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: March 10, 1997
(Date of Earliest Event Reported): (March 10, 1997)
SANTA FE PACIFIC GOLD CORPORATION
---------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-13096 85-0307713
----------------- ------------ -------------------
(State of (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
6200 Uptown Blvd, NE, Suite 400
Albuquerque, New Mexico 87110
---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(505) 880-5300
--------------
(Registrant's Telephone Number, Including Area Code)
Not Applicable
--------------
(Former Name or Former Address, If Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On March 10, 1997, Santa Fe Pacific Gold
Corporation ("SFPG"), Newmont Mining Corporation
("Newmont") and Midtown Two Corp., a wholly owned
subsidiary of Newmont ("Sub"), entered into an Agreement
and Plan of Merger (the "Merger Agreement") which
provides, among other things, that Sub will merge with
and into SFPG (the "Merger") and each outstanding share
of common stock of SFPG will be converted into the right
to receive 0.43 shares of common stock of Newmont,
subject to the terms and conditions of the Merger
Agreement. The Merger Agreement is filed as Exhibit
10.1 hereto and is incorporated herein by reference.
On March 10, 1997, concurrently with the execution
of the Merger Agreement, SFPG terminated the Agreement and
Plan of Merger (the "Homestake Agreement"), dated as of
December 8, 1996, by and among SFPG, Homestake Mining Company
("Homestake") and HMGLD Corp., a wholly owned subsidiary of
Homestake, in accordance with its terms, including by payment
to Homestake of the $65 million termination fee contemplated
thereby.
In connection with the Merger Agreement, on
March 10, 1997, SFPG amended its Rights Agreement (the
"Rights Agreement"), dated as of January 26, 1995,
between SFPG and Harris Trust and Savings Bank in order
to render the Rights inapplicable to the Merger and the
other transactions contemplated by the Merger Agreement.
A copy of Amendment No. 2 to the Rights Agreement is
attached hereto as Exhibit 4.1
On March 10, 1997, SFPG issued a press release
announcing the execution of the Merger Agreement and the
termination of the Homestake Agreement. A copy of the
press release is attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
4.1 Amendment No. 2, dated as of March 10, 1997, to
Rights Agreement, dated as of January 26, 1995,
between SFPG Pacific Gold Corporation and
Harris Trust and Savings Bank.
10.1 Agreement and Plan of Merger, dated as of March
10, 1997 by and among Santa Fe Pacific Gold
Corporation, Newmont Mining Corporation and
Midtown Two Corp.
99.1 Press Release, dated March 10, 1997, of Santa
Fe Pacific Gold Corporation.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned
thereunto duly authorized.
SANTA FE PACIFIC GOLD
CORPORATION
Date: March 10, 1997 By: /s/ WAYNE JARKE
Name: Wayne Jarke
Title: Secretary
EXHIBIT INDEX
-------------
Number Description Page
------ ----------- ----
4.1 Amendment No. 2, dated as of March 10,
1997, to Rights Agreement, dated as of
January 26, 1995, between Santa Fe
Pacific Gold Corporation and Harris Trust
and Savings Bank. 5
10.1 Agreement and Plan of Merger, dated as of
March 10, 1997, by and among Santa Fe
Pacific Gold Corporation, Newmont
Mining Corporation and Midtown Two Corp. 9
99.1 Press Release, dated March 10, 1997, of
Santa Fe Pacific Gold Corporation. 81
AMENDMENT TO RIGHTS AGREEMENT
Amendment No. 1 (this "Amendment"), dated as of
December 8, 1996, to the Rights Agreement (the "Rights
Agreement"), dated as of January 26, 1995, between Santa
Fe Pacific Gold Corporation, a Delaware corporation (the
"Company"), and Harris Trust and Savings Bank, an
Illinois banking corporation (the "Rights Agent").
WHEREAS, the Company, Homestake Mining Company,
a Delaware corporation ("Parent"), and HMGLD Corp., a
Delaware corporation and a wholly owned subsidiary of
Parent ("Sub"), have proposed to enter into an Agreement
and Plan of Merger (the "Merger Agreement") pursuant to
which, among other things, Sub will merge into the
Company (the "Merger") and each outstanding share of
common stock of the Company will be converted into the
right to receive 1.115 shares of common stock of Parent,
subject ot the terms and conditions of the Merger
Agreement;
WHEREAS, the Company and the Rights Agent
desire to amend the Rights Agreement to render the Rights
inapplicable to the Merger and the other transactions
contemplated by the Merger Agreement;
WHEREAS, Section 27 of the Rights Agreement
permits the Company from time to time to supplement and
amend the Rights Agreement;
NOW, THEREFORE, in consideration of the
foregoing and the agreements, provisions and covenants
herein contained, the parties agree as follows:
1. Section 1 of the Rights Agreement is hereby
amended by adding the following new paragraph at the end
of Section 1:
"Notwithstanding anything in this Agreement
that might otherwise be deemed to the contrary,
neither Homestake Mining Company ("Parent") nor any
of its Affiliates or Associates shall be deemed an
Acquiring Person and none of a Distribution Date,
Shares Acquisition Date or Triggering Event shall be
deemed to occur, in each such case, by reason of the
approval, execution or delivery of the Agreement and
Plan of Merger, dated as of December 8, 1996,
including any amendment or supplement thereto (the
"Merger Agreement") among Parent, HMGLD Corp. and
the Company, the announcement or consummation of the
Merger (as defined in the Merger Agreement) or the
consummation of the other transactions contemplated
by the Merger Agreement."
2. Clause (i) of Section 7(a) of the Rights
Agreement is hereby amended to read in its entirety as
follows:
"(i) the earlier of the close of business on
February 13, 2005 and immediately prior to the
Effective Time of the Merger (as defined in the
Merger Agreement) (the "Final Expiration Date") or".
3. The Rights Agreement shall not otherwise be
supplemented or amended by virtue of this Amendment, but
shall remain in full force and effect. This Amendment
may be executed in one or more counterparts, all of which
shall be considered one and the same amendment and each
of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed and attested, all as
of the day and year first above written.
Attest: SANTA FE PACIFIC GOLD
CORPORATION
By /s/ Wayne Jarke By /s/ Patrick M. James
------------------ -----------------------
Name: Wayne Jarke Name: Patrick M. James
Title: Secretary Title: Chairman, President
and Chief Executive
Officer
Attest: HARRIS TRUST AND SAVINGS
BANK
By /s/ James S. Anderson By /s/ Susan M. Shadel
------------------------ ----------------------
Name: James S. Anderson Name: Susan M. Shadel
Title: Vice President Title: Assistant Vice
President
AGREEMENT AND PLAN OF MERGER
Dated as of March 10, 1997,
Among
NEWMONT MINING CORPORATION
MIDTOWN TWO CORP.
and
SANTA FE PACIFIC GOLD CORPORATION
TABLE OF CONTENTS
Page
----
Parties and Recitals.............................................. 1
ARTICLE I
The Merger
SECTION 1.01. The Merger...................................... 2
SECTION 1.02. Closing......................................... 2
SECTION 1.03. Effective Time of the Merger.................... 2
SECTION 1.04. Effects of the Merger........................... 3
SECTION 1.05. Certificate of Incorporation and
By-laws......................................... 3
SECTION 1.06. Directors....................................... 3
SECTION 1.07. Officers........................................ 3
ARTICLE II
Effect of the Merger on the Capital Stock
of the Constituent Corporations;
Exchange of Certificates
SECTION 2.01. Effect on Capital Stock......................... 3
SECTION 2.02. Exchange of Certificates........................ 4
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties
of the Company.................................. 8
SECTION 3.02. Representations and Warranties
of Parent and Sub............................... 22
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business............................. 35
SECTION 4.02. No Solicitation by the Company.................. 41
SECTION 4.03. No Solicitation by Parent....................... 43
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of Form S-4 and
the Proxy Statement; Company's
Stockholders' Meeting and Parent's
Stockholders' Meeting........................... 45
SECTION 5.02. Letter of the Company's Accountants............. 47
SECTION 5.03. Letter of Parent's Accountants.................. 47
SECTION 5.04. Access to Information;
Confidentiality................................. 48
SECTION 5.05. Reasonable Efforts; Notification................ 48
SECTION 5.06. Rights Agreements; Consequences
if Rights Triggered............................. 49
SECTION 5.07. Company Employee Stock Options.................. 51
SECTION 5.08. Benefit Plans................................... 52
SECTION 5.09. Indemnification................................. 53
SECTION 5.10. Fees and Expenses............................... 54
SECTION 5.11. Public Announcements............................ 54
SECTION 5.12. Tax and Accounting Treatment.................... 55
SECTION 5.13. Affiliates...................................... 55
SECTION 5.14. Stock Exchange Listing.......................... 55
SECTION 5.15. Parent Board of Directors....................... 55
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's
Obligation To Effect The Merger................. 56
SECTION 6.02. Conditions to Obligations of
Parent and Sub.................................. 57
SECTION 6.03. Conditions to Obligation of
the Company..................................... 58
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination..................................... 59
SECTION 7.02. Effect of Termination........................... 62
SECTION 7.03. Amendment....................................... 64
SECTION 7.04. Extension; Waiver............................... 64
SECTION 7.05. Procedure for Termination,
Amendment, Extension or Waiver.................. 65
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations
and Warranties.................................. 65
SECTION 8.02. Notices......................................... 65
SECTION 8.03. Definitions..................................... 67
SECTION 8.04. Interpretation.................................. 67
SECTION 8.05. Severability.................................... 67
SECTION 8.06. Counterparts.................................... 67
SECTION 8.07. Entire Agreement; No Third-Party
Beneficiaries................................... 68
SECTION 8.08. Governing Law................................... 68
SECTION 8.09. Assignment...................................... 68
SECTION 8.10. Enforcement..................................... 68
Exhibit A -- Form of Company Affiliate Letter
Exhibit B -- Form of Parent Affiliate Letter
Location of Defined Terms in Agreement
--------------------------------------
Term Location in Agreement
- ---- ---------------------
"affiliate" Section 8.03
"Amendment to Parent's Restated
Certificate of Incorporation" Section 3.02(d)
"Certificate of Merger Section 1.03
"Certificates" Section 2.02(b)
"Closing Date" Section 1.02
"Common Shares Trust" Section 2.02(e)
"Company Benefit Plans" Section 3.01(i)
"Company Capital Stock" Section 3.01(c)
"Company Common Stock" Recitals
"Company Disclosure Letter" Section 3.01(b)
"Company Employee Stock
Options" Section 3.01(c)
"Company Employee Stock
Plans Section 3.01(c)
"Company Material Adverse
Effect" Section 3.01(a)
"Company Property" Section 3.01(u)
"Company Rights" Section 3.01(c)
"Company Rights Agreement" Section 3.01(c)
"Company SEC Documents" Section 3.01(e)
"Company Series A Preferred
Stock" Section 3.01(c)
"Company Significant
Subsidiary" Section 3.01(a)
"Company Stock Plans" Section 5.08(a)
"Company Stockholder
Approval" Section 3.01(k)
"Company Subsidiary" Section 3.01(a)
"Company Takeover Proposal" Section 4.02(a)
"Company's Stockholders'
Meeting" Section 5.01(b)
"Confidentiality Agreement" Section 5.04
"Conversion Number" Recitals
"Contract" Section 3.01(d)
"DGCL" Section 1.01
"D&O Insurance" Section 5.09
"Effective Time of the
Merger" Section 1.03
"Environmental Law" Section 3.01(r)
"ERISA" Section 3.01(j)
"Excess Shares" Section 2.2(e)
"Exchange Act" Section 3.01(d)
"Exchange Agent" Section 2.02(a)
"Filed Company SEC
Documents" Section 3.01(g)
"Filed Parent SEC
Documents" Section 3.02(g)
"Form S-4" Section 3.01(f)
"Governmental Entity" Section 3.01(d)
"Hazardous Substances" Section 3.01(r)
"LSARs" Section 4.01(a)
"Liens" Section 3.01(b)
"Material Breach" Section 7.02(e)
"Maximum Period" Section 5.09
"Newmont Gold" Section 3.02(e)
"NYSE" Section 2.02(e)
"Options" Section 3.01(c)
"Parent Benefit Plans" Section 3.02(i)
"Parent Capital Stock"" Section 3.02(c)
"Parent Common Stock" Recitals
"Parent Convertible Notes" Section 3.02(c)
"Parent Disclosure Letter" Section 3.02(b)
"Parent Employee Stock
Plans" Section 3.02(c)
"Parent Employee Stock
Options" Section 3.02(c)
"Parent Equal Value Rights" Section 3.02(c)
"Parent Equal Value Rights Agreement" Section 3.02(c)
"Parent LSARs" Section 5.01(a)
"Parent Material Adverse
Effect" Section 3.02(a)
"Parent Phantom Stock Options" Section 5.07(a)
"Parent Preferred Stock" Section 3.02(c)
"Parent Property" Section 3.02(v)
"Parent Rights" Section 3.02(c)
"Parent Rights Agreement" Section 3.02(c)
"Parent SARs" Section 5.01(a)
"Parent SEC Documents" Section 3.02(e)
"Parent Series A Preferred
Stock" Section 3.02(c)
"Parent Significant
Subsidiary Section 3.02(a)
"Parent Stockholder
Approval" Section 3.02(k)
"Parent Subsidiary" Section 3.02(a)
"Parent Takeover Proposal" Section 4.03(a)
"Parent's Stockholders'
Meeting" Section 5.01(c)
"Permits" Section 3.01(d)
"person" Section 8.03
"Phantom Stock Options" Section 5.07(a)
"Primary Company Executives" Section 3.01(p)
"Primary Parent Executives" Section 3.02(p)
"Proxy Statement" Section 3.01(d)
"PW" Section 6.01(f)
"qualified stock options" Section 5.07(a)
"SARs" Section 4.01(a)
"SEC" Section 3.01(a)
"Securities Act" Section 3.01(e)
"SMCRA" Section 3.01(r)
"subsidiary" Section 8.03
"Surviving Corporation" Recitals
"Tax Returns" Section 3.01(n)
"Taxes" Section 3.01(n)
AGREEMENT AND PLAN OF MERGER dated as of March 10, 1997, among
NEWMONT MINING CORPORATION, a Delaware corporation ("Parent"), MIDTOWN TWO
CORP., a Delaware corporation and a wholly owned subsidiary of Parent
("Sub"), and SANTA FE PACIFIC GOLD CORPORATION, a Delaware corporation (the
"Company").
WHEREAS, on December 8, 1996, the Company and Homestake Mining
Company ("Homestake") executed an Agreement and Plan of Merger (the
"Homestake Merger Agreement");
WHEREAS, each of Parent and the Company have been advised by the
Office of the Chief Accountant of the Securities and Exchange Commission to
the effect that the payment of the termination fee contemplated by the
Homestake Merger Agreement will not prevent the merger contemplated hereby
from being accounted for as a pooling of interests;
WHEREAS, simultaneously with the execution hereof, (i) the
Company has made the payment to Homestake contemplated by Section 7.02(a)
of the Homestake Merger Agreement and (ii) the Company terminated the
Homestake Merger Agreement pursuant to Section 7.01(d) thereof;
WHEREAS, Parent has agreed not to proceed with the exchange offer
contemplated by its Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on January 7, 1997;
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the merger of Sub into the Company (the "Merger"),
upon the terms and subject to the conditions set forth in this Agreement,
whereby each issued and outstanding share of common stock, par value $0.01
per share, of the Company (the "Company Common Stock"), not owned directly
or indirectly by Parent or the Company, will be converted into the right to
receive 0.43 (as adjusted pursuant to Sections 2.01(d) and 5.06, the
"Conversion Number") of a fully paid and nonassessable share of common
stock, par value $1.60 per share, of Parent (the "Parent Common Stock");
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger;
WHEREAS for Federal income tax purposes it is intended that the
Merger qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS for accounting purposes, it is intended that the Merger
be accounted for as a pooling of interests under United States generally
accepted accounting principles ("GAAP").
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the
parties agree as follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time of the Merger (as defined in Section 1.03).
Following the Merger, the separate corporate existence of Sub shall cease
and the Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights, properties,
liabilities and obligations of Sub in accordance with the DGCL. At the
election of Parent, any direct or indirect wholly owned subsidiary of
Parent may be substituted for Sub as a constituent corporation in the
Merger; provided, however, that such substitution has no impact on the
satisfaction of the conditions set forth in Sections 6.02(d) and 6.03(d).
In such event, the parties agree to execute an appropriate amendment to
this Agreement in order to reflect such substitution.
SECTION 1.02. Closing. Upon the terms and subject to the
conditions of this Agreement, the closing of the Merger (the "Closing")
shall take place at 10:00 a.m. on a date to be specified by the parties
(the "Closing Date"), which shall be no later than the second business day
after satisfaction of the conditions set forth in Section 6.01, at the
offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York,
New York, unless another time, date or place is agreed to in writing by the
parties hereto.
SECTION 1.03. Effective Time of the Merger. Upon the Closing, the
parties shall file with the Secretary of State of the State of Delaware a
certificate of merger or other appropriate documents (in any such case, the
"Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL and shall make all other filings, recordings or
publications required under the DGCL in connection with the Merger. The
Merger shall become effective at such time as the Certificate of Merger is
duly filed with the Delaware Secretary of State, or at such other time as
the parties may agree and specify in the Certificate of Merger (the time
the Merger becomes effective being the "Effective Time of the Merger").
SECTION 1.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws. (a) The
Amended and Restated Certificate of Incorporation of the Company, as in
effect immediately prior to the Effective Time of the Merger, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The By-laws of the Company as in effect immediately prior to
the Effective Time of the Merger shall be the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
SECTION 1.06. Directors. The individuals who are the directors of
Sub immediately prior to the Effective Time of the Merger shall be the
directors of the Surviving Corporation until thereafter they cease to be
directors in accordance with the DGCL and the Certificate of Incorporation
and By-laws of the Surviving Corporation.
SECTION 1.07. Officers. The individuals who are the officers of
the Company immediately prior to the Effective Time of the Merger shall be
the officers of the Surviving Corporation until thereafter they cease to be
officers in accordance with the DGCL and the Certificate of Incorporation
and By-laws of the Surviving Corporation.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. As of the Effective Time
of the Merger, by virtue of the Merger and without any action on the part
of the holder of any shares of Company Common Stock or any shares of
capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of Common Stock, par value $0.01 per share, of the
Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each
share of Company Common Stock that is owned by the Company or by any wholly
owned subsidiary of the Company and each share of Company Common Stock that
is owned by Parent, Sub or any other wholly owned subsidiary of Parent
shall automatically be canceled and retired and shall cease to exist, and
no Parent Common Stock or other consideration shall be delivered in
exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section
2.02(e), each issued and outstanding share of Company Common Stock (other
than shares to be canceled in accordance with Section 2.01(b)) shall be
converted into the right to receive the Conversion Number of fully paid and
nonassessable shares of Parent Common Stock. As of the Effective Time of
the Merger, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing any such shares of
Company Common Stock shall cease to have any rights with respect thereto,
except the right to receive upon the surrender of such certificates,
certificates representing the shares of Parent Common Stock, any cash in
lieu of fractional shares of Parent Common Stock and any dividends to the
extent provided in Section 2.02(c) to be issued or paid in consideration
therefor upon surrender of such certificate in accordance with Section
2.02, without interest.
(d) Adjustment of Conversion Number. In addition to any
adjustment in the Conversion Number pursuant to Section 5.06(a), in the
event of any split, combination or reclassification of any Parent Capital
Stock or any issuance or the authorization of any issuance of any other
securities in exchange or in substitution for shares of Parent Capital
Stock at any time during the period from the date of this Agreement to the
Effective Time of the Merger, the Company and Parent shall make such
adjustment to the Conversion Number as the Company and Parent shall
mutually agree so as to preserve the economic benefits that the Company and
Parent each reasonably expected on the date of this Agreement to receive as
a result of the consummation of the Merger and the other transactions
contemplated by this Agreement.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent.
Immediately following the Effective Time of the Merger, Parent shall
deposit with Chase Mellon Shareholder Services LLC or such other bank or
trust company as may be designated by Parent and the Company (the "Exchange
Agent"), for the benefit of the holders of shares of Company Common Stock,
for exchange in accordance with this Article II, through the Exchange
Agent, certificates representing the shares of Parent Common Stock (such
shares of Parent Common Stock, together with any dividends or distributions
with respect thereto with a record date after the Effective Time of the
Merger, being hereinafter referred to as the "Exchange Fund") issuable
pursuant to Section 2.01 in exchange for outstanding shares of Company
Common Stock.
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time of the Merger, the Exchange Agent shall mail to each
holder of record of a certificate or certificates (the "Certificates")
which immediately prior to the Effective Time of the Merger represented
outstanding shares of Company Common Stock, other than shares to be
canceled or retired in accordance with Section 2.01(b), (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 shall be in such form and have such
other provisions as Parent may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing shares of Parent Common Stock. Upon surrender of
a Certificate for cancellation to the Exchange Agent or to such other agent
or agents as may be appointed by Parent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such Certificate shall be
entitled to receive in exchange therefor a certificate representing that
number of whole shares of Parent Common Stock which such holder has the
right to receive pursuant to the provisions of this Article II, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock which is not registered in
the transfer records of the Company, a certificate representing the proper
number of shares of Parent Common Stock may be issued to a person other
than the person in whose name the Certificate so surrendered is registered,
if such Certificate shall be properly endorsed or otherwise be in proper
form for transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the issuance of shares of
Parent Common Stock to a person other than the registered holder of such
Certificate or establish to the satisfaction of Parent that such tax has
been paid or is not applicable. Until surrendered as contemplated by this
Section 2.02, each Certificate shall be deemed at any time after the
Effective Time of the Merger to represent only the right to receive upon
such surrender the certificate representing the appropriate number of whole
shares of Parent Common Stock, cash in lieu of any fractional shares of
Parent Common Stock and any dividends to the extent provided in Section
2.02(c) as contemplated by this Section 2.02. No interest will be paid or
will accrue on any cash payable in lieu of any fractional shares of Parent
Common Stock.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Parent Common Stock with a
record date after the Effective Time of the Merger shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of
Parent Common Stock represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section
2.02(e) until the surrender of such Certificate in accordance with this
Article II. Subject to the effect of applicable laws, following surrender
of any such Certificate, there shall be paid to the holder of the
certificate representing whole shares of Parent Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of any cash payable in lieu of a fractional share of Parent Common
Stock to which such holder is entitled pursuant to Section 2.02(e) and the
amount of dividends or other distributions with a record date after the
Effective Time of the Merger 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 of the Merger but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such whole shares of
Parent Common Stock.
(d) No Further Ownership Rights in Company Common Stock. All
shares of Parent Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Article II (including any
cash paid pursuant to Section 2.02(c) or 2.02(e)) shall be deemed to have
been issued (and paid) in full satisfaction of all rights pertaining to the
shares of Company Common Stock theretofore represented by such
Certificates, subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distributions with a record date
prior to the Effective Time of the Merger which may have been declared or
made by the Company on such shares of Company Common Stock in accordance
with the terms of this Agreement or prior to the date of this Agreement and
which remain unpaid at the Effective Time of the Merger, and there shall be
no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time of the Merger. If,
after the Effective Time of the Merger, Certificates are presented to the
Surviving Corporation or the Exchange Agent for any reason, they shall be
canceled and exchanged as provided in this Article II, except as otherwise
provided by law.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon
the surrender for exchange of Certificates, and such fractional share
interests shall not entitle the owner thereof to vote or to any rights of a
stockholder of Parent.
(ii) As promptly as practicable following the Effective Time
of the Merger, the Exchange Agent shall determine the excess of (x) the
number of shares of Parent Common Stock delivered to the Exchange Agent by
Parent pursuant to Section 2.02(a) over (y) the aggregate number of whole
shares of Parent Common Stock to be distributed to holders of the
Certificates pursuant to Section 2.02(b) (such excess being herein called
the "Excess Shares"). As soon as practicable after the Effective Time of
the Merger, the Exchange Agent, as agent for the holders of the
Certificates, shall sell the Excess Shares at then prevailing prices on the
New York Stock Exchange (the "NYSE") all in the manner provided in
paragraph (iii) of this Section 2.02(e).
(iii) The sale of the Excess Shares by the Exchange Agent
shall be executed on the NYSE through one or more member firms of the NYSE
and shall be executed in round lots to the extent practicable. The proceeds
from such sale or sales available for distribution to the holders of
Certificates shall be reduced by the compensation payable to the Exchange
Agent and the expenses incurred by the Exchange Agent, in each case, in
connection with such sale or sales of the Excess Shares, including all
related commissions, transfer taxes and other out-of-pocket transaction
costs. Until the net proceeds of such sale or sales have been distributed
to the holders of the Certificates, the Exchange Agent shall hold such
proceeds in trust for the holders of the Certificates (the "Common Shares
Trust"). The Exchange Agent shall determine the portion of the Common
Shares Trust to which each holder of a Certificate shall be entitled, if
any, by multiplying the amount of the aggregate net proceeds comprising the
Common Shares Trust by a fraction, the numerator of which is the amount of
the fractional share interest to which such holder of a Certificate is
entitled and the denominator of which is the aggregate amount of fractional
share interests to which all holders of the Certificates are entitled.
(iv) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Certificates in lieu of
any fractional share interests, the Exchange Agent shall make available
such amounts, without interest, to such holders of Certificates who have
surrendered their Certificates in accordance with this Article II.
(f) Termination of Exchange Fund and Common Shares Trust. Any
portion of the Exchange Fund and Common Shares Trust which remains
undistributed to the holders of Certificates for six months after the
Effective Time of the Merger shall be delivered to Parent, upon demand, and
any holders of Certificates who have not theretofore complied with this
Article II shall thereafter look only to Parent for payment of their claim
for Parent Common Stock, any cash in lieu of fractional shares of Parent
Common Stock and any dividends or distributions with respect to Parent
Common Stock.
(g) No Liability. None of Parent, Sub, the Company or the
Exchange Agent shall be liable to any person in respect of any shares of
Parent Common Stock (or dividends or distributions with respect thereto) or
cash from the Exchange Fund or the Common Shares Trust delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered prior to
seven years after the Effective Time of the Merger (or immediately prior to
such earlier date on which any shares of Parent Common Stock, any cash in
lieu of fractional shares of Parent Common Stock or any dividends or
distributions with respect to Parent Common Stock in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.01(d)), any such shares, cash,
dividends or distributions in respect of such Certificate 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.
(h) Investment of Exchange Fund and Common Shares Trust. The
Exchange Agent shall invest any cash included in the Exchange Fund and
Common Shares Trust, as directed by Parent, on a daily basis. Any interest
and other income resulting from such investments shall be paid to Parent.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company. The
Company represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. Each of the
Company and each Company Significant Subsidiary (as hereinafter defined) is
a corporation, partnership or other legal entity duly organized, validly
existing and in good standing under the laws of the jurisdiction in which
it is organized and has the requisite power and authority to carry on its
business as now being conducted. Each of the Company and each of its
subsidiaries (each a "Company Subsidiary") is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed (individually or in the
aggregate) would not (i) have a material adverse effect on the business,
properties, financial condition or results of operations of the Company and
the Company Subsidiaries, taken as a whole (other than effects relating to
the gold mining industry in general), or (ii) prevent the Company from
performing its obligations under this Agreement (a "Company Material
Adverse Effect"). The Company has made available to Parent complete and
correct copies of its Amended and Restated Certificate of Incorporation and
By-laws and the certificates of incorporation and by-laws or comparable
organization documents of the Company Significant Subsidiaries, in each
case as amended to the date of this Agreement. For purposes of this
Agreement, a "Company Significant Subsidiary" means any Company Subsidiary
that constitutes a significant subsidiary of the Company within the meaning
of Rule 1-02 of Regulation S-X of the Securities and Exchange Commission
(the "SEC"). The Company is not in violation of any provision of its
Amended and Restated Certificate of Incorporation or By-laws, and no
Company Subsidiary is in violation of any provisions of its certificate of
incorporation, by-laws or comparable organizational documents, except to
the extent that such violations would not, individually or in the
aggregate, have a Company Material Adverse Effect.
(b) Company Subsidiaries. Section 3.01(b) of the letter from the
Company, dated the date of this Agreement, addressed to Parent (the
"Company Disclosure Letter") lists each Company Significant Subsidiary and
the ownership or interest therein of the Company. All the outstanding
shares of capital stock of each Company Significant Subsidiary have been
validly issued and are fully paid and nonassessable and, except as set
forth in Section 3.01(b) of the Company Disclosure Letter, are owned by the
Company, by another subsidiary of the Company or by the Company and another
Company Subsidiary, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"). Except for the capital stock of the Company
Subsidiaries and except for the ownership interests set forth in Section
3.01(b) of the Company Disclosure Letter, the Company does not own,
directly or indirectly, any capital stock or other ownership interest, with
a fair market value as of the date of this Agreement greater than
$25,000,000, in any person.
(c) Capital Structure. The authorized capital stock of the
Company (the "Company Capital Stock") consists of 500,000,000 shares of
Company Common Stock and 50,000,000 shares of preferred stock, par value
$0.01 per share. Pursuant to a Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock, on January 26,
1995, the Board of Directors of the Company created a series of 1,500,000
shares of preferred stock designated as the "Series A Junior Participating
Preferred Stock", par value $0.01 per share (the "Company Series A
Preferred Stock"), which shares are issuable in connection with the rights
to purchase shares of Company Series A Preferred Stock (the "Company
Rights") that were issued pursuant to the Rights Agreement dated February
13, 1995 (as amended from time to time, the "Company Rights Agreement"),
between the Company and Harris Trust and Savings Bank, as Rights Agent. At
the close of business on March 5, 1997: (i) 131,549,384 shares of Company
Common Stock were outstanding, all of which were validly issued, fully paid
and non-assessable, and no shares of Company Series A Preferred Stock, or
of any other series of preferred stock of the Company, were outstanding;
(ii) no shares of Company Common Stock were held by the Company in its
treasury; (iii) 1,328,772 shares of Company Common Stock were issuable upon
the exercise of outstanding employee or outside director stock options (the
"Company Employee Stock Options") that were granted pursuant to the
Company's employee stock plans set forth in Section 3.01(c) of the Company
Disclosure Letter (the "Company Employee Stock Plans"); and (iv) 1,500,000
shares of Company Series A Preferred Stock were reserved for issuance in
connection with the Company Rights. Except as set forth above, at the close
of business on March 5, 1997, no shares of capital stock or other voting
securities of the Company were issued, reserved for issuance or
outstanding. There are not any bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which stock- holders of the Company must vote. Except as set forth above
and except as set forth in Section 3.01(c) of the Company Disclosure
Letter, as of the date of this Agreement, there are not any options,
warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind (collectively, "Options") to which the Company or
any Company Subsidiary is a party or by which any of them is bound relating
to the issued or unissued capital stock of the Company or any Company
Subsidiary, or obligating the Company or any Company Subsidiary to issue,
transfer, grant or sell any shares of capital stock or other equity
interests in, or securities convertible or exchangeable for any capital
stock or other equity interests in, the Company or any Company Subsidiary
or obligating the Company or any Company Subsidiary to issue, grant, extend
or enter into any such Options. All shares of Company Common Stock that are
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instrument pursuant to which they are issuable, will be
duly authorized, validly issued, fully paid and nonassessable. Except as
set forth in Section 3.01(c) of the Company Disclosure Letter, as of the
date of this Agreement, there are not any outstanding contractual
obligations of the Company or any Company Subsidiary to repurchase, redeem
or otherwise acquire any shares of capital stock of the Company or any
Company Subsidiary, or make any material investment (in the form of a loan,
capital contribution or otherwise) in, any Company Subsidiary or any other
person.
(d) Authority; Noncontravention. The Company has all requisite
corporate power and authority to enter into this Agreement and, subject to
the Company Stockholder Approval (as defined in Section 3.01(k)), to
consummate the transactions contemplated by this Agreement. The Board of
Directors of the Company has unanimously approved this Agreement and the
transactions contemplated by this Agreement, and has resolved to recommend
to the Company's stockholders that they give the Company Stockholder
Approval. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on
the part of the Company, subject to the Company Stockholder Approval. This
Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. Except as set forth in
Section 3.01(d) of the Company Disclosure Letter, the execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of consent, termination, purchase,
cancellation or acceleration of any obligation or to loss of any property,
rights or benefits under, or result in the imposition of any additional
obligation under, or result in the creation of any Lien upon any of the
properties or assets of the Company or any Company Subsidiary under, (i)
the Amended and Restated Certificate of Incorporation or By-laws of the
Company or the comparable organizational documents of any Company
Subsidiary, (ii) any contract, instrument, permit, concession, franchise,
license, loan or credit agreement, note, bond, mortgage, indenture, lease
or other property agreement, partnership or joint venture agreement or
other legally binding agreement, whether oral or written (a "Contract"),
applicable to the Company or any Company Subsidiary or their respective
properties or assets or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or
any Company Subsidiary or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights or Liens that individually or in the aggregate
would not have a Company Material Adverse Effect. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Federal, state or local government or any court, administrative agency or
commission or other governmental authority or agency, domestic or foreign,
including the European Community (a "Governmental Entity"), is required by
or with respect to the Company or any Company Subsidiary in connection with
the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated by this
Agreement, except for (i) the filing with the SEC of (A) a joint proxy
statement relating to the meetings of the Company's stockholders and the
Parent's stockholders to be held in connection with the Merger and the
transactions contemplated by this Agreement (as amended or supplemented
from time to time, the "Proxy Statement"), and (B) such reports under
Section 12 or 13(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be required in connection with this Agreement and
the transactions contemplated by this Agreement, (ii) the filing of the
Certificate of Merger with the Delaware Secretary of State and appropriate
documents with the relevant authorities of other states in which the
Company is qualified to do business, (iii) those that may be required
solely by reason of Parent's or Sub's (as opposed to any other third
party's) participation in the Merger and the other transactions
contemplated by this Agreement and (iv) such other consents, approvals,
orders, authorizations, registrations, declarations and filings, including
under applicable Environmental Laws (as defined in Section 3.01(r)), (x) as
may be required under the laws of any foreign country in which the Company
or any Company Subsidiary conducts any business or owns any property or
assets, (y) as are set forth in Section 3.01(d) of the Company Disclosure
Letter or (z) that, if not obtained or made, would not, individually or in
the aggregate, have a Company Material Adverse Effect. Except as set forth
in Section 3.01(d) of the Company Disclosure Letter, the Company and the
Company Subsidiaries possess all certificates, franchises, licenses,
permits, authorizations and approvals issued to or granted by Governmental
Entities (collectively, "Permits"), including pursuant to any Environmental
Law, necessary to conduct their business as such business is currently
conducted or is expected to be conducted, except for such Permits, the lack
of possession of which has not, and is not reasonably expected to have, a
Company Material Adverse Effect. Except as set forth in Section 3.01(d) of
the Company Disclosure Letter, (i) all such Permits are validly held by the
Company or the Company Subsidiaries, and the Company and the Company
Subsidiaries have complied in all respects with all terms and conditions
thereof, except for such instances where the failure to validly hold such
Permits or the failure to have complied with such Permits has not, and is
not reasonably expected to have, a Company Material Adverse Effect, (ii)
none of such Permits will be subject to suspension, modification,
revocation or nonrenewal as a result of the execution and delivery of this
Agreement or the consummation of the Merger, other than such Permits the
suspension, modification or nonrenewal of which, individually or in the
aggregate, have not had and could not reasonably be expected to have a
Company Material Adverse Effect and (iii) since December 31, 1995, neither
the Company nor any Company Subsidiary has received any written warning,
notice, notice of violation or probable violation, notice of revocation, or
other written communication from or on behalf of any Governmental Entity,
alleging (A) any violation of any such Permit or (B) that the Company or
any Company Subsidiary requires any Permit required for its business, as
such business is currently conducted, that is not currently held by it.
(e) SEC Documents; Undisclosed Liabilities. The Company has filed
all required reports, schedules, forms, statements and other documents with
the SEC since January 1, 1995 (the "Company SEC Documents"). As of its
date, each Company SEC Document complied in all material respects with the
requirements of the Securities Act of 1933 (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Company SEC Documents. None of
the Company SEC Documents contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except to the
extent that such statements have been modified or superseded by a later
filed Company SEC Document. The consolidated financial statements of the
Company included in the Company SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared
in accordance with generally accepted accounting principles (except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
financial position of the Company as of the dates thereof and the
consolidated results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments). Except as set forth in the Filed Company SEC Documents
(as defined in Section 3.01(g)), neither the Company nor any Company
Subsidiary has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by generally accepted
accounting principles to be set forth on a consolidated balance sheet of
the Company and the consolidated Company Subsidiaries or in the notes
thereto and which, individually or in the aggregate, could reasonably be
expected to have a Company Material Adverse Effect, other than any such
liabilities or obligations that were required to be set forth in the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996. None of the Company Subsidiaries is subject to the informational
reporting requirements of Section 13 of the Exchange Act.
(f) Information Supplied. None of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in
(i) the registration statement on Form S-4 filed with the SEC by Parent in
connection with the issuance of Parent Common Stock in the Merger (the
"Form S-4") will, at the time any amendment or supplement to the Form S-4
is filed with the SEC, or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, or (ii) the Proxy Statement will, at
the date the Proxy Statement is first mailed to the Company's stockholders
or Parent's stockholders or at the time of the Company's Stockholders'
Meeting (as defined in Section 5.01(b)) or the Parent's Stockholders'
Meeting (as defined in Section 5.01(c)), contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy
Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder, except that no representation or warranty is made by the
Company with respect to statements made or incorporated by reference
therein based on information supplied by Parent or Sub for inclusion or
incorporation by reference in the Proxy Statement.
(g) Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Documents filed and publicly available prior to the date of
this Agreement (the "Filed Company SEC Documents"), from December 31, 1995,
to the date of this Agreement, the Company has conducted its business only
in the ordinary course, and:
(i) during the period from September 30, 1996, to the date of
this Agreement, there has not been any event, change, effect or
development which, individually or in the aggregate, has had or is, so
far as reasonably can be foreseen, likely to have, a Company Material
Adverse Effect;
(ii) during the period from December 31, 1995, to the date of
this Agreement, there has not been except for regular annual dividends
not in excess of $0.05 per share of Company Common Stock, with
customary record and payment dates, any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock
or property) with respect to any shares of Company Capital Stock;
(iii) during the period from December 31, 1995, to the date
of this Agreement, there has not been any split, combination or
reclassification of any Company Capital Stock or any issuance or the
authorization of any issuance of any other securities in exchange or
in substitution for shares of Company Capital Stock;
(iv) during the period from December 31, 1995, to the date of
this Agreement, there has not been except as disclosed in Section
3.01(g) of the Company Disclosure Letter, (A) any granting by the
Company or any Company Subsidiary to any executive officer of the
Company or any Company Subsidiary of any increase in compensation,
except in the ordinary course of business consistent with prior
practice or as was required under employment agreements in effect as
of the date of the most recent audited financial statements included
in the Filed Company SEC Documents, (B) any granting by the Company or
any Company Subsidiary to any such executive officer of any increase
in severance or termination pay, except as was required under any
employment, severance or termination agreements in effect as of the
date of the most recent audited financial statements included in the
Filed Company SEC Documents or (C) any entry by the Company or any
Company Subsidiary into any employment, severance or termination
agreement with any such executive officer; and
(v) during the period from December 31, 1995, to the date of
this Agreement, there has not been any change in accounting methods,
principles or practices by the Company or any Company Significant
Subsidiary materially affecting its assets, liabilities or business,
except insofar as may have been required by a change in generally
accepted accounting principles.
(h) Litigation. Except as disclosed in the Filed Company SEC
Documents or in Section 3.01(h) of the Company Disclosure Letter, there is
no suit, action or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any Company Subsidiary (and the Company
does not have any reasonable basis to expect any such suit, action or
proceeding to be commenced) that, individually or in the aggregate, could
reasonably be expected to have a Company Material Adverse Effect, and there
is not any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against the Company or any Company
Subsidiary having, or which, insofar as reasonably can be foreseen, in the
future would have, any Company Material Adverse Effect. As of the date of
this Agreement, except as disclosed in the Filed Company SEC Documents or
in Section 3.01(h) of the Company Disclosure Letter, there is no suit,
action or proceeding pending, or, to the knowledge of the Company,
threatened, against the Company or any Company Subsidiary (and the Company
does not have any reasonable basis to expect any such suit, action or
proceeding to be commenced) that, individually or in the aggregate, could
reasonably be expected to prevent or delay in any material respect the
consummation of the Merger or the transactions contemplated by this
Agreement.
(i) Absence of Changes in Benefit Plans. Except as disclosed in
the Filed Company SEC Documents or in Section 3.01(i) of the Company
Disclosure Letter, since the date of the most recent audited financial
statements included in the Filed Company SEC Documents and prior to the
date of this Agreement, there has not been any adoption or amendment in any
material respect by the Company or any Company Subsidiary of any collective
bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance, disability,
death benefit, hospitalization, medical or other plan, arrangement or
understanding (whether or not legally binding) providing benefits to any
current or former employee, officer or director of the Company or any
Company Subsidiary (collectively, "Company Benefit Plans").
(j) ERISA Compliance. Except as described in the Filed Company
SEC Documents or in Section 3.01(j) of the Company Disclosure Letter or as
would not have a Company Material Adverse Effect, (i) all employee benefit
plans or programs maintained for the benefit of the current or former
employees or directors of the Company or any Company Subsidiary that are
sponsored, maintained or contributed to by the Company or any Company
Subsidiary, or with respect to which the Company or any Company Subsidiary
has any liability, including any such plan that is an "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974 ("ERISA"), are in compliance with all applicable requirements
of law, including ERISA and the Code, and (ii) neither the Company nor any
Company Subsidiary has any liabilities or obligations with respect to any
such employee benefit plans or programs, whether accrued, contingent or
otherwise, nor to the knowledge of the Company are any such liabilities or
obligations expected to be incurred. Except as set forth in Section 3.01(j)
of the Company Disclosure Letter, the execution of, and performance of the
transactions contemplated by, this Agreement will not (either alone or upon
the occurrence of any additional or subsequent events) constitute an event
under any benefit plan, policy, arrangement or agreement or any trust or
loan that will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with
respect to any employee. The only severance agreements or severance
policies applicable to the Company or the Company Subsidiaries are the
agreements and policies specifically set forth in Section 3.01(j) of the
Company Disclosure Letter.
(k) Voting Requirements. The approval and adoption of this
Agreement by the holders of a majority of the outstanding shares of Company
Common Stock (the "Company Stockholder Approval") is the only vote of the
holders of any class or series of Company Capital Stock necessary to
approve this Agreement and the transactions contemplated by this Agreement.
(l) Brokers; Schedule of Fees and Expenses. Except as set forth
in Section 3.01(l) of the Company Disclosure Letter, no broker, investment
banker, financial advisor or other person is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has made
available to Parent true and complete copies of all agreements that are
referred to in Section 3.01(l) of the Company Disclosure Letter and all
indemnification and other agreements related to the engagement of the
persons so listed.
(m) Opinion of Financial Advisor. The Company has received the
opinion of SBC Warburg Inc., dated the date of this Agreement, to the
effect that, as of such date, the consideration to be received in the
Merger by the Company's stockholders is fair to the Company's stockholders
from a financial point of view, a signed copy of which opinion has been
delivered to Parent.
(n) Taxes. (i) The Company and each Company Subsidiary have
timely filed (or have had timely filed on their behalf) or will file or
cause to be timely filed, all material Tax Returns required by applicable
law to be filed by any of them prior to or as of the Effective Time of the
Merger. All such material Tax Returns are, or will be at the time of
filing, true, complete and correct in all material respects.
(ii) The Company and each Company Subsidiary have paid (or
have had paid on their behalf) or, where payment is not yet due, have
established (or have had established on their behalf and for their sole
benefit and recourse) or will establish or cause to be established on or
before the Effective Time of the Merger an adequate accrual for the payment
of all Taxes due with respect to any period ending prior to or as of the
Effective Time of the Merger, except where the failure to pay or establish
adequate reserves has not had and would not reasonably be expected to have
a Company Material Adverse Effect.
(iii) Except as set forth in Section 3.01(n) of the Company
Disclosure Letter, no deficiencies for any material Taxes have been
proposed, asserted or assessed against the Company or any Company
Subsidiary, and no requests for waivers of the time to assess any such
material Taxes are pending. The Federal Income Tax Returns of the Company
and each Company Subsidiary consolidated in such Tax Returns have been
examined by and settled with the United States Internal Revenue Service for
all years through 1985.
(iv) The Company has no reason to believe that any conditions
exist that could reasonably be expected to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code.
(v) For purposes of this Agreement, the following terms shall
have the following meanings:
(A) "Taxes" shall mean all Federal, state, local and
foreign taxes, and other assessments of a similar nature (whether
imposed directly or through withholding), including any interest,
additions to tax, or penalties applicable thereto.
(B) "Tax Returns" shall mean all Federal, state, local
and foreign tax returns, declarations, statements, reports, schedules,
forms and information returns and any amended tax return relating to
Taxes.
(o) Compliance with Laws. Neither the Company nor any Company
Subsidiary has violated or failed to comply with any statute, law,
ordinance, regulation, rule, judgment, decree or order of any Governmental
Entity applicable to its business or operations, except for violations and
failures to comply that could not, individually or in the aggregate,
reasonably be expected to result in a Company Material Adverse Effect.
(p) No Excess Parachute Payments. Other than payments that may be
made to the persons listed in Section 3.01(p) of the Company Disclosure
Letter (the "Primary Company Executives"), any amount that could be
received (whether in cash or property or the vesting of property) as a
result of any of the transactions contemplated by this Agreement by any
employee, officer or director of the Company or any of its affiliates who
is a "disqualified individual" (as such term is defined in proposed
Treasury Regulation Section 1.280G-1) under any employment, severance or
termination agreement, other compensation arrangement or Company Benefit
Plan currently in effect would not be characterized as an "excess parachute
payment" (as such term is defined in Section 280G(b)(1) of the Code). Set
forth in Section 3.01(p) of the Company Disclosure Letter is (i) the
estimated maximum amount that could be paid to each Primary Company
Executive as a result of the transactions contemplated by this Agreement
under all employment, severance and termination agreements, other
compensation arrangements and Company Benefit Plans currently in effect and
(ii) the "base amount" (as such term is defined in Section 280G(b)(3) of
the Code) for each Primary Company Executive calculated as of the date of
this Agreement.
(q) Accounting Matters. Neither the Company nor, to its best
knowledge, any of its affiliates, has taken or agreed to take any action
that (without giving effect to any action taken or agreed to be taken by
Parent or any of its affiliates) would prevent Parent from accounting for
the business combination to be effected by the Merger as a pooling of
interests.
(r) Environmental Matters. (i) Except as set forth in Section
3.01(r) of the Company Disclosure Letter and except for items that could
not, in all such cases taken individually or in the aggregate, reasonably
be expected to result in a Company Material Adverse Effect, neither the
Company nor any Company Subsidiary has (x) placed, held, located, released,
transported or disposed of any Hazardous Substances (as defined below) on,
under, from or at any of the Company's or any Company Subsidiary's current
or former properties or any other properties or (y) any knowledge or reason
to know of the presence of any Hazardous Substances on, under or at any of
the Company's or any Company Subsidiary's current or former properties or
any other property but arising from the Company's or any Company
Subsidiary's current or former properties. For purposes of this Agreement,
the term "Hazardous Substance" shall mean any materials or substances
(including asbestos, buried contaminants, chemicals, flammable explosives,
radioactive materials, petroleum and petroleum products) defined as, or
included in the definition of, "hazardous substances", "hazardous wastes",
"hazardous materials" or "toxic substances" under any Environmental Law.
For purposes of this Agreement, the term "Environmental Law" shall mean any
federal, state, provincial, regional, territorial, municipal, local or
foreign statute, code, ordinance, rule, regulation, policy, permit,
consent, approval, license, judgment, order, writ, decree, injunction or
other authorization, relating to: (A) emissions, discharges, releases or
threatened releases of Hazardous Substances into the natural or workplace
environment, including, without limitation, ambient air, soil, sediments,
land surface, subsurface, surface water, groundwater, tailings ponds or
settling lagoons; (B) the generation, treatment, storage, disposal, use,
handling, manufacturing, transportation or shipment of Hazardous
Substances; or (C) protection of health or safety or the environment,
handling, treatment or disposal of solid waste, or operation or reclamation
of mines.
(ii) Except for items that individually or in the aggregate
could not reasonably be expected to result in a Company Material Adverse
Effect or as disclosed in Section 3.01(r) of the Company Disclosure Letter,
the Company and the Company Subsidiaries are in compliance with the Surface
Mining Control and Reclamation Act, 30 U.S.C. ss. 1201 et seq. (the
"SMCRA") and any state law comparable to SMCRA under 30 U.S.C. ss. 1253,
and neither the Company nor any Company Subsidiary is subject to any
reclamation obligation or other site restoration obligation under any
Environmental Law.
(iii) Except for items that individually or in the aggregate
could not reasonably be expected to result in a Company Material Adverse
Effect or as set forth in Section 3.01(r) of the Company Disclosure Letter,
no Environmental Law imposes any obligation upon the Company or any Company
Subsidiary arising out of or as a condition to any transaction contemplated
by this Agreement, including any requirement to modify or to transfer any
permit or license, any requirement to file any notice or other submission
with any Governmental Entity, the filing of any notice, acknowledgement or
covenant in any land records, or the modification of or provision of notice
under any agreement, consent order or consent decree.
(s) State Takeover Statutes. The Board of Directors of the
Company has approved the Merger and this Agreement, and such approval is
sufficient to render inapplicable to the Merger, this Agreement and the
transactions contemplated by this Agreement, the provisions of Section 203
of the DGCL. To the best of the Company's knowledge, no other state
takeover statute or similar statute or regulation applies or purports to
apply to the Merger, this Agreement or any of the transactions contemplated
by this Agreement.
(t) Rights Agreement. The Company has taken all necessary action
to (i) render the Company Rights inapplicable to the Merger and the other
transactions contemplated by this Agreement and (ii) ensure that (x)
neither Parent nor any of its affiliates is an Acquiring Person (as defined
in the Company Rights Agreement), (y) none of a Distribution Date, Shares
Acquisition Date or Triggering Event (each as defined in the Company Rights
Agreement) shall occur by reason of the approval, execution or delivery of
this Agreement, the announcement or consummation of the Merger or the
consummation of any of the other transactions contemplated by this
Agreement and (z) the Company Rights shall expire immediately prior to the
Effective Time of the Merger.
(u) Dispositions of Company Property. Except as described in the
Filed Company SEC Documents or in Section 3.01(u) of the Company Disclosure
Letter, since December 31, 1995, neither the Company nor any Company
Subsidiary has sold or disposed of or ceased to hold or own any personal
property, real property, any interest or rights with respect to real
property (including exploration or production rights), any interest in a
joint venture or other assets or properties of the Company or any Company
Subsidiary ("Company Property"), other than sales and dispositions of raw
materials, obsolete equipment, mine output and other inventories, and any
interests or rights with respect to real property having an individual fair
market value of less than $10,000,000 of the Company or any Company
Subsidiary, in each case in the ordinary course of business, consistent
with past practice. Except as set forth in Section 3.01(u) of the Company
Disclosure Letter, no Company Property whose fair market value on the date
of this Agreement is greater than $10,000,000 is subject to any pending
sale or disposition transaction.
(v) Absence of Reduction in Reserves and Mineralized Material.
There has been no material reduction in the aggregate amount of reserves or
in the aggregate amount of mineralized material of the Company and the
Company Subsidiaries, taken as a whole, from the amounts set forth in the
Company's 1995 annual report to shareholders except for (i) such reductions
in reserves that have resulted from production in the ordinary course of
business and (ii) such reductions in mineralized material that have
resulted from reclassifications of mineralized material as reserves.
(w) Development Projects. The Company has no reason to believe
that (i) the estimated production capacity for each of the time periods set
forth in Section 3.01(w) of the Company Disclosure Letter with respect to
the four development projects described in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 will not be reached
during such time periods, or (ii) the estimated costs set forth in Section
3.01(w) of the Company Disclosure Letter with respect to each such
development project will be exceeded.
(x) Compliance with Homestake Merger Agreement. The Company has
complied with its obligations under the Homestake Merger Agreement and
effected the termination of such Agreement in accordance with its terms. As
a result of such Agreement and the termination thereof, no amounts are
payable by the Company to Homestake other than the $65 million previously
paid.
SECTION 3.02. Representations and Warranties of Parent and Sub.
Parent and Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of Parent,
Sub and each Parent Significant Subsidiary (as hereinafter defined) is a
corporation, partnership or other legal entity duly organized, validly
existing and in good standing under the laws of the jurisdiction in which
it is organized and has the requisite power and authority to carry on its
business as now being conducted. Each of Parent, Sub and each of Parent's
subsidiaries (each a "Parent Subsidiary") is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed (individually or in the
aggregate) would not (i) have a material adverse effect on the business,
properties, financial condition or results of operations of Parent and the
Parent Subsidiaries, taken as a whole (other than effects relating to the
gold mining industry in general), or (ii) prevent Parent from performing
its obligations under this Agreement (a "Parent Material Adverse Effect").
Parent has made available to the Company complete and correct copies of its
Restated Certificate of Incorporation and By-laws, the Certificate of
Incorporation and By-Laws of Sub and the certificates of incorporation and
by-laws or comparable organizational documents of the Parent Significant
Subsidiaries, in each case as amended to the date of this Agreement. For
purposes of this Agreement, a "Parent Significant Subsidiary" means any
Parent Subsidiary that constitutes a significant subsidiary of Parent
within the meaning of Rule 1-02 of Regulation S-X of the SEC. Neither
Parent nor Sub is in violation of any provision of its certificate of
incorporation or by-laws, and no Parent Subsidiary is in violation of any
provisions of its certificate of incorporation, by-laws or comparable
organizational documents, except to the extent that such violations would
not, individually or in the aggregate, have a Parent Material Adverse
Effect.
(b) Parent Subsidiaries. Section 3.02(b) of the letter from
Parent, dated the date of this Agreement, addressed to the Company (the
"Parent Disclosure Letter") lists each Parent Significant Subsidiary and
the ownership or interest therein of Parent. All the outstanding shares of
capital stock of each Parent Significant Subsidiary have been validly
issued and are fully paid and nonassessable and, except as set forth in
Section 3.02(b) of the Parent Disclosure Letter, are owned by Parent, by
another subsidiary of Parent or by Parent and another Parent Subsidiary,
free and clear of all Liens. Except for the capital stock of the Parent
Subsidiaries and except for the ownership interests set forth in Section
3.02(b) of the Parent Disclosure Letter, Parent does not own, directly or
indirectly, any capital stock or other ownership interest, with a fair
market value as of the date of this Agreement greater than $25,000,000, in
any person.
(c) Capital Structure. Except as otherwise contemplated by this
Agreement, the authorized capital stock of Parent (the "Parent Capital
Stock") consists of 120,000,000 shares of Parent Common Stock and 5,000,000
shares of preferred stock, par value $5.00 per share ("Parent Preferred
Stock"). Pursuant to a Certificate of Designations, Preferences and Rights
of the First Series of the Preferred Stock, par value $5.00 per share,
filed on September 11, 1990, the Board of Directors of Parent created a
series of 240,000 shares of preferred stock designated as the "Series A
Junior Participating Preferred Stock", par value $5.00 per share (the
"Parent Series A Preferred Stock"). The shares of Parent Series A Preferred
Stock are issuable in connection with the rights to purchase shares of
Parent Series A Preferred Stock (the "Parent Rights") that were issued
pursuant to the Rights Agreement dated August 30, 1990 (as amended from
time to time, the "Parent Rights Agreement"), between Parent and The Chase
Manhattan Bank, as successor corporation. At the close of business on March
4, 1997: (i) 99,522,308 shares of Parent Common Stock were outstanding, all
of which were validly issued, fully paid and nonassessable, and no shares
of Parent Series A Preferred Stock, or of any other series of Parent
Preferred Stock, were outstanding; (ii) 306,785 shares of Parent Common
Stock were held by Parent in its treasury; (iii) 4,672,543 shares of Parent
Common Stock were reserved for issuance upon the exercise of outstanding
employee stock options (the "Parent Employee Stock Options") that were
granted in each case pursuant to the Parent's employee stock plans set
forth in Section 3.02(c) of the Parent Disclosure Letter (the "Parent
Employee Stock Plans"); and (iv) 240,000 shares of Parent Series A
Preferred Stock were reserved for issuance in connection with the Parent
Rights. As of the close of business on March 4, 1997, 99,522,308 equal
value rights of Parent ("Parent Equal Value Rights") issued pursuant to the
Rights Agreement dated as of September 27, 1987 between Parent and The
Chase Manhattan Bank, as successor corporation and as Rights Agent (the
"Parent Equal Value Rights Agreement"), are outstanding and trade together
with the Parent Common Stock. Except as set forth above, at the close of
business on March 4, 1997, no shares of capital stock or other voting
securities of Parent were issued, reserved for issuance or outstanding.
Except as set forth above, there are not any bonds, debentures, notes or
other indebtedness of Parent having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which stockholders of the Company must vote. Except as set forth above and
except as set forth in Section 3.02(c) of the Parent Disclosure Letter, as
of the date of this Agreement, there are not any Options to which Parent or
any Parent Significant Subsidiary is a party or by which any of them is
bound relating to the issued or unissued capital stock of Parent or any
Parent Significant Subsidiary, or obligating Parent or any Parent
Significant Subsidiary to issue, transfer, grant or sell any shares of
capital stock or other equity interests in, or securities convertible or
exchangeable for any capital stock or other equity interests in, Parent or
any Parent Significant Subsidiary or obligating Parent or any Parent
Significant Subsidiary to issue, grant, extend or enter into any such
Options. All shares of Parent Common Stock that are subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instrument pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. All shares of Parent Common
Stock that are subject to issuance pursuant to the Merger, upon issuance
pursuant to this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable. Except as set forth in Section 3.02(c) of the
Parent Disclosure Letter, as of the date of this Agreement, there are not
any outstanding contractual obligations of Parent or any Parent Subsidiary
to repurchase, redeem or otherwise acquire any shares of capital stock of
Parent or any Parent Subsidiary, or make any material investment (in the
form of a loan, capital contribution or otherwise) in, any Parent
Subsidiary or any other person. As of the date of this Agreement, the
authorized capital stock of Sub consists of 100 shares of common stock, par
value $0.01 per share, all of which have been validly issued, are fully
paid and nonassessable and are owned by Parent free and clear of any Lien.
(d) Authority; Noncontravention. Parent and Sub have all
requisite corporate power and authority to enter into this Agreement and,
subject to the Parent Stockholder Approval (as defined in Section 3.02(k))
and the filing of an amendment to Parent's Restated Certificate of
Incorporation to increase the authorized Parent Common Stock (the
"Amendment to Parent's Restated Certificate of Incorporation"), to
consummate the transactions contemplated by this Agreement. The Board of
Directors of Parent has approved this Agreement and the transactions
contemplated by this Agreement, and has resolved to recommend to Parent's
stockholders that they give the Parent Stockholder Approval. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement, in each case by Parent or by Parent and
Sub, as the case may be, have been duly authorized by all necessary
corporate action on the part of Parent and Sub, subject to the Parent
Stockholder Approval and the filing of the Amendment to Parent's Restated
Certificate of Incorporation. This Agreement has been duly executed and
delivered by Parent and Sub, respectively, and constitutes a valid and
binding obligation of Parent and Sub, respectively, enforceable against
each such party in accordance with its terms. Except as set forth in
Section 3.02(d) of the Parent Disclosure Letter, the execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of consent, termination, purchase, cancellation or
acceleration of any obligation or to loss of any property, rights or
benefits under, or result in the imposition of any additional obligation
under, or result in the creation of any Lien upon any of the properties or
assets of Parent, Sub or any other Parent Subsidiary under, (i) the
Restated Certificate of Incorporation or By-laws of Parent, the certificate
of incorporation and by-laws of Sub, or the comparable organizational
documents of any Parent Subsidiary, (ii) any Contract applicable to Parent,
Sub or any other Parent Subsidiary or their respective properties or assets
or (iii) subject to the governmental filings and other matters referred to
in the following sentence, and as set forth in Section 3.02(d) of the
Parent Disclosure Letter, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent, Sub or any other Parent
Subsidiary or their respective properties or assets, other than, in the
case of clauses (ii) and (iii), any such conflicts, violations, defaults,
rights or Liens that individually or in the aggregate would not have a
Parent Material Adverse Effect. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Parent, Sub or any
other Parent Subsidiary in connection with the execution and delivery of
this Agreement by Parent or Sub, as the case may be, or the consummation by
Parent or Sub, as the case may be, of the transactions contemplated by this
Agreement, except for (i) the filing with the SEC of (A) the Proxy
Statement, and (B) such reports under Section 13(a) of the Exchange Act, as
may be required in connection with this Agreement and the transactions
contemplated by this Agreement, (ii) the filing of the Certificate of
Merger and the Amendment to Parent's Restated Certificate of Incorporation
with the Delaware Secretary of State and appropriate documents with the
relevant authorities of other states in which Parent is qualified to do
business, (iii) those that may be required solely by reason of the
Company's (as opposed to any other third party's) participation in the
Merger and the other transactions contemplated by this Agreement and (iv)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings, including under applicable Environmental Laws,
(x) as may be required under the laws of any foreign country in which
Parent or any Parent Subsidiary conducts any business or owns any property
or assets, (y) as are set forth in Section 3.02(d) of the Parent Disclosure
Letter or (z) that, if not obtained or made, would not, individually or in
the aggregate, have a Parent Material Adverse Effect. Except as set forth
in Section 3.02(d) of the Parent Disclosure Letter, Parent and the Parent
Subsidiaries possess all Permits, including pursuant to any Environmental
Law, necessary to conduct their business as such business is currently
conducted or is expected to be conducted, except for such Permits, the lack
of possession of which has not, and is not reasonably expected to have, a
Parent Material Adverse Effect. Except as set forth in Section 3.02(d) of
the Parent Disclosure Letter, (i) all such Permits are validly held by
Parent or the Parent Subsidiaries, and Parent and the Parent Subsidiaries
have complied in all respects with all terms and conditions thereof, except
for such instances where the failure to validly hold such Permits or the
failure to have complied with such Permits has not, and is not reasonably
expected to have, a Parent Material Adverse Effect, (ii) none of such
Permits will be subject to suspension, modification, revocation or
nonrenewal as a result of the execution and delivery of this Agreement or
the consummation of the Merger, other than such Permits the suspension,
modification or nonrenewal of which, individually or in the aggregate, have
not had and could not reasonably be expected to have a Parent Material
Adverse Effect and (iii) since December 31, 1995, neither Parent nor any
Parent Subsidiary has received any written warning, notice, notice of
violation or probable violation, notice of revocation, or other written
communication from or on behalf of any Governmental Entity, alleging (A)
any violation of such Permit or (B) that Parent or any Parent Subsidiary
requires any Permit required for its business, as such business is
currently conducted that is not currently held by it.
(e) SEC Documents; Undisclosed Liabilities. Parent has filed all
required reports, schedules, forms, statements and other documents with the
SEC since January 1, 1995 (the "Parent SEC Documents"). As of its date,
each Parent SEC Document complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable
to such Parent SEC Documents. None of the Parent SEC Documents contains any
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except to the extent that such statements have been modified or
superseded by a later filed Parent SEC Document. The consolidated financial
statements of Parent included in the Parent SEC Documents comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present the
consolidated financial position of Parent as of the dates thereof and the
consolidated results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments). Except as set forth in the Filed Parent SEC Documents
(as defined in Section 3.02(g)), neither Parent nor any Parent Subsidiary
has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by generally accepted
accounting principles to be set forth on a consolidated balance sheet of
Parent and the consolidated Parent Subsidiaries or in the notes thereto and
which, individually or in the aggregate, could reasonably be expected to
have a Parent Material Adverse Effect, other than any such liabilities or
obligations that were required to be set forth in Parents' Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996. None of the Parent
Subsidiaries, other than Newmont Gold Company, a Delaware corporation
("Newmont Gold"), is subject to the informational reporting requirements of
Section 13 of the Exchange Act.
(f) Information Supplied. None of the information supplied or to
be supplied by Parent or Sub for inclusion or incorporation by reference in
(i) the Form S-4 will, at the time the Form S-4 is filed with the SEC, at
any time it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) the Proxy
Statement will, at the date the Proxy Statement is first mailed to the
Company's stockholders or Parent's stockholders or at the time of the
Company's Stockholders' Meeting or the Parent's 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 are
made, not misleading. The Form S-4 will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder, except that no representation or
warranty is made by Parent or Sub with respect to statements made or
incorporated by reference therein based on information supplied by the
Company for inclusion or incorporation by reference in the Form S-4.
(g) Absence of Certain Changes or Events. Except as disclosed in
the Parent SEC Documents filed and publicly available prior to the date of
this Agreement (the "Filed Parent SEC Documents"), from December 31, 1995,
to the date of this Agreement, Parent has conducted its business only in
the ordinary course, and:
(i) during the period from September 30, 1996, to the date of
this Agreement, there has not been any event, change, effect or
development which, individually or in the aggregate, has had or, so
far as reasonably can be foreseen, is likely to have, a Parent
Material Adverse Effect;
(ii) during the period from December 31, 1995, to the date of
this Agreement, there has not been except for regular quarterly
dividends not in excess of $0.12 per share of Parent Common Stock,
with customary record and payment dates, any declaration, setting
aside or payment of any dividend or other distribution (whether in
cash, stock or property) with respect to any shares of Parent Capital
Stock;
(iii) during the period from December 31, 1995, to the date
of this Agreement, there has not been any split, combination or
reclassification of any Parent Capital Stock or any issuance or the
authorization of any issuance of any other securities in exchange or
in substitution for shares of Parent Capital Stock;
(iv) during the period from December 31, 1995, to the date of
this Agreement, there has not been except as disclosed in Section
3.02(g) of the Parent Disclosure Letter, (A) any granting by Parent or
any Parent Subsidiary to any executive officer of Parent or any Parent
Subsidiary of any increase in compensation, except in the ordinary
course of business consistent with prior practice or as was required
under employment agreements in effect as of the date of the most
recent audited financial statements included in the Filed Parent SEC
Documents, (B) any granting by Parent or any Parent Subsidiary to any
such executive officer of any increase in severance or termination
pay, except as was required under any employment, severance or
termination agreements in effect as of the date of the most recent
audited financial statements included in the Filed Parent SEC
Documents or (C) any entry by Parent or any Parent Subsidiary into any
employment, severance or termination agreement with any such executive
officer; and
(v) during the period from December 31, 1995, to the date of
this Agreement, there has not been any change in accounting methods,
principles or practices by Parent or any Parent Significant Subsidiary
materially affecting its assets, liabilities or business, except
insofar as may have been required by a change in generally accepted
accounting principles.
(h) Litigation. Except as disclosed in the Filed Parent SEC
Documents or in Section 3.02(h) of the Parent Disclosure Letter, there is
no suit, action or proceeding pending or, to the knowledge of Parent,
threatened against Parent or any Parent Subsidiary (and Parent does not
have any reasonable basis to expect any such suit, action or proceeding to
be commenced) that, individually or in the aggregate, could reasonably be
expected to have a Parent Material Adverse Effect, and there is not any
judg- ment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against Parent or any Parent Subsidiary having, or
which, insofar as reasonably can be foreseen, in the future would have, any
Parent Material Adverse Effect. As of the date of this Agreement, except as
disclosed in the Filed Parent SEC Documents or in Section 3.02(h) of the
Parent Disclosure Letter, there is no suit, action or proceeding pending,
or, to the knowledge of Parent, threatened, against Parent or any Parent
Subsidiary (and Parent does not have any reasonable basis to expect any
such suit, action or proceeding to be commenced) that, individually or in
the aggregate, could reasonably be expected to prevent or delay in any
material respect the consummation of the Merger or the transactions
contemplated by this Agreement.
(i) Absence of Changes in Benefit Plans. Except as disclosed in
the Filed Parent SEC Documents or in Section 3.02(i) of the Parent
Disclosure Letter, since the date of the most recent audited financial
statements included in the Filed Parent SEC Documents and prior to the date
of this Agreement, there has not been any adoption or amendment in any
material respect by Parent or any Parent Subsidiary of any collective
bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance, disability,
death benefit, hospitalization, medical or other plan, arrangement or
understanding (whether or not legally binding) providing benefits to any
current or former employee, officer or director of Parent or any Parent
Subsidiary (collectively, "Parent Benefit Plans").
(j) ERISA Compliance. Except as described in the Filed Parent SEC
Documents or in Section 3.02(j) of the Parent Disclosure Letter or as would
not have a Parent Material Adverse Effect, (i) all employee benefit plans
or programs maintained for the benefit of the current or former employees
or directors of Parent or any Parent Subsidiary that are sponsored,
maintained or contributed to by Parent or any Parent Subsidiary, or with
respect to which Parent or any Parent Subsidiary has any liability,
including any such plan that is an "employee benefit plan" as defined in
Section 3(3) of ERISA, are in compliance with all applicable requirements
of law, including ERISA and the Code, and (ii) neither Parent nor any
Parent Subsidiary has any liabilities or obligations with respect to any
such employee benefit plans or programs, whether accrued, contingent or
otherwise, nor to the knowledge of Parent are any such liabilities or
obligations expected to be incurred. Except as set forth in Section 3.02(j)
of the Parent Disclosure Letter, the execution of, and performance of the
transactions contemplated by, this Agreement will not (either alone or upon
the occurrence of any additional or subsequent events) constitute an event
under any benefit plan, policy, arrangement or agreement or any trust or
loan that will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with
respect to any employee. The only severance agreements or severance
policies applicable to Parent or the Parent Subsidiaries are the agreements
and policies specifically set forth in Section 3.02(j) of the Parent
Disclosure Letter.
(k) Voting Requirements. The (A) approval and adoption by
Parent's stockholders of the issuance of shares of Parent Common Stock
pursuant to the Merger as required by Rule 312 of the New York Stock
Exchange and (B) approval by the holders of a majority of the outstanding
shares of Parent Common Stock of an amendment to the Restated Certificate
of Incorporation of Parent to increase the number of authorized shares of
Parent Common Stock (collectively, the "Parent Stockholder Approval") are
the only votes of the holders of any class or series of Parent Capital
Stock necessary to approve this Agreement and the transactions contemplated
by this Agreement.
(l) Brokers; Schedule of Fees and Expenses. Except as set forth
in Section 3.02(l) of the Parent Disclosure Letter, no broker, investment
banker, financial advisor or other person is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Sub. Parent has made
available to the Company true and complete copies of all agreements that
are referred to in Section 3.02(l) of the Parent Disclosure Letter and all
indemnification and other agreements related to the engagement of the
persons so listed.
(m) Opinion of Financial Advisor. Parent has received the opinion
of Goldman, Sachs & Co. to the effect that, as of the date of this
Agreement, the Conversion Number is fair to Parent.
(n) Taxes. (i) Parent and each Parent Subsidiary have timely
filed (or have had timely filed on their behalf) or will file or cause to
be timely filed, all material Tax Returns required by applicable law to be
filed by any of them prior to or as of the Effective Time of the Merger.
All such material Tax Returns are, or will be at the time of filing, true,
complete and correct in all material respects.
(ii) Parent and each Parent Subsidiary have paid (or have had
paid on their behalf) or, where payment is not yet due, have
established (or have had established on their behalf and for their
sole benefit and recourse) or will establish or cause to be
established on or before the Effective Time of the Merger an adequate
accrual for the payment of all Taxes due with respect to any period
ending prior to or as of the Effective Time of the Merger, except
where the failure to pay or establish adequate reserves has not had
and would not reasonably be expected to have a Parent Material Adverse
Effect.
(iii) Except as set forth in Section 3.02(n) of the Parent
Disclosure Letter, no deficiencies for any material Taxes have been
proposed, asserted or assessed against Parent or any Parent
Subsidiary, and no requests for waivers of the time to assess any such
material Taxes are pending. The Federal income Tax Returns of Parent
and each Parent Subsidiary consolidated in such Tax Returns have been
examined by and settled with the United States Internal Revenue
Service for all years through 1992.
(iv) Parent has no reason to believe that any conditions
exist that could reasonably be expected to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of
the Code.
(o) Compliance with Laws. Neither Parent nor any Parent
Subsidiary has violated or failed to comply with any statute, law,
ordinance, regulation, rule, judgment, decree or order of any Governmental
Entity applicable to its business or operations, except for violations and
failures to comply that could not, individually or in the aggregate,
reasonably be expected to result in a Parent Material Adverse Effect.
(p) No Excess Parachute Payments. Other than payments that may be
made to the persons listed in Section 3.02(p) of the Parent Disclosure
Letter (the "Primary Parent Executives"), any amount that could be received
(whether in cash or property or the vesting of property) as a result of any
of the transactions contemplated by this Agreement by any employee, officer
or director of Parent or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation
Section 1.280G-1) under any employment, severance or termination agreement,
other compensation arrangement or Parent Benefit Plan currently in effect
would not be characterized as an "excess parachute payment" (as such term
is defined in Section 280G(b)(1) of the Code). Set forth in Section 3.02(p)
of the Parent Disclosure Letter is (i) the estimated maximum amount that
could be paid to each Primary Parent Executive as a result of the
transactions contemplated by this Agreement under all employment, severance
and termination agreements, other compensation arrangements and Parent
Benefit Plans currently in effect and (ii) the "base amount" (as such term
is defined in Section 280G(b)(3) of the Code) for each Primary Parent
Executive calculated as of the date of this Agreement.
(q) Accounting Matters. Neither Parent nor, to its best
knowledge, any of its affiliates, has taken or agreed to take any action
that (without giving effect to any action taken or agreed to be taken by
the Company or any of its affiliates) would prevent Parent from accounting
for the business combination to be effected by the Merger as a pooling of
interests.
(r) Environmental Matters. (i) Except as set forth in Section
3.02(r) of the Parent Disclosure Letter and except for items that could
not, in all such cases taken individually or in the aggregate, reasonably
be expected to result in a Parent Material Adverse Effect, neither Parent
nor any Parent Subsidiary has (x) placed, held, located, released,
transported or disposed of any Hazardous Substances on, under, from or at
any of Parent's or any Parent Subsidiary's current or former properties or
any other properties or (y) any knowledge or reason to know of the presence
of any Hazardous Substances on, under or at any of Parent's or any Parent
Subsidiary's current or former properties or any other property but arising
from Parent's or any Parent Subsidiary's current or former properties.
(ii) Except for items that individually or in the aggregate
could not reasonably be expected to result in a Parent Material
Adverse Effect or as disclosed in Section 3.02(r) of the Parent
Disclosure Letter, Parent and the Parent Subsidiaries are in
compliance with the SMCRA and any state law comparable to SMCRA under
30 U.S.C. ss. 1253, and neither Parent nor any Parent Subsidiary is
subject to any reclamation obligation or other site restoration
obligation under any Environmental Law.
(iii) Except for items that individually or in the aggregate
could not reasonably be expected to result in a Parent Material
Adverse Effect or as set forth in Section 3.02(r) of the Parent
Disclosure Letter, no Environmental Law imposes any obligation upon
Parent or any Parent Subsidiary arising out of or as a condition to
any transaction contemplated by this Agreement, including any
requirement to modify or to transfer any permit or license, any
requirement to file any notice or other submission with any
Governmental Entity, the filing of any notice, acknowledgement or
covenant in any land records, or the modification of or provision of
notice under any agreement, consent order or consent decree.
(s) State Takeover Statutes. Subject to the representation of the
Company in Section 3.01(s), to the best of Parent's knowledge, no state
takeover statute or similar statute or regulation applies or purports to
apply to the Merger, this Agreement or any of the transactions contemplated
by this Agreement.
(t) Rights Agreement. (i) Parent does not need to take any action
to (a) render the Parent Rights inapplicable to the Merger and the other
transactions contemplated by this Agreement and (b) ensure that (x) neither
the Company nor any of its affiliates is an Acquiring Person (as defined in
the Parent Rights Agreement) as a result of the Merger and (y) none of a
Distribution Date, Stock Acquisition Date, Triggering Event or Section 13
Event (each as defined in the Parent Rights Agreement) shall occur by
reason of the approval, execution or delivery of this Agreement, the
announcement or consummation of the Merger or the consummation of any of
the other transactions contemplated by this Agreement.
(ii) Parent does not need to take any action to (a) render
the Parent Equal Value Rights inapplicable to the Merger and the other
transactions contemplated by this Agreement and (b) ensure that (x) neither
the Company nor any of its affiliates is a Controlling Person (as defined
in the Parent Equal Value Rights Agreement) as a result of the Merger and
(y) none of a Distribution Date, Control Date or Extraordinary Transaction
(each as defined in the Parent Equal Value Rights Agreement) shall occur by
reason of the approval, execution or delivery of this Agreement, the
announcement or consummation of the Merger or the consummation of any of
the other transactions contemplated by this Agreement.
(u) Dispositions of Parent Property. Except as described in the
Filed Parent SEC Documents or in Section 3.02(u) of the Parent Disclosure
Letter or as otherwise contemplated by this Agreement, since December 31,
1995, neither Parent nor any Parent Subsidiary has sold or disposed of or
ceased to hold or own any personal property, real property, any interest in
or rights with respect to real property (including exploration or
production rights), any interest in a joint venture or other assets or
properties of Parent or any Parent Subsidiary ("Parent Property"), other
than sales and dispositions of raw materials, obsolete equipment, mine
output and other inventories, and any interests or rights with respect to
real property having an individual fair market value of less than
$10,000,000 of Parent or any Parent Subsidiary, in each case in the
ordinary course of business, con- sistent with past practice. Except as set
forth in Section 3.02(u) of the Parent Disclosure Letter, no Parent
Property whose fair market value on the date of this Agreement is greater
than $10,000,000 is subject to any pending sale or disposition transaction.
(v) Absence of Reduction in Reserves and Mineralized Material.
There has been no material reduction in the aggregate amount of reserves or
in the aggregate amount of mineralized material of Parent and the Parent
Subsidiaries, taken as a whole, from the amounts set forth in Parent's 1995
annual report to shareholders except for (i) such reductions in reserves
that have resulted from production in the ordinary course of business, (ii)
such reductions in mineralized material that have resulted from
reclassifications of mineralized material as reserves and (iii) items set
forth in Section 3.02(v) of the Parent Disclosure Letter.
(w) Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement and
has not engaged in any business activities or conducted any operations
other than in connection with the transactions contemplated by this
Agreement.
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business. (a) Conduct of Business by the
Company. During the period from the date of this Agreement to the Effective
Time of the Merger, the Company shall, and shall cause the Company
Subsidiaries to, carry on their respective businesses in the usual, regular
and ordinary course in substantially the same manner as heretofore
conducted and in compliance in all material respects with all applicable
laws and regulations and, to the extent consistent therewith, use
reasonable efforts to preserve intact their current business organizations,
keep available the services of their current officers and employees and
preserve their relationships with customers, suppliers, licensors,
licensees, distributors and others having business dealings with them.
Without limiting the generality of the foregoing, during the period from
the date of this Agreement to the Effective Time of the Merger, except as
expressly contemplated by this Agreement or as set forth in Section 4.01(a)
of the Company Disclosure Letter, or otherwise approved in writing by
Parent, the Company shall not, and shall not permit any Company Subsidiary
to:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than dividends and distributions by a direct or indirect wholly owned
Company Subsidiary to its parent and regular annual cash dividends on
the Company Common Stock in an amount not in excess of $0.05 per share
per annum at the same time such dividends are customarily declared and
paid, (y) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock, or (z)
purchase, redeem or otherwise acquire any shares of capital stock of
the Company or any Company Subsidiary or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities;
(ii) issue, deliver, sell, grant, pledge or otherwise
encumber any shares of its capital stock, any other voting securities
or any securities convertible into, any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities,
any phantom stock options ("Phantom Stock Options") under the
Company's Phantom Stock Option Plan, or any restricted stock,
performance units, performance shares, stock appreciation rights
("SARs") or limited stock appreciation rights ("LSARs") under the
Company's Long Term Incentive Stock Plan (other than (x) the issuance
of shares of Company Common Stock (and associated Company Rights) upon
the exercise of Company Employee Stock Options outstanding on the date
of this Agreement and in accordance with their present terms, (y) the
issuance of Company Capital Stock pursuant to the Company Rights
Agreement and (z) the grant of additional Company Employee Stock
Options, Phantom Stock Options, SARs and LSARs in the ordinary course
of business consistent with past practice to employees of the Company
and the Company Subsidiaries covering not more than an aggregate of
600,000 shares of Company Common Stock and equivalents and, in the
case of Company Employee Stock Options, the issuance of Company Common
Stock (and associated Company Rights) upon the exercise thereof, but
only if and to the extent that the terms of such Company Employee
Stock Options, Phantom Stock Options, SARs and LSARs provide that the
consummation by the Company of the transactions contemplated by this
Agreement will not result in the acceleration of vesting or the
exercisability of such Company Employee Stock Options, Phantom Stock
Options, SARs and LSARs);
(iii) amend its certificate of incorporation, by-laws or
other comparable charter or organizational documents, except for such
amendments to its certificate of incorporation, by-laws and other
comparable charter or organizational documents that do not have an
adverse effect on the transactions contemplated by this Agreement;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, limited liability company, joint venture, association or
other business organization or division thereof or (y) any assets that
are material, individually or in the aggregate, to the Company and the
Company Subsidiaries taken as a whole;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any Company Property other
than (A) sales and dispositions of interests or rights with respect to
real property having an aggregate fair market value on the date of
this Agreement of less than $20,000,000, raw materials, obsolete
equipment, mine output and other inventories, in each case only if in
the ordinary course of business consistent with past practice, and (B)
encumbrances and Liens that are incurred in the ordinary course of
business consistent with past practice;
(vi) (y) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of the Company or any Company Subsidiary, guarantee any
debt securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any
of the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice, or (z) make
any loans, advances (other than any advances to employees in the
ordinary course of business consistent with prior practice) or capital
contributions to, or investments in, any other person, other than to
the Company or any direct or indirect wholly owned Company Subsidiary;
(vii) make or agree to make any new capital expenditure or
expenditures that, in the aggregate, are in excess of $25,000,000
above the aggregate amount currently budgeted by the Company, as
disclosed in Section 4.01(a) of the Company Disclosure Letter;
(viii) make any material Tax election or settle or
compromise any material Tax liability or refund, except to the extent
already provided for in the Filed Company SEC Documents;
(ix) except pursuant to existing employment agreements or as
required by applicable laws, (A) increase the compensation payable or
to become payable to its executive officers or employees, (B) grant
any severance or termination pay to, or enter into any employment or
severance agreement with, any director, executive officer or employee
of the Company or any Company Subsidiary (other than in accordance
with Company Benefit Plans as in effect on the date of this Agreement)
or (C) establish, adopt, enter into or amend in any material respect
or take any action to accelerate any rights or benefits under any
collective bargaining agreement or Company Benefit Plan;
(x) without limiting the generality of clause (ix) above,
make any amendment to any Company Employee Stock Plan as a result of
this Agreement or in contemplation of the Merger;
(xi) terminate or amend on terms less favorable to the
Company any agreement filed as an exhibit to any Company SEC Document;
or
(xii) authorize any of, or commit or agree to take any of,
the foregoing actions.
(b) Conduct of Business by Parent. During the period from the
date of this Agreement to the Effective Time of the Merger, Parent shall,
and shall cause the Parent Subsidiaries to, carry on their respective
businesses in the usual, regular and ordinary course in substantially the
same manner as heretofore conducted and in compliance in all material
respects with all applicable laws and regulations and, to the extent
consistent therewith, use reasonable efforts to preserve intact their
current business organizations, keep available the services of their
current officers and employees and preserve their relationships with
customers, suppliers, licensors, licensees, distributors and others having
business dealings with them. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to the
Effective Time of the Merger, except as expressly contemplated by this
Agreement or as set forth in Section 4.01(b) of the Parent Disclosure
Letter, or otherwise approved in writing by the Company, Parent shall not,
and shall not permit any Parent Subsidiary to:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than dividends and distributions by a direct or indirect wholly owned
Parent Subsidiary to its parent and regular quarterly cash dividends
on the Parent Common Stock and common stock of Newmont Gold in an
amount not in excess of $0.12 per share per quarter at the same time
such dividends are customarily declared and paid, (y) split, combine
or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or (z) purchase, redeem
or otherwise acquire any shares of capital stock of Parent or any
Parent Subsidiary or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell, grant, pledge or otherwise
encumber any shares of its capital stock, any other voting securities
or any securities convertible into, any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
or any share appreciation rights or share rights under the Parent
Employee Stock Plans (other than (w) the issuance of shares of Parent
Common Stock (and associated Parent Rights and Parent Equal Value
Rights) in connection with the granting of up to 10,000 shares under
Newmont Gold's Directors' Stock Award Plan and upon the exercise of
Parent Employee Stock Options outstanding on the date of this
Agreement and in accordance with their present terms, (x) the issuance
of Parent Common Stock pursuant to the Parent Rights Agreement, (y)
the grant of additional Parent Employee Stock Options in the ordinary
course of business consistent with past practice to employees of
Parent and the Parent Subsidiaries covering not more than 1,000,000
shares of Parent Common Stock and the issuance of Parent Common Stock
(and associated Parent Rights and Parent Equal Value Rights) upon the
exercise thereof, but only if and to the extent that the terms of such
Parent Employee Stock Options provide that the consummation by Parent
of the transactions contemplated by this Agreement will not result in
the acceleration of vesting or the exercisability of such Parent
Employee Stock Options and (z) the issuance of shares of common stock
of Newmont Gold to equalize the number of shares of Parent Common
Stock which are issued and outstanding and the number of shares of
Newmont Gold common stock owned by Parent);
(iii) amend its certificate of incorporation, by-laws or
other comparable charter or organizational documents, except for such
amendments to its certificate of incorporation, by-laws and other
comparable charter or organizational documents that do not have an
adverse effect on the transactions contemplated by this Agreement;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, limited liability company, joint venture, association or
other business organization or division thereof that would be
material, individually or in the aggregate, to Parent and the Parent
Subsidiaries taken as a whole or (y) any assets that are material,
individually or in the aggregate, to the Parent and the Parent
Subsidiaries taken as a whole;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any Parent Property other
than (A) sales and dispositions of interests or rights with respect to
real property having an aggregate fair market value on the date of
this Agreement of less than $30,000,000, raw materials, obsolete
equipment, mine output and other inventories, in each case only if in
the ordinary course of business consistent with past practice, and (B)
encumbrances and Liens that are incurred in the ordinary course of
business consistent with past practice;
(vi) (y) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of Parent or any Parent Subsidiary, guarantee any debt
securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any
of the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice, or (z) make
any loans, advances (other than advances to employees in the ordinary
course of business consistent with prior practice) or capital
contributions to, or investments in, any other person, other than to
Parent or any direct or indirect wholly owned Parent Subsidiary;
(vii) make or agree to make any new capital expenditure or
expenditures that, in the aggregate, are in excess of $25,000,000
above the aggregate amount currently budgeted by Parent, as disclosed
in Section 4.01(b) of the Parent Disclosure Letter;
(viii) make any material Tax election or settle or
compromise any material Tax liability or refund, except to the extent
already provided for in the Filed Parent SEC Documents;
(ix) except pursuant to existing employment agreements or as
required by applicable laws or in the ordinary course of business
consistent with past practice, (A) increase the compensation payable
or to become payable to its executive officers or employees, (B) grant
any severance or termination pay to, or enter into any employment or
severance agreement with, any director, executive officer or employee
of Parent or any Parent Subsidiary (other than in accordance with
Parent Benefit Plans as in effect on the date of this Agreement) or
(C) establish, adopt, enter into or amend in any material respect or
take any action to accelerate any rights or benefits under any
collective bargaining agreement or Parent Benefit Plan;
(x) without limiting the generality of clause (ix) above,
make any amendment to any Parent Employee Stock Plan as a result of
this Agreement or in contemplation of the Merger;
(xi) terminate or amend on terms less favorable to Parent
any agreement filed as an exhibit to any Parent SEC Document; or
(xii) authorize any of, or commit or agree to take any of,
the foregoing actions.
(c) Other Actions. Except as expressly permitted by Sections
4.02, 4.03, 5.01(d) or 5.01(e), the Company and Parent shall not, and shall
not permit any of their respective subsidiaries to, take any action that
would, or that could reasonably be expected to, result in (i) any of the
representations and warranties of such party set forth in this Agreement
that are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in
any material respect or (iii) any of the conditions to the Merger set forth
in Article VI not being satisfied.
(d) Advice of Changes. The Company and Parent shall promptly
advise the other party orally and in writing of any change or event having,
or which, insofar as can reasonably be foreseen, would have, a Company
Material Adverse Effect or a Parent Material Adverse Effect, as applicable.
SECTION 4.02. No Solicitation by the Company. (a) The Company
shall not, nor shall it permit any Company Subsidiary to, nor shall it
authorize or permit any officer, director or employee of or any investment
banker, attorney, accountant or other advisor or representative of, the
Company or any Company Subsidiary to, (i) solicit, initiate or encourage
the submission of any Company Takeover Proposal (as defined below), (ii)
enter into any agreement with respect to any Company Takeover Proposal or
(iii) provide any non-public information regarding the Company to any third
party or engage in any negotiations or substantive discussions in
connection with any Company Takeover Proposal; provided, however, that (A)
prior to receipt of the Company Stockholder Approval, the Company may, in
response to a Company Takeover Proposal that was not solicited by the
Company and that did not otherwise result from a breach of this Section
4.02(a), provide any non-public information regarding itself to any third
party or engage in any negotiations or substantive discussions with such
person regarding any Company Takeover Proposal, in each case only if the
Company's Board of Directors determines in good faith, after consultation
with counsel and its financial advisors, that failing to take such action
would create a reasonable possibility of a breach of the fiduciary duties
of the Company's Board of Directors, and (B) nothing contained in this
Agreement shall prevent the Company or its Board of Directors from
complying with Rule 14e-2 promulgated under the Exchange Act with regard to
a Company Takeover Proposal or prevent the Company's Board of Directors
from taking any action permitted by Section 5.01(d). Without limiting the
foregoing, it is understood that any violation of the restrictions set
forth in the preceding sentence by any executive officer of the Company or
any Company Subsidiary or any investment banker, attorney, accountant or
other advisor or representative of the Company or any Company Subsidiary,
whether or not such person is purporting to act on behalf of the Company or
any Company Subsidiary or otherwise, shall be deemed to be a breach of this
Section 4.02(a) by the Company. For purposes of this Agreement, "Company
Takeover Proposal" means any proposal for a merger, consolidation or other
business combination involving the Company or a Company Significant
Subsidiary or any proposal or offer to acquire in any manner, directly or
indirectly, more than 30% of any class of voting securities of the Company
or of a Company Significant Subsidiary (other than where such Company
Significant Subsidiary's securities directly or indirectly represent an
economic interest in less than 30% of the assets of the Company and the
Company Subsidiaries, taken as a whole), including any proposal or offer
relating to the acquisition by the Company or a Company Significant
Subsidiary in any manner, directly or indirectly, of any securities or
assets of another person in consideration for the issuance of more than 30%
of any class of voting securities of the Company or of a Company
Significant Subsidiary (other than where such Company Significant
Subsidiary's securities directly or indirectly represent an economic
interest in less than 30% of the assets of the Company and the Company
Subsidiaries, taken as a whole), or assets representing a substantial
portion of the assets of the Company and the Company Subsidiaries, taken as
a whole, other than the transactions contemplated by this Agreement. The
Company shall, and shall cause each Company Subsidiary to, immediately
cease and cause to be terminated any existing activities, discussions or
negotiations by the Company, any Company Subsidiary or any officer,
director or employee of or investment banker, attorney, accountant or other
advisor or representative of, the Company or any Company Subsidiary, with
any parties conducted heretofore with respect to any of the foregoing. Any
action taken by the Company, any Company Subsidiary or any officer,
director or employee of or any investment banker, attorney, accountant or
other advisor or representative of, the Company or any Company Subsidiary
with or with respect to any such party on or prior to the date hereof,
shall be deemed not to constitute a violation of this Section 4.02(a) and
shall not in and of itself constitute the solicitation of a Company
Takeover Proposal even if such actions result in any such party making a
Company Takeover Proposal after the date of this Agreement.
(b) Subject to Section 5.01(d), neither the Board of Directors of
the Company nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent or Sub, the
adoption and approval by such Board of Directors or any such committee of
this Agreement or the Merger or (ii) approve or recommend, or propose to
approve or recommend, any Company Takeover Proposal.
(c) The Company promptly shall advise Parent orally and in
writing of the receipt of any Company Takeover Proposal and of the receipt
of any inquiry with respect to or which the Company reasonably believes
could lead to any Company Takeover Proposal. The Company promptly shall
advise Parent orally and in writing of the identity of the person making
any such Company Takeover Proposal or inquiry and of the material terms of
any such Company Takeover Proposal and of any changes thereto; provided,
however, that the Company's Board of Directors shall have determined in
good faith, after consultation with counsel, that taking such action would
not create a reasonable possibility of a breach of the fiduciary duties of
the Company's Board of Directors, except that in all events prior to
exercising its right of termination pursuant to Section 7.01(d) the Company
shall endeavor to provide Parent with a reasonable opportunity to respond
to any Company Takeover Proposal which the Company otherwise may wish to
accept.
SECTION 4.03. No Solicitation by Parent. (a) Parent shall not,
nor shall it permit any Parent Subsidiary to, nor shall it authorize or
permit any officer, director or employee of or any investment banker,
attorney, accountant or other advisor or representative of, Parent or any
Parent Subsidiary to, (i) solicit, initiate or encourage the submission of
any Parent Takeover Proposal (as defined below), (ii) enter into any
agreement with respect to any Parent Takeover Proposal or (iii) provide any
non-public information regarding Parent to any third party or engage in any
negotiations or substantive discussions in connection with any Parent
Takeover Proposal; provided, however, that (A) prior to receipt of the
Parent Stockholder Approval, Parent may, in response to a Parent Takeover
Proposal that was not solicited by Parent and that did not otherwise result
from a breach of this Section 4.03(a), provide any non-public information
regarding itself to any third party or engage in any negotiations or
substantive discussions with such person regarding any Parent Takeover
Proposal, in each case only if Parent's Board of Directors determines in
good faith, after consultation with counsel and its financial advisors,
that failing to take such action would create a reasonable possibility of a
breach of the fiduciary duties of Parent's Board of Directors, and (B)
nothing contained in this Agreement shall prevent Parent or its Board of
Directors from complying with Rule 14e-2 promulgated under the Exchange Act
with regard to a Parent Takeover Proposal or prevent Parent's Board of
Directors from taking any action permitted by Section 5.01(e). Without
limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any executive officer
of Parent or any Parent Subsidiary or any investment banker, attorney,
accountant or other advisor or representative of Parent or any Parent
Subsidiary, whether or not such person is purporting to act on behalf of
Parent or any Parent Subsidiary or otherwise, shall be deemed to be a
breach of this Section 4.03(a) by Parent. For purposes of this Agreement,
"Parent Takeover Proposal" means any proposal for a merger, consolidation
or other business combination involving Parent or a Parent Significant
Subsidiary or any proposal or offer to acquire in any manner, directly or
indirectly, more than 30% of any class of voting securities of Parent or of
a Parent Significant Subsidiary (other than where such Parent Significant
Subsidiary's securities directly or indirectly represent an economic
interest in less than 30% of the assets of Parent and the Parent
Subsidiaries, taken as a whole), including any proposal or offer relating
to the acquisition by Parent or a Parent Significant Subsidiary in any
manner, directly or indirectly, of any securities or assets of another
person in consideration for the issuance of more than 30% of any class of
voting securities of Parent or of a Parent Significant Subsidiary (other
than where such Parent Significant Subsidiary's securities directly or
indirectly represent an economic interest in less than 30% of the assets of
Parent and the Parent Subsidiaries, taken as a whole), or assets
representing a substantial portion of the assets of Parent and the Parent
Subsidiaries, taken as a whole, other than the transactions contemplated by
this Agreement. Notwithstanding the foregoing, any transaction between
Parent and a Parent Subsidiary shall not constitute a Parent Takeover
Proposal. Parent shall, and shall cause each Parent Subsidiary to,
immediately cease and cause to be terminated any existing activities,
discussions or negotiations by Parent, any Parent Subsidiary, or any
officer, director or employee of or investment banker, attorney, accountant
or other advisor or representative of, Parent or any Parent Subsidiary,
with any parties conducted heretofore with respect to any of the foregoing.
(b) Subject to Section 5.01(e), neither the Board of Directors of
Parent nor any committee thereof shall (i) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to the Company, the adoption and
approval by such Board of Directors or any such committee of this Agreement
or the Merger or (ii) approve or recommend, or propose to approve or
recommend, any Parent Takeover Proposal.
(c) Parent promptly shall advise the Company orally and in
writing of the receipt of any Parent Takeover Proposal and of the receipt
of any inquiry with respect to or which Parent reasonably believes could
lead to any Parent Takeover Proposal.
Parent promptly shall advise the Company orally and in writing of the
identity of the person making any such Parent Takeover Proposal or inquiry and
of the material terms of any such Parent Takeover Proposal and of any changes
thereto; provided, however, that Parent's Board of Directors shall have
determined in good faith, after consultation with counsel, that taking such
action would not create a reasonable possibility of a breach of the fiduciary
duties of Parent's Board of Directors, except that in all events prior to
exercising its right of termination pursuant to Section 7.01(e) Parent shall
endeavor to provide the Company with a reasonable opportunity to respond to
any Parent Takeover Proposal which Parent otherwise may wish to accept.
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of Form S-4 and the Proxy Statement;
Company's Stockholders' Meeting and Parent's Stockholders' Meeting. (a) As
soon as practicable following the date of this Agreement, the Company and
Parent shall prepare and file with the SEC the Proxy Statement and Parent
shall prepare and file with the SEC the Form S-4, in which the Proxy
Statement shall be included as a prospectus. Each of the Company and Parent
shall use reasonable efforts to have the Form S-4 declared effective under
the Securities Act as promptly as practicable after such filing. Each of
the Company and Parent shall use reasonable efforts to cause the Proxy
Statement to be mailed to the Company's stockholders and Parent's
stockholders, respectively, as promptly as practicable after the Form S-4
is declared effective under the Securities Act. Parent shall also take any
action (other than qualifying to do business in any jurisdiction in which
it is not now so qualified) required to be taken under any applicable state
securities or "blue sky" laws in connection with the issuance of Parent
Common Stock pursuant to the Merger, and the Company shall furnish all
information concerning the Company and the holders of the Company Common
Stock and rights to acquire Company Common Stock pursuant to the Company
Employee Stock Plans as may be reasonably requested in connection with any
such action.
(b) Unless the Board of Directors of the Company shall take any
action permitted by Section 5.01(d), the Company shall, as soon as
practicable following the date of this Agreement, duly call, give notice
of, convene and hold a meeting of its stockholders (the "Company's
Stockholders' Meeting") for the purpose of obtaining the Company
Stockholder Approval. Subject to Section 5.01(d), the Company shall,
through its Board of Directors, recommend to its stockholders that they
give the Company Stockholder Approval. Parent shall vote or cause to be
voted all the shares of Company Capital Stock owned of record by Parent or
any Parent Subsidiary in favor of the Company Stockholder Approval.
(c) Unless the Board of Directors of Parent shall take any action
permitted by Section 5.01(e), Parent shall, as soon as practicable
following the date of this Agreement, duly call, give notice of, convene
and hold a meeting of its stockholders (the "Parent's Stockholders'
Meeting") for the purpose of obtaining the Parent Stockholder Approval.
Subject to Section 5.01(e), Parent shall, through its Board of Directors,
recommend to its stockholders that they give the Parent Stockholder
Approval. The Company shall vote or cause to be voted all the shares of
Parent Common Stock owned of record by the Company or any Company
Subsidiary in favor of the Parent Stockholder Approval.
(d) The Board of Directors of the Company shall be permitted to
(i) not recommend to the Company's stockholders that they give the Company
Stockholder Approval or (ii) withdraw or modify in a manner adverse to
Parent its recommendation to the Company's stockholders that they give the
Company Stockholder Approval, but only if and to the extent that (x) a
Company Takeover Proposal is pending at the time the Company's Board of
Directors determines to take any such action or inaction and such Company
Takeover Proposal was not the result of an intentional breach of Section
4.02(a) by the Company's Board of Directors and (y) the Company's Board of
Directors determines in good faith, after consultation with counsel and its
financial advisors, and after considering among other things whether such
Company Takeover Proposal is more favorable to the stockholders of the
Company than the transactions contemplated by this Agreement (taking into
account all relevant material terms of such Company Takeover Proposal and
this Agreement, including all such conditions, and any changes to this
Agreement proposed by Parent in response to such Company Takeover Proposal)
that failing to take any such action would create a reasonable possibility
of a breach of the fiduciary duties of the Company's Board of Directors.
(e) The Board of Directors of Parent shall be permitted to (i)
not recommend to Parent's stockholders that they give the Parent
Stockholder Approval or (ii) withdraw or modify in a manner adverse to the
Company its recommendation to Parent's stockholders that they give the
Parent Stockholder Approval, but only if and to the extent that (x) a
Parent Takeover Proposal is pending at the time Parent's Board of Directors
determines to take any such action or inaction and such Parent Takeover
Proposal was not the result of an intentional breach of Section 4.03(a) by
Parent's Board of Directors and (y) Parent's Board of Directors determines
in good faith, after consultation with counsel and its financial advisors,
and after considering among other things whether such Parent Takeover
Proposal is more favorable to the stockholders of Parent than the
transactions contemplated by this Agreement (taking into account all
relevant material terms of such Parent Takeover Proposal and this
Agreement, including all such conditions, and any changes to this Agreement
proposed by the Company in response to such Parent Takeover Proposal) that
failing to take any such action would create a reasonable possibility of a
breach of the fiduciary duties of Parent's Board of Directors.
SECTION 5.02. Letter of the Company's Accountants. The Company
shall use reasonable efforts to cause to be delivered to Parent a letter of
Price Waterhouse LLP, the Company's independent public accountants, dated a
date within two business days before the date on which the Form S-4 shall
become effective and addressed to Parent, in form and substance reasonably
satisfactory to Parent and customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Form S-4.
SECTION 5.03. Letter of Parent's Accountants. Parent shall use
reasonable efforts to cause to be delivered to the Company a letter of
Arthur Andersen LLP, Parent's independent public accountants, dated a date
within two business days before the date on which the Form S-4 shall become
effective and addressed to the Company, in form and substance reasonably
satisfactory to the Company and customary in scope and substance for
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
SECTION 5.04. Access to Information; Confidentiality. Each of the
Company and Parent shall, and shall cause each of its respective
subsidiaries to, afford to the other party and to the officers, directors,
employees, accountants, counsel, financial advisors and other
representatives of such other party, reasonable access during normal
business hours during the period prior to the Effective Time of the Merger
to all their respective properties, books, contracts, commitments,
personnel and records and, during such period, each of the Company and
Parent shall, and shall cause each of its respective subsidiaries to,
furnish promptly to the other party (i) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of Federal or state securities laws and (ii)
all other information concerning its business, properties and personnel as
such other party may reasonably request, including any information
requested with respect to stockholder approval at the Company Stockholders'
Meeting or the Parent Stockholders' Meeting and the status of the efforts
to obtain such approval. Such information shall be held in confidence to
the extent required by, and in accordance with, the provisions of the
letter dated October 22, 1996, between the Company and Parent (the
"Confidentiality Agreement").
SECTION 5.05. Reasonable Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each of
the parties shall use reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable,
the Merger and the other transactions contemplated by this Agreement,
including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making
of all necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all reasonable steps as
may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated by this Agreement including seeking to have any
stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, and (iv) the execution and
delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement; provided, however, that a party shall not be obligated to take
any action pursuant to the foregoing if the taking of such action or the
obtaining of any waiver, consent, approval or exemption is reasonably
likely to result in the imposition of a condition or restriction of the
type referred to in clause (ii), (iii) or (iv) of Section 6.01(g). In
connection with and without limiting the foregoing, Parent, the Company and
their respective Boards of Directors shall (i) take all action necessary so
that no state takeover statute or similar statute or regulation is or
becomes applicable to the Merger, this Agreement or any other transaction
contemplated by this Agreement and (ii) if any state takeover statute or
similar statute or regulation becomes applicable to the Merger, this
Agreement or any other transaction contemplated by this Agreement, take all
action necessary so that the Merger and the other transactions contemplated
by this Agreement may be consummated as promptly as practicable on the
terms contemplated by this Agreement and otherwise to minimize the effect
of such statute or regulation on the Merger and the other transactions
contemplated by this Agreement.
(b) The Company shall give prompt notice to Parent, and Parent or
Sub shall give prompt notice to the Company, of (i) any representation or
warranty made by it or contained in this Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with
or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement; provided,
however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
SECTION 5.06. Rights Agreements; Consequences if Rights
Triggered. (a) The Board of Directors of the Company shall take all further
action (in addition to that referred to in Section 3.01(t)) requested in
writing by Parent in order to render the Company Rights inapplicable to the
Merger and the other transactions contemplated by this Agreement. Except as
provided in Section 3.01(t) or as requested in writing by Parent, prior to
the Company's Stockholders' Meeting, the Board of Directors of the Company
shall not (i) amend the Company Rights Agreement or (ii) take any action
with respect to, or make any determination under, the Company Rights
Agreement. In the event that notwithstanding Section 3.01(t) and this
Section 5.06(a), a Distribution Date, Shares Acquisition Date or Triggering
Event occurs under the Company Rights Agreement at any time during the
period from the date of this Agreement to the Effective Time of the Merger
when the Company Rights are outstanding, the Company and Parent shall make
such adjustment to the Conversion Number as the Company and Parent shall
mutually agree so as to preserve the economic benefits that the Company and
Parent each reasonably expected on the date of this Agreement to receive as
a result of the consummation of the Merger and the other transactions
contemplated by this Agreement.
(b) The Board of Directors of Parent shall take all further
action (in addition to that referred to in Section 3.02(t)) requested in
writing by the Company in order to render the Parent Rights and the Parent
Equal Value Rights inapplicable to the Merger and the other transactions
contemplated by this Agreement. In the event that, notwithstanding Section
3.02(t) and this Section 5.06(b), a Distribution Date, Stock Acquisition
Date, Triggering Event or Section 13 Event occurs under the Parent Rights
Agreement at any time during the period from the date of this Agreement to
the Effective Time of the Merger and Rights Certificates (as such term is
defined in the Parent Rights Agreement) are issued to Parent's
stockholders, Parent's Board of Directors shall take such actions as are
necessary and permitted under the Parent Rights Agreement to provide that
Rights Certificates representing an appropriate number of Rights are issued
to the Company's stockholders and employees who receive Parent Common Stock
pursuant to the Merger. In the event that Parent is not permitted under the
Parent's Rights Agreement to provide Rights Certificates to such Company
stockholders and employees following the occurrence of a Distribution Date,
Triggering Event or Section 13 Event during such time period, the Company
and Parent shall make such adjustment to the Conversion Number as the
Company and Parent shall mutually agree so as to preserve the economic
benefits that the Company and Parent each reasonably expected on the date
of this Agreement to receive as a result of the consummation of the Merger
and the other transactions contemplated by this Agreement. In the event
that, an Extraordinary Transaction, Control Date or Distribution Date
occurs under the Parent Equal Value Rights Agreement, the Company and
Parent shall make such adjustment to the Conversion Number as the Company
and Parent shall mutually agree so as to preserve the economic benefits
that the Company and Parent each reasonably expected on the date of this
Agreement to receive as a result of the consummation of the Merger and the
other transactions contemplated by this Agreement.
SECTION 5.07. Company Employee Stock Options. (a) As soon as
practicable following the date of this Agreement, the Board of Directors of
the Company (or, if appropriate, any committee administering the Company
Employee Stock Plans) shall adopt such resolutions or take such other
actions as may be required to effect the following:
(i) adjust the terms of all outstanding Company Employee
Stock Options granted under the Company Employee Stock Plans and the
terms of the Company Employee Stock Plans, to provide that at the
Effective Time of the Merger, each Company Employee Stock Option
outstanding immediately prior to the Effective Time of the Merger
shall be deemed to constitute an option to acquire, on the same terms
and conditions as were applicable under such Company Employee Stock
Option, the same number of shares of Parent Common Stock as the holder
of such Company Employee Stock Option would have been entitled to
receive pursuant to the Merger had such holder exercised such Company
Employee Stock Option in full immediately prior to the Effective Time
of the Merger, at a price per share equal to (y) the aggregate
exercise price for the shares of Company Common Stock otherwise
purchasable pursuant to such Company Employee Stock option divided by
(z) the number of shares of Parent Common Stock deemed purchasable
pursuant to such Company Employee Stock Option; provided, however,
that in the case of any option to which Section 421 of the Code
applies by reason of its qualification under either Section 422 or 423
of the Code ("qualified stock options"), the option price, the number
of shares purchasable pursuant to such option and the terms and
conditions of exercise of such option shall be determined in order to
comply with Section 424(a) of the Code;
(ii) adjust the terms of all outstanding Phantom Stock
Options, SARs and LSARs granted under the Company Stock Plans to
provide that, at the Effective Time of the Merger, (y) each holder of
a Phantom Stock Right, SAR or LSAR shall be entitled to that number of
phantom stock rights, stock appreciation rights or limited stock
appreciation rights with respect to Parent Common Stock ("Parent
Phantom Stock Options", "Parent SARs" or "Parent LSARs") equal to the
number of Phantom Stock Options, SARs or LSARs, as the case may be,
held by such holder immediately prior to the Effective Time of the
Merger multiplied by the Conversion Number, and (z) the share value on
the grant date with respect to each Parent Phantom Stock Option,
Parent SAR or Parent LSAR, as the case may be, shall be equal to the
share value on the grant date in effect with respect to the
corresponding Phantom Stock Option, SAR or LSAR, as the case may be,
immediately prior to the Effective Time of the Merger, divided by the
Conversion Number; and
(iii) make such other changes to the Company Employee Stock
Plans as it deems appropriate to give effect to the Merger (subject to
the approval of Parent, which shall not be unreasonably withheld).
(b) As soon as practicable after the Effective Time of the
Merger, Parent shall deliver to the holders of Company Employee Stock
Options, Phantom Stock Options, SARs and LSARs appropriate notices setting
forth such holders' rights pursuant to the respective Company Employee
Stock Plans and the agreements evidencing the grants of such Company
Employee Stock Options, Phantom Stock Options, SARs and LSARs shall
continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 5.07 after giving effect to the
Merger). Parent shall comply with the terms of the Company Employee Stock
Plans and ensure, to the extent required by, and subject to the provisions
of, such Company Employee Stock Plans, that the Company Employee Stock
Options which qualified as qualified stock options prior to the Effective
Time of the Merger continue to qualify as qualified stock options after the
Effective Time of the Merger.
(c) Parent shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of the Company Employee Stock Options assumed in
accordance with this Section 5.07. As soon as reasonably practicable after
the Effective Time of the Merger, Parent shall file a registration
statement on Form S-8 (or any successor or other appropriate form) with
respect to the shares of Parent Common Stock subject to such Company
Employee Stock Options and shall use reasonable 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 Company Employee Stock Options
remain outstanding. With respect to those individuals who subsequent to the
Merger are subject to the reporting requirements under Section 16(a) of the
Exchange Act, where applicable, Parent shall administer the Company
Employee Stock Plans assumed pursuant to this Section 5.07 in a manner that
complies with Rule 16b-3 promulgated under the Exchange Act to the extent
the applicable Company Stock Plan complied with such rule prior to the
Merger.
SECTION 5.08. Benefit Plans. (a) Maintenance of Benefits. For a
period of one year after the Effective Time of the Merger, Parent shall (i)
either (A) maintain or cause the Surviving Corporation (or in the case of a
transfer of all or substantially all the assets and business of the
Surviving Corporation, its successors and assigns) to maintain the Company
Benefit Plans (other than medical plans and plans providing for the
issuance of Company Capital Stock or based on the value of Company Capital
Stock) at the benefit levels in effect on the date of this Agreement or (B)
provide or cause the Surviving Corporation (or, in such case, its
successors or assigns) to provide benefits (other than medical benefits) to
employees of the Surviving Corporation and the Company Subsidiaries that,
taken as a whole, are not materially less favorable in the aggregate to
such employees than those provided to similarly situated employees of
Parent and (ii) make available plans providing for the issuance of Parent
Capital Stock or based on the value of Parent Capital Stock, and provide or
cause to be provided medical benefits, to employees of the Company and the
Company Subsidiaries that are substantially equivalent to those provided to
similarly situated employees of Parent. From and after the Effective Time
of the Merger, Parent shall, and shall cause the Surviving Corporation to
honor in accordance with their respective terms (as in effect on the date
of this Agreement), all of the Company's employment, severance and
termination agreements set forth in the Company Disclosure Letter.
(b) Service. With respect to any "employee benefit plan", as
defined in Section 3(3) of ERISA, maintained by Parent or any Parent
Subsidiary (including any severance plan), for all purposes, including
determining eligibility to participate, level of benefits and vesting,
service with the Company or any Company Subsidiary shall be treated as
service with Parent or the Parent Subsidiaries; provided, however, that
such service need not be recognized to the extent that such recognition
would result in any duplication of benefits.
(c) Consultant's Study. Parent shall retain Hay Associates or
McKinsey and Company, Inc. to study Parent's and the Company's organization
and personnel. Parent shall take the results of such study into account in
making determinations as to its organization and personnel following the
Merger.
SECTION 5.09. Indemnification. (a) Parent shall, to the fullest
extent permitted by law, cause the Surviving Corporation to honor all the
Company's obligations to indemnify (including any obligations to advance
funds for expenses) the current or former directors or officers of the
Company for acts or omissions by such directors and officers occurring
prior to the Effective Time of the Merger to the extent that such
obligations of the Company exist on the date of this Agreement, whether
pursuant to the Company's Amended and Restated Certificate of
Incorporation, By-laws, individual indemnity agreements or otherwise, and
such obligations shall survive the Merger and shall continue in full force
and effect in accordance with the terms of such Amended and Restated
Certificate of Incorporation, By-laws and individual indemnity agreements
from the Effective Time of the Merger until the expiration of the
applicable statute of limitations with respect to any claims against such
directors or officers arising out of such acts or omissions.
(b) For a period of five years after the Effective Time, Parent
shall cause to be maintained in effect the current policies of directors'
and officers' liability insurance maintained by the Company (provided that
Parent may substitute therefor policies with reputable and financially
sound carriers of at least the same coverage and amounts containing terms
and conditions which are no less advantageous) with respect to claims
arising from or related to facts or events which occurred at or before the
Effective Time; provided, however, that Parent shall not be obligated to
make annual premium payments for such insurance to the extent such premiums
exceed 200% of the annual premiums paid as of the date hereof by the
Company for such insurance (such 200% amount, the "Maximum Premium"). If
such insurance coverage cannot be obtained at all, or can only be obtained
at an annual premium in excess of the Maximum Premium, Parent shall
maintain the most advantageous policies of directors' and officers'
insurance obtainable for an annual premium equal to the Maximum Premium.
The Company represents to Parent that the Maximum Premium is $725,000.
SECTION 5.10. Fees and Expenses. Except as provided in Section
7.02, all fees and expenses, including any fees payable to any broker,
investment banker or financial advisor, incurred in connection with the
Merger, this Agreement and the transactions contemplated by this Agreement
shall be paid by the party incurring such fees or expenses, whether or not
the Merger is consummated, except that expenses incurred in connection with
printing and mailing the Proxy Statement and the Form S-4 shall be shared
equally by Parent and the Company.
SECTION 5.11. Public Announcements. Parent and Sub, on the one
hand, and the Company, on the other hand, shall consult with each other
before issuing, and provide each other the opportunity to review and
comment upon, any press release or other public statements with respect to
the transactions contemplated by this Agreement, including the Merger, and
shall not issue any such press release or make any such public statement
prior to such consultation, except as may be required by applicable law,
court process or by obligations pursuant to any listing agreement with any
national securities exchange.
SECTION 5.12. Tax and Accounting Treatment. Each of Parent and
the Company shall not take any action and shall not fail to take any action
which action or failure to act would prevent, or would be likely to
prevent, the Merger from qualifying (A) for pooling of interests accounting
treatment or (B) as a reorganization within the meaning of Section 368(a)
of the Code and shall use reasonable efforts to obtain the opinions of
counsel and the letters of accountants referred to in Sections 6.02(d),
6.03(d) and 6.01(f).
SECTION 5.13. Affiliates. (a) Prior to the Closing Date, the
Company shall deliver to Parent a letter identifying all persons who are,
at the time this Agreement is submitted for approval to the stockholders of
the Company, "affiliates" of the Company (including all directors of the
Company) for purposes of Rule 145 under the Securities Act. The Company
shall use reasonable efforts to cause each such person to deliver to Parent
on or prior to the Closing Date a written agreement substantially in the
form attached hereto as Exhibit A.
(b) Prior to the Closing Date, Parent shall deliver to the
Company a letter identifying all persons who are, at the time of the
Parent's Stockholders' Meeting, "affiliates" of Parent. Parent shall use
reasonable efforts to cause each such person to deliver to Parent on or
prior to the Closing Date a written agreement substantially in the form
attached hereto as Exhibit B.
SECTION 5.14. Stock Exchange Listing. Parent shall use reasonable
efforts to cause the shares of Parent Common Stock to be issued in the
Merger and pursuant to the Company Employee Stock Plans to be approved for
listing on the NYSE, subject to official notice of issuance, prior to the
Closing Date.
SECTION 5.15. Parent Board of Directors. No later than five
business days prior to the day of the Company Stockholders' Meeting, the
Board of Directors of the Company shall submit to Parent a written list of
at least six candidates selected from the Board of Directors of the
Company. The Board of Directors of Parent shall take such corporate actions
as are necessary to provide that, effective at the Effective Time of the
Merger, (i) the number of directors of Parent shall be increased from 10 to
15, (ii) the number of directors of Newmont Gold shall be increased from 12
to 17 and (iii) the Nominating Committee of the Board of Directors of
Parent shall appoint as directors of Parent and Newmont Gold five of the at
least six candidates proposed by the Board of Directors of the Company
pursuant to the preceding sentence.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation To Effect The
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Company Stockholder Approval and Parent Stockholder Approval.
The Company shall have obtained the Company Stockholder Approval and Parent
shall have obtained the Parent Stockholder Approval.
(b) NYSE Listing. The shares of Parent Company Stock issuable to
the Company's stockholders and employees pursuant to this Agreement shall
have been approved for listing on the NYSE, subject to official notice of
issuance.
(c) Antitrust. The waiting periods (and any extensions thereof)
applicable to the transactions contemplated by this Agreement under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, have been
terminated or shall have expired. Any consents, approvals and filings under
any foreign antitrust law, the absence of which would prohibit the
consummation of the Merger, shall have been obtained or made.
(d) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger shall be in effect; provided, however, that
subject to the proviso in Section 5.05(a) each of the parties shall have
used reasonable efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any such injunction or
other order that may be entered.
(e) Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order, and Parent shall have received all state
securities or "blue sky" authorizations necessary to issue the Parent
Common Stock pursuant to this Agreement.
(f) Pooling Letters. Parent shall have received a letter from
Arthur Andersen LLP, dated as of the Closing Date, stating that the Merger
will be treated as a pooling of interests under Accounting Principles Board
Opinion No. 16 and the Company shall have received a letter from Price
Waterhouse LLP ("PW"), dated as of the Closing Date, that PW concurs with
the conclusions of the Company's management that, as of the Closing Date,
no conditions exist that would preclude Parent's accounting for the Merger
as a pooling of interests as those conditions relate to the Company.
(g) No Litigation. There shall not be pending any suit, action or
proceeding by any Governmental Entity (i) challenging the acquisition by
Parent or Sub of any shares of Company Common Stock, seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement or seeking to obtain from the Company,
Parent or Sub any damages that are material in relation to the Company and
its subsidiaries taken as a whole, (ii) seeking to prohibit or limit the
ownership or operation by the Company, any Company Significant Subsidiary,
Parent or any Parent Significant Subsidiary of any material portion of the
business or assets of the Company, any Company Significant Subsidiary,
Parent or any Parent Significant Subsidiary or to compel the Company, any
Company Significant Subsidiary, Parent or any Parent Significant Subsidiary
to dispose of or hold separate any material portion of the business or
assets of the Company, any Company Significant Subsidiary, Parent or any
Parent Significant Subsidiary, as a result of the Merger or any of the
other transactions contemplated by this Agreement, (iii) seeking to impose
limitations on the ability of Parent or Sub to acquire or hold, or exercise
full rights of ownership of, any shares of capital stock of the Surviving
Corporation, including the right to vote such capital stock on all matters
properly presented to the stockholders of the Surviving Corporation, (iv)
seeking to prohibit Parent or any Parent Subsidiary from effectively
controlling in any material respect the business or operations of the
Company or the Company Significant Subsidiaries or (v) which otherwise is
reasonably likely to have a Company Material Adverse Effect or a Parent
Material Adverse Effect.
SECTION 6.02. Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are further subject to
the satisfaction or waiver by Parent on or prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement that are qualified as
to materiality shall be true and correct, and the representations and
warranties of the Company set forth in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case
as of the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date, except to the extent any such representation
or warranty expressly relates to an earlier date (in which case as of such
date), and Parent shall have received a certificate signed on behalf of the
Company by the Chief Executive Officer and the Chief Financial Officer of
the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the Company by
the Chief Executive Officer and the Chief Financial Officer of the Company
to such effect.
(c) Letters from Company Affiliates. Parent shall have received
from each person named in the letter referred to in Section 5.13(a) an
executed copy of an agreement substantially in the form attached hereto as
Exhibit A.
(d) Tax Opinion. Parent shall have received an opinion dated the
Closing Date from each of White & Case and Wachtell, Lipton, Rosen & Katz,
counsel to Parent and Sub, in form and substance reasonably satisfactory to
Parent, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing on the Closing Date, the Merger
will be treated for Federal income tax purposes as a reorganization within
the meaning of Section 368(a) of the Code. In rendering such opinion, each
of White & Case and Wachtell, Lipton, Rosen & Katz may require and rely
upon (and may incorporate by reference) representations and covenants,
including those contained in certificates of officers of Parent, the
Company, Sub and others.
(e) Absence of Company Material Adverse Effect. There shall not
have occurred since the date of this Agreement any event, change, effect or
development which, individually or in the aggregate, has had or is
reasonably likely to have, a Company Material Adverse Effect.
SECTION 6.03. Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger is further subject to the
satisfaction or waiver by the Company on or prior to the Closing Date of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub set forth in this Agreement that are qualified
as to materiality shall be true and correct, and the representations and
warranties of Parent and Sub set forth in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case
as of the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date, except to the extent any such representation
or warranty expressly relates to an earlier date (in which case as of such
date), and the Company shall have received a certificate signed on behalf
of Parent by the Chief Executive Officer and the Chief Financial Officer of
Parent to such effect.
(b) Performance of Obligations of Parent and Sub. Parent and Sub
shall have performed in all material respects all obligations required to
be performed by them under this Agreement at or prior to the Closing Date,
and the Company shall have received a certificate signed on behalf of
Parent by the Chief Executive Officer and the Chief Financial Officer of
Parent to such effect.
(c) Letters from Parent Affiliates. Parent shall have received
from each person named in the letter referred to in Section 5.13(b) an
executed copy of an agreement substantially in the form attached hereto as
Exhibit B.
(d) Tax Opinion. The Company shall have received an opinion dated
the Closing Date from Skadden, Arps, Slate, Meagher & Flom, LLP, counsel to
the Company, in form and substance reasonably satisfactory to the Company,
substantially to the effect that, on the basis of facts, representations
and assumptions set forth in such opinion which are consistent with the
state of facts existing on the Closing Date, the Merger will be treated for
Federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code. In rendering such opinion, Skadden, Arps,
Slate, Meagher & Flom, LLP may require and rely upon (and may incorporate
by reference) representations and covenants, including those contained in
certificates of officers of Parent, the Company, Sub and others.
(e) Absence of Parent Material Adverse Effect. There shall not
have occurred since the date of this Agreement any event, change, effect or
development which, individually or in the aggregate, has had or is
reasonably likely to have, a Parent Material Adverse Effect.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. This Agreement may be terminated at
any time prior to the Effective Time of the Merger, whether before or after
the Company Stockholder Approval or the Parent Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if, at a duly held stockholders meeting of the Company or
any adjournment thereof at which the Company Stockholder Approval is
voted upon, the Company Stockholder Approval shall not have been
obtained;
(ii) if, at a duly held stockholders meeting of Parent or any
adjournment thereof at which the Parent Stockholder Approval is voted
upon, the Parent Stockholder Approval shall not have been obtained;
(iii) if the Merger shall not have been consummated on or
before August 31, 1997 (the "Outside Date"), unless the failure to
consummate the Merger is the result of a wilful, Material Breach (as
defined in Section 7.02(e)) of this Agreement by the party seeking to
terminate this Agreement;
(iv) if any court of competent jurisdiction or other
Governmental Entity shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the Merger and such order, decree, ruling or other action
shall have become final and non-appealable; or
(v) in the event of a breach by the other party of any
representation, warranty, covenant or other agreement contained in
this Agreement which (A) would give rise to the failure of a condition
set forth in Section 6.02(a) or 6.02(b) or Section 6.03(a) or 6.03(b),
as applicable, and (B) cannot be or has not been cured within 30 days
after the giving of written notice to the breaching party of such
breach (provided that the terminating party is not then in breach of
any representation, warranty, covenant or other agreement that would
give rise to a failure of a condition as described in clause (A)
above);
(c) by either Parent or the Company in the event that any
condition to the obligation of such party to effect the Merger set forth in
Section 6.01(f) or 6.02 (in the case of Parent) or Section 6.01(f) or 6.03
(in the case of the Company) is not capable of being satisfied prior to the
Outside Date;
(d) by the Company, if the Board of Directors of the Company
shall have approved, and the Company shall concurrently with such
termination enter into, a definitive agreement providing for the
implementation of the transactions contemplated by a Company Takeover
Proposal; provided, however, that (i) such Company Takeover Proposal was
not solicited by the Company and did not otherwise result from a breach of
Section 4.02(a), (ii) the Board of Directors of the Company shall have
complied with the exception to the proviso contained in Section 4.02(c) in
connection with such Company Takeover Proposal and (iii) no termination
pursuant to this Section 7.01(d) shall be effective unless the Company
shall simultaneously make the payment required by Section 7.02(a);
(e) by Parent, if the Board of Directors of Parent shall have
approved, and Parent shall concurrently with such termination enter into, a
definitive agreement providing for the implementation of the transactions
contemplated by a Parent Takeover Proposal; provided, however, that (i)
such Parent Takeover Proposal was not solicited by Parent and did not
otherwise result from a breach of Section 4.03(a), (ii) the Board of
Directors of Parent shall have complied with the exception to the proviso
contained in Section 4.03(c) in connection with such Parent Takeover
Proposal and (iii) no termination pursuant to this Section 7.01(e) shall be
effective unless Parent shall simultaneously make the payment required by
Section 7.02(b);
(f) by the Company, if Parent's Board of Directors shall have (i)
failed to recommend to Parent's stockholders that they give the Parent
Stockholder Approval, (ii) withdrawn or modified in a manner adverse to the
Company its recommendation to Parent's stockholders that they give the
Parent Stockholder Approval, or (iii) failed to reaffirm its recommendation
to Parent's stockholders that they give the Parent Stockholder Approval
within fourteen days after the Company has made a written request to Parent
to do so (which written request may be made by the Company at any time
after the public disclosure of a Parent Takeover Proposal); and
(g) by Parent, if the Company's Board of Directors shall have (i)
failed to recommend to the Company's stockholders that they give the
Company Stockholder Approval, (ii) withdrawn or modified in a manner
adverse to Parent its recommendation to the Company's stockholders that
they give the Company Stockholder Approval, or (iii) failed to reaffirm its
recommendation to the Company's stockholders that they give the Company
Stockholder Approval within fourteen days after Parent has made a written
request to the Company to do so (which written request may be made by
Parent at any time after the public disclosure of a Company Takeover
Proposal).
SECTION 7.02. Effect of Termination. (a) In the event that (i)
this Agreement is terminated by the Company pursuant to Section 7.01(d) or
(ii) this Agreement is terminated by Parent pursuant to Section 7.01(g),
then the Company shall pay to Parent a fee of $15,000,000, which amount
shall be payable by wire transfer of same day funds, on the date of
termination of this Agreement. The Company acknowledges that the agreements
contained in this Section 7.02(a) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent
would not enter into this Agreement. Notwithstanding the foregoing, no
payment need be made by the Company pursuant to this Section 7.02(a) (i) if
Parent shall be in Material Breach of its representations, warranties or
covenants under this Agreement, (ii) to the extent that such payment would,
in the good faith determination of the Company's independent accountants,
prevent a subsequent transaction between the Company and a third party
(including a transaction contemplated by a Company Takeover Proposal) from
being accounted for as a pooling of interests as a result thereof or (iii)
if this Agreement is terminated following a determination that the Merger
may not be accounted for as a pooling of interests, unless the failure of
the Merger to be able to be accounted for as a pooling of interests is due
to any action or omission by the Company.
(b) In the event that
(i) this Agreement is terminated pursuant to Section 7.01(a) or
Section 7.01(b)(ii),
(ii) this Agreement is terminated by Parent pursuant to Section
7.01(b)(iii),
(iii) this Agreement is terminated by the Company pursuant to Section
7.01(b)(iii) after November 30, 1997 if at that time any condition set
forth in Section 6.01 (other than Section 6.01(f)) is not capable of
being satisfied other than as a result of any action or omission by
the Company,
(iv) this Agreement is terminated pursuant to Section 7.01(b)(iv)
(other than as a result of a claim relating to the matters described
in the first sentence of Section 3.01(x) (without any reference to the
Company Disclosure Letter)),
(v) this Agreement is terminated by the Company pursuant to Section
7.01(b)(v),
(vi) this Agreement is terminated by the Company pursuant to Section
7.01(c) by reason of (x) any condition set forth in Section 6.03(c) or
(e) not being capable of being satisfied prior to the Outside Date,(y)
the condition set forth in Section 6.03(d) not being capable of being
satisfied by reason of an action or omission by Parent, or (z) the
condition set forth in Section 6.01(f) not being capable of being
satisfied by the Outside Date as a result of any action or omission by
Parent,
(vii) this Agreement is terminated by Parent pursuant to Section
7.01(c) by reason of (x) the condition set forth in Section 6.02(d)
not being capable of being satisfied prior to the Outside Date, (y)
the condition set forth in Section 6.01(f) not being capable of being
satisfied by the Outside Date as a result of any action or omission by
Parent, or (z) the condition set forth in Section 6.02(d) not being
capable of being satisfied by reason of an action or omission by
Parent.
(viii) this Agreement is terminated by Parent pursuant to Section
7.01(e), or
(ix) this Agreement is terminated by the Company pursuant to Section
7.01(f),
then Parent shall pay to the Company a fee of $65,000,000, which amount
shall be payable by wire transfer of same day funds, on the date of
termination of this Agreement. Parent acknowledges that the agreements
contained in this Section 7.02(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, the
Company would not enter into this Agreement. Notwithstanding the foregoing,
no payment need be made by Parent pursuant to this Section 7.02(b) (i) if
the Company shall be in Material Breach of its representations, warranties
or covenants under this Agreement, or (ii) if this Agreement is terminated
following a determination that the Merger may not be accounted for as a
pooling of interests, unless the failure of the Merger to be able to be
accounted for as a pooling of interests is due to any action or omission by
Parent.
(c) In the event of termination of this Agreement by Parent
pursuant to Section 7.01(b)(v), then (unless Section 7.02(a) is applicable)
the Company shall reimburse Parent for all its reasonable out-of-pocket
expenses (up to $5,000,000) actually incurred in connection with this
Agreement and the transactions contemplated hereby, which amount shall be
payable by wire transfer of same day funds within three business days of
written demand, accompanied by a reasonably detailed statement of such
expenses and appropriate supporting documentation, therefor.
Notwithstanding the foregoing, no payment need be made by the Company
pursuant to this Section 7.02(c) (i) if Parent shall be in Material Breach
of its representations, warranties or covenants under this Agreement or
(ii) to the extent that such payment would, in the good faith determination
of the Company's independent accountants, prevent a subsequent transaction
between the Company and a third party (including a transaction contemplated
by a Company Takeover Proposal) from being accounted for as a pooling of
interests as a result thereof.
(d) [intentionally omitted]
(e) In the event of termination of this Agreement by either the
Company or Parent as provided in Section 7.01, this Agreement shall
forthwith become void and have no effect, without any liability or
obligation on the part of Parent, Sub or the Company, other than the
provisions of Sections 3.01(l) and 3.02(l), the second sentence of Section
5.04, Section 5.10, this Section 7.02 and Article VIII and except to the
extent that such termination results from a wilful, Material Breach by a
party of any of its representations, warranties, covenants or other
agreements set forth in this Agreement which has not been cured prior to
the time of such termination. For purposes of this Agreement, a "Material
Breach" shall mean a breach that is material by reference to (i) the
breaching party and its subsidiaries, taken as a whole, (ii) the ability of
the parties to consummate the Merger and the other transactions
contemplated by this Agreement in the manner contemplated by this Agreement
or (iii) the benefits expected to be received by the non-breaching party
and its stockholders as a result of the consummation of the Merger and the
other transactions contemplated by this Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the
parties at any time before or after the Company Stockholder Approval or the
Parent Stockholder Approval; provided, however, that after the Company
Stockholder Approval or the Parent Stockholder Approval, there shall be
made no amendment that by law requires further approval by such
stockholders without the further approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties.
SECTION 7.04. Extension; Waiver. At any time prior to the
Effective Time of the Merger, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties,
(b) waive any inaccuracies in the representations and warranties contained
in this Agreement or in any document delivered pursuant to this Agreement
or (c) subject to the proviso of Section 7.03, waive compliance with any of
the cove- nants or conditions contained in this Agreement. Any agreement on
the part of a party to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party. The
failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of such rights.
SECTION 7.05. Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.01, an
amendment of this Agreement pursuant to Section 7.03 or an extension or
waiver pursuant to Section 7.04 shall, in order to be effective, require,
in the case of Parent, Sub or the Company, action by its Board of Directors
or, in the case of an extension or waiver pursuant to Section 7.04, the
duly authorized designee of its Board of Directors.
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time of the Merger. This Section 8.01 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after
the Effective Time of the Merger.
SECTION 8.02. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing (including by
facsimile) and shall be deemed given upon receipt by the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to Parent or Sub, to
Newmont Mining Corporation
1700 Lincoln Avenue
Denver, Colorado 80203
Phone: (303) 837-5966
Fax: (303) 837-5810
Attention: Joy Hansen
with copies to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Phone: (212) 403-1000
Fax: (212) 403-2000
Attention: Daniel A. Neff, Esq.
David A. Katz, Esq.
and
White & Case
1155 Avenue of the Americas
New York, New York 10036
Phone: (212) 819-8200
Fax: (212) 354-8113
Attention: Maureen Brundage, Esq.
(b) if to the Company, to
Santa Fe Pacific Gold Corporation
6200 Uptown Boulevard NE
Suite 400
Albuquerque, NM 87110
Phone: (505) 880-5300
Fax: (505) 880-5435
Attention: Wayne Jarke
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
Phone: (212) 735-3000
Fax: (212) 735-2000
Attention: Peter Allan Atkins, Esq.
SECTION 8.03. Definitions. For purposes of this Agreement:
An "affiliate" of any person means another person that directly
or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, such first person.
A "person" means an individual, corporation, partnership,
company, limited liability company, joint venture, association, trust,
unincorporated organization or other entity.
A "subsidiary" of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board
of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly
or indirectly by such first person.
SECTION 8.04. Interpretation. When a reference is made in this
Agreement to a Section or Exhibit, such reference shall be to a Section of,
or an Exhibit to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. Whenever the words "include", "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the
words "without limitation".
SECTION 8.05. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule or law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are ful- filled to the extent possible.
SECTION 8.06. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents referred to herein) (a) constitute
the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter of this Agreement and (b) except for the provisions of
Article II and Sections 5.07(b), 5.07(c), 5.08 and 5.09, are not intended
to confer upon any person other than the parties any rights or remedies.
SECTION 8.08. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
SECTION 8.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect
wholly owned Parent Subsidiary, but no such assignment shall relieve Sub of
any of its obligations under this Agreement. 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.
Parent shall cause Sub to perform its obligations hereunder.
SECTION 8.10. Enforcement. 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 or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement in any court of the United States located in the State of
Delaware or in Delaware state court, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of
the parties hereto (a) consents to submit itself to the personal
jurisdiction of any Federal court located in the State of Delaware or any
Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated by this Agreement, (b) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (c) agrees that it will
not initiate any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than a
Federal court sitting in the State of Delaware or a Delaware state court.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
NEWMONT MINING CORPORATION,
by /s/ Ronald C. Cambre
----------------------------
Name: Ronald C. Cambre
Title: Chairman of the Board,
President and Chief
Executive Officer
MIDTOWN TWO CORP.
by /s/ Wayne W. Murdy
----------------------------
Name: Wayne W. Murdy
Title: Chairman of the Board
and Chief Executive
Officer
SANTA FE PACIFIC GOLD
CORPORATION,
by /s/ Patrick M. James
----------------------------
Name: Patrick M. James
Title: Chairman of the Board,
President and Chief
Executive Officer
FOR IMMEDIATE RELEASE: MARCH 10, 1997
CONTACT: BRUCE D. HANSEN FRANK L. WELLS
(505) 880-5383 (505) 880-5355
SANTA FE PACIFIC GOLD'S BOARD OF DIRECTORS
SIGNS MERGER AGREEMENT WITH NEWMONT
NEWMONT INCREASES EXCHANGE RATIO TO 0.43
ALBUQUERQUE, NEW MEXICO Santa Fe Pacific Gold
Corporation's (NYSE: GLD) Board of Directors today
announced the approval and signing of a merger agreement
with Newmont Mining Company (NYSE: NEM) and the
termination of the merger agreement with Homestake Mining
Corporation (NYSE: HM).
The Newmont agreement provides for an exchange ratio
of 0.43 of a share of Newmont common stock for each
outstanding share of Santa Fe Pacific Gold common stock,
which represents a material increase from Newmont's most
recently proposed exchange ratio of 0.40 publicly
announced on January 7, 1997. The Newmont merger is
subject to the approval of the shareholders of both Santa
Fe Pacific Gold and Newmont, as well as other customary
conditions. The merger, which is expected to be tax-free
to Santa Fe Pacific Gold shareholders and to be accounted
for as a pooling of interests, is expected to close
during the second quarter.
Patrick M. James, Chairman, President and Chief
Executive Officer of Santa Fe Pacific Gold, stated, "In
the interest of providing the best value to our
shareholders, Santa Fe Pacific Gold's Board of Directors
invited Newmont and Homestake to make presentations on
March 8, 1997. After discussions with both companies,
Santa Fe Pacific Gold's Board of Directors determined
that the merger proposal made by Newmont includes a
superior exchange ratio and offers a compelling fit,
substantial and improved synergies and significant long-
range potential for our shareholders."
Mr. James further stated, "All of Santa Fe Pacific
Gold's management and Board of Directors recognize that
Homestake is an outstanding Company and very much
appreciate its sincere interest in Santa Fe Pacific Gold
and the professional approach taken throughout this
process by Homestake's Board of Directors and
management".
Under the terms of the Santa Fe Pacific Gold/
Homestake merger agreement, Santa Fe Pacific Gold has
paid Homestake a termination fee of $65 million.
Santa Fe Pacific Gold is one of the largest gold
mining companies in North America with mines in Nevada
and California and exploration offices and projects
throughout the world. The Company's shares are traded on
the New York Stock Exchange under the symbol GLD.
Statements contained in this press release which are
not historical facts are forward-looking statements as
that item is defined in the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties which could cause
actual results to differ materially from estimated
results. Such risks and uncertainties are detailed in
the Company's filings with the Securities and Exchange
Commission.
# # #
