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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Survival Technology, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.10 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
869028100
---------------------------
(CUSIP Number)
James H. Miller
President Stanley Keller, Esq.
Brunswick Biomedical Corporation Palmer & Dodge LLP
2275 Research Blvd. One Beacon Street
Rockville, MD 20850 Boston, MA 02108
(301) 216-2950 (617) 573-0100
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
September 11, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (a fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
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
being sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or other wise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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AMENDMENT NO. 1 TO SCHEDULE 13D
This Amendment No. 1, which is being filed pursuant to Rule 13d-2(a),
amends and restates only Items 2, 4 and 7, and the Exhibit Index, of the
statement on Schedule 13D initially filed by Brunswick Biomedical
Corporation with the Securities and Exchange Commission (the "Commission")
on April 25, 1996 (the "Schedule 13D"). The remaining items of the Schedule
13D are not amended hereby. All capitalized terms used in this Amendment
No. 1 which are not otherwise defined herein shall have those meanings
ascribed to them in the Schedule 13D.
Item 2. Identity and Background.
This statement is being filed by Brunswick Biomedical Corporation
("Brunswick"), a Massachusetts corporation. Brunswick's principal business
address and principal office are located at 2275 Research Blvd, Rockville,
Maryland 20850. Brunswick's business is the development, manufacture and
sale of medical devices. James H. Miller, the President and Chief
Executive Officer of Brunswick, is also the President and Chief Executive
Officer of the Issuer, which also engages in the medical devices business.
See Item 1 above.
During the last five years, neither Brunswick nor any of Brunswick's
other directors or executive officers has been (i) convicted in a criminal
proceeding (excluding traffic violations or misdemeanors) or (ii) a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining further violation of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
Set forth as Exhibit 1 to this Schedule 13D and incorporated herein
by reference is the following information with respect to each director and
executive officer of Brunswick: (i) name, (ii) business address, (iii)
present principal occupation or employment and the name, principal business
and address of any corporation or other organization in which such
employment is conducted, and (iv) citizenship.
Item 4. Purpose of Transaction.
The Shares represent approximately 61.1% of the Issuer's outstanding
shares of Common Stock, and were purchased by Brunswick for the purpose of
acquiring control of the Issuer in order to effect a consolidation of the
operations of Brunswick and the Issuer. In this connection, Brunswick has
relocated its operations to the Issuer's principal offices in Rockville,
Maryland in space subleased from the Issuer. On September 11, 1996,
Brunswick and the Issuer executed an Agreement and Plan of Merger (the
"Merger Agreement"), a copy of which is included in Exhibit 6 attached
hereto. Pursuant to the Merger Agreement, Brunswick will merge with and
into the Issuer, with the Issuer being the surviving corporation (the
"Merger"), upon approval by the stockholders of Brunswick and the Issuer
and satisfaction of certain other conditions to closing.
Upon consummation of the Merger, each share of Brunswick Common Stock
will be converted into the right to receive 2.1 shares of the Issuer's
Common Stock and each share of Brunswick Preferred Stock will be converted
into the right to receive (i) 2.1 shares of the Issuer's Common Stock and
(ii) a warrant for 0.4 shares of the Issuer's Common Stock at an
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exercise price of $11.00 per share exercisable for a period of five years
following consummation of the Merger. With the exception of the warrant to
purchase 50,000 shares of Brunswick Common Stock held by the Seller, all
options and warrants to acquire shares of Brunswick Common Stock
outstanding as of the closing of the Merger will be assumed by the Issuer
subject to adjustment such that (i) the number of shares of the Issuer's
Common Stock subject to each such assumed option or warrant will equal the
product of the number of shares of Brunswick Common Stock subject to the
original option or warrant and 2.1 and (ii) the per share exercise price of
each such assumed option or warrant will equal the quotient obtained by
dividing the per share exercise price of the original option or warrant by
2.1. The warrant to purchase 50,000 shares of Brunswick Common Stock held
by the Seller will be assumed by the Issuer subject to adjustment such that
(i) the number of shares of the Issuer's Common Stock subject to the
assumed warrant will equal the product of the number of shares of Brunswick
Common Stock subject to the original warrant and 2.5 and (ii) the per share
exercise price of the assumed warrant will equal the quotient obtained by
dividing the per share exercise price of the original warrant by 2.5.
Finally, the warrants to acquire shares of Brunswick Class A Common Stock
held by the Senior Lender will be assumed by the Issuer subject to
adjustment such that (i) the number of shares of the Issuer's non-voting
common stock subject to the assumed warrants will equal the product of the
number of shares of Brunswick Class A Common Stock subject to the original
warrants and 2.5046 and (ii) the per share exercise price of the assumed
warrants will equal (a) in the case of the Series A Warrants, the product
of $.10 and 2.5046 and (b) in the case of the Series B Warrants, the
quotient obtained by dividing the per share exercise price of the original
warrants by 2.5046.
As a result of the Merger, the Issuer's certificate of incorporation
will be amended and restated to provide for, among other things, (i)
authority for the directors to authorize the issuance of one or more
classes of preferred stock (up to a fixed number of shares), (ii) the
requirement that any written consent of the stockholders in lieu of a
meeting be unanimous, (iii) elimination of the stockholders' authority to
call a special meeting, (iv) three classes of directors, with each class to
be elected at successive annual meetings for a three year term, (v) the
reservation to the directors of the right to increase the size of the Board
of Directors and to fill vacancies, (vi) the requirement of a vote of
seventy-five percent of the stockholders to remove the directors for cause
and to amend the by-laws and the certificate of incorporation, (vii)
additional indemnification protection for the Issuer's directors and
officers, (viii) authority for the directors to consider certain
constituencies in addition to the long-term and short-term interests of the
stockholders (e.g., the social and economic effects of a matter to be
considered on the Issuer, its subsidiaries, employees, customers and
creditors and on the communities in which the Issuer and its subsidiaries
operate or are located) and (ix) a class of non-voting common stock, to be
reserved for issuance upon conversion of the warrants held by the Senior
Lender. The Issuer's by-laws will also be amended and restated as a result
of the Merger to provide procedures for considering stockholder proposals
and nominations for directors and otherwise to make the by-laws conform to
the certificate of incorporation, as amended and restated. Several of the
proposed changes to the Issuer's certificate of incorporation and by-laws
will have the effect of impeding the acquisition of control of the issuer
by a third person. Copies of the Issuer's certificate of incorporation and
by-laws, as proposed to be amended and restated, are included in Exhibit 6
attached hereto.
In order to obtain the approval of the Issuer's Board of Directors of
Brunswick's acquisition of the Shares from the Seller so that the
provisions of Section 203 of the Delaware
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General Corporation Law relating to business combinations would not apply
to Brunswick (which approval was obtained on March 15, 1996), Brunswick had
made certain undertakings (the "Undertaking") to the Issuer's Board,
including the following:
(i) Until the earlier of the Merger or the expiration of three
years, Brunswick will use its best efforts to cause the Issuer to have
at least two qualified independent directors (a director shall not be
considered independent if he or she (i) is or at any time within ten
years prior to the date of determination was a director, officer or
employee of, or a consultant, attorney or advisor to, the Issuer
(other than persons who served as independent directors of the Issuer
prior to the acquisition) or Brunswick or (ii) has a direct or
indirect material ownership interest in, or is an officer, director or
employee of an organization with a direct or indirect material
ownership interest in, Brunswick);
(ii) During that period, Brunswick and its stockholders will not
enter into any agreement, arrangement or transaction with the Issuer
(other than proportionately as a stockholder) unless it is approved by
a Special Committee of the Issuer's Board of Directors consisting
solely of at least two independent directors;
(iii) For a period of three years, Brunswick and its affiliates
will not acquire shares of Common Stock of the Issuer at a price less
than the $11.00 price per share paid to the Seller except to the
extent otherwise approved by a Special Committee; and
(iv) For a period of three years, Brunswick will not engage in
certain business combination transactions with the Issuer, including a
merger, unless the transaction is approved by a Special Committee
based on an investment banker fairness opinion.
The current directors of the Issuer are Messrs. James H. Miller,
Robert G. Foster (who are also directors of Brunswick), Bruce M. Dresner,
E. Andrews Grinstead, III and David L. Lougee. Messrs. Foster, Grinstead
and Lougee replaced three of the directors of the Issuer who had served
prior to Brunswick's acquisition of the Shares on April 15, 1996. Messrs.
Dresner and Grinstead are independent directors of the Issuer for purposes
of the foregoing Undertaking. A copy of the Undertaking is included in
Exhibit 2 hereto.
Messrs. Dresner and Grinstead are members of the Special Committee of
the Issuer's Board of Directors formed, among other things, to consider and
negotiate the Merger Agreement. In accordance with the Undertaking, the
Special Committee has approved the Merger based on a fairness opinion of
Lehman Brothers Inc., the investment banker retained by the Special
Committee.
Except as stated above, Brunswick has no plans (i) to change the
management of the Issuer, (ii) to sell or transfer any material amount of
assets of the Issuer or any of its subsidiaries, although it reserves the
right to do so in connection with an ongoing evaluation of the properties
and operations of the post-merger consolidated operations, (iii) to make
any material change in the present capitalization or dividend policy of the
Issuer, (iv) to make any other material change in the Issuer's business or
corporate structure, (v) to change the Issuer's charter or bylaws or to
take other actions which may impede the acquisition of control of the
Issuer by any person, (vi) to cause the Issuer's Common Stock to cease to
be authorized to be listed on the Nasdaq National Market System or to
become eligible for termination of
<PAGE>
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended, or (vii) to take any action similar to any of the
foregoing.
Item 7. Material to Be Filed as Exhibits.
Exhibit 1: Directors and Executive Officers of Brunswick.
Exhibit 2: Brunswick's Undertakings to the Issuer's Board of
Directors(1)
Exhibit 3: Senior Loan Documentation:
(a) Credit Agreement(1)
(b) Bridge Note(1)
(c) Senior Stock Pledge Agreement(1)
(d) Warrant Purchase Agreement, together with form of
Series A Warrant and Series B Warrant(1)
(e) Registration Rights Agreement(1)
Exhibit 4: Seller Stock Purchase Documentation:
(a) Stock Purchase Agreement(1)
(b) Warrant(1)
(c) Subordinated Promissory Note(1)
(d) Subordinated Stock Pledge Agreement(1)
Exhibit 5: EM Industries, Inc. Subordinated Loan Documentation:
(a) Note Purchase Agreement(1)
(b) Subordinated Promissory Note(1)
Exhibit 6: Merger Documentation:
(a) Agreement and Plan of Merger dated September 5, 1996
between Survival Technology, Inc. and Brunswick
Biomedical Corporation
(b) Amended and Restated Certificate of Incorporation of
Survival Technology, Inc.
(c) Amended and Restated By-Laws of Survival Technology,
Inc.
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(1) Filed as an exhibit with the same designation to Brunswick's Schedule
13D on April 25, 1996 and incorporated herein by reference.
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 1 to Schedule
13D is true, complete and correct.
September 11, 1996 BRUNSWICK BIOMEDICAL CORPORATION
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By: /s/ James H. Miller
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Name: James H. Miller
Title: President
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EXHIBIT INDEX
Page
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Exhibit 1: Directors and Executive Officers of Brunswick.
Exhibit 2: Brunswick's Undertakings to the Issuer's Board of Directors(1)
Exhibit 3: Senior Loan Documentation:
(a) Credit Agreement(1)
(b) Bridge Note(1)
(c) Senior Stock Pledge Agreement(1)
(d) Warrant Purchase Agreement, together with form of Series A
Warrant and Series B Warrant(1)
(e) Registration Rights Agreement(1)
Exhibit 4: Seller Stock Purchase Documentation:
(a) Stock Purchase Agreement(1)
(b) Warrant(1)
(c) Subordinated Promissory Note(1)
(d) Subordinated Stock Pledge Agreement(1)
Exhibit 5: EM Industries, Inc. Subordinated Loan Documentation:
(a) Note Purchase Agreement(1)
(b) Subordinated Promissory Note(1)
Exhibit 6: Merger Documentation:
(a) Agreement and Plan of Merger dated September 5, 1996
between Survival Technology, Inc. and Brunswick Biomedical
Corporation
(b) Amended and Restated Certificate of Incorporation of
Survival Technology, Inc.
(c) Amended and Restated By-Laws of Survival Technology, Inc.
(1) Filed as an exhibit with the same designation to Brunswick's Schedule 13D on
April 25, 1996 and incorporated herein by reference.
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Exhibit 1
Officers and Directors of Brunswick
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Set forth below is the name, present principal occupation or employment and
the name, principal business and address of any corporation or other
organization in which such employment is conducted of each director and
executive officer of Brunswick. Each executive officer and director is a
citizen of the United States of America.
Directors
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James H. Miller
President and Chief Executive Officer
Brunswick Biomedical Corporation
2275 Research Boulevard
Rockville, MD 20850
and
President & Chief Executive Officer
Survival Technology, Inc.
2275 Research Boulevard
Rockville, MD 20850
Both companies are in the medical devices business.
Robert G. Foster
Chairman, President and Chief Executive Officer
Commonwealth BioVentures Inc.
Four Milk Street
Portland, ME 04101
Venture capital firm
James G. Nichols
Senior Vice President, General Manager
Brunswick Biomedical Technologies, Inc.
6 Thacher Lane
Wareham, MA 02571
Medical devices business.
Executive Officers
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James H. Miller
President and Chief Executive Officer
(See above)
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Exhibit 6(a)
===========================================
AGREEMENT AND PLAN OF MERGER
BETWEEN
SURVIVAL TECHNOLOGY, INC.
AND
BRUNSWICK BIOMEDICAL CORPORATION
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Dated as of September 11, 1996
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===========================================
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TABLE OF CONTENTS
<TABLE>
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Page
<S> <C> <C> <C>
SECTION 1 - THE MERGER 1
1.1 The Merger..................................................... 1
1.2 Effective Time................................................. 1
1.3 Closing........................................................ 1
1.4 Effects of the Merger.......................................... 1
1.5 Certificate of Incorporation and By-Laws....................... 2
1.6 Directors and Officers......................................... 2
1.7 Conversion of Stock............................................ 2
1.8 Options........................................................ 3
1.9 Common Stock Warrants.......................................... 3
1.10 Estate Warrant................................................. 4
1.11 Class A Common Stock Warrants.................................. 4
1.12 Exchange of Certificates, Options and Warrants................. 5
1.13 No Fractional Shares........................................... 6
1.14 Retirement of Certain Shares of STI Common Stock............... 6
1.15 Closing of Brunswick Transfer Books............................ 6
1.16 Dissenting Shares.............................................. 6
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF BRUNSWICK..................... 7
2.1 Organization................................................... 7
2.2 Authority to Execute and Perform Agreement..................... 7
2.3 Capitalization................................................. 8
2.4 Subsidiaries and Other Affiliates.............................. 9
2.5 Financial Statements........................................... 9
2.6 Absence of Undisclosed Liabilities............................. 10
2.7 No Material Adverse Change..................................... 10
2.8 Tax Matters.................................................... 10
2.9 Compliance with Laws........................................... 11
2.10 No Breach...................................................... 11
2.11 Actions and Proceedings........................................ 12
2.12 Contracts and Other Agreements................................. 12
2.13 Bank Accounts and Powers of Attorney........................... 13
2.14 Properties..................................................... 14
2.15 Intellectual Property.......................................... 14
2.16 Customers...................................................... 14
2.17 Accounts Receivable............................................ 15
2.18 Inventory...................................................... 15
2.19 Employee Benefit Plans......................................... 15
2.20 Employee Relations............................................. 16
2.21 Transactions with Management................................... 16
2.22 Insurance...................................................... 16
2.23 Brokerage...................................................... 17
2.24 Hazardous Materials............................................ 17
2.25 Certain Information............................................ 17
</TABLE>
(i)
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<TABLE>
<CAPTION>
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SECTION 3 - REPRESENTATIONS AND WARRANTIES OF STI........................... 18
3.1 Organization................................................... 18
3.2 Authority to Execute and Perform Agreement..................... 18
3.3 Capitalization................................................. 18
3.4 Subsidiaries and Other Affiliates.............................. 19
3.5 SEC Reports.................................................... 19
3.6 Financial Statements........................................... 20
3.7 Absence of Undisclosed STI Liabilities......................... 20
3.8 No Material Adverse Change..................................... 20
3.9 No Breach...................................................... 20
3.10 Actions and Proceedings........................................ 21
3.11 Certain Information............................................ 21
3.12 Brokerage...................................................... 21
SECTION 4 - COVENANTS AND AGREEMENTS........................................ 21
4.1 Conduct of Business............................................ 21
4.2 Corporate Examinations and Investigations...................... 23
4.3 Expenses....................................................... 23
4.4 Authorization from Others...................................... 23
4.5 Consummation of Agreement...................................... 23
4.6 Further Assurances............................................. 24
4.7 STI Stockholder Action......................................... 24
4.8 STI Proxy Statement............................................ 24
4.9 Brunswick Proxy Statement/PPM; Questionnaire................... 24
4.10 Brunswick Stockholder Action................................... 24
4.11 Brunswick's Compliance with Exchange Act....................... 25
4.12 STI's Compliance with Exchange Act............................. 25
4.13 Public Announcements and Confidentiality....................... 25
4.14 Indemnification by STI......................................... 25
4.15 Registration Statement......................................... 25
SECTION 5 - CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF EACH PARTY TO CONSUMMATE THE MERGER........................ 26
5.1 Consents and Approvals......................................... 26
5.2 Absence of Order............................................... 26
5.3 Nasdaq Listing................................................. 26
5.4 Tax Opinions................................................... 26
5.5 Employment Agreement........................................... 27
SECTION 6 - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
STI TO CONSUMMATE THE MERGER............................ 27
6.1 Representations, Warranties and Covenants...................... 27
6.2 Questionnaires................................................. 27
6.3 Opinion of Counsel to Brunswick................................ 27
6.4 Merger Documents............................................... 27
6.5 Dissenting Shares.............................................. 27
6.6 Certificates................................................... 27
</TABLE>
(ii)
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<TABLE>
<S> <C> <C> <C>
6.7 Comfort Letter................................................... 27
SECTION 7 - CONDITIONS PRECEDENT TO THE OBLIGATION OF
BRUNSWICK TO CONSUMMATE THE MERGER.......................... 28
7.1 Representations, Warranties and Covenants........................ 28
7.2 Registration Rights Agreement.................................... 28
7.3 Opinion of Counsel to STI........................................ 28
7.4 Merger Documents................................................. 28
7.5 Certificates..................................................... 28
SECTION 8 - TERMINATION, AMENDMENT AND WAIVER............................... 28
8.1 Termination...................................................... 28
8.2 Effect of Termination............................................ 29
8.3 Amendment........................................................ 29
8.4 Waiver........................................................... 29
SECTION 9 - MISCELLANEOUS................................................... 29
9.1 No Survival...................................................... 29
9.2 Notices.......................................................... 30
9.3 Entire Agreement................................................. 31
9.4 Governing Law.................................................... 31
9.5 No Third Party Beneficiaries..................................... 31
9.6 Binding Effect; No Assignment.................................... 31
9.7 Variations in Pronouns........................................... 31
9.8 Counterparts..................................................... 31
</TABLE>
Schedules:
BRUNSWICK DISCLOSURE SCHEDULE
STI DISCLOSURE SCHEDULE
Exhibits:
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EXHIBIT A -- First Amended and Restated Certificate of Incorporation of STI
EXHIBIT B -- Amended and Restated STI By-Laws
EXHIBITS C-1 and C-2 -- Private Placement and Resale Registration Questionnaire
(iii)
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
September 11, 1996 is between Survival Technology, Inc. ("STI"), a Delaware
corporation, and Brunswick Biomedical Corporation ("Brunswick"), a
Massachusetts corporation. The parties wish to effect the combination of
Brunswick and STI through a merger of Brunswick with and into STI on the
terms and conditions set forth in this Agreement. This Agreement is
intended to be a "plan of reorganization" with the meaning of (S)368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
Accordingly, in consideration of the mutual representations,
warranties and covenants contained herein, the parties hereto agree as
follows:
SECTION 1 - THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions of
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this Agreement, Brunswick shall be merged with and into STI (the "Merger")
in accordance with the General Corporation Law of the State of Delaware
(the "DGCL") and the Business Corporation Law of the Commonwealth of
Massachusetts (the "MBCL"). The Merger shall occur at the Effective Time
(as defined in Section 1.2). Following the Merger, STI shall be the
surviving corporation (the "Surviving Corporation") and the separate
corporate existence of Brunswick shall cease.
1.2 Effective Time. As soon as practicable after satisfaction or
--------------
waiver of all conditions to the Merger, the parties shall cause the Merger
to be consummated by filing and recording a certificate of merger in
accordance with Section 252(c) of the DGCL ("Certificate of Merger") and
articles of merger in accordance with Section 79 of the MBCL ("Articles of
Merger") and shall take all such further actions as may be required by law
to make the Merger effective. The Merger shall be effective at such time
as the Certificate of Merger and the Articles of Merger are duly filed with
the Secretary of State of Delaware and the Secretary of the Commonwealth of
Massachusetts in accordance with the DGCL and the MBCL, respectively, or at
such later time as is specified in the Certificate of Merger and the
Articles of Merger (the "Effective Time").
1.3 Closing. Immediately prior to the filing of the Certificate of
-------
Merger and the Articles of Merger, a closing (the "Closing") shall be held
at the executive offices of STI as set forth in Section 9.2 (or such other
place as the parties may agree) for the purpose of confirming satisfaction
or waiver of all conditions to the Merger. The Closing shall take place at
a date and time agreed upon by Brunswick and STI, which shall be as
promptly as practicable after the day this Agreement is approved by the
stockholders of Brunswick and the stockholders of STI. The date on which
the Closing occurs is referred to in this Agreement as the "Closing Date."
1.4 Effects of the Merger. The Merger shall have the effects set
---------------------
forth in Sections 259, 260 and 261 of the DGCL and Sections 80 and 81 of
the MBCL.
<PAGE>
1.5 Certificate of Incorporation and By-Laws. The certificate of
----------------------------------------
incorporation and by-laws of STI, in each case as in effect immediately
prior to the Effective Time, shall be the certificate of incorporation and
by-laws of the Surviving Corporation immediately after the Effective Time;
provided that at the Effective Time the certificate of incorporation shall
--------
be amended and restated substantially as set forth on Exhibit A hereto and
------- -
the by-laws shall be amended and restated substantially as set forth in
Exhibit B hereto.
------- -
1.6 Directors and Officers. The directors and officers of STI
----------------------
immediately prior to the Effective Time shall be the directors and officers
of the Surviving Corporation immediately after the Effective Time. In
accordance with the certificate of incorporation of the Surviving
Corporation as amended at the Effective Time, the Board of Directors shall
be divided into three classes, with the initial term of each class,
commencing with the first class, expiring at each of the three annual
meetings of stockholders following the Surviving Corporation's 1997 fiscal
year.
1.7 Conversion of Stock. At the Effective Time, by virtue of the
-------------------
Merger and without any action on the part of STI or Brunswick:
(i) Each share of Brunswick Common Stock (as defined below)
outstanding immediately prior to the Effective Time, other than (A) shares
held by Brunswick as treasury stock and (B) Dissenting Shares (as defined
in Section 1.16), shall be converted into the right to receive 2.1 shares
of STI Common Stock ("STI Common Stock"), $0.10 par value per share (the
"Common Per Share Merger Consideration"). The right to receive STI Common
Stock as provided in this paragraph (i) shall except as otherwise provided
in this Section 1.7, be the sole and exclusive consideration to be received
by the holders of Brunswick Common Stock on account of the Merger,
notwithstanding any other provision of such Brunswick Common Stock or any
agreement related thereto.
(ii) Each share of Series A Preferred, Series B Preferred, Series
C Preferred and Series F Preferred (including shares of the Series D
Preferred and Series E Preferred, which have been reclassified as shares of
the Series F Preferred) of Brunswick (each as defined below and,
collectively, "Brunswick Preferred Stock") outstanding immediately prior to
the Effective Time, other than (A) shares held by Brunswick as treasury
stock and (B) Dissenting Shares (as defined in Section 1.16), shall be
converted into the right to receive 2.5 shares of STI Common Stock,
consisting of (i) 2.1 shares of STI Common Stock issued at the Effective
Time and (ii) a warrant (the "STI Merger Warrants") in a form to be agreed
upon to purchase 0.40 shares of STI Common Stock at an exercise price of
$11.00 per share exercisable for a period of five years from the Effective
Time (collectively, the "Preferred Per Share Merger Consideration," and
together with the Common Per Share Merger Consideration, the "Per Share
Merger Consideration"). The Preferred Per Share Merger Consideration to be
received on account of each share of Brunswick Preferred Stock is
hereinafter referred to as an "STI Unit." The right to receive STI Units
as provided in this paragraph (ii) shall except as otherwise provided in
this Section 1.7, be the sole and exclusive consideration to be received by
the holders of Brunswick Preferred Stock (together with the Brunswick
Common Stock, the "Brunswick Capital Stock") on account of the Merger,
notwithstanding any other provision of such Brunswick Preferred Stock or
any agreement related thereto, and no holder shall be entitled to receive
any accrued and unpaid
- 2 -
<PAGE>
dividends on account of the Brunswick Preferred Stock in connection with
the exchange thereof in the Merger.
(iii) All shares of Brunswick Capital Stock held at the Effective
Time by Brunswick as treasury stock shall be canceled without any
conversion thereof and no payment shall be made with respect thereto.
(iv) All Dissenting Shares shall be handled in accordance with
Section 1.16.
(v) Each share of STI Common Stock held at the Effective Time
by Brunswick shall be retired in accordance with Section 1.14.
1.8 Options. At the Effective Time, each outstanding and
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unexercised Brunswick stock option shall cease to represent a right to
acquire shares of Brunswick Common Stock and shall be converted
automatically into an option to purchase shares of STI Common Stock in an
amount and at an exercise price determined as provided below:
(a) The number of shares of STI Common Stock subject to the new option
shall be equal to the product of the number of shares of Brunswick Common
Stock subject to the original option and 2.1, provided that any fractional
shares of STI Common Stock resulting from such multiplication shall be
rounded down to the nearest share; and
(b) The exercise price per share of STI Common Stock under the new
option shall be equal to the quotient obtained by dividing the exercise
price per share of Brunswick Common Stock under the original option by 2.1,
provided that such exercise price shall be rounded to the nearest cent.
The adjustment provided herein with respect to any options that are
"incentive stock options" (as defined in Section 422 of the Code) shall be
and is intended to be effected in a manner consistent with Section 424(a)
of the Code. The duration and other terms of the new option shall be the
same as the original option except that all references to Brunswick shall
be deemed to be references to STI.
1.9 Common Stock Warrants. At the Effective Time, all outstanding
---------------------
warrants to acquire Brunswick Common Stock (other than the Estate Warrant,
as defined in Section 1.10 hereof), whether or not then exercisable, shall
be assumed by STI subject to the amendments described in this Section 1.9
and as otherwise provided in the Private Placement and Resale Registration
Questionnaire substantially in the form of Exhibits C-1 and C-2 hereto (the
-------- --- ---
"Questionnaire"). The warrants so assumed by STI shall continue to have,
and be subject to, the same terms and conditions set forth in such warrants
as in effect immediately prior to the Effective Time, except that (a) each
such warrant shall be exercisable for that number of whole shares of STI
Common Stock equal to the product of the number of shares of Brunswick
Common Stock into which such warrant was exercisable immediately prior to
the Effective Time and 2.1, rounded to the nearest whole share of STI
Common Stock, as required by the terms of such warrant, (b) the exercise
price per share of STI Common Stock under such warrant shall be equal to
the exercise price per share of Brunswick Common
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<PAGE>
Stock immediately prior to the Effective Time divided by 2.1 and rounded to
the nearest cent, and (c) all references to Brunswick shall be deemed
references to STI. STI shall reserve for issuance the number of shares of
STI Common Stock issuable upon exercise of each such warrant as determined
pursuant to this Section 1.9.
1.10 Estate Warrant. At the Effective Time, the warrant to acquire
--------------
50,000 shares of Brunswick Common Stock, which was issued by Brunswick to
the Estate of Dr. Stanley J. Sarnoff, Robert Herzstein as Personal
Representative as of April 15, 1996 (the "Estate Warrant") shall be assumed
by STI subject to the amendments described in this Section 1.10. The
Estate Warrant so assumed by STI shall continue to have, and be subject to,
the same terms and conditions set forth therein as in effect immediately
prior to the Effective Time, except that (a) it shall be exercisable for
that number of whole shares of STI Common Stock equal to the product of the
number of shares of Brunswick Common Stock into which such warrant was
exercisable immediately prior to the Effective Time and 2.5, as required by
the terms of such warrant, (b) the exercise price per share of STI Common
Stock under such warrant shall be equal to the exercise price per share of
Brunswick Common Stock immediately prior to the Effective Time divided by
2.5, and (c) all references to Brunswick shall be deemed references to STI.
STI shall reserve for issuance the number of shares of STI Common Stock
issuable upon exercise of the Estate Warrant as determined pursuant to this
Section 1.10.
1.11 Class A Common Stock Warrants. At the Effective Time, all
-----------------------------
outstanding Series A Warrants and Series B Warrants to acquire Brunswick
Class A Common Stock (collectively, the "Brunswick Class A Common Stock
Warrants"), whether or not then exercisable, shall be assumed by STI
subject to the amendments described in this Section 1.11. The warrants so
assumed shall continue to have, and be subject to, the same terms and
conditions set forth in the Brunswick Class A Common Stock Warrants as in
effect immediately prior to the Effective Time, except that:
(i) as to the Series A Warrants, (a) each such warrant shall be
exercisable for that number of whole shares of STI Class A Common Stock,
$.10 par value per share (the "Class A Common Stock") equal to the product
of the number of shares of Brunswick Class A Common Stock into which such
warrant was exercisable immediately prior to the Effective Time and 2.5046,
rounded to the nearest whole share of STI Class A Common Stock, as required
by the terms of such warrant, (b) the exercise price per share of STI Class
A Common Stock under such warrant shall be equal to the product of $.10 and
2.5046, rounded to the nearest cent, and (c) all references to Brunswick
shall be deemed references to STI; and
(ii) as to the Series B Warrants, (a) each such warrant shall be
exercisable for that number of whole shares of STI Class A Common Stock
equal to the product of the number of shares of Brunswick Class A Common
Stock into which such warrant was exercisable immediately prior to the
Effective Time and 2.5046, rounded to the nearest whole share of STI Class
A Common Stock, as required by the terms of such warrant, (b) the exercise
price per share of STI Class A Common Stock under such warrant shall be
equal to the exercise price per share of Brunswick Class A Common Stock
immediately prior to the Effective
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<PAGE>
Time divided by 2.5046, rounded to the nearest cent, and (c) all references
to Brunswick shall be deemed references to STI.
STI shall reserve for issuance (i) the number of shares of STI Class A
Common Stock issuable upon exercise of each such warrant as determined
pursuant to this Section 1.11, and (ii) the number of shares of STI Common
Stock issuable upon conversion of the shares of the STI Class A Common
Stock from time to time issued and outstanding or so reserved.
1.12 Exchange of Certificates, Options and Warrants.
----------------------------------------------
(a) Prior to the Closing Date, STI shall authorize one or more
persons to act as Exchange Agent hereunder (the "Exchange Agent"). As soon
as practicable after the Effective Time, STI shall cause the Exchange Agent
to mail to all former holders of record of Brunswick Capital Stock
instructions for surrendering their certificates representing Brunswick
Capital Stock in exchange for a certificate or certificates representing
the Per Share Merger Consideration. Upon surrender of a Brunswick Common
Stock certificate for cancellation to the Exchange Agent or to such other
agent or agents as may be appointed by STI, the holder of such certificate
shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of STI Common Stock into which the
shares of Brunswick Common Stock theretofore represented by such
certificate so surrendered shall have been converted pursuant to the
provisions of this Agreement, and the certificate so surrendered shall
forthwith be canceled. Upon surrender of a Brunswick Preferred Stock
certificate for cancellation to the Exchange Agent or to such other agent
or agents as may be appointed by STI, the holder of such certificate shall
be entitled to receive in exchange therefor (i) a Warrant representing the
STI Merger Warrants and (ii) a certificate representing that number of
whole shares of STI Common Stock into which the shares of Brunswick
Preferred Stock theretofore represented by such certificate so surrendered
shall have been converted pursuant to the provisions of this Agreement, and
the certificate so surrendered shall forthwith be canceled. Until
surrendered in accordance with the provisions of this Section 1.12, each
Brunswick Capital Stock certificate (other than certificates for shares to
be canceled in accordance with Sections 1.7.(iii), (iv) and (v)) shall
represent for all purposes the right to receive the applicable Per Share
Merger Consideration and cash in lieu of fractional shares of STI Common
Stock, if any, as provided in Section 1.13. No dividends or other
distributions that are declared on STI Common Stock and payable to the
holders of record thereof after the Effective Time will be paid to holders
of certificates representing Brunswick Capital Stock until such holders
surrender their certificates. Upon such surrender, there shall be paid to
the record holder of the certificates representing shares of STI Common
Stock issued upon such exchange, the amount of dividends or other
distributions that become payable after the Effective Time and were not
paid because of the failure to surrender certificates for exchange. In no
event shall the persons entitled to receive such dividends or distributions
be entitled to receive interest thereon. STI Common Stock and STI Merger
Warrants (if applicable) into which Brunswick Capital Stock shall be
converted in the Merger shall be deemed to have been issued at the
Effective Time. If any STI Common Stock certificates or STI Merger
Warrants are to be issued in a name other than the name in which the
Brunswick Capital Stock certificate surrendered is registered, it shall be
a condition of such exchange that the person requesting such exchange shall
deliver to the Exchange Agent all documents necessary to evidence and
effect such transfer and shall
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pay to the Exchange Agent any transfer or other taxes required by reason of
the issuance of certificates for such STI Common Stock or such STI Merger
Warrants in a name other than the name of the registered holder of the
certificate surrendered or establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable.
(b) As soon as practicable after the Effective Time, STI shall cause
the Exchange Agent to mail to all holders of record of the Brunswick stock
options, the Brunswick Common Stock Warrants, the Estate Warrant and the
Brunswick Class A Common Stock Warrants described in Sections 1.8, 1.9,
1.10 and 1.11, respectively, instructions for surrendering such options or
warrants, as applicable, in exchange for options or warrants issued by STI.
Upon surrender of an option or warrant for cancellation to the Exchange
Agent, or to such other agent or agents as may be appointed by STI, the
holder of such option or warrant shall be entitled to receive in exchange
therefor a replacement option or warrant issued by STI and subject to the
terms of Sections 1.8, 1.9, 1.10 or 1.11, as applicable.
1.13 No Fractional Shares. No certificates representing fractional
--------------------
shares of STI Common Stock shall be issued in the Merger. No fractional
interest shall entitle the owner to vote or to any rights of a security
holder. In lieu of fractional shares, each holder of shares of Brunswick
Capital Stock who would otherwise have been entitled to a fractional share
of STI Common Stock will receive upon surrender of a Brunswick Capital
Stock certificate an amount in cash (without interest) determined by
multiplying such fraction by the closing sale price of a share of STI
Common Stock on the trading day immediately preceding the Closing Date as
reported on the Nasdaq National Market.
1.14 Retirement of Certain Shares of STI Common Stock. At the
------------------------------------------------
Effective Time, the 1,888,126 shares of STI Common Stock held beneficially
and of record by Brunswick shall be deemed repurchased by STI and retired
by its Board of Directors, and pursuant to Section 243 of the DGCL, shall
resume the status of authorized and unissued shares of STI Common Stock.
1.15 Closing of Brunswick Transfer Books. No transfers of shares of
-----------------------------------
Brunswick Capital Stock shall be made on the stock transfer books of
Brunswick after the Effective Time. Any other provision of this Agreement
notwithstanding, neither the Surviving Corporation or its agent nor any
party to the Merger shall be liable to a holder of any Brunswick security
for any amount paid (including amounts pursuant to Section 1.13) or
property delivered in good faith to a public official pursuant to any
applicable abandoned property, escheat or similar law.
1.16 Dissenting Shares.
-----------------
(a) Shares of Brunswick Capital Stock held by a stockholder who
has properly exercised dissenters' rights with respect thereto in
accordance with Sections 86 to 98, inclusive, of the MBCL (collectively,
the "Dissenting Shares") shall not be converted into the applicable Per
Share Merger Consideration, but each such stockholder shall be entitled to
receive payment of the appraised value of such shares in accordance with
the provisions of said Sections 86 through 98; provided, however, that any
--------
Dissenting Shares
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<PAGE>
held by a stockholder who has timely withdrawn such demand for appraisal
pursuant to Section 96 of the MBCL shall thereafter be subject to
conversion into the Per Share Merger Consideration, as described in Section
1.7(i) or (ii), as applicable. From and after the Effective Time, a
stockholder who has properly exercised such dissenters' rights shall no
longer retain any rights of a stockholder of Brunswick or the Surviving
Corporation, except those provided under the MBCL.
(b) Brunswick shall give STI (i) prompt notice of any written demands
under Section 89 of the MBCL with respect to any shares of Brunswick
Capital Stock, any withdrawal of any such demands and any other instruments
served pursuant to the MBCL and received by Brunswick and (ii) the right to
participate in all negotiations and proceedings with respect to any demands
under Section 89 with respect to any shares of Brunswick Capital Stock.
Brunswick shall cooperate with STI concerning, and shall not, except with
the prior written consent of STI, voluntarily make any payment with respect
to, or offer to settle or settle, any such demands.
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF BRUNSWICK
Except as set forth on the disclosure schedule delivered to STI on the
date hereof (the "Brunswick Disclosure Schedule"), the section numbers of
which are numbered to correspond to the section numbers of this Agreement
to which they refer, Brunswick hereby represents and warrants to STI as
follows:
2.1 Organization. Each of Brunswick and its Subsidiaries (as
------------
defined below) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization with full corporate power and authority to own, lease and
operate its assets and to carry on its business as now being and as
heretofore conducted. Each of Brunswick and its Subsidiaries is qualified
or otherwise authorized to transact business as a foreign corporation or
other legal entity in all jurisdictions in which such qualification or
authorization is required by law, except for jurisdictions in which the
failure to be so qualified or authorized would not have a material adverse
effect on the assets, business, results of operations or financial
condition of Brunswick and its Subsidiaries taken as a whole. Brunswick
has previously provided to STI true and complete copies of its articles of
organization and bylaws as presently in effect.
2.2 Authority to Execute and Perform Agreement. Brunswick has the
------------------------------------------
corporate power and authority to enter into, execute and deliver this
Agreement and, subject to the approval of this Agreement by the
stockholders of Brunswick, to perform fully its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of Brunswick. No other corporate action on the part of Brunswick
is necessary to consummate the transactions contemplated hereby other than
approval of this Agreement by the stockholders of Brunswick and the filings
of the Articles of Merger and Certificate of Merger. This Agreement has
been duly executed and delivered by Brunswick and, subject to the
foregoing, constitutes a valid and binding obligation of Brunswick,
enforceable in accordance with its terms.
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<PAGE>
2.3 Capitalization.
--------------
(a) Brunswick is duly authorized to issue 1,903,000 shares of
Common Stock, $0.01 par value per share (the "Brunswick Common Stock"), of
which 66,780 shares are issued and outstanding and 1,636 shares are held in
treasury, 72,000 shares of Class A Common Stock, of which no shares are
issued and outstanding, and 1,400,000 shares of Preferred Stock, $0.01 par
value per share (the "Brunswick Preferred Stock"). Of the Brunswick
Preferred Stock, 65,000 shares have been designated Series A Preferred
Stock ("Series A Preferred"), of which 64,665 shares are issued and
outstanding, 30,000 shares have been designated Series B Preferred Stock
("Series B Preferred"), of which 29,144 shares are issued and outstanding,
380,000 shares have been designated Series C Preferred Stock ("Series C
Preferred"), of which 374,462 shares are issued and outstanding, and
290,000 shares have been designated Series F 10% Convertible Preferred
Stock ("Series F Preferred," including 50,000 shares of the Series D 10%
Convertible Preferred Stock ("Series D Preferred") and 30,000 shares of the
Series E 10% Convertible Preferred Stock ("Series E Preferred") which have
been reclassified as Series F Preferred), of which 278,724 are issued and
outstanding (including 45,695 shares of the Series D Preferred and 24,319
shares of the Series E Preferred which have been reclassified as Series F
Preferred). There are no other authorized classes of capital stock of
Brunswick. All of the outstanding shares of capital stock of Brunswick
have been duly issued and are validly outstanding, fully paid and
nonassessable, and none of such shares has been issued in violation of any
preemptive rights. Immediately prior to the consummation of the Merger,
each issued and outstanding share of Brunswick Preferred Stock shall be
convertible in accordance with the terms of the Brunswick articles of
organization into one share of Brunswick Common Stock.
(b) Options representing in the aggregate the right to purchase
124,720 shares of Brunswick Common Stock pursuant to the Brunswick 1993
Stock Option Plan, and warrants representing in the aggregate the right to
purchase 141,980 shares of Brunswick Common Stock, are outstanding as of
the date hereof.
(c) Warrants representing in the aggregate the right to purchase
69,668 shares of Brunswick Class A Common Stock are outstanding as of the
date hereof.
(d) Except as set forth in paragraphs (a), (b) and (c) of this
Section 2.3, or as a result of the exercise of outstanding options,
warrants or rights set forth therein, there are not as of the date hereof,
and as of the Effective Time there will not be, any other shares of
Brunswick capital stock authorized or outstanding or any subscriptions,
options, conversion or exchange rights, warrants, repurchase or redemption
agreements, or other agreements or commitments obligating Brunswick to
issue, transfer, sell, repurchase or redeem any shares of its capital stock
or other securities of Brunswick. Except as set forth on the Brunswick
Disclosure Schedule, to the knowledge of Brunswick, there are no written
shareholder agreements, voting trusts, proxies or other agreements,
instruments or understandings with respect to the voting of the capital
stock of Brunswick.
(e) Brunswick has previously delivered to STI a list, or lists, of the
holders of Brunswick Capital Stock, warrants to purchase Brunswick Common
Stock, Brunswick Class A Common Stock Warrants, the Estate Warrant and
options to purchase Brunswick Common
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<PAGE>
Stock, in each case including information with respect to the name of the
holder, the type and number of securities held, the number of shares of
Brunswick Common Stock (or Brunswick Class A Common Stock, as applicable)
subject to such warrants and options, and the exercise prices thereof.
Such list is accurate in all material respects as of the date hereof.
2.4 Subsidiaries and Other Affiliates.
---------------------------------
(a) The Brunswick Disclosure Schedule sets forth all of the
Subsidiaries and the jurisdiction in which each is incorporated or
organized. Except as otherwise set forth in the Brunswick Disclosure
Schedule, all issued and outstanding shares or other equity interest of
each Subsidiary are owned directly by Brunswick free and clear of any
charges, liens, encumbrances, security interests or adverse claims. As
used in this Agreement, "Subsidiary" means any corporation or other legal
entity of which Brunswick or any Subsidiary owns, directly or indirectly,
50% or more of the stock or other equity interest entitled to vote for the
election of directors (but shall not include STI or any STI Subsidiary (as
defined below)).
(b) Except as set forth above, there are not as of the date hereof,
and at the Effective Time there will not be, any other shares of capital
stock or other equity interest of any Subsidiary authorized or outstanding
or any subscriptions, options, conversion or exchange rights, warrants,
repurchase or redemption agreements, or other agreements, claims or
commitments of any nature whatsoever obligating any Subsidiary to issue,
transfer, deliver or sell, or cause to be issued, transferred, delivered,
sold, repurchased or redeemed, additional shares of the capital stock or
other securities or equity interests of Brunswick or any Subsidiary or
obligating Brunswick or any Subsidiary to grant, extend or enter into any
such agreement. There are no shareholder agreements, voting trusts,
proxies or other agreements, instruments or understandings with respect to
the capital stock of any Subsidiary.
(c) Except for the Subsidiaries, Brunswick does not directly or
indirectly own or have any investment in any of the capital stock of, and
is not a party to a partnership or joint venture with, any other person.
2.5 Financial Statements. Brunswick has previously delivered to STI
--------------------
(i) the audited consolidated financial statements of Brunswick at June 30,
1995 and June 30, 1994 (including the footnotes thereto), in each case
examined by and accompanied by the report of Arthur Andersen LLP,
independent public accountants (the "Audited Financial Statements") and
(ii) the unaudited balance sheet of Brunswick (the "Interim Balance Sheet")
at March 31, 1996 and related statements of operations and cash flows for
the period then ended (the "Interim Financial Statement"). All of such
financial statements referred to in this section are collectively referred
to herein as the "Brunswick Financial Statements." The Brunswick Financial
Statements have been prepared from, and are in accordance with, the books
and records of Brunswick and present fairly, in all material respects, the
financial position and the results of operations of Brunswick and its
Subsidiaries as of the dates and for the periods indicated, in each case in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout the periods involved except as otherwise
stated
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<PAGE>
therein, and subject, in the case of the Interim Financial Statement, to
normal and recurring year-end audit adjustments, which are not, in the
aggregate, material.
2.6 Absence of Undisclosed Liabilities. As at June 30, 1995,
----------------------------------
Brunswick and its Subsidiaries had no liabilities of any nature, whether
accrued, absolute, contingent or otherwise (including, without limitation,
liabilities as guarantor or otherwise with respect to obligations of others
or liabilities for taxes due or then accrued or to become due), required to
be reflected or disclosed in the June 30, 1995 balance sheet included in
the Audited Financial Statements that were not adequately reflected or
reserved against on such balance sheet. Brunswick and its Subsidiaries
have no such liabilities, other than liabilities (i) adequately reflected
or reserved against on the June 30, 1995 balance sheet, (ii) reflected on
the Interim Balance Sheet, (iii) incurred since March 31, 1996 in the
ordinary course of business or (iv) disclosed in this Agreement or the
Brunswick Disclosure Schedule.
2.7 No Material Adverse Change. Since June 30, 1995, except as
--------------------------
described in the Brunswick Disclosure Schedule, there has not been (i) any
material adverse change in the assets, business, prospects, results of
operations or financial condition of Brunswick and its Subsidiaries taken
as a whole (the "Business of Brunswick") or (ii) action by Brunswick or its
Subsidiaries which, if taken on or after the date hereof, would require the
consent or approval of STI pursuant to Section 4.1.
2.8 Tax Matters.
-----------
(a) Brunswick and its Subsidiaries have filed all tax reports and
returns required to be filed by them and have paid or will timely pay all
taxes and other charges shown as due on such reports and returns. Neither
Brunswick nor any of its Subsidiaries is delinquent in the payment of any
material tax assessment or other governmental charge (including without
limitation applicable withholding taxes). Any provision for taxes
reflected in the Interim Balance Sheet is adequate for payment of any and
all tax liabilities for periods ending on or before March 31, 1996 and, as
of the Closing Date, all taxes due in respect of any periods of Brunswick
and its Subsidiaries subsequent to March 31, 1996 (including any periods
ending on or prior to the Closing Date) will have been paid or adequate
reserves will have been established for the payment thereof. Neither
Brunswick nor its Subsidiaries will have any material liability for any
taxes in excess of the amounts so paid or reserves or accruals so
established. There are no tax liens on any assets of Brunswick or its
Subsidiaries except liens for current taxes not yet due.
(b) There has not been during the prior three years any audit of any
tax return filed by Brunswick or any of its Subsidiaries and no audit of
any such tax return is in progress and neither Brunswick nor any Subsidiary
has been notified by any tax authority that any such audit is contemplated
or pending. Brunswick knows of no tax deficiency or claim for additional
taxes asserted or threatened to be asserted against Brunswick or any of its
Subsidiaries by any taxing authority and Brunswick knows of no grounds for
any such assessment. No extension of time with respect to any date on
which a tax return was or is to be filed by Brunswick or any of its
Subsidiaries is in force, and no waiver or agreement by Brunswick or any of
its Subsidiaries is in force for the extension of time for the assessment
or payment of any tax. For purposes of this Agreement, the term "tax"
includes all federal,
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<PAGE>
state, local and foreign taxes or assessments, including income, sales,
gross receipts, excise, use, value added, royalty, franchise, payroll,
withholding, property and import taxes and any interest or penalties
applicable thereto.
(c) Neither Brunswick nor any of its Subsidiaries has agreed to, or is
required to, make any adjustments under Section 481(a) of the Code by
reason of a change in accounting method or otherwise.
2.9 Compliance with Laws.
--------------------
(a) Brunswick and its Subsidiaries have all licenses, permits,
franchises, orders or approvals of any federal, state, local or foreign
governmental or regulatory body material to the conduct of their respective
businesses (collectively, "Permits"); such Permits are in full force and
effect; no proceeding is pending or, to the best knowledge of Brunswick,
threatened to revoke or limit any Permit; and such Permits will continue in
effect after the Effective Time, and the Surviving Corporation will not be
required to obtain additional Permits to conduct the business of Brunswick
after the Effective Time.
(b) Brunswick and its Subsidiaries are not in violation of any
applicable law, ordinance or regulation or any order, judgment, injunction,
decree or other requirement of any court, arbitrator or governmental or
regulatory body, except for violations that would not, in the aggregate,
have a material adverse effect on the Business of Brunswick. During the
last three years, Brunswick has not received notice of, and there has not
been any citation, fine or penalty imposed against Brunswick for, any such
violation or alleged violation. To the best knowledge of Brunswick,
Brunswick has not received any such notice of violation more than three
years ago which has not been resolved.
2.10 No Breach. Except for (a) obtaining the approval of the
---------
stockholders of Brunswick of this Agreement and (b) the filing of the
Certificate of Merger with the State of Delaware and the Articles of Merger
with the Commonwealth of Massachusetts, respectively, the execution,
delivery and performance of this Agreement by Brunswick and the
consummation by Brunswick of the transactions contemplated hereby will not
(i) violate any provision of the articles of organization or by-laws of
Brunswick; (ii) violate, conflict with or result in the breach of any of
the terms or conditions of, result in modification of the effect of, or
otherwise give any other contracting party the right to terminate, or
constitute (or with notice or lapse of time or both constitute) a default
under, any instrument, contract or other agreement to which Brunswick or
any of its Subsidiaries is a party or to which any of them or any of their
assets is bound or subject; (iii) violate any law, ordinance or regulation
or any order, judgment, injunction, decree or other requirement of any
court, arbitrator or governmental or regulatory body applicable to
Brunswick or its Subsidiaries or by which any of their assets is bound;
(iv) violate any Permit; (v) require any filing with, notice to, or permit,
consent or approval of, any other governmental or regulatory body; or (vi)
result in the creation of any lien or other encumbrance on the assets of
Brunswick or its Subsidiaries excluding from the foregoing clauses (ii),
(iii), (iv), (v) and (vi) any exceptions to the foregoing that, in the
aggregate, would not have a material adverse effect on the Business of
Brunswick or on the ability of Brunswick to consummate the transactions
contemplated hereby.
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2.11 Actions and Proceedings. There are no outstanding orders,
-----------------------
awards, judgments, injunctions, decrees or other requirements of any court,
arbitrator or governmental or regulatory body against Brunswick, any
Subsidiary or any of their assets. There are no actions, suits,
investigations or claims or legal, administrative or arbitration
proceedings pending or, to the best knowledge of Brunswick, threatened
against Brunswick or any Subsidiary which, if adversely determined, could
individually or in the aggregate have a material adverse effect on the
Business of Brunswick or upon the transaction contemplated hereby. To the
best knowledge of Brunswick, there is no fact, event or circumstance now in
existence that reasonably could be expected to give rise to any such
action, suit, claim, proceeding or investigation.
2.12 Contracts and Other Agreements. The Brunswick Disclosure
------------------------------
Schedule sets forth a list of the following contracts and other agreements
to which Brunswick or any Subsidiary is a party or by or to which any of
them or their assets or properties are bound or subject:
(a) any agreement or series of related agreements requiring aggregate
payments by or to Brunswick or any Subsidiary of more than $50,000;
(b) any agreement with or for the benefit of any current or former
officer, director, stockholder, employee or consultant of Brunswick or any
Subsidiary;
(c) any agreement with any labor union or association representing any
employee of Brunswick or any Subsidiary;
(d) any agreement for the purchase or sale of materials, supplies,
equipment, merchandise or services that contain an escalation,
renegotiation or redetermination clause or that obligate Brunswick or any
Subsidiary to purchase all or substantially all of its requirements of a
particular product from a supplier, or for periodic minimum purchases of a
particular product from a supplier;
(e) any agreement for the sale of any of the assets or properties of
Brunswick or any Subsidiary other than in the ordinary course of business
or for the grant to any person of any options, rights of first refusal, or
preferential or similar rights to purchase any such assets or properties;
(f) any partnership or joint venture agreement;
(g) any agreement of surety, guarantee or indemnification, other than
agreements in the ordinary course of business with respect to obligations
in an aggregate amount not in excess of $50,000;
(h) any agreement containing covenants of Brunswick or any Subsidiary
not to compete in any line of business, in any geographic area or with any
person or covenants of any other person not to compete with Brunswick or
any Subsidiary or in any line of business of Brunswick or its Subsidiaries;
- 12 -
<PAGE>
(i) any agreement granting or restricting the right of Brunswick or
any Subsidiary to use any Proprietary Right (as defined in Section 2.15);
(j) any agreement with customers or suppliers for the sharing of fees,
the rebating of charges or other similar arrangements;
(k) any agreement with any holder of securities of Brunswick or any
Subsidiary as such (including, without limitation, any agreement containing
an obligation to register any of such securities under any federal or state
securities laws);
(l) any agreement obligating, Brunswick or any Subsidiary to deliver
services or product enhancements or containing a "most favored nation"
pricing clause;
(m) any agreement relating to the acquisition by Brunswick or any
Subsidiary of any operating business or the capital stock of any other
person;
(n) any agreement requiring the payment to any person of a brokerage
or sales commission or a finder's or referral fee (other than arrangements
to pay commissions or fees to employees in the ordinary course of
business);
(o) any agreement or note relating to or evidencing outstanding
indebtedness for borrowed money;
(p) any lease, sublease or other agreement under which Brunswick or
any of the Subsidiaries is lessor or lessee of any real property or
equipment or other tangible property; and
(q) any other material agreement whether or not made in the ordinary
course of business.
True and complete copies of all the contracts and other agreements (and all
amendments, waivers or other modifications thereto) set forth on the
Brunswick Disclosure Schedule have been furnished to STI. Each of such
contracts is valid, subsisting, in full force and effect, binding upon
Brunswick and, to the best knowledge of Brunswick, binding upon the other
parties thereto in accordance with their terms, and Brunswick and its
Subsidiaries are not in default under any of them, nor, to the best
knowledge of Brunswick, is any other party to any such contract or other
agreement in default thereunder, nor does any condition exist that with
notice or lapse of time or both would constitute a default thereunder,
except, in each case, such defaults as would not, individually or in the
aggregate, have a material adverse effect on the Business of Brunswick.
2.13 Bank Accounts and Powers of Attorney. The Brunswick Disclosure
------------------------------------
Schedule identifies all bank and brokerage accounts of Brunswick and its
Subsidiaries, whether or not such accounts are held in the name of
Brunswick, lists the respective signatories therefor and lists the names of
all persons holding a power of attorney from Brunswick and a summary of the
terms thereof.
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<PAGE>
2.14 Properties.
----------
(a) Brunswick and its Subsidiaries own and have good title to all of
their assets and properties reflected as owned on the June 30, 1995 balance
sheet included in the Audited Financial Statements or acquired after such
date, free and clear of any lien, claim or other encumbrance, except for
(i) the liens, claims or other encumbrances reflected in the Interim
Financial Statement, (ii) assets and properties disposed of, or subject to
purchase or sales orders, in the ordinary course of business for adequate
consideration since June 30, 1995, (iii) liens or other encumbrances
securing the liens of materialmen, carriers, landlords and like persons,
all of which are not yet due and payable, (iv) liens for taxes not yet
delinquent and (v) liens, claims or other encumbrances that, in the
aggregate, are not material to the Business of Brunswick.
(b) Brunswick and its Subsidiaries do not own any real property and do
not have any options or contractual obligations to purchase or acquire any
interest in real property. Brunswick or a Subsidiary has a valid leasehold
interest in all of the buildings, structures and leasehold improvements,
and owns or has a valid leasehold interest in all equipment and other
tangible property material to the conduct of their respective businesses,
all of which are in good and sufficient operating condition and repair,
ordinary wear and tear excepted. There is no equipment located on the
premises of Brunswick or any Subsidiary that is on loan from another party.
2.15 Intellectual Property. Brunswick and its Subsidiaries own, or
---------------------
are licensed to use, or otherwise have the right to use all patents,
trademarks, service marks, trade names, logos, franchises, and copyrights,
and all applications for any of the foregoing, and all technology,
inventions, trade secrets, know-how, computer software and processes used
in or necessary for the conduct of their respective businesses as now
conducted or proposed to be conducted (collectively, the "Proprietary
Rights"). A list of all such copyrights, trademarks, tradenames and
patents, and all applications therefor, has been previously delivered to
STI. Brunswick is not aware of any claim by any third party that the
business of Brunswick or its Subsidiaries as currently conducted or
proposed to be conducted infringes upon the proprietary rights of others,
nor has Brunswick or its Subsidiaries received any notice or claim from any
third party of such infringement by Brunswick or any of its Subsidiaries.
Brunswick is not aware of any infringement by any third party on, or any
competing claim of right to use or own any of, the Proprietary Rights of
Brunswick and its Subsidiaries. Brunswick and its Subsidiaries have the
right to use, free and clear of claims or rights of others, all customer
lists and computer software used in the conduct of their respective
businesses. To the best knowledge of Brunswick, none of the activities of
the employees of Brunswick on behalf of Brunswick violates any agreements
or arrangements which any such employees have with former employers.
2.16 Customers. The Brunswick Disclosure Schedule sets forth the ten
---------
customers who accounted for the largest sales of Brunswick and its
Subsidiaries, considered as one enterprise, for each of the fiscal years
1994 and 1995 and for the nine months ended March 31, 1996 (the
"Customers"). The relationships of Brunswick and its Subsidiaries with the
Customers are good commercial working relationships. No Customer has
canceled or otherwise terminated its relationship with Brunswick or any of
its Subsidiaries, or has during
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<PAGE>
the fiscal years 1995 and 1996 or the current fiscal year decreased
materially its usage or purchase of the products or services of Brunswick
or any of its Subsidiaries. Brunswick does not know of any plan or
intention of any Customer, and has not received any written threat or
notice from any Customer, to terminate, cancel or otherwise materially and
adversely modify its relationship with Brunswick or any of its Subsidiaries
or to decrease materially or limit its usage or purchase of the services or
products of Brunswick or any of its Subsidiaries.
2.17 Accounts Receivable. Subject to the allowances with respect to
-------------------
accounts receivable set forth on the Interim Balance Sheet, all accounts
receivable reflected on the Interim Balance Sheet and all accounts
receivable arising subsequent thereto, have arisen in the ordinary course
of business of Brunswick or the Subsidiaries, represent valid and
enforceable obligations due to Brunswick or the Subsidiaries and have been
and are subject to no set-off, counterclaim or future performance
obligation on the part of Brunswick or a Subsidiary.
2.18 Inventory. The inventory of Brunswick and its Subsidiaries is
---------
and at the Effective Time will be in good and merchantable condition and
saleable or usable in the manufacture of saleable finished goods in the
ordinary course of business.
2.19 Employee Benefit Plans. The Brunswick Disclosure Schedule sets
----------------------
forth a complete list of all pension, profit sharing, retirement, deferred
compensation, welfare, insurance, disability, bonus, stock option, stock
purchase, vacation pay, severance pay and similar plans, programs or
arrangements, including without limitation all employee benefit plans as
defined in Section 3 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") (the "Plans") maintained by Brunswick or its
Subsidiaries or with respect to which Brunswick or any Subsidiary has any
liability or obligation. With respect to each of the Plans, Brunswick has
heretofore delivered or made available to STI a copy of the Plan (including
all amendments thereto), a copy of the most recent summary plan
description, and a copy of the annual report, if required under ERISA, with
respect to each such Plan for the last two years. Neither Brunswick nor
any Subsidiary maintains or contributes to any "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA, and neither Brunswick nor any
Subsidiary has any material liability under Sections 4062, 4063 or 4201 of
ERISA or to the Pension Benefit Guaranty Corporation ("PBGC") (other than
liability for PBCG premiums) that has not been satisfied in full. Each
Plan which is intended to be qualified under either Section 401(a) or
501(c)(9) of the Code ("Qualified Plans") is so qualified. Each Plan has
been administered in all material respects in accordance with the terms of
such Plan and the provisions of any and all statutes, orders or
governmental rules or regulations, including without limitation ERISA and
the Code, and to the knowledge of Brunswick nothing has been done or
omitted to be done with respect to any Plan that would result in any
material liability on the part of Brunswick or a Subsidiary under Title I
of ERISA or Section 4975 of the Code. All reports required to be filed
with respect to all Plans, including without limitation annual reports on
Form 5500, have been timely filed. No "reportable event" as defined at
Section 4043 of ERISA, other than any such event for which the thirty-day
notice period has been waived, has occurred with respect to any Plan
subject to Title IV of ERISA. With respect to all Plans subject to Title
IV of ERISA, such Plans have no unfunded benefit liabilities, all
contributions to such plans under the minimum funding
- 15 -
<PAGE>
requirements of Section 412 of the Code have been made and all premium
payments to the PBGC with respect to such plans have been made. All claims
for welfare benefits incurred by employees on or before the Closing are or
will be fully covered by third-party insurance policies or programs.
Except for continuation of health coverage to the extent required under
Section 4980B of the Code or as otherwise set forth in this Agreement,
there are no obligations under any Plan that is a welfare plan (within the
meaning of Section 3(1) of ERISA) for providing benefits after termination
of employment. All payments due to each Plan and all amounts properly
accrued to date as liabilities of Brunswick or any Subsidiary with respect
to the Plans which have not been paid have been properly recorded on the
Brunswick Financial Statements. There is no pending or threatened or
anticipated claim against or otherwise involving any Plan, a related trust
or any fiduciary thereof (other than routine claims for benefits), and
there is no judgment, decree, injunction, rule or order of any court,
governmental body, commission, agency or arbitrator outstanding against or
in favor of any such Plan or any fiduciary thereof.
2.20 Employee Relations. Brunswick and its Subsidiaries have
------------------
approximately 39 full-time equivalent employees and generally enjoy good
employer-employee relations. Brunswick and its Subsidiaries are not
delinquent in payments to any of their respective employees or consultants
for any wages, salaries, commissions, bonuses or other direct compensation
for any services performed by them to the date hereof or amounts required
to be reimbursed to such employees. Neither Brunswick, its Subsidiaries
nor STI or the Surviving Corporation will by reason of the Merger or
anything done prior to the Effective Time be liable to any of such
employees for severance pay or any other payments (other than accrued
salary, vacation or sick pay in accordance with Brunswick's normal
policies). No payments to directors, officers, employees, or consultants
of Brunswick resulting from the transactions contemplated hereby will cause
the imposition of excise taxes under Section 4999 of the Code or the
disallowance of a deduction pursuant to Section 280G of the Code. True and
complete information as to all current directors, officers, employees or
consultants of Brunswick and its Subsidiaries, including, in each case,
name, current job title, base salary, bonus potential, commissions and
termination obligations has been previously furnished to STI.
2.21 Transactions with Management. No executive officer or director
----------------------------
of Brunswick or any of its Subsidiaries has (whether directly or indirectly
through another entity in which such person has an interest, other than as
the holder of less that 1% of a class of securities of a publicly traded
company) any interest in (i) any property or assets of Brunswick or any of
its Subsidiaries (except as a shareholder), (ii) any current competitor,
customer or supplier of Brunswick or any of its Subsidiaries, or (iii) any
person which is currently a party to any material contract or agreement
with Brunswick or any of its Subsidiaries (other than this Agreement).
2.22 Insurance. The Brunswick Disclosure Schedule sets forth a list
---------
of all policies or binders of fire, liability, product liability, workmen's
compensation, vehicular, directors' and officers' and other insurance held
by or on behalf of Brunswick and its Subsidiaries. Such policies and
binders are in full force and effect, are reasonably believed to be
adequate for the businesses engaged in by Brunswick or its Subsidiaries, as
applicable, and are in conformity with the requirements of all leases or
other agreements to which Brunswick or
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<PAGE>
any of its Subsidiaries is a party and, to the best knowledge of Brunswick,
are valid and enforceable in accordance with their terms. Brunswick and
the Subsidiaries are not in default with respect to any provision contained
in any such policy or binder nor has Brunswick or its Subsidiaries failed
to give any notice or present any claim under any such policy or binder in
due and timely fashion. There are no outstanding unpaid claims under any
such policy or binder. Brunswick has not received notice of premium
increase, cancellation or non-renewal of any such policy or binder.
2.23 Brokerage. Except as otherwise disclosed to STI in writing, no
---------
broker, finder, agent or similar intermediary has acted on behalf of
Brunswick in connection with this Agreement or the transactions
contemplated hereby, and there are no brokerage commissions, finders' fees
or similar fees or commissions payable in connection herewith based on any
agreement, arrangement or understanding with Brunswick or any action taken
by it.
2.24 Hazardous Materials.
-------------------
(a) There are no Hazardous Materials (as hereinafter defined)
generated, used, disposed, handled or stored by Brunswick or any of its
Subsidiaries the proper disposal of which will require any material
expenditure by Brunswick or any of its Subsidiaries. There has been no
transportation, generation, use, handling, storage or disposal of any
Hazardous Materials in violation of common law or any applicable
environmental law, or such that remediation or any other cleanup
obligations could be imposed upon Brunswick or any of its Subsidiaries, at
any site owned or premises leased by Brunswick or any of its Subsidiaries
during the period of Brunswick's or such Subsidiary's ownership or lease
or, to the best of Brunswick's knowledge, prior thereto. Nor has there
been or is there threatened any release of any Hazardous Materials on or at
any such site or premises during such period or, to the best of Brunswick's
knowledge, prior thereto in violation of common law or any applicable
environmental law or which created or will create an obligation to report,
remediate or otherwise respond to such release. "Hazardous Materials"
means any (i) "hazardous waste" as defined in either the United States
Resource Conservation and Recovery Act or regulations adopted pursuant to
said Act; (ii) any "hazardous substance" or "pollutant or contaminant" as
defined in the United States Comprehensive Environmental Response,
Compensation and Liability Act; and (iii) petroleum (including crude oil or
any fraction thereof) and natural gas, liquefied natural gas or synthetic
gas of pipeline quality (or mixtures of natural gas and such synthetic
gas).
(b) There is no environmental or health and safety matter that could
have a material adverse effect on the Business of Brunswick. Brunswick has
previously furnished to STI copies of any environmental audits or risk
assessments, site assessments, documentation regarding off-site disposal of
Hazardous Materials, spill control plans and material correspondence with
any governmental agency regarding the foregoing.
2.25 Certain Information. The information furnished by Brunswick for
-------------------
inclusion in the STI Proxy Statement (as defined in Section 4.8) and the
Proxy Statement/PPM (as defined in Section 4.9) (i) at the time the STI
Proxy Statement is mailed to stockholders of STI, and the Proxy
Statement/PPM is mailed to stockholders of Brunswick; (ii) at the time of
the action of Brunswick's stockholders and STI's stockholders to adopt this
Agreement; and
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<PAGE>
(iii) at the Effective Time, including any amendments or supplements
thereto, will comply as to form in all material respects with the
applicable provisions of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and the Securities Act of 1933, as amended (the
"Securities Act"), respectively, and the rules and regulations of the
United States Securities and Exchange Commission (the "SEC") thereunder,
and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they are made, not misleading (subject, if required, to a reasonable period
of time for the parties hereto to take such action as may be necessary to
amend or supplement the STI Proxy Statement or the Proxy Statement/PPM).
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF STI
Except as set forth on the disclosure schedule delivered to Brunswick
on the date hereof (the "STI Disclosure Schedule"), the section numbers of
which are numbered to correspond to the section numbers of this Agreement
to which they refer, STI hereby represents and warrants to Brunswick as
follows:
3.1 Organization. Each of STI and the STI Subsidiaries (as defined
------------
below) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation with full corporate
power and authority to own, lease and operate its assets and to carry on
its business as now being and as heretofore conducted. Each of STI and the
STI Subsidiaries is qualified or otherwise authorized to transact business
as a foreign corporation or other legal entity in all jurisdictions in
which such qualification or authorization is required by law, except for
jurisdictions in which the failure to be so qualified or authorized would
not have a material adverse effect on the assets, business, results of
operations or financial condition of STI and the STI Subsidiaries taken as
a whole.
3.2 Authority to Execute and Perform Agreement. STI has the
------------------------------------------
corporate power and authority to enter into, execute and deliver this
Agreement and, subject to the adoption of this Agreement by the
stockholders of STI, to perform fully its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of STI and by the directors of STI who are not affiliated with
Brunswick (the "Special Committee"). The Special Committee has received
the opinion, dated as of the date hereof, of Lehman Brothers as to the
fairness of the Merger from a financial point of view, and such opinion, a
copy of which has been delivered to Brunswick, has not been withdrawn,
revoked or modified. No other corporate action on the part of STI is
necessary to consummate the transactions contemplated hereby other than the
adoption of this Agreement by the stockholders of STI and the filings of
the Certificate of Merger and Articles of Merger. This Agreement has been
duly executed and delivered by STI and, subject to the foregoing,
constitutes a valid and binding obligation of STI, enforceable in
accordance with its terms.
3.3 Capitalization. STI is authorized to issue 10,000,000 shares of
--------------
STI Common Stock, of which 3,088,163 shares are issued and outstanding as
of the date hereof, and no shares of preferred stock. As of the date
hereof, except for an aggregate of 109,777 shares
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<PAGE>
of STI Common Stock reserved for issuance under various stock option plans
of STI and a stock option for 32,500 shares of STI Common Stock held by the
Estate of Stanley D. Sarnoff, there is no outstanding right, subscription,
warrant, call, preemptive right, option or other agreement of any kind to
purchase or otherwise to receive from STI any shares of the capital stock
or any other security of STI and there is no outstanding security of any
kind convertible into or exchangeable for such capital stock. When issued
in accordance with the terms of this Agreement, (i) the STI Common Stock to
be issued pursuant to the Merger will be duly authorized, validly issued,
fully paid, nonassessable and free of any preemptive rights and (ii) the
STI Merger Warrants will be duly authorized, validly issued and constitute
a valid and binding obligation of STI, enforceable in accordance with its
terms and any STI Common Stock issued upon exercise of the STI Merger
Warrants, when issued in accordance with the terms thereof, will be duly
authorized, validly issued, fully paid and nonassessable and free of any
preemptive rights.
3.4 Subsidiaries and Other Affiliates.
---------------------------------
(a) The STI Disclosure Schedule sets forth all of the STI Subsidiaries
and the jurisdiction in which each is incorporated or organized. All
issued and outstanding shares or other equity interest of each STI
Subsidiary are owned directly by STI free and clear of any charges, liens,
encumbrances, security interests or adverse claims. As used in this
Agreement, "STI Subsidiary" means any corporation or other legal entity of
which STI or any STI Subsidiary owns, directly or indirectly, 50% or more
of the stock or other equity interest entitled to vote for the election of
directors.
(b) Except as set forth above, there are not as of the date hereof,
any other shares of capital stock or other equity interest of any STI
Subsidiary authorized or outstanding or any subscriptions, options,
conversion or exchange rights, warrants, repurchase or redemption
agreements, or other agreements, claims or commitments of any nature
whatsoever obligating any STI Subsidiary to issue, transfer, deliver or
sell, or cause to be issued, transferred, delivered, sold, repurchased or
redeemed, additional shares of the capital stock or other securities or
equity interests of STI or any STI Subsidiary or obligating STI or any STI
Subsidiary to grant, extend or enter into any such agreement. There are no
shareholder agreements, voting trusts, proxies or other agreements,
instruments or understandings with respect to the capital stock of any STI
Subsidiary.
(c) Except for the STI Subsidiaries, STI does not directly or
indirectly own or have any investment in any of the capital stock of, and
is not a party to a partnership or joint venture with, any other person.
3.5 SEC Reports. STI has previously delivered to Brunswick its (i)
-----------
Annual Report on Form 10-K for the year ended July 31, 1995 (the "STI 10-
K"), as filed with the SEC, (ii) all proxy statements relating to STI's
meetings of stockholders held or currently scheduled to be held since July
31, 1995 and (iii) all other reports filed by STI with the SEC under the
Exchange Act since July 31, 1995. As of their respective dates, such
reports complied in all material respects with applicable SEC requirements
and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not
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<PAGE>
misleading. STI has timely filed with the SEC all reports required to be
filed under Section 13, 14 or 15(d) of the Exchange Act since July 31,
1995.
3.6 Financial Statements. The consolidated financial statements
--------------------
contained in the STI 10-K and in STI's quarterly report on Form 10-Q for
the quarter ended April 30, 1996 (the "STI 10-Q") have been prepared from,
and are in accordance with, the books and records of STI and present
fairly, in all material respects, the consolidated financial condition and
results of operations of STI as of and for the periods presented therein,
all in conformity with generally accepted accounting principles applied on
a consistent basis, except as otherwise noted therein and subject (in the
case of the unaudited financial statements included in the STI 10-Q) to
normal year-end adjustments, which are not, in the aggregate, material.
3.7 Absence of Undisclosed STI Liabilities. As at July 31, 1995,
--------------------------------------
STI and the STI Subsidiaries had no material liabilities of any nature,
whether accrued, absolute, contingent or otherwise, (a) required to be
reflected or disclosed on the consolidated balance sheet dated July 31,
1995 (or the notes thereto) included in the STI 10-K that were not
adequately reflected or reserved against on such balance sheet or (b) for
the payment of any dividends, or any other distribution, to the
stockholders of STI. STI and the STI Subsidiaries have no such
liabilities, other than liabilities (i) adequately reflected or reserved
against on such balance sheet, (ii) reflected in STI's unaudited
consolidated balance sheets (or the notes thereto) included in the STI 10-
Q, (iii) incurred since July 31, 1995 in the ordinary course of business,
(iv) disclosed in the STI Disclosure Schedule or (v) that would not, in the
aggregate, have a material adverse effect on the assets, business,
prospects, results of operations or financial condition of STI and the STI
Subsidiaries taken as a whole (the "Business of STI").
3.8 No Material Adverse Change. Since July 31, 1995, there has not
--------------------------
been any material adverse change in the Business of STI.
3.9 No Breach. Except for (a) the adoption of this Agreement by the
---------
STI stockholders, (b) the filing of the Merger Certificate with the State
of Delaware and the filing of the Articles of Merger with the Commonwealth
of Massachusetts, respectively, (c) filings under the Securities Act or the
Exchange Act, (d) filings with various state blue sky authorities and (e)
the filing with the Nasdaq National Market of an application for listing of
the shares of STI Common Stock to be issued in the Merger or upon exercise
of the STI Merger Warrants, the execution, delivery and performance of this
Agreement by STI and the consummation by STI of the transactions
contemplated hereby will not (i) violate any provision of the certificate
of incorporation or by-laws of STI; (ii) violate, conflict with or result
in the breach of any of the terms or conditions of, result in modification
of the effect of, or otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time or both
constitute) a default under, any instrument, contract or other agreement to
which STI or any STI Subsidiary is a party or to which any of them or any
of their assets is bound or subject; (iii) violate any law, ordinance or
regulation or any order, judgment, injunction, decree or requirement of any
court, arbitrator or governmental or regulatory body applicable to STI or
any STI Subsidiary or by which any of their assets is bound; (iv) require
any filing with, notice to, or permit, consent or approval of, any
governmental or regulatory body or (v) result in the creation of any lien
or other
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<PAGE>
encumbrance on the assets of STI or any STI Subsidiary, excluding from the
foregoing clauses (ii), (iii), (iv) and (v) any exceptions to the foregoing
that, in the aggregate, would not have a material adverse effect on the
Business of STI or on the ability of STI to consummate the transactions
contemplated hereby.
3.10 Actions and Proceedings. Except as set forth in the STI 10-K or
-----------------------
the STI 10-Q, there are no actions, suits or claims or legal,
administrative or arbitration proceedings pending or, to the best knowledge
of STI, threatened against STI, any STI Subsidiary or any of their assets
that, if adversely determined, could individually or in the aggregate have
a material adverse effect upon the Business of STI or the transactions
contemplated hereby. To the best knowledge of STI, there is no fact, event
or circumstance now in existence that reasonably could be expected to give
rise to any such action, suit, claim, proceeding or investigation.
3.11 Certain Information. The information furnished by STI for
-------------------
inclusion in the STI Proxy Statement (as defined in Section 4.8) and the
Proxy Statement/PPM (as defined in Section 4.9) (i) at the time the STI
Proxy Statement is mailed to stockholders of STI, and the Proxy
Statement/PPM is mailed to stockholders of Brunswick; (ii) at the time of
the action of Brunswick's stockholders and STI's stockholders to vote on or
otherwise approve this Agreement; and (iii) at the Effective Time,
including any amendments or supplements thereto, will comply as to form in
all material respects with the applicable provisions of the Exchange Act
and the Securities Act, respectively, and the rules and regulations of the
SEC thereunder, and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading (subject, if
required, to a reasonable period of time for the parties hereto to take
such action as may be necessary to amend or supplement the STI Proxy
Statement or the Proxy Statement/PPM).
3.12 Brokerage. Except as otherwise disclosed to Brunswick in
---------
writing, no broker, finder, agent or similar intermediary has acted on
behalf of STI in connection with this Agreement or the transactions
contemplated hereby, and there are no brokerage commissions, finders' fees
or similar fees or commissions payable in connection herewith based on any
agreement, arrangement or understanding with STI or any action taken by it.
SECTION 4 - COVENANTS AND AGREEMENTS
4.1 Conduct of Business. Except with the prior written consent of
-------------------
STI, which will not be unreasonably withheld or delayed, and except as
otherwise contemplated herein, during the period from the date hereof to
the Effective Time, Brunswick shall observe the following covenants:
(a) Affirmative Covenants Pending Closing. Brunswick shall and
-------------------------------------
shall cause its Subsidiaries to:
(i) Preservation of Personnel. Use all reasonable efforts
-------------------------
to preserve intact and keep available the services of its present
employees;
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<PAGE>
(ii) Insurance. Use all reasonable efforts to keep in effect
---------
casualty, public liability, worker's compensation and other insurance
policies in coverage amounts not less than those in effect at the date of
this Agreement;
(iii) Preservation of the Business; Maintenance of Properties.
-------------------------------------------------------
Use all reasonable efforts to preserve its business, advertise, promote and
market its products and services in accordance with past practices over the
last twelve months, keep its properties intact, preserve its goodwill and
maintain all physical properties in such operating condition as will permit
the conduct of its business on a basis consistent with past practice;
(iv) Intellectual Property Rights. Use all reasonable efforts
----------------------------
to preserve and protect its Proprietary Rights; and
(v) Ordinary Course of Business. Operate its business solely
---------------------------
in the ordinary course in substantially the same manner as heretofore
conducted.
(b) Negative Covenants Pending Closing. Except as set forth in
----------------------------------
the Brunswick Disclosure Statement, Brunswick will not and will cause its
Subsidiaries to not:
(i) Disposition of Assets. Sell or transfer, or mortgage,
---------------------
pleade or create or permit to be created any security interest on, any of
its assets other than in the ordinary course of business;
(ii) Liabilities. Other than indebtedness or obligations to STI
-----------
(A) incur any obligation or liability other than in the ordinary course of
business, (B) incur any indebtedness for borrowed money in excess of
$100,000 or (C) enter into any contracts or commitments involving payments
by it of $100,000 or more;
(iii) Compensation. Except as required by applicable law or any
------------
existing employment or severance agreement, (A) manage the compensation and
benefits of its officers, directors, employees and agents in a manner
inconsistent with past practices, or (B) enter into or modify any agreement
with any consultant, except for agreements terminable upon not more than
one month's notice without liability to the Surviving Corporation that are
consistent with its past practices with respect to consulting agreements;
(iv) Capital Stock. Make any change in the number of shares of
-------------
its capital stock authorized, issued or outstanding or issue, grant,
authorize or accelerate the exercisability of, any option, warrant or other
right to purchase, or to convert any obligation into, shares of its capital
stock, or declare, or set aside or pay any dividend or other distribution
with respect to any shares of its capital stock, or sell or transfer any
shares of its capital stock, except upon the exercise of options
outstanding on the date hereof or pursuant to any offering in progress as
of the date hereof under any employee stock purchase plan or upon the
exercise of outstanding warrants;
(v) Charter and By-Laws. Amend its articles of organization or
-------------------
by-laws;
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<PAGE>
(vi) Acquisitions. Make any material acquisition of property
------------
other than in the ordinary course of business; or
(vii) License Agreements. Enter into or modify any license,
------------------
technology development or technology transfer agreement with any other
person or entity other than in the ordinary course of business.
(viii) Other Material Changes. Take any affirmative action or
----------------------
fail to take any reasonable action within its or their control as a result
of which any of the changes or events listed in Section 2.12 is likely to
occur.
4.2 Corporate Examinations and Investigations. Prior to the
-----------------------------------------
Effective Time, STI and Brunswick shall each be entitled, through its
employees and representatives, to have such access to the assets,
properties, business and operations of the other, as is reasonably
necessary or appropriate in connection with its investigation of the other
with respect to the transactions contemplated hereby. Any such
investigation and examination shall be conducted at reasonable times and
under reasonable circumstances so as to minimize any disruption to or
impairment of either party's business and each party shall cooperate fully
therein. No investigation by STI or Brunswick shall diminish or obviate
any of the representations, warranties, covenants or agreements of the
other contained in this Agreement. In order that each party may have full
opportunity to make such investigation, STI and Brunswick shall each
furnish the representatives of the other during such period with all such
information and copies of such documents concerning its affairs as such
representatives may reasonably request and cause its officers, employees,
consultants, agents, accountants and attorneys to cooperate fully with such
representatives in connection with such investigation.
4.3 Expenses. STI and Brunswick shall bear their respective
--------
expenses incurred in connection with the preparation, execution and
performance of this Agreement and the transactions contemplated hereby,
including without limitation, all fees and expenses of agents,
representatives, counsel and accountants.
4.4 Authorization from Others. Prior to the Closing Date, the
-------------------------
parties shall use their reasonable commercial efforts to obtain all
authorizations, consents and permits of others required to permit the
consummation of the transactions contemplated by this Agreement.
4.5 Consummation of Agreement. Each party shall use its respective
-------------------------
reasonable commercial efforts to perform and fulfill all conditions and
obligations to be performed and fulfilled by it under this Agreement and to
ensure that to the extent within its control or capable of influence by it,
no breach of any of the respective representations, warranties and
agreements hereunder occurs or exists on or prior to the Effective Time,
all to the end that the transactions contemplated by this Agreement shall
be fully carried out in a timely fashion. In connection with the
foregoing, each of STI and Brunswick shall provide, and Brunswick shall use
reasonable efforts to cause its stockholders to provide, to Arnold &
Porter, counsel to STI, and Palmer & Dodge LLP, counsel to Brunswick, a
letter setting
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<PAGE>
forth facts, assumptions and representations on which Arnold & Porter and
Palmer & Dodge LLP may rely in rendering their respective opinions referred
to in Section 5.4.
4.6 Further Assurances. Each of the parties shall execute such
------------------
documents, further instruments of transfer and assignment and other papers
and take such further actions as may be reasonably required or desirable to
carry out the provisions hereof and the transactions contemplated hereby.
As to any agreements between the parties or their affiliates in effect as
of the Effective Time that may by their terms require consent to any of the
transactions contemplated in this Agreement, such consent shall be given,
or the parties shall cause such consent to be given, prior to the Effective
Time.
4.7 STI Stockholder Action. STI shall, in accordance with
----------------------
applicable law and its certificate of incorporation and by-laws, use
reasonable efforts to promptly obtain the requisite action of its
stockholders adopting this Agreement either at a meeting (which may be the
annual meeting) or by written consent and if by written consent, give
notice of such adoption to its stockholders in accordance with the
requirements of the DGCL and the Exchange Act. In this connection,
Brunswick shall vote for or consent to adoption of this Agreement.
4.8 STI Proxy Statement. As soon as practicable after the date
-------------------
hereof, the parties shall cooperate in preparing and filing with the SEC a
proxy statement or an information statement (the "STI Proxy Statement") in
accordance with the requirements of the Exchange Act and Regulations 14A or
14C, as the case may be, thereunder. STI shall use reasonable efforts to
(i) respond promptly, after consultation with Brunswick, to any comments
made by the SEC with respect to the STI Proxy Statement and any preliminary
version thereof and (ii) cause the STI Proxy Statement to be mailed to its
stockholders at the earliest practicable date after its clearance with the
SEC.
4.9 Brunswick Proxy Statement/PPM; Questionnaire. As soon as
--------------------------------------------
practicable after the date hereof, the parties shall cooperate in the
preparation of a (i) proxy/information statement of Brunswick and private
placement memorandum of STI (the "Proxy Statement/PPM") for Brunswick's
stockholder action referred to in Section 4.10 and (ii) the Questionnaire.
Prior to the taking of action by Brunswick's stockholders on the Agreement,
STI shall use its reasonable efforts to qualify the shares of STI Common
Stock and the STI Merger Warrants to be issued in connection with the
Merger under applicable state securities or "blue sky" laws; provided,
however, that STI shall not be obligated to qualify as a foreign
corporation or to execute a general consent to service of process in any
state in which it has not previously so qualified or has not previously so
consented.
4.10 Brunswick Stockholder Action. Brunswick shall, in accordance
----------------------------
with applicable law and its articles of organization and by-laws:
(i) duly hold a meeting of its stockholders as soon as
practicable after the availability of the Proxy Statement/PPM for the
purpose of considering and acting on this Agreement or, in lieu thereof,
obtain the unanimous written consent of its stockholders to the approval of
this Agreement;
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<PAGE>
(ii) subject to their fiduciary duties under applicable law as
advised by independent counsel, include in the Proxy Statement/PPM the
recommendation of its Board of Directors that stockholders of Brunswick
vote in favor of approving this Agreement; and
(iii) use reasonable efforts (A) to obtain and furnish the
information required to be included by it in the Proxy Statement/PPM (B) to
cause the Proxy Statement/PPM and the Questionnaire to be mailed to its
stockholders at the earliest practicable time after they become available
and (C) to obtain the necessary approvals by its stockholders of this
Agreement and the transactions contemplated hereby.
4.11 Brunswick's Compliance with Exchange Act. All filings made by
----------------------------------------
Brunswick after the date hereof pursuant to the Exchange Act with respect
to its beneficial ownership of STI Common Stock will be made in a timely
fashion, will comply as to form in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
are made, not misleading.
4.12 STI's Compliance with Exchange Act. All filings made by STI
----------------------------------
after the date hereof pursuant to the Exchange Act will be made in a timely
fashion, will comply as to form in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
are made, not misleading.
4.13 Public Announcements and Confidentiality. Any press release or
----------------------------------------
other information provided to the press or any third party with respect to
this Agreement or the transactions contemplated hereby shall require the
prior approval of STI and Brunswick, which approval shall not be
unreasonably withheld, provided that a party shall not be prevented from
making such disclosure as it shall be advised by counsel is required by
law. Each party shall keep confidential and shall not use in any manner
any information or documents obtained from the other concerning its assets,
properties, business and operations, unless readily ascertainable from
public information, already known or subsequently developed by such party
independently, received from a third party not under an obligation to keep
such information confidential or otherwise required by law.
4.14 Indemnification by STI. After the Effective Time, the Surviving
----------------------
Corporation shall indemnify and hold harmless each former officer and
director of Brunswick with respect to actions taken or omitted to be taken
prior to the Effective Time, to the extent such person is entitled to
indemnification under the articles of organization and by-laws of Brunswick
as in effect on the date hereof.
4.15 Registration Statement. As soon as practicable consistent with
----------------------
maintenance of an exemption under Section 4(2) of the Securities Act for
the offer and sale of STI Common Stock pursuant to the Merger, STI shall
prepare and file with the SEC a registration statement on Form S-3 or other
appropriate form under the Securities Act (the "Registration
- 25 -
<PAGE>
Statement") on behalf of Brunswick's stockholders who have returned an
appropriately completed Questionnaire for the purpose of registering the
resale of the shares of STI Common Stock to be received in connection with
the Merger or upon exercise of the STI Merger Warrants (the "Selling
Stockholders"). STI shall perform its obligations with respect to such
Registration Statement as set forth in the Questionnaire.
SECTION 5 - CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF EACH PARTY TO CONSUMMATE THE MERGER
The respective obligations of each party to consummate the Merger
shall be subject to the satisfaction or waiver, at or before the Effective
Time, of each of the following conditions:
5.1 Consents and Approvals. All required approvals of the
----------------------
stockholders of Brunswick and of STI and all consents and waivers referred
to in Sections 2.10 and 3.9 of this Agreement or in the corresponding
sections of each party's Disclosure Schedule shall have been obtained.
5.2 Absence of Order. No restraining order or injunction of any
----------------
court which prevents consummation of the Merger shall be in effect.
5.3 Nasdaq Listing. The shares of STI Common Stock to be issued in
--------------
the Merger or upon exercise of the STI Merger Warrants shall have been
qualified on the Nasdaq National Market.
5.4 Tax Opinions. STI and Brunswick shall have received opinions
------------
from Arnold & Porter, counsel to STI, and Palmer & Dodge LLP, counsel to
Brunswick, dated the Closing Date and addressed to STI and Brunswick,
substantially to the effect that, on the basis of the facts,
representations and assumptions set forth in such opinions, or set forth in
writing elsewhere and referred to therein, for federal income tax purposes:
(a) the Merger, when consummated in accordance with the terms hereof,
will constitute a reorganization within the meaning of Section 368(a) of
the Code;
(b) gain, if any, realized by a holder of Brunswick Preferred Stock
upon the exchange of his Brunswick Preferred Stock for STI Common Stock and
STI Merger Warrants will be recognized, but in an amount not in excess of
the fair market value of the STI Merger Warrants received;
(c) no gain or loss will be recognized by a holder of Brunswick Common
Stock upon the exchange of his Brunswick Common Stock solely for STI Common
Stock; and
(d) cash received in lieu of a fractional share of STI Common Stock by
a holder of Brunswick Capital Stock will be treated as a payment in
redemption of the STI fractional share, and the holder of such stock will
recognize gain or loss in an amount equal to the difference between the
cash payment received less the stockholder's adjusted basis allocable
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<PAGE>
to the fractional share. Such gain or loss generally will be treated as
capital gain or loss assuming such STI fractional share would have been a
capital asset in the hands of the stockholder.
5.5 Employment Agreement. The Surviving Corporation shall have
--------------------
entered into an employment agreement with James H. Miller (the "Executive")
in form and substance satisfactory to the Surviving Corporation and the
Executive superseding the Executive's current employment agreements with
STI and Brunswick.
SECTION 6 - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
STI TO CONSUMMATE THE MERGER
The obligation of STI to consummate the Merger is subject to the
satisfaction or waiver, at or before the Effective Time, of each of the
following conditions:
6.1 Representations, Warranties and Covenants. The representations
-----------------------------------------
and warranties of Brunswick contained in this Agreement shall be true and
correct in all material respects on and as of the Effective Time with the
same force and effect as though made on and as of the Effective Time (with
such exceptions as may be permitted under or contemplated by this
Agreement) and there shall not have been any material adverse change in the
Business of Brunswick. Brunswick shall have performed and complied in all
material respects with all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the
Effective Time. Brunswick shall have delivered to STI a certificate, dated
the Closing Date, to the foregoing effect.
6.2 Questionnaires. STI shall have received a Questionnaire in
--------------
proper form from each securityholder of Brunswick.
6.3 Opinion of Counsel to Brunswick. STI shall have received the
-------------------------------
opinion of Palmer & Dodge LLP, counsel to Brunswick, dated the Closing Date
and in form and substance reasonably acceptable to STI.
6.4 Merger Documents. Brunswick shall have executed and delivered
----------------
the Articles of Merger and the Certificate of Merger referred to in Section
1.2.
6.5 Dissenting Shares. The Dissenting Shares shall not exceed three
-----------------
percent (3%) of Brunswick's capital stock issued and outstanding on the
Closing Date.
6.6 Certificates. Brunswick shall have furnished STI with such
------------
certificates of public officials and of Brunswick officers as may be
reasonably requested by STI.
6.7 Comfort Letter. STI shall have received from Arthur Andersen
--------------
LLP a letter, dated not more than five days prior to the Closing Date, with
respect to certain financial information regarding Brunswick in form and
substance which is customary in transactions of the nature contemplated by
this Agreement.
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<PAGE>
SECTION 7 - CONDITIONS PRECEDENT TO THE OBLIGATION OF
BRUNSWICK TO CONSUMMATE THE MERGER
The obligation of Brunswick to consummate the Merger is subject to the
satisfaction or waiver, at or before the Effective Time, of each of the
following conditions:
7.1 Representations, Warranties and Covenants. The representations
-----------------------------------------
and warranties of STI contained in this Agreement shall be true and correct
in all material respects on and as of the Effective Time with the same
force and effect as though made on and as of the Effective Time (with such
exceptions as may be permitted under or contemplated by this Agreement).
STI shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or
complied with by it on or prior to the Effective Time. STI shall have
delivered to Brunswick a certificate, dated the Closing Date, to the
foregoing effect.
7.2 Registration Rights Agreement. STI shall have executed and
-----------------------------
delivered the Questionnaire and shall have assumed in form and substance
reasonably satisfactory to Brunswick the registration rights agreements of
Brunswick identified in the Brunswick Disclosure Schedule.
7.3 Opinion of Counsel to STI. Brunswick shall have received the
-------------------------
opinion of Arnold & Porter, counsel to STI, dated the Closing Date and in
form and substance reasonably satisfactory to Brunswick.
7.4 Merger Documents. STI have executed and delivered the Articles
----------------
of Merger and the Certificate of Merger referred to in Section 1.2.
7.5 Certificates. STI shall have furnished Brunswick with such
------------
certificates of public officials and of STI officers as may be reasonably
requested by Brunswick.
SECTION 8 - TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior
-----------
to the Effective Time, whether prior to or after approval by Brunswick's
stockholders and STI's stockholders, as follows:
(a) by STI (acting through the Special Committee) or by
Brunswick upon written notice to the other party, if, without fault of the
terminating party, the Effective Time shall not have occurred on or before
November 30, 1996, which date may be extended by mutual consent of the
Brunswick and the Special Committee on behalf of STI;
(b) by the Special Committee upon written notice to Brunswick if
Brunswick has materially breached any representation, warranty, covenant or
agreement contained herein and has not cured such breach within ten (10)
business days of receipt of written notice from the Special Committee;
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<PAGE>
(c) by the Board of Directors of Brunswick upon written notice
to STI if STI has materially breached any representation, warranty,
covenant or agreement contained herein and has not cured such breach within
ten (10) business days of receipt of written notice from Brunswick;
(d) by either party if any court of competent jurisdiction or
United States governmental body shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or otherwise
prohibiting the Merger and such order, decree or ruling shall have become
final and nonappealable;
(e) by either party if the requisite stockholder action of
either party is not obtained; or
(f) at any time with the written consent of the Special
Committee and the Brunswick Board of Directors.
8.2 Effect of Termination. If this Agreement is terminated as
---------------------
provided in Section 8.1, this Agreement shall forthwith become void and
have no effect, without liability on the part of any party, its directors,
officers or stockholders, other than the provisions of this Section 8.2,
Section 4.3 relating to expenses, and Section 4.12 relating to publicity
and confidentiality to the extent provided therein. Nothing contained in
this Section 8.2 shall relieve any party from liability for any breach of
this Agreement occurring before such termination.
8.3 Amendment. This Agreement may not be amended except by an
---------
instrument signed by each of the parties hereto; provided, however, that
after approval or adoption of this Agreement by the stockholders of
Brunswick or STI, without the further approval of the stockholders of
Brunswick or STI, no amendment may be made that (a) alters or changes the
amount or kind of Merger consideration as provided in Section 1.7, (b)
alters or changes any term of the certificate of incorporation of the
Surviving Corporation or (c) alters or changes any of the terms and
conditions of this Agreement if such alteration or change would materially
adversely affect the stockholders of Brunswick or STI, as the case may be.
8.4 Waiver. At any time prior to the Effective Time, any party
------
hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto or (b) waive compliance
with any of the agreements of the other party or any conditions to its own
obligations, in each case only to the extent such obligations, agreements
and conditions are intended for its benefit; provided that any such
extension or waiver shall be binding upon a party only if such extension or
waiver is set forth in a writing executed by such party.
SECTION 9 - MISCELLANEOUS
9.1 No Survival. None of the representations, warranties, covenants
-----------
and agreements of any party in this Agreement or in any certificate
delivered by any party
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<PAGE>
pursuant hereto shall survive the Merger, except the covenants of STI
contained in Sections 4.13 and 4.14.
9.2 Notices. Any notice or other communication required or
-------
permitted hereunder shall be in writing and shall be deemed given when so
delivered in person, by overnight courier, by facsimile transmission (with
receipt confirmed by telephone or by automatic transmission report) or two
business days after being sent by registered or certified mail (postage
prepaid, return receipt requested), as follows:
(i) if to STI, to:
Survival Technology, Inc.
2275 Research Blvd.
Rockville, Maryland 20850
Attention: Senior Vice President-Finance
Tel: (301) 216-2907
FAX: (301) 926-6423
with a copy to:
Arnold & Porter
555 12th Street, N.W.
Washington, D.C. 20004
Attention: Steven Kaplan
Tel: (202) 942-5998
FAX: (202) 942-5999
(ii) if to Brunswick, to:
Brunswick Biomedical Corporation
2275 Research Blvd.
Rockville, Maryland 20850
Attention: President
Tel: (301) 216-2950
FAX: (301) 926-6423
with a copy to:
Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Stanley Keller, Esq.
Tel: (617) 573-0217
FAX: (617) 227-4420
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<PAGE>
Any party may by notice given in accordance with this Section 9.2 to the
other party designate another address or person for receipt of notices
hereunder.
9.3 Entire Agreement. This Agreement, including the Disclosure
----------------
Schedules, contains the entire agreement among the parties with respect to
the Merger and related transactions, and supersedes all prior agreements,
written or oral, with respect thereto.
9.4 Governing Law. This Agreement is governed by the laws of the
-------------
State of Delaware without regard to its conflict of law provisions.
9.5 No Third Party Beneficiaries. Nothing in this Agreement shall be
----------------------------
construed to create any rights or obligations except among the parties
hereto, and no person or entity shall be regarded as a third-party
beneficiary of this Agreement, except that STI's covenants in Sections 4.13
and 4.14 shall inure to the benefit of the former officers and directors of
Brunswick and Brunswick stockholders, respectively, as stated therein.
9.6 Binding Effect; No Assignment. This Agreement shall be binding
-----------------------------
upon and inure to the benefit of the parties and their respective
successors and permitted assigns. This Agreement is not assignable without
the prior written consent of the other parties hereto.
9.7 Variations in Pronouns. All pronouns and any variations thereof
----------------------
refer to the masculine, feminine or neuter, singular or plural, as the
context may require.
9.8 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement under
seal as of the date first stated above.
SURVIVAL TECHNOLOGY, INC.
By
-----------------------------------------------
Jeffrey W. Church, Sr. Vice President-Finance
BRUNSWICK BIOMEDICAL CORPORATION
By
-----------------------------------------------
James H. Miller, President and Treasurer
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<PAGE>
Exhibit 6B
FIRST AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SURVIVAL TECHNOLOGY, INC.
Survival Technology, Inc., a corporation organized and existing under and by
virtue of the Delaware General Corporation Law (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is Survival Technology, Inc.; the original
certificate of incorporation was filed on August 18, 1969 with the Secretary of
State of the State of Delaware.
2. This First Amended and Restated Certificate of Incorporation, the entirety
of which is set forth below, has been duly adopted in accordance with Sections
242 and 245 of the Delaware General Corporation Law.
ARTICLE I
NAME
The name of the Corporation is Survival Technology, Inc. (the "Corporation").
ARTICLE II
ADDRESS OF REGISTERED OFFICE;
NAME OF REGISTERED AGENT
The address of the Corporation's registered office in the State of Delaware is
No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The
name of its registered agent at such address is The Corporation Trust Company.
ARTICLE III
PURPOSE
The Corporation may engage in any lawful act or activity for which corporations
may be organized under the Delaware General Corporation Law.
<PAGE>
ARTICLE IV
CAPITAL STOCK
Section 4.1. Total Number of Shares of Capital Stock. The total number of
shares of stock of all classes that the Corporation shall have authority to
issue is 20,000,000 shares. The authorized capital stock is divided into
2,000,000 shares of Preferred Stock, $.01 par value per share (the "Preferred
Stock"), 17,800,000 shares of Common Stock, $.10 par value per share (the
"Voting Common Stock"), and 200,000 shares of Class A Common Stock, $.10 par
value per share (the "Non-Voting Common Stock"). The Voting Common Stock and the
Non-Voting Common Stock shall be identical in all respects except as set forth
in Sections 4.3 and 4.4 below and shall, except as otherwise required by law, be
treated as a single class.
Section 4.2. Preferred Stock.
(a) The shares of Preferred Stock of the Corporation may be issued from time to
time in one or more classes or series thereof, the shares of each class or
series thereof to have such voting powers, full or limited, or no voting powers,
and such designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions thereof,
as are stated and expressed herein or in the resolution or resolutions providing
for the issue of such class or series, adopted by the Board of Directors as
hereinafter provided.
(b) Authority is hereby expressly granted to the Board of Directors of the
Corporation, subject to the provisions of this Article IV and to the limitations
prescribed by the Delaware General Corporation Law, to authorize the issue of
one or more classes, or series thereof, of Preferred Stock and with respect to
each such class or series to fix by resolution or resolutions providing for the
issue of such class or series the voting powers, full or limited, if any, of the
shares of such class or series and the designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof. The authority of the Board of Directors with respect
to each class or series thereof shall include, but not be limited to, the
determination or fixing of the following:
(i) the designation of such class or series;
(ii) the number of shares to compose such class, which number the Board of
Directors may thereafter (except where otherwise provided in a resolution
designating a particular class) increase (but not above the total number of
authorized shares of the class) or decrease (but not below the number of shares
thereof then outstanding);
(iii) the dividend rate of such class or series, the conditions and dates upon
which such dividends shall be payable, the relation which such dividends shall
bear to the dividends payable on any other class or classes of stock or any
other series of any class of stock of the Corporation, and whether such
dividends shall be cumulative or noncumulative;
(iv) whether the shares of such class or series shall be subject to redemption
by the Corporation and, if made subject to such redemption, the times, prices
and other terms and conditions of such redemption;
- 2 -
<PAGE>
(v) the terms and amount of any sinking fund provided for the purchase or
redemption of the shares of such class or series;
(vi) whether or not the shares of such class or series shall be convertible
into or exchangeable for shares of any other class or classes of any stock or
any other series of any class of stock of the Corporation, and, if provision is
made for conversion or exchange, the times, prices, rates, adjustments, and
other terms and conditions of such conversion or exchange;
(vii) the extent, if any, to which the holders of shares of such class or
series shall be entitled to vote with respect to the election of Directors or
otherwise;
(viii) the restrictions, if any, on the issue or reissue of any additional
Preferred Stock;
(ix) the rights of the holders of the shares of such class or series upon the
dissolution of, or upon the distribution of assets of, the Corporation;
and
(x) the manner in which any facts ascertainable outside the resolution or
resolutions providing for the issue of such class or series shall operate upon
the voting powers, designations, preferences, rights and qualifications,
limitations or restrictions of such class or series.
Section 4.3. Voting Common Stock.
(a) Subject to all of the powers, rights and preferences of the holders of
Preferred Stock provided by resolution or resolutions of the Board of Directors
pursuant to this Article IV or by the Delaware General Corporation Law, the
holders of the shares of the Voting Common Stock shall be entitled to one vote
for each share so held with respect to all matters voted on by the Stockholders
of the Corporation.
(b) Subject to the powers, rights and preferences of any other class of stock,
the holders of the Common Stock, consisting of the Voting Common Stock and the
Non-Voting Common Stock, shall have the right (i) to receive dividends when, as
and if properly declared by the Board of Directors in its sole discretion and
(ii) to receive ratably all the assets of the Corporation remaining after
providing for the payment of the creditors of the Corporation upon the
liquidation, dissolution or winding up of the Corporation.
Section 4.4. Non-Voting Common Stock.
(a) Voting Rights. Except as specifically required by law, the holders of the
shares of Non-Voting Common Stock shall not be entitled to any vote whatsoever,
but shall be entitled to notice of, and participation in, the meetings of the
Stockholders of the Corporation. To the extent that the Non-Voting Common Stock
is entitled to vote on the increase in the number of authorized shares of Non-
Voting Common Stock, it shall vote together with the Voting Common Stock as a
single class.
(b) Conversion of Non-Voting Common Stock.
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<PAGE>
(i) At any time and from time to time, each record holder of Non-Voting Common
Stock will be entitled to convert any and all of the shares of such holder's
Non-Voting Common Stock into the same number of shares of Voting Common Stock at
such holder's election; provided, however, that shares of Non-Voting Common
Stock may be converted into shares of Voting Common Stock only after the record
holder of such shares of Non-Voting Common Stock shall have certified to the
Corporation that it is not a "bank holding company" or a "subsidiary" of a "bank
holding company" within the meaning of Section 4 of the Bank Holding Company Act
of 1956, as amended, and Regulation Y promulgated thereunder, or one of the
following shall have occurred: (1) the bonafide sale to any purchaser
(including, without limitation, an underwriter) of such shares of Non-Voting
Common Stock (x) pursuant to a registration statement declared effective by the
United States Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Act"), covering the offer and sale of the Corporation's
Common Stock in a bona fide public offering, or (y) pursuant to Rules 144 and
144A promulgated under the Act, or in a public distribution pursuant to
Regulation A of the General Rules and Regulations under the Act; (2) the bona
fide sale to any purchaser of such shares of Non-Voting Common Stock in a
transaction not involving a sale of the Corporation's Common Stock to the
public, provided that such purchaser does not immediately after such transaction
hold shares of Voting Common Stock (including any shares converting to Voting
Common Stock in accordance herewith) equaling two percent (2%) or more of the
then outstanding shares of Voting Common Stock; or (3) the receipt by the
Corporation of (x) a staff opinion, ruling or other written advice from the
Board of Governors of the Federal Reserve System, or from the appropriate
Federal Reserve Bank, or (y) an opinion of counsel experienced in bank
regulatory matters, in each case to the effect that such shares of Non-Voting
Common Stock may be converted into shares of Voting Common Stock without
violation of Section 4 of the Bank Holding Company Act of 1954, as amended, and
Regulation Y promulgated thereunder.
(ii) Each conversion of shares of Non-Voting Common Stock into shares of Voting
Common Stock shall be effected by the surrender of the certificate or
certificates representing the shares to be converted at the principal office of
the Corporation (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holder or holders of the
Non-Voting Common Stock) at any time during normal business hours, together with
a written notice by the holder of such Non-Voting Common Stock stating that such
holder desires to convert the shares, or a stated number of the shares, of Non-
Voting Common Stock represented by such certificate or certificates into Voting
Common Stock and that such conversion is permitted in accordance herewith. Upon
receipt of such statement, the Corporation shall be obligated to issue such
Voting Common Stock without further inquiry. Such conversion shall be deemed to
have been effected as of the close of business on the date on which such
certificate or certificates have been surrendered and such notice has been
received, and at such time the rights of the holder of the converted Non-Voting
Common Stock shall cease and the person or persons in whose name or names the
certificate or certificates for shares of Voting Common Stock are to be issued
upon such conversion shall be deemed to have become the holder or holders of
record of the shares of Voting Common Stock represented thereby.
(iii) Promptly after such surrender and the receipt of such written notice, the
Corporation shall issue and deliver in accordance with the surrendering holder's
instructions (1) the certificate or certificates for the Voting Common Stock
issuable upon such conversion and (2) a certificate
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representing any Non-Voting Common Stock which was represented by the
certificate or certificates delivered to the Corporation in connection with such
conversion but which was not converted.
(iv) The issuance of certificates for Voting Common Stock upon conversion of
Non-Voting Common Stock shall be made without charge to the holders of such
shares for any stamp, transfer or issuance tax in respect thereof or other cost
incurred by the Corporation in connection with such conversion and the related
issuance of Voting Common Stock. The Corporation shall not close its books
against the transfer of Non-Voting Common Stock or of Voting Common Stock issued
or issuable upon conversion of Non-Voting Common Stock in any manner which would
interfere with the timely conversion of Non-Voting Common Stock.
ARTICLE V
STOCKHOLDER ACTIONS
Section 5.1. Written Consent. Except as may be provided in a resolution or
resolutions providing for any class or series of Preferred Stock pursuant to
Article IV hereof, any action required or permitted to be taken by the
Stockholders of the Corporation at any annual or special meeting may be taken
without a meeting, without prior notice and without a vote, but only if consents
in writing, setting forth the action so taken, have been signed by the holders
of all of the outstanding stock entitled to vote thereon at a meeting at which
all shares entitled to vote thereon were present and voted.
Section 5.2. Stockholder Meetings. Meetings of Stockholders may be held within
or without the State of Delaware, as the By-Laws may provide.
Section 5.3. Special Stockholder Meetings. Special Meetings of Stockholders of
the Corporation may be called only by the Board of Directors pursuant to a
resolution adopted by a majority of the members of the Board of Directors then
in office.
Section 5.4. Form of Ballot. Elections of Directors need not be by written
ballot unless the By-Laws of the Corporation so provide.
ARTICLE VI
BOARD OF DIRECTORS
Section 6.1. Management of the Corporation. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors.
Section 6.2. Meetings of the Board. Meetings of the Board of Directors may be
held within or without the State of Delaware, as the By-Laws may provide.
Section 6.3. Number of Directors. The number of Directors constituting the
Board of Directors shall be as specified in or determined pursuant to the By-
Laws of the Corporation.
Section 6.4. Classes, Election and Term. The Board of Directors shall be
divided into three classes, with each class to be as nearly equal in number as
reasonably possible, and with the
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initial term of office of the first class of Directors to expire at the Annual
Meeting of Stockholders to be held after the end of the Corporation's 1997
fiscal year, the initial term of office of the second class of Directors to
expire at the Annual Meeting of Stockholders to be held after the end of the
Corporation's 1998 fiscal year and the initial term of office of the third class
of Directors to expire at the Annual Meeting of Stockholders to be held after
the end of the Corporation's 1999 fiscal year. Commencing with the Annual
Meeting of Stockholders to be held after the end of the Corporation's 1997
fiscal year, Directors elected to succeed those Directors whose terms have
thereupon expired shall be elected for a term of office to expire at the third
succeeding Annual Meeting of Stockholders after their election, and upon the
election and qualification of their successors. If the number of Directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain or attain, if possible, the number of Directors in each class as
nearly equal as reasonably possible, but in no case will a decrease in the
number of Directors shorten the term of any incumbent Director.
Section 6.5. Vacancies. Any vacancies in the Board of Directors for any reason
and any newly created directorships resulting by reason of any increase in the
number of Directors may be filled only by the Board of Directors, acting by a
majority of the remaining Directors then in office, although less than a quorum,
or by a sole remaining Director, and any Directors so appointed shall hold
office until the next election of the class for which such Directors have been
chosen and until their successors are elected and qualified.
Section 6.6. Removal. Except as may be provided in a resolution or resolutions
providing for any class or series of Preferred Stock pursuant to Article IV
hereof with respect to any Directors elected by the holders of such class or
series, any Director, or the entire Board of Directors, may be removed from
office at any time, but only for cause by the affirmative vote of the holders of
at least 75% of the voting power of all of the shares of capital stock of the
Corporation then entitled to vote generally in the election of Directors, voting
together as a single class.
Section 6.7. Constituencies. In connection with the exercise of its or their
judgment in determining what is in the best interests of the Corporation and its
Stockholders, the Board of Directors of the Corporation, any committee of the
Board of Directors or any individual Director may, but shall not be required to,
in addition to considering the long-term and short-term interests of the
Stockholders, consider all of the following factors and any other factors which
it or they deem relevant: (i) the social and economic effects of the matter to
be considered on the Corporation and its subsidiaries, its and their employees,
customers, and creditors and the communities in which the Corporation and its
subsidiaries operate or are located; and (ii) when evaluating a business
combination or a proposal by another Person or Persons to make abusiness
combination or a tender or exchange offer or any other proposal relating to a
potential change of control of the Corporation, (x) the business and financial
condition and earnings prospects of the acquiring Person or Persons, including,
but not limited to, debt service and other existing financial obligations,
financial obligations to be incurred in connection with the acquisition, and
other likely financial obligations of the acquiring Person or Persons, and the
possible effect of such conditions upon the Corporation and its subsidiaries and
the communities in which the Corporation and its subsidiaries operate or are
located, (y) the competence, experience, and integrity of the acquiring Person
or Persons and its or their management, and (z) the prospects for successful
conclusion of the business combination, offer or proposal. The provisions of
this
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Section 6.7 shall be deemed solely to grant discretionary authority to the
Directors and shall not be deemed to provide to any constituency the right to be
considered. The term "Person" means any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other entity;
when two or more Persons act as a partnership, limited partnership, syndicate,
or other group acting in concert for the purpose of acquiring, holding, voting
or disposing of securities of the Corporation, such partnership, limited
partnership, syndicate or group shall also be deemed a "Person."
ARTICLE VII
INDEMNIFICATION
Section 7.1. Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact:
(a) that he or she is or was a director or officer of the Corporation, or
(b) that he or she, being at the time a director or officer of the Corporation,
is or was serving at the request of the Corporation as a director, trustee,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to an
employee benefit plan (collectively, "another enterprise" or "other
enterprise"), whether either in case (a) or in case (b) the basis of such
proceeding is alleged action or inaction (x) in an official capacity as a
director or officer of the Corporation, or as a director, trustee, officer,
employee or agent of such other enterprise, or (y) in any other capacity related
to the Corporation or such other enterprise while so serving as a director,
trustee, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent not prohibited by Section 145 of the
Delaware General Corporation Law (or any successor provision or provisions) as
the same exists or may hereafter be amended (but, in the case of any such
amendment, with respect to actions taken prior to such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than permitted prior thereto), against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such person in connection therewith if such
person satisfied the applicable level of care to permit such indemnification
under the Delaware General Corporation Law. The persons indemnified by this
Article VII are hereinafter referred to as "indemnitees." Such indemnification
as to such alleged action or inaction shall continue as to an indemnitee who has
after such alleged action or inaction ceased to be a director or officer of the
Corporation, or director, officer, employee or agent of another enterprise; and
shall inure to the benefit of the indemnitee's heirs, executors and
administrators. The right to indemnification conferred in this Article VII:
(i) shall be a contract right; (ii) shall not be affected adversely as to any
indemnitee by any amendment of this Certificate with respect to any action or
inaction occurring prior to such amendment; and (iii) shall, subject to any
requirements imposed by law, this Article VII, and the By-laws, include the
right to have paid by the Corporation the expenses incurred in defending any
such proceeding in advance of its final disposition.
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Section 7.2. Agents and Employees. The Corporation may, to the extent
authorized from time to time by the Board of Directors, grant rights to
indemnification, and to the advancement of expenses, to any employee or agent of
the Corporation (or any person serving at the Corporation's request as a
director, trustee, officer, employee or agent of another enterprise) or to
persons who are or were a director, officer, employee or agent of any of the
Corporation's affiliates, predecessor or subsidiary corporations or of a
constituent corporation absorbed by the Corporation in a consolidation or merger
or who is or was serving at the request of such affiliate, predecessor or
subsidiary corporation or of such constituent corporation as a director,
officer, employee or agent of another enterprise, in each case as determined by
the Board of Directors to the fullest extent of the provisions of this Article
VII in cases of the indemnification and advancement of expenses of directors and
officers of the Corporation, or to any lesser extent (or greater extent, if
permitted by law) determined by the Board of Directors.
Section 7.3. Undertakings for Advances of Expenses. An advancement by the
Corporation of expenses incurred by an indemnitee pursuant to clause (iii) of
the last sentence of Section 7.1 (hereinafter an "advancement of expenses")
shall be made only upon delivery to the Corporation of an undertaking
(hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (hereinafter a "final
adjudication") that such indemnitee is not entitled to be indemnified for such
expenses under this Article VII or otherwise; provided, however, that no such
advance need be made in any particular case in which the Board of Directors
determines, at any time, that based on the information then known, the Director
or officer is not entitled to indemnification.
Section 7.4. Partial Indemnification. If the indemnitee is entitled under any
provision of this Article VII to indemnification by the Corporation for some or
a portion of the expenses, liabilities, losses, judgments, fines, penalties or
ERISA excise taxes actually and reasonably incurred by him or her in the
investigation, defense, appeal or settlement of any proceeding but not, however,
for the total amount thereof, the Corporation shall nevertheless indemnify the
indemnitee for the portion of such expenses, liabilities, losses, judgments,
fines, penalties or ERISA excise taxes to which the indemnitee is entitled.
Section 7.5. Indemnification Procedure; Determination of Right to
Indemnification.
(a) Promptly after receipt by the indemnitee of written notice of the
commencement of any proceeding, the indemnitee will, if a claim in respect
thereof is to be made against the Corporation in accordance herewith, notify the
Corporation of the commencement thereof. The omission so to notify the
Corporation (i) will relieve it from any liability which it may have to the
indemnitee hereunder only to the extent that the Corporation is able to
establish that its ability to avoid such liability was materially prejudiced by
such omission and (ii) will not relieve it from any liability which it may
otherwise have to the indemnitee.
(b) If a claim for indemnification under this Article VII is not paid in full
by the Corporation within sixty days after it has been received in writing by
the Corporation, except in the case of a claim for an advancement of expenses,
in which case the applicable period shall be twenty
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days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in whole
or inpart in any such suit, or in a suit brought by the Corporation to recover
an advancement of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expense of prosecuting or
defending such suit. In any suit brought by the indemnitee to enforce a right
to indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses), it shall be a defense that, and
in any suit by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the Corporation shall be entitled to recover such
expenses only upon a final adjudication that the indemnitee has not met the
applicable standard of conduct set forth in Section 145 of the Delaware General
Corporation Law (or any successor provision or provisions). Neither the failure
of the Corporation (including the Board of Directors, independent legal counsel
or its stockholders) to have made a determination prior to the commencement of
such suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
Section 145 of the Delaware General Corporation Law (or any successor provision
or provisions), nor an actual determination by the Corporation (including the
Board of Directors, independent legal counsel, or its stockholders) that the
indemnitee has not met such applicable standard of conduct, shall create a
presumption that the indemnitee has not met the applicable standard of conduct
or, in the case of such a suit brought by the indemnitee, be a defense to such
suit. In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to be
indemnified, or to have or retain such advancement of expenses, under this
Article VII or otherwise, shall be on the Corporation.
(c) The Corporation shall not be obligated to indemnify or advance expenses to
the indemnitee under this Article VII in connection with a proceeding (or part
thereof) initiated or brought voluntarily by the indemnitee (other than to
enforce the rights to indemnification hereunder) unless the initiation thereof
was approved by the Board of Directors of the Corporation.
(d) In the case of a settlement of a proceeding by an indemnitee, the payment
of amounts and indemnification thereof shall be approved, in advance, by the
Corporation, which approval shall not be unreasonably withheld, or by a court of
competent jurisdiction.
Section 7.6. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, trustee, officer, employee or agent
of the Corporation or another enterprise against any expense, liability or loss,
whether or not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General Corporation
Law.
Section 7.7. Binding Effect; Successors and Assigns. The indemnification and
advance of expenses provided by or granted pursuant to this Article VII shall
continue as to a person who has ceased to be a Director or officer, and shall
inure to the benefit of the heirs, executors and administrators of such Director
or officer.
Section 7.8. Severability. In the event that any of the provisions of this
Article VII (including any provision within a single section, paragraph or
sentence) is held by a court of competent
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jurisdiction to be invalid, void or otherwise unenforceable, the remaining
provisions are severable and shall remain enforceable to the full extent
permitted by law.
Section 7.9. Relationship to Other Rights and Provisions Concerning
Indemnification. The rights to indemnification and to the advancement of
expenses conferred in this Article VII shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, this
Certificate, By-laws, agreement, vote of stockholders or disinterested directors
or otherwise. The By-laws may contain such other provisions concerning
indemnification, including provisions specifying reasonable procedures relating
to and conditions to the receipt by indemnitees of indemnification, provided
that such provisions are not inconsistent with the provisions of this Article
VII.
ARTICLE VIII
LIMITATION ON LIABILITY OF DIRECTORS
As to any act or omission occurring after this provision becomes effective, a
Director of the Corporation shall, to the maximum extent permitted by the laws
of Delaware, have no personal liability to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, provided that
this Article VIII shall not eliminate or reduce the liability of a director in
any case where such elimination or reduction is not permitted by law.
ARTICLE IX
BOOKS OF THE CORPORATION
The books of the Corporation may be kept (subject to any provision contained in
the statutes) outside the State of Delaware at such place or places as may be
designated from time to time by the Board of Directors or in the By-Laws of the
Corporation.
ARTICLE X
COMPROMISE
Whenever a compromise or arrangement is proposed between this Corporation and
its creditors or any class of them and/or between this Corporation and its
Stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or Stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions
of section 291 of Title 8 of the Delaware Code, as that section may read from
time to time, or any successor provision, or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of section 279 of Title 8 of the Delaware Code, as that section
may read from time to time, or any successor provision, order a meeting of the
creditors or class of creditors, and/or of the Stockholders or class of
Stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing three-
fourths in value of the creditors or class of creditors, and/or of the
Stockholders or class of Stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made,
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be binding on all the creditors or class of creditors, and/or on all the
Stockholders or class of Stockholders, of this Corporation, as the case may be,
and also on this Corporation.
ARTICLE XI
AMENDMENT OF BY-LAWS
The Board of Directors shall have power to adopt, amend, alter, change and
repeal any By-Laws of the Corporation by vote of the majority of the Board of
Directors then in office. In addition to any requirements of the Delaware
General Corporation Law (and notwithstanding the fact that a lesser percentage
may be specified by the Delaware General Corporation Law), any adoption,
amendment, alteration, change or repeal of any By-Laws by the holders of capital
stock of the Corporation shall require the affirmative vote of either: (a) the
holders of at least 75% of the voting power of all of the shares of capital
stock of the Corporation then entitled to vote generally in the election of
Directors, voting together as a single class, or (b) the holders of a majority
of the voting power of all of the shares of capital stock of the Corporation
then entitled to vote generally in the election of Directors, voting as a single
class, if such adoption, amendment, alteration, change or repeal has been
previously recommended by a vote of the Continuing Directors. For the purposes
of this Certificate of Incorporation, Continuing Director shall mean either (x)
an individual who was a member of the Board of Directors prior to the time any
Person after [_____ ___,] 1996 acquired 25% or more of the voting power of any
voting securities of the Corporation or (y) an individual designated (before his
or her initial election as a Director) as a Continuing Director by a majority of
the then Continuing Directors.
ARTICLE XII
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation hereby reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon Stockholders are
granted subject to this reservation. Except as may be provided in a resolution
or resolutions providing for any class or series of Preferred Stock pursuant to
Article IV hereof and which relate to such class or series of Preferred Stock,
any amendment, alteration, change or repeal of Articles IV, V, VI, XI and XII
hereof shall require the affirmative vote of either: (a) the holders of at least
75% of the voting power of all of the shares of capital stock of the Corporation
then entitled to vote generally in the election of Directors, voting together
as a single class, or (b) the holders of a majority of the voting power of all
of the shares of capital stock of the Corporation then entitled to vote
generally in the election of Directors, voting as a single class, if such
amendment, alteration, change or repeal has been previously recommended by a
vote of the Continuing Directors. Except as may be provided in a resolution or
resolutions providing for any class or series of Preferred Stock pursuant to
Article IV hereof and which relate to such class or series of Preferred Stock,
any other amendment, alteration, change or repeal of any other provision of this
Certificate of Incorporation shall require the affirmative vote of both (a) a
majority of the members of the Board of Directors then in office and (b) a
majority of the voting power of all of the shares of capital stock of the
Corporation entitled to vote generally in the election of Directors, voting
together as a single class.
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ARTICLE XIII
SEVERABILITY
In the event that any of the provisions of this Certificate of Incorporation
(including any provision within a single section, paragraph or sentence) is
held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable, the remaining provisions are severable and shall remain
enforceable to the full extent permitted by law.
I, THE UNDERSIGNED, being the duly elected Chief Executive Officer of the
Corporation, do on behalf of the Corporation make this First Amended and
Restated Certificate of Incorporation of the Corporation, hereby declaring and
certifying, under penalties of perjury, that this is the act and deed of the
Corporation and that the facts herein stated are true, and accordingly have
hereunto set my hand this ___ day of ___, 1996.
By:
-----------------------------
James H. Miller
Chief Executive Officer
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Exhibit 6C
SURVIVAL TECHNOLOGY, INC.
BY-LAWS
(Restated Through ____ __, 1996)
ARTICLE 1.
OFFICES
1.1. The registered office of the Corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware.
1.2. The Corporation may also have offices at such other places both within and
without the State of Delaware as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE 2.
MEETINGS OF STOCKHOLDERS
2.1. All meetings of the Stockholders shall be held at such place, within or
without the State of Delaware, as shall be fixed from time to time by the Board
of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
2.2. An annual meeting of Stockholders shall be held on the first day of
November, if not a legal holiday, and if a legal holiday then on the next
secular day following, at 10:00 a.m., local time, or at such other date and time
as shall be designated from time to time by the Board of Directors and stated in
the notice of the meeting, at which meeting the Stockholders shall elect a Board
of Directors and transact such other business as may properly be brought before
the meeting.
2.3. Special meetings of the Stockholders for any purpose or purposes may be
called at any time only by the Board of Directors pursuant to a resolution
adopted by a majority of the members of the Board of Directors then in office.
Business transacted at any special meeting of Stockholders, other than
procedural matters and matters relating to the conduct of the meeting, shall be
limited to the purpose or purposes stated in the notice of the meeting pursuant
to Section 2.4 of these By-Laws.
2.4. Written notice of the annual or any special meeting of the Stockholders
shall be given to each Stockholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting (unless a
different time is specified by law). The notice shall state the place, date and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which such meeting has been called. If mailed, notice is given
when deposited in the United States mail, postage prepaid, directed to the
Stockholder at his address as it appears on the records of the Corporation. Any
such notice may be waived and shall be deemed
<PAGE>
waived by any Stockholder who signs a written waiver of such notice before or
after the time stated therein, or by any Stockholder who attends the meeting
unless at the beginning of the meeting or promptly upon arrival, the Stockholder
objects to the holding of the meeting or the transacting of specified business
at the meeting.
2.5. At all meetings of the Stockholders, the holders of stock having a
majority in voting power of the stock issued and outstanding and entitled to
vote thereat, present in person or represented by proxy, shall constitute a
quorum for the transaction of business. If, however, such quorum shall not be
present or represented at any meeting of the Stockholders, the chairman of the
meeting or the holders of stock having a majority of the voting power of the
stock entitled to vote thereat who are present in person or represented by proxy
shall have the power to adjourn the meeting from time to time, without notice
other than announcement at the meeting or as may be required under the Delaware
General Corporation Law, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. If after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be given to each
Stockholder of record entitled to vote at the meeting.
2.6. When a quorum is present at any meeting, all elections for the Board of
Directors shall be decided by a plurality of the votes cast and all other
questions shall be decided by a majority of the votes cast, except as otherwise
required by statute or as provided for in the Certificate of Incorporation or
these By-Laws. Abstentions shall not be considered to be votes cast.
2.7. The officer who has charge of the stock ledger of the Corporation shall
prepare and make, at least ten days before every meeting of Stockholders, a
complete list of the Stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each such Stockholder and the
number of shares registered in the name of each such Stockholder. Such list
shall be open to the examination of any Stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least ten days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any Stockholder who is present.
2.8. Except as provided in the Certificate of Incorporation, any action
required by statute to be taken at any annual or special meeting of Stockholders
of the Corporation, or any action which may be taken at any annual or special
meeting of such Stockholders, may be taken without a meeting, without prior
notice and without a vote, if consents in writing have been signed by the
holders of all of the outstanding stock entitled to vote thereon at a meeting at
which all shares entitled to vote thereon were present and voted.
2.9. Votes by written ballot at any meeting of Stockholders may be conducted by
one or more inspectors, appointed for that purpose, either by the Board of
Directors or by the chairman of the meeting. The inspector or inspectors may
decide upon the qualifications of voters and the validity of proxies, and may
count the votes and declare the result.
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STOCKHOLDER PROPOSALS AND NOMINATIONS
2.10. (a) No proposal for a Stockholder vote shall be submitted by a
Stockholder (a "Stockholder Proposal") to the Corporation's Stockholders unless
the Stockholder submitting such proposal (the "Proponent") shall have filed a
written notice setting forth with particularity (i) the names and business
addresses of the Proponent and all Persons (as such term is defined in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended through the date of
adoption of these By-Laws) acting in concert with the Proponent; (ii) the names
and addresses of the Proponent and the Persons identified in clause (i), as they
appear on the Corporation's books (if they so appear); (iii) the class and
number of shares of the Corporation beneficially owned by the Proponent and the
Persons identified in clause (i); (iv) a description of the Stockholder Proposal
containing all material information relating thereto; and (v) such other
information as the Board of Directors reasonably determines is necessary or
appropriate to enable the Board of Directors and Stockholders of the Corporation
to consider the Stockholder Proposal. Upon receipt of the Stockholder Proposal
and prior to the Stockholder meeting at which such Stockholder Proposal will be
considered, if the Board of Directors or a designated committee or the officer
who will preside at the Stockholders meeting determines that the information
provided in a Stockholder Proposal does not satisfy the informational
requirements of these By-Laws or is otherwise not in accordance with law, the
Secretary of the Corporation shall promptly notify such Proponent of the
deficiency in the notice. Such Proponent shall have an opportunity to cure the
deficiency by providing additional information to the Secretary within the
period of time, not to exceed five days from the date such deficiency notice is
given to the Proponent, determined by the Board of Directors, such committee or
such officer. If the deficiency is not cured within such period, or if the
Board of Directors, such committee or such officer determines that the
additional information provided by the Proponent, together with the information
previously provided, does not satisfy the requirements of this Section 2.10,
then such proposal shall not be presented for action at the meeting in question.
(b) Only persons who are selected and recommended by the Board of
Directors or a committee thereof, or who are nominated by Stockholders in
accordance with the procedures set forth in this Section 2.10, shall be eligible
for election, or qualified to serve, as Directors. Nominations of individuals
for election to the Board of Directors of the Corporation at any annual meeting
or any special meeting of Stockholders at which Directors are to be elected may
be made by any Stockholder of the Corporation entitled to vote for the election
of Directors at that meeting by compliance with the procedures set forth in this
Section 2.10. Nominations by Stockholders (the "Nominating Stockholders") shall
be made by written notice (a "Nomination Notice"), which shall set forth (i) as
to each individual nominated, (A) the name, date of birth, business address and
residence address of such individual; (B) the business experience during the
past five years of such nominee, including his principal occupations and
employment during such period, the name and principal business of any
corporation or other organization in which such occupations and employment were
carried on and such other information as to the nature of his responsibilities
and level of professional competence as may be sufficient to permit assessment
of his prior business experience; (C) whether the nominee is or has ever been at
any time a Director, officer or owner of five percent (5%) or more of any class
of capital stock, partnership interests or other equity interest of any
corporation, partnership or other entity; (D) any directorships held by such
nominee in any company with a class of securities registered pursuant to Section
12 of the Securities Exchange Act of 1934, as amended, or subject to the
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requirements of Section 15(d) of such Act or any company registered as an
investment company under the Investment Company Act of 1940, as amended; and (E)
whether, in the last five years, such nominee has been convicted in a criminal
proceeding or has been subject to a judgment, order, finding or decree of any
federal, state or other governmental entity, concerning any violation of
federal, state or other law, or any proceeding in bankruptcy, which conviction,
judgment, order, finding, decree or proceeding may be material to an evaluation
of the ability or integrity of the nominee; and (ii) as to the Nominating
Stockholder and any Persons acting in concert with such Nominating Stockholder
(x) the names and business addresses of such Nominating Stockholder and Persons,
(y) the names and addresses of such Nominating Stockholder and Persons as they
appear on the Corporation's books (if they so appear) and (z) the class and
number of shares of the Corporation which are beneficially owned by such
Nominating Stockholder and Persons. A written consent to being named in a proxy
statement as a nominee, and to serve as a Director if elected, signed by the
nominee, shall be filed with any Nomination Notice. If the presiding officer at
any Stockholders meeting determines that a nomination was not made in accordance
with the procedures prescribed by these By-Laws, such officer shall so declare
to the meeting and the defective nomination shall be disregarded.
(c) Nomination Notices and Stockholder Proposals for an annual
Stockholders meeting shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the time permitted for
submission of a stockholder proposal for inclusion in the Corporation's proxy
statement for the corresponding meeting of stockholders pursuant to Rule 14a-
8(a)(3) of the Securities Exchange Act of 1934, as amended or any successor
thereto. Nomination Notices and Stockholder Proposals shall be delivered to the
Secretary at either of the principal executive offices of the Corporation no
later than the close of business on the tenth day following the day on which
notice of the date of a special meeting of Stockholders was given if the
Nomination Notices or Stockholder Proposals are to be submitted at a special
Stockholders meeting.
ARTICLE 3.
BOARD OF DIRECTORS
3.1. The business of the Corporation shall be managed by its Board of
Directors, which may exercise all such powers of the Corporation and all such
lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these By-Laws directed or required to be exercised or done
by the Stockholders.
3.2. The number of Directors that shall constitute the whole Board shall be the
number from time to time fixed exclusively by a vote of a majority of the Board
of Directors then in office, which number shall not be less than one. The Board
by resolution may from time to time increase or decrease the number of Directors
to any number not less than one, provided that any reduction in the number of
Directors shall not have the effect of shortening the term of any Director in
office at the time such resolution becomes effective and provided that the
number of directors shall not be increased by fifty percent (50%) or more in any
twelve-month period without the approval of at least sixty-six and two-thirds
percent (66-2/3%) of the members of the Board of Directors then in office. The
phrase "the whole Board," as used in these By-Laws, shall refer to the total
number of Directors which the Corporation would have if there were no vacancies.
The Directors shall be elected at the Annual Meeting of the Stockholders as
provided
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in Section 6.4 of the Certificate of Incorporation, except as provided in
Section 3.3 of these By-Laws, and each Director elected shall hold office until
removal or resignation or until his successor is elected and qualified. A
director may resign at any time by giving written notice to the Chairman of the
Board, to the Chief Executive Officer or to the Secretary. Unless otherwise
stated in such notice of resignation, the acceptance thereof shall not be
necessary to make it effective; and such resignation shall take effect at the
time specified therein or, in the absence of such specification, it shall take
effect upon the receipt thereof.
3.3. Any or all of the Directors may be removed only for cause by the
Stockholders, as provided for in the Certificate of Incorporation.
3.4. Vacancies and newly created directorships resulting from any increase in
the authorized number of Directors may be filled by a majority of the remaining
Directors then in office, though less than a quorum, or by a sole remaining
Director, and the Directors so chosen shall hold office until the next election
of the class for which such Directors have been chosen and until their
successors are duly elected and qualified. If at any time there are no
Directors in office, by reason of death, resignation or other cause, then any
Stockholders or any executor or administrator or other fiduciary entrusted with
like responsibility for the estate of a Stockholder may call a special meeting
of the Stockholders to elect a Board of Directors. If at the time of filling
any vacancy or any newly created directorship, the Directors then in office
shall constitute less than a majority of the whole Board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any Stockholder or Stockholders holding at least ten percent of
the total number of the shares outstanding at the time and having the right to
vote for such Directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the Directors chosen by
the Directors then in office.
MEETINGS OF THE BOARD OF DIRECTORS
3.5. The Board of Directors of the Corporation may hold meetings, both regular
and special, either within or without the State of Delaware.
3.6. Regular meetings of the Board of Directors may be held without notice at
such time and at such place as shall from time to time be determined by the
Board. A meeting of the Board of Directors for the election of officers and the
transaction of such other business as may come before it may be held without
notice immediately following the annual meeting of Stockholders.
3.7. Special meetings of the Board may be called by the Chairman of the Board,
the Chief Executive Officer or upon the written request of a majority of the
whole Board on two days' notice to each Director, either personally or by
telephone, or on four days' notice by mail (computed from the date of mailing).
Any such notice may be waived and shall be deemed waived by any Director who
signs a written waiver of such notice before or after the time stated therein or
who is present at a meeting of the Board of Directors when a vote on any matter
is taken unless at the beginning of the meeting or promptly upon arrival, the
Director objects to the holding of the meeting or the transacting of specified
business at the meeting.
3.8. At all meetings of the Board, a majority of the Directors constituting the
whole Board shall constitute a quorum for the transaction of business, and the
vote of a majority of the Directors
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present at any meeting at which there is a quorum shall be the act of the Board
of Directors, except as may be otherwise specifically provided by statute, the
Certificate of Incorporation or these By-Laws. If a quorum shall not be present
at any meeting of the Board of Directors, the Directors present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
3.9. Unless otherwise restricted by the Certificate of Incorporation or these
By-Laws, any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting,
if all members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of the
proceedings of the Board or committee.
3.10. A Director of the Corporation who is present at a meeting of the Board of
Directors when a vote on any matter is taken is deemed to have assented to the
action taken unless he votes against or abstains from the action taken, or
unless at the beginning of the meeting or promptly upon arrival, the Director
objects to the holding of the meeting or the transacting of specified business
at the meeting. Any such dissenting votes, abstentions or objections shall be
entered in the minutes of the meeting.
THE CHAIRMAN OF THE BOARD AND THE VICE-CHAIRMAN OF THE BOARD
3.11. The Board of Directors, at its first meeting following the annual meeting
of Stockholders in each year, or at such other time when there shall be a
vacancy, shall elect one of its members as Chairman of the Board, and may elect
one of its members as Vice-Chairman of the Board; each to serve for one year or
until his successor is elected and qualified. The Chairman of the Board shall
preside at all meetings of the Stockholders, except as the Board may otherwise
determine, and of the Board of Directors and shall perform such other duties as
may be required of him by the Board of Directors and by these By-Laws. The
Vice-Chairman of the Board, if one is elected, shall, in the absence of the
Chairman of the Board, preside at the meetings of the Stockholders and of the
Board of Directors and shall perform such other duties as may be required of him
by the Board of Directors. In the absence of the Chairman of the Board and the
Vice-Chairman, if any, those members of the Board who are present shall choose
from among themselves a person to preside at the meeting of the Board.
COMMITTEES OF DIRECTORS
3.12. The Board of Directors may, by resolution passed by a majority of the
whole Board, designate one or more committees, each committee to consist of one
or more of the Directors of the Corporation. The Board may, by resolution
passed by a majority of the whole Board, designate one or more Directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. Any such committee, to the extent
provided in the resolution and as limited by the Delaware General Corporation
Law, shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it. In
the absence or disqualification of any member of such committee or committees,
except as otherwise provided to the extent that there shall have been designated
alternate members who shall be present, the member or members thereof present at
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any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Each committee shall keep regular minutes of its meetings and report the same to
the Board of Directors as requested by the Board of Directors.
COMPENSATION OF DIRECTORS
3.13. The Board of Directors shall have the authority to fix the compensation
to be paid to Directors. The Directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors, or of any committee of the
Board of Directors, in addition to a fixed sum for attendance at each such
meeting and/or a stated salary as Director or committee member. Unless
otherwise provided by the Board of Directors, no such payment shall preclude any
Director from serving the Corporation in any other capacity and receiving
compensation therefor.
ARTICLE 4.
OFFICERS
4.1. The Board of Directors shall elect the officers of the Corporation, which
shall be a Chief Executive Officer, a President, a Secretary and a Treasurer, at
the first meeting of the Board following each annual meeting of the
Stockholders. The Board may from time to time also elect one or more Vice-
Presidents in such gradations as the Board of Directors may determine, Assistant
Vice-Presidents, Assistant Secretaries, Assistant Treasurers and such other
officers and agents as it shall deem necessary, or it may delegate the authority
to appoint such officers and agents to an officer subject to the control of the
Board of Directors. Any number of offices may be held by the same person.
4.2. Unless otherwise provided in the resolution of election or appointment,
the officers of the Corporation shall hold office until their successors are
chosen and qualified or until their earlier resignation or removal. Any officer
may resign at any time by giving written notice to the Chief Executive Officer
or the Secretary. Unless otherwise stated in such notice of resignation, the
acceptance thereof shall not be necessary to make it effective; and such
resignation shall take effect at the time specified therein or, in the absence
of such specification, it shall take effect upon the receipt thereof. Any
officer, servant or agent of the Corporation may be removed at any time with or
without cause by the Board of Directors or by the officer having power to
appoint the successor of the person being removed. Any vacancy occurring in any
office of the Corporation may be filled by the Board of Directors or otherwise
as provided in this Article.
4.3. The officers of the Corporation shall receive such compensation for their
services as the Board of Directors may determine. The Board of Directors may
delegate its authority to determine compensation to a committee or designated
officers of the Corporation.
4.4. The duties and powers of the officers of the Corporation shall be as
provided in these By-Laws or as defined in the resolutions appointing them, or
shall be those duties and powers customarily exercised by corporate officers
holding such offices.
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4.5. The Chief Executive Officer of the Corporation shall have general charge
and supervision of its business. He shall preside at all meetings of the
Stockholders and at meetings of the Board of Directors in the absence of the
Chairman and the Vice-Chairman of the Board, if any, if they were to preside;
shall see that all orders and resolutions of the Board of Directors are carried
into effect; and shall have such other powers and duties as normally pertain to
his office or as shall be prescribed by the Board of Directors.
4.6. Unless otherwise specified by the Board of Directors, the President of the
Corporation shall be the Chief Executive Officer of the Corporation. If a
person other than the Chief Executive Officer, the President shall have such
powers and perform such duties as may be assigned from time-to-time by the Board
of Directors or by the Chief Executive Officer, subject to the powers and
control of the Board of Directors.
4.7. The Vice-Presidents, if any, shall perform such duties and have such
powers as the Board of Directors may from time to time prescribe by standing or
special resolution, or the Chief Executive Officer may from time to time
provide, subject to the powers and the control of the Board of Directors.
4.8. The Secretary of the Corporation or an Assistant Secretary, as designated
by the Chairman of the Board or other presiding officer, or another person so
designated, shall act as secretary and record the minutes of meetings of the
Board of Directors and committees thereof and of the Stockholders. Unless given
by another authorized officer, the Secretary shall give, or cause to be given,
notices of all meetings of Stockholders and Directors and of such committees as
directed by the Board of Directors. The Secretary shall have charge of such
books and papers as the Board of Directors may require. The Secretary or any
Assistant Secretary is authorized to certify copies of extracts from minutes and
of documents in the Secretary's charge and anyone may rely on such certified
copies to the same effect as if such copies were originals and may rely upon any
statement of fact concerning the Corporation certified by the Secretary (or any
Assistant Secretary). The Secretary shall have custody of the corporate seal of
the Corporation and shall have authority to affix the same to any instrument
requiring it and, when so affixed, it may be attested by the Secretary's
signature. The Board of Directors may give general or special authority to any
other officer to affix the seal of the Corporation and to attest the affixing by
his signature. The Secretary shall perform all acts incident to the office of
Secretary, subject to the control of the Board of Directors, the Chairman of the
Board or the Chief Executive Officer, under whose supervision the Secretary
shall be.
4.9. The Assistant Secretary, if there be any, or, if there be more than one,
the Assistant Secretaries in the order determined by the Board of Directors (or
if there be no such determination, then in the order of their election), shall,
in the absence of the Secretary or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board of Directors,
the Chairman of the Board, the Chief Executive Officer or the Secretary may from
time to time prescribe.
4.10. Unless the Board of Directors shall designate another officer, the
Treasurer shall have the custody of the corporate funds and securities and shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the Corporation, and may deposit all moneys
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and other valuable effects in the name and to the credit of the Corporation in
such banks, trust companies or other depositories, as the Board of Directors may
select or as may be selected by an officer, employee or agent of the Corporation
to whom such power may from time to time be delegated by the Board of Directors.
He shall perform such other duties and have such other powers as may be
prescribed by the Board of Directors or the Chief Executive Officer, under whose
supervision he shall be. The Treasurer may act with the assistance of such
Assistant Treasurers, if any, or such other employees of the Company as he may
reasonably designate.
4.11. The Assistant Treasurer, if there be any, or, if there be more than one,
the Assistant Treasurers in the order determined by the Board of Directors (or
if there be no such determination, then in the order of their election), shall,
in the absence of the Treasurer or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the Treasurer, and shall
perform such other duties and have such other powers as the Board of Directors,
the Chief Executive Officer, or the Treasurer may from time to time prescribe.
4.12. Checks, notes, drafts, other commercial instruments, assignments,
guarantees of signatures and contracts (except as otherwise provided herein or
by law) shall be executed by the Chief Executive Officer, the President, any
Vice President or such officers or employees or agents as the Board of Directors
or any of such designated officers may direct.
4.13. The Chief Executive Officer, the President, any Vice President or the
Secretary may authorize any endorsement on behalf of the Corporation to be made
by such mechanical means or stamps as any of such officers may deem appropriate.
ARTICLE 5.
CERTIFICATES OF STOCK
5.1. Every holder of stock in the Corporation shall be entitled to have a
certificate signed by, or in the name of the Corporation by the Chairman or
Vice-Chairman of the Board of Directors, or the President or a Vice-President,
and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the Corporation certifying the number of shares owned by him in the
Corporation. Where a certificate is countersigned (1) by a transfer agent other
than the Corporation or its employee, or (2) by a registrar other than the
Corporation or its employee, any other signature on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he or it
were such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
5.2. The Board of Directors may in its discretion direct, or vest in the
officers of the Corporation the power to direct, that a new certificate or
certificates be issued in place of any certificate or certificates theretofore
issued by the Corporation and alleged to have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition
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precedent to the issuance thereof, require, or vest in the officers of the
Corporation the power to require, that the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost, stolen or destroyed. The Corporation may refuse to issue a
new certificate except as ordered by the Court of Chancery of Delaware.
TRANSFERS OF STOCK
5.3. The Board of Directors may appoint, or authorize any officer or officers
to appoint, one or more transfer agents and one or more registrars. The Board
of Directors may make such further rules and regulations as it may deem
expedient concerning the issue, transfer and registration of stock certificates
of the Corporation.
5.4. Upon surrender to the Corporation or the transfer agent of the Corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
FIXING RECORD DATE
5.5. In order that the Corporation may determine the Stockholders entitled to
notice of or to vote at any meeting of Stockholders or any adjournment thereof,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which date
shall be a permitted record date under the Delaware General Corporation Law with
respect to such meeting or action. A determination of Stockholders of record
entitled to notice of or to vote at a meeting of Stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
REGISTERED STOCKHOLDERS
5.6. The Corporation shall be entitled to recognize a person registered as the
owner of shares on its books as being the owner of such shares for the purpose
of receiving dividends, voting those shares, and being accorded all other rights
and liabilities of an owner of shares, and the Corporation shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of Delaware. Every
Stockholder shall furnish to the Corporation his address, and the Corporation
may rely for all purposes upon the address of such Stockholder so furnished to
it. If any Stockholder shall not furnish the Corporation with his address, his
address shall be presumed to be at the registered office of the Corporation, in
its care.
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ARTICLE 6.
GENERAL PROVISIONS
DIVIDENDS
6.1. Dividends upon the capital stock of the Corporation, subject to the
provisions of the Certificate of Incorporation, may be declared by the Board of
Directors at any regular or special meeting, pursuant to law. Dividends may be
paid in cash, in property, or in shares of the capital stock, subject to the
provisions of the Certificate of Incorporation.
6.2. Before payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Directors from
time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other purpose as the
Directors shall think conducive to the interest of the Corporation, and the
Directors may modify or abolish any such reserve in the manner in which it was
created.
FISCAL YEAR
6.3. The fiscal year of the Corporation shall be fixed by resolution of the
Board of Directors.
CORPORATE SEAL
6.4. The corporate seal shall be in such form as the Board of Directors may
prescribe.
VOTING OF STOCK IN OTHER CORPORATIONS
6.5. Any shares of stock or other securities in any other corporation or
organization, with respect to which the Corporation may from time to time have
the right to vote or to give approvals, ratifications or consents may be
represented and voted at any meeting of security holders of such other
corporation or organization, or approvals, ratifications or consents may be
given with respect thereto, by the Chief Executive Officer of the Corporation or
by the proxy or proxies appointed by the Chief Executive Officer, or by any
other person appointed by resolution of the Board of Directors, of which
resolution a certified copy under the seal of the Corporation shall be
conclusive evidence.
POSITION WITH CORPORATION NOT TO IMPOSE
DUTY TO REFRAIN FROM EXERCISING RIGHTS
6.6. No person who is an officer, Director or controlling Stockholder of the
Corporation shall be deemed to be under any disability, by reason of his status
as such officer, Director or controlling Stockholder, from exercising as against
the Corporation any rights or privileges whatsoever which he may enjoy under the
terms of any provision of any certificate of incorporation, by-law, resolution
or contract, in his personal capacity (including his capacity as a fiduciary for
another person or persons); and any such officer, Director or controlling
Stockholder may exercise any such rights or privileges as fully as if such
person were not such officer, Director or controlling Stockholder.
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ARTICLE 7.
AMENDMENTS
These By-Laws of the Corporation may be amended, altered, changed, adopted and
repealed by a vote of the majority of the Board of Directors then in office at
any regular or special meeting. The Stockholders also shall have the power to
amend, alter, change, adopt and repeal the By-Laws of the Corporation at any
annual or special meeting pursuant to the requirements of the Certificate of
Incorporation.
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