name: Theo Melas-Kyriazi
Title: Vice President and Chief
Financial Officer
RETEC ACQUISITION CORPORATION
By: /s/ Theo Melas-Kyriazi
------------------------------
Name: Theo Melas-Kyriazi
Title: President
THERMORETEC CORPORATION
By: /s/ Robert W. Dunlap
------------------------------
Name: Robert W. Dunlap
Title: President and Chief Executive Officer
