UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13D-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)(1)
FOODBRANDS AMERICA, INC
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
344822 10 1
(CUSIP Number)
PETER A. JOSEPH MARK C. SMITH
JOSEPH LITTLEJOHN & LEVY SKADDEN, ARPS, SLATE,
450 LEXINGTON AVENUE MEAGHER & FLOM LLP
SUITE 3350 919 THIRD AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10022
(212) 286-8600 (212) 735-3000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 25, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the
subject of this Statement because of Rule 13d-1(b)(3) or
(4), check the following box ( ).
Note: Six copies of this statement, including all
exhibits, should be filed with the Commission. See Rule
13d-1(a) for other parties to whom copies are to be sent.
---------------
1 The remainder of this cover page shall be filled out
for a reporting person's initial filing on this form with
respect to the subject class of securities, and for any
subsequent amendment which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this
cover page shall not be deemed to be "filed for the
purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other
provisions of the Act (however, see the Notes).
SCHEDULE 13D
CUSIP No. 344822 10 1
--------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Joseph Littlejohn & Levy Fund, L.P.
-------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF THE GROUP:
(a)( )
(b)( )
-------------------------------------------------------------------
(3) SEC USE ONLY
-------------------------------------------------------------------
(4) SOURCE OF FUNDS*
OO
-------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) ( )
-------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
(7) SOLE VOTING POWER
None
NUMBER OF ---------------------------------
SHARES (8) SHARED VOTING POWER
BENEFICIALLY 2,182,500
OWNED BY ---------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING None
PERSON ---------------------------------
WITH (10) SHARED DISPOSITIVE
2,182,500
-------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,182,500
-------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* ( )
-------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
17.5%
-------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 344822 10 1
-------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Joseph Littlejohn & Levy Fund II, L.P.
-------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF THE GROUP: (a)( )
(b)( )
-------------------------------------------------------------------
(3) SEC USE ONLY
-------------------------------------------------------------------
(4) SOURCE OF FUNDS*
OO
-------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) ( )
-------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
(7) SOLE VOTING POWER
None
NUMBER OF ---------------------------------
SHARES (8) SHARED VOTING POWER
BENEFICIALLY 3,333,333
OWNED BY
EACH (9) SOLE DISPOSITIVE POWER
REPORTING None
PERSON ---------------------------------
WITH (10) SHARED DISPOSITIVE POWER
3,333,333
-------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
-------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* ( )
-------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
26.7%
-------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
-------------------------------------------------------------------
SCHEDULE 13D
CUSIP No. 344822 10 1
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(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Peter A. Joseph
-------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF THE GROUP:
(a)( )
(b)( )
-------------------------------------------------------------------
(3) SEC USE ONLY
-------------------------------------------------------------------
(4) SOURCE OF FUNDS*
OO
-------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) ( )
-------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
(7) SOLE VOTING POWER
None
NUMBER OF
SHARES (8) SHARED VOTING POWER
BENEFICIALLY 5,515,833
OWNED BY ---------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING None
PERSON ---------------------------------
WITH (10) SHARED DISPOSITIVE POWER
5,515,833
-------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,515,833
-------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* ( )
-------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
44.2%
-------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
-------------------------------------------------------------------
SCHEDULE 13D
CUSIP No. 344822 10 1
-------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Paul S. Levy
-------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF THE GROUP:
(a)( )
(b)( )
-------------------------------------------------------------------
(3) SEC USE ONLY
-------------------------------------------------------------------
(4) SOURCE OF FUNDS*
OO
-------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) ( )
-------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
-------------------------------------------------------------------
(7) SOLE VOTING POWER
None
NUMBER OF
SHARES (8) SHARED VOTING POWER
BENEFICIALLY 5,515,833
OWNED BY ---------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING None
PERSON ---------------------------------
WITH (10) SHARED DISPOSITIVE POWER
5,515,833
-------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
5,515,833
-------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* ( )
-------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
44.2%
-------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
-------------------------------------------------------------------
SCHEDULE 13D
CUSIP No. 344822 10 1
-------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
JLL Associates, L.P.
-------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF THE GROUP:
(a)( )
(b)( )
-------------------------------------------------------------------
(3) SEC USE ONLY
-------------------------------------------------------------------
(4) SOURCE OF FUNDS*
OO
-------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) ( )
-------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
(7) SOLE VOTING POWER
None
NUMBER OF ---------------------------------
SHARES (8) SHARED VOTING POWER
BENEFICIALLY 2,182,500
OWNED BY ---------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING None
PERSON ---------------------------------
WITH (10) SHARED DISPOSITIVE POWER
2,182,500
-------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,182,500
-------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* ( )
-------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
17.5%
-------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
-------------------------------------------------------------------
SCHEDULE 13D
CUSIP No. 344822 10 1
-------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
JLL Associates II, L.P.
-------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF THE GROUP:
(a)( )
(b)( )
-------------------------------------------------------------------
(3) SEC USE ONLY
-------------------------------------------------------------------
(4) SOURCE OF FUNDS*
OO
-------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) ( )
-------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
(7) SOLE VOTING POWER
None
NUMBER OF ---------------------------------
SHARES (8) SHARED VOTING POWER
BENEFICIALLY 3,333,333
OWNED BY ---------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING None
PERSON ---------------------------------
WITH (10) SHARED DISPOSITIVE POWER
3,333,333
-------------------------------------------------------------------
(7) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,333,333
-------------------------------------------------------------------
(8) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* ( )
-------------------------------------------------------------------
(9) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
26.7%
-------------------------------------------------------------------
(28) TYPE OF REPORTING PERSON*
PN
-------------------------------------------------------------------
This Amendment No. 4 to the Schedule 13D, dated
February 26, 1993 (the "Schedule 13D") supplements the
information contained therein with respect to the common
stock (the "Common Stock"), par value $.01 per share, of
Foodbrands America, Inc., a Delaware corporation (the
"Issuer"). Capitalized terms used herein but not
otherwise defined shall have the meanings assigned to
them in the Schedule 13D.
The Schedule 13D is hereby amended as follows:
ITEM 2. IDENTITY AND BACKGROUND.
Paragraphs (a), (b), (c) and (f) of Item 2 are
hereby amended and restated to read as follows:
(a) This statement is being filed by Joseph
Littlejohn & Levy Fund, L.P., a Delaware limited
partnership ("JLL"), Joseph Littlejohn & Levy Fund II,
L.P., a Delaware limited partnership ("JLL Fund II"), JLL
Associates, L.P., a Delaware limited partnership, which
is the general partner of JLL ("JLL Associates"), and JLL
Associates II, L.P., a Delaware limited partnership,
which is the general partner of JLL Fund II ("JLL
Associates II"); and Peter A. Joseph and Paul S. Levy,
who are each general partners of each of JLL Associates
and JLL Associates II. JLL, JLL Fund II, JLL Associates,
JLL Associates II and Messrs. Joseph and Levy are
sometimes collectively referred to herein as the
"Reporting Persons." Each of Ms. Yvonne Cliff and Mr.
Angus Littlejohn resigned, as of August 18, 1995 and
September 12, 1996, respectively, as general partners of
both JLL Associates and JLL Associates II and are no
longer deemed to beneficially own any Shares of the
Issuer covered hereby.
(b) The address of the principal business
office of JLL, JLL Fund II, JLL Associates, JLL
Associates II and Messrs. Joseph and Levy is 450
Lexington Avenue, Suite 3350, New York, New York 10017.
(c) The principal business of JLL, JLL Fund
II, JLL Associates and JLL Associates II is to make and
hold investments in various entities. The principal
business of each of Messrs. Joseph and Levy is to act as
a general partner of JLL Associates and JLL Associates
II.
(f) Each of JLL, JLL Fund II, JLL Associates
and JLL Associates II is a limited partnership organized
under the laws of the State of Delaware. Each of Messrs.
Joseph and Levy is a United States citizen.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended by adding the
following:
On March 25, 1997, the Issuer entered into an
Agreement and Plan of Merger (the "Merger Agreement"), by
and among the Issuer, IBP, inc. (the "Parent") and IBP
Sub, Inc. (the "Purchaser") a copy of which is attached
hereto as Exhibit 7 and incorporated herein by reference,
pursuant to which the Purchaser will make an offer (the
"Offer") to purchase, at a price equal to $23.40 per
share, net to the sellers in cash, or such higher price
as may be made in the Offer (the "Share Price"), all of
the issued and outstanding shares of the Issuer's Common
Stock, and shall merge with and into the Issuer, upon the
terms and subject to the conditions set forth in the
Merger Agreement.
Concurrently with the execution of the
Agreement, and as a condition to the willingness of the
Parent and the Purchaser to enter into the Merger
Agreement, JLL and JLL Fund II entered into a Tender
Agreement (the "Agreement"), dated as of March 25, 1997,
with the Parent and the Purchaser, a copy of which is
attached hereto as Exhibit 8 and incorporated herein by
reference. Pursuant to the Agreement, JLL and JLL Fund
II have agreed to validly tender pursuant to the Offer,
and, except in certain circumstances, not withdraw, the
shares of Common Stock owned by them within five business
days of the commencement of the Offer.
In addition, pursuant to the Agreement, JLL and
JLL Fund II have irrevocably granted to the Purchaser an
option (the "Option") to acquire from JLL and JLL Fund
II, at the Share Price, any or all of the shares of
Common Stock beneficially owned by JLL and JLL Fund II if
(i) JLL and JLL Fund II fail to comply with any of their
obligations under the Agreement or withdraw (except in
certain circumstances) the tender of the shares of Common
Stock owned by them or (ii) the Offer is not consummated
because of the failure to satisfy any of the conditions
to the Offer (other than as a result of any action or
inaction of the Parent or the Purchaser which constitutes
a breach of the Agreement and Merger Agreement). Subject
to certain conditions specified in the Agreement, such
right is exercisable in whole or in part for the 60 day
period following the first to occur of the foregoing
events.
Pursuant the Agreement, JLL and JLL Fund II
have agreed to vote all shares of Common Stock now or
hereafter owned by them in favor of the merger described
in the Merger Agreement, and against any Acquisition
Proposal (as defined in the Merger Agreement). The
Agreement shall expire and be of no further force or
effect if (i) the conditions to the Purchaser's
obligations to accept for payment and pay for shares of
Common Stock pursuant to the Offer shall have been
satisfied and the Purchaser breaches any obligation of
the Purchaser under the Merger Agreement to accept for
payment and promptly pay for all shares of Common Stock
validly tendered and not withdrawn pursuant to the Offer
or (ii) the Purchaser amends the Offer to (w) reduce the
Share Price to less than $23.40 in cash, net to the
sellers, (x) reduce the number of shares of Common Stock
subject to the Offer, (y) change the form of the
consideration payable in the Offer or (z) amend or modify
any term or condition of the Offer in a manner adverse to
JLL and JLL Fund II. The Agreement will also terminate
on the earlier of (i) the close of business on September
24, 1997 or (ii) the Effective Time (as defined in the
Merger Agreement).
ITEM 6. CONTRACTS, AGREEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
ISSUER.
Item 6 of the Schedule 13D is hereby amended
by adding the following:
The response to Item 4 above is hereby
incorporated by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 7 Agreement and Plan of
Merger, dated as of March
25, 1997, by and among
Foodbrands America, Inc.,
IBP, inc. and IBP Sub, Inc.
Exhibit 8 Tender Agreement, dated as
of March 25, 1997, among
IBP, inc., IBP Sub, Inc.
and Joseph Littlejohn &
Levy Fund, L.P. and Joseph
Littlejohn & Levy Fund II,
L.P.
SIGNATURE
After reasonable inquiry and to its best
knowledge and belief, the undersigned certifies that the
information set forth in this Statement is true, complete
and correct.
Dated: March 28, 1997
JOSEPH LITTLEJOHN & LEVY FUND, L.P.
By: JLL Associates, L.P.,
its General Partner
By: /s/ Peter A. Joseph
------------------------
Peter A. Joseph
General Partner
SIGNATURE
After reasonable inquiry and to its best
knowledge and belief, the undersigned certifies that the
information set forth in this Statement is true, complete
and correct.
Dated: March 28, 1997
JOSEPH LITTLEJOHN & LEVY
FUND II, L.P.
By: JLL Associates II, L.P.,
its General Partner
By: /s/ Peter A. Joseph
------------------------
Peter A. Joseph
General Partner
SIGNATURE
After reasonable inquiry and to its best
knowledge and belief, the undersigned certifies that the
information set forth in this Statement is true, complete
and correct.
Dated: March 28, 1997
JLL Associates, L.P.
By: /s/ Peter A. Joseph
-----------------------------
Peter A. Joseph
General Partner
SIGNATURE
After reasonable inquiry and to its best
knowledge and belief, the undersigned certifies that the
information set forth in this Statement is true, complete
and correct.
Dated: March 28, 1997
JLL Associates II, L.P.
By: /s/Peter A. Joseph
---------------------------
Peter A. Joseph
General Partner
SIGNATURE
After reasonable inquiry and to his best
knowledge and belief, the undersigned certifies that the
information set forth in this Statement is true, complete
and correct.
Dated: March 28, 1997
By: /s/ Peter A. Joseph
----------------------------
Peter A. Joseph
SIGNATURE
After reasonable inquiry and to his best
knowledge and belief, the undersigned certifies that the
information set forth in this Statement is true, complete
and correct.
Dated: March 28, 1997
By: /s/ Paul S. Levy
---------------------------
Paul S. Levy
Exhibit 7
AGREEMENT AND PLAN OF MERGER
by and among
FOODBRANDS AMERICA, INC.
AND
IBP, inc.
AND
IBP SUB, INC.
Dated as of
March 25, 1997
TABLE OF CONTENTS
Page
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Offer . . . . . . . . . . . . . . . . . . . 1
1.2 Company Action. . . . . . . . . . . . . . . . . 4
1.3 Board of Directors of the Company . . . . . . . 5
ARTICLE II THE MERGER . . . . . . . . . . . . . . . . . . . 6
2.1 The Merger . . . . . . . . . . . . . . . . . . . 6
2.2 Effect of Merger . . . . . . . . . . . . . . . . 7
(a)Name of Surviving Corporation . . . . . . . . 7
(b)Certificate of Incorporation . . . . . . . . 7
(c)Bylaws . . . . . . . . . . . . . . . . . . . 7
(d)Corporate Organization . . . . . . . . . . . 7
(e)Directors and Officers . . . . . . . . . . . 8
(f)Closing . . . . . . . . . . . . . . . . . . . 8
(g)Filing of Certificate of Merger;
Effective Date and Effective Time . . . . . . 8
2.3 Conversion of Shares . . . . . . . . . . . . . . 8
2.4 Dissenters' Rights . . . . . . . . . . . . . . . 9
2.5 Payment for Shares; Surrender of Certif-
icates . . . . . . . . . . . . . . . . . . . . . 9
2.6 Stock Options . . . . . . . . . . . . . . . . 11
2.7 Lost Certificates . . . . . . . . . . . . . . 12
2.8 Closing of Company Transfer Books . . . . . . 12
2.9 Further Assurances . . . . . . . . . . . . . . 12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
COMPANY . . . . . . . . . . . . . . . . . . . 13
3.1 Organization of the Company . . . . . . . . . 13
3.2 Authorization . . . . . . . . . . . . . . . . 13
3.3 Capitalization of the Company . . . . . . . . 14
3.4 Subsidiaries of the Company . . . . . . . . . 15
3.5 Undisclosed Liabilities . . . . . . . . . . . 16
3.6 Absence of Certain Changes or Events . . . . . 16
3.7 Title to Assets, Etc. . . . . . . . . . . . . 18
3.8 Condition of Tangible Assets . . . . . . . . . 18
3.9 Contracts and Commitments . . . . . . . . . . 19
3.10 No Conflict or Violation; Third Party
Consents . . . . . . . . . . . . . . . . . . . 20
3.11 Consents and Approvals . . . . . . . . . . . . 20
3.12 Compliance with Law . . . . . . . . . . . . . 20
3.13 Brokers . . . . . . . . . . . . . . . . . . . 21
3.14 No Other Agreements to Sell the Company . . . 21
3.15 Intellectual Property . . . . . . . . . . . . 21
3.16 Employee Benefit Plans . . . . . . . . . . . . 22
3.17 Tax Matters . . . . . . . . . . . . . . . . . 23
3.18 SEC Documents . . . . . . . . . . . . . . . . 24
3.19 Environmental Matters . . . . . . . . . . . . 25
3.20 Proxy Statement; Information Statement . . . . 27
3.22 Vote Required . . . . . . . . . . . . . . . . 28
3.23 Opinion of Financial Advisor . . . . . . . . . 28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
PARENT AND THE PURCHASER . . . . . . . . . . . 28
4.1 Organization . . . . . . . . . . . . . . . . . 28
4.2 Authorization . . . . . . . . . . . . . . . . 29
4.3 Consents and Approvals . . . . . . . . . . . . 29
4.4 No Conflict or Violation; Third Party
Consents . . . . . . . . . . . . . . . . . . . 29
4.5 No Brokers . . . . . . . . . . . . . . . . . . 30
4.6 Proxy Statement; Information Statement . . . . 30
4.7 Share Ownership . . . . . . . . . . . . . . . 31
4.8 Financing . . . . . . . . . . . . . . . . . . 31
ARTICLE V ACTIONS BY THE COMPANY, THE PARENT
AND THE PURCHASER PRIOR TO THE EFFECTIVE DATE 31
5.1 Maintenance of Business . . . . . . . . . . . 31
5.2 Certain Prohibited Transactions . . . . . . . 31
5.3 Investigation by the Parent and the
Purchaser . . . . . . . . . . . . . . . . . . 34
5.4 Consents and Reasonable Best Efforts. . . . . 35
5.5 Notification of Certain Matters. . . . . . . . 36
5.6 Stockholders' Meeting; Board Recommenda-
tions;
Proxy Material . . . . . . . . . . . . . . . 36
5.7 Information Statement . . . . . . . . . . . . 38
ARTICLE VI CONDITIONS . . . . . . . . . . . . . . . . . . 41
6.1 Conditions to Each Party's Obligation to
Effect
the Merger . . . . . . . . . . . . . . . . . 41
6.2 Conditions to Obligation of the Parent
to Effect
the Merger . . . . . . . . . . . . . . . . . 42
ARTICLE VII ADDITIONAL COVENANTS OF THE COMPANY, THE
PARENT AND THE PURCHASER . . . . . . . . . . . 42
7.1 Employee Benefits . . . . . . . . . . . . . . 42
7.2 Officers' and Directors' Insurance;
Indemnification . . . . . . . . . . . . . . . 43
7.3 Transition Agreements . . . . . . . . . . . . 44
7.4 Restructuring of Transaction . . . . . . . . . 45
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . 45
8.1 Termination . . . . . . . . . . . . . . . . . 45
8.2 Effect of Termination . . . . . . . . . . . . 46
8.3 No Survival of Representations, Warran-
ties
and Covenants . . . . . . . . . . . . . . . . 46
8.4 Assignment . . . . . . . . . . . . . . . . . . 47
8.5 Notices . . . . . . . . . . . . . . . . . . . 47
8.6 Choice of Law . . . . . . . . . . . . . . . . 49
8.7 Entire Agreement; Amendments and Waiv-
ers . . . . . . . . . . . . . . . . . . . . . 49
8.8 Schedules . . . . . . . . . . . . . . . . . . 49
8.9 No Third Party Beneficiary . . . . . . . . . . 50
8.10 Counterparts . . . . . . . . . . . . . . . . . 50
8.11 Invalidity . . . . . . . . . . . . . . . . . . 50
8.12 Headings . . . . . . . . . . . . . . . . . . . 50
8.13 Publicity . . . . . . . . . . . . . . . . . . 50
Annex A
Exhibits
Exhibit "A" Tender Agreements
Exhibit "B" Charter Amendment
DEFINITIONS
The following terms are defined in the Sections
indicated and shall have the meanings ascribed to them therein
unless the context clearly indicates otherwise.
Defined in
Term Section
"Acquisition Proposal" . . . . . . . . . . . . . . . . 5.8
"Antitrust Improvements Act" . . . . . . . . . . . . . 3.11
"Assets" . . . . . . . . . . . . . . . . . . . . . . . 3.7
"Business Day" . . . . . . . . . . . . . . . . . . . . 8.5
"CERCLA" . . . . . . . . . . . . . . . . . . . . . . . 3.19(a)
"CERCLIS" . . . . . . . . . . . . . . . . . . . . . . . 3.19(c)
"Certificate of Amendment" . . . . . . . . . . . . . . 3.2(c)
"Certificate of Merger" . . . . . . . . . . . . . . . 2.2(g)
"Charter Amendment" . . . . . . . . . . . . . . . . . . 3.2(c)
"Closing" . . . . . . . . . . . . . . . . . . . . . . . 2.2(f)
"Code" . . . . . . . . . . . . . . . . . . . . . . . . 3.16
"Common Stock" . . . . . . . . . . . . . . . . . . . . 2.3(a)
"Company Disclosure Letter" . . . . . . . . . . . . . . 3.3
"Company Permits" . . . . . . . . . . . . . . . . . . . 3.12
"Company SEC Documents" . . . . . . . . . . . . . . . . 3.18
"Confidentiality Agreement" . . . . . . . . . . . . . . 8.7
"Constituent Corporations" . . . . . . . . . . . . . . 2.1
"Delaware Law" . . . . . . . . . . . . . . . . . . . . 2.1
"Disbursing Agent" . . . . . . . . . . . . . . . . . . 2.5
"Dissenters' Shares" . . . . . . . . . . . . . . . . . 2.4
"Effective Date" . . . . . . . . . . . . . . . . . . . 2.2(g)
"Effective Time" . . . . . . . . . . . . . . . . . . . 2.2(g)
"Employment Agreements" . . . . . . . . . . . . . . . . 7.1(a)
"Encumbrances" . . . . . . . . . . . . . . . . . . . . 3.7
"Environmental Laws" . . . . . . . . . . . . . . . . . 3.19(a)
"ERISA" . . . . . . . . . . . . . . . . . . . . . . . . 3.16
"Exchange Act" . . . . . . . . . . . . . . . . . . . . 1.1
"Expenses" . . . . . . . . . . . . . . . . . . . . . . 5.10(c)
"Financial Statements" . . . . . . . . . . . . . . . . 3.5
"FINDS" . . . . . . . . . . . . . . . . . . . . . . . . 3.19(c)
"Governmental Entity" . . . . . . . . . . . . . . . . . 3.11
"Hazardous Material" . . . . . . . . . . . . . . . . . 3.19(b)
"Indemnified Parties" . . . . . . . . . . . . . . . . . 7.2(a)
"Information Statement" . . . . . . . . . . . . . . . . 5.7
"Intellectual Property" . . . . . . . . . . . . . . . . 3.15
"Investment Banker" . . . . . . . . . . . . . . . . . . 4.5
"JLL" . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
"Licenses" . . . . . . . . . . . . . . . . . . . . . . 3.15
"Material Adverse Change" . . . . . . . . . . . . . . . 3.1
"Material Adverse Effect" . . . . . . . . . . . . . . . 3.1
"Merger" . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Merger Consideration" . . . . . . . . . . . . . . . . 2.3(a)
"Minimum Condition" . . . . . . . . . . . . . . . . . . Annex A
"Morgan Stanley" . . . . . . . . . . . . . . . . . . . 3.13
"NOLs" . . . . . . . . . . . . . . . . . . . . . . . . 3.17
"Notice of a Superior Proposal" . . . . . . . . . . . . 5.8
"Offer" . . . . . . . . . . . . . . . . . . . . . . . . 1.1(a)
"Offer Documents" . . . . . . . . . . . . . . . . . . . 1.(b)
"Offer to Purchase" . . . . . . . . . . . . . . . . . . 1.1(a)
"OSHA" . . . . . . . . . . . . . . . . . . . . . . . . 3.19(a)
"Option Settlement Amount" . . . . . . . . . . . . . . 2.6
"Parent Companies" . . . . . . . . . . . . . . . . . . 5.6
"Patents" . . . . . . . . . . . . . . . . . . . . . . . 3.15
"Pension Plans" . . . . . . . . . . . . . . . . . . . . 3.16
"Personnel" . . . . . . . . . . . . . . . . . . . . . . 3.6(b)
"Plans" . . . . . . . . . . . . . . . . . . . . . . . . 3.16
"Preferred Stock" . . . . . . . . . . . . . . . . . . . 3.3
"Proxy Statement" . . . . . . . . . . . . . . . . . . . 5.6(c)
"RCRA" . . . . . . . . . . . . . . . . . . . . . . . . 3.19(a)
"SEC" . . . . . . . . . . . . . . . . . . . . . . . . . 1.1(b)
"Shares" . . . . . . . . . . . . . . . . . . . . . . . 1.1(a)
"Share Price" . . . . . . . . . . . . . . . . . . . . . 2.3(a)
"Special Meeting" . . . . . . . . . . . . . . . . . . . 5.6(a)
"Stock Option Plans" . . . . . . . . . . . . . . . . . 2.6
"Subsidiary" or "Subsidiaries" . . . . . . . . . . . . 3.4
"Superior Proposal" . . . . . . . . . . . . . . . . . . 5.8
"Surviving Corporation" . . . . . . . . . . . . . . . . 2.1
"Takeover Proposal" . . . . . . . . . . . . . . . . . . 5.10(c)
"Tender Agreements" . . . . . . . . . . . . . . . . . . Recitals
"Termination Fee" . . . . . . . . . . . . . . . . . . . 5.10(b)
"Trademarks" . . . . . . . . . . . . . . . . . . . . . 3.15
"Transition Agreements" . . . . . . . . . . . . . . . . 7.3
"Warrant Agreement" . . . . . . . . . . . . . . . . . . 3.3
"Welfare Plans" . . . . . . . . . . . . . . . . . . . . 3.16
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of March
25, 1997 (the "Agreement") is by and among Foodbrands America,
Inc., a Delaware corporation (the "Company"), IBP, inc., a
Delaware corporation (the "Parent"), and IBP Sub, Inc., a Dela-
ware corporation and a wholly-owned subsidiary of the Parent (the
"Purchaser").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of the
Parent, Purchaser and the Company have each approved the acquisi-
tion of the Company by the Parent upon the terms and subject to
the conditions set forth in this Agreement;
WHEREAS, to induce the Parent and the Purchaser to
enter into this Agreement, each of Joseph Littlejohn & Levy Fund,
L.P., Joseph Littlejohn & Levy Fund II, L.P. (collectively,
"JLL") and The Airlie Group L.P. are concurrently entering into a
Tender Agreement with the Parent and the Purchaser in the form
attached hereto as Exhibit A (each a "Tender Agreement" and
collectively, the "Tender Agreements"), each of which Tender
Agreements have been approved by the Board of Directors of the
Company; and
WHEREAS, the Parent, the Purchaser and the Company
desire to make certain representations, warranties, covenants and
agreements in connection with the Offer and the Merger (each as
hereafter defined) and also to prescribe certain conditions to
the Offer and the Merger.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements herein contained, and intend-
ing to be legally bound hereby, the Parent, the Purchaser and the
Company hereby agree as follows:
ARTICLE I
THE TENDER OFFER
1.1 The Offer.
(a) In accordance with the provisions of this
Agreement and provided that nothing shall have occurred which
would result in a failure of any of the conditions set forth in
Annex A, attached hereto and made a part hereof, as promptly as
practicable, and in no event later than the fifth (5th) business
day following the date hereof, the Parent shall cause the Pur-
chaser to, and the Purchaser shall commence (within the meaning
of Rule 14d-2 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), a tender offer (as it may be
amended from time to time as permitted hereunder, the Offer )
for all of the issued and outstanding shares (the Shares ) of
the Common Stock (defined hereafter) at a price of Twenty Three
Dollars and Forty Cents ($23.40) per share net to the seller in
cash, without interest thereon (such price or such higher price
per share as may be paid in the Offer, being referred to herein
as the Share Price ), which Offer, and the obligation of the
Purchaser to accept payment and pay for Shares tendered pursuant
to the Offer, shall be in accordance with the terms of this
Agreement, subject to the conditions set forth in Annex A hereto.
The Purchaser shall, subject only to the satisfaction or waiver
of the conditions set forth on Annex A hereto, accept for payment
and pay for all Shares validly tendered and not withdrawn pursu-
ant to the Offer as soon as practicable after the expiration of
the Offer. The Offer shall be made by means of an offer to
purchase (the "Offer to Purchase") containing the terms set forth
in this Agreement, the Minimum Condition (as defined in Annex A
hereto) and the other conditions set forth in Annex A hereto.
Notwithstanding the foregoing, the Purchaser expressly reserves
the right to increase the price per Share payable in the Offer
and make any other changes to the terms or conditions of the
Offer (or waive in whole or in part, at the sole discretion of
the Purchaser any of such conditions), provided, however, that
the Purchaser will not, without the prior written consent of the
Company (such consent to be authorized by the Board of Directors
of the Company), (i) waive the Minimum Condition, (ii) subject to
clause (z) of the proviso in the immediately following sentence,
extend the Offer if all of the Offer conditions are satisfied or
waived, (iii) decrease the Share Price, change the form of
consideration payable in the Offer or decrease the number of
Shares sought, (iv) impose additional conditions to the Offer,
(v) waive the condition described in clause (x) of Annex A hereto
or (vi) amend the conditions of the Offer or any other term of
the Offer in any manner adverse to the holders of Shares (other
than insignificant changes or amendments or other than to waive
any condition). The initial expiration date of the Offer shall
be 20 business days following commencement of the Offer (such
date and time, as may be extended in accordance with the terms
hereof, is referred to as the Expiration Date ); provided,
however, and notwithstanding anything in the foregoing to the
contrary, it is understood and agreed that the Purchaser may,
from time to time, in its sole discretion extend the Expiration
Date, but not beyond September 24, 1997, without the consent of
the Company (x) if any of the conditions to the Offer have not
been satisfied, for the minimum period of time necessary to
satisfy such condition; (y) for any period required by any order,
decree or ruling of, or any rule, regulation, interpretation or
position of, any Governmental Entity (as hereafter defined)
applicable to the Offer; or (z) for a period of not more than
five business days beyond the latest expiration date that would
otherwise be permitted under clause (x) or (y) of this sentence
solely for the purpose of obtaining valid tenders (which are not
withdrawn) of 90% of the Shares. A record holder who validly
tenders, and does not withdraw, pursuant to the Offer at least
500,000 shares of Common Stock which such holder beneficially
owns, may receive, upon acceptance of such shares by the Purchas-
er pursuant to the Offer, payment therefor by wire transfer of
immediately available funds to an account in the United States
designated in writing by such holder at the time such shares are
tendered pursuant to the Offer.
(b) As soon as practicable on the date the Offer
is commenced, the Parent and the Purchaser shall file with the
United States Securities and Exchange Commission (the "SEC") a
Tender Offer Statement on Schedule 14D-1 with respect to the
Offer (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-1"). The
Schedule 14D-1 will include, as exhibits, the Offer to Purchase
and a form of letter of transmittal and summary advertisement
(collectively, together with any amendments and supplements
thereto, the "Offer Documents"). The Offer Documents will comply
as to form in all material respects with the provisions of
applicable federal securities laws and, on the date filed with
the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by
the Parent or the Purchaser with respect to information furnished
by the Company for inclusion or incorporation by reference in the
Offer Documents. The information supplied in writing by the
Company for inclusion or incorporation by reference in the Offer
Documents and by the Parent or the Purchaser for inclusion or
incorporation by reference in the Schedule 14D-9 (as hereinafter
defined) will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Each of the Parent and the Purchaser will take all steps neces-
sary to cause the Offer Documents to be filed with the SEC and to
be disseminated to holders of the Shares, in each case as and to
the extent required by applicable federal securities laws. Each
of the Parent and the Purchaser, on the one hand, and the Compa-
ny, on the other hand, will promptly correct any information
provided by it for use in the Offer Documents if and to the
extent that it shall have become false and misleading in any
material respect and the Purchaser will take all steps necessary
to cause the Offer Documents as so corrected to be filed with the
SEC and to be disseminated to holders of the Shares, in each case
as and to the extent required by applicable federal securities
laws. The Company and its counsel shall be given the opportunity
to review the Schedule 14D-1 before it is filed with the SEC. In
addition, the Parent and the Purchaser will provide the Company
and its counsel in writing with any comments, whether written or
oral, the Parent, the Purchaser or their counsel may receive from
time to time from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
1.2 Company Action.
(a) The Company hereby approves of and consents
to the Offer and represents that its Board of Directors has duly
adopted resolutions approving the Offer, the Merger, this Agree-
ment, the Tender Agreements and the acquisition of shares of
Common Stock pursuant thereto, has determined that the Merger is
advisable and that the terms of the Offer and the Merger are fair
to, and in the best interests of, the Company's stockholders and
has resolved to recommend acceptance of the Offer and approval of
the Merger by the stockholders of the Company. The Company
hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board of Directors of the Company described
in this Section 1.2(a), subject to the right of the Board of
Directors of the Company to withdraw or modify its approval or
recommendation of the Offer in accordance with Section 5.7(b)
hereof.
(b) Concurrently with the commencement of the
Offer, the Company shall file with the SEC a Solicita-
tion/Recommendation Statement on Schedule 14D-9 (together with
all amendments and supplements thereto and including the exhibits
thereto, the "Schedule 14D-9") which shall, subject to the right
of the Board of Directors of the Company to withdraw or modify
its approval or recommendation of the Offer in accordance with
Section 5.7(b) hereof, contain the recommendation referred to in
Section 1.2(a) hereof. The Schedule 14D-9 will comply in all
material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the
date first published, sent or given to the Company's stockhold-
ers, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading,
except that no representation is made by the Company with respect
to information furnished by the Parent or the Purchaser for
inclusion or incorporation by reference in the Schedule 14D-9.
The Company further agrees to take all steps necessary to cause
the Schedule 14D-9 to be filed with the SEC and to be disseminat-
ed to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws. Each of the
Company, on the one hand, and the Parent and the Purchaser, on
the other hand, agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false and misleading in any material
respect and the Company further agrees to take all steps neces-
sary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and to be disseminated to holders of the Shares, in each
case as and to the extent required by applicable federal securi-
ties laws. The Parent and its counsel shall be given the oppor-
tunity to review the Schedule 14D-9 before it is filed with the
SEC. In addition, the Company agrees to provide the Parent, the
Purchaser and their counsel with any comments, whether written or
oral, that the Company or its counsel may receive from time to
time from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments or other communica-
tions. The Company has been advised by each of its directors
that as of the date hereof each such person intends to tender all
of the shares of Common Stock owned by such person pursuant to
the Offer.
(c) In connection with the Offer, the Company
will promptly furnish or cause to be furnished to the Purchaser
mailing labels, security position listings and any available
listing or computer file containing the names and addresses of
all record holders of the Shares as of a recent date, and shall
furnish the Purchaser with such additional information (includ-
ing, but not limited to, updated lists of holders of the Shares
and their addresses, mailing labels and lists of security posi-
tions) and assistance as the Purchaser or its agents may reason-
ably request in communicating the Offer to the record and benefi-
cial holders of the Shares. Except for such steps as are neces-
sary to disseminate the Offer Documents, the Parent and the
Purchaser shall hold in confidence the information contained in
any of such labels and lists and the additional information
referred to in the preceding sentence, will use such information
only in connection with the Offer and the Merger, and, if this
Agreement is terminated, will upon request of the Company deliver
or cause to be delivered to the Company all copies of such
information then in its possession or the possession of its
agents or representatives.
1.3 Board of Directors of the Company.
(a) Promptly upon the purchase of and payment for
any Shares by the Parent or any of its subsidiaries which repre-
sents at least a majority of the outstanding Shares (on a fully
diluted basis), the Parent shall be entitled to designate such
number of directors, rounded up to the next whole number, on the
Board of Directors of the Company as is equal to the product of
the total number of directors on such Board (giving effect to the
directors designated by the Parent pursuant to this sentence)
multiplied by the percentage that the number of Shares so accept-
ed for payment bears to the total number of Shares then outstand-
ing. In furtherance thereof, the Company shall, upon request of
the Purchaser, use its best efforts promptly either to increase
the size of its Board of Directors or secure the resignations of
such number of its incumbent directors, or both, as is necessary
to enable the Parent's designees to be so elected to the
Company's Board, and shall take all actions available to the
Company to cause the Parent's designees to be so elected. At
such time, the Company shall also cause persons designated by the
Parent to constitute at least the same percentage (rounded up to
the next whole number) as is on the Company's Board of Directors
of (i) each committee of the Company's Board of Directors, (ii)
each board of directors (or similar body) of each Subsidiary (as
defined hereafter) of the Company, and (iii) each committee (or
similar body) of each such board. Notwithstanding the foregoing,
until the Effective Time (as defined hereafter), the Company
shall use all reasonable efforts to have at least two members of
the Board of Directors who are neither officers of the Parent or
designees, stockholders or affiliates of the Parent. Subject to
receipt by the Company from the Parent or the Purchaser of the
information referred to in the penultimate sentence of this
Section 1.3(a), the Company shall promptly take all actions
required pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder in order to fulfill its obligations
under this Section 1.3(a), including mailing to stockholders the
information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable the Parent's designees to be elected to the
Company's Board of Directors. The Parent or the Purchaser will
supply the Company any information with respect to either of them
and their nominees, officers, directors and affiliates required
by such Section 14(f) and Rule 14f-1. The provisions of this
Section 1.3(a) are in addition to and shall not limit any rights
which the Purchaser, the Parent or any of their affiliates may
have as a holder or beneficial owner of Shares as a matter of law
with respect to the election of directors or otherwise.
(b) From and after the time, if any, that the
Parent's designees constitute a majority of the Company's Board
of Directors and prior to the Effective Date (as hereinafter
defined), any amendment of this Agreement by the Company, any
termination of this Agreement by the Company, any extension of
time for performance of any of the obligations of the Parent or
the Purchaser hereunder, any waiver of any condition to the
Company's obligations hereunder or any of the Company's rights
hereunder or action to amend or otherwise modify the Company's
Amended and Restated Certificate of Incorporation or Amended and
Restated By-Laws may be effected only by the action of a majority
of the directors of the Company then in office who were not
officers of the Parent or designees, stockholders or affiliates
of the Parent, which action shall be deemed to constitute the
action of any committee specifically designated by the Board of
Directors to approve the actions and transactions contemplated
hereby and the full Board of Directors; provided, that if there
shall be no such directors, such actions may be effected by
majority vote of the entire Board of Directors of the Company.
ARTICLE II
THE MERGER
2.1 The Merger. At the Effective Time, the Purchaser
shall be merged with and into the Company (the "Merger") upon the
terms and subject to the conditions hereinafter set forth as
permitted by and in accordance with the provisions of Section 251
(or other applicable provision) of the General Corporation Law of
the State of Delaware (the "Delaware Law"). The Company and the
Purchaser are sometimes referred to herein as the "Constituent
Corporations." The Company shall be the surviving corporation
following the effectiveness of the Merger (sometimes referred to
herein as the "Surviving Corporation"). Notwithstanding anything
to the contrary herein, at the election of the Parent, any direct
or indirect wholly-owned subsidiary of the Parent may be substi-
tuted for the Purchaser as a Constituent Corporation in the
Merger; provided, however, that such substitution shall not
impede or delay the consummation of the transactions contemplated
by this Agreement. In such event, the parties agree to execute
an appropriate amendment to this Agreement, in form and substance
reasonably satisfactory to the Parent and the Company, in order
to reflect such substitution.
2.2 Effect of Merger. The parties agree to the
following provisions with respect to the Merger:
(a) Name of Surviving Corporation. The name of
the Surviving Corporation from and after the Effective Date shall
be "Foodbrands America, Inc."
(b) Certificate of Incorporation. The Certifi-
cate of Incorporation of the Purchaser as in effect immediately
prior to the Effective Date shall from and after the Effective
Date be the Certificate of Incorporation of the Surviving Corpo-
ration until changed or amended in accordance with the provisions
of applicable law.
(c) Bylaws. The Bylaws of the Purchaser as in
effect immediately prior to the Effective Date shall from and
after the Effective Date be and continue to be the Bylaws of the
Surviving Corporation until changed or amended as provided
therein or the Certificate of Incorporation of the Surviving
Corporation or in accordance with the provisions of applicable
law.
(d) Corporate Organization. The separate corpo-
rate existence of the Purchaser shall cease at the Effective
Time. All the rights, privileges, immunities and franchises, of
a public as well as a private nature, and all property, real,
personal and mixed, of each of the Constituent Corporations, and
all debts due on whatever account to each of them, including
subscriptions for stock and other choses in action belonging to
each of them, shall be taken and deemed to be transferred to and
vested in the Surviving Corporation in accordance with Delaware
Law without further act or deed. The title to any real estate,
or any interest therein, vested in either of the Constituent
Corporations shall not revert or be in any way impaired by reason
of Merger. The Surviving Corporation shall thenceforth be
responsible for all the liabilities and obligations of each of
the Constituent Corporations, with the effect set forth in the
Delaware Law. Any claim, action or proceeding existing or
pending by or against any of the Constituent Corporations may be
prosecuted as if the Merger had not taken place, or the Surviving
Corporation may be substituted in its place. The Surviving
Corporation shall have all the rights, privileges, immunities and
powers and shall be subject to all the duties and liabilities of
a corporation organized under the Delaware Law, and neither the
rights of creditors nor any liens upon the property of the
Purchaser or the Company shall be impaired by the Merger.
(e) Directors and Officers. The directors of the
Purchaser immediately prior to the Effective Time will be the
initial directors of the Surviving Corporation, and the officers
of the Company immediately prior to the Effective Time will be
the initial officers of the Surviving Corporation, in each case
until the earlier of their resignation or removal or until their
successors are elected or appointed and qualified.
(f) Closing. The Merger shall be consummated and
the closing of this Agreement (the "Closing") shall take place at
the offices of Sidley & Austin, One First National Plaza, Chica-
go, Illinois 60603, or at such other place as the parties may
mutually agree, no later than the second business day (the
"Closing Date") after the satisfaction or waiver of the condi-
tions to the obligations of the parties hereto set forth in
Article VI hereof.
(g) Filing of Certificate of Merger; Effective
Date and Effective Time. On the Closing Date (or such other date
as the Parent and the Company may agree) the Parent, the Purchas-
er and the Company shall cause a certificate of merger or, if
applicable, a certificate of ownership and merger (the "Certifi-
cate of Merger") to be executed and filed with the Secretary of
State of the State of Delaware as provided in the Delaware Law.
The Merger shall become effective on the date and time at which
the Certificate of Merger shall have been duly filed with the
Secretary of State of the State of Delaware or at such other time
as the Parent, the Purchaser and the Company shall agree should
be specified in the Certificate of Merger (the date and time the
Merger becomes effective being referred to herein respectively as
the "Effective Date" and the "Effective Time").
2.3 Conversion of Shares. By virtue of the Merger and
without any action on the part of the Parent, the Purchaser or
any stockholder of the Company, as of the Effective Time pursuant
to this Agreement:
(a) Each share of common stock, $.01 par value
per share, of the Company (the "Common Stock") then issued and
outstanding immediately prior to the Effective Time (other than
shares of Common Stock held by the Company as treasury stock or
by any wholly-owned subsidiary of the Company or owned by the
Parent, the Purchaser or any other subsidiaries of the Parent and
other than the Dissenters' Shares (as defined in Section 2.4))
shall be cancelled and converted into and become the right to
receive, upon surrender of the certificate representing such
share an amount in cash, without interest thereon, equal to the
Share Price (the "Merger Consideration");
(b) Each outstanding share of Common Stock held
by the Company as a treasury share or by any wholly-owned subsid-
iary of the Company and any shares of Common Stock owned by the
Parent, the Purchaser or any other subsidiary of the Parent
shall be cancelled and retired and cease to exist and no consid-
eration shall be delivered in exchange therefor; and
(c) Each share of common stock, $.01 par value
per share, of the Purchaser then issued and outstanding shall be
converted into one fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation.
2.4 Dissenters' Rights. Each outstanding share of
Common Stock held by stockholders who shall have properly exer-
cised and perfected appraisal rights with respect thereto under
Section 262 of the Delaware Law ("Dissenters' Shares") shall not
be cancelled and converted into the right to receive the Merger
Consideration in cash, without interest, pursuant to the Merger,
but shall be entitled to receive payment of the appraised value
of such Dissenters' Shares in accordance with provisions of such
Section 262, except that any Dissenters' Shares held by a stock-
holder who fails to perfect or withdraws his or her demand for
appraisal of such Dissenters' Shares or loses his or her right to
such payment shall be cancelled and converted, as of the Effec-
tive Time, into the right to receive the Merger Consideration.
The Company will give the Parent prompt written notice of any
demands received by the Company for appraisals of shares of
Common Stock. The Company shall not, except with the prior
written consent of the Parent, make any payment with respect to
any demands for appraisal or offer to settle or settle any such
demands.
2.5 Payment for Shares; Surrender of Certificates. In
order that the cash payments provided for by Sections 2.3(a) and
2.6 hereof may be made, the Parent shall cause Purchaser to
deliver to a bank or trust company designated by the Parent prior
to the Effective Time (herein referred to as the "Disbursing
Agent"), at or prior to the Effective Time, in trust for the
benefit of the holders of Common Stock and persons entitled to
any portion of the Option Settlement Amount (as defined in
Section 2.6), cash, in immediately available funds, in an aggre-
gate amount necessary to pay the Merger Consideration pursuant to
Section 2.3(a) (determined as though there are no Dissenters'
Shares), plus the Option Settlement Amount. As soon as practica-
ble after the Effective Time, the Parent shall cause the Disburs-
ing Agent to mail (and to make available for collection by hand)
to each record holder of an outstanding certificate or certifi-
cates which immediately prior to the Effective Time represented
shares of Common Stock, a form letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and
title to the certificates shall pass, only upon actual delivery
of the certificates to the Disbursing Agent and shall be in a
form and have such other provisions as the Parent may reasonably
specify) and instructions for use in effecting the surrender of
such certificate or certificates for payment therefor. Such
letter of transmittal and instructions shall request that each
such record holder shall surrender such holder's certificate or
certificates to the Disbursing Agent promptly following the
Effective Date.
Upon surrender of a certificate formerly representing
shares of Common Stock, together with a letter of transmittal
duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be reason-
ably required pursuant to such instructions, the Disbursing Agent
shall promptly pay to the persons entitled thereto the amount to
which such persons are entitled. No interest will be paid or
accrued on the cash payable upon the surrender of any certificate
or certificates (it being understood that any interest earned on
funds made available to the Disbursing Agent pursuant to this
Agreement shall be turned over to the Parent).
If payment is to be made to a person other than the
person in whose name the certificate so surrendered is regis-
tered, it shall be a condition of payment that such certificate
shall be properly endorsed or otherwise in proper form for
transfer and that the person requesting such payment shall pay
any transfer or other taxes required by reason of the delivery of
such payment to a person other than the registered holder of such
certificate or establish to the satisfaction of the Parent that
any such taxes have been paid or are not applicable. Until
surrendered as contemplated by this Section 2.5, each certificate
(other than certificates representing Dissenters' Shares and
certificates representing any shares of Common Stock owned by the
Parent or any subsidiaries of the Parent, the Company or any
wholly-owned subsidiary of the Company) shall be deemed at any
time after the Effective Date to represent only the right to
receive upon such surrender the amount of cash, without interest,
into which the shares of Common Stock theretofore represented by
such certificate shall have been converted pursuant to Section
2.3(a). Notwithstanding the foregoing, none of the Disbursing
Agent, the Surviving Corporation or any party hereto shall be
liable to a former stockholder of the Company for any cash or
interest delivered to a public official as is required pursuant
to applicable abandoned property, escheat or similar laws.
After six months after the Effective Date, any remain-
ing funds, including any interest or other income thereon, held
by the Disbursing Agent pursuant to this Section shall be re-
leased from trust and shall be paid by the Disbursing Agent to
the Surviving Corporation. Thereafter, holders of shares of
Common Stock shall look only to the Parent or the Surviving
Corporation (subject to the terms of this Agreement and abandoned
property, escheat and other similar laws) as general creditors
thereof with respect to the Merger Consideration, without any
interest thereon, that may be payable per share of Common Stock
upon due surrender of the certificates held by them.
The Parent or the Disbursing Agent shall be entitled to
deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Common
Stock such amounts as the Parent or the Disbursing Agent is
required to deduct and withhold with respect to the making of
such payment under the Code (as hereinafter defined) or under any
provision of state, local or foreign tax law. To the extent
that amounts are so withheld by the Parent or the Disbursing
Agent, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the shares of
Common Stock in respect of which such deduction and withholding
was made by the Parent or the Disbursing Agent.
2.6 Stock Options. Immediately prior to the Effective
Time, subject to obtaining any consent which may be necessary
from the holder of the outstanding options, the Company shall
cancel and settle, by cash payment to the holders thereof (the
"Option Settlement Amount"), all the outstanding options to
purchase shares of Common Stock (whether or not such options are
currently exercisable or vested) which have heretofore been
granted under the following stock plans and agreements of the
Company: (i) Foodbrands America, Inc. 1992 Stock Incentive Plan,
as amended, (ii) Foodbrands America, Inc. Associate Stock Pur-
chase Plan, (iii) Foodbrands America, Inc. Nonqualified Associate
Stock Purchase Plan, (iv) Deferred Stock Compensation Plan for
the non-employee directors of Foodbrands, and (v) the 25,000
options issued to certain directors of the Company pursuant to
option agreements dated April 27, 1995. (Such plans and agree-
ments are referred to herein collectively as the "Stock Option
Plans.") Except as otherwise provided pursuant to the terms of
the Stock Option Plans in clauses (ii) and (iii) above, such
Option Settlement Amount with respect to each cancelled option
shall be in an amount equal to the excess, if any, of the Merger
Consideration over the per share exercise price of such cancelled
option, multiplied by the number of shares of Common Stock into
which such cancelled option would be exercisable, less any
amounts that the Company is required to withhold and pay over to
any federal and state, local or other tax authorities under
applicable law with respect to such Option Settlement Amount.
The remaining proceeds, if any, will be paid to the option holder
in cash. Such cash settlement shall constitute full performance
of the Company's obligations under the Stock Option Plans and any
related stock option agreements. Except as otherwise agreed to
by the parties, the Stock Option Plans shall terminate before or
as of the Effective Time.
2.7 Lost Certificates. If any certificate represent-
ing Common Stock shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed and, if required
by the Surviving Corporation, the posting by such person of a
bond, in such reasonable amount as the Surviving Corporation may
direct, as indemnity against any claim that may be made against
it with respect to such certificate, the Disbursing Agent will
pay in exchange for such lost, stolen or destroyed certificate
the Merger Consideration multiplied by the number of shares of
Common Stock represented by such certificate, to which the holder
thereof is entitled pursuant to this Article II.
2.8 Closing of Company Transfer Books. At the Effec-
tive Time, the stock transfer books of the Company shall be
closed, and no transfer of shares of Common Stock shall thereaf-
ter be made. If, after the Effective Time, share certificates
are presented to the Surviving Corporation, the Disbursing Agent
or the Parent, they shall be cancelled and exchanged for the
Merger Consideration as provided in this Article II.
2.9 Further Assurances. If at any time the Surviving
Corporation shall consider or be advised that any further assign-
ments or assurances are necessary or desirable to vest in the
Surviving Corporation, according to the terms hereof, the title
of any property or rights of the Company or the Purchaser, the
last acting officers and directors of the Company or the Purchas-
er, as the case may be, or the corresponding officers and direc-
tors of the Surviving Corporation shall and will execute and make
all such proper assignments and assurances and do all things
necessary or proper to vest title in such property or rights in
the Surviving Corporation, and otherwise to carry out the purpos-
es of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the
Parent and the Purchaser as follows:
3.1 Organization of the Company. The Company is duly
organized, validly existing and in good standing under the laws
of the State of Delaware, has full corporate power and authority
to conduct its business as it is presently being conducted and to
own and lease its properties and assets. Each of the direct and
indirect Subsidiaries of the Company is duly organized, validly
existing and in good standing under the laws of its respective
state of incorporation, has full corporate power and authority to
conduct its business as it is presently being conducted and to
own, operate and lease its properties and assets. Each of the
Company and its Subsidiaries is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdic-
tion in which (i) such qualification is necessary under the
applicable law as a result of its conduct of its business or
ownership of assets or properties held under lease, and (ii)
where the failure to be so qualified would have a Material
Adverse Effect (as defined below) on the Company. "Material
Adverse Change" or "Material Adverse Effect" means, when used
with respect to the Parent or the Company, as the case may be,
any change or effect, either individually or in the aggregate,
that is or can reasonably be expected to be materially adverse to
the business, assets, liabilities, properties, condition (finan-
cial or otherwise) or results of operations of the Parent and its
subsidiaries taken as a whole, or the Company and its Subsidiar-
ies taken as a whole, as the case may be.
3.2 Authorization.
(a) The Company has all necessary corporate power
and authority to enter into this Agreement and will at the
Closing have taken all necessary corporate action, including
stockholder consent or approval (if necessary), to consummate the
transactions contemplated hereby and to perform its obligations
hereunder. The execution and delivery of this Agreement by the
Company and the performance of its obligations hereunder have
been duly and validly authorized by the Board of Directors of the
Company and, other than the approval and adoption of this Agree-
ment by the requisite vote of the Company's stockholders, no
other corporate proceedings on the part of the Company are
necessary, and this Agreement has been duly executed and deliv-
ered by the Company and (assuming the valid authorization,
execution and delivery of this Agreement by the Parent and the
Purchaser) constitutes a valid and binding obligation of the
Company enforceable against it in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now
or hereafter in effect, relating to or limiting creditors' rights
generally and (ii) general principles of equity (whether consid-
ered in an action in equity or at law) which provide, among other
things, that the remedy of specific performance and injunctive
and other forms of equity relief are subject to equitable defens-
es and the discretion of the court before which any proceedings
therefor may be brought.
(b) The Board of Directors of the Company has duly and
validly approved and taken all corporate action required to be
taken by the Board of Directors for the approval and confirmation
of the transactions contemplated by this Agreement and the Tender
Agreements, including, without limitation, all actions necessary
to render the provisions of Section 203 of the Delaware Law
inapplicable to transactions contemplated by this Agreement or
the Tender Agreements. No Oklahoma takeover statute or similar
statute or regulation applies or purports to apply to the Parent,
the Purchaser, the Merger, this Agreement, the Tender Agreements
or any of the transactions contemplated by this Agreement or the
Tender Agreements in connection with the transactions contemplat-
ed by this Agreement or the Tender Agreements.
(c) The Board of Directors of the Company has duly and
validly approved and taken all corporate actions required to be
taken by the Board of Directors for the approval of the amend-
ments to the Amended and Restated Certificate of Incorporation of
the Company (which amendments are attached as Exhibit B hereto)
(the "Charter Amendment"). The stockholders of the Company have
duly and validly approved the Charter Amendment. Subject to (i)
the provisions of the Exchange Act relating to the distribution
of an information statement to the stockholders of the Company
and (ii) the filing of a certificate of amendment ("Certificate
of Amendment") with the Secretary of State of the State of
Delaware, no further action is required to make effective the
Charter Amendment. The execution and delivery of the Tender
Agreements, the tender of shares of Common Stock pursuant to the
Offer and the grant of the options contemplated by the Tender
Agreements do not conflict with Article Fifth of the Amended and
Restated Certificate of Incorporation of the Company, and upon
the effectiveness of the Charter Amendment neither the purchase
of shares of Common Stock pursuant to the Offer nor the exercise
of any such options under the Tender Agreement will violate the
Amended and Restated Certificate of Incorporation of the Company.
3.3 Capitalization of the Company. The Company has an
authorized capital stock of 20,000,000 shares of Common Stock and
4,000,000 shares of preferred stock, par value $.01 per share
(the "Preferred Stock"). As of the date hereof, 12,465,107
shares of Common Stock and no shares of Preferred Stock were
issued and outstanding. Such issued shares of Common Stock are
duly authorized, validly issued and are fully paid and nonassess-
able and are not subject to preemptive rights. As of the date
hereof, there are no treasury shares, and there are no outstand-
ing stock appreciation rights. There are no outstanding contrac-
tual obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any outstanding shares of
capital stock of the Company or any of its Subsidiaries. Except
as set forth on Schedule 3.3 of the letter from the Company to
the Parent dated the date hereof which relates to this Agreement
and is designated therein as the Company Disclosure Letter (the
"Company Disclosure Letter") and except for the outstanding
options and warrants to purchase 1,762,752 shares of Common Stock
granted under the Company's Stock Option Plans and the Warrant
Agreement dated October 31, 1991 among the Company and certain
banks (the "Warrant Agreement"), there are no outstanding op-
tions, warrants or rights to purchase or acquire any capital
stock of the Company or any securities convertible, exchangeable
or exercisable for any of its capital stock, and except as set
forth on Schedule 3.3 of the Company Disclosure Letter, there are
no contracts, commitments, understandings, arrangements or
restrictions by which the Company is bound to sell or issue any
shares of its capital stock or any securities convertible,
exchangeable or exercisable for any of its capital stock. As of
the Effective Time, the Company will have no obligation to issue
any shares of Common Stock.
3.4 Subsidiaries of the Company. Schedule 3.4 of the
Company Disclosure Letter sets forth a complete and correct
description of the name and jurisdiction of incorporation or
formation of each of the direct and indirect subsidiaries of the
Company of which the Company owns more than a 50% equity inter-
est. Such subsidiaries are sometimes hereafter collectively
referred to as the "Subsidiaries" or "Subsidiary." Except as set
forth on Schedule 3.4 of the Company Disclosure Letter, all of
the issued and outstanding shares of common stock or other equity
interest of each Subsidiary have been duly authorized, validly
issued, are fully paid and nonassessable and are owned benefi-
cially by the Company or a Subsidiary of the Company free and
clear of any liens, claims or other encumbrances or rights of
third parties. There are no outstanding options, warrants or
rights to purchase or acquire any capital stock of any of the
Subsidiaries of the Company, and there are no contracts, commit-
ments, understandings, arrangements or restrictions by which the
Company or any Subsidiary of the Company is bound to sell or
issue any shares of capital stock of such Subsidiary. Except for
the Company's interest in its Subsidiaries and except as dis-
closed on Schedule 3.4 of the Company Disclosure Letter, neither
the Company nor its Subsidiaries owns directly or indirectly any
interest or investment (whether equity or debt) in, nor is the
Company or any of its Subsidiaries subject to any obligation or
requirement to provide for or to make any investment (in the form
of a loan, capital contribution or otherwise) to or in, any
corporation, partnership, joint venture, limited liability
company, business, trust or entity.
3.5 Undisclosed Liabilities. Except as set forth in
the Company SEC Documents (as hereafter defined) and in the
audited financial statements of the Company and Subsidiaries as
of and for the fiscal year ended December 28, 1996 (the "Finan-
cial Statements") listed on and attached to Schedule 3.5 of the
Company Disclosure Letter neither the Company nor any of its
Subsidiaries has any liabilities or obligations, either accrued,
absolute, contingent or otherwise, which would be required to be
reflected on a balance sheet, or in the notes thereto, prepared
in accordance with generally accepted accounting principles,
consistently applied, except for liabilities and obligations
listed in Schedule 3.5 of the Company Disclosure Letter, or
incurred in the ordinary course of business consistent with past
practice since December 28, 1996, or which would not have a
Material Adverse Effect on the Company.
3.6 Absence of Certain Changes or Events. Except as
otherwise contemplated by this Agreement or as disclosed in any
of the Company's SEC Documents or the Financial Statements, since
December 28, 1996, the Company and its Subsidiaries have operated
their respective businesses in the ordinary course consistent
with past practices and there has not been, occurred or arisen:
(a) any Material Adverse Change in the Company
(other than changes which are the result of general economic
changes affecting the industries or businesses in which the
Company or any of its Subsidiaries operate);
(b) except as required by the Transition Agree-
ments (as hereafter defined) (i) any increase in the compensation
payable or to become payable by the Company or its Subsidiaries
to any of their respective officers, employees or agents (collec-
tively, "Personnel") whose total compensation for services
rendered to the Company or its Subsidiaries is currently at an
annual rate of more than $75,000, except for normal periodic
increases in the ordinary course of business consistent with past
practice; or (ii) any new employment agreement to which the
Company or any Subsidiary is a party, other than agreements
entered into in the ordinary course of business, consistent with
past practices which provide for an annual salary less than
$75,000 and have no provisions with respect to a change of
control of the Company;
(c) except for the Transition Agreements (as
hereafter defined) (true and complete copies of which have
heretofore been furnished to the Parent), any material addition
to or modification of any of the employee benefit plans, arrange-
ments or practices affecting Personnel other than the extension
of coverage to other Personnel who became eligible after December
28, 1996;
(d) any sale, assignment or transfer (except for
intercompany transfers or sales out of inventory in the ordinary
course of business) of any asset or group of related assets of
the Company or its Subsidiaries, having a fair market value in
excess of $500,000;
(e) any waiver of any rights of substantial value
to the Company and its Subsidiaries taken as a whole, whether or
not in the ordinary course of business;
(f) any failure to repay any obligation of the
Company or its Subsidiaries, except where such failure would not
have a Material Adverse Effect on the Company;
(g) any entry into or any commitment or transac-
tion that, individually or in the aggregate, has or is reasonably
likely to have, a Material Adverse Effect on the Company;
(h) any change by the Company or any of its
Subsidiaries in accounting methods, principles or practices,
except for any such change required by reason of a concurrent
change in generally accepted accounting principles;
(i) any amendments or changes in the Amended and
Restated Certificate of Incorporation or Amended and Restated
Bylaws, as amended, of the Company;
(j) any revaluation by the Company or any of its
Subsidiaries of any of their respective assets, including,
without limitation, write-offs of accounts receivable, other than
in the ordinary course of the Company's and each of its
Subsidiaries' businesses consistent with past practices;
(k) any damage, destruction or loss affecting the
business or assets of the Company or any Subsidiary which,
individually or in the aggregate resulted in or is reasonably
likely to be materially adverse to the business, assets, liabili-
ties, properties, condition (financial or otherwise) or results
of operations of the Company and its Subsidiaries taken as a
whole;
(l) any declaration, setting aside or payment of
any dividend or other distribution with respect to any shares of
capital stock of the Company, or any repurchase, redemption or
other acquisition by the Company or any of its Subsidiaries of
any outstanding shares of capital stock or other securities of,
or other ownership interests in, the Company; or
(m) any agreement by the Company or any of its
Subsidiaries to do any of the foregoing or take any action which
would make any representation or warranty in Article III hereof
untrue or incorrect.
3.7 Title to Assets, Etc. The Company or its Subsid-
iaries have, or on the Effective Date will have, good and market-
able title to the assets (the "Assets") reflected on the Finan-
cial Statements other than those that are leased or assets which
have been acquired or disposed of as contemplated by this Agree-
ment or in the ordinary course of business consistent with past
practice since December 28, 1996, and (b) none of the Assets is
subject to any mortgage, deed of trust, pledge, lien, security
interest, encumbrance, claim, charge or adverse interest (collec-
tively, "Encumbrances") of any other person or entity not re-
flected on the Financial Statements, except for liens incurred in
the ordinary course of business consistent with past practice and
except for minor liens which in the aggregate are not substantial
in amount, do not materially detract from the value of the
property or assets subject thereto or interfere with the present
use thereof.
Neither the Company nor any of its Subsidiaries has
received notice of any violation of any zoning, use, occupancy,
building or environmental regulation, ordinance or other law,
order, regulation or requirement relating to its owned or leased
real property that would have a Material Adverse Effect on the
Company.
3.8 Condition of Tangible Assets. The facilities and
equipment of the Company and its Subsidiaries necessary to the
operations of their businesses are in good operating condition
and repair except for (a) ordinary wear and tear and (b) any
defect the cost of repairing which would not be material to the
Company and its Subsidiaries taken as a whole.
All meats (fresh and frozen), frozen pizza crusts,
appetizers, sauces, soups, processed meat products, supplies, and
any other inventories on hand constituting assets of the Company
and its Subsidiaries are (i) in good and marketable condition and
usable or saleable in the ordinary course of business (normal
waste and spoilage excepted) and (ii) the Company is in compli-
ance as to content labeling and packaging with applicable laws
and regulations (including without limitation those of the U.S.
Department of Agriculture and Federal Food and Drug Administra-
tion), except where the failure to be in such condition or in
compliance would not have a Material Adverse Effect on the
Company.
3.9 Contracts and Commitments. Except (i) as set
forth on Schedule 3.9 of the Company Disclosure Letter hereto,
(ii) for employee benefit plans set forth on Schedule 3.16 of the
Company Disclosure Letter and (iii) contracts entered into
pursuant to the terms of Section 5.2 after the date hereof,
neither the Company nor any of its Subsidiaries is a party to any
written or oral:
(a) commitment, contract, purchase order, letter
of credit or agreement, other than as described in subsections
(b) or (c) below, involving any obligation or liability on the
part of the Company or its Subsidiaries in excess of $250,000 and
not cancelable (without liability) within sixty (60) days, except
for purchases made in the ordinary course of business in amounts
not substantially in excess of past practice;
(b) lease of real property involving an annual
expense on the part of the Company or its Subsidiaries in excess
of $250,000 per year;
(c) lease of personal property involving an
annual expense on the part of the Company or its Subsidiaries in
excess of $250,000, which lease is not cancelable (without
liability) within sixty (60) days; or
(d) contracts and commitments not in the ordinary
course of business not otherwise described above or listed on
Schedule 3.9 of the Company Disclosure Letter relating to the
businesses of the Company and its Subsidiaries and materially
affecting the Company's and its Subsidiaries' businesses.
Except as set forth on Schedule 3.9 of the Company
Disclosure Letter, neither the Company nor any of its Subsidiar-
ies is (and to the best knowledge of the Company, no other party
is) in material breach or violation of, or default under, any of
the contracts, letters of credit, purchase orders, leases,
commitments, licenses or permits described on Schedule 3.9 of the
Company Disclosure Letter, the breach or violation of which would
have a Material Adverse Effect on the Company.
3.10 No Conflict or Violation; Third Party Consents.
Assuming the accuracy and completeness of the representations and
warranties of the Parent and the Purchaser herein, and assuming
all consents and approvals referred to in Section 3.11 hereof are
obtained and except for the third party consents identified on
Schedule 3.10 of the Company Disclosure Letter, the execution and
delivery of this Agreement does not, and consummation of the
transactions contemplated hereby will not, result in (a) a
violation of or a conflict with any provision of the Amended and
Restated Certificate of Incorporation or Amended and Restated
Bylaws of the Company or the charter or bylaws or operating
agreements of any Subsidiary, (b) a breach or default under any
provision of any material contract, agreement, lease, commitment,
license, franchise or permit to which the Company or any of its
Subsidiaries is a party or by which the Assets are bound until
such time as a "Change of Control" (as defined in that certain
Indenture dated as of May 15, 1996 relating to the Company's
$120,000,000 10 3/4% Senior Subordinated Notes due 2006) to
occur, (c) a violation of any statute, rule, regulation, ordi-
nance, order, judgment, writ, injunction or decree the violation
of which would have a Material Adverse Effect on the Company, or
(d) an imposition of any material lien, mortgage, pledge, encum-
brance, claim, restriction or charge on the business of the
Company or any of its Subsidiaries or on any of the Assets.
3.11 Consents and Approvals. Except where such con-
sent, approval or authorization, declaration, filing or registra-
tion is not material to the Company and its Subsidiaries taken as
a whole or would not materially impair the ability of the Company
to perform its obligation hereunder, no consent, approval or
authorization of, or declaration, filing or registration with,
any foreign, federal, state or local governmental or regulatory
authority (each a "Governmental Entity") is required to be made
or obtained by the Company in connection with the execution,
delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby, other than (i) the filings required under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the
"Antitrust Improvements Act"), (ii) the filing of the Certificate
of Merger with the Secretary of State of Delaware, and (iii)
filings made in compliance with any applicable provisions of the
Exchange Act.
3.12 Compliance with Law. The Company and its Subsid-
iaries hold, and at all required times have held, all permits,
licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary for the lawful conduct of their
respective businesses as currently being conducted (the "Company
Permits"), except for failures to hold such permits, licenses,
variances, exemptions, orders and approvals which have not had,
and will not have a Material Adverse Effect on the Company. The
Company and its Subsidiaries are, and at all times have been, in
compliance with the terms of the Company Permits, except where
the failure so to comply would not have, a Material Adverse
Effect on the Company. The Company and its Subsidiaries are in
compliance with all applicable laws, statutes, ordinances and
regulations of any Governmental Entity, except where the failure
to comply would not have a Material Adverse Effect on the Compa-
ny. The Company (or its Subsidiaries) has not received any
written notice to the effect that, or otherwise been advised
that, it is not in compliance with any of such statutes, regula-
tions and orders, ordinances or other laws where the failure to
comply would have a Material Adverse Effect on the Company, and,
assuming the accuracy and completeness of the representations and
warranties of the Parent and the Purchaser herein, the Company
has no reason to anticipate that any presently existing circum-
stances are likely to result in violations of any such regula-
tions which would have a Material Adverse Effect on the Company.
No investigation or review by any Governmental Entity with
respect to the Company or any of its Subsidiaries is pending or,
to the knowledge of the Company, threatened, nor, to the knowl-
edge of the Company, has any Governmental Entity indicated an
intention to conduct the same, other than, in each case, those
which will not have a Material Adverse Effect on the Company.
3.13 Brokers. Other than the arrangement between the
Company and Morgan Stanley & Co. Incorporated ("Morgan Stanley"),
neither the Company nor any affiliates of the Company has entered
into or will enter into any agreement, arrangement or understand-
ing with any person or firm which will result in the obligation
of the Parent or any affiliate of the Parent or the Company to
pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby. The
parties hereby acknowledge the written arrangement (a copy of
which has been delivered to the Parent) with respect to this
transaction between the Company and Morgan Stanley, with respect
to which all fees due to Morgan Stanley will be paid by the
Company.
3.14 No Other Agreements to Sell the Company. Except
as contained in this Agreement, the Company has no legal obliga-
tion, absolute or contingent, to any other person or firm to sell
the Common Stock or the stock of any of its Subsidiaries, to sell
substantially all of the assets of the Company or to effect any
merger, consolidation or other reorganization of the Company or
to enter into any negotiations or agreement with respect thereto.
3.15 Intellectual Property. (a) For purposes of this
Agreement, "Intellectual Property" means (i) all United States
and foreign copyrights, whether registered or unregistered, and
pending applications to register the same, and all copyrightable
works, including, without limitation, software; (ii) all United
States, state and foreign trademarks, service marks and trade
names (including all assumed or fictitious names under which the
Company or any Subsidiary is conducting the business, whether
registered or unregistered, and pending applications to register
the foregoing ("Trademarks"); (iii) all United States and foreign
patents, patent applications, continuations, continuations-in-
part, divisions, reissues, patent disclosures, inventions (wheth-
er or not patentable or reduced to practice) or improvements
thereto ("Patents"); (iv) all confidential ideas, know-how,
methods, formulae, trade secrets, processes, reports, data,
customer lists, business plans, or other proprietary information;
(v) all agreements, commitments, contracts, understandings,
licenses, sublicenses, assignments and indemnities which relate
or pertain to any of the intellectual property identified in
subsections (i) through (iv) above or to disclosure or use of
ideas or third parties ("Licenses"). All Trademarks, Patents
and Licenses of the Company and its Subsidiaries which are
material to the operation of the business of the Company and its
Subsidiaries taken as a whole , are listed on Schedule 3.15 of
the Company Disclosure Letter. The Company owns or has the right
to use all Intellectual Property required to permit the conduct
of the Company's or any Subsidiary's business in the ordinary
course. To the best knowledge of the Company, the Company's and
its Subsidiaries' use of their Intellectual Property are not
infringing upon or otherwise violating the rights of any third
party in or to such Intellectual Property, and no proceedings
have been instituted against or claims received by the Company or
any Subsidiary that are presently outstanding alleging that the
Company's (or any Subsidiary's) use of it Intellectual Property
infringe upon or otherwise violate any right of a third party in
or to such Intellectual Property.
3.16 Employee Benefit Plans. Schedule 3.16 of the
Company Disclosure Letter contains a complete list of "employee
welfare benefit plans" (as that term is defined in Section 3(1)
of the Employee Retirement Income Security Act of 1974 ("ERISA")
in which employees of the Company and its Subsidiaries partici-
pate (which plans, as applied to such active and former employees
are hereinafter referred to as "Welfare Plans"). Schedule 3.16
of the Company Disclosure Letter also contains a complete list of
"employee pension benefit plans" (as that term is defined in
Section 3(2) of ERISA), including any "multi-employer plans" (as
that term is defined in Section 3(37) of ERISA) in which such
employees of the Company and its Subsidiaries participate (which
plans as applied to such employees are hereinafter referred to as
"Pension Plans"). The Welfare Plans and Pension Plans are
hereinafter collectively referred to as the "Plans." Each of the
Plans is in compliance with the provisions of all applicable
laws, rules and regulations, which shall include by example and
not by limitation ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"). None of the Pension Plans have incurred
any "accumulated funding deficiency" (as defined in Section
412(a) of the Code). The Company and its Subsidiaries have not
incurred any liability to the Pension Benefit Guaranty Corpora-
tion under Sections 4062, 4063 or 4064 of ERISA which has not
been paid with respect to any of the Plans or any withdrawal
liability under Title IV of ERISA with respect to any of the
Pension Plans.
3.17 Tax Matters. The Company, any predecessor of the
Company and all members of any affiliated group of corporations
of which the Company or any such predecessor corporation is or
has been a member, have duly filed all tax returns and reports
required to be filed by them, including all federal, state, local
and foreign income tax returns and reports, and have timely paid
all taxes shown as due on such returns and reports (except where
failures to file such returns and reports or failures to pay such
taxes would not have a Material Adverse Effect on the Company,
any predecessor of the Company or any such member). All such
returns and reports required to have been filed are complete and
accurate in all material respects. The Company has made adequate
provision, in conformity with GAAP, for the payment of all taxes
of the Company or such Subsidiary, as the case may be, existing
as of the Effective Date for all periods ending on or prior to
the date of the Balance Sheet.
Except as reflected on Schedule 3.17 of the Company
Disclosure Letter, the consolidated federal income tax returns of
the Company (and any predecessor of the Company) have been
examined by the Internal Revenue Service. Except as set forth on
Schedule 3.17 of the Company Disclosure Letter neither the
Company, any predecessor of the Company, nor any Subsidiary (i)
has waived any statute of limitations, (ii) has filed a statement
under Section 341(f) of the Code, or (iii) is a party to any tax
sharing agreement. Except as set forth on Schedule 3.17 of the
Company Disclosure Letter, (i) the state income tax returns of
the Company, any predecessor of the Company and all Subsidiaries
and the federal income tax returns of all Subsidiaries have been
examined by the appropriate taxing authority, (ii) there is no
action, suit, investigation, audit, claim or assessment pending
or proposed or threatened in writing with respect to taxes of the
Company, any predecessor of the Company or any Subsidiary, (iii)
there are no liens for taxes upon the assets of the Company or
any Subsidiary except liens relating to current taxes not yet
due, (iv) all taxes which the Company or any predecessor of the
Company or any Subsidiary are required by law to withhold or
collect for payment have been duly withheld and collected, and
have been paid or accrued, reserved against and entered on the
books of the Company (except where failures to withhold and
collect and to pay or accrue, reserve against or enter on the
books of the Company would not have a Material Adverse Effect on
the Company, any predecessor of the Company or any Subsidiary),
(v) none of the Company, any predecessor of the Company or any
Subsidiary has been a member of any group of corporations filing
tax returns on a consolidated, combined, unitary or similar basis
other than each such group of which it is currently a member, and
(vi) as a result of a change in accounting method for a tax
period beginning on or before the Effective Date, none of the
Company or any Subsidiary will be required to include any adjust-
ment under Section 481(c) of the Code (or any corresponding
provision of state or local tax law) in taxable income for any
tax period beginning on or after the Effective Date.
Except as may be limited as a result of the transac-
tions contemplated by this Agreement, the "regular" and "alterna-
tive minimum tax" net operating loss carryforwards of the Company
and the Subsidiaries for each of the taxable years ended prior to
the date of this Agreement (collectively, the "NOLs") are set
forth (for each year) on Schedule 3.17 of the Company Disclosure
Letter and are each available to the Company (or the applicable
Subsidiary) for a period of fifteen taxable years from the end of
the taxable year in which the applicable NOL was incurred.
Except as may be limited as a result of the transactions contem-
plated by this Agreement and except as set forth on Schedule 3.17
of the Company Disclosure Letter, none of the NOLs constitute
separate return limitation year ("SRLY") losses immediately prior
to the Effective Date, none of the NOLs will be limited immedi-
ately prior to the Effective Date by Section 382 or 384 of the
Code and regulations thereunder, and none of the NOLs constitutes
"dual consolidated losses" immediately prior to the Effective
Date (as defined in Section 1503 of the Code and the regulations
thereunder).
No transaction contemplated by this Agreement is
subject to withholding under Section 1445 of the Code (relating
to "FIRPTA").
For purposes of this Agreement, "tax" (and, with a
correlative meaning, "taxes") shall mean (i) any federal, state,
local or foreign net income, gross income, gross receipts,
windfall profit, severance, property, production, sales, use,
license, excise, franchise, employment, payroll, withholding,
alternative or add-on minimum, ad valorem, value-added, transfer
stamp, or environmental tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, addition to
tax or additional amount imposed by any governmental authority;
and (ii) any liability of the Company or any Subsidiary for the
payment of amounts with respect to payments of a type described
in clause (i) as a result of being a member of an affiliated
group, or as a result of any obligation of the Company or any
Subsidiary under any tax sharing arrangement or tax indemnity
arrangement.
3.18 SEC Documents. The Company has filed all required
reports, proxy statements, forms and other documents with the SEC
since January 2, 1994 (the "Company SEC Documents"). As of their
respective dates, and giving effect to any amendments thereto,
(a) the Company SEC Documents, including, without limitation, any
financial statements and schedules contained therein, complied in
all material respects with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, and the applicable rules and regulations of
the SEC promulgated thereunder, and (b) none of the Company SEC
Documents contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in
the Company SEC Documents as at the dates thereof complied as to
form in all material respects with applicable accounting require-
ments and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally
accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated therein
or in the notes thereto) and fairly present in all material
respects the consolidated financial position of the Company and
its consolidated Subsidiaries as at the dates thereof and the
consolidated results of their operations and changes in financial
position for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to
any other adjustments described therein).
3.19 Environmental Matters.
(a) Except as set forth in Schedule 3.19 of the
Company Disclosure Letter, the Company and each of its Subsidiar-
ies have complied with all applicable foreign, federal, state and
local laws, statutes, regulations, codes or ordinances enacted,
adopted, issued or promulgated by any Governmental Entity relat-
ing to or addressing the environment, health or safety as in
effect at the relevant time, including the Comprehensive Environ-
mental Response, Compensation and Liability Act, any amendments
thereto, any successor statute and any regulations promulgated
thereunder ("CERCLA"), the Occupational Safety and Health Act,
any amendments thereto, any successor statute and any regulations
promulgated thereunder ("OSHA") and the Resource Conservation and
Recovery Act, any amendments thereto, any successor statute and
any applicable regulations promulgated thereunder ("RCRA"), and
any state equivalent ("Environmental Laws"), except for such
failures to so comply that would not have a Material Adverse
Effect on the Company.
(b) Except as set forth on Schedule 3.19 of the
Company Disclosure Letter, or where the failure to do so would
not have a Material Adverse Effect on the Company, (i) any
handling, transportation, storage, treatment or usage of Hazard-
ous Material that has occurred on any tract of real property
owned by the Company or a Subsidiary during the period of such
ownership or real property covered by any real property lease to
which the Company or a Subsidiary is a party during the term of
such lease, has been in compliance with all applicable Environ-
mental Laws, (ii) no leak, spill, release, discharge, emission or
disposal of any Hazardous Material has occurred on any such tract
during the period of such ownership or term of such lease perti-
nent to each such tract which would subject the property to
remedial action under any Environmental Laws, (iii) each such
tract is in substantial compliance with applicable Environmental
Laws, and (iv) each underground storage tank located on any such
tract, has been registered, maintained and operated during the
Company's or a Subsidiary's ownership or operation of such tank
in accordance with all applicable Environmental Laws. Schedule
3.19 of the Company Disclosure Letter, lists all reports, studies
and tests in the possession of the Company or a Subsidiary
relating to the presence or suspected presence of any Hazardous
Material on any such tract in violation of any Environmental Law
or relating to the existence of any underground storage tank
thereon and the Company and each Subsidiary agree that they will,
promptly following the Company's or a Subsidiary's receipt
thereof, furnish to the Parent all such reports, studies and
tests hereafter obtained by the Company or a Subsidiary on or
prior to the Closing Date. "Hazardous Material" means asbestos,
petroleum (including without limitation, oil, used oil, waste
oil, gasoline, diesel and petroleum based fuels), petroleum
products and by-products, petroleum wastes, petroleum contaminat-
ed soils, and any substance, material or waste which is regulated
as "hazardous", "toxic" or under any other similar designation
under any Environmental Law. Such term includes, without limita-
tion, (i) any material, substance or waste defined as a "hazard-
ous waste" pursuant to Section 1004 of the RCRA, (ii) any materi-
al, substance or waste defined as a "hazardous substance" pursu-
ant to Section 101 of CERCLA or (iii) any material, substance or
waste defined as a "regulated substance" pursuant to Subchapter
IX of the Solid Waste Disposal Act (42 U.S.C. SECTION 6991, et seq.).
(c) Except as disclosed on Schedule 3.19 of the
Company Disclosure Letter, or where the failure to do so would
not have a Material Adverse Effect on the Company, (i) Hazardous
Materials have not been generated, used, treated, handled or
stored on, or transported to or from, or released or disposed on
or from any tract of real property owned by the Company during
the period of such ownership or any real property covered by any
real property lease to which the Company is a party during the
term of such lease in violation of any Environmental Law ; (ii)
the Company has disposed of all wastes, including those wastes
containing Hazardous Materials, in compliance with all applicable
Environmental Laws; (iii) there are no past unresolved, pending
or, to the knowledge of the Company or the Subsidiaries, threat-
ened, actions against the Company relating to compliance with
Environmental Laws or asserting damages or injury to natural
resources, wildlife or the environment; (iv) no such tract or, to
the knowledge of the Company or the Subsidiaries, any property
adjoining such tract, is listed or proposed for listing on the
National Priorities List under CERCLA or on the Comprehensive
Environmental Response, Compensation and Liability Act Informa-
tion System ("CERCLIS"), the Facility Index System ("FINDS"),
RCRA, Hazardous Waste Registrations Listing Report as a result of
any alleged violation of any applicable Governmental Law; and (v)
to the knowledge of the Company or the Subsidiaries, neither the
Company nor the Subsidiaries has transported or arranged for the
transportation of any Hazardous Materials to any location that is
listed or proposed for listing on the National Priorities List
under CERCLA or on the CERCLIS or FINDS or which is the subject
of any environmental claim arising because of any alleged viola-
tion of an Environmental Law.
3.20 Proxy Statement; Information Statement. (a) None
of the information supplied or to be supplied by the Company for
inclusion in the Proxy Statement (as defined hereafter) (and any
amendments thereof or supplements thereto), if any, will, with
respect to information relating to the Company, at the time of
the mailing of the Proxy Statement to the stockholders of the
Company and at the time of the Special Meeting (as defined
hereafter), contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
The Proxy Statement will, with respect to information relating to
the Company, comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation is made in
this Section 3.20(a) by the Company with respect to the state-
ments made in the Proxy Statement relating to the Parent or the
Purchaser or their affiliates or based on information supplied by
the Parent or the Purchaser for inclusion in the Proxy Statement.
(b) None of the information supplied or to be supplied
by the Company for inclusion in the Information Statement (as
defined hereafter) (and any amendments thereof or supplements
thereto), if any, will, with respect to information relating to
the Company, at the time of the mailing of the Information
Statement to the stockholders of the Company, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. The Information Statement will,
with respect to information relating to the Company, comply as to
form in all material respects with the provisions of the Exchange
Act and the rules and regulations promulgated thereunder, except
that no representation is made in this Section 3.20(b) by the
Company with respect to the statements made in the Information
Statement relating to the Parent or the Purchaser or their
affiliates or based on information supplied by the Parent or the
Purchaser for inclusion in the Information Statement.
3.21 Certain Agreements. Except as set forth on
Schedule 3.21 of the Company Disclosure Letter, neither the
Company nor any of its Subsidiaries is a party to any oral or
written stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan, incentive compensa-
tion or bonus plan, employment agreement, severance or termina-
tion agreement, consulting agreement or other benefit plan or
arrangement, any of the benefits of which will be increased, or
the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this
Agreement or the Tender Agreements or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement or the Tender Agree-
ments.
3.22 Vote Required. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock
of the Company entitled to vote with respect to the Merger is the
only vote of the holders of any class or series of the Company's
capital stock necessary to approve the Merger.
3.23 Opinion of Financial Advisor. The Company has
received the opinion of Morgan Stanley dated as of a date which
is on or prior to this Agreement substantially to the effect
that, as of the date of this Agreement, the consideration to be
received pursuant to the Merger Agreement by the Company's
stockholders (other than the Parent or any of its affiliates) is
fair to such stockholders from a financial point of view. A
complete and correct signed copy of such opinion has been deliv-
ered to the Parent, and such opinion has not been withdrawn or
modified as of the date hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND THE PURCHASER
The Parent and the Purchaser hereby represent and
warrant to the Company as follows:
4.1 Organization. The Parent is duly organized,
validly existing and in good standing under the laws of the State
of Delaware and has full corporate power and authority to conduct
its business and to own and lease its properties. The Purchaser
is duly organized, validly existing and in good standing under
the laws of the State of Delaware and has full corporate power
and authority to conduct its business and to own and lease its
properties. The Purchaser has been formed for the purpose of
effecting the Offer and the Merger in accordance with the terms
of this Agreement. The Purchaser has not transacted, and prior
to the Effective Date will not transact any business or engage in
any activities other than in connection with the transactions
contemplated by this Agreement.
4.2 Authorization. Each of the Parent and the Pur-
chaser has all necessary corporate power and authority to enter
into this Agreement and will at the Closing have taken all
necessary corporate action to consummate the transactions contem-
plated hereby and to perform its obligations hereunder. The
execution and delivery of this Agreement by the Parent and the
Purchaser and the performance of their obligations hereunder have
been duly authorized by the Board of Directors of each of the
Parent and the Purchaser and no other corporate proceeding on
the part of the Parent or Purchaser are necessary. This Agree-
ment has been duly executed and delivered by each of the Parent
and the Purchaser and (assuming the valid authorization, execu-
tion and delivery of this Agreement by the Company) constitutes a
valid and binding obligation of the Parent and the Purchaser,
enforceable against each of them in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now
or hereafter in effect, relating to or limiting creditors' rights
generally and (ii) general principles of equity (whether consid-
ered in an action in equity or at law) which provide, among other
things, that the remedy of specific performance and injunctive
and other forms of equitable relief are subject to equitable
defenses and the discretion of the court before which any pro-
ceedings therefor may be brought.
4.3 Consents and Approvals. Except where such con-
sent, approval or authorization, declaration, filing or registra-
tion would not have a Material Adverse Effect on the Purchaser or
would not materially impair the ability of the Parent and the
Purchaser to perform its obligations hereunder, no consent,
approval or authorization of, or declaration, filing or registra-
tion with, any Governmental Entity is required to be made or
obtained by the Parent in connection with the execution, delivery
and performance by the Parent and the Purchaser of this Agree-
ment and the consummation by the Parent and the Purchaser of the
transactions contemplated hereby other than (i) the filings
required under the Antitrust Improvements Act, (ii) the filing of
the Certificate of Merger, and (iii) filings made in compliance
with any applicable provisions of the Exchange Act.
4.4 No Conflict or Violation; Third Party Consents.
Assuming the accuracy and completeness of the representations and
warranties of the Company herein, and assuming all consents and
approvals referred to in Section 4.3 hereof are obtained, the
execution and delivery of this Agreement does not, and consumma-
tion of the transactions contemplated hereby will not, result in
(a) a violation of or a conflict with any provision of the
certificates of incorporation or bylaws or other organizational
documents of the Parent or the Purchaser, (b) a breach or default
under any provision of any material contract, agreement, lease,
commitment, license, franchise or permit to which the Parent or
the Purchaser is a party or by which any of their respective
assets are bound, (c) a violation of any statute, rule, regula-
tion, ordinance, order, judgment, writ, injunction or decree the
violation of which would have a Material Adverse Effect on the
Parent, or (d) an imposition of any material lien, mortgage,
pledge, encumbrance, claim, restriction or charge on the business
of the Parent or the Purchaser or any of their respective assets.
4.5 No Brokers. Other than the arrangements between
the Parent and Donaldson, Lufkin & Jenrette Securities Corpora-
tion (the "Investment Banker"), neither the Parent, the Purchaser
nor any affiliate of the Parent or the Purchaser has entered
into or will enter into any agreement, arrangement or understand-
ing with any person or firm which will result in the obligation
of the Parent or any affiliate of the Parent to pay any finder's
fee, brokerage commission or similar payment in connection with
the transactions contemplated hereby. The parties hereby ac-
knowledge the arrangement with respect to this transaction
between the Parent and the Investment Banker, with respect to
which all fees due to the Investment Banker will be paid by the
Parent.
4.6 Proxy Statement; Information Statement. (a) None
of the information supplied or to be supplied by the Parent or
the Purchaser for inclusion in the Proxy Statement (including any
amendments thereof or supplements thereto) will, at the time of
mailing the Proxy Statement and at the time of the Special
Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading,
except that no representation or warranty is made by the Parent
or the Purchaser with respect to statements made or incorporated
by reference therein based on information supplied by the Company
for inclusion or incorporation by reference therein.
(b) None of the information supplied or to be supplied
by the Parent or the Purchaser for inclusion in the Information
Statement (including any amendments thereof or supplements
thereto) will, at the time of mailing the Information Statement
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 circum-
stances under which they were made, not misleading, except that
no representation or warranty is made by the Parent or the
Purchaser with respect to statements made or incorporated by
reference therein based on information supplied by the Company
for inclusion or incorporation by reference therein.
4.7 Share Ownership. As of the date of this Agree-
ment, the Parent and the Purchaser own 497,800 shares of Common
Stock and will not acquire beneficial ownership of any additional
shares of Common Stock except pursuant to this Agreement and the
Tender Agreements if the result would be a Change of Control.
4.8 Financing. The Parent and the Purchaser have on
the date of the execution of this Agreement and will have upon
acceptance of any Shares pursuant to the Offer and at the Closing
sufficient available funds (through existing credit arrangements
or otherwise) to pay the Share Price or the Merger Consideration,
as applicable, for all shares to be purchased or converted
pursuant to Section 1.1(a), or Section 2.3(a), pay the Option
Settlement Amount, pay all fees and expenses required to be paid
in connection with the Merger and perform their obligations
hereunder and the obligations of the Surviving Corporation and
its Subsidiaries following the Effective Time.
ARTICLE V
ACTIONS BY THE COMPANY, THE PARENT
AND THE PURCHASER PRIOR TO THE EFFECTIVE DATE
The Company, the Parent and the Purchaser covenant as
follows for the period from the date hereof through the Effective
Date:
5.1 Maintenance of Business. The Company shall carry
on, and cause its Subsidiaries to carry on, their respective
businesses in the ordinary course of business consistent with
past practice and use their commercially reasonable efforts to
preserve the goodwill of those having business relationships with
them and use their reasonable best efforts to preserve intact
their current business organizations, keep available the services
of their current officers and key employees and preserve their
relationships with customers, suppliers and others having busi-
ness dealings with them.
5.2 Certain Prohibited Transactions. Except as
otherwise contemplated by this Agreement, each of the Company and
its Subsidiaries shall not, without the prior written consent of
the Parent (which consent shall not be unreasonably withheld or
delayed) from and after the date hereof:
(a) incur any additional indebtedness for bor-
rowed money, assume, guarantee, endorse or otherwise become
responsible for the obligations of any other individual, partner-
ship, firm or corporation or make any loans or advances to any
individual, partnership, firm or corporation in an amount in
excess of $30,000,000; provided, however, that total indebtedness
for borrowed money under the Company's Credit Agreement with
Chase Manhattan Bank, as of the Effective Date, shall not exceed
$251,000,000; and provided further, however, that the Company
shall not be prohibited from repaying any indebtedness of the
Company or its Subsidiaries prior to the Effective Date if such
repayments are made without penalty;
(b) enter into any capital or operating leases of
equipment except in accordance with the Master Equipment Lease
Agreement by and between NationBanc Leasing Corporation of North
Carolina and the Company, dated October, 1995 the Master Lease
Agreement by and between BancBoston Leasing, Inc. and the Compa-
ny, dated June 1996, and a new lease for equipment to be in-
stalled at KPR Foods not to exceed $3,000,000;
(c) except for the Charter Amendment, amend its
Amended and Restated Certificate of Incorporation or Amended and
Restated Bylaws or the articles or certificate of incorporation
or bylaws of any of its Subsidiaries issue, deliver, sell,
pledge, dispose of or otherwise encumber any shares of its
capital stock, any other voting securities or equity equivalent
or any securities convertible or exchangeable into, or any
rights, warrants or options to acquire, any such shares, voting
securities or convertible securities or equity equivalent, except
for the issuance of up to 1,762,752 shares of Common Stock
pursuant to the exercise of stock options to purchase shares of
Common Stock under the Stock Option Plans and the Warrant which
are outstanding on the date hereof;
(d) mortgage, pledge or otherwise encumber any of
its material properties or assets or sell, transfer (except
pursuant to intercompany transfers) or otherwise dispose of any
of its material properties or material assets or cancel, release
or assign any indebtedness owed to it or any claims held by it,
except in the ordinary course of business and consistent with
past practice;
(e) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the
assets of or equity in, or by any other manner, any business or
any corporation, partnership, limited liability company, associa-
tion or other business organization or division thereof or
otherwise acquire or agree to acquire any assets, in each case
that are material, individually or in the aggregate, to the
Company and its Subsidiaries, taken as a whole;
(f) enter into, terminate or permit any renewal
or extension options to expire with respect to any material
contract or agreement, or make any material change in any of its
leases and contracts, other than in the ordinary course of
business and consistent with past practice; provided, however,
the Company may (i) enter into, an amendment to the June 3, 1996
Lease Agreement with Option to Purchase between Continental Deli
Foods, Inc., a subsidiary of the Company, and Thorn Apple Valley,
Inc., which covers the Concordia, Missouri facility, to extend
the term from May 31, 1997, to May 31, 2002, and to increase the
rent to equal the purchase price payments under the promissory
note provided for in such lease and to retain the option to
purchase the property for a nominal amount at the end of the
extended lease term, or, at the option of the Parent, exercise
the option to purchase under the current agreement and (ii) enter
into two new office leases in Riverside and Irvine, California,
with annual rentals not to exceed $300,000 each;
(g) declare, set aside or pay any dividend or
distribution with respect to the capital stock of the Company or
any of its Subsidiaries or directly or indirectly redeem, pur-
chase or otherwise acquire any capital stock of the Company or
any of its Subsidiaries or effect a split or reclassification of
any capital stock of the Company or any of its Subsidiaries or a
recapitalization of the Company or any of its Subsidiaries,
except for intercompany transactions in the ordinary course of
business consistent with past practice;
(h) alter through merger, liquidation, reorgani-
zation, restructuring or in any other fashion the corporate
structure or ownership of the Company or any of its Subsidiaries;
(i) enter into or adopt or amend any existing
severance plan, severance agreement or severance arrangement, any
benefit plan or arrangement (including without limitation, the
Stock Option Plans) or employment or consulting agreement except
as required by law;
(j) increase the compensation payable or to
become payable to its officers or employees, except for increases
in the ordinary course of business in accordance with past
practices, or grant any severance or termination pay to, or enter
into any employment or severance agreement with any director or
officer of the Company or any of its Subsidiaries, or establish,
adopt, enter into or, except as may be required to comply with
applicable law, amend in any material respect or take action to
enhance in any material respect or accelerate any rights or
benefits under any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee;
(k) settle or compromise any suit, proceeding or
claim or threatened suit, proceeding or claim for an amount that
is more than $50,000 in the case of any individual suit provided
that such settlement or compromise shall be made in the ordinary
course of business in accordance with past practice, other than
the Marshall fire case as to which there is an agreement in
principle to settle ;
(l) knowingly violate or fail to perform any
material obligation or duty imposed upon it by any applicable
foreign, federal, state or local law, rule, regulation, guide-
line, ordinance, order, judgment or decree;
(m) make any tax election or change any method of
accounting for tax purposes, in each case except to the extent
required by law, or settle or compromise any tax liability;
(n) change any of the accounting principles or
practices used by it except as required by the SEC or the Finan-
cial Accounting Standards Board;
(o) grant any license relating to its Intellectu-
al Property, except as required by existing agreements of the
Company, except in connection with the settlement of a protest by
the Company of the use of the mark El Posado by a third party; or
(p) enter into any agreement to enter a new line
of business, nor will the Company expend over $10,000 to produce
or provide a product in a new line of business;
(q) authorize or enter into an agreement, con-
tract, commitment or arrangement to do any of the foregoing.
5.3 Investigation by the Parent and the Purchaser.
Upon reasonable advance notice, the Company shall allow the
Parent and the Purchaser at their own expense, during regular
business hours through the Parent's and the Purchaser's employ-
ees, agents and representatives, to make such investigation of
the businesses, properties, books and records of the Company and
Subsidiaries, and to conduct such examination of the condition of
the Company and Subsidiaries as the Parent and the Purchaser
deem necessary or advisable to familiarize themselves further
with such businesses, properties books, records, condition and
other matters, and to verify the representations and warranties
of the Company hereunder, provided that all requests for informa-
tion, to visit plants or facilities shall be directed to and
coordinated with the vice-president of finance of the Company;
and provided, further that the foregoing shall be subject in each
case to the Confidentiality Agreement referred to in Section 8.7
hereof.
5.4 Consents and Reasonable Best Efforts.
(a) The Parent, the Purchaser and the Company
shall use their reasonable best efforts to make all filings
required under the Antitrust Improvements Act as soon as practi-
cable after the execution and delivery of this Agreement.
(b) The Parent, the Purchaser and the Company
shall, as soon as practicable, use their reasonable best efforts
required (i) to obtain all waivers, consents, approvals and
agreements of, and to give all notices and make all other filings
with, any persons, including Governmental Entities, necessary or
appropriate to authorize, approve or permit the Merger, including
all necessary consents or releases from holders of options or
warrants under the Stock Option Plans and to take all such other
action as may be necessary to give effect to the transactions
contemplated by Section 2.6, and (ii) to defend and cooperate
with each other in defending any lawsuits or other legal proceed-
ings, including appeals, whether individual or administrative and
whether brought derivatively or on behalf of third parties
(including Governmental Entities or officials) challenging this
Agreement or the consummation of the transactions contemplated
hereby. The Parent and the Purchaser will furnish to the
Company, and the Company will furnish to the Parent and the
Purchaser, such necessary information and reasonable assistance
as the Company, or the Parent and the Purchaser, as the case may
be, may request in connection with its or their preparation of
all necessary filings with any third parties, including Govern-
mental Entities. The Parent and the Purchaser will furnish to
the Company, and the Company will furnish to the Parent and the
Purchaser, copies of all correspondence, filings or communica-
tions (or memoranda setting forth the substance thereof) between
the Parent and the Purchaser, or the Company, or any of their
respective representatives, on the one hand, and any governmental
agency or authority, or members of the Staff of such agency or
authority, on the other hand, with respect to this Agreement, the
Offer or the Merger.
(c) Prior to the Effective Date, the Company and
the Parent shall each use its respective commercially reasonable
efforts to obtain the consent or approval of each person whose
consent or approval shall be required in order to permit the
Company, the Parent or the Purchaser, as the case may be, to
consummate the Offer and the Merger, including, without limita-
tion, consents or waivers from the third parties identified on
Schedule 3.10 of the Company Disclosure Letter.
(d) Upon the terms and subject to the conditions
contained herein, each of the parties hereto covenants and agrees
to use its reasonable best efforts to take, or cause to be taken,
all action or do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated
hereby. Notwithstanding anything to the contrary contained in
this Agreement, in connection with any filing or submission
required or action to be taken by either the Parent or the
Company to consummate the Offer, to effect the Merger and to
consummate the other transactions contemplated hereby, the
Company shall not, without the Parent's prior written consent,
commit to any divestiture transaction and neither the Parent nor
any of its affiliates shall be required to divest or hold sepa-
rate or otherwise take or commit to take any action that limits
its freedom of action with respect to, or its ability to retain,
the Company or any of the material businesses, product lines or
assets of the Parent or any of its affiliates.
5.5 Notification of Certain Matters. The Company
shall give prompt- notice to the Parent and the Purchaser, and
the Parent and the Purchaser shall give prompt notice to the
Company, of (i) the occurrence, or failure to occur, of any event
which occurrence or failure would be likely to cause any repre-
sentation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect any time from the date hereof
to the Effective Date and (ii) any material failure of the
Company, the Parent or the Purchaser, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
5.6 Stockholders' Meeting; Board Recommendations;
Proxy Material.
(a) If required to consummate the Merger, follow-
ing the expiration of the Offer the Company shall, in accordance
with applicable law and the Amended and Restated Certificate of
Incorporation and the Amended and Restated Bylaws of the Company
duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as promptly as practica-
ble for the purpose of considering and taking action upon this
Agreement and the Merger and such other matters as may be appro-
priate at the Special Meeting. At such Special Meeting, the
Parent shall vote, or cause to be voted, all of the Shares of
Common Stock then owned by the Parent or Purchaser, or any of
their affiliates (collectively, the "Parent Companies") in favor
of this Agreement and the Merger.
(b) The Board shall recommend acceptance of the
Offer and approval and adoption of this Agreement and the Merger
by the Company's stockholders and, to the extent required, shall
use its reasonable best efforts to obtain stockholder approval of
this Agreement and the Merger; provided that the Board may
withdraw, modify or change such recommendation if it has reason-
ably determined in good faith, after consultation with outside
legal counsel, that the Board is required to withdraw, modify or
change such recommendation or the recommendation of the Offer to
comply with the Board's fiduciary duties to the Company's stock-
holders under applicable law. In the event the Parent acquires
at least 90% of the outstanding shares of each class of capital
stock of the Company pursuant to the Offer or otherwise, the
Parent, the Purchaser and the Company shall take all necessary
and appropriate action to cause the Merger to become effective as
soon as practicable after such acquisition, without a meeting of
the stockholders of the Company, in accordance with Delaware Law.
(c) If approval by the stockholders of the
Company of this Agreement or the Merger is required by law, the
Company shall, as soon as practicable following the termination
of the Offer, prepare and file with the SEC, and the Parent and
the Purchaser shall cooperate with the Company in such prepara-
tion and filing, a preliminary proxy statement relating to this
Agreement and the transactions contemplated hereby and use its
reasonable best efforts to furnish the information required to be
included by the SEC in the Proxy Statement (as defined hereafter)
and, after consultation with the Parent, to respond promptly to
any comments made by the SEC with respect to the preliminary
proxy statement and shall, cause a definitive proxy statement
(the "Proxy Statement") to be mailed to the Company's stockhold-
ers that contains the recommendation of the Board that stockhold-
ers of the Company approve and adopt this Agreement. If applica-
ble to the Merger, the Parent agrees to comply with the require-
ments of Rule 13e-3 under the Exchange Act. The Company will
notify the Parent and the Purchaser of the receipt of any com-
ments from the SEC or its staff and of any request by the SEC or
its staff for amendments or supplements to the preliminary proxy
statement and the Proxy Statement or for additional information
and will supply the Parent and the Purchaser with copies of all
correspondence between the Company or any of its representatives,
on the one hand, and the SEC or its staff, on the other hand,
with respect to the preliminary proxy statement and the Proxy
Statement or the Merger. The Company shall give the Parent and
the Purchaser and its counsel the opportunity to review the
preliminary proxy statement and the Proxy Statement prior to its
being filed with the SEC and shall give the Parent and the
Purchaser and its counsel the opportunity to review all amend-
ments and supplements to the preliminary proxy statement and the
Proxy Statement and all responses to requests for additional
information and replies to comments prior to their being filed
with, or sent to, the SEC. If at any time prior to the approval
of this Agreement by the Company's stockholders there shall occur
any event that is required to be set forth in an amendment or
supplement to the Proxy Statement, the Company will prepare and
mail to its stockholders such an amendment or supplement.
5.7 Information Statement. As soon as practicable
after the date of this Agreement, the Company will prepare and
file with the SEC, and the Parent and the Purchaser shall cooper-
ate with the Company in such preparation and filing, a prelimi-
nary information statement relating to the Charter Amendment and
use its reasonable best efforts to furnish the information
required to be included by the SEC in the Information Statement
and, after consultation with the Parent, to respond promptly to
any comments made by the SEC with respect to the preliminary
information statement and shall use its reasonable best efforts
to cause a definitive information statement (the "Information
Statement") to be mailed to the Company's stockholders as soon as
practicable. The Company will notify the Parent and the Purchas-
er of the receipt of any comments from the SEC or its staff and
of any request by the SEC or its staff for amendments or supple-
ments to the preliminary information statement and the Informa-
tion Statement or for additional information and will supply the
Parent and the Purchaser with copies of all correspondence
between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect
to the preliminary information statement and the Information
Statement or the Merger. The Company shall give the Parent and
the Purchaser and its counsel the opportunity to review the
preliminary information statement and the Information Statement
prior to its being filed with the SEC and shall give the Parent
and the Purchaser and its counsel the opportunity to review all
amendments and supplements to the preliminary information state-
ment and the Information Statement and all responses to requests
for additional information and replies to comments prior to their
being filed with, or sent to, the SEC. The Company will cause
the Certificate of Amendment to be filed with Secretary of State
of Delaware the next business day after all applicable time
periods for taking such actions have expired. If at any time
prior to the effectiveness of the Charter Amendment there shall
occur any event that is required to be set forth in an amendment
or supplement to the Information Statement, the Company will
prepare and mail to its stockholders such an amendment or supple-
ment.
5.8 Acquisition Proposals. From and after the date of
this Agreement until the earlier of the Effective Date or the
consummation of the Offer, except as provided below, the Company
agrees that (a) neither the Company nor its Subsidiaries shall,
and the Company shall not authorize or permit its officers,
directors, employees, agents or representatives (including,
without limitation, any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) to, initiate, solicit
or knowingly encourage, directly or indirectly, any inquiries or
the making or implementation of any proposal or offer (including,
without limitation, any proposal or offer to its stockholders)
with respect to a merger, acquisition, consolidation, tender
offer, exchange offer or similar transaction involving, or any
purchase of all or any significant portion of the assets or any
significant portion of the equity securities (excluding any
issuable pursuant to agreement existing on the date hereof) of,
the Company or its Subsidiaries (any such proposal or offer,
other than by the Parent or its affiliates, being hereinafter
referred to as an "Acquisition Proposal") or engage in any
negotiations concerning, or provide any confidential information
or data to, or have any substantive discussions with, any person
relating to an Acquisition Proposal, or otherwise knowingly
facilitate any effort or attempt to make or implement an Acquisi-
tion Proposal; (b) it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the
foregoing; and (c) it will notify the Parent immediately (but in
no event later than 24 hours) if any such Acquisition Proposals
are received by the Company, any such information is requested
from the Company, or any such negotiations or discussions are
sought to be initiated or continued with the Company. Any such
notice pursuant to clause (c) of the previous sentence shall
include the identity of the party making the Acquisition Proposal
and the terms of such proposal. Notwithstanding the foregoing,
nothing contained in this Section 5.8 shall prohibit the Board of
Directors of the Company from (i) furnishing information to or
entering into discussions or negotiations with, any person or
entity that indicates an interest in making a Superior Proposal
(as hereinafter defined), if, and only to the extent that, (A)
the Board of Directors reasonably determines in good faith after
consultation with outside counsel that such action is required
for the Board of Directors to comply with its fiduciary duties to
its stockholders under applicable law and (B) the Company keeps
the Parent informed of the status and terms of any such discus-
sions or negotiations; and (ii) to the extent applicable, comply-
ing with Rule 14d-9 and Rule 14e-2 promulgated under the Exchange
Act with regard to an Acquisition Proposal. If any person or
entity makes a Superior Proposal, upon receipt and determination
thereof, the Company shall promptly (but in no event later than
24 hours after determination) provide written notice (a "Notice
of a Superior Proposal") to the Parent of such Superior Proposal,
including the identity of the parties and the terms thereof. For
purposes of this Agreement, "Superior Proposal" means an unsolic-
ited bona fide Acquisition Proposal by a third party in writing
that the Board of Directors of the Company determines in its good
faith reasonable judgment (based on the advice of a nationally
recognized investment banking firm) provides greater aggregate
value to the Company's stockholders than the transactions contem-
plated by this Agreement and for which any required financing is
committed or which, in the good faith reasonable judgment of the
Board of Directors (based on the advice of a nationally recog-
nized investment banking firm), is reasonably capable of being
financed by such third party.
Nothing in this Section 5.8 shall (x) permit the
Company to terminate this Agreement, (y) permit the Company to
enter into any agreement with respect to an Acquisition Proposal
during the term of this Agreement, or (z) affect any other
obligation of any party under this Agreement.
5.9 Third Party Standstill Agreements. During the
period from the date of this Agreement until the earlier of the
Effective Date or termination hereof, the Company shall not
terminate, amend, modify or waive any provision of any confiden-
tiality or standstill agreement to which the Company or any of
its Subsidiaries is a party (other than those involving the
Parent or its affiliates). During such period, the Company
agrees to enforce, to the fullest extent under applicable law,
the provisions of any such agreements, including, but not limited
to, injunctions to prevent any breaches of such agreements and to
enforce specifically the terms and provisions thereof in any
court of the United States or any state thereof having jurisdic-
tion.
5.10 Expenses. (a) All costs and expenses incurred in
connection with this Agreement, the Merger and the transactions
contemplated hereby shall be paid by the party incurring such
cost or expense.
(b) Notwithstanding any provision in this Agreement to
the contrary, the Company shall pay, or cause to be paid, in same
day funds, to Parent (x) the Expenses (as hereinafter defined) in
an amount up to but not to exceed $3,000,000 and (y) $9,900,000
(the "Termination Fee") under the circumstances and at the times
set forth as follows:
(i) if the Company or the Parent terminates
this Agreement under Section 8.1(b) and after the date hereof a
Takeover Proposal (as defined hereafter) shall have been made and
concurrently with or within twelve months after such termination,
the Company shall enter into an agreement providing for a Take-
over Proposal or a Takeover Proposal shall have been consummated,
the Company shall pay the Expenses and the Termination Fee
concurrently with the earlier of the entering into of such
agreement or the consummation of such Takeover Proposal; and
(ii) if the Company or the Parent terminates
this Agreement under Section 8.1(c) and after the date hereof
(but on or prior to the date of termination) aTakeover Proposal
shall have been made , the Company shall pay the Expenses and the
Termination Fee concurrently with such termination; and
(iii) if the Company or the Parent termi-
nates this Agreement under Section 8.1(e) as a result of the
occurrence of paragraphs (b) or (h) of Annex A, the Company shall
pay the Expenses; and
(iv) if the Company or the Parent terminates
this Agreement under Section 8.1(e) as a result of clause (x) of
Annex A, paragraph (b) of Annex A or the failure to attain the
Minimum Condition and, after the date hereof (but on or prior to
the date of termination) a Takeover Proposal shall have been
made, the Company shall pay, the Expenses and the Termination Fee
concurrently with such termination; and
(v) if the Parent terminates this Agreement
under Section 8.1(f), the Company shall pay the Expenses and the
Termination Fee concurrently with such termination.
(c) As used herein, (i) "Expenses" shall mean all out-
of-pocket fees and expenses incurred or paid by or on behalf of
the Parent or any affiliate of the Parent in connection with this
Agreement and the transactions contemplated herein, including all
fees and expenses of counsel, investment banking firms, accoun-
tants and consultants which are evidenced by written invoice or
other supporting documentation provided by Parent; and (ii)
"Takeover Proposal" shall mean any proposal or offer to the
Company or its stockholders by a third party with respect to (x)
a tender offer or exchange offer for 30% or more of the outstand-
ing shares of capital stock of the Company, (y) a merger, consol-
idation or sale of all or substantially all of the assets of the
Company, or similar transaction or (z) any liquidation or recapi-
talization having the foregoing effect.
ARTICLE VI
CONDITIONS
6.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect
the Merger shall be subject to the satisfaction or waiver, where
permissible, prior to the Effective Time, of the following
conditions:
(a) If approval of this Agreement and the Merger
by the holders of Common Stock is required by applicable law,
this Agreement and the Merger shall have been approved by the
requisite vote of such holders.
(b) No injunction or any other order, decree or
ruling shall have been issued by a court of competent jurisdic-
tion or by a Governmental Entity, nor shall any statute, rule,
regulation or executive order have been promulgated or enacted by
any Governmental Entity, in each case that prevents the consumma-
tion of the Merger; provided, however, that each of the parties
shall have used reasonable efforts to prevent the entry of any
such injunction or other order, decree or ruling and to appeal
promptly the same after issuance thereof.
6.2 Conditions to Obligation of the Parent to Effect
the Merger. The obligations of the Parent and the Purchaser to
effect the Merger shall be further subject to the satisfaction or
waiver on or prior to the Effective Time of the condition that
the Purchase shall have accepted for payment and paid for Shares
tendered pursuant to the Offer; provided, that this condition
shall be deemed satisfied if the Purchaser's failure to accept
for payment and pay for such shares breaches this Agreement or
violates the terms and conditions of the Offer.
ARTICLE VII
ADDITIONAL COVENANTS OF THE
COMPANY, THE PARENT AND THE PURCHASER
7.1 Employee Benefits.
(a) The Surviving Corporation and its subsidiar-
ies will honor, and the Parent agrees to cause the Surviving
Corporation and its subsidiaries to honor, all of the Company's
employment, transition employment, non-compete, consulting,
benefit, compensation or severance agreements (the "Employment
Agreements") in accordance with their terms and, for a period of
not less than twelve (12) months immediately following the
Effective Date, all of the Company's written employee severance
plans (or policies), in existence on the date hereof, including,
without limitation, the separation pay plan for corporate offi-
cers. Schedule 7.1 of the Company Disclosure Letter hereto lists
all Employment Agreements not terminable upon 30 days' written
notice and which require annual payments in excess of $75,000,
true and complete copies of all of which have been furnished to
the Parent.
(b) If any salaried employee of the Company
becomes a participant in any employee benefit plan, practice or
policy of the parent, the Purchaser, any of their affiliates or
the Surviving Corporation, such employee shall be given credit
under such plan, practice or policy for all service prior to the
Effective Time with the Company, or any predecessor employer (to
the extent such credit was given by the Company), and all service
after the Effective Time and prior to the time such employee
becomes such a participant, for purposes of eligibility and
vesting and for all other purposes for which such service is
either taken into account or recognized; provided, however, such
service need not be credited to the extent it would result in a
duplication of benefits, including, without limitation, benefit
accrual service under defined benefit plans.
(c) For at least twelve months following the
Effective Date, the Parent shall cause the Surviving Corporation
to maintain employee benefits for management and hourly employees
of the Company and its Subsidiaries that are no less than the
employee benefits, in the aggregate, available to similarly
situated management and hourly employees of the Parent and its
subsidiaries. Nothing contained herein shall be construed to
obligate the Parent or any of its subsidiaries to employ, or
cause the Company or its Subsidiaries from and after the Effec-
tive Date to continue to employ, any management or hourly employ-
ee of the Company or its Subsidiaries.
7.2 Officers' and Directors' Insurance; Indemnifica-
tion.
(a) The Company shall indemnify and hold harm-
less, and, after the Effective Date, the Surviving Corporation
and the Parent shall indemnify and hold harmless, each present
and former director and officer of the Company (the "Indemnified
Parties") against any expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such Indemnified Party in connection with
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative to which
such Indemnified Party was made, or threatened to be made, a
party by reason of the fact that such Indemnified Party was or is
a director, officer, employee or agent of the Company, or was
serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint
venture trust or other enterprise and which arises out of or
pertains to any action or omission occurring prior to the Effec-
tive Date (including, without limitation, any which arise out of
or relate to the transactions contemplated by this Agreement) to
the full extent permitted under the Delaware Law (and the
Company or the Surviving Corporation and the Parent, as the case
may be, will advance expenses to each such person to the full
extent so permitted); provided, that any determination required
to be made with respect to whether an Indemnified Party's conduct
complied with the standards set forth in the Delaware Law shall
be made by independent counsel selected by such Indemnified Party
and reasonably satisfactory to the Company or the Surviving
Corporation and the Parent, as the case may be (which shall pay
such counsel's fees and expenses). In the event any such claim,
action, suit, proceeding or investigation if brought against any
Indemnified Party (whether arising before or after the Effective
Date), (a) the Company (or the Parent and the Surviving Corpora-
tion after the Effective Date) shall retain counsel for the
Indemnified Parties reasonably satisfactory to them, (b) the
Company (or the Surviving Corporation and the Parent after the
Effective Date) shall pay all fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are
received, and (c) the Company (or the Surviving Corporation and
the Parent after the Effective Date) will use its reasonable best
efforts to assist in the vigorous defense of any such matter,
provided, that neither the Company, the Surviving Corporation nor
the Parent shall be liable for any such settlement effected
without their written consent, which consent, however, shall not
be unreasonably withheld. Any Indemnified Party wishing to claim
indemnification under this Section 7.2, upon learning of any such
claim, action, suit, proceeding or investigation, shall notify
the Company or the Surviving Corporation or the Parent thereof
and shall deliver to the Company or the Surviving Corporation or
the Parent an undertaking to repay any amounts advanced pursuant
hereto in the event a court of competent jurisdiction shall
ultimately determine, after exhaustion of all avenues of appeal,
that such Indemnified Party was not entitled to indemnification
under this Section.
(b) For five years after the Effective Date, the
Surviving Corporation and the Parent shall use their respective
reasonable best efforts to provide officers' and directors'
liability insurance for events occurring prior to the Effective
Time covering the Indemnified Parties who are currently covered
by the Company's officers' and directors' liability insurance
policy (a copy of which has heretofore been delivered to the
Parent) on terms no less favorable than those of such policy in
terms of coverage and amounts or, if substantially similar
insurance coverage is unavailable, the best available coverage;
provided, however, that the Surviving Corporation shall not be
required to pay a per annum amount of premiums for such officers'
and directors' insurance in excess of 200 percent of the last per
annum amount of premiums incurred prior to the date hereof, but
in such case shall purchase as much coverage as possible for such
amount. The Company represents and warrants that the last per
annum amount of such premiums incurred by the Company is approxi-
mately $280,000.
(c) This Section 7.2 shall survive the consumma-
tion of the Merger. Subject to the Delaware Law, the certificate
of incorporation and bylaws of the Company and the Surviving
Corporation shall not be amended in a manner which adversely
affects the rights of the Indemnified Parties under this Section
7.2.
7.3 Transition Agreements. The Parent and the Pur-
chaser agree that the Surviving Corporation shall maintain and
shall comply with the Company's Transition Employment Agreements,
as amended, and Stay Bonus Agreements, with several officers of
the Company listed on Schedule 7.3 of the Company Disclosure
Letter and the Employment Agreement, as amended, with R. Randolph
Devening set forth on Schedule 7.3 of the Company Disclosure
Letter (collectively referred to herein as the "Transition
Agreements"). The Company agrees not to amend the Transition
Agreements after the date hereof without first obtaining the
Parent's consent.
7.4 Restructuring of Transaction. Notwithstanding any
provision contained in this Agreement to the contrary, in the
event that any claim, suit, proceeding or action is brought
against any of the Parent, the Purchaser or the Company seeking
to limit, void or enjoin any of the transactions contemplated by
this Agreement, the Tender Agreements or any action taken by the
Board of Directors of the Company to facilitate any transaction
contemplated by this Agreement or the Tender Agreements on the
basis of the transfer restriction contained in Article Fifth of
the Company's Amended and Restated Certificate of Incorporation
or the rules of the New York Stock Exchange, either the Parent or
the Company may, at its option, upon written notice to the other
parties, elect to amend this Agreement to provide for a cash
merger of the Purchaser with and into the Company in lieu of the
Offer upon terms and conditions which are substantially consis-
tent with those contained in this Agreement, and all parties
shall as promptly as practicable following receipt of such notice
amend this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Termination. Notwithstanding anything herein to
the contrary, this Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time, whether
before or after the Company has obtained stockholder approval:
(a) by the mutual written consent of the Board of
Directors of each of the Company and the Parent;
(b) by either the Company or the Parent, if the
Merger has not been consummated by the close of business on
September 24, 1997, or such other date, if any, as the Company
and the Parent shall agree upon; provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(b)
shall not be available to any party whose failure to fulfill any
of its obligations contained in this Agreement has been the cause
of, or resulted in, the failure of the Merger to have occurred
prior to the aforesaid date;
(c) by either the Company or the Parent, if the
acquisition of the Company has been restructured to be a cash
merger pursuant to Section 7.4 and the stockholders of the
Company fail to approve and adopt this Agreement and the Merger,
at the Special Meeting or any postponement or adjournment there-
of;
(d) by either the Company or the Parent, if any
Governmental Entity shall have issued any judgment, injunction,
order or decree enjoining Parent or the Company from consummating
the Offer or the Merger and such judgment, injunction, order or
decree shall become final and nonappealable; or
(e) by the Company or the Parent if the Offer
terminates or expires on account of the failure of any condition
specified in Annex A without the Parent having purchased any
Shares thereunder; provided, however, that the right to terminate
this Agreement pursuant to this Section 8.1(e) shall not be
available to any party whose failure to fulfill any of its
obligations contained in this Agreement has been the cause of, or
resulted in, the failure of any such condition;
(f) by the Parent prior to the consummation of
the Offer if (i) the Board of Directors of the Company shall not
have recommended, or shall have resolved not to recommend, or
shall have modified or withdrawn its recommendation of the Offer
or the Merger or determination that the Offer or the Merger is
fair to and in the best interest of the Company and its stock-
holders, or shall have resolved to do so, or (ii) the Board of
Directors of the Company fails to recommend against acceptance of
an Acquisition Proposal within five business days after a request
by Parent or Purchaser to do so.
The party desiring to terminate this Agreement
pursuant to this Section 8.1 shall give written notice of such
termination to the other party.
8.2 Effect of Termination. If this Agreement is
terminated pursuant to Section 8.1 hereof, this Agreement shall
become void and of no effect with no liability on the part of any
party hereto; provided, that the agreements contained in this
Section 8.2 and in Sections 5.10 and 8.3 and the second proviso
of Section 5.3 hereof shall survive the termination hereof; and,
provided, further, that the termination of this Agreement shall
not relieve any party for liability for any willful and knowing
breach of this Agreement.
8.3 No Survival of Representations, Warranties and
Covenants. Except for the agreements set forth in Sections 7.1,
7.2 and 7.3 hereof, the respective representations, warranties
and covenants of the Company, Parent and the Purchaser contained
herein shall expire with, and be terminated and extinguished
upon, consummation of the Merger, and thereafter neither the
Company, Parent nor the Purchaser nor any officer, director or
principal thereof shall be subject to any liability whatsoever
based on any such representation, warranty or covenant.
8.4 Assignment. Neither this Agreement nor any of the
rights or obligations hereunder may be assigned by the Company
without the prior written consent of the Parent and the Purchas-
er, or by the Parent or the Purchaser without the prior written
consent of the Company, except that Purchaser may assign, in its
sole discretion, any of or all its rights, interests and obliga-
tions under this Agreement to the Parent or to any direct or
indirect wholly-owned subsidiary of the Parent, but no such
assignment shall relieve the Purchaser of any of its obligations
hereunder; provided, that such assignment shall not materially
impede or delay the consummation of the transactions contemplated
by this Agreement. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
8.5 Notices. All notices, requests, demands and other
communications hereunder to any party shall be in writing and
shall be delivered or transmitted by (i) delivery in person, (ii)
courier or messenger service, (iii) telegram, telex, telecopy, or
similar electronic or facsimile transmission, or (iv) registered
or certified United States Mail, postage prepaid and return
receipt requested, in each case as follows:
If to the Company, addressed to: Foodbrands America, Inc.
1601 N.W. Expressway
Suite 1700
Oklahoma City, OK 73118-1495
Attn: Mr. R. Randolph Devening
Chairman, President and
Chief Executive Officer
Facsimile No. (405) 840-2447
With copies to: McAfee & Taft
A Professional Corporation
Tenth Floor, Two Leadership
Square
211 North Robinson
Oklahoma City, Oklahoma 73102-
7103
Attention: John M. Mee, Esq.
W. Chris Coleman, Esq.
Facsimile No. (405) 235-0439
and
Skadden, Arps, Slate, Meagher &
Flom LLP
919 Third Avenue
New York, New York 10022-9931
Attention: Mark C. Smith, Esq.
Facsimile No. (212) 735-2000
If to the Parent or the Purchaser,
addressed to: IBP, inc.
IBP Avenue
P. O. Box 515
Dakota City, Nebraska 68731
Attention: Robert L. Peterson
Facsimile No. (402) 241-2427
With a copy to: Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Larry A. Barden,
Esq.
Paul L. Choi, Esq.
Facsimile No. (312) 853-7036
or to such other place and with such other copies as a party may
designate as to itself by written notice to the others. All
notices delivered or transmitted by any method described in
clauses (i), (ii), and (iv) of this Section 8.5 shall be deemed
given and effective upon receipt or refusal of receipt by the
addressee, with the courier's delivery record or the return
receipt being conclusive evidence of such receipt or attempted
delivery. All notices delivered or transmitted by any method
described in clause (iii) of this Section 8.4 shall be given and
effective upon receipt of transmission, with the answerback or
the facsimile or electronic confirmation of transmission being
conclusive evidence of such receipt (unless the addressee prompt-
ly gives a notice to the transmitting party of the incompleteness
or illegibility of the original notice); provided, however, any
communication provided under clause (iii) shall be followed by a
duplicate communication under either clause (i), clause (ii) or
clause (iv). In any event, if receipt or refusal of receipt is
on a day that is not a Business Day, then receipt shall be deemed
to have occurred on the first Business Day thereafter. A "Busi-
ness Day" is any day that is not a Saturday, Sunday, or state or
federal legal holiday.
8.6 Choice of Law. This Agreement shall be construed,
interpreted and the rights of the parties determined in accor-
dance with the laws of the State of Delaware except with respect
to matters of law concerning the internal corporate affairs of
any corporate entity which is a party to or the subject of this
Agreement but is not incorporated in the State of Delaware, and
as to those matters the law of the jurisdiction under which the
respective entity derives its powers shall govern.
8.7 Entire Agreement; Amendments and Waivers. This
Agreement, together with all schedules contained in the Company
Disclosure Letter and exhibits hereto and the confidentiality
agreement between the Parent and the Company dated January 25,
1997 (the "Confidentiality Agreement"), constitutes the entire
agreement among the parties pertaining to the subject matter
hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the
parties. To the extent any of the provisions of this Agreement
or the Tender Agreements conflict with any of the provisions of
the Confidentiality Agreement, the provisions of this Agreement
or the Tender Agreements, as the case may be, shall control and
any such provisions of the Confidentiality Agreement shall be
deemed amended and superseded. No supplement, notification or
waiver of this Agreement shall be binding unless executed in
writing by the party or parties to be bound thereby. No waiver
of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether
or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
8.8 Schedules. Notwithstanding anything to the
contrary contained in this Agreement, the Company, the Parent and
the Purchaser hereby agree that the schedules attached to the
Company Disclosure Letter are made a part of this Agreement for
all purposes. The parties further understand and agree that
disclosure made in any schedule shall be deemed disclosure in all
other schedules as if set forth therein, i.e., information set
forth in one schedule shall be deemed disclosure in all schedules
other than as to the matters disclosed in Schedules 3.3 and 3.10.
8.9 No Third Party Beneficiary. This Agreement is for
the benefit of, and may be enforced only by, the Parent, the
Purchaser and the Company and their respective assignees, and is
not for the benefit of, and may not be enforced by, any third
party except for Section 7.2.
8.10 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument and shall be effective when two or more counter-
parts have been signed by each of the parties hereto and deliv-
ered to the other parties.
8.11 Invalidity. In the event that any one or more of
the provisions contained in this Agreement or in any other
instrument referred to herein, shall, for any reason, be held to
be invalid, illegal or unenforceable in any respect, such inval-
idity, illegality or unenforceability shall not affect any other
provision of this Agreement or any other such instrument.
8.12 Headings. The headings of the Articles and
Sections herein are inserted for convenience of reference only
and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
8.13 Publicity. Unless required by law or the rules of
any applicable securities exchange, neither party shall issue any
press release or make any public statement regarding the transac-
tions contemplated hereby, without the prior approval of the
other party (which approval shall not be unreasonably withheld).
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on their respective behalf, by
their respective officers, thereunto duly authorized, as of the
day and year first above written.
FOODBRANDS AMERICA, INC.
("Company")
By /s/ R. Randolph Devening
---------------------------------
R. Randolph Devening, Chairman,
President and Chief Executive
Officer
IBP, inc.
("Parent")
By /s/ Robert L. Peterson
---------------------------------
Robert L. Peterson, Chairman and
Chief
Executive Officer
IBP Sub, Inc.
(the "Purchaser")
By /s/ Larry Shipley
---------------------------------
Larry Shipley, President
ANNEX A
Certain Conditions Of The Offer
Notwithstanding any other provision of the Agreement or
the Offer, the Purchaser shall not be required to accept for
payment or pay for, or may delay the acceptance for payment of or
payment for, any tendered Shares, or may, in its sole discretion,
at any time, terminate or amend the Offer as to any Shares not
then paid for if (v) a majority of the Shares outstanding on a
fully diluted basis shall not have been validly tendered pursuant
to the Offer and not withdrawn prior to the expiration of the
Offer (the "Minimum Condition"), (w) any waiting period under the
Antitrust Improvements Act applicable to the purchase of shares
of Common Stock pursuant to the Offer shall not have expired or
shall not have been terminated prior to the expiration of the
Offer, (x) the Certificate of Amendment shall not have been filed
with the Secretary of State of the State of Delaware and the
Charter Amendment shall not be in full force and effect prior to
the close of business on September 24, 1997, (y) the Agreement
shall have been terminated in accordance with its terms, or (z)
on or after the date of the Agreement, and at or before the time
of payment for any such Shares, any of the following events shall
occur:
(a) there shall have occurred (i) any general suspen-
sion of, or limitation on prices for, trading in
securities on the New York Stock Exchange or on
NASDAQ, (ii) a declaration of a banking moratorium
or any suspension of payments in respect of banks
in the United States, (iii) a commencement of a
war, armed hostilities or other international or
national calamity directly involving the armed
forces of the United States, (iv) any general
limitation (whether or not mandatory) by any gov-
ernmental authority on the extension of credit by
banks or other lending institutions, (v) in the
case of any of the foregoing existing at the time
of the commencement of the Offer, a material ac-
celeration or worsening thereof, (vi) a decline of
at least thirty percent (30%) in the Dow Jones
Industrial Average or the Standard and Poors 500
Index from the date of this Agreement to the expi-
ration or termination of the Offer or (vii) a
change in general financial, bank or capital mar-
ket conditions which materially and adversely
affects the ability of financial institutions in
the United States to extend credit or syndicate
loans;
(b) any of the representations and warranties of the
Company set forth in the Agreement that are quali-
fied as to materiality shall not be true and cor-
rect or any such representations and warranties
that are not so qualified shall not be true and
correct in any material respect, in each case, on
the date when made and at the Expiration Date, or
in the case of any representations and warranties
that are made as of a different date, as of that
date; or
(c) the Company shall have breached or failed to com-
ply in any material respect with any of its obli-
gations under the Agreement and such failure con-
tinues for two (2) days after receipt by the Com-
pany of notice from the Parent specifying such
failure; or
(d) there shall have been instituted or pending any
litigation by a Governmental Entity thereof (i)
which prohibits the consummation of the transac-
tions contemplated by the Offer or the Merger;
(ii) which prohibits the Parent's or the
Purchaser's ownership or operation of all or any
material portion of their or the Company's busi-
ness or assets, or which compels the Parent or the
Purchaser to dispose of or hold separate all or
any material portion of the Parent's or the
Purchaser's or the Company's business or assets as
a result of the transactions contemplated by the
Offer or the Merger, (iii) which makes the accep-
tance for payment, purchase of, or payment for,
some or all of the Shares illegal; (iv) which
imposes material limitations on the ability of
the Parent or the Purchaser to acquire or hold or
to exercise effectively all rights of ownership of
Shares including, without limitation, the right to
vote any Shares purchased by the Purchaser or the
Parent on all matters properly presented to the
stockholders of the Company, or (v) which imposes
any limitations on the ability of the Parent or
the Purchaser, or any of their respective subsid-
iaries, effectively to control in any material
respect the business or operations of the Company;
(e) any statute, rule, regulation, order or injunction
shall be enacted, promulgated, entered, enforced
or deemed applicable to the Offer or the Merger or
any other action shall have been taken by any
United States governmental authority or court (i)
which prohibits the consummation of the transac-
tions contemplated by the Offer or the Merger;
(ii) which prohibits the Parent's or the
Purchaser's ownership or operation of all or any
material portion of their or the Company's busi-
ness or assets, or which compels the Parent or the
Purchaser to dispose of or hold separate all or
any material portion of the Parent's or the
Purchaser's or the Company's business or assets as
a result of the transactions contemplated by the
Offer or the Merger, (iii) which makes the accep-
tance for payment, purchase of, or payment for,
some or all of the Shares illegal; (iv) which
imposes material limitations on the ability of
the Parent or the Purchaser to acquire or hold or
to exercise effectively all rights of ownership of
Shares including, without limitation, the right to
vote any Shares purchased by the Purchaser or the
Parent on all matters properly presented to the
stockholders of the Company, or (v) which imposes
any limitations on the ability of the Parent or
the Purchaser, or any of their respective subsid-
iaries, effectively to control in any material
respect the business or operations of the Company;
(f) Parent or the Purchaser shall have reached an
agreement or understanding in writing with the
Company providing for termination of the Offer or
the Agreement;
(g) any filing required to be made by the Company
with, or any consent, approval or authorization
required to be obtained prior to the Effective
Time by the Company from, any Governmental Entity
in connection with the execution and delivery of
the Agreement by the Company or the consummation
of the Offer or the transactions contemplated by
the Agreement, shall not have been made or ob-
tained; or
(h) a Material Adverse Change in the Company has oc-
curred,
which, in the sole judgment of the Purchaser, regardless of the
circumstances giving rise to any such conditions, makes it
inadvisable to proceed with the Offer and/or with such acceptance
for payment of or payment for Shares.
The foregoing conditions are for the sole benefit of
the Parent and the Purchaser and may be asserted by the Parent or
the Purchaser regardless of the circumstances or may be waived by
the Parent or Purchaser in whole or in part at any time and from
time to time in its sole discretion.
Exhibit 8
TENDER AGREEMENT
TENDER AGREEMENT dated as of March 25, 1997 (this "Agree-
ment"), among IBP, inc., a Delaware corporation (the "Parent"),
IBP Sub, Inc., a Delaware corporation and a wholly owned subsid-
iary of the Parent ("Purchaser"), and Joseph Littlejohn & Levy,
L.P., a Delaware limited partnership, and Joseph, Littlejohn &
Levy Fund II, L.P., a Delaware limited partnership (together, the
"Stockholder").
WHEREAS, concurrently with the execution and delivery of
this Agreement the Parent, Purchaser and Foodbrands America,
Inc., a Delaware corporation (the "Company"), have entered into
an Agreement and Plan of Merger dated as of the date hereof (such
Agreement and Plan of Merger, as amended from time to time, the
"Merger Agreement"), which provides, among other things, that
Purchaser shall make the Offer (as defined in the Merger Agree-
ment) to purchase at a price of $23.40 per share, net to the
sellers in cash, all of the issued and outstanding shares of the
Company's Common Stock, par value $.01 per share (the "Company
Common Stock"), and shall merge with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth
in the Merger Agreement (any term used herein without definition
shall have the definition ascribed thereto in the Merger Agree-
ment);
WHEREAS, the Stockholder owns beneficially and of record
shares of Company Common Stock (such shares of Company Common
Stock being collectively referred to herein as the "Stockholder
Shares" or individually referred to herein as the "Stockholder
Share") and;
WHEREAS, as a condition to the willingness of the Parent and
Purchaser to enter into the Merger Agreement, and as an induce-
ment to them to do so, the Stockholder has agreed for the benefit
of the Parent and Purchaser to tender the Stockholder Shares and
any other shares of Company Common Stock at any time during the
term of this Agreement held by the Stockholder, pursuant to the
Offer, to vote all the Stockholder Shares and any other shares of
Company Common Stock owned by the Stockholder in favor of the
Merger, and to grant to Purchaser an option to acquire all
Stockholder Shares and all other shares of Company Common Stock
owned by the Stockholder under certain circumstances, all on the
terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement,
the parties hereby agree as follows:
ARTICLE I
Tender Offer and Option
SECTION 1.01. Tender of Shares. (a) Within five business
days of the commencement by Purchaser of the Offer, the Stock-
holder shall tender to the Depository designated in the Offer to
Purchase (the "Offer to Purchase") distributed by Purchaser in
connection with the Offer (i) a letter of transmittal with
respect to the Stockholder Shares and any other shares of Company
Common Stock held by the Stockholder (whether or not currently
held by the Stockholder; the Stockholder Shares, together with
any shares acquired by the Stockholder in any capacity after the
date hereof and prior to the termination of this Agreement
whether upon the exercise of options, warrants or rights, the
conversion or exchange of convertible or exchangeable securities,
or by means of purchase, dividend, distribution or otherwise (the
"Shares"), complying with the terms of the Offer to Purchase,
(ii) the certificates representing the Shares, and (iii) all
other documents or instruments required to be delivered pursuant
to the terms of the Offer to Purchase.
(b) The Stockholder shall not, subject to applicable law,
withdraw the tender effected in accordance with Section 1.01(a);
provided, however, that the Stockholder may decline to tender, or
may withdraw, any and all Shares owned by the Stockholder if the
Purchaser amends the Offer to (w) reduce the Offer Price to less
than $23.40 in cash, net to the stockholders, (x) reduce the
number of shares of Company Common Stock subject to the Offer,
(y) change the form of consideration payable in the Offer or (z)
amend or modify any term or condition of the Offer in a manner
adverse to the stockholders of the Company (other than insignifi-
cant changes or amendments or other than to waive any condition).
The Stockholder shall give Purchaser at least two business days'
prior notice of any withdrawal of Shares owned by the Stockholder
pursuant to the immediately preceding proviso.
SECTION 1.02. Option. (a) The Stockholder hereby irrevoca-
bly grants Purchaser an option (the "Option"), exercisable only
upon the events and subject to the conditions set forth herein,
to purchase any or all of the Shares at a purchase price per
share equal to $23.40 (or such higher per share price as may be
offered by Purchaser in the Offer).
(b) Subject to the conditions set forth in Section 1.03 and
the termination provisions of Section 6.07, Purchaser may exer-
cise the Option in whole or in part at any time prior to the date
60 days after the expiration or termination of the Offer (such
sixtieth day being herein called the "Option Expiration Date") if
(x) the Stockholder fails to comply with any of its obligations
under this Agreement or withdraws the tender of the Shares except
under the circumstances set forth in the proviso to Section
1.01(b) (but the Option shall not limit any other right or remedy
available to the Parent or Purchaser against the Stockholder for
breach of this Agreement) or (y) the Offer is not consummated
because of the failure to satisfy any of the conditions to the
Offer set forth in Annex A to the Merger Agreement (other than as
a result of any action or inaction of the Parent or Purchaser
which constitutes a breach of the Merger Agreement).
Upon the occurrence of any of such circumstances,
Purchaser shall be entitled to exercise the Option and (subject
to Section 1.03) Purchaser shall be entitled to purchase the
Shares and the Stockholder shall sell the Shares to Purchaser.
Purchaser shall exercise the Option by delivering written notice
thereof to the Stockholder (the "Notice"), specifying the number
of Shares to be purchased and the date, time and place for the
closing of such purchase which date shall not be less than three
business days nor more than five business days from the date the
Stockholder receives the Notice and in no event shall such date
be later than the Option Expiration Date. The closing of the
purchase of Shares pursuant to this Section 1.02 (the "Closing")
shall take place on the date, at the time and at the place
specified in such notice; provided, that if at such date any of
the conditions specified in Section 1.03 shall not have been
satisfied (or waived), Purchaser may postpone the Closing until a
date within five business days after such conditions are satis-
fied (but not later than the Option Expiration Date).
(c) At the Closing, the Stockholder will deliver to Pur-
chaser (in accordance with Purchaser's instructions) the certifi-
cates representing the Shares owned by the Stockholder and being
purchased pursuant to Section 1.02(c), duly endorsed or accompa-
nied by stock powers duly executed in blank. At such Closing,
Purchaser shall deliver to the Stockholder, by bank wire transfer
of immediately available funds, an amount equal to the number of
Shares being purchased from the Stockholder as specified in the
Notice multiplied by $23.40 (or such higher per share price as
may be offered by Purchaser in the Offer).
SECTION 1.03. Conditions to Option. The obligation of
Purchaser to purchase the Shares at the Closing is subject to the
following conditions:
(a) all waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the rules and regula-
tions promulgated thereunder (the "HSR Act") applicable to
such purchase shall have expired or been terminated; and
(b) there shall be no preliminary or permanent injunc-
tion or other order, decree or ruling issued by any Govern-
mental Entity, nor any statute, rule, regulation or order
promulgated or enacted by any Governmental Entity prohibit-
ing, or otherwise restraining, such purchase.
SECTION 1.04. No Purchase. Purchaser may allow the Offer
to expire without accepting for payment or paying for any Shares,
on the terms and conditions set forth in the Offer to Purchase,
and may allow the Option to expire without exercising the Option
and purchasing all or any Shares pursuant to such exercise. If
all Shares validly tendered and not withdrawn are not accepted
for payment and paid for in accordance with the terms of the
Offer to Purchase or pursuant to the exercise of the Option, they
shall be returned to the Stockholder, whereupon they shall
continue to be held by the Stockholder subject to the terms and
conditions of this Agreement.
ARTICLE II
Consent and Voting
The Stockholder hereby revokes any and all previous proxies
granted with respect to the Shares owned by the Stockholder. By
entering into this Agreement, the Stockholder hereby consents to
the Merger Agreement and the transactions contemplated thereby,
including the Merger. So long as the Merger Agreement is in
effect, the Stockholder hereby agrees (i) to vote all Shares now
or hereafter owned by such Stockholder or execute a consent and
not revoke any proxy, vote or consent, in favor of the Merger
Agreement, the Merger and the transactions contemplated thereby,
and (ii) to oppose any Acquisition Proposal and to vote all
Shares now or hereafter owned by such Stockholder, or execute a
consent, against any Acquisition Proposal.
ARTICLE III
Representations, Warranties and Covenants
of the Stockholder
The Stockholder represents, warrants and covenants to the
Purchaser that:
SECTION 3.01. Ownership. As of the date hereof the Stock-
holder is the sole, true, lawful and beneficial owner of
5,515,833 Shares and that there are no restrictions on voting
rights or rights of disposition pertaining to such Shares other
than those specified herein or any applicable provisions of
Article Fifth of the Company's Amended and Restated Certificate
of Incorporation. To the extent permitted by Article Fifth of
the Company's Amended and Restated Certificate of Incorporation,
the Stockholder will convey good and valid title to the Shares
owned by the Stockholder and being acquired pursuant to the
Offer, the Merger or the exercise of the Option, as the case may
be, free and clear of any and all liens, restrictions, security
interests or any encumbrances whatsoever (collectively, "Liens").
None of the Shares owned by the Stockholder is subject to any
voting trust or other agreement, arrangement or restriction with
respect to the voting of such Shares. Until this Agreement is
terminated, the Stockholder shall not, directly or indirectly,
sell, exchange, encumber, pledge, assign or otherwise transfer or
dispose of, or agree to or solicit any of the foregoing, or grant
any right or power to any person that limits the Stockholder's
sole power to vote, sell, assign, transfer, pledge, encumber or
otherwise dispose of the Shares owned by the Stockholder or
otherwise directs the Stockholder with respect to such Shares.
SECTION 3.02. Authority and Non-Contravention. The execu-
tion, delivery and performance by the Stockholder of this Agree-
ment and the consummation of the transactions contemplated hereby
(i) are within the Stockholder's power and authority, have been
duly authorized by all necessary action (including any consulta-
tion, approval or other action by or with any other person),
(ii) require no action by or in respect of, or filing with, any
Governmental Entity (except as may be required under the HSR Act
and under the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder (the "Exchange
Act")), and (iii) do not and will not contravene or constitute a
default under, or give rise to a right of termination, cancella-
tion or acceleration of any right or obligation of the Stockhold-
er or to a loss of any benefit of the Stockholder under, any
provision of applicable law or regulation or any agreement,
judgment, injunction, order, decree, or other instrument binding
on the Stockholder or result in the imposition of any Lien on any
assets of the Stockholder.
SECTION 3.03. Binding Effect. This Agreement has been duly
executed and delivered by the Stockholder and is the valid and
binding agreement of the Stockholder, enforceable against it in
accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights generally.
SECTION 3.04. Total Shares. The Stockholder Shares owned
by the Stockholder are the only shares of Company Common Stock
beneficially owned as of the date hereof by the Stockholder and
the Stockholder has no option to purchase or right to subscribe
for or otherwise acquire any securities of the Company and has no
other interest in or voting rights with respect to any other
securities of the Company.
SECTION 3.05. Finder's Fees. No investment banker, broker
or finder is entitled to a commission or fee from Purchaser or
the Company in respect of this Agreement based upon any arrange-
ment or agreement made by or on behalf of the Stockholder, except
as otherwise disclosed in the Merger Agreement.
ARTICLE IV
Representations, Warranties and Covenants
of the Parent and Purchaser
The Parent and Purchaser represent, warrant and covenant to
the Stockholder:
SECTION 4.01. Corporate Power and Authority;
Noncontravention. The Parent and Purchaser have all requisite
corporate power and authority to enter into this Agreement and to
perform their obligations hereunder. The execution, delivery and
performance by the Parent and Purchaser of this Agreement and the
consummation by the Parent and Purchaser of the transactions
contemplated hereby (i) have been duly authorized by all neces-
sary corporate action on the part of the Parent and Purchaser,
(ii) require no action by or in respect of, or filing with, any
Governmental Entity (except as may be required under the HSR Act
and under the Exchange Act, or (iii) do not and will not contra-
vene or constitute a default under, the certificate of incorpora-
tion or by-laws of Parent or Purchaser or any provision of
applicable law or regulation or any, judgment, injunction, order,
decree, material agreement or other material instrument binding
on the Parent or Purchaser.
SECTION 4.02. Binding Effect. This Agreement has been duly
executed and delivered by the Parent and Purchaser and is a valid
and binding agreement of the Parent and Purchaser, enforceable
against each of them in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium
or other similar laws relating to creditors' rights generally.
SECTION 4.03. Acquisition for Purchaser's Account. Any
Shares to be acquired upon consummation of the Offer, or upon
exercise of the Option will be acquired by Purchaser for its own
account and not with a view to the public distribution thereof
and will not be transferred except in compliance with the Securi-
ties Act and the rules and regulations promulgated thereunder.
ARTICLE V
Additional Agreements
SECTION 5.01. Agreements of Stockholder. The Stockholder
hereby covenants and agrees that:
(a) No Solicitation. The Stockholder shall not di-
rectly or indirectly (i) solicit, initiate or knowingly
encourage (or authorize any person to solicit, initiate or
encourage) any Acquisition Proposal, or (ii) participate in
any discussion or negotiations regarding, or furnish to any
other person any information with respect to, or otherwise
knowingly cooperate in any way with, or participate in,
facilitate or encourage any effort or attempt by any other
person to do or seek the foregoing. The Stockholder shall
promptly advise the Purchaser of the terms of any communica-
tions it or any of its affiliates may receive relating to
any Acquisition Proposal (including, without limitation, the
identify of the party making any such Acquisition Proposal).
(b) Adjustment upon Changes in Capitalization or
Merger. In the event of any change in the Company's capital
stock by reason of stock dividends, stock splits, mergers,
consolidations, recapitalization, combinations, conversions,
exchanges of shares, extraordinary or liquidating dividends,
or other changes in the corporate or capital structure of
the Company which would have the effect of diluting or
changing Purchaser's rights hereunder, the number and kind
of shares or securities subject to this Agreement and the
price set forth herein at which Shares may be purchased from
the Stockholder pursuant to the Offer or the exercise of the
Option shall be appropriately and equitably adjusted so that
Purchaser shall receive pursuant to the Offer or the exer-
cise of the Option the number and class of shares or other
securities or property that Purchaser would have received in
respect of the Shares purchasable pursuant to the Offer or
the exercise of the Option if such purchase had occurred
immediately prior to such event.
ARTICLE VI
Miscellaneous
SECTION 6.01. Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incur-
ring such cost or expense.
SECTION 6.02. Further Assurances. The Parent, Purchaser
and the Stockholder will execute and deliver or cause to be
executed and delivered all further documents and instruments and
use its reasonable best efforts to secure such consents and take
all such further action as may be reasonably necessary in order
to consummate the transactions contemplated hereby and by the
Merger Agreement.
SECTION 6.03. Additional Agreements. Subject to the terms
and conditions of this Agreement, each of the parties hereto
agrees to use all reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regula-
tions and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or re-
strictions of any kind to which such party is a party or by which
such party is governed or bound, to consummate and make effective
the transactions contemplated by this Agreement.
SECTION 6.04. Specific Performance. The parties acknowl-
edge and agree that performance of their respective obligations
hereunder will confer a unique benefit on the other and that a
failure of performance will not be compensable by money damages.
The parties therefore agree that this Tender Agreement shall be
specifically enforceable and that specific enforcement and
injunctive relief shall be available to the Parent, Purchaser or
the Stockholder for any breach by the other party or parties of
any agreement, covenant or representation hereunder.
SECTION 6.05. Notices. All notices, requests, claims,
demands and other communications hereunder shall be deemed to
have been duly given when delivered in person, by telecopy, or by
registered or certified mail (postage prepaid, return receipt
requested) to such party at its address set forth on the signa-
ture page hereto.
SECTION 6.06. Survival of Representations and Warranties.
All representations and warranties contained in this Agreement
shall survive delivery of and payment for the Shares pursuant to
Section 1.02 hereof. None of the representations and warranties
contained in this Agreement shall survive the acceptance for
payment and payment for the Shares pursuant to the Offer.
SECTION 6.07. Amendments; Termination. This Agreement may
not be modified, amended, altered or supplemented, except upon
the execution and delivery of a written agreement executed by the
parties hereto. Notwithstanding anything herein to the contrary,
this Agreement shall expire and be of no further force or effect
if (i) the conditions to the Purchaser's obligations to accept
for payment and pay for Shares pursuant to the Offer shall have
been satisfied and the Purchaser breaches any obligation of
Purchaser under the Merger Agreement to accept for payment and
promptly pay for all Shares validly tendered and not withdrawn
pursuant to the Offer upon expiration of the Offer or (ii)
Purchaser amends the Offer to (w) reduce the Offer Price to less
than $23.40 in cash, net to the sellers, (x) reduce the number of
shares of Company Common Stock subject to the Offer, (y) change
the form of consideration payable in the Offer or (z) amend or
modify any term or condition of the Offer in a manner adverse to
the stockholders of the Company (other than insignificant changes
or amendments or other than to waive any condition). This
Agreement will also terminate upon the earlier of (i) the close
of business on September 24, or (ii) the Effective Time.
SECTION 6.08. Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns;
provided, however, that Purchaser may assign its rights and
obligations to another wholly-owned subsidiary of the Parent
which is the assignee of Purchaser's rights under the Merger
Agreement; and provided further that except as set forth in the
prior clause, a party may not assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto and any purported
assignment, delegation or transfer without such consent shall be
null and void.
SECTION 6.09. Governing Law. This Agreement shall be
construed in accordance with and governed by the law of Delaware
without giving effect to the principles of conflicts of laws
thereof.
SECTION 6.10. Counterparts; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall
be an original, with the same effects as if the signatures
thereto and thereof were upon the same instrument. This Agree-
ment shall become effective when each party hereto shall have
received counterparts hereof signed by all of the other parties
hereto.
SECTION 6.11. Stockholder Capacity. The Stockholder signs
solely in its capacity as the record holder and beneficial owner
of the Shares and nothing herein shall limit or affect any
actions taken by any officer, director, partner, employee or
affiliate of the Stockholder in his or her capacity as an officer
or director of the Company and no such actions shall be deemed a
breach of this Agreement.
SECTION 6.12. Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being
enforced by any rule of law, or public policy, all other condi-
tions and provisions of this Agreement shall nevertheless remain
in full force and effect so long as the economic or legal sub-
stance of the transactions contemplated hereby are not affected
in any manner materially adverse to any party. Upon such deter-
mination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions be consummated
as originally contemplated to the fullest extent possible. To
the extent that any provision of this Agreement and the Merger
Agreement conflict, the provisions of the Merger Agreement shall
control.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
IBP, inc.
By: /s/ Robert L. Peterson
--------------------------------
Name: Robert L. Peterson
Title: Chairman and Chief Execu-
tive Officer
Address for Notices:
IBP Avenue
P.O. Box 515
Dakota City, Nebraska 68731
Attn: Lonnie Grigsby, Esq. (#141)
IBP SUB, INC.
By: /s/ Larry Shipley
--------------------------------
Name: Larry Shipley
Title: President
Address for Notices:
IBP Avenue
P.O. Box 515
Dakota City, Nebraska 68731
Attn: Lonnie Grigsby, Esq. (#141)
JOSEPH LITTLEJOHN & LEVY FUND, L.P.
By: JLL Associates, L.P., General
Partner
By /s/ Peter A. Joseph
----------------------------
Name: Peter A. Joseph
Title: General Partner
Address for Notices:
Joseph Littlejohn & Levy
450 Lexington Avenue, Suite 3350
New York, New York 10017
Attn: Paul S. Levy
JOSEPH LITTLEJOHN & LEVY FUND II,
L.P.
By: JLL Associates, L.P., General
Partner
By /s/ Peter A. Joseph
----------------------------
Name: Paul S. Levy
Title: General Partner
Address for Notices:
Joseph Littlejohn & Levy
450 Lexington Avenue, Suite 3350
New York, New York 10017
Attn: Paul S. Levy
