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): June 21, 2000
PSS WORLD MEDICAL, INC.
(Exact name of registrant
as specified in its charter)
Florida 0-23832 59-2280364
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
4345 Southpoint Boulevard
Jacksonville, Florida 32216
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (904) 332-3000
N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On June 21, 2000, PSS World Medical, Inc. ( "PSS") entered into an
Agreement and Plan of Merger dated as of June 21, 2000 (the "Merger Agreement")
by and among PSS, FSI Merger Corporation ("Merger Corp.") and Fisher Scientific
International, Inc. ("FSI"), providing for the merger (the "Merger") of Merger
Corp. with and into PSS.
Pursuant to the Merger, each of the issued and outstanding shares of
the $.01 par value common stock of PSS ("PSS Common Stock") at the effective
time of the Merger (other than treasury shares) will be exchanged for 0.3121
shares (the "Exchange Ratio") of the Common Stock of Parent (the "Parent Common
Stock"). Consummation of the Merger is subject to approval of the shareholders
of both PSS and FSI, various state and federal regulatory agencies and other
conditions to the obligations of the parties set forth in the Merger Agreement.
In the event that the Merger is terminated by either company, PSS and FSI have
agreed that a cash termination fee will be paid by PSS in certain circumstances.
In connection with the Merger Agreement, PSS has granted to FSI an
option to purchase up to 19.9% of PSS' common stock, exercisable under certain
conditions. Also in connection with the Merger Agreement, PSS and certain
shareholders of FSI have entered into a Voting Agreement dated as of June 21,
2000, which provides, among other things, that such shareholders will vote
shares of FSI Common Stock owned by them on the record date of the special
meeting of shareholders of FSI in favor of the issuance of shares of FSI Common
Stock in the Merger.
The foregoing summary of the Merger Agreement, the Stock Option
Agreement and the Voting Agreement does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the provisions of the
Agreement and Plan of Merger, the Stock Option Agreement and the Voting
Agreement, which are filed as Exhibits 2.1, 2.2 and 2.3, respectively, to this
Current Report on Form 8-K.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
2.1 Agreement and Plan of Merger dated as of June 21, 2000 by and
among PSS World Medical, Inc., FSI Merger Corporation and
Fisher Scientific International, Inc.
2.2 Stock Option Agreement dated June 21, 2000 by and among PSS
World Medical, Inc. and Fisher Scientific International,
Inc.
2.3 Voting Agreement dated June 21, 2000 by and among PSS World
Medical, Inc. and certain shareholders of Fisher Scientific
International, Inc.
99.1 Press Release dated June 22, 2000.
2
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SIGNATURES
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 hereunto duly authorized.
PSS WORLD MEDICAL, Inc.
By: /s/ David A. Smith
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David A. Smith
Executive Vice President
and Chief Financial Officer
Dated: June 23, 2000
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PSS FORM 8-K ANNOUNCE FISHER DEAL
EXHIBIT INDEX
Number Description
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2.1 Agreement and Plan of Merger dated as of June 21, 2000 by and
among PSS World Medical, Inc., FSI Merger Corp. and Fisher
Scientific International, Inc.
2.2 Stock Option Agreement dated June 21, 2000 by and among PSS
World Medical, Inc. and Fisher Scientific International, Inc.
2.3 Voting Agreement dated June 21, 2000 by and among PSS World
Medical, Inc. and certain shareholders of Fisher Scientific
International, Inc.
99.1 Press Release of PSS World Medical, Inc. dated June 22, 2000.
<PAGE>
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
FISHER SCIENTIFIC INTERNATIONAL INC.,
FSI MERGER CORPORATION
AND
PSS WORLD MEDICAL, INC.
Dated as of June 21, 2000
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TABLE OF CONTENTS
Preamble.....................................................................1
ARTICLE I - THE MERGER.......................................................6
1.1 Merger.....................................................6
1.2 Effective Time.............................................6
1.3 Time and Place of Closing..................................7
1.4 Articles of Incorporation and Bylaws.......................7
1.5 Directors..................................................7
1.6 Officers...................................................7
1.7 Stock Option Agreement.....................................8
ARTICLE II...................................................................8
2.1 Conversion of Shares.......................................8
2.2 Shares Held by Company or Parent...........................8
2.3 Fractional Shares..........................................8
2.4 Payment in Respect of Equity Rights........................9
2.5 Adjustments................................................10
ARTICLE III - EXCHANGE OF SHARES.............................................10
3.1 Exchange Procedures........................................11
3.2 Rights of Former Company Shareholders......................13
3.3 Affiliates.................................................14
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF COMPANY.......................14
4.1 Organization, Standing and Power...........................14
4.2 Authority of Company; No Breach By Agreement...............14
4.3 Capital Stock..............................................16
4.5 Company Subsidiaries.......................................16
4.5 SEC Filings; Financial Statements..........................17
4.6 Absence of Undisclosed Liabilities.........................19
4.7 Absence of Certain Changes or Events.......................19
4.8 Tax Matters................................................19
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4.9 Assets.....................................................20
4.10 Intellectual Property......................................21
4.11 Environmental Matters......................................21
4.12 Compliance with Laws.......................................22
4.13 Labor Relations............................................22
4.14 Employee Benefit Plans.....................................22
4.15 Material Contracts.........................................23
4.16 Legal Proceedings..........................................24
4.17 Opinion of Financial Advisor...............................25
4.18 State Takeover Laws........................................25
4.19 Charter Provisions.........................................25
4.20 Rights Agreement...........................................25
4.21 Tax Reorganization.........................................26
4.22 Customers and Suppliers....................................26
4.23 ERP Rollout................................................26
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER...........26
5.1 Organization, Standing and Power...........................26
5.2 Authority; No Breach By Agreement..........................26
5.3 Capital Stock..............................................27
5.4 Parent Subsidiaries........................................28
5.5 SEC Filings; Financial Statements..........................29
5.6 Absence of Undisclosed Liabilities.........................30
5.7 Absence of Certain Changes or Events.......................30
5.8 Tax Matters................................................30
5.9 Environmental Matters......................................32
5.10 Compliance with Laws.......................................32
5.11 Legal Proceedings..........................................32
5.12 Authority of Purchaser.....................................32
5.13 Tax Reorganization.........................................34
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ARTICLE VI - CONDUCT OF BUSINESS PENDING CONSUMMATION........................34
6.1 Affirmative Covenants of Company...........................34
6.2 Negative Covenants of Company..............................34
6.3 Covenants of Parent and Purchaser..........................37
6.4 Adverse Changes in Condition...............................37
6.5 Reports....................................................37
ARTICLE VII - ADDITIONAL AGREEMENTS..........................................38
7.1 Registration Statement; Proxy Statement; Shareholder Approv38
7.2 NYSE Listing...............................................39
7.3 Purchaser Compliance.......................................39
7.4 Applications; Antitrust Notification.......................39
7.5 Filings with State Offices.................................39
7.6 Agreement as to Efforts to Consummate......................39
7.7 Investigation and Confidentiality..........................40
7.8 Press Releases.............................................41
7.9 No Solicitation; Acquisition Proposals.....................41
7.10 State Takeover Laws........................................43
7.11 Employee Benefits and Contracts............................43
7.12 Indemnification............................................44
7.13 Repayment of Certain Indebtedness..........................45
7.14 Senior Subordinated Notes due 2007.........................45
7.15 Section 16 Matters.........................................46
7.16 Affiliates.................................................46
7.17 Employment and Non-Compete Agreements......................46
7.18 Voting Agreement...........................................46
7.19 Accountant's Letters.......................................46
7.20 Waiver or Declination of Preemptive Rights.................47
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ARTICLE VIII - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.............47
8.1 Conditions to Obligations of Each Party....................47
8.2 Conditions to Obligations of Parent and Purchaser..........48
8.3 Conditions to Obligations of Company.......................49
ARTICLE IX - TERMINATION.....................................................51
9.1 Termination................................................51
9.2 Effect of Termination......................................53
9.3 Non-Survival of Representations and Covenants..............53
ARTICLE X - MISCELLANEOUS....................................................53
10.1 Definitions................................................53
10.2 Expenses...................................................64
10.3 Brokers and Finders........................................66
10.4 Entire Agreement...........................................67
10.5 Amendments.................................................67
10.6 Waivers....................................................67
10.7 Assignment.................................................68
10.8 Notices....................................................68
10.9 Governing Law..............................................69
10.10 Counterparts...............................................69
10.11 Captions; Articles and Sections............................69
10.12 Interpretations............................................69
10.13 Enforcement of Agreement...................................69
10.14 Severability...............................................69
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LIST OF EXHIBITS
Exhibit Number Description
1.6 Officers of Company
1.7 Stock Option Agreement
4.23 ERP System Roll-Out Schedule
7.16 Rule 145 Affiliates of Company
7.18(a) Parent Shareholders Party to Voting Agreement
7.18(b) Voting Agreement
8.2(d) Tax Representations Letter of Parent
8.3(e) Tax Representations Letter of Company
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of June 21, 2000, by and among FISHER SCIENTIFIC INTERNATIONAL
INC. ("Parent"), a Delaware corporation; FSI MERGER CORPORATION ("Purchaser"), a
Florida corporation; and PSS WORLD MEDICAL, INC. ("Company"), a Florida
corporation.
Preamble
The respective Boards of Directors of the Company, Parent and Purchaser
have each determined that it is in the best interests of their respective
shareholders for Parent, through Purchaser, to acquire the Company upon the
terms and subject to the conditions set forth herein. The transactions described
in this Agreement are subject to the approvals of the stockholders of Company
and Parent, expiration of the required waiting period under the HSR Act, and the
satisfaction of other terms and conditions described in this Agreement. It is
the intention of the parties to this Agreement that, for federal income tax
purposes, the Merger shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code.
Immediately after the execution and delivery of this Agreement, and as
condition and inducement to the willingness of Parent to enter into this
Agreement, Company and Parent are entering into a stock option agreement
pursuant to which Company is granting Parent an option to purchase shares of
Company Common Stock.
Certain terms used in this Agreement are defined in Section 10.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE I
THE MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time, Purchaser shall be merged with and into Company in
accordance with the provisions of Section 607.1106 of the FBCA and with the
effect provided therein (the "Merger"). Company shall be the Surviving
Corporation resulting from the Merger and shall become a wholly owned Subsidiary
of Parent and shall continue to be governed by the Laws of the State of Florida.
The Merger shall be consummated pursuant to the terms of this Agreement, which
has been adopted by the respective Boards of Directors of Company, Purchaser and
Parent and approved by Parent, as the sole shareholder of Purchaser.
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7
1.2 Effective Time. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the Articles
of Merger reflecting the Merger shall become effective with the Secretary of
State of the State of Florida (the "Effective Time"). Subject to the terms and
conditions hereof, the Parties shall cause the Effective Time to occur on or
prior to the first business day (unless a greater delay is required by
applicable Law or unless the Parties agree on another date) following the
satisfaction or (to the extent permissible under Law) waiver of all the
conditions of Article 8.
1.3 Time and Place of Closing. The closing of the Transactions (the
"Closing") will take place at the Effective Time, or at such other time as the
Parties, acting through their authorized officers, may mutually agree. The
Closing shall be held at the offices of Debevoise & Plimpton, 875 Third Avenue,
New York, New York or such other location as may be mutually agreed upon by the
Parties.
1.4 Articles of Incorporation and Bylaws.
(a) At the Effective Time, the articles of incorporation of
the Surviving Corporation shall be amended in their entirety to become
the same as the articles of incorporation of Purchaser, as in effect
immediately before the Effective Time, until thereafter amended as
provided by law and such articles of incorporation.
(b) The bylaws of Purchaser in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation until
duly amended or repealed.
1.5 Directors.
(a) The directors of Purchaser in office immediately prior to
the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the initial directors of the
Surviving Corporation to hold office in accordance with the articles of
incorporation and bylaws of the Surviving Corporation until such
director's successor is duly elected and qualified.
(b) Parent shall take, or cause to be taken, such action as
may be required (including if and to the extent amending the Investor
Agreement) in order to, effective as of the Effective Time, (i) appoint
or cause to be appointed Hugh Brown to serve as a director with a term
expiring in 2001 and Patrick Kelly to serve as a director with a term
expiring in 2003 and (ii) if necessary for the appointment of directors
contemplated by clause (i), increase the size of its Board of Directors
from nine persons to eleven persons with three directors whose terms
expire in 2003, four directors whose terms expire in 2002 and four
directors whose terms expire in 2001.
1.6 Officers. The officers of Company in office immediately prior to
the Effective Time, together with the persons named on Exhibit 1.6 hereto, shall
serve as the initial officers of the Surviving Corporation until such officer's
successor is duly elected and qualified.
1.7 Stock Option Agreement. Simultaneous with the execution of
this Agreement by the Parties as a condition thereto, Company and Parent are
executing and delivering the Stock Option Agreement in substantially the form of
Exhibit 1.7.
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8
ARTICLE II
MANNER OF CONVERTING SHARES IN THE MERGER
2.1 Conversion of Shares. Subject to the provisions of this Article 2,
at the Effective Time, by virtue of the Merger and without any action on the
part of Parent, Company, Purchaser or the shareholders of any of the foregoing,
the shares of the constituent corporations shall be converted as follows:
(a) each share of common stock of Purchaser issued and
outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be converted into one validly issued, fully paid
and nonassessable share of common stock of the Surviving Corporation;
and
(b) each Share (excluding Shares held by any Company Entity or
any Parent Entity) issued and outstanding immediately prior to the
Effective Time shall be cancelled and shall be converted into and
exchanged for the right to receive 0.3121 of a fully paid and
non-assessable share of Parent Common Stock (the "Exchange Ratio"). The
consideration referred to in the preceding sentence and in Section 2.3
is hereinafter referred to as the "Merger Consideration."
2.2 Shares Held by Company or Parent. Each of the Shares held by any
Company Entity or any Parent Entity shall, by virtue of the Merger, cease to be
outstanding and will be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
2.3 Fractional Shares.
(a) Notwithstanding any other provision of this Agreement, no
certificates or scrip or shares of Parent Common Stock representing
fractional shares of Parent Common Stock or book-entry credit of the
same shall be issued upon the surrender for exchange of the Certificate
and such fractional share interests will not entitle the owner thereof
to vote, to be entitled to dividends or to have any rights of a
shareholder of Parent or a holder of shares of Parent Common Stock.
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(b) Notwithstanding any other provision of this Agreement,
each holder of shares of Company Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of
a share of Parent Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof,
cash (without interest) in an amount equal to such fractional part of a
share of Parent Common Stock multiplied by the market value of one
share of Parent Common Stock at the Effective Time. The market value of
one share of Parent Common Stock at the Effective Time shall be the
Average Stock Price. As promptly as practicable after the determination
of the amount of cash, if any, to be paid to holders of fractional
interests, the Exchange Agent shall so notify Parent, and Parent shall
cause the Surviving Corporation to deposit such amount with the
Exchange Agent and shall cause the Exchange Agent to forward payments
to such holders of fractional interests subject to and in accordance
with the terms hereof.
2.4 Payment in Respect of Equity Rights.
(a) At the Effective Time, (i) each outstanding Equity Right
relating to Company Common Stock, whether or not then exercisable,
shall be converted, in the manner described below, into and become a
right to acquire Parent Common Stock, (ii) Parent shall assume each
Equity Right in accordance with the terms of the Company Stock Plans
and/or the agreements governing such Equity Right, subject to the
modifications set forth in this Section 2.4, and (iii) the Company
Stock Plans and the agreements evidencing the grants of such Equity
Rights shall continue in effect on the same terms and conditions,
subject to the modifications set forth in this Section 2.4. The number
of shares of Parent Common Stock subject to such converted Equity Right
shall equal the product of (i) the number of shares of Company Common
Stock into which such Equity Right was exercisable prior to the
Effective Time and (ii) the Exchange Ratio. The exercise, price, if
any, applicable to such Equity Right shall be equal to the per share
exercise price applicable to such Equity Right prior to the Effective
Time divided by the Exchange Ratio.
(b) Prior to the Effective Time, Company shall use all
commercially reasonable efforts to obtain all necessary consents or
releases from holders of Equity Rights, to the extent required by the
terms of the plans or agreements governing such Equity Rights, as the
case may be, or pursuant to the terms of any Equity Right granted
thereunder, and take all such other lawful action as may be necessary
to give effect to the transactions contemplated by this Section 2.4
(except for such action that may require the approval of Company's
stockholders). Except as otherwise agreed to by Parent or Purchaser and
Company, Company shall take all action necessary to ensure that
following the Effective Time, (x) no participant in any Company Stock
Plan or other plans, programs or arrangements shall have any right
thereunder to acquire equity securities of Company, the Surviving
Corporation or any Subsidiary thereof, and (y) Company will not be
bound by any Equity Right which would entitle any Person to own any
capital stock of Company, the Surviving Corporation or any Subsidiary
thereof. Any amounts otherwise payable under this Section 2.4 shall be
subject to any income or employment tax withholding required under the
Internal Revenue Code or any provision of state or local Law.
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(c) Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Parent Common
Stock for delivery upon the exercise or conversion of Equity Rights. As
soon as practicable after the Effective Time, Parent shall file a
registration statement on Form S-3 or Form S-8, as the case may be (or
any successor or other appropriate forms), with respect to the shares
of Parent Common Stock subject to such Equity Rights and shall use its
reasonable best efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the
current status of the prospectus or prospectuses contained therein) for
so long as such Equity Rights remain outstanding.
(d) With respect to the Company Stock Plans, from and after
the Effective Time, Parent and its Compensation Committee shall be
substituted for Company and Company's Compensation Committee
administering the Company Stock Plans. As soon as practicable after the
Effective Time, Parent shall deliver to the holders of Equity Rights
appropriate notices setting forth such holders' rights pursuant to the
Company Stock Plans. Notwithstanding the provisions of clause (a)
above, each Equity Right which is an "incentive stock option" shall be
adjusted as required by Section 424 of the Internal Revenue Code, and
the regulations promulgated thereunder, so as not to constitute a
modification, extension or renewal of such Equity Right, within the
meaning of Section 424(h) of the Internal Revenue Code.
(e) With respect to those individuals who subsequent to the
Merger will be subject to the reporting requirements under Section
16(a) of the 1934 Act, where applicable, Parent shall administer the
Company Stock Plans in a manner that complies with Rule 16b-3
promulgated under the 1934 Act to the extent the Company Stock Plans
complied with such rule prior to the Merger.
2.5 Adjustments. If, during the period between the date of this
Agreement and the Effective Time, any change in the outstanding Shares of
Company Common Stock or Parent Common Stock shall occur, including by reason of
the Company Rights Agreement, any reclassification, recapitalization, stock
split or combination, exchange or readjustment of Shares, or stock dividend
thereon, in any of these cases with a record date during such period, the
Exchange Ratio and any other amounts payable pursuant to this Agreement shall be
appropriately adjusted.
ARTICLE III
EXCHANGE OF SHARES
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11
3.1 Exchange Procedures.
(a) Prior to the Effective Time, Parent shall select a bank or
trust company, which shall be reasonably satisfactory to Company, to
act as exchange agent (the "Exchange Agent") to receive the funds and
to deliver the certificates for the shares of Parent Common Stock upon
surrender of certificates which represented Shares immediately prior to
the Effective Time (the "Certificates"). At or prior to the Effective
Time, Parent shall deposit with the Exchange Agent, in trust for the
benefit of holders of shares of Company Common Stock, certificates
representing the Parent Common Stock issuable pursuant to Section 2.1
in exchange for outstanding shares of Company Common Stock. Parent
agrees to make available to the Exchange Agent from time to time as
needed, cash sufficient to pay cash in lieu of fractional shares
pursuant to Section 2.3 and any dividends and other distributions
pursuant to Section 3.1(h). Any cash and certificates of Parent Common
Stock deposited with the Exchange Agent are hereinafter be referred to
as the "Exchange Fund".
(b) As soon as reasonably practicable after the Effective
Time, the Surviving Corporation shall cause the Exchange Agent to mail
to each holder 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 Exchange Agent, and which letter shall be in customary form and
have such other provisions as Parent may reasonably specify, and (ii)
instructions for effecting the surrender of such Certificates in
exchange for the applicable Merger Consideration. Upon surrender of a
Certificate to the Exchange Agent together with such letter of
transmittal, duly executed and completed in accordance with the
instructions thereto, and such other documents as may reasonably be
required by the Exchange Agent, (A) the holder of such Certificate
shall be entitled to receive in exchange therefor (x) one or more
shares of Parent Common Stock (which shall be in uncertificated
book-entry form unless a physical certificate is requested)
representing, in the aggregate, the whole number of shares that such
holder has the right to receive pursuant to Section 2.1 (after taking
into account all shares of Company Common Stock then held by such
holder) and (y) a check in the amount equal to the cash that such
holder has the right to receive cash in lieu of any fractional shares
of Parent Common Stock pursuant to Section 2.3 and dividends and other
distributions pursuant to Section 3.1(h), after giving effect to any
tax withholdings, and (B) the Certificate so surrendered shall
forthwith be cancelled. No interest will be paid or will accrue on any
cash payable pursuant to Section 2.3 or Section 3.1(h). In the event of
a transfer of ownership of Company Common Stock that is not registered
in the transfer records of the Company, one or more shares of Parent
Common Stock evidencing, in the aggregate, the proper number of shares
of Parent Common Stock, a check in the proper amount of cash in lieu of
any fractional shares of Parent Common Stock pursuant to Section 2.3
and any dividends or other distributions to which such holder is
entitled pursuant to Section 3.1(h), may be issued with respect to such
Company Common Stock to such a transferee if the Certificate
representing such shares of Company Common Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and to evidence that the payment of applicable
stock transfer taxes.
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(c) If any Certificates shall have been lost, stolen, mislaid
or destroyed, upon receipt of (i) an affidavit of that fact from the
holder of record claiming such Certificates to be lost, mislaid, stolen
or destroyed, (ii) such bond, security or indemnity as Parent and the
Exchange Agent may reasonably require and (iii) any other documents
necessary to evidence and effect the bona fide exchange thereof, the
Exchange Agent shall issue to such holder the consideration into which
the Shares represented by such lost, stolen, mislaid or destroyed
Certificates shall have been converted.
(d) Any other provision of this Agreement notwithstanding,
neither Parent, the Surviving Corporation nor the Exchange Agent shall
be liable to a holder of Company Common Stock for any Merger
Consideration or amounts paid or property delivered in good faith to a
public official pursuant to any applicable abandoned property, escheat
or similar Law. Any portion of the Exchange Fund remaining unclaimed by
the holders of Company Common Stock five years after the Effective
Time, (or immediately prior to such earlier date on which payment
pursuant to Article 2 would otherwise escheat to or become the property
of any governmental entity) shall, to the extent permitted by
applicable Law, become the property of the Surviving Corporation, free
and clear of all claims or interest of any Person previously entitled
thereto.
(e) The Exchange Agent shall invest any cash in the Exchange
Fund, as directed by Parent, in (i) direct obligations of the United
States of America, (ii) obligations for which the full faith and credit
of the United States of America is pledged to provide for the payment
of principal and interest, (iii) commercial paper rated the highest
quality by either Moody's Investors Services, Inc. or Standard & Poor's
Corporation, or (iv) certificates of deposit, bank repurchase
agreements or bankers' acceptances of commercial banks with capital
exceeding $500 million. Any net earnings with respect to the funds
deposited with the Exchange Agent shall be the property of and paid
over to Parent as and when requested by Parent.
(f) Any portion of the Exchange Fund which remains
undistributed to the holders of Certificates for six months after the
Effective Time shall be delivered to Parent together with any
Certificates and other documents in the Exchange Agent's possession,
upon demand, and any holders of Certificates that have not theretofore
complied with this Section 3.1 shall thereafter only look to Parent,
and only as general creditors thereof, for payment of their claim for
any Merger Consideration, any cash in lieu of fractional shares of
Parent Common Stock to which such holders are entitled pursuant to
Section 2.3 and any dividends or distributions with respect to shares
of Parent Common Stock to which such holders are entitled pursuant to
Section 3.1(h).
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(g) Parent, Purchaser or the Surviving Corporation, as the
case may be, shall be entitled to deduct and withhold from the
consideration otherwise payable to any holder of Company Common Stock
pursuant to this Agreement such amounts as may be required to be
deducted and withheld with respect to the making of such payment under
the Internal Revenue Code or under any provision of state or local Tax
Law. To the extent that amounts are so withheld by the Surviving
Corporation or Parent, as the case may be, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to
the holder of the shares of Company Common Stock in respect of which
such deduction and withholding was made by the Surviving Corporation or
Parent, as the case may be.
(h) No dividends or other distributions declared or made with
respect to shares of Parent Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Parent Common Stock that such
holder would be entitled to receive upon surrender of such Certificate,
and no cash payment in lieu of fractional shares of Parent Common Stock
shall be paid to any such holder pursuant to Section 2.3, in each case
unless and until such holder surrenders such Certificate in accordance
with this Section 3.1. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to
such holder of shares of Parent Common Stock issuable in exchange
therefor, without interest, (i) promptly after the time of such
surrender, the amount of any cash payable in lieu of fractional shares
of Parent Common Stock to which such holder is entitled pursuant to
Section 2.3 and the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to
such whole shares of Parent Common Stock, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to such surrender and a
payment date subsequent to such surrender payable with respect to
shares of Parent Common Stock.
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3.2 Rights of Former Company Shareholders. At the Effective Time, the
stock transfer books of Company shall be closed and no transfer of Company
Common Stock by any such holder shall thereafter be registered or recognized.
Until surrendered for exchange in accordance with the provisions of Section 3.1,
each Certificate (other than Shares to be canceled pursuant to Section 2.2)
shall from and after the Effective Time represent for all purposes only the
right to receive the consideration provided in Sections 2.1 and 2.3 in exchange
therefor, subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which have been declared or made by Company in respect of such
Shares of Company Common Stock in accordance with the terms of this Agreement
and which remain unpaid at the Effective Time. However, upon surrender of such
Certificate, any undelivered dividends and cash payments payable hereunder
(without interest) shall be delivered and paid with respect to each Share
formerly represented by such Certificate. All shares of Parent Common Stock
issued and cash paid in lieu of fractional shares pursuant to Section 2.3, and
any dividends or distributions pursuant to Section 3.1(h), shall be deemed to
have been issued or paid in full satisfaction of all rights pertaining to the
shares of Company Common Stock.
3.3 Affiliates. Notwithstanding anything to the contrary herein, no
shares of Parent Common Stock or cash shall be delivered to a Person who may be
deemed an "affiliate" of Company in accordance with Section 7.16 of this
Agreement for purposes of Rule 145 under the 1933 Act until such Person has
executed and delivered an Affiliate Agreement to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to Parent as follows:
4.1 Organization, Standing and Power.
(a) Company is a corporation validly existing and in good
standing under the Laws of the State of Florida, and has the corporate
power and authority to carry on its business as now conducted and to
own, lease and operate its material Assets. Company is duly qualified
or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions
where the character of its Assets owned, leased or operated or the
nature or conduct of its business requires it to be so qualified or
licensed, except for such failures which are not reasonably likely to
have a Company Material Adverse Effect.
(b) Company has heretofore furnished to Parent a complete and
correct copy of the Amended and Restated Articles of Incorporation (the
"Company Articles of Incorporation") and the Bylaws (the "Company
Bylaws") of Company as currently in effect. No other similar
organizational documents are applicable to or binding upon Company.
Company is not in violation of any of the provisions of the Company
Articles of Incorporation or the Company Bylaws.
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15
4.2 Authority of Company; No Breach By Agreement.
(a) Company has the corporate power and authority necessary to
execute, deliver, and perform its obligations under the Transaction
Agreements and to consummate the Transactions. The execution, delivery,
and performance of the Transaction Agreements and the consummation of
the Transactions have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Company, subject to
the approval of this Agreement by the holders of the outstanding shares
of Company Common Stock, as and to the extent required by Law. Subject
to such requisite shareholder approval, each of the Transaction
Agreements represents a legal, valid, and binding obligation of
Company, enforceable against Company in accordance with its terms
(except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement
of creditors' rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding may
be brought).
(b) Neither the execution and delivery of the Transaction
Agreements by Company, nor the consummation by Company of the
Transactions, nor compliance by Company with any of the provisions
thereof, will (i) conflict with or result in a breach of any provision
of the Company Articles of Incorporation or the Company Bylaws or the
certificate or articles of incorporation or bylaws or other
organizational documents of any Company Subsidiary or any resolution
adopted by the board of directors or the shareholders of any Company
Entity, or (ii) except as disclosed in Section 4.2(b) of the Company
Disclosure Memorandum, constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien
on any Asset of any Company Entity under, any Contract or Permit of any
Company Entity, where such Default or Lien, or any failure to obtain
such Consent, is reasonably likely to have a Company Material Adverse
Effect, or, (iii) subject to receipt of the requisite Consents referred
to in Section 4.2(c), constitute or result in a Default under, or
require any Consent pursuant to, any Law or Order applicable to any
Company Entity or any of their respective material Assets where such
Default, or any failure to obtain such Consent is reasonably likely to
have a Company Material Adverse Effect.
(c) No notice to, filing with, or Consent of, any public body
or authority by Company or any of its Subsidiaries is necessary for the
consummation by Company of the Transactions other than (i) in
connection or compliance with the provisions of the Securities Laws,
applicable state corporate and securities Laws, and rules of the NASD,
(ii) notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee
benefit plans or under the HSR Act, and (iii) Consents, filings, or
notifications (including Consents required from Regulatory Authorities)
which, if not obtained or made, are not reasonably likely to have a
Company Material Adverse Effect.
<PAGE>
16
4.3 Capital Stock.
(a) The authorized capital stock of Company consists solely of
(i) 150,000,000 shares of Company Common Stock, $0.01 par value per
share, of which 71,068,708 shares are issued and outstanding as of the
date of this Agreement, and (ii) 1,000,000 shares of preferred stock,
of which 300,000 shares are designated as Series A Participating
Preferred Stock, $0.01 par value per share, none of which are issued
and outstanding. All of the issued and outstanding shares of capital
stock of Company are duly authorized, validly issued and outstanding
and are fully paid and nonassessable under the FBCA and are free of
pre-emptive rights and were issued in compliance, in all material
respects, with the FBCA and all applicable Securities Laws.
(b) Section 4.3 of the Company Disclosure Memorandum sets
forth a complete and correct list, as of June 21, 2000, of (i) the name
of each person holding Equity Rights relating to Company Common Stock,
and (ii) the number of shares of Company Common Stock subject to such
person's Equity Rights, and the dates of grant and the exercise prices
thereof. Except as set forth in Section 4.3(a), or as provided pursuant
to the Company Rights Agreement, or under the Company Stock Plans, or
as disclosed in Section 4.3 of the Company Disclosure Memorandum, (i)
there are no shares of capital stock or other equity securities of
Company outstanding and no outstanding Equity Rights relating to the
capital stock of Company, (ii) since June 1, 2000, no Company Entity
has issued or granted, or authorized the issuance or grant of any
Equity Right relating to the capital stock of the Company, and (iii) no
Company Entity has any obligation or commitment to repurchase, redeem
or otherwise acquire any shares of capital stock of the Company or any
Equity Right relating to the capital stock of the Company.
4.4 Company Subsidiaries. Except as disclosed in Section 4.4 of the
Company Disclosure Memorandum, Company or one of its Subsidiaries owns all of
the issued and outstanding shares of capital stock (or other equity interests),
and Equity Rights relating to capital stock, of each Company Subsidiary. Except
as disclosed in Section 4.4 of the Company Disclosure Memorandum, no capital
stock (or other equity interest) of any Company Subsidiary is or may become
required to be issued (other than to another Company Entity) by reason of any
Equity Rights, and there are no Contracts by which any Company Subsidiary is
bound to issue (other than to another Company Entity) additional shares of its
capital stock (or other equity interests) or Equity Rights or by which any
Company Entity is or may be bound to transfer, sell, purchase, redeem or
otherwise acquire any shares of the capital stock (or other equity interests) of
any Company Subsidiary or any Equity Rights relating to any such capital stock
<PAGE>
17
(other than to or from another Company Entity). Except as disclosed in Section
4.4 of the Company Disclosure Memorandum, there are no Contracts relating to the
rights of any Company Entity to vote or to dispose of any shares of the capital
stock (or other equity interests) of any Company Subsidiary. Except as disclosed
in Section 4.4 of the Company Disclosure Memorandum, all of the shares of
capital stock (or other equity interests) of each Company Subsidiary held by a
Company Entity are duly authorized, validly issued and outstanding and are fully
paid, nonassessable, free of pre-emptive rights and were issued in compliance
with the applicable corporation Law of the jurisdiction in which such Subsidiary
is incorporated and are owned by a Company Entity free and clear of any Lien.
Each Company Subsidiary is a corporation, and each such Subsidiary is validly
existing and in good standing under the Laws of the jurisdiction in which it is
incorporated, has the corporate power and authority necessary for it to own,
lease, and operate its material Assets and to carry on its business as now
conducted, and is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such failures
which are not reasonably likely to have a Company Material Adverse Effect. The
copies of the organizational and charter documents for the Company Subsidiaries
made available to Parent are true and correct as of the date hereof. Section 4.4
of the Company Disclosure Memorandum lists all of the Company Subsidiaries and
correctly sets forth the percentage of Company's ownership of each Company
Subsidiary and the jurisdiction in which each Company Subsidiary is organized or
formed.
4.5 SEC Filings; Financial Statements.
(a) Company has timely filed and made available to Parent all
SEC Documents required to be filed by Company since March 31, 1998 (the
"Company SEC Reports"). Except as disclosed in Section 4.5 of the
Company Disclosure Memorandum, the Company SEC Reports (i) at the time
filed, complied in all material respects with the applicable
requirements of the Securities Laws and other applicable Laws and (ii)
did not, at the time they were filed (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated in such Company SEC Reports
or necessary in order to make the statements in such Company SEC
Reports, in light of the circumstances under which they were made, not
misleading; provided, that any pro forma financial statements contained
in the Company SEC Reports are not necessarily indicative of the
consolidated financial position of the Company Entities as of the
respective dates thereof and the consolidated results of operations and
cash flows of the Company Entities for the periods indicated. No
Company Subsidiary is required to file any SEC Documents.
(b) Except as disclosed in Section 4.5 of the Company
Disclosure Memorandum, each of the Company Financial Statements
<PAGE>
18
(including, in each case, any related notes) contained in the Company
SEC Reports, including any Company SEC Reports filed after the date of
this Agreement until the Effective Time, complied as to form in all
material respects with the applicable published rules and regulations
of the SEC with respect thereto, was prepared in accordance with GAAP
applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes to such financial statements or, in
the case of unaudited interim statements, as permitted by Form 10-Q of
the SEC), and fairly presented in all material respects the
consolidated financial position of Company and its Subsidiaries as at
the respective dates and the consolidated results of operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material
in amount or effect and that any pro forma financial statements
contained in the Company SEC Reports are not necessarily indicative of
the consolidated financial position of the Company Entities as of the
respective dates thereof and the consolidated results of operations and
cash flows of the Company Entities for the periods indicated.
(c) Attached to the Company Disclosure Memorandum are the
consolidated balance sheet of the Company as of March 31, 2000 and the
consolidated statements of income, changes in shareholders' equity and
cash flows for the fiscal year ended March 31, 2000 and the notes
related thereto (the "2000 Financial Statements"). The 2000 Financial
Statements comply as to form in all material respects with the
applicable published rules and regulations of the SEC relating to such
financial statements, have been prepared in accordance with GAAP
applied on a basis consistent with the Company Financial Statements and
fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as at the date and for the
periods indicated. The audited financial statements of the Company for
the fiscal year ended March 31, 2000, including the notes thereto,
included in any SEC Document of the Company will be the same as the
2000 Financial Statements, except for any immaterial changes to the
notes to such financial statements.
(d) None of the information supplied or to be supplied by
Company for inclusion or incorporation by reference in the Proxy
Statement/Prospectus will, on the date it is first mailed to Company
stockholders or Parent stockholders or at the time of the Company
Stockholders Meeting or the Parent Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The Proxy Statement/Prospectus will comply as to
form in all material respects with the requirements of the 1934 Act and
the 1933 Act and the rules and regulations of the SEC thereunder.
Notwithstanding the provisions of this Section 4.5(c), no
representation or warranty is made by Company with respect to
statements made or incorporated by reference in the Proxy
Statement/Prospectus based on information supplied by Parent for
inclusion or incorporation by reference therein.
<PAGE>
19
4.6 Absence of Undisclosed Liabilities. No Company Entity has any
Liabilities that are reasonably likely to have a Company Material Adverse
Effect, other than Liabilities or allowances which are disclosed or accrued or
reserved against in the consolidated balance sheet included in the 2000
Financial Statements or reflected in the notes thereto. No Company Entity has
incurred or paid any Liability since December 31, 1999, except as disclosed in
the Company Financial Statements and the 2000 Financial Statements and for such
Liabilities incurred or paid (i) in the ordinary course of business consistent
with past business practice and which are not reasonably likely to have a
Company Material Adverse Effect or (ii) in connection with the transactions
contemplated by this Agreement.
4.7 Absence of Certain Changes or Events. Since December 31, 1999,
there have been no events, changes or occurrences which have had, or are
reasonably likely to have a Company Material Adverse Effect, except (i) as
disclosed in the Company Financial Statements and the 2000 Financial Statements
delivered prior to the date of this Agreement, or (ii) as disclosed in Section
4.7 of the Company Disclosure Memorandum.
4.8 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of
any of the Company Entities on or before the Effective Time have been
or will be timely filed or requests for extensions have been or will be
timely filed, granted, and shall not have expired, except to the extent
that all such failures to file, taken together, are not reasonably
likely to have a Company Material Adverse Effect, and all Tax Returns
filed are complete and accurate in all material respects, except as
disclosed in Section 4.8 of the Company Disclosure Memorandum. All
Taxes shown on filed Tax Returns have been paid. There is no audit,
examination, notice of deficiency, or refund Litigation with respect to
any Taxes, except as reserved against in the Company Financial
Statements delivered prior to the date of this Agreement or as
disclosed in Section 4.8 of the Company Disclosure Memorandum, or
except for audits, examinations or notices of deficiency that are not
reasonably likely to have a Company Material Adverse Effect. There are
no Liens with respect to Taxes upon any of the Assets of the Company
Entities, except for any such Liens which are not reasonably likely to
have a Company Material Adverse Effect.
(b) Except as disclosed in Section 4.8 of the Company
Disclosure Memorandum, none of the Company Entities has executed an
extension or waiver of any statute of limitations on the assessment or
collection of any Tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other
applicable taxing authorities) that is currently in effect.
<PAGE>
20
(c) The provision for any Taxes due or to become due for any
of the Company Entities for the period or periods through and including
the date of the respective Company Financial Statements that has been
made and is reflected on such Company Financial Statements is
sufficient to cover all such Taxes.
(d) Deferred Taxes of the Company Entities have been provided
for in the Company Financial Statements in accordance with GAAP.
(e) Except as disclosed in Section 4.8 of the Company
Disclosure Memorandum, none of the Company Entities is a party to any
Tax allocation, indemnification or sharing agreement and none of the
Company Entities has been a member of an affiliated group filing a
consolidated federal income Tax Return, has any Liability for Taxes of
any Person (other than Company and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign Law) or as a transferee or successor or by Contract or
otherwise.
(f) Except as disclosed in Section 4.8 of the Company
Disclosure Memorandum, no Company Entity is required to include any
amount in income pursuant to Section 481 of the Internal Revenue Code.
(g) Except as disclosed in Section 4.8 of the Company
Disclosure Memorandum, each Company Entity has withheld all Taxes
required to be withheld and has paid all such withholdings to the
proper governmental entity.
4.9 Assets.
(a) Except as disclosed in Section 4.9 of the Company
Disclosure Memorandum or as disclosed or reserved against in the
Company Financial Statements delivered prior to the date of this
Agreement, the Company Entities have good and marketable title, free
and clear of all Liens, to all of their respective Assets, except for
any such Liens or other defects of title which are not reasonably
likely to have a Company Material Adverse Effect.
(b) The Company Entities currently maintain insurance similar
in amounts, scope, and coverage as Company believes is adequate to
conduct its business. None of the Company Entities has received notice
from any insurance carrier that (i) any policy of insurance will be
canceled or that coverage thereunder will be reduced or eliminated, or
(ii) premium costs with respect to such policies of insurance will be
substantially increased.
<PAGE>
21
4.10 Intellectual Property. Except as disclosed in Section 4.10 of the
Company Disclosure Memorandum, (i) each Company Entity owns or has a license to
use all of the Intellectual Property used by such Company Entity in the course
of its business, (ii) each Company Entity is the owner of or has a license to
any Intellectual Property sold or licensed to a third party by such Company
Entity in connection with such Company Entity's business operations, and such
Company Entity has the right to convey by sale or license any Intellectual
Property so conveyed, (iii) no Company Entity is in Default under any of its
Intellectual Property licenses and no proceedings which challenge the rights of
any Company Entity with respect to Intellectual Property used, sold, or licensed
by such Company Entity in the course of its business have been instituted, are
pending, or, to the knowledge of the Company, have been threatened, nor, to the
Knowledge of Company, has any person claimed or alleged any rights to such
Intellectual Property, except for any failure to own or license, Default or
proceeding which is not reasonably likely to have a Company Material Adverse
Effect. To the Knowledge of Company, the conduct of the business of the Company
Entities does not infringe any Intellectual Property of any other person. Except
as disclosed in Section 4.10 of the Company Disclosure Memorandum, no Company
Entity is obligated to pay any recurring royalties to any Person with respect to
any such Intellectual Property.
4.11 Environmental Matters. Except as set forth in Section 4.11 of
the Company Disclosure Memorandum:
(a) Each Company Entity, and its Operating Properties are, and
have been, in material compliance with all Environmental Laws.
(b) There is no Litigation pending or, to the knowledge of the
Company, threatened before any court, governmental agency, or authority
or other forum in which any Company Entity or any of its Operating
Properties (or Company in respect of such Operating Property) has been
or, with respect to threatened Litigation, may be named (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release, discharge, spillage, or disposal into
the environment of any Hazardous Material, whether or not occurring at,
on, under, adjacent to, or affecting (or potentially affecting) a site
currently or formerly owned, leased, operated or used by any Company
Entity or any of its Operating Properties.
(c) To the Knowledge of Company, there have been no releases,
discharges, spillages, or disposals of Hazardous Material in, on,
under, adjacent to, or affecting (or potentially affecting) any
property currently or formerly owned, operated or used by a Company
Entity, except such as are not reasonably likely to have a Company
Material Adverse Effect.
<PAGE>
22
4.12 Compliance with Laws. Each Company Entity has in effect all
Permits necessary for it to own, lease, or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have a Company Material Adverse Effect.
Except as disclosed in Section 4.12 of the Company Disclosure Memorandum, the
operations of the Company Entities do not violate any applicable Law, Order or
Permit, other than violations which are not reasonably likely to have a Company
Material Adverse Effect. None of the Company Entities is currently subject to
any fine or penalty as the result of a failure to comply with any requirement of
Law nor has the Company received any notice from any Regulatory Authorities of
such non-compliance.
4.13 Labor Relations. No Company Entity is the subject of any
Litigation asserting that it or any other Company Entity has committed an unfair
labor practice (within the meaning of the National Labor Relations Act, as
amended) or seeking to compel it or any other Company Entity to bargain with any
labor organization as to wages or conditions of employment, nor is any Company
Entity party to any collective bargaining agreement, nor is there any strike
involving any Company Entity pending or, to the knowledge of the Company,
threatened, or is there any activity involving any Company Entity's employees
seeking to certify a collective bargaining unit or engaging in any other
organization activity.
4.14 Employee Benefit Plans.
(a) Except as disclosed in Section 4.14 of the Company
Disclosure Memorandum, none of the Company Entities or their ERISA
Affiliates maintains, sponsors, contributes to, has a commitment to
establish or has any liability or contingent liability with respect to
any pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus, or
other incentive plan, any employee program, arrangement, or agreement,
any medical, vision, dental, or other health plan, any life insurance
plan or any other employee benefit plan or fringe benefit plan,
including any "employee benefit plan" as that term is defined in
Section 3(3) of ERISA, for any current or former employee, retiree,
dependent, spouse, director, independent contractor, or other
beneficiary (collectively, the "Company Benefit Plans"). No Company
Benefit Plan is or has been a "defined benefit plan" (as defined in
Section 414(j)) of the Internal Revenue Code) or a multiemployer plan
within the meaning of Section 3(37) of ERISA. A true and correct copy
of each of the Company Benefit Plans and all contracts relating thereto
as in effect on the date hereof has been made available to Parent prior
to the execution of this Agreement, and Parent has been provided an
accurate description of any Company Benefit Plan which is not in
written form.
(b) All Company Benefit Plans are in material compliance and
have been administered in all material respects in form and operation
<PAGE>
23
in accordance with their terms and all applicable provisions of ERISA,
the Internal Revenue Code, and any other applicable Laws. Except as
disclosed in Section 4.14 of the Company Disclosure Memorandum, each
Company Benefit Plan that is intended to be qualified under Section
401(a) of the Internal Revenue Code and all amendments thereto (except
those for which the remedial amendment period has not expired) is the
subject of a favorable Internal Revenue Service determination letter,
and the Company is not aware of any event which will or could give rise
to disqualification of any such plan or to a tax under Section 511 of
the Internal Revenue Code. No Company Entity has engaged in a
transaction with respect to any Company Benefit Plan that would subject
any Company Entity to a Tax imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA. All contributions
required to be made under the terms of any Company Benefit Plan have
been made and adequate accruals for all obligations under the Company
Benefit Plans are reflected in the Company Financial Statements.
(c) Except as disclosed in Section 4.14 of the Company
Disclosure Memorandum, or as required by Law, no Company Entity has any
Liability for post-termination or retiree health and life benefits
under any of the Company Benefit Plans.
(d) Except as disclosed in Section 4.14 of the Company
Disclosure Memorandum, neither the execution and delivery of this
Agreement nor the consummation of the Transactions will (i) result in
any payment (including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director, any officer or
any employee of any Company Entity from any Company Entity under any
Company Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any Company Benefit Plan, or (iii) result in the
acceleration of the time of payment or vesting of any benefit payable
under any Company Benefit Plan.
(e) Except as set forth in Section 4.14 of the Company
Disclosure Memorandum, none of the assets of any Company Benefit Plan
are invested in employer securities or employer real property.
(f) There are no actions, suits or material claims (other than
routine claims for benefits) pending or threatened involving any
Company Benefit Plan.
(g) There has been no act or omission that would impair the
ability of any Company Entity (or any successor thereto) to
unilaterally amend or terminate any Company Benefit Plan.
4.15 Material Contracts. Except as disclosed in Section 4.15 of the
Company Disclosure Memorandum or otherwise reflected in the Company Financial
Statements filed with the SEC prior to the date hereof, none of the Company
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24
Entities, nor any of their respective Assets, businesses, or operations, is a
party to, or is bound or affected by, or receives benefits under, (i) any
employment, severance, termination, consulting, or retirement Contract providing
for aggregate payments to any Person in any calendar year in excess of $150,000,
(ii) any Contract relating to the borrowing of money by any Company Entity or
the guarantee by any Company Entity of any such obligation (other than Contracts
evidencing trade payables and Contracts relating to borrowings or guarantees
made in the ordinary course of business), (iii) any Contract which prohibits or
restricts any Company Entity or its Affiliates from engaging in any business
activities in any geographic area, line of business or otherwise in competition
with any other Person, (iv) any Contract between or among Company Entities, (v)
any other Contract or amendment thereto that would be required to be filed as an
exhibit to a Form 10-K filed by Company with the SEC as of the date of this
Agreement, (vi) any registration rights agreement, stockholder agreements or
agreements containing rights to register securities, (vii) any Contracts that
are material to the Company Entities and contain a "change of control" or
similar provision, and (viii) any "material contract" (as such term is defined
in Item 601(b)(10) of Regulation S-K of the SEC) (collectively, the "Company
Contracts"). With respect to each Company Contract and except as disclosed in
Section 4.15 of the Company Disclosure Memorandum: (i) the Company Contract is
in full force and effect (unless otherwise expired by its terms or earlier
terminated as set forth in Section 4.15 of the Company Disclosure Memorandum and
is valid and binding on Company (or, to the extent a Company Subsidiary is a
party, such Company Subsidiary) and, to Company's Knowledge, each other party
thereto); (ii) no Company Entity is in Default thereunder, other than Defaults
which are not reasonably likely to have a Company Material Adverse Effect; (iii)
no Company Entity has repudiated or waived any material provision of any such
Company Contract; and (iv) no other party to any such Company Contract is, to
the Knowledge of Company, in Default in any respect, other than Defaults which
are not reasonably likely to have a Company Material Adverse Effect, or has
repudiated or waived any material provision thereunder. Except as disclosed in
Section 4.15 of the Company Disclosure Memorandum, all of the indebtedness of
any Company Entity for money borrowed in excess of $250,000 in any single
instrument is prepayable at any time by such Company Entity without penalty or
premium.
4.16 Legal Proceedings. Except as disclosed in Section 4.16 of the
Company Disclosure Memorandum, there is no Litigation instituted or pending, or,
to the Knowledge of Company, threatened against any Company Entity, or against
any director, employee or employee benefit plan of any Company Entity, or
against any Asset, interest, or right of any of them, that is reasonably likely
to have a Company Material Adverse Effect, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any Company Entity or, to the knowledge of the Company, any
director or officer of any Company Entity, that are reasonably likely to have a
Company Material Adverse Effect.
<PAGE>
25
4.17 Opinion of Financial Advisor. Donaldson, Lufkin & Jenrette
Securities Corporation has delivered to the Board of Directors its written
opinion, dated prior to or as of the date of this Agreement, that based on the
assumptions, qualifications and limitations contained therein, the Merger
Consideration to be received by Company's shareholders in the Merger is fair
from a financial point of view to such shareholders. Company has provided a copy
of such opinion to Parent.
4.18 State Takeover Laws. The Company's Board of Directors and each
Company Entity have taken all necessary action to exempt the transactions
contemplated by this Agreement from, or if necessary to challenge the validity
or applicability of, any applicable "moratorium," "fair price," "business
combination," "control share," or other anti-takeover Laws, including the Fair
Price Provision contained in Article IX of the Company's Articles of
Incorporation and Section 607.0902 of the FBCA (collectively, "Takeover Laws").
4.19 Charter Provisions. Each Company Entity has taken all action so
that the entering into of this Agreement and the consummation of the Merger and
the Transactions do not and will not result in the grant of any rights to any
Person under the certificate or articles of incorporation, bylaws or other
governing instruments of any Company Entity or restrict or impair the ability of
Parent or any of its Subsidiaries to vote, or otherwise to exercise the rights
of a shareholder with respect to, shares of any Company Entity that may be
directly or indirectly acquired or controlled by them.
4.20 Rights Agreement. Company has taken, or will take prior to the
Effective Time, all necessary action, including, without limitation, amending
the Rights Agreement with respect to all of the outstanding Rights, (a) to
render the Company Rights Agreement inapplicable to the Transaction Agreements,
the Merger and the other Transactions (including the Stock Option Agreement),
(b) to ensure that in connection with the Merger, and the Transactions that (i)
Parent and Purchaser, or either of them, are not deemed to be an Acquiring
Person (as defined in the Company Rights Agreement) pursuant to the Company
Rights Agreement and (ii) no "Stock Acquisition Date," "Flip-in Date" or
"Flip-Over Transaction or Event" (as such terms are defined in the Company
Rights Agreement) occurs by reason of the execution and delivery of the
Transaction Agreements or the consummation of the Merger or other Transactions,
including the purchase of any Company Common Stock by Parent pursuant to the
Stock Option Agreement and (c) so that Company will have no obligations under
the Company Rights or the Company Rights Agreement in connection with the Merger
or the Transactions (including any purchase of Company Common Stock pursuant to
the Stock Option Agreement) and the holders of Shares and the associated Company
Rights will have no rights under the Company Rights or the Company Rights
Agreement in connection with the Merger or the Transactions (including any
purchase of Company Common Stock pursuant to the Stock Option Agreement). Except
for the foregoing, there have been no amendments or modifications to the Company
Rights Agreement since April 20, 1998. Copies of all such amendments to the
Company Rights Agreement (or drafts of amendments to be made in connection with
the execution of this Agreement) have been previously provided to Purchaser.
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26
4.21 Tax Reorganization. No Company Entity or, to Company's knowledge,
any Affiliate thereof, has taken or agreed to take any action that will prevent
the Merger from qualifying as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code.
4.22 Customers and Suppliers. Since December 31, 1999, there has been
no adverse change that is material to the Company in the relationship of any
Company Entity with its customers or suppliers and no such customer or supplier
has indicated that it intends to seek such a change.
4.23 ERP Rollout. The implementation by the Company of J.D. Edwards &
Company's One World ERP System (the "ERP System"), and the conversion of the
Company's current systems to the ERP System have proceeded, and as of the
Effective Time will have proceeded, substantially in accordance with the
roll-out schedule set forth in Schedule 4.23, and there is no indication that
would lead the Company to reasonably believe that such implementation and
conversion has adversely affected or will adversely affect in any material
respect the Company's business and operations.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby jointly and severally represent and warrant
to Company as follows:
5.1 Organization, Standing and Power. Parent is a company duly
organized, validly existing and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own lease and operate its material Assets. Parent is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature of conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have a Parent
Material Adverse Effect.
5.2 Authority; No Breach By Agreement.
(a) Parent has the corporate power and authority necessary to
execute, deliver and perform its obligations under the Transaction
Agreements and to consummate the Transactions, subject to the approval
by a majority of the shares of Parent Common Stock of the issuance of
shares of Parent Common Stock in the Merger (the "Parent Share
<PAGE>
27
Issuance"). The execution, delivery and performance of the Transaction
Agreements and the consummation of the Transactions have been duly and
validly authorized by all necessary corporate action in respect thereof
on the part of Parent, except for the approval of the Parent Share
Issuance by a majority of the holders of Parent Common Stock. Each of
the Transaction Agreements represents a legal, valid, and binding
obligation of Parent, enforceable against Parent in accordance with its
terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement
of creditors' rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding may
be brought).
(b) Neither the execution and delivery of the Transaction
Agreements by Parent, nor the consummation by Parent of the
Transactions, nor compliance by Parent with any of the provisions
hereof, will (i) conflict with or result in a breach of any provision
of Parent's organizational documents, or (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the
creation of any Lien on any Asset of any Parent Entity under, any
Contract or Permit of any Parent Entity, where such Default or Lien, or
any failure to obtain such Consent, would prevent or materially delay
the consummation of the Merger, or, (iii) subject to the receipt of the
consents referred to in Section 5.2(c), constitute or result in a
Default under, or require any Consent pursuant to, any Law or Order
applicable to any Parent Entity or any of their respective material
Assets where such Default, or any failure to obtain such Consent would
prevent or materially delay the consummation of the Merger.
(c) No notice to, filing with, or Consent of, any public body
or authority by Parent or any of its Subsidiaries is necessary for the
consummation by Parent of the Transactions other than (i) in connection
or compliance with the provisions of the Securities Laws and applicable
state corporate and securities Laws and the rules of the NYSE, (ii)
notices to or filings with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation with respect to any employee benefit
plans, or under the HSR Act, and (iii) Consents, filings, or
notifications (including Consents required from Regulatory Authorities)
which, if not obtained or made, would not prevent or materially delay
the consummation of the Merger.
5.3 Capital Stock.
(a) The authorized capital stock of Parent consists solely of
(i) 100 million authorized shares of common stock, $0.01 par value per
share, of which as of June 12, 2000, 40,094,979 shares were issued and
outstanding and (ii) 15 million shares of preferred stock, $0.01 par
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28
value per share, none of which are issued and outstanding. Of the
common stock issued and outstanding as of June 12, 2000, (A) 27,059,689
were shares of Parent Common Stock, (B) 4,035,290 shares were
Non-Voting Common Stock, and (C) 9,000,000 shares were Series B
Non-Voting Common Stock. The Non-Voting Common Stock and the Series B
Non-Voting Common Stock have no rights to vote except as required by
applicable Law and each share of Non-Voting Common Stock and Series B
Non-Voting Common Stock is convertible into one share of Parent Common
Stock. All of the issued and outstanding shares of capital stock of
Parent are, and all of the shares of Parent Common Stock to be issued
in exchange for the Shares upon consummation of the Merger will be,
duly authorized, validly issued and outstanding and are fully paid and
nonassessable under the Delaware General Corporation Law, free of
pre-emptive rights and issued in compliance, in all material respects,
with the Delaware General Corporation Law and all applicable Securities
Laws.
(b) Section 5.3 of the Parent Disclosure Memorandum sets forth
a complete and correct list, as of June 12, 2000, of the total number
of shares of Parent Common Stock, Parent Non-Voting Common Stock and
Parent Series B Non-Voting Common Stock subject to Equity Rights, and
the range of exercise prices thereof. Except as set forth in Section
5.3(a) or under the Parent Stock Plans, or as disclosed in Section 5.3
of the Parent Disclosure Memorandum, (i) there are no shares of capital
stock or other equity securities of Parent outstanding and no
outstanding Equity Rights relating to the capital stock of Parent, (ii)
since June 12, 2000, no Parent Entity has issued or granted, or
authorized the issuance or grant of any Equity Right relating to the
capital stock of Parent, and (iii) no Parent Entity has any obligation
or commitment to repurchase, redeem or otherwise acquire any shares of
capital stock of the Parent or any Equity Right relating to the capital
stock of Parent.
5.4 Parent Subsidiaries. Except as disclosed in Section 5.4 of the
Parent Disclosure Memorandum, Parent or one of its Subsidiaries owns all of the
issued and outstanding shares of capital stock (or other equity interests), and
Equity Rights related to capital stock, of each Parent Subsidiary. Except as
disclosed in Section 5.4 of the Parent Disclosure Memorandum, no capital stock
(or other equity interest) of any Parent Subsidiary is or may become required to
be issued (other than to another Parent Entity) by reason of any Equity Rights,
and there are no Contracts by which any Parent Subsidiary is bound to issue
(other than to another Parent Entity) additional shares of its capital stock (or
other equity interests) or Equity Rights or by which any Parent Entity is or may
be bound to transfer, sell, purchase, redeem, or otherwise acquire any shares of
the capital stock (or other equity interests) of any Parent Subsidiary or any
Equity Rights relating to any such capital stock (other than to or from another
Parent Entity). Except as disclosed in Section 5.4 of the Parent Disclosure
Memorandum, there are no Contracts relating to the rights of any Parent Entity
<PAGE>
29
to vote or to dispose of any shares of the capital stock (or other equity
interests) of any Parent Subsidiary. Except as disclosed in Section 5.4 of the
Parent Disclosure Memorandum, all of the shares of capital stock (or other
equity interests) of each Parent Subsidiary held by a Parent Entity are duly
authorized, validly issued and outstanding and are fully paid, nonassessable,
free of pre-emptive rights and were issued in compliance with the applicable
corporation Law of the jurisdiction in which such Subsidiary is incorporated and
are owned by a Parent Entity free and clear of any Lien. Each Parent Subsidiary
is a corporation, and each such Subsidiary is validly existing and in good
standing under the Laws of the jurisdiction in which it is incorporated, has the
corporate power and authority necessary for it to own, lease, and operate its
material Assets and to carry on its business as now conducted, and is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such failures which are not reasonably
likely to have a Parent Material Adverse Effect.
5.5 SEC Filings; Financial Statements.
(a) Parent has timely filed and made available to Company all
SEC Documents required to be filed by Parent since December 31, 1998
(the "Parent SEC Reports"). The Parent SEC Reports (i) at the time
filed, complied in all material respects with the applicable
requirements of the Securities Laws and other applicable Laws and (ii)
did not, at the time they were filed (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated in such Parent SEC Reports
or necessary in order to make the statements in such Parent SEC
Reports, in light of the circumstances under which they were made, not
misleading; provided, that any pro forma financial statements contained
in the Parent SEC Reports are not necessarily indicative of the
consolidated financial position of the Parent Entities as of the
respective dates thereof and the consolidated results of operations and
cash flows of the Parent Entities for the periods indicated. No Parent
Subsidiary is required to file any SEC Documents.
(b) Each of the Parent Financial Statements (including, in
each case, any related notes) contained in the Parent SEC Reports,
including any Parent SEC Reports filed after the date of this Agreement
until the Effective Time, complied as to form in all material respects
with the applicable published rules and regulations of the SEC with
respect thereto, was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Form 10-Q of the SEC),
and fairly presented in all material respects the consolidated
financial position of Parent and its Subsidiaries as at the respective
dates and the consolidated results of operations and cash flows for the
<PAGE>
30
periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount
or effect and that any pro forma financial statements contained in the
Parent SEC Reports are not necessarily indicative of the consolidated
financial position of the Parent Entities as of the respective dates
thereof and the consolidated results of operations and cash flows of
the Parent Entities for the periods indicated.
(c) None of the information supplied or to be supplied by
Parent for inclusion or incorporation by reference in the Proxy
Statement/Prospectus will, on the date it is first mailed to Company
stockholders or Parent stockholders or at the time of the Company
Stockholders Meeting or the Parent Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The Proxy Statement/Prospectus will comply as to
form in all material respects with the requirements of the 1934 Act and
the 1933 Act and the rules and regulations of the SEC thereunder.
Notwithstanding the provisions of this Section 5.5(c), no
representation or warranty is made by Parent with respect to statements
made or incorporated by reference in the Proxy Statement/Prospectus
based on information supplied by Company for inclusion or incorporation
by reference therein.
5.6 Absence of Undisclosed Liabilities. No Parent Entity has any
Liabilities that are reasonably likely to have a Parent Material Adverse Effect,
other than Liabilities or allowances which are disclosed or accrued or reserved
against in the consolidated balance sheet of Parent as of March 31, 2000 or
December 31, 1999 included in the Parent Financial Statements delivered prior to
the date of this Agreement or reflected in the notes thereto. No Parent Entity
has incurred or paid any Liability since December 31, 1999, except as disclosed
in the Parent Financial Statements and for such Liabilities incurred or paid in
the ordinary course of business consistent with past business practice and which
are not reasonably likely to have a Parent Material Adverse Effect.
5.7 Absence of Certain Changes or Events. Since December 31, 1999,
there have been no events, changes or occurrences which have had, or are
reasonably likely to have a Parent Material Adverse Effect, except (i) as
disclosed in the Parent Financial Statements delivered prior to the date of this
Agreement, or (ii) as disclosed in Section 5.7 of the Parent Disclosure
Memorandum.
5.8 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of
any of the Parent Entities on or before the Effective Time have been or
will be timely filed or requests for extensions have been or will be
timely filed, granted, and shall not have expired, except to the extent
that all such failures to file, taken together, are not reasonably
<PAGE>
31
likely to have a Parent Material Adverse Effect, and all Tax Returns
filed are complete and accurate in all material respects, except as
disclosed in Section 5.8 of the Parent Disclosure Memorandum. All Taxes
shown on filed Tax Returns have been paid. There is no audit,
examination, notice of deficiency, or refund Litigation with respect to
any Taxes, except as reserved against in the Parent Financial
Statements delivered prior to the date of this Agreement or as
disclosed in Section 5.8 of the Parent Disclosure Memorandum or except
for audits, examinations or notices of deficiency that are not
reasonably likely to have a Parent Material Adverse Effect. There are
no Liens with respect to Taxes upon any of the Assets of the Parent
Entities, except for any such Liens which are not reasonably likely to
have a Parent Material Adverse Effect.
(b) Except as disclosed in Section 5.8 of the Parent
Disclosure Memorandum, none of the Parent Entities has executed an
extension or waiver of any statute of limitations on the assessment or
collection of any Tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other
applicable taxing authorities) that is currently in effect.
(c) The provision for any Taxes due or to become due for any
of the Parent Entities for the period or periods through and including
the date of the respective Parent Financial Statements that has been
made and is reflected on such Parent Financial Statements is sufficient
to cover all such Taxes.
(d) Deferred Taxes of the Parent Entities have been provided
for in the Parent Financial Statements in accordance with GAAP.
(e) Except as disclosed in Section 5.8 of the Parent
Disclosure Memorandum, none of the Parent Entities is a party to any
Tax allocation, indemnification or sharing agreement and none of the
Parent Entities has been a member of an affiliated group filing a
consolidated federal income Tax Return, has any Liability for Taxes of
any Person (other than Parent and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign Law) or as a transferee or successor or by Contract or
otherwise.
(f) Except as disclosed in Section 5.8 of the Parent
Disclosure Memorandum, no Parent Entity is required to include any
amount in income pursuant to Section 481 of the Internal Revenue Code.
(g) Except as disclosed in Section 5.8 of the Parent
Disclosure Memorandum, each Parent Entity has withheld all Taxes
required to be withheld and has paid all such withholdings to the
proper governmental entity.
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32
5.9 Environmental Matters. Except as set forth in Section 5.9 of
the Parent Disclosure Memorandum:
(a) Each Parent Entity, and its Operating Properties are, and
have been, in material compliance with all Environmental Laws.
(b) There is no Litigation pending or, to the Knowledge of
Parent, threatened before any court, governmental agency, or authority
or other forum in which any Parent Entity or any of its Operating
Properties (or Parent in respect of such Operating Property) has been
or, with respect to threatened Litigation, may be named (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release, discharge, spillage, or disposal into
the environment of any Hazardous Material, whether or not occurring at,
on, under, adjacent to, or affecting (or potentially affecting) a site
currently or formerly owned, leased, or ,operated or used by any Parent
Entity.
(c) To the Knowledge of Parent, there have been no releases,
discharges, spillages, or disposals of Hazardous Material in, on,
under, adjacent to, or affecting (or potentially affecting) any
property currently or formerly owned, operated or used by a Parent
Entity, except such as are not reasonably likely to have a Parent
Material Adverse Effect.
5.10 Compliance with Laws. Each Parent Entity has in effect all Permits
necessary for it to own, lease, or operate its material Assets and to carry on
its business as now conducted, except for those Permits the absence of which are
not reasonably likely to have a Parent Material Adverse Effect. Except as
disclosed in Section 5.10 of the Parent Disclosure Memorandum, the business of
the Parent Companies as currently operated does not violate any applicable Law,
Order or Permit, other than violations which are not reasonably likely to have a
Company Material Adverse Effect. None of the Company Entities is currently
subject to any fine or penalty as the result of a failure to comply with any
requirement of Law nor has the Company received any notice from any Regulatory
Authorities of such non-compliance.
5.11 Legal Proceedings. Except as disclosed in Section 5.11 of the
Parent Disclosure Memorandum, there is no Litigation instituted or pending, or,
to the Knowledge of Parent, threatened against any Parent Entity or Purchaser or
against any director, employee or employee benefit plan of any Parent Entity or
Purchaser or against any Asset, interest, or right of any of them, that would
prevent or materially delay the consummation of the Merger, nor are there any
Orders of any Regulatory Authorities, other governmental authorities, or
arbitrators outstanding against any Parent Entity or Purchaser or any director
or officer of a Parent Entity, that are reasonably likely to have a Parent
Material Adverse Effect.
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33
5.12 Authority of Purchaser.
(a) Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Florida
and is a wholly owned Subsidiary of Parent. The authorized capital
stock of Purchaser consists of 1,000 shares of common stock ("Purchaser
Common Stock"), all of which shares are validly issued and outstanding,
fully paid and nonassessable and are owned by Parent free and clear of
any Lien. Purchaser has the corporate power and authority necessary to
execute, deliver and perform its obligations under the Transaction
Agreements and to consummate the Transactions. The execution, delivery
and performance of the Transaction Agreements and the consummation of
the Transactions have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Purchaser. Each of
the Transaction Agreements represents a legal, valid, and binding
obligation of Purchaser, enforceable against Purchaser in accordance
with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar Laws affecting the enforcement of creditors'
rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
Parent, as the sole shareholder of Purchaser, has irrevocably caused
the shares of Purchaser Common Stock to be voted in favor of approval
of this Agreement, as and to the extent required by applicable Law.
(b) Neither the execution and delivery of the Transaction
Agreements by Purchaser, nor compliance by Purchaser with any of the
provisions thereof, will (i) conflict with or result in a breach of any
provision of Purchaser's Articles of Incorporation or Bylaws, or (ii)
subject to the receipt of the consents referred to in Section 5.12(c),
constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of
Purchaser under, any Contract or Permit of Purchaser or any Subsidiary
or Affiliate of Purchaser, where such Default or Lien, or any failure
to obtain such Consent, would prevent or materially delay the
consummation of the Merger, or, (iii) constitute or result in a Default
under, or require any Consent pursuant to, any Law or Order applicable
to Purchaser or any Subsidiary or Affiliate of Purchaser or any of its
material Assets where such Default, or any failure to obtain such
Consent would prevent or materially delay the consummation of the
Merger.
(c) No notice to, filing with, or Consent of, any public body
or authority by Purchaser or any of its Subsidiaries is necessary for
the consummation by Purchaser of the Transactions other than (i) in
connection or compliance with the provisions of the Securities Laws and
applicable state corporate and securities Laws, (ii) notices to or
filings with the Internal Revenue Service or the Pension Benefit
Guaranty Corporation with respect to any employee benefit plans, or
under the HSR Act, and (iii) Consents, filings, or notifications
<PAGE>
34
(including Consents required from Regulatory Authorities) which, if not
obtained or made, would not prevent or materially delay the
consummation of the Merger.
5.13 Tax Reorganization. No Parent Entity or, to Parent's knowledge,
any Affiliate thereof, has taken or agreed to take any action that will prevent
the Merger from qualifying as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code.
ARTICLE VI
CONDUCT OF BUSINESS PENDING CONSUMMATION
6.1 Affirmative Covenants of Company. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Parent shall have been obtained (which
consent shall not be unreasonably withheld), and except as otherwise expressly
contemplated herein, Company shall and shall cause each of its Subsidiaries to
(i) operate its business only in the usual, regular, and ordinary course, (ii)
use reasonable efforts to preserve intact its business organization and Assets
and maintain its rights and franchises, (iii) comply in all material respects
with all Laws applicable to it or any of its Assets or businesses, (iv) continue
to use its reasonable efforts to continue the implementation and conversion the
Company's current systems to the J.D. Edwards & Company's OneWorld ERP System,
and (iv) take no affirmative action which would (x) materially adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated hereby, or (y) materially adversely affect the ability of any Party
to perform its covenants and agreements under this Agreement.
6.2 Negative Covenants of Company. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Parent shall have been obtained (which
consent shall not be unreasonably withheld), and except as otherwise expressly
contemplated herein, or as disclosed in Section 6.2 of the Company Disclosure
Memorandum, Company covenants and agrees that it will not do or agree or commit
to do, or permit any of its Subsidiaries to do or agree or commit to do, any of
the following:
(a) amend the Company Articles of Incorporation or the Company
Bylaws or articles of incorporation or bylaws or other organizational
documents of any Company Entity; or
(b) incur any additional debt obligation or other obligation
for borrowed money (other than indebtedness of a Company Entity to
another Company Entity) in excess of an aggregate of $250,000 (for the
Company Entities on a consolidated basis), except in the ordinary
course of business consistent with past practices, or impose, or suffer
the imposition, on any Asset of any Company Entity of any Lien or
permit any such Lien to exist (other than in connection with Liens in
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35
effect as of the date hereof securing indebtedness which is disclosed
in the Company Financial Statements); or
(c) repurchase, redeem, or otherwise acquire or exchange,
directly or indirectly, any shares, or any securities convertible into
any shares, of the capital stock of any Company Entity, or declare or
pay any dividend or make any other distribution in respect of Company's
capital stock; or
(d) except as provided in this Agreement, or pursuant to the
exercise of stock options outstanding as of the date hereof and
pursuant to the terms thereof in existence on the date hereof, or
pursuant to the Company Rights Agreement, or issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional Shares or any other
capital stock of any Company Entity, or any stock appreciation rights,
or any option, warrant, or other Equity Right (including but not
limited to stock appreciation rights, phantom stock or stock based
performance awards); or
(e) adjust, split, combine or reclassify any capital stock of
any Company Entity or issue or authorize the issuance of any other
securities in respect of or in substitution for Shares, or sell, lease,
mortgage or otherwise dispose of or otherwise encumber any shares of
capital stock of any Company Entity (unless any such shares of stock
are sold or otherwise transferred to another Company Entity) or any
Assets having a book value in excess of $250,000 other than in the
ordinary course of business for reasonable and adequate consideration;
or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of
three years or less, purchase any securities or make any material
investment, either by purchase of stock or securities, contributions to
capital, Asset transfers, or purchase of any Assets, in any Person
other than a wholly owned Company Subsidiary, or otherwise acquire
direct or indirect control over any Person or business, other than in
connection with (i) the creation of new wholly owned Subsidiaries
organized to conduct or continue activities being conducted on the date
hereof and otherwise permitted by this Agreement, or (ii) investments
in connection with cash management activities consistent with past
practices; or
(g) grant any increase in compensation or benefits to the
employees or officers of any Company Entity, except as disclosed in
Section 6.2(g) of the Company Disclosure Memorandum or as required by
Law; accelerate the vesting of any Company Option (other than by its
terms); enter into or amend any severance agreements with directors or
officers of any Company Entity; or grant any increase in fees or other
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36
increases in compensation or other benefits to directors of any Company
Entity, except as disclosed in Section 6.2(g) of the Company Disclosure
Memorandum; or
(h) enter into or amend any employment Contract between any
Company Entity and any Person providing for total compensation
thereunder in excess of $100,000 per year (unless such amendment is
required by Law) that the Company Entity does not have the
unconditional right to terminate without Liability (other than
Liability for services already rendered), at any time on or after the
Effective Time; or
(i) adopt any new employee benefit plan of any Company Entity
or terminate or withdraw from (other than completing the termination of
plans that are in various stages of termination and that are associated
with various stock acquisitions and mergers that occurred in recent
years), or make any material change in or to, any existing employee
benefit plans of any Company Entity other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan, or
make any distributions from such employee benefit plans, except as
required by Law or the terms of such plans; or
(j) make any material tax election or significant change in
any Tax or accounting methods or systems of internal accounting
controls, except as may be appropriate to conform to changes in Tax
Laws or GAAP, file any amended Tax Returns that may have a material
adverse effect on the tax position of Company or any Company Subsidiary
or settle or compromise any material federal, state, local or foreign
Tax liability or refund; or
(k) except for the settlement of any suit, action or claim
disclosed in Section 6.2(k) of the Company Disclosure Memorandum,
settle or compromise any pending suit, action, audit or claim (A)
against Company or any Company Subsidiary by any Regulatory Authority,
or (B) which is material to Company and the Company Subsidiaries, taken
as a whole, or which relates to the Transactions; or
(l) amend, modify or waive any provision of the Company Rights
Agreement, or take any action to redeem the Company Rights, or render
the Company Rights inapplicable to any transaction, other than to
permit another transaction that the Company's Board of Directors has
determined is a Superior Proposal in accordance with Section 7.9 hereof
and which will be consummated after the termination of this Agreement.
(m) take, or propose to take, or agree to take in writing or
otherwise, any of the actions described in Section 6.2 (a) through
6.2(l), or any action that would cause any of the conditions set forth
in Article 8 not to be satisfied.
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6.3 Covenants of Parent and Purchaser. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Company shall have been obtained (which
consent shall not be unreasonably withheld), and except as otherwise expressly
contemplated herein, Parent and Purchaser shall and shall cause each of its
Subsidiaries to take no action which would (i) materially adversely affect the
ability of any Party to obtain any Consents required for the transactions
contemplated hereby, (ii) cause any of the conditions set forth in Article 8 not
to be satisfied, (iii) materially adversely affect the ability of any Party to
perform its covenants and agreements under this Agreement or (iv) amend the
Parent Certificate of Incorporation or bylaws except as contemplated by this
Agreement (except for amendments to the Parent Certificate of Incorporation
necessary to increase the number of authorized share capital of Parent).
6.4 Adverse Changes in Condition. Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have a Company Material Adverse
Effect or a Parent Material Adverse Effect, as applicable, or to prevent or
materially delay the obligation of Parent and Purchaser to consummate the
Merger, as applicable, or (ii) would cause or constitute a material breach of
any of its representations, warranties, or covenants contained herein, and to
use its reasonable efforts to prevent or promptly to remedy the same; provided,
however, that the delivery of any notice pursuant to this Section 6.4 shall not
limit or otherwise affect the remedies available to Parent or Company hereunder.
Each Party shall give prompt notice to the other Parties of any written notice
or other written communication from any third party alleging that the consent of
such third party is or may be required in connection with the Transactions.
6.5 Reports. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time. If financial statements are contained in any
such reports filed with the SEC, such financial statements will fairly present
the consolidated financial position of the entity filing such statements as of
the dates indicated and the consolidated results of operations, changes in
shareholders' equity, and cash flows for the periods then ended in accordance
with GAAP (subject in the case of interim financial statements to normal
recurring year-end adjustments that are not material). As of their respective
dates, all SEC Reports filed by any Party between the date hereof and the
Effective will comply in all material respects with the Securities Laws and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any financial statements contained in any other reports to another
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
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ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Registration Statement; Proxy Statement; Shareholder Approval.
(a) As promptly as reasonably practicable following the date
hereof, Parent shall prepare and file with the SEC the Proxy
Statement/Prospectus, and Parent shall prepare and file the
Registration Statement. The Proxy Statement/Prospectus will be included
in and will constitute a part of the Registration Statement as Parent's
prospectus. The Company shall cooperate with Parent and provide to
Parent all such information as may be necessary or appropriate with
respect to the preparation and filing of the Proxy
Statement/Prospectus. The Registration Statement and the Proxy
Statement/Prospectus shall comply as to form in all material respects
with the applicable provisions of the 1933 Act and the 1934 Act and the
rules and regulations thereunder. Parent shall use its reasonable best
efforts to have the Registration Statement declared effective by the
SEC as promptly as reasonably practicable after filing with the SEC and
to keep the Registration Statement effective as long as is necessary to
consummate the Merger and the transactions contemplated thereby.
Company and Parent shall, as promptly as practicable after receipt
thereof, provide the other party copies of any written comments and
advise the other party of any oral comments, with respect to the Proxy
Statement / Prospectus received from the SEC. Each party will advise
the other party, promptly after it receives notice thereof, of the time
when the Registration Statement has become effective, the issuance of
any stop order, the suspension of the qualification of the Parent
Common Stock issuable in connection with the Merger for offering or
sale in any jurisdiction, or any request by the SEC for amendment of
the Proxy Statement / Prospectus or the Registration Statement. If at
any time prior to the Effective Time any information relating to
Company and Parent, or any of their respective affiliates, officers or
directors, should be discovered by Company or Parent, which should be
set forth in an amendment or supplement to any of the Registration
Statement or the Proxy Statement / Prospectus so that any of such
documents would not include any misstatement of a material fact or omit
to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
the party which discovers such information shall promptly notify the
other party hereto and, to the extent required by Law, an appropriate
amendment or supplement describing such information shall be promptly
filed with the SEC and disseminated to the stockholders of Company and
Parent.
(b) Company shall call a Company Shareholders' Meeting, to be
held as soon as reasonably practicable after the Registration Statement
is declared effective by the SEC, for the purpose of voting upon
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approval of this Agreement and the Merger and such other related
matters as it deems appropriate. Parent shall call a Parent
Shareholders' Meeting, to be held as soon as reasonably practicable
after the Registration Statement is declared effective by the SEC, for
the purpose of voting upon approval of this Agreement and the Merger
and such other related matters as it deems appropriate. In connection
with the Company and Parent Shareholders' Meetings, (i) Parent and
Company shall mail such Proxy Statement/Prospectus to their respective
shareholders, (ii) the Parties shall furnish to each other all
information concerning them that they may reasonably request in
connection with such Proxy Statement/Prospectus, (iii) the Board of
Directors of Company and Parent shall recommend to their respective
shareholders the approval of the Merger and the transactions
contemplated by this Agreement, and (iv) the Board of Directors and
officers of the Company and Parent shall use its commercially
reasonable efforts to obtain the approval of their respective
shareholders Board of Directors of Company. Parent and Company shall
make all necessary filings with respect to the Merger under the
Securities Laws.
7.2 NYSE Listing. Parent shall use its reasonable best efforts to cause
to be listed on the NYSE, subject to official notice of issuance, prior to the
Effective Time the shares of Parent Common Stock to be issued to the holders of
Company Common Stock and Equity Rights pursuant to the Merger. Parent shall give
all notices and make all filings with the NYSE required in connection with the
transactions contemplated herein.
7.3 Purchaser Compliance. Parent shall cause Purchaser to comply
with all of its obligations under or related to this Agreement and hereby
guarantees Purchaser's performance hereunder.
7.4 Applications; Antitrust Notification. Each of the Parties shall
promptly prepare and file, and shall cooperate with the other in the preparation
and, where appropriate, filing of, applications with all Regulatory Authorities
having jurisdiction over the transactions contemplated by this Agreement seeking
the requisite Consents necessary to consummate the transactions contemplated by
this Agreement. To the extent required by the HSR Act, each of the Parties will
promptly file with the United States Federal Trade Commission and the United
States Department of Justice the notification and report form required for the
Transactions and any supplemental or additional information which may reasonably
be requested in connection therewith pursuant to the HSR Act and will comply in
all material respects with the requirements of the HSR Act.
7.5 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, Company shall execute and file the Articles of
Merger with the Secretary of State of the State of Florida in connection with
the Closing.
7.6 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
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40
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the Transactions,
including using its reasonable efforts to lift or rescind any Order adversely
affecting its ability to consummate the Transactions and to cause to be
satisfied the conditions referred to Article 8; provided, that nothing herein
shall preclude either Party from exercising its rights under this Agreement.
Each Party shall use, and shall cause each of its Subsidiaries to use, its
reasonable efforts to obtain all Consents necessary or desirable for the
consummation of the Transactions. Each Party undertakes and agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code for federal income tax purposes.
7.7 Investigation and Confidentiality.
(a) Prior to the Effective Time, each of Company and Parent
shall keep the other advised of all material developments relevant to
its business and to consummation of the Merger and, subject to the
limitations set forth below, shall permit the other Party to make or
cause to be made such investigation of the business and properties of
such Party and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that
such investigation shall not interfere unnecessarily with normal
operations. In furtherance of such investigation, Company shall afford
Parent and its Representatives with access to its property, books and
records and officers and employees, furnish Parent and its
Representatives with all financial and operating data and other
information regarding Company, its Subsidiaries and their businesses,
and shall instruct their officers, employees and Representatives to
reasonably cooperate with Parent and its Representatives in their
investigation of Company's business and properties. In furtherance of
such investigation, Parent shall, to the extent required by Company to
ensure the continuing accuracy of the representations, warranties and
covenants of Parent under the Transaction Agreements, afford Company
and its Representatives with access to its property, books and records
and officers and employees, furnish Parent and its Representatives with
financial and operating data and other information regarding Parent,
its Subsidiaries and their businesses, and shall instruct their
officers, employees and Representatives to reasonably cooperate with
Company and its Representatives in any such investigation of Parent's
business and properties.
(b) In addition to each Party's respective obligations under
the Confidentiality Agreements, which are hereby reaffirmed and
adopted, and incorporated by reference herein, each Party shall, and
shall cause its advisers and agents to, maintain the confidentiality of
all confidential information furnished to it by the other Party
concerning the businesses, operations, and financial positions of the
other Party and shall not use such information for any purpose except
in furtherance of the Transactions. If this Agreement is terminated
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41
prior to the Effective Time, each Party shall promptly return or
certify the destruction of all documents and copies thereof, and all
work papers containing confidential information received from the other
Party. The Confidentiality Agreement shall not prohibit Parent or
Purchaser from responding to the Board of Directors of Company (and no
other Person) regarding an Acquisition Proposal by a third party prior
to the termination of this Agreement.
7.8 Press Releases. Prior to the Effective Time, Company and Parent
shall consult with each other and provide each other a reasonable opportunity to
review and comment upon as to the form and substance of any press release or
other public statement related to this Agreement or any of the other
Transactions contemplated hereby, and, except as may be required by Law or any
listing agreement with any securities exchange or quotation system, will not
issue any such press release of make any such public statement prior to
obtaining such other Party's consent to any such release or public statement.
7.9 No Solicitation; Acquisition Proposals.
(a) Except with respect to this Agreement and the
Transactions, no Company Entity nor any Affiliate thereof nor any
Representatives thereof shall directly or indirectly (1) solicit,
initiate, encourage or knowingly facilitate (including by way of
furnishing information) any inquiries relating to, or the making of,
any Acquisition Proposal by any Person, (2) have any discussion with or
furnish any confidential information or data to any Person relating to
an Acquisition Proposal, or engage in any negotiations concerning an
Acquisition Proposal, or knowingly facilitate any effort or attempt to
make or implement an Acquisition Proposal or (3) accept an Acquisition
Proposal. Notwithstanding anything herein to the contrary (including
the foregoing sentence), Company and its Board of Directors shall be
permitted (i) to the extent applicable, to comply with Rule 14d-9 and
Rule 14e-2 promulgated under the 1934 Act with regard to an Acquisition
Proposal, and (ii) to engage in any discussions or negotiations with,
or provide any information to, any Person in response to an unsolicited
bona fide written Acquisition Proposal by any such Person, if and only
to the extent (in the case of clause (ii) only) that (A) Company's
Board of Directors concludes in good faith (x) after consulting with
its independent financial advisors, that such Person is reasonably
capable of consummating such Acquisition Proposal, taking into account
the legal, financial, regulatory and other aspects of such Acquisition
Proposal and the Person making such Acquisition Proposal, and that such
Acquisition Proposal could reasonably be expected to result in a
Superior Proposal and (y) (after consultation with its outside legal
counsel) that the failure to take such action would be inconsistent
with its fiduciary duties under applicable Law, (B) prior to providing
any information or data to any Person in connection with an Acquisition
Proposal by any such Person, Company's Board of Directors receives from
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42
such Person an executed confidentiality agreement containing customary
confidentiality and standstill provisions (and in any event no more
favorable in any material respects to such Person than the terms of the
Confidentiality Agreement), and (C) prior to providing any information
or data to any Person or entering into discussions or negotiations with
any Person, Company's Board of Directors notifies Parent promptly (and
in any event not later than 24 hours after receipt thereof) of the
receipt of the Acquisition Proposal and shall in such notice indicate
in reasonable detail the identity of the offeror and the material terms
and conditions of any proposal and shall keep Parent promptly advised
of the status and material terms of any such inquiry, offer or
proposal. Company agrees that it will, and will cause its officers,
directors and Representatives to, immediately cease and cause to be
terminated any activities, discussions or negotiations existing as of
the date of this Agreement with any parties conducted heretofore with
respect to any Acquisition Proposal. Company agrees that it will use
reasonable efforts to promptly inform its directors, officers, key
employees, agents and Representatives of the obligations undertaken in
this Section 7.9.
(b) Except as provided in the following sentence, neither
Company nor its Board of Directors shall withdraw or modify or qualify
in a manner adverse to Parent or Purchaser or following the public
announcement of an Acquisition Proposal fail at Parent's request to
publicly reaffirm the approval by such Board of Directors of this
Agreement, the Merger or the favorable recommendation of the Board with
respect thereto. Notwithstanding the foregoing, in the event that,
after Company has received an Acquisition Proposal not solicited in
violation of this Agreement, the Board of Directors determines (after
consultation with its outside legal counsel), that the failure to take
the following action would be inconsistent with its fiduciary duties
under applicable Law, the Board may (x) withdraw or modify its approval
or recommendation of this Agreement and the Merger and disclose to
Company's shareholders a position contemplated by Rule 14d-9 or Rule
14e-2(a) promulgated under the 1934 Act or otherwise make disclosure to
them, or (y) approve or recommend such an Acquisition Proposal that is
a Superior Proposal; provided, however, that in no event may the Board
of Directors take either such action earlier than the conclusion of the
third full business day following Parent's receipt of written notice of
the intention of the Board of Directors to do so.
(c) Company and the Board of Directors shall not (i) redeem
the Company Rights under the Company Rights Agreement, or (ii) waive or
amend any provision of the Company Rights Agreement, in any such case
to permit or facilitate the consummation of any Acquisition Proposal
(other than the Acquisition Proposal contemplated by this Agreement),
unless this Agreement has been terminated in accordance with its terms.
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(d) Company shall not release any third party from the
confidentiality and standstill provisions of any agreement to which
Company is a party, unless this Agreement has been terminated in
accordance with its terms.
7.10 State Takeover Laws. Each Company Entity shall promptly take
all necessary steps to exempt the transactions contemplated by this Agreement
from, or if necessary to challenge the applicability of, any applicable Takeover
Law.
7.11 Employee Benefits and Contracts.
(a) For the first year following the Effective Time, each
person who is an employee of the Company Entities at the Effective Time
and who continues in such employment (a "Continuing Employee") shall be
eligible for employee benefits which in the aggregate are no less
favorable than the employee benefits available to such employee under
the Company Benefit Plans as in effect immediately prior to the
Effective Time. For purposes of any benefit plans, programs, policies
and arrangements made available to such Continuing Employees, Parent
shall treat the prior service of such Continuing Employees with Company
and its ERISA Affiliates, including all periods of service recognized
under the Company's Employee Stock Ownership and Savings Plan (the
"Company 401(k) Plan"), as service rendered to Parent or its ERISA
Affiliate for eligibility and vesting purposes and, solely with regard
to vacation and sick leave programs, for benefit accrual purposes
thereunder.
(b) No employee of any Company Entity (or eligible dependent
thereof) who is eligible for and elects to be covered under any medical
or disability insurance plan of Parent or its ERISA Affiliates shall be
excluded from coverage under such plan on the basis of a pre-existing
condition that was not also excluded under the comparable Company
Benefit Plan. To the extent that a Continuing Employee has satisfied in
whole or in part any annual deductible or paid any out-of-pocket or
co-payment expenses under any Company Benefit Plan for the current plan
year, such individual shall be credited for the current plan year under
the corresponding provisions of the corresponding plan in which such
individual participates after the Effective Time.
(c) In the event of any termination of the Company 401(k) Plan
during the first year following the Effective Time, Parent or its ERISA
Affiliate shall maintain a tax-qualified retirement plan that, at the
request of an employee of a Company Entity, accepts a rollover of such
employee's account from the Company 401(k) Plan to the extent that such
distribution and rollover is permitted under applicable Law.
(d) Parent shall honor, and shall cause the Surviving
Corporation and its Subsidiaries to honor in accordance with their
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44
terms, all employment, severance, consulting and other compensation
contracts between Company and its Subsidiaries and any current or
former director, officer, or employee thereof that are disclosed in
Section 4.14 of the Company Disclosure Memorandum, and all provisions
for vested amounts earned or accrued through the Effective Time under
the Company Benefit Plans.
7.12 Indemnification.
(a) The articles of incorporation and bylaws of the Surviving
Corporation shall contain provisions with respect to indemnification
substantially to the same effect as those set forth in the Company
Articles of Incorporation and the Company Bylaws on the date hereof,
which provisions shall not be amended, modified or otherwise repealed
for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder as of the Effective Time
of individuals who at the Effective Time were directors, officers,
employees or agents of Company, unless such modification is required
after the Effective Time by Law.
(b) After the Effective Time, Parent shall cause the Surviving
Corporation to indemnify, defend and hold harmless the present and
former directors, officers, employees and agents of the Company
Entities (each, an "Indemnified Party") against all Liabilities arising
out of actions or omissions arising out of the Indemnified Party's
service or services as directors, officers, employees or agents of
Company or, at Company's request, of another Company Entity occurring
at or prior to the Effective Time (including the transactions
contemplated by this Agreement) to the fullest extent such persons are
entitled to indemnification as of the date hereof and permitted under
Florida Law and by the Company Articles of Incorporation and the
Company Bylaws as in effect on the date hereof, and any applicable
indemnification Contracts, including provisions relating to advances of
expenses incurred in the defense of any Litigation and whether or not
any Parent Entity is insured against any such matter. Without limiting
the foregoing, in any case in which approval by the Surviving
Corporation is required to effectuate any indemnification, the
Surviving Corporation shall direct, at the election of the Indemnified
Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between Parent and such
Indemnified Party.
(c) Prior to the Effective Time, Parent shall purchase (i) a
new insurance policy or (ii) an endorsement under Company's existing
directors, officers and corporate liability insurance policy in a form
acceptable to Company, which shall provide the Indemnified Parties with
coverage for six years following the Effective Time of not less than
the existing coverage under, and have other terms not materially less
favorable to, the directors, officers and corporate liability insurance
coverage presently maintained by Company; provided, however, that
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Parent and the Surviving Corporation shall not be required to pay an
annual premium for such insurance in excess of 200% of the annual
premiums on the Company's current policy in effect as of the date of
this Agreement, but in such case shall purchase as much such coverage
as possible for such amount. The provisions of this Section 7.12(c)
shall be deemed to have been satisfied if prepaid policies have been
obtained by Parent prior to the Effective Time, which policies provide
such directors and officers with coverage as described in the preceding
sentence for an aggregate period of six years with respect to claims
arising from facts or events that occurred on or before the Effective
Time, including, without limitation, in respect of the transactions
contemplated by this Agreement.
(d) If Parent or the Surviving Corporation or any successors
or assigns shall consolidate with or merge into any other Person and
shall not be the continuing or surviving Person of such consolidation
or merger or shall transfer all or substantially all of its assets to
any Person, then and in each case, proper provision shall be made so
that the successors and assigns of Parent or the Surviving Corporation
shall assume the obligations set forth in this Section 7.12.
(e) The provisions of this Section 7.12 shall survive the
Effective Time, are irrevocable and intended expressly to be for the
benefit of and shall be enforceable by, each Indemnified Party and
their respective heirs and representatives. Parent hereby guarantees
the payment and performance by the Surviving Corporation of the
indemnification obligations of the Surviving Corporation pursuant to
this Section 7.12.
7.13 Repayment of Certain Indebtedness. At the Effective Time, Parent
and Purchaser shall repay or cause to be repaid in full all of the obligations
of the Company Entities (including all outstanding loans) under Company's
Amended and Restated Credit Agreement (the "Credit Agreement") dated February
11, 1999, as further amended on October 20, 1999, with Bank of America, N.A.,
successor in interest to NationsBank, N.A., as lender, and Bank of America,
N.A., successor in interest to NationsBank, N.A., as administrative agent for
the lenders, and the lenders party thereto (the "Existing Facility"), and
terminate such facility; provided, however, that Parent and Purchaser shall have
the right from and after the date of this Agreement to negotiate with the
lenders under such facility to seek their approval for postponing such repayment
and termination and that such repayment and termination shall not be necessary
if the lenders under such facility agree such repayment and termination is not
necessary.
7.14 Senior Subordinated Notes due 2007. As soon as practicable, but in
any event within thirty days, following the Effective Time, Parent shall cause
the Surviving Corporation to make a Change in Control Offer in accordance with
Section 4.15(f) of the Company's Indenture (the "Indenture") dated October 7,
1997, with SunTrust Bank, Central Florida, National Association, as Trustee,
offering to repurchase the Senior Subordinated Notes and discharge all of the
obligations of the Company Entities (including all guarantees of the Senior
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46
Subordinated Notes) under the Indenture. In the event a holder of Senior
Subordinated Notes does not accept the offer to repurchase the Senior
Subordinated Notes, Parent and Purchaser shall expressly assume, by supplemental
indenture, all obligations related to such Senior Subordinated Notes
7.15 Section 16 Matters. Prior to the Closing Date, Parent and Company
shall take all such steps as may be required to cause any dispositions of
Company Common Stock (including Equity Rights with respect to Company Common
Stock) or acquisitions of Parent Common Stock (including Equity Rights with
respect to Parent Common Stock) resulting from the transactions contemplated by
this Agreement by each individual who is subject to the reporting requirements
of Section 16(a) of the 1934 Act with respect to the Company, to be exempt under
Rule 16b-3 promulgated under the 1934 Act.
7.16 Affiliates. Exhibit 7.16 contains a list of all persons who, in
the opinion of the Company, may be deemed at the time this Agreement is
submitted for adoption by the stockholders of the Company, "affiliates" of the
Company for purposes of Rule 145 under the 1933 Act and such list shall be
updated as necessary to reflect changes from the date thereof. Company shall use
reasonable efforts to cause each person identified on such list to deliver to
Parent not less than 30 days prior to the Effective Time, a written agreement in
a form reasonably satisfactory to Parent, acknowledging that such person is
subject to the provisions of Rule 145(d) under the 1933 Act (an "Affiliate
Agreement"). Notwithstanding anything to the contrary herein, no shares of
Parent Common Stock or cash shall be delivered to a Person who may be deemed an
"affiliate" of Company in accordance with this Section 7.16 for purposes of Rule
145 under the 1933 Act until such Person has executed and delivered an Affiliate
Agreement to Parent.
7.17 Employment and Non-Compete Agreements. Simultaneous with the
execution and delivery of this Agreement, Company shall enter into an employment
agreement and a restrictive covenants agreement with Patrick Kelly, the Chief
Executive Officer of the Company, and a restrictive covenants agreement with
each Level 2 and Level 3 officer of the Company, each having such terms and
conditions as agreed to by Parent and Company on or prior to the date hereof and
each being automatically effective immediately upon consummation of the Merger.
None of such agreements, or any other arrangements with respect to the
employment of such persons may be modified, supplemented or restated without the
prior written consent of Parent and such employees.
7.18 Voting Agreement. Simultaneous with the execution and delivery of
this Agreement, Company shall enter into the Voting Agreements with those
persons and representing the number of shares of Parent Common Stock set forth
in Exhibit 7.18(a), in substantially the form attached hereto as Exhibit
7.18(b).
7.19 Accountant's Letters. Parent shall use its reasonable best efforts
to cause to be delivered to Company two letters from Parent's independent public
accountants, one dated a date within two business days of the date on which the
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Registration Statement shall become effective and one dated a date within two
business days of the Closing, addressed to Company, in form and substance
reasonably satisfactory to Company and customary in scope and substance for
comfort letters delivered by independent public accountants in connection with
registration statements similar to the Registration Statement. Company shall use
its reasonable best efforts to cause to be delivered to Parent two letters from
Company's independent public accountants, one dated a date within two business
days of the date on which the Registration Statement shall become effective and
one dated a date within two business days of the Closing, addressed to Company
and Parent, in form and substance reasonably satisfactory to Parent and
customary in scope and substance for comfort letters delivered by independent
public accountants in connection with registration statements similar to the
Registration Statement.
7.20 Waiver or Declination of Preemptive Rights. Parent shall use its
best efforts to cause each party to the Amended and Restated Investors'
Agreement dated March 29, 1999 among Fisher Scientific International, Inc. and
certain shareholders of Parent as set forth therein (the "Investors' Agreement")
to waive or decline to exercise the preemptive rights of such parties contained
in Section IV.3 of the Investors' Agreement with respect to the Parent Share
Issuance.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
8.1 Conditions to Obligations of Each Party. The respective obligations
of each Party to perform this Agreement and consummate the Merger are subject to
the satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 10.6:
(a) Shareholder Approval. The shareholders of Company shall
have approved this Agreement, and the consummation of the transactions
contemplated hereby, as and to the extent required by applicable Law.
The shareholders of Parent shall have approved the issuance of the
shares of Parent Common Stock pursuant to the Merger, as and to the
extent required by applicable Law and the rules of the NYSE.
(b) Legal Proceedings. No court or Regulatory Authority of
competent jurisdiction shall be seeking or have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits,
restricts or makes illegal consummation of the Transactions.
(c) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger (other than Consents and
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filing, registration and notice requirements which if not obtained,
made or complied with are not reasonably likely to have a Company
Material Adverse Effect or a Parent Material Adverse Effect, as
applicable) shall have been obtained or made and shall be in full force
and effect and all waiting periods required by Law shall have expired
or been earlier terminated (other than waiting periods the failure to
comply with is not reasonably likely to have a Company Material Adverse
Effect or a Parent Material Adverse Effect, as applicable).
(d) Registration Statement. The Registration Statement shall
be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no
action, suit, proceeding or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing, and
all necessary approvals under state securities Laws or the 1933 Act or
1934 Act relating to the issuance or trading of the shares of Parent
Common Stock issuable pursuant to the Merger shall have been received.
(e) NYSE Listing. The shares of Parent Common Stock to be
issued in the Merger and such other shares to be reserved for issuance
in connection with the Merger shall have been approved for listing on
the NYSE, subject to official notice of issuance.
8.2 Conditions to Obligations of Parent and Purchaser. The obligations
of Parent and Purchaser to perform this Agreement and consummate the Merger are
subject to the satisfaction of the following conditions, unless waived by Parent
pursuant to Section 10.6:
(a) Representations and Warranties. The representations and
warranties of Company contained in this Agreement shall be true and
correct in all material respects at and as of the Effective Time with
the same force and effect as if made at and as of such time, except for
(i) changes contemplated by this Agreement and (ii) those
representations and warranties which address matters only as of a
particular date (which shall be true and correct as of such date).
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of Company to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.
(c) Certificates. Company shall have delivered to Parent (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
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effect that the conditions set forth in Section 8.1 as relates to the
Company and in Sections 8.2(a) and 8.2(b) have been satisfied, and (ii)
certified copies of resolutions duly adopted by Company's Board of
Directors and shareholders evidencing the taking of all corporate
action necessary to authorize the execution, delivery and performance
of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Parent and its
counsel shall request.
(d) Tax Opinion. Parent shall have received from Debevoise &
Plimpton, special tax counsel to Parent, on or about the date the Proxy
Statement/Prospectus is mailed to shareholders and, subsequently, on
the Closing Date, a written opinion in form reasonably satisfactory to
it substantially to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code. In rendering such tax opinion, such counsel shall be
entitled to rely upon information, representations and assumptions
provided by Parent and Company substantially in the form of Exhibits
8.2(d) and 8.3(e) (allowing for such amendments to the representations
as counsel to Parent reasonably deems necessary).
(e) 2000 First Quarter. The amount of the Company 2000 First
Quarter EBITDA (as defined in the following sentence) shall have been
in excess of $23.0 million. The "Company 2000 First Quarter EBITDA"
means the Company's EBITDA (earnings before interest expense, income
taxes, depreciation and amortization) for the quarter ended June 30,
2000 as reported in Company's Quarterly Report on Form 10-Q for such
quarter, which shall be calculated by (i) taking the Company's
operating income for such period, calculated on a basis consistent with
the calculation of the Company's operating income for prior periods
reflected in the Company Financial Statements and Company SEC Reports,
and without including any reversal of reserves or provisions, and (ii)
adding back one-time merger and restructuring charges relating to
existing mergers and restructuring plans (including those related to
the transactions contemplated by this Agreement), financing income
relating to trade accounts, and depreciation and amortization expenses
during such period accounted for on a basis consistent with past
practice to the extent reported in the Company Financial Statements and
Company SEC Reports. This condition shall expire 15 business days after
the Company files its Quarterly Report on Form 10-Q for such quarter
and provides the Parent with its calculation of the Company 2000 First
Quarter EBITDA in reasonable detail, unless Parent terminates this
Agreement by reason of the non-satisfaction of the condition in this
Section 8.2(e) within such 15 business day period.
8.3 Conditions to Obligations of Company. The obligations of Company to
perform this Agreement and consummate the Merger are subject to the satisfaction
of the following conditions, unless waived by Company pursuant to Section 10.6:
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50
(a) Representations and Warranties. The representations and
warranties of Parent and Purchaser contained in this Agreement shall be
true and correct in all material respects at and as of the Effective
Time with the same force and effect as if made at and as of such time,
except for (i) changes contemplated by this Agreement and (ii) those
representations and warranties which address matters only as of a
particular date (which shall be true and correct as of such date).
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of Parent and Purchaser to be performed
and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all material respects.
(c) Certificates. Parent and Purchaser shall have delivered to
Company (i) a certificate, dated as of the Effective Time and signed on
its behalf by its chief executive officer and its chief financial
officer, to the effect that the conditions set forth in Section 8.1 as
relates to Parent and Purchaser and in Sections 8.3(a) and 8.3(b) have
been satisfied, and (ii) certified copies of resolutions duly adopted
by Parent's Board of Directors and Purchaser's Board of Directors and
shareholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby, all in
such reasonable detail as Company and its counsel shall request.
(d) Tax Opinion. The Company shall have received from Alston &
Bird LIP, special tax counsel to the Company, on or about the date the
Proxy Statement/Prospectus is mailed to shareholders and, subsequently,
on the Closing Date, a written opinion in form reasonably satisfactory
to it substantially to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code. In rendering such tax opinion, such counsel shall be
entitled to rely upon information, representations and assumptions
provided by Parent and Company substantially in the form of Exhibits
8.2(d) and 8.3(e) (allowing for such amendments to the representations
as counsel to the Company reasonably deems necessary).
(e) Preemptive Rights. Each party to the Investors' Agreement
shall have waived or declined to exercise the preemptive rights of such
parties contained in Section IV.3 of the Investors' Agreement with
respect to the Parent Share Issuance, except for any non-waivers or
exercises of preemptive rights with respect to an immaterial number of
shares of Parent Common Stock; and Parent shall have delivered to
Company a certificate, dated as of the Effective Time and signed by an
executive officer of Parent, setting forth the number of shares of
Parent Common Stock with respect to which such preemptive rights have
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51
lapsed or been waived or not exercised and stating that such
non-waivers and exercises are valid and preclude a subsequent exercise
of preemptive rights regarding the Parent Share Issuance.
ARTICLE IX
TERMINATION
9.1 Termination. Notwithstanding any other provision of this Agreement
and notwithstanding the approval of this Agreement by the shareholders of
Company, this Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time:
(a) By mutual consent of Parent and Company; or
(b) By either of Company or Parent:
(i) if the Merger shall not have occurred on or prior
to (x) January 15, 2001, if the SEC shall have declared
effective the Registration Statement by December 1, 2000, and
(y) March 31, 2001, if the SEC shall not have declared
effective the Registration Statement by December 1, 2000;
provided, however, that the right to terminate this Agreement
under this Section 9.1(b)(i) shall not be available to any
Party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure
of the consummation of the Merger on or prior to such date; or
(ii) if any court or Regulatory Authority of
competent jurisdiction shall have issued any Order or taken
any other action (which Order or other action the Parties
shall use their reasonable efforts to lift), which permanently
restrains, enjoins or otherwise prohibits the acceptance for
payment of, or payment for, Shares pursuant to the Merger, and
such Order or other action shall have become final and
non-appealable;
(iii) if the conditions precedent to the obligations
of such Party to consummate the Merger cannot be satisfied or
fulfilled by the date specified in Section 9.1(b)(i); provided
that the terminating Party is not then in material breach of
any representation, warranty, covenant or other agreement
contained in this Agreement; or
(c) By Company:
(i) if Parent or Purchaser shall have breached any of
its representations or warranties which breach would give rise
to the failure of the conditions set forth in Section 8.3(a)
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52
hereof to be satisfied or if Parent or Purchaser shall have
failed to perform its covenants or other agreements contained
in this Agreement which failure to perform would give rise to
the failure of the conditions set forth in Section 8.3(b) to
be satisfied, which breach or failure to perform is incapable
of being cured or has not been cured by the date that is 15
business days following written notice thereof to Parent or
Purchaser from Company; or
(ii) if the Board of Directors of Company shall have
finally determined to approve, endorse or recommend an
Acquisition Proposal (other than the Acquisition Proposal
contemplated by this Agreement) to Company's shareholders
after complying with Section 7.9; provided that such
termination shall not be effective unless concurrently with or
prior to such termination, Company or its designee has made
payment of the Termination Fee set forth in Section 10.2(b);
provided, that notwithstanding anything in this Agreement to
the contrary, the termination of this Agreement pursuant to
and in compliance with this Section 9.1(c)(ii) shall not be
deemed to violate or breach other obligations of Company under
this Agreement so long as the Company has complied with its
obligations under Section 7.9; or
(d) By Parent or Purchaser:
(i) if the Company Board of Directors or any
committee thereto shall have withdrawn, or modified or changed
or qualified, or publicly proposed to withdraw, modify or
change or qualify, in a manner adverse to Parent or Purchaser
its approval or recommendations of this Agreement or the
Merger or shall have approved, endorsed or recommended or
publicly proposed to approve, endorse or recommend an
Acquisition Proposal, or if the Company Board of Directors or
any committee thereof fails to reaffirm publicly and
unconditionally its recommendation to Company's shareholders
of the Merger, which public reaffirmation must be made within
five business days after Parent's written request to do so
(which request may be made at any time that a publicly
announced Acquisition Proposal is pending and not withdrawn);
or
(ii) if Company shall have breached any of its
representations or warranties which breach would give rise to
the failure of the conditions set forth in Section 8.2(a)
hereof to be satisfied or if Company shall have failed to
perform its covenants or other agreements contained in this
Agreement which failure to perform would give rise to the
failure of the conditions set forth in Section 8.2(b) to be
satisfied, which breach or failure to perform is incapable of
being cured or has not been cured by the date that is 15
business days following written notice thereof to Company from
Parent or Purchaser; or
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53
(iii) pursuant to and as contemplated by Section 8.2(e).
9.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 9.1, this Agreement shall
become void and have no effect, without any Liability on the part of any Party
or its Affiliates, agents, advisors or shareholders, except that (i) the
provisions of this Section 9.2 and Article 10 and Section 7.7(b) shall survive
any such termination and abandonment, and (ii) except as otherwise provided
herein, a termination shall not relieve the breaching Party from Liability for a
material breach of this Agreement.
9.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except for this Section 9.3,
Articles 1, 2, 3 and 10 and Sections 7.11, 7.12, 7.13 and 7.14.
ARTICLE X
MISCELLANEOUS
10.1 Definitions.
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as
amended.
"1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
"Acquisition Proposal" shall mean any proposal or
offer (in each case, whether or not in writing and whether or
not delivered to the shareholders of Company generally) to
acquire in any manner, directly or indirectly, all or a
substantial portion of the Assets of Company or a greater than
30% equity interest in Company or any of its Subsidiaries,
whether by merger, tender offer, exchange offer, sale of
assets or similar transactions involving Company or any
Subsidiary, division or operating or principal business unit
of Company, other than pursuant to the transactions
contemplated by this Agreement.
"Affiliate" of a Person shall mean: (i) any other
Person directly, or indirectly through one or more
intermediaries, controlling, controlled by or under common
control with such Person, (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any
other Person for which a Person described in clause (ii) acts
in any such capacity.
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54
"Agreement" shall mean this Agreement and Plan of
Merger, including the Exhibits and Company Disclosure
Memorandum and Parent Disclosure Memorandum delivered pursuant
hereto and incorporated herein by reference.
"Articles of Merger" shall mean the Articles of
Merger to be executed by the Company and filed with the
Secretary of State of the State of Florida relating to the
Merger as contemplated by Section 2.1.
"Assets" of a Person shall mean all of the assets,
properties, businesses and rights of such Person of every
kind, nature, character and description, whether real,
personal or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in
part, whether or not carried on the books and records of such
Person, and whether or not owned in the name of such Person or
any Affiliate of such Person and wherever located.
"Average Stock Price" shall mean the average of the
daily closing prices of Parent Common Stock on the NYSE
Composite Transaction Tape for the ten consecutive trading
days ending on the second trading day immediately prior to the
Closing Date.
"Board of Directors" shall mean the board of
directors of Company.
"Company Common Stock" shall mean the $0.01 par value
common stock of the Company.
"Company Disclosure Memorandum" shall mean the
written information entitled "Company, Inc. Disclosure
Memorandum" delivered on or prior to the date of this
Agreement to Parent describing in reasonable detail the
matters contained therein. Information disclosed with respect
to one Section shall be deemed to be disclosed for purposes of
all other Sections not specifically referenced with respect
thereto.
"Company Entities" shall mean, collectively, Company
and all Company Subsidiaries.
"Company Financial Statements" shall mean (i) the
consolidated balance sheets (including related notes and
schedules, if any) of Company as of December 31, 1999 and as
of April 2, 1999 and April 3, 1998, and the related statements
of income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) for the nine
months ended December 31, 1999 and for each of the three
<PAGE>
55
fiscal years ended April 2, 1999, April 3, 1998 and March 31,
1997, each as included in Company SEC Reports filed prior to
the date hereof, and (ii) the consolidated balance sheets of
Company (including related notes and schedules, if any) and
related statements of income, changes in shareholders' equity,
and cash flows (including related notes and schedules, if any)
included in Company SEC Reports filed with respect to periods
ended subsequent to December 31, 1999.
"Company Material Adverse Effect" shall mean a
material adverse impact on (i) the results of operations,
financial condition or business of the Company and its
Subsidiaries, taken as a whole, or (ii) the ability of Company
to perform its obligations under this Agreement or to
consummate the Merger or the other transactions contemplated
by this Agreement; provided that "Material Adverse Effect"
shall not be deemed to include the impact of (a) actions and
omissions of Company (or any of its Subsidiaries) taken with
the prior informed written Consent of Parent in contemplation
of the transactions contemplated hereby, (b) changes in Laws
of general applicability or interpretations thereof by courts
or governmental authorities, (c) changes in generally accepted
accounting principles, (d) the expenses incurred by Company in
consummating the transactions contemplated by this Agreement,
and (e) any adverse change in the price of Company Common
Stock, as quoted on the Nasdaq National Market, and (f) items
disclosed in the Company Disclosure Memorandum.
"Company Rights" shall mean the preferred stock
purchase rights or other securities issued pursuant to the
Company Rights Agreement.
"Company Rights Agreement" shall mean that certain
Shareholder Protection Rights Agreement, dated as of April 20,
1998, between Company and Continental Stock Transfer & Trust
Company, as Rights Agent.
"Company Senior Notes" shall mean the 8-1/2% Senior
Subordinated Notes due 2007 issued by the Company.
"Company Stock Plans" shall mean the existing stock
option and other stock-based compensation plans of Company
designated as follows: PSS World Medical, Inc. Employee Stock
Ownership and Savings Plan; PSS World/Taylor Medical Profit
Sharing 401(k) Plan; PSS World Medical, Inc. 1986 Incentive
Stock Option Plan; PSS World Medical, Inc. Amended and
Restated 1994 Long-Term Stock Plan; PSS World Medical, Inc.
Amended and Restated 1994 Long Term Incentive Plan; PSS World
Medical, Inc. Fourth Amended and Restated Directors' Stock
<PAGE>
56
Plan; PSS World Medical, Inc. 1999 Long-Term Incentive Plan;
PSS World Medical, Inc. 1999 Broad-Based Employee Stock Plan;
Gulf South Medical Supply, Inc. 1992 Stock Plan; Gulf South
Medical Supply, Inc. 1997 Stock Plan; Elite Stock Option Grant
Program; Officer Stock Option Grant Program; and Leader's
Stock Option Grant Program.
"Company Subsidiaries" shall mean the direct and
indirect Subsidiaries of Company, which shall include the
Company Subsidiaries described in Section 4.4 and any
corporation or other organization acquired as a direct or
indirect Subsidiary of Company in the future and held as a
direct or indirect Subsidiary by Company at the Effective
Time.
"Confidentiality Agreements" shall mean those certain
Confidentiality Agreements, one dated March 3, 2000 and
another dated May 12, 2000, between Company and Parent.
"Consent" shall mean any consent, approval,
authorization, clearance, exemption, waiver, or similar
affirmation by any Person pursuant to any Contract, Law,
Order, or Permit.
"Contract" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or
other document to which any Person is a party or that is
binding on any Person or its capital stock, Assets or
business.
"Default" shall mean (i) any breach or violation of,
default under, contravention of, or conflict with, any
Contract, Law, Order, or Permit, (ii) any occurrence of any
event that with the passage of time or the giving of notice or
both would constitute a breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order,
or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give
rise to a right of any Person to exercise any remedy or obtain
any relief under, terminate or revoke, suspend, cancel, or
modify or change the current terms of, or renegotiate, or to
accelerate the maturity or performance of, or to increase or
impose any Liability under, any Contract, Law, Order, or
Permit.
"Environmental Laws" shall mean all Laws relating to
pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land
surface, or subsurface strata) and which are administered,
interpreted, or enforced by the United States Environmental
Protection Agency and foreign, federal, state and local
<PAGE>
57
agencies with jurisdiction over, and including common law in
respect of, pollution or protection of human health and safety
and the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C.
9601 et seq. ("CERCLA"), the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and
other Laws relating to emissions, discharges, releases, or
threatened releases of any Hazardous Material, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any
Hazardous Material.
"Equity Rights" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to,
scrip, understandings, warrants, or other binding obligations
of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the
capital stock of a Person or by which a Person is or may be
bound to issue additional shares of its capital stock or other
Equity Rights.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"ERISA Affiliate" shall mean, with respect to any
Person, any corporation, trade or business, which, together
with such Person, is a member of a controlled group of
corporations or a group of trades or businesses under common
control within the meaning of Section 414 of the Internal
Revenue Code.
"Exhibits" shall mean each Exhibit as so marked, a
copy of which is attached to this Agreement. Each Exhibit is
hereby incorporated by reference herein and made a part
hereof, and may be referred to in this Agreement and any other
related instrument or document without being attached hereto.
"FBCA" shall mean the Florida Business Corporation
Act.
"GAAP" shall mean generally accepted accounting
principles, consistently applied during the periods involved.
"Hazardous Material" shall mean (i) any hazardous
substance, hazardous material, hazardous waste, regulated
substance, or toxic substance (as those terms are defined by
any applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or
oil (and specifically shall include asbestos requiring
abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any
polychlorinated biphenyls).
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58
"HSR Act" shall mean Section 7A of the Clayton Act,
as added by Title 11 of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
"Intellectual Property" shall mean copyrights,
patents, trademarks, service marks, service names, trade
names, applications therefor, technology rights and licenses,
computer software (including any source or object codes
therefor or documentation relating thereto), trade secrets,
franchises, know-how, inventions, and other intellectual
property rights.
"Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
"Knowledge" as used with respect to any Person
(including references to any such Person being aware of a
particular matter) shall mean the knowledge after reasonable
inquiry of senior management of such Person, including senior
management of any divisions or businesses of such Person
operated through its Subsidiaries.
"Law" shall mean any code, law (including common
law), ordinance, regulation, reporting or licensing
requirement, rule, or statute applicable to a Person or its
Assets, Liabilities, or business, including those promulgated,
interpreted or enforced by any Regulatory Authority.
"Liability" shall mean any direct or indirect,
primary or secondary, liability, indebtedness, obligation,
penalty, cost or expense (including costs of investigation,
collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or
deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement,
default of title, easement, encroachment, encumbrance,
hypothecation, infringement, lien, mortgage, pledge,
reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or
with respect to any property or property interest, other than
(i) Liens for current Taxes not yet due and payable, and (ii)
Liens which do not materially impair the value or use of or
title to the Assets subject to such Lien.
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59
"Litigation" shall mean any action, arbitration,
cause of action, claim, complaint, criminal prosecution,
governmental or other examination or investigation, hearing,
administrative or other proceeding relating to or affecting a
Party, its business, its Assets (including Contracts related
to it), or the Transactions.
"NASD" shall mean the National Association of
Securities Dealers, Inc.
"Nasdaq National Market" shall mean the National
Market System of the National Association of Securities
Dealers Automated Quotation System.
"NYSE" shall mean the New York Stock Exchange, Inc..
"Operating Property" shall mean any property owned,
leased, or operated by the Party in question or by any of its
Subsidiaries, and, where required by the context, includes the
owner or operator of such property, but only with respect to
such property.
"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 Regulatory Authority.
"Parent Common Stock" shall mean the $0.01 par value
voting common stock of Parent.
"Parent Disclosure Memorandum" shall mean the written
information entitled "Parent, Inc. Disclosure Memorandum"
delivered on or prior to the date of this Agreement to Parent
describing in reasonable detail the matters contained therein.
Information disclosed with respect to one Section shall be
deemed to be disclosed for purposes of all other Sections not
specifically referenced with respect thereto.
"Parent Entities" shall mean, collectively, Parent
and all Parent Subsidiaries.
"Parent Financial Statements" shall mean (i) the
consolidated balance sheets (including related notes and
schedules, if any) of Company as of March 31, 2000 and as of
December 31, 1999 and 1998, and the related statements of
income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) for the three
months ended March 31, 2000 and 1999 and for each of the three
fiscal years ended December 31, 1999, 1998 and 1997, as filed
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60
by Company in SEC Documents prior to the date hereof, and (ii)
the consolidated balance sheets of Company (including related
notes and schedules, if any) and related statements of income,
changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC Documents
filed with respect to periods ended subsequent to March 31,
2000.
"Parent Material Adverse Effect" shall mean a
material adverse impact on (i) the results of operations,
financial condition or business of Parent and its
Subsidiaries, taken as a whole, or (ii) the ability of Parent
to perform its obligations under this Agreement or to
consummate the Merger or the other transactions contemplated
by this Agreement; provided that "Material Adverse Effect"
shall not be deemed to include the impact of (a) actions and
omissions of Parent (or any of its Subsidiaries) taken with
the prior informed written Consent of Company in contemplation
of the transactions contemplated hereby, (b) changes in Laws
of general applicability or interpretations thereof by courts
or governmental authorities, (c) changes in generally accepted
accounting principles, (d) the expenses incurred by Parent in
consummating the transactions contemplated by this Agreement,
and (e) any adverse change in the price of Parent Common
Stock, as quoted on the NYSE, and (f) items disclosed in the
Parent Disclosure Memorandum.
"Parent Subsidiaries" shall mean the Subsidiaries of
Parent, which shall include any corporation or other
organization acquired as a Subsidiary of Parent in the future
and held as a Subsidiary by Parent at the Effective Time.
"Party" shall mean, on the one hand, Parent and
Purchaser and, Company on the other hand, and "Parties" shall
mean all of Company, Parent and Purchaser.
"Permit" shall mean any federal, state, local, and
foreign governmental approval, authorization, certificate,
easement, filing, franchise, license, notice, permit, or right
to which any Person is a party or that is or may be binding
upon or inure to the benefit of any Person or its securities,
Assets, or business.
"Person" shall mean a natural person or any legal,
commercial or governmental entity, such as, but not limited
to, a corporation, general partnership, joint venture, limited
partnership, limited liability company, trust, business
association, group acting in concert, or any person acting in
a representative capacity.
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61
"Proxy Statement/Prospectus" shall mean (i) the proxy
statement used by Company to solicit the approval of its
stockholders of the transactions contemplated by this
Agreement, (ii) the proxy statement used by Parent to solicit
the approval of its stockholders of the Parent Share Issuance,
and (iii) the prospectus of Parent relating to the issuance of
Parent Common Stock to holders of Company Common Stock.
"Registration Statement" shall mean the Registration
Statement on Form S-4, or other appropriate form, including
any pre-effective or post-effective amendments or supplements
thereto, filed with the SEC by Parent under the 1933 Act with
respect to the shares of Parent Common Stock to be issued to
the shareholders of Company in connection with the
transactions contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively,
the SEC, the NASD, the Federal Trade Commission, the United
States Department of Justice, and all other international,
federal, state, county, local or other governmental or
regulatory agencies, authorities (including self-regulatory
authorities), instrumentalities, commissions, boards or bodies
having jurisdiction over the Parties and their respective
Subsidiaries.
"Representative" shall mean any investment banker,
financial advisor, attorney, accountant, consultant, or other
representative engaged by a Person.
"SEC" shall mean the United States Securities and
Exchange Commission.
"SEC Documents" shall mean all forms, proxy
statements, registration statements, reports, schedules, and
other documents filed, or required to be filed, by a Party or
any of its Subsidiaries with any Regulatory Authority pursuant
to the Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934
Act, the Investment Company Act of 1940, as amended, the
Investment Advisors Act of 1940, as amended, the Trust
Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated
thereunder.
"Share" shall mean each share of Company Common
Stock, together with the associated Company Rights.
"Subsidiaries" shall mean all those corporations,
associations, or other business entities of which the entity
in question either (i) owns or controls 50% or more of the
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62
outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of
the outstanding equity securities is owned directly or
indirectly by its parent (provided, there shall not be
included any such entity the equity securities of which are
owned or controlled solely in a fiduciary capacity), (ii) in
the case of partnerships, serves as a general partner, (iii)
in the case of a limited liability company, serves as a
managing member, or (iv) otherwise has the ability to elect a
majority of the directors, trustees or managing members
thereof.
"Superior Proposal" shall mean with respect to
Company or its Subsidiaries, any Acquisition Proposal made by
a Person other than Parent, Purchaser or any of their
respective Affiliates which is on terms which the Board of
Directors of Company in good faith concludes (a) would, if
consummated, result in a transaction that is more favorable to
its shareholders than the transactions contemplated by this
Agreement and (b) is reasonably capable of being completed.
"Surviving Corporation" shall mean Company as the
surviving corporation resulting from the Merger.
"Tax Return" shall mean any report, return,
information return, or other information required to be
supplied to a taxing authority in connection with Taxes,
including any return of an affiliated or combined or unitary
group that includes a Party or its Subsidiaries.
"Tax" or "Taxes" shall mean all federal, state,
county, local, or foreign taxes, fees, escheat or other
similar governmental assessments, including, income, excise,
sales, use, transfer, payroll, franchise, real property,
personal property and other taxes, together with any interest
and penalties thereon or with respect thereto.
"Transaction Agreements" shall mean this Agreement,
the Stock Option Agreement, the Voting Agreements and the
Employment Agreements, if such Party is a party thereto.
"Transactions" shall mean the Merger and the other
transactions contemplated by this Agreement.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
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63
2000 Financial Statements Section 4.5(c)
Certificates Section 3.1(a)
Closing Section 1.3
Company 401(k) Plan Section 7.11
Company Articles of Incorporation Section 4.1(a)
Company Benefit Plans Section 4.14(a)
Company Bylaws Section 4.1(b)
Company Contracts Section 4.15
Company SEC Reports Section 4.5(a)
Company Stockholders Meeting Section 7.1
Continuing Employee Section 7.11(a)
Credit Agreement Section 7.13
Effective Time Section 1.2
Exchange Ratio Section 2.1(b)
Exchange Agent Section 3.1(a)
Exchange Fund Section 3.1(a)
Indemnified Party Section 7.12(b)
Indenture Section 7.14
Investors Agreement Section 7.20
Merger Section 1.1
Merger Consideration Section 2.1(b)
Parent SEC Reports Section 5.5(a)
Parent Share Issuance Section 5.2(a)
Parent Stockholders Meeting Section 7.1
Shareholders Preamble
Takeover Laws Section 4.19
Termination Fee Section 10.2(b)
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64
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the
words "include," "includes" or "including" are used in this Agreement,
they shall be deemed followed by the words "without limitation."
10.2 Expenses.
(a) Except as otherwise provided in this Section 10.2, each of
the Parties shall bear and pay all direct costs and expenses incurred
by it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration and application fees,
printing fees, and fees and expenses of its own financial or other
consultants, investment bankers, accountants, and counsel.
(b) If:
(A) Parent or Purchaser terminates this Agreement
under Section 9.1(d)(i), or Company terminates this Agreement
pursuant to Section 9.1(c)(ii) or
(B) Parent or Purchaser terminates this Agreement
pursuant to Section 9.1(d)(ii) (but only as a result of a
knowing or willful breach by the Company of any of its
representations or warranties or knowing or willful failure of
the Company to perform its covenants or other agreements
contained in this Agreement) or pursuant to Section
9.1(b)(iii) (but only on the basis of the failure of the
Company to satisfy any of the conditions enumerated in Section
8.2 as a result of a knowing or willful breach by the Company
of any of its representations or warranties or knowing or
willful failure of the Company to perform its covenants or
other agreements contained in this Agreement), and in the case
of a termination described in this clause (B), (x) at any time
after the date of this Agreement and prior to such
termination, an Acquisition Proposal (other than the
Acquisition Proposal contemplated by this Agreement) shall
have been publicly announced or otherwise publicly
communicated to the shareholders of Company generally and (y)
prior to the first anniversary of such termination, Company
shall enter into a definitive agreement with respect to an
Acquisition Proposal or an Acquisition Proposal is
consummated,
<PAGE>
65
then, Company shall pay to Purchaser, or cause to be paid, (1) in the
case of a termination of this Agreement by Parent or Purchaser pursuant
to Section 9.1(d)(i), not later than one business day following such
termination, (2) in the case of a termination by Company pursuant to
Section 9.1(c)(ii), prior to or concurrently with such termination, or
(3) in the case of a termination of this Agreement described in clause
(B) of this Section 10.2(b), not later than one business day following
the earlier of the entering into of a definitive agreement with respect
to, or the consummation of, an Acquisition Proposal prior to the first
anniversary of such termination, as applicable, a termination fee, in
cash, by wire transfer of immediately available funds to an account
designated by Purchaser, in an amount equal to the sum of (x)
$28,500,000 plus (y) out-of-pocket expenses incurred by Parent or
Purchaser exclusively in connection with the transactions contemplated
by this Agreement not to exceed $4,500,000 in the aggregate (such sum
is referred to herein as the "Termination Fee"). Except for nonpayment
of the amount set forth in this Section 10.2(b) and except as provided
below, Parent and Purchaser hereby agree that, upon any termination of
this Agreement pursuant to Section 9.1(c)(ii) or 9.1(d)(i), in no event
shall Parent or Purchaser be entitled to seek or to obtain any recovery
or judgment against Company or any of the Company Entities or any of
their respective Assets, or against any of their respective Affiliates,
agents, advisors or shareholders relating to the Transactions, and in
no event shall Parent or Purchaser be entitled to seek or obtain any
other amount relating to the Transactions; provided, however, that
neither the termination of this Agreement pursuant to Section
9.1(c)(ii) or 9.1(d)(i) nor receipt of the fee set forth in this
Section 10.2(b) shall preclude any remedy in favor of Parent or
Purchaser against Company relating to a material breach of Section 7.9
of this Agreement by Company.
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66
(c) If Parent, Purchaser or Company terminates this Agreement
on the basis of the failure of the shareholders of the Company to
approve the Merger and in the absence of a publicly announced
Acquisition Proposal pending which has not been withdrawn at the time
of the Company Shareholders' Meeting and if the Company has complied
with all its obligations under Section 7.9, then Company shall pay to
Purchaser, or cause to be paid, prior to or concurrently with such
termination the out-of-pocket expenses incurred by Parent or Purchaser
exclusively in connection with the transactions contemplated by this
Agreement not to exceed $4,500,000 in the aggregate. Except for
nonpayment of the amount set forth in this Section 10.2(c), Parent and
Purchaser hereby agree that, upon any termination of this Agreement due
to the failure of the shareholders of the Company to approve the Merger
(in the absence of a publicly announced Acquisition Proposal pending
which has not been withdrawn at the time of the Company Shareholders'
Meeting and if the Company has complied with all its obligations under
Section 7.9), in no event shall Parent or Purchaser be entitled to seek
or to obtain any recovery or judgment against Company or any of the
Company Entities or any of their respective Assets, or against any of
their respective Affiliates, agents, advisors or shareholders relating
to the Transactions, and in no event shall Parent or Purchaser be
entitled to seek or obtain any other amount relating to the
Transactions.
10.3 Brokers and Finders. Except for Donaldson, Lufkin & Jenrette
Securities Corporation and as disclosed in Section 10.3 of the Company
Disclosure Memorandum as to Company and except for Lazard Freres & Co LLC as to
Parent and Purchaser, each of the Parties represents and warrants that neither
it nor any of its officers, directors, employees, or Affiliates has employed any
broker or finder or incurred any Liability for any financial advisory fees,
investment bankers' fees, brokerage fees, commissions, or finders' fees in
connection with this Agreement or the Transactions. In the event of a claim by
any broker or finder based upon his or its representing or being retained by or
allegedly representing or being retained by Company or by Parent or Purchaser,
each of Company, Parent and Purchaser, as the case may be, agrees to indemnify
and hold the other Party harmless of and from any Liability in respect of any
such claim.
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67
10.4 Entire Agreement. Except as otherwise expressly provided herein,
this Agreement constitutes the entire agreement between the Parties with respect
to the transactions contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral (except for the
Confidentiality Agreement). Nothing in this Agreement expressed or implied, is
intended to confer upon any Person, other than the Parties or their respective
successors, any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, other than as provided in Sections 7.11(d) and 7.12.
10.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of each of the Parties, whether before or after shareholder approval of this
Agreement has been obtained, provided, that after any such approval by the
holders of Company Common Stock, there shall be made no amendment that pursuant
to the FBCA requires further approval by such shareholders, unless such an
amendment is approved by such shareholders.
10.6 Waivers.
(a) Prior to or at the Effective Time, Parent and Purchaser,
acting through their respective Boards of Directors, chief executive
officers or other authorized officers, shall have the right to waive
any Default in the performance of any term of this Agreement by
Company, to waive or extend the time for the compliance or fulfillment
by Company of any and all of its obligations under this Agreement, and
to waive any or all of the conditions precedent to the obligations of
Parent or Purchaser, as the case may be, under this Agreement, except
any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by
a duly authorized officer of Parent or Purchaser, as the case may be.
(b) Prior to or at the Effective Time, Company, acting through
its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default in the performance
of any term of this Agreement by Parent or Purchaser, to waive or
extend the time for the compliance or fulfillment by Parent or
Purchaser of any and all of its obligations under this Agreement, and
to waive any or all of the conditions precedent to the obligations of
Company under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver
shall be effective unless in writing signed by a duly authorized
officer of Company.
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68
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other
provision of this Agreement. No waiver of any condition or of the
breach of any term contained in this Agreement in one or more instances
shall be deemed to be or construed as a further or continuing waiver of
such condition or breach or a waiver of any other condition or of the
breach of any other term of this Agreement.
10.7 Assignment. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and assigns.
10.8 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
Company: PSS World Medical, Inc.
4345 Southpoint Boulevard
Jacksonville, Florida 32216
Telecopy Number: (904) 332-3000
Attention: Chief Executive Officer
Copy to Counsel: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telephone Number: (404) 881-7000
Telecopy Number: (404) 881-7777
Attention: J. Vaughan Curtis
Parent or Purchaser: Fisher Scientific International Inc.
Liberty Lane
Hampton, New Hampshire 03842
Telecopy Number: (603) 929-2703
Attention: Vice President and General
Counsel
<PAGE>
69
Copy to Counsel: Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telecopy Number: (212) 909-6836
Attention: Paul H. Wilson, Jr.
10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Florida, without regard to
any applicable conflicts of Laws.
10.10 Counterparts. This Agreement may be executed in two or, more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.11 Captions; Articles and Sections. The captions contained in
this Agreement are for reference purposes only and are not part of this
Agreement. Unless otherwise indicated, all references to particular Articles or
Sections shall mean and refer to the referenced Articles and Sections of this
Agreement.
10.12 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein 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 draftsman. 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 parties
hereto.
10.13 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with the specific terms or was
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 Unites
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
10.14 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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70
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
FISHER SCIENTIFIC INTERNATIONAL INC.
By: /s/ Paul Meister
----------------------------------------------
Name: Paul Meister
Title: Executive Vice President, CFO
FSI MERGER CORPORATION
By: /s/ Paul Meister
----------------------------------------------
Name: Paul Meister
Title: Executive Vice President, CFO
PSS WORLD MEDICAL, INC.
By: /s/ Patrick Kelly
----------------------------------------------
Name: Patrick Kelly
Title: Chief Executive Officer
<PAGE>
Exhibit 2.2
Stock Option Agreement
STOCK OPTION AGREEMENT, dated as of June 21, 2000, between Fisher
Scientific International Inc., a Delaware corporation ("Grantee"), and PSS World
Medical, Inc., a Florida corporation ("Issuer").
Recitals
--------
A. Concurrently with the execution and delivery of this Agreement,
Grantee, Issuer and FSI Merger Corporation, a Florida corporation and a wholly
owned subsidiary of Grantee ("Merger Sub"), are entering into an Agreement and
Plan of Merger, dated as of the date hereof (as the same may from time to time
be modified, supplemented or restated, the "Merger Agreement"), pursuant to
which the Merger Sub will merge with and into the Issuer (the "Merger"), all
upon the terms and conditions set forth in the Merger Agreement.
B. As a condition to its willingness to enter into the Merger
Agreement, Grantee has required that Issuer agree, and believing it to be in the
best interests of Issuer, Issuer has agreed, among other things, to grant to
Grantee the Option (as hereinafter defined) to purchase shares of common stock,
par value $.01 per share, of Issuer ("Issuer Common Stock") at a price per share
equal to the Exercise Price (as hereinafter defined).
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
OPTION TO PURCHASE SHARES
1.1 Grant of Option. (a) Subject to the terms and conditions of this
Agreement, Issuer hereby grants to Grantee an irrevocable option (the "Option")
to purchase, in whole or in part, an aggregate of up to 14,142,672 duly
authorized, validly issued, fully paid and nonassessable shares of Issuer Common
Stock (representing 19.9% of the outstanding shares of Issuer Common Stock as of
July 18, 2000); provided that in no event shall the number of shares of Issuer
Common Stock for which this Option is exercisable exceed 19.9% of the issued and
outstanding shares of Issuer Common Stock at the time of exercise without giving
effect to the issuance of any Option Shares (as hereinafter defined). The number
of shares of Issuer Common Stock that may be received upon the exercise of the
Option and the Exercise Price are subject to adjustment as provided in this
Agreement.
<PAGE>
(b) In the event that any additional shares of Issuer Common Stock are
issued or otherwise become outstanding after the date of this Agreement (other
than pursuant to this Agreement and other than pursuant to an event described in
Section 3.1), the number of shares of Issuer Common Stock subject to the Option
shall be increased so that, after such issuance, such number together with any
shares of Issuer Common Stock previously issued pursuant hereto, equals 19.9% of
the number of shares of Issuer Common Stock then issued and outstanding without
giving effect to any shares subject or issued pursuant to the Option. Nothing
contained in this Section 1.1(b) or elsewhere in this Agreement shall be deemed
to authorize Issuer to breach or fail to comply with any provision of the Merger
Agreement. As used in this Agreement, the term "Option Shares" means the shares
of Issuer Common Stock issuable pursuant to the Option, as the number of such
shares shall be adjusted pursuant to the terms of this Agreement.
1.2 Exercise of Option. (a) The Option may be exercised by Grantee, in
whole or in part, at any time, or from time to time, commencing upon the
Exercise Date and prior to the Expiration Date; provided that the Option may be
exercised only if (i) Grantee shall not be in breach of its agreements or
covenants contained in this Agreement or the Merger Agreement and (ii) no
preliminary or permanent injunction or order against the delivery of shares
covered by the Option issued by any court of competent jurisdiction in the
United States shall be in effect, and (iii) the waiting period under the HSR Act
shall have expired or been terminated. In the event the exercise of this Option
or the Option Closing is delayed pursuant to clause (ii) or (iii) of the
previous sentence, the exercise of this Option or the Option Closing shall be
within ten Business Days following cessation of the injunction or the expiration
or early termination of the waiting period under the HSR Act (so long as the
Option Notice was delivered prior to the Expiration Date). As used herein:
(A) the term "Exercise Date" means the first to occur of: (i) the
date on which Grantee becomes entitled to receive, pursuant to
Section 10.2(b) of the Merger Agreement, that portion of the
Termination Fee which does not relate to the reimbursement of
Grantee's expenses; (ii) the authorization, recommendation,
public proposal or public announcement by Issuer of an intention
to authorize, recommend, propose or enter into an agreement with
any Person with respect to an Acquisition Proposal; (iii) any
acquisition by any Person of beneficial ownership (as such term
is defined in Rule 13d-3 promulgated under the Exchange Act) of
or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under the Exchange Act) shall have been
formed which beneficially owns or has the right to acquire
beneficial ownership of, more than 30% of the then outstanding
shares of Issuer Common Stock; and (iv) any Person (other than
Grantee and its Subsidiaries) shall have commenced, or shall
have filed a registration statement under the Securities Act
with respect to, a tender or exchange offer to purchase any
shares of Issuer Common Stock such that, upon consummation of
such offer, such Person would own or control 30% or more of the
then outstanding shares of Issuer Common Stock.
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(B) the term "Expiration Date" means the first to occur prior to
Grantee's exercise of the Option pursuant to Section 1.2(b) of:
(i) the Effective Time; (ii) written notice of termination of
this Agreement by Grantee to Issuer; (iii)180 days after the
first occurrence of an Exercise Date; or (iv) the date of
termination of the Merger Agreement, unless, in the case of this
clause (iv), Grantee has the right to receive the Termination
Fee, in which case the Option will not terminate until the later
of 30 business days following the time the Termination Fee
becomes due and payable.
Notwithstanding the expiration of the Option, Grantee shall be entitled to
purchase those Option Shares with respect to which it may have exercised the
Option by delivery of an Option Notice (as defined below) prior to the
Expiration Date, and the expiration of the Option will not affect any rights
under this Agreement which by their terms do not terminate or expire prior to or
at the Expiration Date.
(b) In the event Grantee wishes to exercise the Option, Grantee shall
send a written notice to Issuer of its intention to so exercise the Option (an
"Option Notice"), specifying the number of Option Shares to be purchased (and
the denominations of the certificates, if more than one), whether the aggregate
Exercise Price will be paid in cash or by surrendering a portion of the Option
in accordance with Section 1.3(b) or a combination thereof, and the place in the
United States, time and date of the closing of such purchase (the "Option
Closing" and the date of such Closing, the "Option Closing Date"), which date
shall not be less than two Business Days nor more than ten Business Days from
the date on which an Option Notice is delivered. Notwithstanding anything to the
contrary in this Agreement, Grantee shall be entitled to rescind any Option
Notice and shall not be obligated to purchase any Option Shares in connection
with such exercise upon written notice to such effect to Issuer.
(c) At any Option Closing, (i) Issuer shall deliver to Grantee all of
the Option Shares to be purchased by delivery of a certificate or certificates
evidencing such Option Shares in the denominations designated by Grantee in the
Option Notice, which Option Shares shall be free and clear of all Liens, and
(ii) (A) if the Option is exercised in part and/or surrendered in part to pay
the aggregate Exercise Price pursuant to Section 1.3(b), Issuer and Grantee
shall execute and deliver an amendment to this Agreement reflecting the Option
Shares for which the Option has not been exercised and/or surrendered and (B) if
the Grantee is not paying the Exercise Price pursuant to Section 1.3(b), Grantee
shall pay to Issuer, by wire transfer of immediately available funds to an
account specified by Issuer to Grantee in writing at least two business days
prior to the Option Closing Date, an amount equal to the Exercise Price
multiplied by the number of Option Shares to be purchased for cash pursuant to
this Article I (it being understood that the failure or refusal of Issuer to
specify an account shall not affect Issuer's obligation to issue the Option
Shares). If at the time of issuance of any Option Shares pursuant to an exercise
of all or part of the Option hereunder, Issuer shall have issued any rights or
other securities which are attached to or otherwise associated with the Issuer
Common Stock, then each Option Share issued pursuant to such exercise shall also
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<PAGE>
represent such rights or other securities with terms substantially the same as
and at least as favorable to Grantee as are provided under any shareholder
rights agreement or similar agreement of Issuer then in effect.
(d) Upon the delivery by Grantee to Issuer of the Option Notice and
the tender of the applicable aggregate Exercise Price in immediately available
funds or the requisite portion of the Option in accordance with Section 1.3,
Grantee shall be deemed to be the holder of record of the Option Shares issuable
upon such exercise, notwithstanding that the stock transfer books of Issuer may
then be closed, that certificates representing such Option Shares may not then
have been actually delivered to Grantee, or Issuer may have failed or refused to
take any action required of it hereunder. Issuer shall pay all expenses that may
be payable in connection with the preparation, issuance and delivery of stock
certificates or an amendment to this Agreement under this Section 1.2 and any
filing fees and other expenses arising from the performance of the transactions
contemplated hereby.
1.3 Payments. (a) The purchase and sale of the Option Shares pursuant
to Section 1.2 of this Agreement shall be at a purchase price equal to $11.00
per Share (as such amount may be adjusted pursuant to the terms hereof, the
"Exercise Price"), payable at Grantee's option in cash, by surrender of a
portion of the Option in accordance with Section 1.3(b), or a combination
thereof.
(b) Grantee may elect to purchase Option Shares issuable, and pay some
or all of the aggregate Exercise Price payable, upon an exercise of the Option
by surrendering a portion of the Option with respect to such number of Option
Shares as is determined by dividing (i) the aggregate Exercise Price payable in
respect of the number of Option Shares being purchased in such manner by (ii)
the excess of the Fair Market Value (as defined below) per share of Issuer
Common Stock as of the last trading day preceding the date Grantee delivers its
Option Notice (such date, the "Option Exercise Date") over the per share
Exercise Price. The "Fair Market Value" per share of Issuer Common Stock shall
be the average of last reported sale price for a share of Issuer Common Stock on
the Nasdaq National Market for the ten trading days commencing on the 12th
trading day immediately preceding the Option Exercise Date. That portion of the
Option so surrendered under this Section 1.3(b) shall be canceled and shall
thereafter be of no further force and effect.
(c) In addition to any other legend that is required by applicable
law, certificates for the Option Shares delivered at each Option Closing shall
be endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT
DATED AS OF JUNE 18, 2000. A COPY OF SUCH AGREEMENT WILL BE
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<PAGE>
PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY THE
ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Grantee shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably satisfactory to Issuer and its counsel, to the
effect that such legend is not required for purposes of the Securities Act.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that any Option Shares or other securities
acquired by Grantee upon exercise of the Option will not be taken with a view to
the public distribution thereof and will not be transferred or otherwise
disposed of except in a transaction registered or exempt from registration under
the Securities Act.
2.2 Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and authority to enter
into this Agreement and, subject to any approvals or consents referred to
herein, 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 Issuer. This Agreement has been duly executed and delivered by Issuer. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and compliance by Issuer with any of the provisions hereof
will not conflict with or result in a breach or default of or under (i) any
provision of Issuer's Certificate of Incorporation or Bylaws, (ii) any of the
terms, conditions or provisions of any note, bond, debenture, mortgage,
indenture, license, material agreement or other material instrument or
obligation to which Issuer is bound, or (iii) any order, writ, injunction,
decree, statute, rule or regulation applicable to Issuer or any of its
properties or assets, except (A) in the case of clause (ii) or (iii), for such
conflict, breach or default as, individually or in the aggregate, would not have
a Company Material Adverse Effect, and (B) in the case of clause (ii), for any
limitations contained in agreements or instruments relating to indebtedness of
Issuer that are filed as exhibits to Company SEC Reports prior to the date
hereof ("Company Debt Documents"). No Consent by any governmental or regulatory
agency or authority, other than compliance with Securities Laws or the filing of
a notification under the HSR Act, is required of Issuer in connection with the
execution and delivery by Issuer of this Agreement or the consummation by Issuer
of the transactions contemplated hereby.
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(b) Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from the date
hereof until the obligation to deliver Issuer Common Stock upon the exercise of
the Option terminates, will have reserved for issuance, upon exercise of the
Option, the number of shares of Issuer Common Stock necessary for Grantee to
exercise the Option, and Issuer will take all necessary corporate action to
authorize and reserve for issuance all additional shares of Issuer Common Stock
or other securities which may be issued pursuant to Section 3.1 upon exercise of
the Option. The shares of Issuer Common Stock to be issued upon due exercise of
the Option, including all additional shares of Issuer Common Stock or other
securities which may be issuable pursuant to Section 3.1, upon issuance pursuant
hereto, shall be duly and validly issued, fully paid, and nonassessable, and
shall be delivered free and clear of all liens, claims, charges, and
encumbrances for any kind or nature whatsoever, including any preemptive rights
for any stockholder of Issuer (other than any rights in the Issuer's Stock
Purchase Agreement with Abbott Laboratories filed as an exhibit to Company SEC
Reports prior to the date hereof).
ARTICLE III
ADJUSTMENT UPON CHANGES IN CAPITALIZATION
-----------------------------------------
3.1 Adjustment Upon Changes in Capitalization. In addition to the
adjustment in the number of shares of Issuer Common Stock that may be purchased
upon exercise of the Option pursuant to Section 1.1 of this Agreement, the
number of shares of Issuer Common Stock that may be purchased upon the exercise
of the Option and the Exercise Price shall be subject to adjustment from time to
time as provided in this Section 3.1. In the event of any change in the number
of issued and outstanding shares of Issuer Common Stock by reason of any stock
dividend, split-up, merger, recapitalization, combination, conversion, exchange
of shares, spin-off or other change in the corporate or capital structure of
Issuer which would have the effect of diluting or otherwise diminishing
Grantee's rights hereunder, the number and kind of Option Shares or other
securities subject to the Option and the Exercise Price therefor shall be
appropriately adjusted so that Grantee shall receive upon exercise of the Option
(or, if such a change occurs between exercise and the Option Closing, upon the
Option Closing) the number and kind of shares or other securities or property
that Grantee would have received in respect of the Option Shares that Grantee is
entitled to purchase upon exercise of the Option if the Option had been
exercised (or the purchase thereunder had been consummated, as the case may be)
immediately prior to such event or the record date for such event, as
applicable. The rights of Grantee under this Section shall be in addition to,
and shall not limit, its rights against Issuer for breach of or the failure to
perform any provision of the Merger Agreement.
ARTICLE IV
REGISTRATION RIGHTS
-------------------
4.1 Registration of Option Shares Under the Securities Act. (a) If
requested by Grantee at any time and from time to time prior to the second
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anniversary of receipt by Grantee of Option Shares (the "Registration Period"),
Issuer shall use its reasonable best efforts, as promptly as practicable, to
effect the registration under the Securities Act and any applicable state law (a
"Demand Registration") of such number of Option Shares or such other Issuer
securities owned by or issuable to Grantee in accordance with the method of sale
or other disposition contemplated by Grantee, including a "shelf" registration
statement under Rule 415 of the Securities Act or any successor provision, and
to obtain all consents or waivers of other parties that are required therefor.
Except with respect to such a "shelf" registration, Issuer shall keep such
Demand Registration effective for a period of not less than 90 days, unless, in
the written opinion of counsel to Issuer, which opinion shall be delivered to
Grantee and which shall be satisfactory in form and substance to Grantee and its
counsel, such registration under the Securities Act is not required in order to
lawfully sell and distribute such Option Shares or other Issuer securities in
the manner contemplated by Grantee. Issuer shall only have the obligation to
effect two Demand Registrations pursuant to this Section 4.1(a); provided that
only requests relating to a registration statement that has become effective
under the Securities Act shall be counted for purposes of determining the number
of Demand Registrations made. Issuer shall be entitled to postpone for up to 90
days from receipt of Grantee's request for a Demand Registration the filing of
any registration statement in connection therewith if the Board of Directors of
Issuer determines in its good faith reasonable judgment that such registration
would materially interfere with or require premature disclosure of, any material
acquisition, reorganization, pending or proposed offering of Issuer Securities
or other transaction involving Issuer or any other material contract under
active negotiation by Issuer; provided further that Issuer shall not have
postponed any Demand Registration pursuant to this sentence during the twelve
month period immediately preceding the date of delivery of Grantee's request for
a Demand Registration.
(b) If Issuer effects a registration under the Securities Act of
Issuer Common Stock for its own account or for any other stockholders of Issuer
(other than on Form S-4 or Form S-8, or any successor form), Grantee shall have
the right to participate in such registration and include in such registration
the number of shares of Issuer Common Stock or such other Issuer securities as
Grantee shall designate by notice to Issuer (an "Incidental Registration" and,
together with a Demand Registration, a "Registration"); provided that, if the
managing underwriters of such offering advise Issuer in writing that in their
opinion the number of shares of Issuer Common Stock or other securities
requested to be included in such Incidental Registration exceeds the number
which can be sold in such offering, Issuer shall include therein (i) first, all
shares proposed to be included therein by Issuer, (ii) second, subject to the
rights of any other holders of registration rights in effect as of the date
hereof, the shares requested to be included therein by Grantee and (iii) third,
shares proposed to be included therein by any other stockholder of Issuer.
Participation by Grantee in any Incidental Registration shall not affect the
obligation of Issuer to effect Demand Registrations under this Section 4.1.
Issuer may withdraw any registration under the Securities Act that gives rise to
an Incidental Registration without the consent of Grantee.
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(c) In connection with any Registration pursuant to this Section 4.1,
(i) Issuer shall provide the Grantee and any underwriter of the offering with
customary representations, warranties, covenants, indemnification and
contribution obligations in connection with such Registration, and (ii) Issuer
shall use reasonable best efforts to cause any Option Shares included in such
Registration to be included for quotation on the Nasdaq National Market or any
other nationally recognized exchange or trading system upon which Issuer's
securities are then listed, subject to official notice of issuance, which notice
shall be given by Issuer upon issuance. Grantee will provide all information
reasonably requested by Issuer for inclusion in any registration statement to be
filed hereunder. The costs and expenses incurred by Issuer in connection with
any Registration pursuant to this Section 4.1 (including any fees related to
qualifications under blue sky laws and SEC filing fees) (the "Registration
Expenses") shall be borne by Issuer, excluding legal fees of Grantee's counsel
and underwriting discounts or commissions with respect to Option Shares to be
sold by Grantee included in a Registration.
ARTICLE V
REPURCHASE RIGHTS; SUBSTITUTE OPTIONS
-------------------------------------
5.1 Repurchase Rights. (a) Subject to Section 6.1, at any time on or
after the Exercise Date and prior to the Expiration Date, Grantee shall have the
right (the "Repurchase Right") to require Issuer to repurchase from Grantee (i)
the Option or any part thereof as Grantee shall designate at a price (the
"Option Repurchase Price") equal to the amount by which (A) the Market/Offer
Price (as defined below) exceeds (B) the Exercise Price, multiplied by the
number of Option Shares as to which the Option is to be repurchased and (ii)
such number of Option Shares as Grantee shall designate at a price (the "Option
Share Repurchase Price") equal to the Market/Offer Price multiplied by the
number of Option Shares so designated; provided that the aggregate amount of the
Option Repurchase Price and the Option Share Repurchase Price pursuant to the
exercise by the Grantee of its Repurchase Right shall not exceed (1) the Maximum
Amount (as defined in Section 6.1) minus the amount of the Termination Fee
received by Grantee under the Merger Agreement plus (2) the Exercise Price for
the Option Shares sold pursuant to the Repurchase Right. The term "Market/Offer
Price" shall mean the higher of (i) the highest price per share of Issuer Common
Stock offered or paid in any Acquisition Proposal, and (ii) the Fair Market
Value. In determining the Market/Offer Price, the value of consideration other
than cash shall be determined by a nationally recognized investment banking firm
selected by Grantee and reasonably acceptable to Issuer, which determination,
absent manifest error, shall be conclusive for all purposes of this Agreement.
Notwithstanding anything in this Section 5.1 to the contrary, the Repurchase
Right may be exercised only if (A) Grantee shall not be in breach of its
agreements or covenants contained in this Agreement or the Merger Agreement, and
(B) no preliminary or permanent injunction or order against the delivery of
shares covered by the Option issued by any court of competent jurisdiction in
the United States shall be in effect.
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(b) Grantee shall exercise its Repurchase Right by delivering to Issuer
written notice (a "Repurchase Notice") stating that Grantee elects to require
Issuer to repurchase all or a portion of the Option and/or the Option Shares as
specified therein. The closing of the Repurchase Right (the "Repurchase
Closing") shall take place in the United States at the place, time and date
specified in the Repurchase Notice, which date shall not be less than two
business days nor more than ten business days from the date on which the
Repurchase Notice is delivered. At the Repurchase Closing, subject to the
receipt of a writing evidencing the surrender of the Option and/or certificates
representing Option Shares, as the case may be, Issuer shall deliver to Grantee
the Option Repurchase Price therefor or the Option Share Repurchase Price
therefor, as the case may be, or the portion thereof that Issuer is not then
prohibited under Applicable Law from so delivering. At the Repurchase Closing,
(i) Issuer shall pay to Grantee the Option Repurchase Price for the portion of
the Option which is to be repurchased or the Option Shares Repurchase Price for
the number of Option Shares to be repurchased, as the case may be, by wire
transfer of immediately available funds to an account specified by Grantee at
least two business days prior to the Repurchase Closing, and (ii) if the Option
is repurchased only in part, Issuer and Grantee shall execute and deliver an
amendment to this Agreement reflecting the Option Shares for which the Option is
not being repurchased.
(c) To the extent that Issuer is prohibited under applicable Law or
Company Debt Documents from repurchasing the portion of the Option or the Option
Shares designated in such Repurchase Notice, Issuer shall immediately so notify
Grantee and thereafter deliver, from time to time, to Grantee the portion of the
Option Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within five business days after
the date on which Issuer is no longer so prohibited; provided that if Issuer at
any time after delivery of a Repurchase Notice is prohibited under applicable
Law or Company Debt Documents from delivering to Grantee the full amount of the
Option Repurchase Price and the Option Share Repurchase Price for the Option or
Option Shares to be repurchased, respectively, Grantee may rescind the exercise
of the Repurchase Right, whether in whole, in part or to the extent of the
prohibition, and, to the extent rescinded, no part of the amounts, terms or the
rights with respect to the Option or Repurchase Right shall be changed or
affected as if such Repurchase Right were not exercised. Issuer shall use its
reasonable best efforts to obtain all required Regulatory Approvals and to file
any required notices to permit Grantee to exercise its Repurchase Right and
shall use its reasonable best efforts to avoid or cause to be rescinded or
rendered inapplicable any prohibition on Issuer's repurchase of the Option or
the Option Shares.
5.2 Substitute Option. (a) In the event that Issuer enters into an
agreement (i) to consolidate with or merge into any Person, other than Grantee
or any Subsidiary of Grantee (each, an "Excluded Person"), and Issuer is not the
continuing or surviving corporation of such consolidation or merger, (ii) to
permit any Person, other than an Excluded Person, to merge into Issuer and
Issuer shall be the continuing or surviving or acquiring corporation, or (iii)
to sell or otherwise transfer all or substantially all of its assets to any
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Person, other than an Excluded Person, then, and in each such case, the
agreement governing such transaction shall make proper provision so that, unless
earlier exercised by Grantee, the Option shall, upon the consummation of any
such transaction and upon the terms and conditions set forth herein, be
converted into, or exchanged for, an option with identical terms appropriately
adjusted to acquire the number and class of shares or other securities or
property that Grantee would have received in respect of Issuer Common Stock if
the Option had been exercised immediately prior to such consolidation, merger,
sale, or transfer, or the record date therefor, as applicable and make any other
necessary adjustments; provided that if such a conversion or exchange cannot,
because of Applicable Law be the same as the Option, such terms shall be as
similar as possible and in no event less advantageous to Grantee than the
Option.
(b) In addition to any other restrictions or covenants, Issuer agrees
that it shall not enter or agree to enter into any transaction described in
Section 5.2(a) unless the Acquiring Corporation (as hereinafter defined) and any
Person that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder and agree for the benefit of Grantee to comply
with this Article V.
(c) For purposes of this Section 5.2, the term "Acquiring Corporation"
shall mean (i) the continuing or surviving Person of a consolidation or merger
with Issuer (if other than Issuer), (ii) Issuer in a consolidation or merger in
which Issuer is the continuing or surviving or acquiring Person, and (iii) the
transferee of all or substantially all of Issuer's assets.
ARTICLE VI
MISCELLANEOUS
-------------
6.1 Total Profit. Notwithstanding any other provision of this Agreement
to the contrary, in no event may Grantee purchase under this Agreement that
number of Option Shares whose Spread Value plus the amount of the Termination
Fee received by Grantee under the Merger Agreement (less any amount paid to
Grantee under the Merger Agreement as reimbursement of Grantee's expenses)
exceeds $29.0 million (the "Maximum Amount"). For purposes of this Agreement,
"Spread Value" shall mean the difference between (i) the product of (A) the sum
of the total number of Option Shares that Grantee (x) intends to purchase at the
Option Closing Date pursuant to the exercise of the Option and (y) previously
purchased pursuant to the prior exercise of the Option, and (B) the average of
the last reported sales price of Issuer Common Stock on the Nasdaq National
Market for the ten trading days commencing on the 12th trading day immediately
preceding the Option Closing Date, and (ii) the product of (A) the total number
of Option Shares that Grantee (x) intends to purchase at the Option Closing Date
pursuant to the exercise of the Option and (y) previously purchased pursuant to
the prior exercise of the Option and (B) the applicable Exercise Price of such
Option Shares. In the event the Spread Value exceeds the Maximum Amount, the
number of Option Shares which Grantee is entitled to purchase at the Closing
Date shall be reduced to that number of shares necessary such that the Spread
Value equals or is less than the Maximum Amount.
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6.2 Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Grantee good and marketable title,
free and clear of all Liens, to any Option Shares purchased hereunder. Issuer
agrees not to avoid or seek to avoid (whether by charter amendment or through
reorganization, consolidation, merger, issuance of rights or securities, the
Company Rights Agreement or similar agreement, dissolution or sale of assets, or
by any other voluntary act) the observance or performance of any of the
covenants, agreements or conditions to be observed or performed hereunder by it.
6.3 Quotation. If Issuer Common Stock or any other securities to be
acquired upon exercise of the Option are then authorized for quotation or
trading or listing on the Nasdaq National Market or any other securities
exchange, Issuer, upon the request of Grantee, will promptly file an
application, if required, to authorize for quotation or trading or listing the
shares of Issuer Common Stock or other securities to be acquired upon exercise
of the Option on the Nasdaq National Market or any other securities exchange and
will use its best efforts to obtain approval, if required, of such quotation or
listing as soon as practicable.
6.4 Division of Option. The Agreement (and the Option granted hereby)
are exchangeable, without expense, at the option of Grantee, upon presentation
and surrender of this Agreement at the principal office of Issuer, for other
agreements providing for Options of different denominations entitling Grantee to
purchase, on the same terms and subject to the same conditions as are set forth
herein, in the aggregate the same number of Option Shares purchasable hereunder.
Upon receipt by Issuer of evidence reasonably satisfactory to it of the loss,
theft or destruction or mutilation of this Agreement, and (in the case of loss,
theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement, if mutilated, Issuer will execute
and deliver a new agreement of like tenor and date.
6.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida, without regard to the
conflict of laws principles or rules thereof.
6.6 Specific Performance. The parties 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. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
6.7 Amendment, Assignment, No Third Party Beneficiaries, Waivers, etc.
(a) Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by an instrument in writing, signed by the
party against which enforcement of such amendment, discharge, waiver or
termination is sought.
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(b) This Agreement shall not be assignable or otherwise transferable by
a party without the prior consent of the other parties, and any attempt to so
assign or otherwise transfer this Agreement without such consent shall be void
and of no effect. This Agreement shall be binding upon the respective successors
and assigns of the parties hereto. Nothing in this Agreement shall be construed
as giving to any Person, other than the parties hereto and their successors and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provision hereof.
(c) No failure or delay by any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided herein shall be cumulative and not exclusive of any rights or
remedies provided by law.
6.8 Notices. All notices, consents, requests, instructions, approvals
and other communications provided for in this Agreement shall be in writing and
shall be deemed validly given upon personal delivery or one day after being sent
by overnight courier service or by telecopy (so long as for notices or other
communications sent by telecopy, the transmitting telecopy machine records
electronic conformation of the due transmission of the notice and a copy of the
notice or other communication is also sent on the same day by registered letter,
acknowledgment of receipt requested), at the following address or telecopy
number, or at such other address or telecopy number as a party may designate to
the other parties: (i) if to Grantee, at Fisher Scientific International Inc.,
Liberty Lane, Hampton, New Hampshire 03842, telecopy: 1-603-929-2703,
attention: Vice President and General Counsel, with a copy to Debevoise &
Plimpton, 875 Third Avenue, New York, New York 10017, telecopy: 1-212-909-6836,
attention: Paul H. Wilson, Jr.; and (ii) if to Issuer, at PSS World Medical,
Inc., 4345 Southpoint Boulevard, Jacksonville, Florida 32216, telecopy:
1-904-332-3000, attention: Chief Executive Officer, with a copy to Alston &
Bird, One Atlantic Center, 1201 West Peachtree Street, Atlanta, Georgia 30309,
telecopy: 1-404-881-7777, attention: J. Vaughan Curtis.
6.9 Severability. If any provision of this Agreement is held to be
invalid or unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the parties hereto to the
maximum extent possible. In any event, the invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
6.10 Integration. This Agreement and the other agreements of the
parties referred to in this Agreement constitute the full and entire
understanding and agreement of the parties and supersede any and all prior
agreements, arrangements and understandings relating to the subject matters
hereof and thereof.
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6.11 Section Headings. The article and section headings of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
6.12 Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed an original and all of which will
together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and date above written.
FISHER SCIENTIFIC INTERNATIONAL INC.
By: /s/ Paul Meister
------------------------------------
Name: Paul Meister
Title: Executive Vice President, CFO
PSS WORLD MEDICAL, INC.
By: /s/ Patrick Kelly
-------------------------------------
Name: Patrick Kelly
Title: Chief Executive Officer
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Exhibit 2.3
VOTING AGREEMENT
THIS VOTING AGREEMENT, dated as of June 21, 2000 (this "Agreement"), is
made and entered into by and among PSS World Medical, Inc., a Florida
corporation ("PSS") and each of the persons listed on the signature pages hereof
(each a "Stockholder" and collectively, "Stockholders").
Preamble
--------
WHEREAS, each Stockholder is the record and beneficial owner of the
number of shares of Common Stock, par value $0.01 per share (the "FSI Common
Stock"), of Fisher Scientific International, Inc., a Delaware corporation
("FSI"), set forth on Schedule 1 hereto opposite the name of such Stockholder
(with respect to each Stockholder, such "Stockholder's Existing Shares" and
together with any shares of FSI Common Stock or other voting capital stock of
FSI acquired after the date hereof, whether upon the exercise of warrants or
options, the conversion of Non-Voting Common Stock or otherwise, such
"Stockholders' Shares");
WHEREAS, each Stockholder desires that PSS, FSI Merger Corporation, a
wholly owned subsidiary of FSI ("Merger Corp."), and FSI enter into an Agreement
and Plan of Merger dated the date hereof (as the same may be amended or
supplemented, the "Merger Agreement") with respect to the merger of Merger Corp.
with and into PSS (the "Merger"), with the result that PSS becomes a wholly
owned subsidiary of FSI all upon the terms and conditions set forth in the
Merger Agreement; and
WHEREAS, the Stockholders are executing this Agreement as an inducement
to PSS to enter into and execute the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by PSS
of the Merger Agreement and the mutual covenants, conditions and agreements
contained herein and therein, the parties agree as follows:
1. Representations and Warranties. (a) Each Stockholder
severally and not jointly represents and warrants to PSS as follows:
(i) Set forth on Schedule 1 are the number of such
Stockholder's Existing Shares; each of which Existing Shares are
beneficially owned by such Stockholder. Such Stockholder's Existing
Shares constitute all of the shares of FSI Common Stock owned of record
or beneficially by such Stockholder. Such Stockholder holds, and during
the term hereof, will continue to hold, such Stockholder's Shares free
and clear of all liens, claims, security interests and encumbrances and
has, and during the term hereof, will continue to have, sole voting
power, sole power of disposition, sole power to issue instructions with
respect to the matters set forth in this Agreement, and sole power to
agree to all the matters set forth in this Agreement, in each case with
respect to all such Stockholder's Existing Shares and with respect to
<PAGE>
all such Stockholder's Shares as of the Effective Time, subject to
applicable securities laws and the terms of this Agreement.
(ii) Such Stockholder has the power and authority
necessary to execute, deliver and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement
have been duly and validly authorized by all necessary action in
respect thereof on the part of such Stockholder. This Agreement
represents a legal, valid and binding obligation of such Stockholder,
enforceable against such Stockholder in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws and subject to
general principles of equity). The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
will not conflict with or result in a breach of any provisions of the
organizational documents of such Stockholder, if applicable, or a
breach or default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any trust, note, bond, debenture, mortgage, indenture,
license, material agreement or other material instrument or obligation
to which such Stockholder is bound, except for such conflict, breach or
default as would not adversely affect the ability of such Stockholder
to perform its obligations hereunder. Performance by such Stockholder
of its obligations hereunder will not violate, or require any consent,
approval, or notice under, any provision of any judgment, order,
decree, statute, law, rule or regulation applicable to such Stockholder
or such Stockholder's Shares, except for such violations, consents,
approvals or notices as would not adversely affect the ability of
Stockholder to perform its obligations hereunder.
(iii) Such Stockholder understands and acknowledges
that PSS is entering the Merger Agreement in reliance upon such
Stockholder's execution and delivery of this Agreement.
(b) PSS represents and warrants to each Stockholder that this
Agreement has been duly authorized, executed and delivered by and
constitutes a valid and binding agreement of, PSS, enforceable in
accordance with its terms except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors
rights generally or the availability of equitable remedies, and the
execution and delivery of this Agreement will not violate or result in
a default under any agreement to which PSS is a party.
2. Voting Agreement. Each Stockholder severally agrees with, and
covenants to, PSS that at any meeting of stockholders of FSI called to vote upon
the issuance of shares of FSI Common Stock pursuant to the Merger Agreement and
any other matters related to the Merger Agreement, or at any adjournment thereof
or in any other circumstances upon which a vote, consent or other approval with
respect to the transactions contemplated by the Merger Agreement is sought, such
Stockholder shall vote (or cause to be voted) the Stockholder's Shares in favor
of the issuance of the shares of FSI Common Stock pursuant to the Merger
Agreement and approval of any other matters related to the Merger Agreement.
Such Stockholder, as a holder of FSI Common Stock, shall be present in person or
by proxy at all meetings of stockholders of FSI so that all such Stockholder's
Shares are counted for purposes of determining the presence of a quorum at such
meetings.
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3. Covenants. Each Stockholder severally agrees with, and covenants to,
PSS that, prior the termination of this Agreement, such Stockholder shall not
(i) transfer (which term shall include, without limitation, for the purposes of
this Agreement, any sale, gift, pledge, or consent to any transfer of), any or
all of such Stockholder's Shares, such Stockholder's Non-Voting Common Stock,
Series B Non-Voting Common Stock, or warrants or options for the purchase of FSI
Common Stock, shares of FSI Common Stock issued upon exercise of such
Stockholder's warrant or options or upon conversion of such Stockholder's
Non-Voting Common Stock or Series B Non-Voting Common Stock (such "Stockholder's
Equity Rights") or any interest in any of the foregoing; (ii) enter into any
contract, option or other agreement or understanding with respect to any
transfer of any or all of such Stockholder's Equity Rights or any interest
therein, (iii) grant any proxy, power of attorney or other authorization in or
with respect to such Stockholder's Equity Rights, except for this Agreement or
(iv) deposit such Stockholder's Equity Rights into a voting trust or enter into
a voting agreement or arrangement with respect to such Stockholder's Equity
Rights. Notwithstanding the foregoing, PSS may in its discretion consent to any
such transfer if the transferee agrees in writing to be bound by the provisions
of this Agreement.
4. Delivery of Proxy. Not later than 10 days after the date of any
proxy statement in connection with any meeting of stockholders of FSI to vote
upon the issuance of shares of common stock of FSI pursuant to the Merger
Agreement, Stockholder agrees to execute and return to the Company a proxy and
to vote in favor of the issuance of such shares. Stockholder further agrees not
to revoke such proxy prior to any such meeting of stockholders held for such
purpose.
5. Certain Events. Each Stockholder agrees that this Agreement and the
obligations hereunder shall attach to such Stockholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Stockholder's Shares shall pass, whether by operation of law or otherwise,
including without limitation the Stockholder's successors or assigns. In the
event of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of FSI, or the
acquisition of additional shares of FSI Common Stock or other voting securities
of FSI by such Stockholder, the number of such Stockholder's Shares subject to
the terms of this Agreement shall be adjusted appropriately and this Agreement
and the obligations hereunder shall attach to any additional shares of FSI
Common Stock or other voting securities of FSI issued to or acquired by such
Stockholder.
6. Further Assurances. Each Stockholder shall, upon request of
PSS, execute and deliver any additional documents and take such further actions
as may reasonably be deemed by PSS to be necessary or desirable to carry out the
provisions hereof.
7. Termination. This Agreement, and all rights and obligations
of the parties hereunder shall terminate upon the first to occur of (i) the
Effective Time of the Merger or (ii) the date upon which the Merger Agreement
is terminated in accordance with its terms.
8. Miscellaneous.
(a) All capitalized terms used herein which are not defined
herein shall have the same meanings as ascribed to them in the Merger
Agreement.
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(b) This Agreement may be executed in two or more counterparts
, all of which shall be considered one and the same agreement.
(c) This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement, and supersedes
all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof.
(d) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the
laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
(e) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise, by any of the parties without
the prior written consent of the other parties. Any assignment in
violation of the foregoing shall be void.
(f) The Stockholder agrees that irreparable damage would occur
and that PSS would not have any adequate remedy at law 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 PSS shall be entitled to an injunction or
injunctions to prevent breaches by the Stockholder of this Agreement
and to enforce specifically the terms and provisions of this Agreement,
this being in addition to any other remedy to which they are entitled
at law or in equity.
(g) If any term, provision, covenant or restriction herein, or
the application thereof to any circumstance, shall, to any extent, be
held by a court of competent jurisdiction to be invalid, void or
unenforceable, such term, provision, covenant or restriction shall be
modified or voided, as may be necessary to achieve the intent of the
parties to the extent possible, and the remainder of the terms,
provisions, covenants and restrictions herein and the application
thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and
shall be enforced to the fullest extent permitted by law.
(h) No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be in
writing and signed by such party.
(i) If the Stockholder is an individual and is married and the
Stockholder's Shares constitute community property, this Agreement has
been duly executed and delivered by, and constitutes a valid and
binding agreement of, the Stockholder's spouse, enforceable against
such person in accordance with its terms.
4
<PAGE>
IN WITNESS WHEREOF, the undersigned parties have executed and delivered
this Voting Agreement as of the day and year first above written.
PSS WORLD MEDICAL, INC.
By: /s/ Patrick C. Kelly
-----------------------------------
Name: Patrick Kelly
Title: Chief Executive Officer
THOMAS H. LEE EQUITY FUND III, L.P.
By: /s/ Anthony J. DiNovi
-----------------------------------
Name: Anthony J. DiNovi
Title:
THL FSI EQUITY INVESTORS L.P.
By: /s/ Anthony J. DiNovi
-----------------------------------
Name: Anthony J. DiNovi
Title:
THL FOREIGN FUND III
By: /s/ Anthony J. DiNovi
-----------------------------------
Name: Anthony J. DiNovi
Title:
THL-CCI LIMITED PARTNERSHIP
By: /s/ Anthony J. DiNovi
-----------------------------------
Name: Anthony J. DiNovi
Title:
5
<PAGE>
MELLON BANK, N.A., SOLELY IN ITS
CAPACITY AS TRUSTEE FOR THE
FISHER SCIENTIFIC INTERNATIONAL
INC. TRUST AMENDED AND RESTATED
AS OF AUGUST 1, 1996 (AS
DIRECTED BY FISHER SCIENTIFIC
INTERNATIONAL INC.), AND NOT IN
ITS INDIVIDUAL CAPACITY
By: /s/ Bernadette Rist
-----------------------------
Name: Bernadette Rist
Title: Authorized Signatory
MELLON BANK, N.A., SOLELY IN ITS
CAPACITY AS TRUSTEE FOR FISHER
SCIENTIFIC INTERNATIONAL, INC.
TRUST DATED AS OF JANUARY 21,
1998 (AS DIRECTED BY FISHER
SCIENTIFIC INTERNATIONAL INC.),
AND NOT IN ITS INDIVIDUAL
CAPACITY
By: /s/ Bernadette Rist
-----------------------------
Name: Bernadette Rist
Title: Authorize Signatory
Schedule 1
----------
Stockholder Name Class Number of Shares Held
---------------- ----- ---------------------
Thomas H. Lee Equity Voting Common Stock 6,652,027
Fund III, L.P.
---------------------- --------------------- ---------------------------
THL FSI Equity Voting Common Stock 3,342,094
Investors L.P.
---------------------- --------------------- ---------------------------
THL Foreign Fund III Voting Common Stock 411,607
---------------------- --------------------- ---------------------------
THL-CCI Limited Voting Common Stock 409,667
Partnership
---------------------- --------------------- ---------------------------
Mellon Bank, N.A.,
solely in its Voting Common Stock 634,000
capacity as Trustee
for the Fisher
Scientific
International Inc.
Trust Amended and
Restated as of
August 1, 1996
(as directed by
Fisher Scientific
International
Inc.), and not in
its individual
capacity
----------------------- --------------------- --------------------------
6
<PAGE>
Mellon Bank, N.A., Voting Common Stock 2,930,771
solely in its
capacity as Trustee
for Fisher Scientific
International, Inc.
Trust dated as of
January 21, 1998
(as directed by Fisher
Scientific
International Inc.),
and not in its
individual capacity
----------------------- --------------------- --------------------------
7
<PAGE>
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: David A. Smith
Executive Vice President and
Chief Financial Officer
904-332-3000
PSS WORLD MEDICAL ANNOUNCES DEFINITIVE MERGER AGREEMENT
WITH FISHER SCIENTIFIC INTERNATIONAL
--------------------------------
Company Also Announces Year-End Results
Jacksonville, Florida (June 22, 2000) - PSS World Medical, Inc.
(Nasdaq/NM:PSSI) announced today that is has entered into a definitive merger
agreement with Fisher Scientific International, Inc. (NYSE: FSH), a leading
supplier, manufacturer and distributor of laboratory equipment and supplies to
the research community. Under the terms of the agreement, Fisher agreed to
acquire PSS World Medical in a tax-free, stock-for-stock transaction. Each share
of PSS will be exchanged for 0.3121 shares of Fisher. Based on Fisher's June 21,
2000, closing price of $38.00 per share, the equity value of the transaction is
approximately $843 million, or $11.86 per PSS share. The closing of the
transaction, which is contingent upon approval by the shareholders of both
companies as well as regulatory approval, is expected to close in the last
quarter of calendar 2000.
PSS believes a combination with Fisher Scientific will create
significant shareholder value given the complementary strengths and assets of
each company. The combined company will benefit from a significantly expanded
product and service offering and from each company's leading market position,
extending Fisher's leadership in the research market and PSS' leadership in the
healthcare market. PSS expects to benefit from Fisher's strong manufacturing and
operations-driven focus while contributing PSS' strong sales organization to the
combined entity.
Patrick C. Kelly, chairman and chief executive officer of PSS World
Medical, added, "We are delighted to join forces with Fisher Scientific. We
believe our shareholders will be able to participate in the upside potential
created by this strategic combination, and that our customers will see an
enhanced range of products and services with better access to Fisher Scientific
world-class technology. Finally, employees will be part of a larger company that
is well-positioned to be the industry leader."
The Company also announced results for the fourth quarter and year
ended March 31, 2000. The following PSS World Medical results for the fourth
quarter and twelve months ended March 31, 2000, refer to results from operations
before special items unless otherwise noted. Special items include merger and
restructuring expenses and goodwill impairment.
For the three months ended March 31, 2000, net sales increased 8.1% to
$443.4 million compared with $410.0 million for the same period last year. Net
income for the quarter decreased to a loss of $10.8 million, or a loss of $0.15
per diluted share, on 71.1 million weighted average shares outstanding versus
net income of $12.0 million, or $0.17 per diluted share, on 71.2 million
weighted average shares outstanding for the prior year period. Net income
including special items for the fourth quarter of 2000 was a loss of $15.7
million, or a loss of $0.22 per diluted share.
8
<PAGE>
For the year ended March 31, 2000, net sales increased 14.6% to $1.79
billion compared with $1.56 billion for the same period last year. Net income
for the year was $28.0 million, or $0.39 per diluted share, on 71.2 million
weighted average shares outstanding versus $53.8 million, or $0.76 per diluted
share, on 71.4 million weighted average shares outstanding for the prior year
period. Net income for the year ended March 31, 2000 including special items was
$20.7 million, or $0.29 per diluted share.
In addition to the special items, the Company believes that during the
fourth quarter there are several items, which either represent events that are
not related to normal, ongoing operations or represent charges that are in
excess of normal historical operating amounts, as follows:
<TABLE>
<CAPTION>
<S> <C>
Write-offs, reserves, and costs from long-term care customer receivables $ 11.5
Reserves, costs, and lost revenue related profit from Physician division
manufacturer product recalls 7.7
Lost revenue related profit from Imaging division manufacturer
product backorder and supply issues 2.6
Write-offs of Imaging division customer receivables related to
branch closures and systems integration difficulties 2.5
Other fourth quarter items 3.1
---------
Total fourth quarter operating earnings impact
from items above, before income taxes $ 27.4
=========
</TABLE>
In discussing the results for the year, Mr. Kelly added, "We had a very
challenging fiscal 2000 due to industry and manufacturing issues. Many of our
long-term care customers experienced bankruptcy, and two of our largest
manufacturers faced product recalls and supply interruptions. Through these
difficult times, we have maintained our customer and service focus and our loyal
customer base has responded. Because we have maintained our customer base and
refilled our product pipeline, we are looking forward to fiscal 2001."
PSS World Medical, Inc. is a specialty marketer and distributor of
medical products to physicians, alternate-site imaging centers, long-term care
providers and hospitals through 101 service centers to customers in all 50
states and four European countries. Since its inception in 1983, PSS has become
a leader in all three market segments that it serves with a focused
market-specific approach to customer services, a consultative sales force,
strategic acquisitions, strong arrangements with product manufacturers and a
unique culture of performance.
Statements made in this release, other than those containing historical
information, should be considered forward-looking statements subject to the
safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such statements, and the information they contain, are subject to certain risks,
trends, and/or uncertainties that may cause actual results and events to differ
materially from those set forth in these statements. The Company wishes to
caution readers that the results and events that are the subject of
forward-looking statements could differ materially because of, among other
things, the following: the possibility that the consideration of strategic
alternatives discussed above may or may not lead to any future transactions or
action, and other risks, trends, and/or uncertainties detailed in the Company's
reports filed with the Securities and Exchange Commission, including, but not
limited to, business and economic conditions as well as conditions affecting the
health care industry; competitive forces; the ability to integrate acquired
operations successfully; pricing and customer credit quality pressures;
competitive pricing pressures; continued consolidation within the health care
industry; and dependence on a limited number of large customers.
9
<PAGE>
<TABLE>
<CAPTION>
PSS WORLD MEDICAL, INC.
Unaudited Consolidated Operating Highlights
Including Net Income and Net Income Per Share Before Special Items
(In millions, except per share data)
Three Months Ended March 31,
----------------------------------------------------------------
Percent of Percent of Percent
2000 Net Sales 1999 Net Sales Change
----------- ------------- ------- --------- ------
<S> <C> <C> <C> <C> <C>
Net sales $ 443.4 100.0 $ 410.0 100.0 8.1
Gross profit 112.0 25.3 110.1 26.9 1.7
Selling, general and administrative expenses 131.1 29.6 98.3 24.0 33.4
Operating income (19.1) (4.3) 11.8 2.9 (261.9)
Net income $ (15.7) (3.5) $ 7.7 1.9 (303.9)
Basic earnings per share $ (0.22) $ 0.11
Diluted earnings per share $ (0.22) $ 0.11
Adjusted operating income
excluding special items $ (13.1) (3.0) $ 18.6 4.5 (170.4)
Adjusted net income
excluding special items(1,3) $ (10.8) (2.4) $ 12.0 2.9 (190.0)
Adjusted diluted earnings per share
excluding special items $ (0.15) $ 0.17
Weighted average shares (in thousands):
Basic 71,102 70,743
Diluted 71,102 71,236
Year Ended March 31,
----------------------------------------------------------------
Percent of Percent of Percent
2000 Net Sales 1999 Net Sales Change
----------- ------------- ------- --------- ------
Net sales $ 1,793.5 100.0 $ 1,564.5 100.0 14.6
Gross profit 472.3 26.3 421.9 27.0 11.9
Selling, general and administrative expenses 427.6 23.8 348.0 22.2 22.9
Operating income 44.7 2.5 73.9 4.7 (39.5)
Income before cumulative effect
of accounting change $ 22.1 1.2 $ 43.7 2.8 (49.4)
Cumulative effect of accounting change $ (1.4) 0.0 $ 0.0 0.0 NM
Net Income $ 20.7 1.2 $ 43.7 2.8 (52.6)
Basic earnings per share before cumulative
effect of accounting change $ 0.31 $ 0.62
Basic earnings per share $ 0.29 $ 0.62
Diluted earnings per share before cumulative
effect accounting change $ 0.31 $ 0.61
Diluted earnings per share $ 0.29 $ 0.61
Adjusted operating income
excluding special items(2,3) $ 52.4 2.9 $ 89.5 5.7 (41.5)
Adjusted net income
excluding special items(2,3) $ 28.0 1.6 $ 53.8 3.4 (48.0)
Adjusted diluted earnings per share
excluding special items $ 0.39 $ 0.76
Weighted average shares (in thousands):
Basic 70,966 70,548
Diluted 71,185 71,398
</TABLE>
10
<PAGE>
PSS WORLD MEDICAL, INC.
Unaudited Segment Information
(In millions)
For the Three Months Ended March 31,
Adjusted
Operating
Net Sales Income (Loss) (1,3)
---------------------- ---------------------
2000 1999 2000 1999
--------- ---------- --------- -------
Physician division $ 174.6 $ 170.4 $ (1.9) $ 9.5
Imaging division 182.1 152.0 2.6 7.7
Long-term care division 85.6 86.4 (11.6) 1.5
International and other 1.1 1.2 (2.2) (0.1)
---------- ---------- --------- -------
$ 443.4 $ 410.0 (13.1) $ 18.6
========== ========== ========= =======
(1) Special items totaled $5.9 million and $6.8 million for the three months
ended March 31, 2000 and April 2, 1999, respectively.
(2) Special items totaled $7.7 million and $15.6 million for the twelve months
ended March 31, 2000 and April 2, 1999, respectively.
(3) Special items in footnotes 1 and 2 consist of costs and expenses related to
mergers, merger-related activities and restructuring costs. In addition,
special items in footnote 2 include accelerated depreciation of $1.1
million and $5.5 million for the three and twelve months ended April 2,
1999, respectively.
-END-
