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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(RULE 13D-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)*
Wandel & Goltermann Technologies, Inc.
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(Name of Issuer)
Common Stock, $.01 par value per share
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(Title of Class of Securities)
193369210
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(CUSIP Number)
Rolf Schmid
Managing Director-Finance and Controlling
Wandel & Goltermann Management Holding GmbH
Box 1262, D-72795
Eningen u.A., Federal Republic of Germany
Tel No.: 011 49 7121 86-1708
(Name, Address and Telephone Number of Person Authorized to Receive
- --------------------------------------------------------------------------------
Notices and Communications)
March 28, 1998
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 30 Pages)
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*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
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CUSIP No. 193369210 Page 2 of 30 Pages
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1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WANDEL & GOLTERMANN MANAGEMENT HOLDING GMBH
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ ]
(B) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC OR 00 OR BK
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
FEDERAL REPUBLIC OF GERMANY
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7 SOLE VOTING POWER
3,285,600
Number of ----------------------------------------------------
Shares 8 SHARED VOTING POWER
Beneficially
Owned by
Each ----------------------------------------------------
Reporting 9 SOLE DISPOSITIVE POWER
Person
With 3,285,600
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10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,285,600
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.1%
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14 TYPE OF REPORTING PERSON*
00
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 193369210 Page 3 of 30 Pages
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 4 TO SCHEDULE 13D
This Amendment No. 4 to Schedule 13D relates to the shares of common
stock, $.01 par value per share (the "Common Stock"), of Wandel & Goltermann
Technologies, Inc. (the "Issuer"). Items 3, 4 and 7 of the Schedule 13D filed by
Wandel & Goltermann Management Holding GmbH ("WG Holding" or the "Reporting
Person"), as previously amended, are further amended as set forth below.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
No change except for the deletion and replacement of the third
paragraph of Item 3 with the following:
The responses to Item 4 are incorporated herein by this
reference. The funds needed by the Reporting Person to acquire all of
the shares of the Issuer not owned by the Reporting Person if the
transaction contemplated by the Proposed Merger (as defined in the
response to Item 4 hereof) is consummated will aggregate to
approximately $32 million, and will be obtained from the Reporting
Person's and the Issuer's working capital and from advances under
existing credit facilities of the Reporting Person with a syndicate of
banks for which Commerzbank AG, Frankfurt, Germany, serves as agent
bank and, to the extent funds are available thereunder, from advances
under an existing unsecured line of credit facility of the Issuer with
First Union National Bank.
ITEM 4. PURPOSE OF THE TRANSACTION
No change except for the addition of the following paragraphs as the
last two paragraphs of Item 4:
On March 28, 1998, the Board of Directors of the Issuer
unanimously approved an Agreement and Plan of Merger (the "Merger
Agreement") among the Issuer, WG Holding and WG Merger Corp., a wholly
owned subsidiary of WG Holding, pursuant to which WG Merger Corp. will
be merged into the Issuer and each share of the outstanding Common
Stock (other than shares owned by WG Holding) will be converted into
the right to receive $15.90 in cash (the "Proposed Merger").
Thereafter, the Issuer, WG Holding and WG Merger Corp. executed the
Merger Agreement, a copy of which has been filed as an exhibit hereto,
which Merger Agreement is incorporated in this Item by this reference.
Completion of the Proposed Merger is subject to certain
conditions, including approval of the Merger Agreement by the Issuer's
shareholders at a special meeting. The Issuer anticipates that the
special meeting will be held in June or July 1998. Approval of the
Merger Agreement at the special meeting will require the affirmative
vote of the holders of a majority of the outstanding shares of Common
Stock. WG Holding has informed the Issuer that WG Holding intends to
vote its shares in favor of the Merger Agreement.
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CUSIP No. 193369210 Page 4 of 30 Pages
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following exhibit is filed as part of this Schedule 13D:
Exhibit 4 - Agreement and Plan of Merger dated as of March 28,
1998 between Wandel & Goltermann Technologies, Inc., Wandel &
Goltermann Management Holding GmbH and WG Merger Corp.
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CUSIP No. 193369210 Page 5 of 30 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 31, 1998 WANDEL & GOLTERMANN MANAGEMENT
-------------- HOLDING GMBH
By: /s/ Rolf Schmid
------------------------------------
Rolf Schmid, Managing Director and
Chief Financial Officer
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EXHIBIT 4 TO SCHEDULE 13D
AGREEMENT AND PLAN OF MERGER
DATED AS OF
MARCH 28, 1998
AMONG
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
WG MERGER CORP.
AND
WANDEL & GOLTERMANN MANAGEMENT HOLDING GMBH
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TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I. THE MERGER .............................................................. 2
SECTION 1.1 Company Action ....................................................... 2
SECTION 1.3 Conversion of Shares ................................................. 3
SECTION 1.4 Surrender and Payment ................................................ 3
SECTION 1.5 Dissenting Shares .................................................... 4
SECTION 1.6 Stock Options and Employee Stock Purchase Plan ....................... 5
SECTION 1.7 Closing .............................................................. 5
ARTICLE II. THE SURVIVING CORPORATION ............................................... 5
SECTION 2.1 Articles of Incorporation ............................................ 5
SECTION 2.2 Bylaws ............................................................... 6
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY ........................... 6
SECTION 3.1 Corporate Organization ............................................... 6
SECTION 3.2 Capitalization ....................................................... 6
SECTION 3.3 Authority Relative to this Agreement ................................. 7
SECTION 3.4 No Violation ......................................................... 7
SECTION 3.5 Compliance with Laws ................................................. 8
SECTION 3.7 Financial Statements and Reports ..................................... 9
SECTION 3.8 Absence of Certain Changes or Events .................................10
SECTION 3.9 No Undisclosed Material Liabilities ..................................10
SECTION 3.10 No Default ...........................................................10
SECTION 3.11 Finders' and Bankers' Fees ...........................................11
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER .................................11
SECTION 4.1 Corporate Organization ...............................................11
SECTION 4.2 Corporate Authorization ..............................................11
SECTION 4.3 Governmental Authorization ...........................................11
SECTION 4.4 Non-Contravention ....................................................11
SECTION 4.5 Finders' and Bankers' Fees ...........................................12
ARTICLE V. COVENANTS OF THE COMPANY ................................................12
SECTION 5.1 Conduct of the Company ...............................................12
SECTION 5.2 Shareholder Meeting; Proxy Material 12
SECTION 5.3 Disclosure Documents .................................................12
SECTION 5.4 Access to Information ................................................13
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 5.5 Notices of Certain Events ............................................13
ARTICLE VI. COVENANTS OF BUYER ......................................................13
SECTION 6.1 Director and Officer Liability .......................................13
SECTION 6.2 Disclosure Documents .................................................14
SECTION 6.3 Notices of Certain Events ............................................14
ARTICLE VII. COVENANTS OF BUYER AND THE COMPANY ......................................14
SECTION 7.1 Best Efforts .........................................................14
SECTION 7.2 Certain Filings ......................................................14
SECTION 7.3 Public Announcements .................................................15
SECTION 7.4 Further Assurances ...................................................15
ARTICLE VIII. CONDITIONS TO THE MERGER ................................................15
SECTION 8.1 Conditions to the Obligations of Each Party ..........................15
SECTION 8.2 Additional Conditions to the Obligations of Buyer and
Merger Susidiary
SECTION 8.3 Additional Conditions to the Obligations of the Company ..............16
ARTICLE IX. TERMINATION .............................................................17
SECTION 9.1 Termination ..........................................................17
SECTION 9.2 Effect of Termination ................................................17
ARTICLE X. MISCELLANEOUS ...........................................................18
SECTION 10.1 Definitions ..........................................................18
SECTION 10.2 Notices ..............................................................20
SECTION 10.3 No Survival of Representations and Warranties ........................20
SECTION 10.4 Amendments; No Waivers ...............................................21
SECTION 10.5 Fees and Expenses ....................................................21
SECTION 10.6 Successors and Assigns ...............................................21
SECTION 10.7 Governing Law ........................................................21
SECTION 10.8 Severability .........................................................21
SECTION 10.9 Headings and Captions ................................................22
SECTION 10.10 Interpretations ......................................................22
SECTION 10.11 Counterparts; Effectiveness ..........................................22
</TABLE>
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of March 28, 1998, by and
among Wandel & Goltermann Management Holding GmbH, a German limited liability
company ("Holding"), WG Merger Corp., a North Carolina corporation and
wholly-owned subsidiary of Holding ("Merger Subsidiary" or "Merger Sub")
(Holding and Merger Subsidiary are sometimes referred to collectively as
"Buyer"), and Wandel & Goltermann Technologies, Inc., a North Carolina
corporation (the "Company").
WHEREAS:
A. The authorized capital stock of the Company consists of (i)
20,000,000 shares of common stock, $.01 par value (the "Company Common Stock"),
of which 5,287,778 shares were issued and outstanding as of close of business on
March 27, 1998, and (ii) 2,000,000 shares of Preferred Stock, $.01 par value
(the "Preferred Stock"), of which no shares were issued and outstanding as of
the close of business on March 27, 1998.
B. Holding currently owns, and will own immediately prior to the
Effective Time, 3,285,600 shares of Company Common Stock representing
approximately sixty-two percent (62%) of the total issued and outstanding
Company Common Stock.
C. A special committee of the Board of Directors of the Company
appointed on November 18, 1997 and comprised entirely of directors who are
neither members of management of the Company nor affiliated with Buyer or any
Affiliate of Buyer (other than the Company) (the "Special Committee") has
unanimously determined that the Merger is fair to and in the best interests of
the shareholders of the Company other than Buyer (the "Public Shareholders") and
has unanimously approved this Agreement and unanimously recommends its approval
and adoption by the Board of Directors (the "Board") and by the shareholders of
the Company.
D. The Board, based in part on the recommendation of the Special
Committee and the written opinion of The Robinson-Humphrey Company, LLC, the
financial advisor to the Special Committee (the "Financial Advisor"), has
determined that the Merger is fair to and in the best interests of the Public
Shareholders and has resolved to approve and adopt this Agreement and its
contemplated transactions and, subject to the following terms and conditions, to
recommend the approval and adoption of this Agreement by the shareholders of the
Company.
E. The Board, Holding, and Merger Sub each have approved the merger of
Merger Subsidiary with and into the Company (the "Merger") in accordance with
the North Carolina Business Corporation Act (the "NCBCA") and the terms and
conditions provided below, pursuant to which each share (other than shares of
Company Common Stock held by the Company as
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treasury stock, shares of Company Common Stock owned by Holding immediately
prior to the Effective Time, and shares of Company Common Stock as to which
dissenters' rights have been perfected in accordance with the NCBCA) shall be
converted into the right to receive the Merger Consideration.
F. Certain capitalized terms are defined in Section 10.1 hereof.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants, representations, warranties, and agreements herein, the parties agree
as follows:
ARTICLE I.
THE MERGER
SECTION 1.1. COMPANY ACTION. The Company represents that its Board of
Directors, at a meeting called and held, and relying in part on the unanimous
recommendation of the Special Committee, has (i) unanimously determined that
this Agreement and its contemplated transactions, including the Merger, are fair
to and in the best interests of the Public Shareholders, (ii) unanimously
approved and adopted this Agreement and its contemplated transactions, including
the Merger, and (iii) unanimously resolved to recommend the approval and
adoption of this Agreement and the Merger by the Company's shareholders,
provided that such recommendation may be withdrawn, modified, or amended by the
Board if the Board deems such withdrawal, modification, or amendment necessary
in light of its fiduciary obligations to the Company's shareholders after
consultation with counsel.
SECTION 1.2. THE MERGER.
(a) At the Effective Time, Merger Subsidiary will be merged with and
into the Company in accordance with Article 11 of the NCBCA, the separate
existence of Merger Subsidiary shall cease, and the Company shall be the
Surviving Corporation.
(b) As soon as practicable after satisfaction of all conditions to the
Merger, or waiver of conditions to the extent permitted herein, the Company and
Merger Subsidiary will file articles of merger ("Articles of Merger") with the
Secretary of State of the State of North Carolina and make all other filings or
recordings required by the NCBCA in connection with the Merger. The Merger shall
become effective when the Articles of Merger are filed with the Secretary of
State of the State of North Carolina or at such later time as is specified in
the Articles of Merger (the "Effective Time").
(c) After the Effective Time, the Surviving Corporation shall possess
all the rights, privileges, and powers, and be subject to all of the
restrictions, disabilities, and duties of the Company and Merger Subsidiary, all
as provided under the NCBCA.
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SECTION 1.3. CONVERSION OF SHARES. At the Effective Time:
(a) Each share of Company Common Stock (a "Share") which is outstanding
immediately prior to the Effective Time, except as otherwise provided in Section
1.3(b) or as provided in Section 1.5 with respect to Shares for which
dissenters' rights have been perfected, shall be converted into the right to
receive $15.90 in cash, without interest (the "Merger Consideration").
(b) Each Share held by the Company as treasury stock immediately prior
to the Effective Time and each share held by Holding immediately prior to the
Effective Time shall be canceled and no payment shall be made for it.
(c) Each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation with the same rights, powers,
and privileges as the shares so converted and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
SECTION 1.4. SURRENDER AND PAYMENT.
(a) At or before the Effective Time, the Company shall appoint First
Union National Bank, as agent (the "Exchange Agent"), for the purpose of
exchanging certificates representing Shares for the Merger Consideration. At or
immediately prior to the Effective Time, Holding shall make a capital
contribution to the Company in an amount that, together with funds available to
the Company, is sufficient to permit the Company to make the aggregate Merger
Consideration available to the Exchange Agent in accordance herewith. At the
Effective Time, the Company shall make the aggregate Merger Consideration
available to the Exchange Agent for all applicable outstanding Shares to be
converted in accordance with Section 1.3(a) hereof. At or promptly following the
Effective Time, the Company or Surviving Corporation will send or cause the
Exchange Agent to send to each holder of Shares at the Effective Time a letter
of transmittal for use in such exchange. This letter of transmittal shall
specify that the delivery shall be effected and risk of loss and title shall
pass only upon proper delivery of the certificates representing Shares to the
Exchange Agent.
(b) Each holder of Shares that have been converted into a right to
receive Merger Consideration will be entitled to receive the Merger
Consideration payable for such holder's Shares upon surrender to the Exchange
Agent of a certificate or certificates representing such Shares, together with a
properly completed letter of transmittal covering such Shares. After the
Effective Time and until surrendered with the letter of transmittal, each such
certificate shall only represent the right to receive Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate(s) surrendered in exchange, it will
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be a condition to payment that the certificate(s) surrendered be properly
endorsed or otherwise be in proper form for transfer. Additionally, the Person
requesting such payment must pay to the Exchange Agent any transfer or other
taxes required as a result of payment to a Person other than the registered
holder of such Shares, or establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not payable.
(d) After the Effective Time, no further transfers of Shares will be
registered. After the Effective Time, if certificates representing Shares are
presented to the Surviving Corporation, they will be canceled and exchanged for
the Merger Consideration in accordance with the procedures set forth in this
Article I.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.4(a) that remains unclaimed by the holders
of Shares six (6) months after the Effective Time shall be returned within one
week after the end of the six (6) month period, without further action or
request, to the Surviving Corporation, and any such holder who has not exchanged
such Shares for the Merger Consideration in accordance with this Section prior
to that time shall thereafter look only to the Surviving Corporation for payment
of the Merger Consideration in respect of such Shares. However, neither Buyer
nor the Surviving Corporation shall be liable to any holder of Shares for any
amount paid to a public official pursuant to applicable abandoned property Laws.
Any amounts remaining unclaimed by holders of Shares two years after the
Effective Time (or an earlier date immediately prior to such time as the amounts
would otherwise escheat to or become property of any governmental entity) shall,
to the extent permitted by applicable Law, become the property of the Surviving
Corporation free and clear of any claims or interest of any Person previously
entitled to them. Nothing in this section limits the obligations of the Buyer
under Section 1.4(a).
SECTION 1.5. DISSENTING SHARES. Notwithstanding Section 1.3, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of this Agreement or consented in writing and who has
demanded payment of the fair value of such Shares in accordance with the NCBCA
shall not be converted into a right to receive the Merger Consideration, but
shall be converted into the right to receive such consideration as may be
determined to be due in respect of such dissenting Shares pursuant to Article 13
of the NCBCA; provided, however, that if the holder of such dissenting Shares
shall have failed to perfect or shall have waived, rescinded or otherwise lost
(in each such instance, to the reasonable satisfaction of the Surviving
Corporation) its status as a "dissenter" pursuant to Article 13 of the NCBCA,
then such holder shall forfeit the right to dissent from the Merger and such
Shares shall be deemed to have been converted into the right to receive the
Merger Consideration as of the Effective Time. The Company shall give Buyer
prompt notice of any demands received by the Company for appraisal of Shares,
and Buyer 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 Buyer, make any payment with respect to, or settle, or
offer to settle, any such demands.
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SECTION 1.6. STOCK OPTIONS AND EMPLOYEE STOCK PURCHASE PLAN.
(a) Prior to the Effective Time, the Company shall take all steps
necessary to give written notice to each holder of options granted under the
Wandel & Goltermann Technologies, Inc. Omnibus Stock Plan, as amended and the
Wandel & Goltermann Technologies, Inc. Outside Directors' Stock Option Plan, as
amended (collectively, the "Option Plans") that are outstanding that: (i) all
such options outstanding as of the Effective Time, whether vested or unvested
(collectively the "Options"), shall be cancelled effective as of the Effective
Time and (ii) upon the execution and delivery to the Company by such holder of
an instrument acknowledging cancellation of all Options held by such holder
effective as the Effective Time ("Cancellation Instrument"), the Company shall
pay such holder, promptly following the Effective Time, an amount determined by
multiplying (a) the excess, if any, of the Merger Consideration over the
applicable exercise price per share of the Options held by such holder by (b)
the number of share such holder could have purchased had such holder exercised
such Options in full immediately prior to the Effective Time (assuming all such
Options were fully vested, including any unvested Options). The Board or any
committee thereof responsible for the administration of the Option Plan shall
take any and all action necessary to effectuate matters described in this
Section 1.6(a) on or before the Effective Time.
(b) Effective at April 1, 1998, the Company shall terminate the Wandel
& Goltermann Technologies, Inc. Employee Stock Purchase Plan, as amended (the
"Purchase Plan"), in accordance with the terms of Article VII of the Purchase
Plan, whereupon the entire amount credited to the "stock purchase account" of
each participant shall be distributed to each such participant.
SECTION 1.7. CLOSING. Subject to the terms and conditions of this
Agreement, the Closing of the Merger (the "Closing") shall take place at the
offices of the Company at 1030 Swabia Court, Research Triangle Park, North
Carolina, as promptly as practicable after satisfaction or waiver, if
permissible, of the conditions set forth in Article VIII hereof, or at such
other location, time, or date as may be agreed to in writing by the parties
hereto. The date on which the Closing occurs is hereinafter referred to as the
"Closing Date."
ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.1. ARTICLES OF INCORPORATION. The articles of incorporation
of the Company in effect at the Effective Time shall be the articles of
incorporation of the Surviving Corporation until amended in accordance with
applicable Law.
5
<PAGE> 9
SECTION 2.2. BYLAWS. The bylaws of the Company in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable Law.
SECTION 2.3. DIRECTORS AND OFFICERS. From and after the Effective Time,
until successors are elected or appointed and qualified in accordance with
applicable Law, (i) the directors of Merger Subsidiary at the Effective Time
shall be the directors of the Surviving Corporation, and (ii) the officers of
the Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Holding and Merger Sub that,
except as set forth in the Disclosure Schedule delivered by the Company to
Holding prior hereto (the "Disclosure Schedule"), which shall identify
exceptions by specific Section references:
SECTION 3.1. CORPORATE ORGANIZATION. The Company and each of its
Subsidiaries (the "Company Subsidiaries") has been duly organized and is validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to own, operate and lease
its properties and to carry on its business as it is now being conducted, and is
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary, other
than where failure to be so qualified or licensed, individually or in the
aggregate, would not have a Material Adverse Effect. Neither the Company nor any
Company Subsidiary is in violation of any provision of its charter or bylaws or
other organizational documents, as the case may be.
SECTION 3.2. CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of the Company consists in its entirety of (i)
20,000,000 shares of common stock, $.01 par value per share, and (ii) 2,000,000
shares of preferred stock, none of which are issued and outstanding. As of the
date of the Agreement, (i) 5,287,778 shares of Company Common Stock were issued
and outstanding, and (ii) options to acquire 810,251 shares of Company Common
Stock were outstanding under the Company Option Plans. All of the outstanding
shares of capital stock of each of the Company Subsidiaries is owned
beneficially and of record by the Company or a Company Subsidiary free and clear
of all liens, charges, encumbrances, options, rights of first refusal or
limitations or agreements regarding voting rights of any nature. All of the
outstanding shares of capital stock of the Company and each of the Company
Subsidiaries have been duly authorized, validly issued and are fully paid and
nonassessable and are not subject to preemptive rights created by statute, their
respective charter or bylaws or any agreement to which any such entity is a
party or by which any such entity is bound. Except as set forth in
6
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Section 1.6(b) and this Section 3.2, there are no options, warrants or other
rights (including registration rights), agreements, arrangements or commitments
of any character to which the Company or any Company Subsidiary is a party
relating to the issued or unissued capital stock, or other interest in, of the
Company or any Company Subsidiary or obligating the Company or any Company
Subsidiary to grant, issue or sell any shares of capital stock of, or other
equity interests in, the Company or any Company Subsidiary, by sale, lease,
license or otherwise.
SECTION 3.3. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has all
requisite corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated on its part hereby to be consummated by the Company. The execution
and delivery of this Agreement by the Company and the consummation of the
transactions contemplated on its part hereby have been duly authorized by all
necessary corporate action, and, other than the approval of the Company's
shareholders as provided in Section 8.1(a) hereof, no other corporate
proceedings on the part of the Company are necessary to authorize the
consummation of the transactions contemplated on its part hereby. This Agreement
has been duly executed and delivered by the Company and, assuming the due
authorization, execution and delivery hereof by Holding and Merger Sub,
constitutes the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally or by general equity principles.
SECTION 3.4. NO VIOLATION. The execution and delivery of this Agreement
by the Company do not, the performance by the Company of its obligations
hereunder will not, and the consummation by the Company of the transactions
contemplated to be performed by it hereby will not (i) violate or conflict with
any provision of any Laws in effect on the date of this Agreement and applicable
to the Company or any Company Subsidiary or by which any of their respective
properties or assets is bound or subject, (ii) require the Company or any
Company Subsidiary to obtain any consent, waiver, approval, license or
authorization or permit of, or make any filing with, or notification to, any
Governmental Entities, based on Laws, rules, regulations and other requirements
of Governmental Entities in effect as of the date of this Agreement (other than
(a) filings or authorizations required in connection or in compliance with the
provisions of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the NCBCA and (b) any other filings and approvals expressly
contemplated by this Agreement or listed in Section 3.4 to the Company
Disclosure Schedule), (iii) require the consent, waiver, approval, license or
authorization of any person (other than Governmental Entities) other than as
listed on Section 3.4 of the Company Disclosure Schedule, (iv) violate, conflict
with or result in a breach of or the acceleration of any obligation under, or
constitute a default (or an event which with notice or the lapse of time or both
would become a default) under, or give to others any rights of, or result in
any, termination, amendment, acceleration or cancellation of, or loss of any
benefit or creation of a right of first refusal, or require any payment under,
or result in the creation of a lien or other encumbrance on any of the
properties or assets of the Company or any Company Subsidiary
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pursuant to or under any provision of any indenture, mortgage, note, bond, lien,
lease, license, agreement, contract, order, judgment, ordinance, Company Permit
(as defined below) or other instrument or obligation to which the Company or
Company Subsidiary is a party or by which the Company or any Company Subsidiary
or any of their respective properties is bound or subject to, or (v) conflict
with or violate the articles of incorporation or bylaws, or the equivalent
organizational documents, in each case as amended or restated, of the Company or
any of the Company Subsidiaries, except for any such conflicts or violations
described in clause (i) or breaches, defaults, events, rights of termination,
amendment, acceleration or cancellation, payment obligations or liens or
encumbrances described in clause (iv) that would not have a Material Adverse
Effect and except where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications would not,
either individually or in the aggregate, prevent the Company from performing any
of its obligations under this Agreement and would not have a Material Adverse
Effect.
SECTION 3.5. COMPLIANCE WITH LAWS.
(a) As of the date of this Agreement, each of the Company and
the Company Subsidiaries holds all licenses, franchises, grants, permits,
easements, variances, exemptions, consents, certificates, identification
numbers, approvals, orders, and other authorizations (collectively, "Company
Permits") necessary to own, lease and operate its properties and to carry on its
business as it is now being conducted and are in compliance with all Company
Permits and all Laws governing their respective businesses, except where the
failure to hold such Company Permits or to so comply, individually or in the
aggregate, would not have a Material Adverse Effect.
(b) Except as set forth in Section 3.5 of the Company Disclosure
Schedule, no action or proceeding is pending or, to the Company's knowledge,
threatened that may result in the suspension, revocation or termination of any
the Company Permit, the issuance of any cease-and-desist order, or the
imposition of any administrative or judicial sanction, and neither the Company
nor any Company Subsidiary has received any notice from any governmental
authority in respect of the suspension, revocation or termination of any Company
Permit, or any notice of any intention to conduct any investigation or institute
any proceeding, in any such case where such suspension, revocation, termination,
order, sanction, investigation or proceeding would result, individually or in
the aggregate, in a Material Adverse Effect.
SECTION 3.6. LITIGATION. As of the date of this Agreement, except as
may be disclosed in the Company 10-K (as defined below), reports filed on Forms
10-Q or 8-K for periods subsequent to the period covered by the Company 10-K, in
each case filed prior to the date hereof (such reports and filings, including
the Company 10-K, collectively, the "the Company Current Reports"), or except as
set forth on Section 3.6 of the Company Disclosure Schedule, there is no claim,
litigation, suit, arbitration, mediation, action, proceeding, unfair labor
practice complaint or grievance pending or, to the Company's knowledge,
investigation of any
8
<PAGE> 12
kind, at law or in equity (including actions or proceedings seeking injunctive
relief), pending or, to the Company's knowledge, threatened in writing against
the Company or any Company Subsidiary or with respect to any property or asset
of any of them, except for claims, litigations, suits, arbitrations, mediations,
actions, proceedings, complaints, grievances or investigations which,
individually or in the aggregate, would not have a Material Adverse Effect.
Neither the Company nor any Company Subsidiary nor any property or asset of any
of them is subject to any continuing order, judgment, settlement agreement,
injunction, consent decree or other similar written agreement with or, to the
Company's knowledge, continuing investigation by, any Governmental Entity, or
any judgment, order, writ, injunction, consent decree or award of any
Governmental Entity or arbitrator, including, without limitation,
cease-and-desist or other orders, except for such matters which would not
reasonably be expected to have a Material Adverse Effect.
SECTION 3.7. FINANCIAL STATEMENTS AND REPORTS. The Company has made
available to Holding true and complete copies (in each case, as amended) of (i)
its Annual Report on Form 10-K for the year ended September 30, 1997 (the
"Company 10-K"), as filed with the Securities and Exchange Commission (the
"Commission") and (ii) all other reports (including Quarterly Reports on Form
10-Q and Current Reports on Form 8-K) filed by it with the Commission subsequent
to September 30, 1997. The reports referred to in the immediately preceding
sentence (including, without limitation, any financial statements or schedules
or other information included or incorporated by reference therein) are referred
to in this Agreement as the "the Company SEC Filings." As of the respective
times such documents were filed, the Company SEC Filings complied in all
material respects with the requirements of the Securities Act of 1933, as
amended, or the Exchange Act, as the case may be, and the rules and regulations
promulgated thereunder, except for such noncompliance which, individually or in
the aggregate, would not have a Material Adverse Effect, and did not contain any
untrue statement of a material fact or omit to state any 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. The financial
statements of the Company included in the Company SEC Filings comply as to form
in all material respect with applicable accounting requirements and with the
published rules and regulations of the Commission with respect thereto, were
prepared in accordance with generally accepted accounting principles (as in
effect from time to time) applied on a consistent basis during the periods
involved (except as may be indicated therein or in the notes thereto or, in the
case of the unaudited interim financial statements, as permitted by Form 10-Q of
the Commission) and present fairly the consolidated financial position,
consolidated results of operations and consolidated cash flows of the Company
and the Company Subsidiaries as of the dates and for the periods indicated,
except (i) in the case of unaudited interim consolidated financial statements,
to normal recurring year-end adjustments and any other adjustments described
therein and (ii) any pro forma financial information contained therein is not
necessarily indicative of the consolidated financial position of the Company and
the Company Subsidiaries as of the respective dates thereof and the consolidated
results of operations and cash flows for the periods indicated. No Company
Subsidiary is required to file any form, report or other document with the
Commission.
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<PAGE> 13
SECTION 3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. Other than as
disclosed in the Company Current Reports, or otherwise disclosed in this
Agreement or in Section 3.8 of the Company Disclosure Schedule, since September
30, 1997 and through the date hereof, the business of the Company and of each of
the Company Subsidiaries has been conducted in the ordinary course, and there
has not been (i) any Material Adverse Effect on the Company; (ii) any material
indebtedness incurred by the Company or any Company Subsidiary for money
borrowed; (iii) any material transaction or commitment, except in the ordinary
course of business or as contemplated by this Agreement, entered into by the
Company or any of the Company Subsidiaries; (iv) any damage, destruction or
loss, whether covered by insurance or not, which, individually or in the
aggregate, would have a Material Adverse Effect on the Company; (v) any material
change by the Company in accounting principles or methods except insofar as may
be required by a change in generally accepted accounting principles; (vi) any
material revaluation by the Company or any Company Subsidiary of any asset
(including, without limitation, any writing down of the value of inventory or
writing off of notes or accounts receivable); (vii) any mortgage or pledge of
any of the assets or properties of the Company or any Company Subsidiary or the
subjection of any of the assets or properties of the Company or any Company
Subsidiary to any material liens, charges, encumbrances, imperfections of title,
security interest, options or rights or claims of others with respect thereto
other than in the ordinary course consistent with past practice; or (viii) any
assumption or guarantee by the Company or a Company Subsidiary of the
indebtedness of any person or entity, other than in the ordinary course
consistent with past practice.
SECTION 3.9. NO UNDISCLOSED MATERIAL LIABILITIES. Except as disclosed
in the Company Current Reports, neither the Company nor any of the Company
Subsidiaries has incurred any liabilities of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, that,
individually or in the aggregate, would have a Material Adverse Effect other
than (i) liabilities incurred in the ordinary course of business consistent with
past practice since September 30, 1997, (ii) liabilities that have been repaid,
discharged or otherwise extinguished and (iii) liabilities under or contemplated
by this Agreement.
SECTION 3.10. NO DEFAULT. Except as set forth in Section 3.10 of the
Company Disclosure Schedule, neither the Company nor any of the Company
Subsidiaries is in default or violation (and no event has occurred which with
notice or the lapse of time or both would constitute a default or violation) of
any term, condition or provision of (a) its articles of incorporation or bylaws
or other organizational document, (b) indenture, mortgage, note, bond, lien,
lease, license, agreement, contract, order, judgment, ordinance, the Company
Permit or other instrument or obligation to which the Company or Company
Subsidiary is a party or by which the Company or any Company Subsidiary or any
of their respective properties is bound or subject to, or (c) any order, writ,
injunction, decree or Law applicable to the Company or any of the Company
Subsidiaries, except in the case of clauses (b) and (c) above for defaults or
violations which would not have a Material Adverse Effect on the Company.
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<PAGE> 14
SECTION 3.11. FINDERS' AND BANKERS' FEES. Except for the Financial
Advisor, a copy of whose engagement agreement has been provided to Buyer, there
is no investment banker, broker, finder, or other intermediary which has been
retained by or is authorized to act on behalf of the Company, the Special
Committee or any Company Subsidiary who might be entitled to any fee or
commission from the Company, Buyer or any of their respective Affiliates upon
consummation of the transactions contemplated by this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Company that:
SECTION 4.1. CORPORATE ORGANIZATION. Holding is a validly existing
limited liability company (GmbH) in good standing under the laws of Germany.
Merger Subsidiary has been duly incorporated and is validly existing and in good
standing under the laws of North Carolina. Each has all corporate powers and all
material governmental licenses, authorizations, consents, and approvals required
to consummate the transactions contemplated by this Agreement. Since the date of
its incorporation, Merger Subsidiary has not engaged in any material activities
other than in connection with or as contemplated by this Agreement.
SECTION 4.2. CORPORATE AUTHORIZATION. The execution, delivery, and
performance by Holding and Merger Subsidiary of this Agreement and the
consummation of the contemplated transactions contemplated are within the
corporate powers of Holding and Merger Subsidiary and are duly authorized by all
necessary corporate action. This Agreement constitutes a valid and binding
agreement of Holding and Merger Subsidiary enforceable against them in
accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general equity
principles.
SECTION 4.3. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Holding and Merger Subsidiary of this Agreement and the
consummation by Holding and Merger Subsidiary of the transactions contemplated
by this Agreement require no action by or in respect of, or filing with, any
Governmental Authority other than (i) the filing of Articles of Merger in
accordance with the NCBCA and (ii) compliance with any applicable requirements
of the Exchange Act.
SECTION 4.4. NON-CONTRAVENTION. The execution, delivery and performance
by Holding and Merger Subsidiary of this Agreement and the consummation by
Holding and Merger Subsidiary of the contemplated transactions contemplated do
not and will not (i) contravene or conflict with organizational documents of
Holding or the articles of incorporation or bylaws of Merger Subsidiary, or (ii)
assuming compliance with the matters referred to in Section 4.3,
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<PAGE> 15
contravene or conflict with any material provision of Law or Order binding upon
or applicable to Holding or Merger Subsidiary.
SECTION 4.5. FINDERS' AND BANKERS' FEES. There is no investment banker,
broker, finder, or other intermediary which has been retained by or is
authorized to act on behalf of Buyer who is entitled to any fee or commission
from the Company or any of the Company Subsidiaries if the transactions
contemplated by this Agreement are not consummated.
ARTICLE V.
COVENANTS OF THE COMPANY
SECTION 5.1. CONDUCT OF THE COMPANY. From the date of this Agreement
until the Effective Time, the Company shall conduct its business in the ordinary
course consistent with past practice and (except for acts in connection with the
Merger) shall use its best efforts to preserve intact its business relationships
with third parties and to keep available the services of its present officers
and employees.
SECTION 5.2. SHAREHOLDER MEETING; PROXY MATERIAL. The Company shall
cause a meeting of its shareholders (the "Company Shareholder Meeting") to be
called and held as soon as reasonably practicable for the purpose of voting on
the approval and adoption of this Agreement and the Merger. The directors of the
Company, acting in part in reliance upon the unanimous recommendation of the
Special Committee, shall, subject to their fiduciary duties after consultation
with counsel, recommend approval and adoption of this Agreement and the Merger
by the Company's shareholders. In connection with this meeting, but subject to
the terms hereof, the Company (i) will promptly prepare and file with the
Commission, will use its best efforts to have cleared by the Commission and will
then mail to its shareholders as promptly as practicable the Company Proxy
Statement and all other proxy materials for such meeting, and will cooperate
with Holding to prepare and file the Schedule 13E-3 Transaction Statement
required to be filed by the Company and Holding pursuant to Section 13(e) of the
Exchange Act (the "Schedule 13E-3"), (ii) will use its best efforts to obtain
the necessary approvals by its shareholders of this Agreement and the
transactions contemplated hereby and (iii) will otherwise comply with all legal
requirements applicable to such meeting.
SECTION 5.3 DISCLOSURE DOCUMENTS.
(a) Each document required to be filed by the Company with the
Commission in connection with the transactions contemplated by this Agreement
(the "Company Disclosure Documents"), including without limitation the proxy
statement of the Company (the "Company Proxy Statement") to be filed with the
Commission in connection with the Merger, and any amendments or supplements
will, when filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act.
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<PAGE> 16
(b) At the time the Company Proxy Statement or any amendment or
supplement is first mailed to shareholders of the Company, at the time such
shareholders vote on adoption of this Agreement, and at the Effective Time, the
Company Proxy Statement, as supplemented or amended if applicable will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements not misleading in the light of
the circumstances under which they were made. At the time of the filing of any
Company Disclosure Document other than the Company Proxy Statement and at the
time of any distribution, such Company Disclosure Document will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements not misleading in the light of the circumstances
under which they were made. The representations and warranties contained in this
Section 5.3(b) will not apply to statements or omissions included in any Company
Disclosure Documents (including without limitation the Company Proxy Statement)
based upon information furnished to the Company in writing by Buyer specifically
for use therein.
SECTION 5.4. ACCESS TO INFORMATION. From the date of this Agreement
until the Effective Time, the Company will give Buyer, its counsel, financial
advisors, auditors, and other authorized representatives full access to the
offices, properties, books and records of the Company, will furnish to Buyer,
its counsel, financial advisors, auditors, and other authorized representatives
such financial and operating data and other information as such Persons may
reasonably request and will instruct the Company's employees, counsel, financial
advisors, and auditors to cooperate with Buyer in its investigation of the
business of the Company; provided that no investigation pursuant to this Section
shall affect any representation or warranty given by the Company to Buyer
hereunder.
SECTION 5.5 NOTICES OF CERTAIN EVENTS. The Company shall promptly
notify Buyer of:
(a) any notice or other communication received by the Company from any
Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement; and
(b) any notice or other communication received by the Company from any
Governmental Authority in connection with the transactions contemplated by this
Agreement.
ARTICLE VI.
COVENANTS OF BUYER
SECTION 6.1. DIRECTOR AND OFFICER LIABILITY . For six years after the
Effective Time, each of the Surviving Corporation and Holding shall indemnify
and hold harmless the present officers and directors of the Company with respect
to acts or omissions occurring at or prior to the Effective Time to the fullest
extent provided under the Company's articles of incorporation
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and bylaws in effect on the date hereof. The provisions of this Section 6.1 are
intended to be for the benefit of, and shall be enforceable by, the indemnified
parties referred to in this Section 6.1 and their heirs and personal
representatives, and shall be binding upon Holding and the Surviving Corporation
and their respective successors and assigns.
SECTION 6.2. DISCLOSURE DOCUMENTS. The information with respect to
Buyer and its Affiliates that Buyer furnishes to the Company in writing
specifically for use in any Company Disclosure Document will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements not misleading in the light of the circumstances
under which they were made (i) in the case of the Company Proxy Statement, at
the time the Company Proxy Statement or any amendment or supplement is first
mailed to shareholders of the Company, at the time the shareholders vote on
adoption of this Agreement and at the Effective Time, and (ii) in the case of
any Company Disclosure Document other than the Company Proxy Statement, at the
time of filing, and at the time of any distribution thereof.
SECTION 6.3. NOTICES OF CERTAIN EVENTS. Buyer shall promptly notify the
Company of:
(a) any notice or other communication received by Buyer from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement; and
(b) any notice or other communication received by Buyer from any
Governmental Authority in connection with the transactions contemplated by this
Agreement.
ARTICLE VII.
COVENANTS OF BUYER AND THE COMPANY
SECTION 7.1. BEST EFFORTS. Subject to the terms and conditions of this
Agreement, each party will use its 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 to consummate the transactions contemplated by
this Agreement.
SECTION 7.2. CERTAIN FILINGS. The Company and Buyer shall cooperate
with one another (i) in connection with the preparation of the Company
Disclosure Documents, including without limitation the Company Proxy Statement
and the Schedule 13E-3, (ii) in determining whether any action by or in respect
of, or filing with, any Governmental Authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the transactions
contemplated by this Agreement, and (iii) in seeking any such actions, consents,
approvals or waivers or making any such filings, furnishing information required
in connection therewith or with the Company
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Disclosure Documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 7.3. PUBLIC ANNOUNCEMENTS. Buyer and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement and the transactions contemplated hereby and,
except as may be required by applicable Law or any agreement with NASDAQ, will
not issue any such press release or make any such public statement prior to such
consultation.
SECTION 7.4. FURTHER ASSURANCES. 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 Merger Subsidiary any deeds,
bills of sale, assignments, agreements, certificates, other documents, or
assurances and to take and do in the name and on behalf of the Company or Merger
Subsidiary any other actions and things they may deem desirable 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.
ARTICLE VIII.
CONDITIONS TO THE MERGER
SECTION 8.1. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of the Company, Holding, and Merger Subsidiary to consummate the
Merger are subject to the satisfaction at or before the Effective Time of the
following conditions, any or all of which may be waived, in whole or in part, by
each of the parties intended to benefit therefrom, to the extent permitted by
applicable Law:
(a) this Agreement and the Merger shall have been approved and adopted
by a majority of all shares of the Company Common Stock entitled to vote
thereon, in accordance with Section 53-11-03 of the NCBCA;
(b) such parties shall have received a copy, certified by the Secretary
of Merger Subsidiary, of consent resolutions duly adopted (and not subsequently
rescinded or modified) by the Board of Directors and sole shareholder of Merger
Subsidiary, by the terms of which resolutions such Board of Directors shall have
adopted and approved this Agreement and the Merger and recommended the Merger to
Holding, as the sole shareholder of Merger Subsidiary, and Holding shall have
adopted and approved this Agreement and the Merger;
(c) no Governmental Authority shall have enacted, issued, promulgated,
enforced, or entered any Law or 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; and
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(d) all actions by or in respect of or filings with any Governmental
Authority required to permit the consummation of the Merger shall have been
obtained, other than the filing of the requisite Articles of Merger with the
Secretary of State of North Carolina.
SECTION 8.2. ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF BUYER AND
MERGER SUBSIDIARY. The obligations of Buyer and Merger Subsidiary to consummate
the Merger are also subject to the satisfaction at or prior to the Effective
Time of the following further conditions, any or all of which may be waived, in
whole or in part, by each of the parties intended to benefit therefrom, to the
extent permitted by applicable Law:
(a) the Company shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of the Company contained in
this Agreement and in any certificate delivered by the Company pursuant hereto
shall be true and correct in all respects, except where the breach or inaccuracy
thereof would not, individually or in the aggregate, have a Material Adverse
Effect, at and as of the Effective Time as if made at and as of such time,
except that those representations and warranties which address matters only as
of a particular date shall remain true and correct as of such date, and Buyer
shall have received a certificate signed by the chief executive officer and the
principal financial officer of the Company to the foregoing effect;
(b) no Material Adverse Effect shall have occurred;
(c) Buyer shall have received or be satisfied that it will receive all
consents and approvals contemplated by Section 3.4 of the Company Disclosure
Schedule and any other consents of third parties necessary in connection with
the consummation of the Merger if the failure to obtain any such consent or
consents would have a Material Adverse Effect;
(d) The Company shall deliver Cancellation Instruments executed by all
holders of Options with respect to all outstanding Options as of the Effective
Time;
(e) Buyer shall have received all documents it may reasonably request
relating to the authority of the Company to enter into this Agreement, all in
form and substance reasonably satisfactory to Buyer; and
(f) Buyer shall have received from Moore & Van Allen, counsel to the
Company, an opinion or opinions dated as of the Effective Time covering such
matters as shall be reasonably requested by Holding.
SECTION 8.3. ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to consummate the Merger are also subject to the
satisfaction at or
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prior to the Effective Time of the following further conditions, any or all of
which may be waived, in whole or in part, by the Company to the extent permitted
by applicable Law:
(a) Buyer and Merger Subsidiary shall have performed in all material
respects all of their respective obligations required to be performed by them at
or prior to the Effective Time, the representations and warranties of Buyer
contained in this Agreement and in any certificate delivered by Buyer or Merger
Subsidiary pursuant hereto shall be true and correct in all material respects at
and as of the Effective Time as if made at and as of such time, except that
those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date, and the Company
shall have received a certificate signed by the chief executive officer and
chief financial officer of each of Holding and Merger Subsidiary to the
foregoing effect; and
(b) the Company shall have received all documents it may reasonably
request relating to the authority of Buyer or Merger Subsidiary to enter into
this Agreement, all in form and substance reasonably satisfactory to the
Company.
ARTICLE IX.
TERMINATION
SECTION 9.1 TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the shareholders of the Company):
(a) by mutual written consent of the Company and Buyer;
(b) by either the Company or Buyer, if the Merger has not been
consummated by October 31, 1998;
(c) by either the Company or Buyer, if there shall be any Law that
makes consummation of the Merger illegal or otherwise prohibited or if any Order
enjoining Buyer or the Company from consummating the Merger is entered and such
Order shall become final and nonappealable; or
(d) by either the Company or Buyer if this Agreement and the Merger
shall fail to be approved and adopted by the shareholders of the Company at the
Company Shareholder Meeting called for such purpose, as set forth in Section
8.1(a) above.
SECTION 9.2. EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 9.1, this Agreement shall become void and of no effect with
no liability on the part of any party, except that the agreements contained in
Section 10.5 shall survive the termination
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hereof; provided however, that, except as specifically provided, nothing herein
shall relieve any party of liability for any breach of this Agreement.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. DEFINITIONS. As used in this Agreement, the following
terms have the following respective meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"AFFILIATE" means, with respect to a Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such given Person.
"AGREEMENT" means this Agreement and Plan of Merger, as the same may be
supplemented, modified, or amended from time to time.
"EXPENSES" means all reasonable out-of-pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants, investment
bankers, experts, consultant and commitment fees and other financing fees and
expenses) incurred by Holding, Merger Subsidiary, or the Company, or on behalf
of any such party in connection with or related to the authorization,
preparation, negotiation, execution, and performance of this Agreement, the
preparation, printing, filing, and mailing of the Company Proxy Statement and
Schedule 13E-3, the solicitation of the shareholder approvals, and all other
matters related to the consummation of the contemplated transactions.
"GAAP" means United States generally accepted accounting principles
consistently applied.
"GOVERNMENTAL AUTHORITY" means any federal, state, county, local,
foreign, or other governmental or public agency, instrumentality, commission,
authority, board, or body, and any court, arbitrator, mediator, or tribunal.
"LAW" means any code, law, ordinance, regulation, rule, or statute of
any Governmental Authority.
"LIEN" means any security interest, lien, mortgage, deed to secure
debt, deed of trust, pledge, charge, conditional sale, or other title retention
agreement, or other encumbrance of any kind.
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"MATERIAL ADVERSE EFFECT" means any matter that would reasonably be
expected to affect materially and adversely the business, condition (financial
or otherwise), or results of operations of the Company and its Subsidiaries
considered as a whole.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency, or other Governmental Authority.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust, a limited liability company or any other entity or
organization, including a government or political subdivision, or any agency or
instrumentality thereof.
"SUBSIDIARY" OR "SUBSIDIARIES" of any person means any corporation,
partnership, joint venture or other legal entity of which such other person
(either alone or through or together with any other subsidiary) owns, directly
or indirectly, 50% or more of the stock or other equity interests the holders of
which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity.
"SURVIVING CORPORATION" means the Company as the surviving corporation
resulting from the Merger.
The following terms are defined in the following Sections of this
Agreement:
<TABLE>
<CAPTION>
<S> <C>
TERM SECTION
"Articles of Merger 1.2(b)
"Board" Recital C
"Buyer" Opening Paragraph
"Closing" 1.7
"Closing Date" 1.7
"Commission" 3.7
"Company" Opening Paragraph
"Company Common Stock" Recital A
"Company Current Reports" 3.6
"Company Disclosure Documents" 5.3
"Company Option Plans" 1.6 [SECTION TO BE DRAFTED]
"Company Permits" 3.5
"Company Proxy Statement" 5.3
"Company SEC Filings" 3.7
"Company Shareholder Meeting" 5.2
"Company Subsidiaries" 3.1
"Company 10-K" 3.7
</TABLE>
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<PAGE> 23
<TABLE>
<S> <C>
"Exchange Act" 3.4
"Exchange Agent" 1.4(a)
"Effective Time" 1.2(b)
"Merger" Recital E
"Merger Consideration" 1.3(a)
"Merger Subsidiary" Opening Paragraph
"NCBCA" Recital E
"Preferred Stock" Recital A
"Public Shareholders" Recital C
"Schedule 13E-3" 5.2
"Share" 1.3(a)
"Special Committee" Recital C
</TABLE>
SECTION 10.2. NOTICES. Unless otherwise specifically provided herein,
any notice, demand, request, or other communication herein requested or
permitted to be given shall be in writing and may be personally served, sent by
overnight courier service, or sent by telecopy with a confirming copy sent by
United States first-class mail, each with any postage or delivery charge
prepaid. For the purposes hereof, the addresses of the parties (until notice of
a change is delivered as provided in this Section) shall be as follows:
If to the Company: Wandel & Goltermann Technologies, Inc.
1030 Swabia Court
Research Triangle Park, NC 27709
Fax: (919) 941-9160
If to Holding or Merger Sub: Wandel & Goltermann Management Holding GmbH
Box 1262
D-72795 Eningen u.A.
Germany
Fax: 011-44-7121-88996
Any notice provided hereunder shall be deemed to have been given on the
date delivered in person, or on the next business day after deposit with an
overnight courier service, or on the date received by telecopy transmissions.
SECTION 10.3. NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein and in any certificate delivered
shall not survive the Effective Time or the termination of this Agreement.
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<PAGE> 24
SECTION 10.4. AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived prior to
the Effective Time if, and only if, such amendment or waiver is in writing and
signed by all parties hereto, or in the case of a waiver, by the party against
whom the waiver is to be effective; and provided, further, that after the
adoption of this Agreement by the shareholders of the Company, no such amendment
or waiver shall, without the further approval of such shareholders, alter or
change (i) the Merger Consideration or (ii) any of the terms or conditions of
this Agreement if such alteration or change would adversely affect the Public
Shareholders.
(b) No failure or delay by any party in exercising any right, power, or
privilege hereunder shall operate as a waiver nor shall any single or partial
exercise preclude any other or further exercise or the exercise of any other
right, power or privilege. The parties' rights and remedies shall be cumulative
and not exclusive of any rights or remedies provided by law.
SECTION 10.5 FEES AND EXPENSES. Except as otherwise provided in this
Section, all Expenses incurred in connection with this Agreement shall be paid
by the party incurring such Expense.
SECTION 10.6. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties 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, in whole or from time to time in part, to one or more of its
Affiliates, its rights under this Agreement, but any such transfer or assignment
will not relieve Buyer of its obligations under this Agreement or prejudice the
rights of shareholders to receive the Merger Consideration for Shares properly
surrendered in accordance with Section 1.4. This Agreement shall not be
construed so as to confer any right or benefit upon any person other than the
parties to this Agreement, and their respective successors and assigns.
SECTION 10.7. GOVERNING LAW. Regardless of the place or places where
this Agreement may be executed, delivered or consummated, this Agreement shall
be governed by and construed in accordance with the Laws of the State of North
Carolina, without regard to any applicable conflicts of Laws.
SECTION 10.8. SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
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<PAGE> 25
SECTION 10.9. HEADINGS AND CAPTIONS. The headings and captions
contained in this Agreement are for reference purposes only and are not part of
this Agreement.
SECTION 10.10. INTERPRETATIONS. Neither this Agreement nor any
uncertainty or ambiguity shall be construed or resolved against any party,
whether under any rule of construction or otherwise. No party to this Agreement
shall be considered the drafter. The parties acknowledge and agree that this
Agreement has been reviewed, negotiated, and accepted by all parties and their
attorneys and shall be construed and interpreted according to the ordinary
meaning of the words used so as fairly to accomplish the purposes and intentions
of all the parties.
SECTION 10.11 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 were upon the same instrument. This Agreement shall
become effective when each party has received a counterpart signed by all of the
other parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as of the day and year first above written.
"The Company" "Holding"
WANDEL & GOLTERMANN WANDEL & GOLTERMANN
TECHNOLOGIES, INC. MANAGEMENT HOLDING GmbH
By: /s/ Gerry Chastelet By: /s/ Peter Wagner
-------------------------------------- -----------------------------
Its: President and Chief Executive Officer Its: Chief Executive Officer
------------------------------------- -----------------------------
By: /s/ Rolf Schmid
-----------------------------
Its: Chief Financial Officer
-----------------------------
"Merger Subsidiary"
WG MERGER CORP.
By: /s/ Peter Wagner
-----------------------------
Its: President
----------------------------
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