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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 1, 1994
SYNTEX CORPORATION
(Exact Name of Registarnt as specified in the charter)
Republic of Panama
(State or other Jurisdiction of Incorporation)
Commission File No. 1-4269 I.R.S Employer Identification
NO. 94-1566146
3401 Hillview Avenue, Palo Alto, CA 94204
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code:
(415)855-5050
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ITEM 5. Other Events.
(b) On May 2, 1994, Syntex Corporation, a Panama corporation (the
"Registrant"), and Roche Holding Ltd, a Swiss corporation ("Roche"), announced
that Syntex had entered into an Acquisition Agreement and Plan of Merger (the
"Agreement"), dated as of May 1, 1994, with Roche Capital Corporation ("Roche
Capital"), a Panama corporation and an indirect wholly owned subsidiary of
Roche, and Roche (Panama) Corporation ("Roche (Panama)"), a Delaware
corporation and a wholly owned subsidiary of Roche Capital. The Agreement
generally provides for the acquisition of the Registrant by Roche in a
transaction in which Syntex stockholders will receive $24.00 in cash per share
of Syntex common stock, par value $1.00 per share (the "Common Stock"). Roche
has guaranteed the obligations of Roche Capital and Roche (Panama) under the
Agreement.
The transaction will be effected by means of a first-step cash tender
offer for all of the shares of the Registrant's outstanding Common Stock (the
"Tender Offer"). The Tender Offer is expected to commence on or before May 9,
1994, and to remain open for at least 20 business days. The Tender Offer is
subject to certain conditions, including the tender of at least a majority of
the shares of Common Stock and receipt of certain regulatory approvals.
The Tender Offer will be followed by a merger of Roche (Panama) with
and into the Registrant (the "Merger"), in which stockholders of the Registrant
whose shares of Common Stock are not purchased in the Tender Offer will receive
$24.00 per share in cash or, at their election, subject to certain
restrictions, shares of a limited conversion preferred stock (the "Preferred
Stock") of Roche Capital. The Preferred Stock will pay dividends annually at a
rate of 3% of the liquidation value thereof, and will be subject to mandatory
redemption ten years after issuance. The Preferred Stock will be
non-transferable, subject to limited exceptions, and will be exchangeable, on
a limited basis, for non-voting equity securities ("NES") of Roche at a
premium of 50 percent over the NES closing price on Friday, April 29, 1994.
Consummation of the Merger is subject to certain conditions, including
approval of the Merger by the stockholders of the Registrant and receipt of
certain regulatory approvals.
In addition, the Agreement requires the Registrant to pay certain
amounts to Roche Capital under certain conditions such as terminations of the
Agreement under certain circumstances, including upon modification or
withdrawal of the recommendation by the Board of Directors of the Registrant,
and in certain other circumstances.
The foregoing description of the Agreement and the transactions
contemplated thereby does not purport to be complete and is qualified in its
entirety by reference to the Agreement, the Guaranty of Roche dated as of May
1, 1994, and the Certificate of Designation of Limited Conversion Preferred
Stock of Roche Capital, copies of each of which are attached hereto as Exhibits
2.1, 99.1 and 99.2, respectively, and incorporated by reference herein. A copy
of the joint press release, dated May 2, 1994, relating to the above-described
transaction is attached hereto as Exhibit 99.3.
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
2.1 Aquisition Agreement and Plan of Merger, dated as of May 1, 1994, among
Syntex Corporation, Roche Capital Corporation and Roche (Panama)
Corporation
99.1 Guaranty dated as of May 1, 1994, of Roche Holdings Ltd
99.2 Form of Certificate of Designation of Limited Conversion Preferred
Stock of Roche Capital Corporation
99.3 Joint Press Release by Roche Holding Ltd and Syntex Corporation, dated
May 2, 1994
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on behalf by the
undersigned hereunto duly authorized.
SYNTEX CORPORATION
(Registrant)
Date: May 3, 1994 By: Carol J. Gillespie
------------------
Carol J. Gillespie
Vice President and Secretary
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EXHIBIT INDEX
--------------
Exhibit
No. Exhibit
- - ------- ---------
2.1 Aquisition Agreement and Plan of Merger, dated as of May 1, 1994,
among Syntex Corporation, Roche Capital Corporation and Roche
(Panama) Corporation
99.1 Guaranty dated as of May 1, 1994, of Roche Holdings Ltd
99.2 Form of Certificate of Designation of Limited Conversion Preferred
Stock of Roche Capital Corporation
99.3 Joint Press Release by Roche Holding Ltd and Syntex Corporation,
dated May 2, 1994
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EXHIBIT 2.1
ACQUISITION AGREEMENT AND PLAN OF MERGER
dated as of
May 1, 1994
among
Syntex Corporation,
Roche Capital Corporation
and
Roche (Panama) Corporation
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I
THE OFFER
SECTION 1.01. The Offer . . . . . . . . . . . . . 1
SECTION 1.02. Company Action . . . . . . . . . . 2
SECTION 1.03. Directors . . . . . . . . . . . . . 4
ARTICLE II
THE MERGER
SECTION 2.01. The Merger . . . . . . . . . . . . 6
SECTION 2.02. Conversion of Shares . . . . . . . 6
SECTION 2.03. Surrender and Payment . . . . . . . 9
SECTION 2.04. Stock Options . . . . . . . . . . . 11
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Articles of Incorporation . . . . . 12
SECTION 3.02. Bylaws . . . . . . . . . . . . . . 12
SECTION 3.03. Directors and Officers . . . . . . 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.01. Corporate Existence and Power . . . 13
SECTION 4.02. Corporate Authorization . . . . . . 13
SECTION 4.03. Governmental Authorization . . . . 13
SECTION 4.04. Non-Contravention . . . . . . . . . 14
SECTION 4.05. Capitalization . . . . . . . . . . 14
SECTION 4.06. Subsidiaries . . . . . . . . . . . 15
SECTION 4.07. SEC Filings . . . . . . . . . . . . 16
SECTION 4.08. Financial Statements . . . . . . . 16
SECTION 4.09. Disclosure Documents . . . . . . . 17
SECTION 4.10. Absence of Certain Changes . . . . 18
SECTION 4.11. No Undisclosed Material
Liabilities . . . . . . . . . . . 19
SECTION 4.12. Litigation . . . . . . . . . . . . 19
SECTION 4.13. Taxes . . . . . . . . . . . . . . . 20
SECTION 4.14 Employee Benefit . . . . . . . . . 22
SECTION 4.15. Compliance with Laws . . . . . . . 24
SECTION 4.16. Finders' Fees . . . . . . . . . . . 24
SECTION 4.17. Environmental Matters . . . . . . 24
</TABLE>
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<TABLE>
<S> <C>
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER
SECTION 5.01. Corporate Existence and Power . . . 26
SECTION 5.02. Corporate Authorization . . . . . . 26
SECTION 5.03. Governmental Authorization. . . . . 26
SECTION 5.04. Non-Contravention . . . . . . . . . 26
SECTION 5.05. Disclosure Documents . . . . . . . 27
SECTION 5.06. Finders' Fees . . . . . . . . . . . 28
SECTION 5.07. Financing . . . . . . . . . . . . . 28
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company . . . . . . 29
SECTION 6.02. Stockholder Meeting; Proxy
Material . . . . . . . . . . . . 29
SECTION 6.03. Access to Information . . . . . . . 30
SECTION 6.04. Other Offers . . . . . . . . . . . 31
SECTION 6.05. Notice of Certain Events . . . . . 32
ARTICLE VII
COVENANTS OF BUYER
SECTION 7.01. Obligations of Merger Subsidiary . 33
SECTION 7.02. Voting of Shares . . . . . . . . . 33
SECTION 7.03. Director and Officer Liability . . 33
SECTION 7.04. Employee Matters . . . . . . . . . 34
ARTICLE VIII
COVENANTS OF BUYER AND THE COMPANY
SECTION 8.01. Best Efforts . . . . . . . . . . . 35
SECTION 8.02. Certain Filings . . . . . . . . . . 36
SECTION 8.03. Public Announcements . . . . . . . 36
SECTION 8.04. Further Assurances . . . . . . . . 37
</TABLE>
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<TABLE>
<S> <C>
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of
Each Party . . . . . . . . . . . 37
SECTION 9.02. Conditions to the Obligations of
Buyer and Merger Subsidiary . . . 38
SECTION 9.03. Conditions to the Obligation of the
Company to Effect the Merger . . 38
ARTICLE X
TERMINATION
SECTION 10.01. Termination . . . . . . . . . . . 39
SECTION 10.02. Effect of Termination . . . . . . 40
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices . . . . . . . . . . . . . 40
SECTION 11.02. Survival of Representations and
Warranties . . . . . . . . . . . 41
SECTION 11.03. Amendments; No Waivers . . . . . . 42
SECTION 11.04. Expenses . . . . . . . . . . . . . 42
SECTION 11.05. Successors and Assigns . . . . . . 43
SECTION 11.06. Governing Law . . . . . . . . . . 43
SECTION 11.07. Counterparts; Effectiveness . . . 43
SECTION 11.08. Validity . . . . . . . . . . . . . 43
SECTION 11.09. Entire Agreement . . . . . . . . . 43
SECTION 11.10. Definition . . . . . . . . . . . . 43
</TABLE>
iii
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ACQUISITION AGREEMENT AND PLAN OF MERGER
ACQUISITION AGREEMENT AND PLAN OF MERGER dated as of May 1, 1994
among Syntex Corporation, a Panama corporation (the "Company"), Roche Capital
Corporation, a Panama corporation ("Buyer") and an indirectly, wholly owned
subsidiary of Roche Holding Ltd, a Swiss corporation ("Parent"), and Roche
(Panama) Corporation, a Delaware corporation and wholly owned subsidiary of
Buyer ("Merger Subsidiary").
The parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that none of the conditions
set forth in Annex I hereto shall have been occurred, Buyer shall, as promptly
as practicable after the date hereof, but in no event later than five business
days following the public announcement of the terms of this Agreement, commence
an offer (the "Offer") to purchase all of the outstanding shares of common
stock, $1.00 par value (the "Shares"), of the Company at a price of $24.00 per
Share, net to the seller in cash (the "Offer Price"). The Offer shall be
subject to the condition that there shall be validly tendered in accordance
with the terms of the Offer prior to the expiration date of the Offer and not
withdrawn a number of Shares which, together with the Shares then owned by
Buyer, represents at least a majority of the Shares outstanding on a fully
diluted basis (the "Minimum Condition") and to the other conditions set forth
in Annex I hereto. Buyer expressly reserves the right to waive the Minimum
Condition (but not below 77,400,000 shares) or any of the other conditions to
the Offer and to make any change in the terms or conditions of the Offer;
provided that no change may be made which changes the form of consideration to
be paid or decreases the price per Share or the number of Shares sought in the
Offer or which imposes conditions to the Offer in addition to those set forth
in Annex I or makes any other change in the terms or conditions of the Offer
which is materially adverse to the holders of Shares. Subject to the terms and
conditions of the Offer, Buyer shall pay for Shares which have been validly
tendered and not withdrawn pursuant to the Offer at the earliest such time
following expiration of the Offer that all conditions to the Offer shall have
been satisfied or waived by Buyer.
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Buyer covenants and agrees that, subject to the terms and conditions of this
Agreement, including but not limited to the conditions of the Offer set forth
in Annex I hereto, it will accept for payment and pay for Shares validly
tendered and not withdrawn pursuant to the Offer as soon as it is permitted to
do so under applicable law.
(b) As soon as practicable on the date of commencement of the Offer,
Buyer shall file with the SEC (as defined in Section 4.07) a Tender Offer
Statement on Schedule 14D-1 with respect to the Offer which will contain the
offer to purchase and form of the related letter of transmittal (together with
any supplements or amendments thereto, collectively the "Offer Documents").
Buyer and the Company each agrees promptly to correct any information provided
by it for use in the Offer Documents if and to the extent that it shall have
become false or misleading in any material respect. Buyer agrees to take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents prior to their being filed with the SEC. Buyer and Merger
Subsidiary agree to provide the Company and its counsel in writing with any
comments Buyer, Merger Subsidiary or their counsel may receive from the SEC or
its Staff with respect to the Offer Documents promptly after the receipt of
such comments.
SECTION 1.02. Company Action. (a) The Company hereby consents to
the Offer and represents as of the date hereof that its Board of Directors, at
a meeting duly called and held, has by a unanimous vote of those directors who
were present and voting (i) determined that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger (as defined in Section
2.01), are fair to and in the best interest of the Company's stockholders, (ii)
approved this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, which approval satisfies the relevant requirements of the
General Corporation Law of the Republic of Panama (the "Panama Law"), and (iii)
(A) accepted the Declaration dated May 1, 1994 setting forth information
regarding the Buyer and the Buyer's future plans regarding the Company (the
"Declaration") as satisfying Panama Law and all Executive Decrees relating to
declarations, including but not limited to Executive Decree No. 45 of December
5, 1977, as amended by Executive Decree No. 51 of July 12, 1985 (the "Decree")
and (B) determined not to deliver the Declaration to the National Securities
Commission of the Republic of Panama as
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permitted by Article 5 of the Decree nor to submit the Declaration to a meeting
of Shareholders of the Corporation for their consideration, as permitted by
Article 5-A of the Decree. The Company represents that its Board of Directors
unanimously recommends acceptance of the Offer and approval and adoption of
this Agreement and the Merger by its stockholders; provided, however, that
subject to Section 11.04, any such recommendation may be withdrawn or modified
to the extent that the Board of Directors deems it necessary to do so in the
exercise of their fiduciary duties under applicable law as advised by counsel
to the Company.
The Company further represents that Arias, Fabrega y Fabrega has
advised the Company's Board of Directors of its opinion to the effect that the
Declaration was delivered in substantially proper form and content to the
Company pursuant to the Decree, that the Declaration contains substantially all
the information and documentation required by the Decree to be delivered for
proper appraisal and recommendation of a purchase offer for securities of a
company under the Decree, and that the Declaration provides sufficient
disclosure under Panamanian law for the making and consummation of the Offer.
In so advising the Company's Board of Directors, Arias, Fabrega y Fabrega shall
have relied on the representation of the Buyer that (i) there were no audited
financial statements for the Buyer for the fiscal year ending December 31, 1993
available on the date thereof, (ii) the audited financial statements for the
Buyer for the fiscal year ending December 31, 1993 will be ready and released
on or about May 10th, 1994, (iii) the financial position of Buyer as of not
more than ninety days prior to the date thereof, was, in all material respects,
no worse than the financial position of the Buyer as of December 31, 1992 and
(iv) the Declaration is true in all material respects and that the statements
included in the Declaration do not omit any material information necessary to
make such statements not misleading in any material respect under the
circumstances in which such statements were made.
The Company further represents that Goldman Sachs & Co. has
delivered to the Company's Board of Directors its written opinion to the effect
that, as of the date of said opinion, the cash consideration to be received by
the holders of Shares in the transactions contemplated by this Agreement is
fair to such holders. To the knowledge of the Company, all of its directors
and members of the operating committee intend either to tender their Shares
pursuant to the Offer or to vote, as shareholders, in favor of the Merger and
adoption of this Agreement.
3
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In connection with the Offer, the Company will promptly furnish
Buyer with a list of its stockholders, mailing labels and any available listing
or computer file containing the names and addresses of all record holders of
Shares and lists of securities positions of Shares held in stock depositories,
in each case to the best knowledge of the Company true and correct as of the
most recent practicable date, and will provide to Buyer such additional
information (including, without limitation, updated lists of stockholders,
mailing labels and lists of securities positions) and such other assistance as
Buyer may reasonably request in connection with the Offer. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Merger, Buyer and its affiliates and associates shall hold in confidence
the information contained in any such labels, listings and files, will use such
information only in connection with the Offer and the Merger, and, if this
Agreement shall be terminated, will deliver to the Company all copies of, and
any extracts and summaries from, such information then in their possession.
(b) As soon as practicable on the day that the Offer is commenced
the Company will file with the SEC (as defined in Section 5.07) a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
which shall reflect the recommendations of the Company's Board of Directors
referred to above. The Company and Buyer each agree promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false or misleading in any material respect. The
Company agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable United States federal
securities laws. Buyer and its counsel shall be given an opportunity to review
and comment on the Schedule 14D-9 prior to its being filed with the SEC and
shall be provided with any comments the Company and its counsel may receive
from the SEC or its Staff with respect to the Schedule 14D-9 promptly after
receipt of such comments. Notwithstanding anything contained in this Section
1.02, if the Board of Directors determines in the exercise of their fiduciary
duties to withdraw, modify or amend the recommendation of the Board of
Directors referred to above, such withdrawal, modification or amendment shall
not constitute a breach of this Agreement.
SECTION 1.03. Directors. (a) Promptly upon the purchase by Buyer
of a majority of the outstanding Shares on
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a fully diluted basis (including Shares purchased pursuant to the Offer), and
subject to the last sentence of this Section 1.03(a), Buyer shall be entitled
to designate the number of directors, rounded up to the next whole number, on
the Company's Board of Directors that equals the product of (i) the total
number of directors on the Company's Board of Directors (giving effect to the
election of any additional directors pursuant to this Section) and (ii) the
percentage that the number of Shares owned by Buyer and its affiliates
(including Shares so purchased) bears to the total number of Shares
outstanding, and the Company shall upon request by Buyer, at the Company's
election, either increase the number of directors or seek and accept
resignations of incumbent directors. At such times, and subject to the last
sentence of this Section 1.03(a) the Company will use its best efforts to cause
individuals designated by Buyer to constitute the same percentage as such
individuals represent on the Company's Board of Directors of (x) each committee
of the Board (other than any committee of the Board established to take action
under this Agreement), (y) each board of directors of each Subsidiary (as
defined in Section 5.06) and (z) each committee of each such board.
Notwithstanding the foregoing, nothing contained in this Section shall require
any current member of the Special Committee of the Board of Directors to resign
from the Board of Directors. Subject to the foregoing, the Company shall use
its best efforts to ensure that all of the members of the Board of Directors
and such boards and committees as of the date hereof shall remain members of
the Board of Directors and such boards and committees until the Effective Time
(as defined in Section 2.01).
(b) The Company's obligations to appoint designees to the Board of
Directors shall be subject to Section 14(f) of the 1934 Act (as defined in
Section 4.03) and Rule 14f-1 promulgated thereunder. The Company shall
promptly take all actions required pursuant to Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this Section and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers
and directors as is required under Section 14(f) and Rule 14f-1 to fulfill its
obligations under this Section 1.03. Buyer will supply to the Company in
writing and be solely responsible for any information with respect to itself
and its nominees, officers, directors and affiliates required by Section 14(f)
and Rule 14f-1.
(c) Following the election or appointment of Buyer's designees
pursuant to this Section 1.03 and prior to the Effective Time, except as
provided in Section 2.02(g), any amendment of this Agreement or the articles of
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incorporation or by-laws of the Company, any termination or amendment of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Buyer or Merger
subsidiary or any exercise or waiver of any of the Company's rights hereunder,
will require the concurrence of a majority of the directors of the Company then
in office who are neither designated by Buyer, employees of the Company or any
of its subsidiaries nor otherwise affiliated with Buyer, and who, if serving on
the Board currently, were disinterested directors in connection with the
Board's consideration of this Agreement.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. (a) Upon the terms and subject to the
conditions of this Agreement, at the Effective Time (as defined in Section
2.01(b)), Merger Subsidiary shall be merged with and into the Company (the
"Merger"), whereupon the separate existence of Merger Subsidiary shall cease,
and the Company shall be the surviving corporation (the "Surviving
Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger in Article X
hereof, the Company and Merger Subsidiary will file articles of merger or other
appropriate documents for registration in the Mercantile Registry of the
Republic of Panama and make all other filings or recordings required by Panama
Law and the General Corporations Law of the State of Delaware ("Delaware GCL")
in connection with the Merger. The Merger shall become effective at such time
as articles of merger or other appropriate documents are duly filed in the
Mercantile Registry of the Republic of Panama (the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be subject
to all of the restrictions, disabilities and duties of the Company and Merger
Subsidiary, all as provided under Panama Law and the Delaware GCL.
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SECTION 2.02. Conversion of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of Buyer, Merger
Subsidiary, the Company or the holder of any of the following securities:
(a) each Share held by the Company as treasury stock or owned by
Buyer or any subsidiary of Buyer immediately prior to the Effective Time
shall be canceled, and no payment shall be made with respect thereto;
(b) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become
one share of common stock of the Surviving Corporation with the same
rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation; and
(c) each Share outstanding immediately prior to the Effective Time
shall, except as otherwise provided in Section 2.02(a), be converted into
the right to receive, at the election of the holders of Shares, either (i)
subject to the restrictions set forth in Section 2.02(g), 0.024 shares of
Limited Conversion Preferred Stock of Buyer, which Limited Conversion
Preferred Stock shall have terms substantially as set forth in Exhibit A
and shall have a stated value and liquidation value of $1,000 (or
proportionately increased for any higher price per Share paid in the
Offer) (the "LCPS") or (ii) $24.00 in cash, or any higher price per Share
paid in the Offer, payable to the holder thereof, without interest ("Cash
Consideration").
(d) Prior to the date of the Company Stockholder Meeting
contemplated by Section 6.02, Buyer and the Company shall prepare a form
(an "Election Form") pursuant to which a holder of Shares may specify the
number of Shares owned by such holder that such holder desires to be
converted into a right to receive cash in the Merger and the number of
Shares owned by such holder that such holder desires to be converted into
a right to receive shares of LCPS in the Merger. The Company shall cause
an Election Form (and a letter of transmittal for use in exchanging
certificates representing Shares for the consideration set forth in
Section 2.02(c) (the "Merger Consideration")) mailed to each holder of
Shares who shall request such an Election Form.
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(e) Each holder of Shares (other than holders of Shares which, in
accordance with subsection (a) above, are to be canceled in the Merger)
shall have the right to specify in an Election Form the number of Shares
owned by such holder that such holder desires to have converted into the
right to receive cash in the Merger (a "Cash Election") and the number of
Shares owned by such holder that such holder desires to have converted
into the right to receive shares of LCPS in the Merger (a "Stock
Election"). A Cash Election or a Stock Election shall be effective only
if the Exchange Agent appointed by Buyer pursuant to Section 2.03 shall
have received no later than 5:00 p.m. New York City time on the date three
business days prior to the date of the Company Stockholder Meeting (the
"Election Deadline") (i) an Election Form covering the Shares to which
such Cash Election and/or Stock Election applies, executed and completed
in accordance with the instructions set forth in such Election Form and
(ii) the certificate or certificates representing such Shares, in such
form and with such endorsements, stock powers and signature guarantees as
may be required by such Election Form. A Cash Election or Stock Election
may be revoked or changed only by delivering to the Exchange Agent, prior
to the Election Deadline, a written notice of revocation or, in the case
of a change, a properly completed revised Election Form that identifies
the share certificates to which such revised Election Form applies.
Delivery to the Exchange Agent prior to the Election Deadline of a revised
Election Form with respect to any certificate representing Shares shall
result in the revocation of all prior Election Forms with respect to all
Shares evidenced by such certificate. Any termination of this Agreement
in accordance with Article X shall result in the revocation of all
Election Forms delivered to the Exchange Agent on or prior to the date of
such termination. If an Election Form is revoked (either by delivery of a
written notice of revocation or by delivery of a revised Election Form),
the share certificates to which such Election Form applies, if previously
delivered to the Exchange Agent, shall be returned to the person revoking
such Election Form unless such person otherwise instructs the Exchange
Agent. For purposes of this Agreement, "Non-Electing Shares" means all
Shares (other than Shares that are to be canceled in the Merger) as to
which neither an effective Cash Election nor an effective Stock Election
has been made as of the Election Deadline. All Non-Electing Shares shall
be deemed to have made the Cash Election.
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(f) Buyer and the Company shall have the right to make rules, not
inconsistent with the terms of this Agreement, governing the validity and
effectiveness of Election Forms, the manner and extent to which Cash
Elections and Stock Elections are to be taken into account in making the
determinations required by this Section and the payment of the Merger
Consideration.
(g) Notwithstanding any other provision of this Agreement to the
contrary, Buyer shall be obligated to issue shares of LCPS only to the
extent that the LCPS would be "held of record" (as such term is defined in
the 1934 Act and Rule 12g-5 thereunder) by not more than 299 Persons. If
the issuance of shares of LCPS in respect of all Shares as to which
effective Stock Elections are made would result in the LCPS being "held of
record" by more than 299 Persons, subject to the terms of this Agreement,
Buyer shall issue LCPS to the maximum number of Persons who have made a
valid Stock Election such that, after giving effect to such issuance, the
LCPS are held of record by 299 Persons. In the event more than 299
holders of Shares make a valid Stock Election, Buyer and the Special
Committee of the Board of Directors of the Company shall jointly agree, in
their discretion, as to the method for selecting the holders who shall be
entitled to receive shares of LCPS in the Stock Election; such method may
consist of a lottery, selection by lot or the aggregate number of Shares
as to which a holder makes a valid Stock Election, or any other method.
In the event Buyer and the Special Committee of the Board of Directors are
unable to agree on such a method, holders who made a Stock Election shall
be deemed to have made a Cash Election.
(h) A Stock Election must be made with respect to at least one
hundred Shares to be a valid Stock Election.
(i) Notwithstanding any provision of this Agreement, Buyer shall not
be obligated to accept Stock Elections with respect to more than 15% of
the Shares outstanding as of the date hereof.
SECTION 2.03. Surrender and Payment. (a) Prior to the record date
for the Company Stockholder Meeting, Buyer shall appoint an agent (the
"Exchange Agent") for the purposes of receiving the Election Forms, determining
(in accordance with Section 2.02) the form of the Merger Consideration to be
received by each holder of Shares and exchanging certificates (the
"Certificates") that prior to
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the Effective Time represented Shares for the Merger Consideration. Buyer will
make available to the Exchange Agent, as needed, the Merger Consideration to be
paid in respect of the Shares.
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
Certificate or Certificates, together with a properly completed letter of
transmittal covering the Shares formerly represented by such Certificate or
Certificates, will be entitled to receive the Merger Consideration payable in
respect of such Shares. Until so surrendered, each such Certificate shall,
after the Effective Time, represent for all purposes, only the right to receive
such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
person other than the registered holder of the Shares represented by the
Certificate or Certificates surrendered in exchange therefor, it shall be a
condition to such payment that the Certificate or Certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a person other than the
registered holder of such Certificates or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. For purposes of
this Agreement, "Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality thereof.
(d) After the Effective Time, there shall be no further registration
of transfers of Shares. If, after the Effective Time, Certificates
representing Shares are presented to the Surviving Corporation, they shall be
canceled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Article II.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) that remains unclaimed by the
holders of Shares six months after the Effective Time shall be returned to
Buyer, upon demand, and any such holder who has not exchanged his Shares for
the Merger Consideration in accordance with this Section prior to that time
shall thereafter look only to Buyer for payment of the Merger Consideration in
respect of his Shares. Buyer shall indemnify the Surviving Corporation for any
payment of the Merger Consideration it may be required
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to make to a holder of Shares after the Merger Consideration has been returned
to Buyer. Notwithstanding the foregoing none of Buyer, the Company or the
Surviving Corporation shall be liable to any holder of Shares for any amount
paid to a public official pursuant to applicable abandoned property laws. Any
amounts remaining unclaimed by holders of Shares three years after the
Effective Time (or such earlier date immediately prior to such time as such
amounts would otherwise escheat to or become property of any governmental
entity) shall, to the extent permitted by applicable law, become the property
of Buyer free and clear of any claims or interest of any person previously
entitled thereto.
(f) No dividends, interest or other distributions with respect to
securities of Buyer constituting part of the Merger Consideration shall be paid
to the holder of any unsurrendered certificates representing Shares until such
certificates are surrendered as provided in this Section. Upon such surrender,
there shall be paid, without interest, to the person in whose name the
certificates representing the securities of Buyer into which such Shares were
converted are registered, all dividends, interest and other distributions
payable in respect of such securities on a date subsequent to, and in respect
of a record date after, the Effective Time.
SECTION 2.04. Stock Options. (a) Prior to the purchase of Shares
pursuant to the Offer, the Board of Directors of the Company (or, if
appropriate, any committee administering the Stock Plans (as defined below))
shall adopt such resolutions or take such other actions as are required to
adjust, effective immediately prior to the Effective Time, the terms of all
outstanding employee and director stock options to purchase Shares ("Stock
Options") and all outstanding stock appreciation rights ("SARs"), whether or
not presently exercisable, heretofore granted under any stock option or stock
appreciation rights plan, program or arrangement of the Company or its
Subsidiaries (collectively, the "Stock Plans") to provide that (i) each Stock
Option together with any SAR related thereto or granted in tandem therewith and
(ii) each SAR granted independent of, and not related to, any Stock Option (a
"Free-standing SAR"), in each case outstanding immediately prior to the
Effective Time shall be converted into the right of the holder of such Stock
Option or Free-standing SAR, as the case may be, to receive a cash payment at
that time from the Company of an amount determined by multiplying (x) the
excess, if any, of the Cash Consideration over the applicable exercise price
per Share of such Stock Option or strike price per Share of such Free-standing
SAR, as the
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case may be by (y) with respect to each Stock Option and related SAR, the
number of Shares the holder of the Stock Option could have purchased (assuming
full vesting of all Stock Options) had such holder exercised such Stock Option
in full immediately prior to the Effective Time or, with respect to each
free-standing SAR, the number of Shares with respect to which the Free-Standing
SAR was granted (assuming full vesting of all free-standing SARs). All amounts
payable pursuant to this Section 2.04(a) shall be subject to any required
withholding of taxes and shall be paid without interest.
(b) Prior to the purchase of Shares pursuant to the Offer, the
Board of Directors of the Company (or, if appropriate, any committee
administering the Stock Plans) shall adopt such resolutions or take such other
actions as are required to provide that the Stock Plans shall terminate as of a
date prior to the occurrence of a "Change in Control" as defined in the Syntex
Security of Employment Plan (the "Stock Plan Termination Date"), except with
respect to Stock Options and SARs that are outstanding as of the Stock Plan
Termination Date which Stock Options and SARs shall be adjusted immediately
prior to the Effective Time as contemplated by Section 2.04(a), and to provide
that the provisions in any other Employee Plan or Benefit Arrangement (each as
defined in Section 4.14) providing for the issuance, transfer or grant of
capital stock of the Company shall be deleted as of the Stock Plan Termination
Date, and the Company shall take all necessary actions to provide that
following the Effective Time, no holder of a Stock Option or SAR or any
participant in any Stock Plan or other Employee Plan or Benefit Arrangement
shall have any right thereunder to acquire any capital stock of the Company or
the Surviving Corporation.
SECTION 2.05. Adjustments. If at any time during the period
between the date of this Agreement and the Effective Time, any change in the
outstanding shares of capital stock of Buyer shall occur, including by reason
of any reclassification, recapitalization, stock split or combination, exchange
or readjustment of shares, or any stock dividend thereon with a record date
during such period, the number of shares of LCPS constituting all or part of
the Merger Consideration shall be appropriately adjusted.
SECTION 2.06. Fractional Shares. No fractional shares of LCPS
shall be issued in the Merger. All fractional shares of LCPS that a holder of
Shares would otherwise be entitled to receive as a result of the Merger shall
be aggregated and if a fractional share results from
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such aggregation, such holder shall be entitled to receive, in lieu thereof, an
amount in cash determined by multiplying the stated value of the LCPS by the
fraction of a share of LCPS to which such holder would otherwise have been
entitled.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Articles of Incorporation. The articles of
incorporation of Merger Subsidiary in effect at the Effective Time shall be the
articles of incorporation of the Surviving Corporation until amended in
accordance with applicable law, except that the name of the Surviving
Corporation shall be that of the Company at the date hereof.
SECTION 3.02. Bylaws. The bylaws of Merger Subsidiary in effect at
the Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with applicable law.
SECTION 3.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in
accordance with applicable law, (i) the directors of Merger Subsidiary at the
Effective Time shall be the directors of the Surviving Corporation, and (ii)
the officers of the Company at the Effective Time shall be the officers of the
Surviving Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer that:
SECTION 4.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Republic of Panama, and has the requisite corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted. The Company is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where the failure to be so qualified would not, individually
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or in the aggregate, have a material adverse effect on the business, assets,
financial condition or results of operations of the Company and the
Subsidiaries (as defined in Section 4.06), taken as a whole (a "Material
Adverse Effect") or would not reasonably be expected to result in a Material
Adverse Effect. The Company has heretofore delivered to Buyer true and complete
copies of the Company's articles of incorporation and bylaws as currently in
effect.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby are within the Company's
corporate powers and, except for any required approval by the Company's
stockholders in connection with the consummation of the Merger, have been duly
authorized by all necessary corporate action. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid and
binding agreement of the Company.
SECTION 4.03. Governmental Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
Merger by the Company require no action by or in respect of, or filing by the
Company with, any governmental body, agency, official or authority other than
(i) the filing of articles of merger or other appropriate documents for
registration in the Mercantile Registry of the Republic of Panama in accordance
with Panama Law and the Delaware GCL; (ii) compliance with any applicable
requirements of the HSR Act; and (iii) compliance with any applicable
requirements of the United States Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (the "1934 Act"); and (iv)
such filings or registration with, or authorizations, consents or approvals of
governmental bodies, agencies, officials or authorities, the failure of which
to make or obtain, individually or in the aggregate, would not result in or
could not reasonably be expected to result in a Material Adverse Effect or
materially affect the consummation of the transactions contemplated by this
Agreement.
SECTION 4.04. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby do not and will not (i)
contravene or conflict with the articles of incorporation or bylaws of the
Company, (ii) assuming compliance with the matters referred to in Sections 4.03
and 5.03, contravene or conflict with or constitute a violation of any
provision of any material law, regulation, judgment, injunction, order or
decree binding
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upon or applicable to the Company or any Subsidiary, (iii) except as disclosed
in writing to Buyer prior to the date hereof, to the knowledge of the Company,
require any consent, approval or notice under and will not conflict with, or
result in the breach or termination of any provision of or constitute a default
(with or without the giving of notice or the lapse of time or both) under, or
give rise to any right of termination, cancellation, or loss of any benefit to
which the Company or any Subsidiary is entitled under any provision of any
material agreement, contract, license or other instrument binding on the
Company or any Subsidiary, or allow the acceleration of the performance of, any
material obligation of the Company or any of its subsidiaries under any
material indenture, mortgage, deed of trust, lease, license, contract,
instrument or other agreement to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries or any of their
respective assets or properties is subject or bound or (iv) result in the
creation or imposition of any Lien on any material asset of the Company or any
Subsidiary. For purposes of this Agreement, "Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset.
SECTION 4.05. Capitalization. The authorized capital stock of the
Company consists of 600,000,000 Shares. As of April 27, 1994, there were
outstanding 221,134,238 Shares and employee stock options to purchase an
aggregate of 11,562,042 Shares (of which, options to purchase an aggregate of
5,578,520 Shares were exercisable), in addition to options granted to
substantially all employees of the Company in 1992 and 1993 with respect to an
aggregate amount of approximately 1,000,000 Shares, none of which were
exercisable. All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable.
Except as set forth in this Section and except for changes since April 27, 1994
resulting from the exercise of employee stock options outstanding on such date,
there are outstanding (i) no shares of capital stock or other voting securities
of the Company, (ii) no securities of the Company or any Subsidiary convertible
into or exchangeable for shares of capital stock or voting securities of the
Company, and (iii) no options or other rights to acquire from the Company or
any Subsidiary, and no obligation of the Company or any Subsidiary to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company (the items
in clauses (i), (ii) and (iii) being referred to collectively as the "Company
Securities"). There are no outstanding obligations of the
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Company or any Subsidiary to repurchase, redeem or otherwise acquire any
Company Securities.
SECTION 4.06. Subsidiaries. (a) Each Subsidiary is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has the requisite corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted and is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
make such qualification necessary, except for those jurisdictions where failure
to be so qualified would not, individually or in the aggregate, have or could
not reasonably be expected to have a Material Adverse Effect. For purposes of
this Agreement, "Subsidiary" means any entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are directly
or indirectly owned by the Company. Except as disclosed in writing to Buyer
prior to the date hereof, all Subsidiaries and their respective jurisdictions
of incorporation are identified in the Company's annual report on Form 10-K for
the fiscal year ended July 31, 1993 (the "Company 10-K").
(b) All of the outstanding capital stock of, or other ownership
interests in, each Subsidiary, is owned by the Company, directly or indirectly,
free and clear of any Lien and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests). There are no outstanding (i)
securities of the Company or any Subsidiary convertible into or exchangeable
for shares of capital stock or other voting securities or ownership interests
in any Subsidiary, and (ii) options or other rights to acquire from the Company
or any Subsidiary, and no other obligation of the Company or any Subsidiary to
issue, any capital stock, voting securities or other ownership interests in, or
any securities convertible into or exchangeable for any capital stock, voting
securities or ownership interests in, any Subsidiary (the items in clauses (i)
and (ii) being referred to collectively as the "Subsidiary Securities"). There
are no outstanding obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any outstanding Subsidiary Securities.
SECTION 4.07. SEC Filings. (a) The Company has delivered to Buyer
(i) the annual reports on Form 10-K for
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its fiscal years ended July 31, 1991, 1992 and 1993, (ii) its quarterly reports
on Form 10-Q for its fiscal quarters ended October 31, 1993 and January 31,
1994 (the latter referred to herein as the "Company 10-Q"), (iii) its proxy or
information statements relating to meetings of, or actions taken without a
meeting by, the stockholders of the Company held since December 7, 1992, and
(iv) all of its other reports, statements, schedules and registration
statements filed with the United States Securities and Exchange Commission (the
"SEC") since December 7, 1992 (collectively, the "SEC Filings").
(b) As of its filing date, each of the SEC Filings, complied as to
form in all material respects and did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 4.08. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements of
the Company included in its annual reports on Form 10-K and the quarterly
reports on Form 10-Q referred to in Section 4.07 fairly present, in conformity
with generally accepted accounting principles applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates
thereof and their consolidated results of operations and changes in financial
position for the periods then ended (subject to normal year-end adjustments in
the case of any unaudited interim financial statements). For purposes of this
Agreement, "Balance Sheet" means the consolidated Balance Sheet of the Company
as of July 31, 1993 and "Balance Sheet Date" means July 31, 1993.
SECTION 4.09. Disclosure Documents. (a) Each document required to
be filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"), including,
without limitation, the Schedule 14D-9, the proxy or information statement of
the Company (the "Company Proxy Statement"), if any, to be filed with the SEC
in connection with the Merger, and any amendments or supplements thereto will,
when filed, comply as to form in all material respects with the applicable
requirements of the 1934 Act.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company, at the time
such stockholders vote on adoption of this Agreement and at the Effective
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Time, the Company Proxy Statement, as supplemented or amended, if applicable,
will not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. At the
time of the filing of any Company Disclosure Document other than the Company
Proxy Statement and at the time of any distribution thereof to the Company's
stockholders, such Company Disclosure Document will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(c) The representations and warranties contained in this Section
4.09 will not apply to statements included in or omissions from the Company
Disclosure Documents based upon information furnished to the Company in writing
by Buyer specifically for use therein.
(d) The information with respect to the Company or any Subsidiary
that the Company furnishes to Buyer in writing specifically for use in the
Offer Documents will not, at the time of the filing thereof, at the time first
published, sent or given to the holders of Shares and immediately prior to the
time Buyer accepts any Shares for payment, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(e) The information with respect to the Company or any Subsidiary
that the Company furnishes to Buyer in writing specifically for use in the
Registration Statement (as defined in Section 5.05(c)) will not contain at the
time the Registration Statement becomes effective or at the Effective Time, 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 made therein,
not misleading.
SECTION 4.10. Absence of Certain Changes. Except as disclosed in
writing to Buyer prior to the date hereof, since the Balance Sheet Date, the
Company and Subsidiaries have in all material respects conducted their business
in the ordinary course consistent with past practice and there has not been:
(a) any material adverse change in the business, assets, financial
condition or results of operations of
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the Company and the Subsidiaries taken as a whole or any event, occurrence
or development of a state of circumstances or facts which would reasonably
be expected to result in such a material adverse change (a "Material
Adverse Change");
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the
Company (other than quarterly cash dividends on the Shares not in excess
of $.26 per Share per quarter and having customary record and payment
dates), or any repurchase, redemption or other acquisition by the Company
or any Subsidiary of any outstanding shares of capital stock or other
securities of, or other ownership interests in, the Company or any
Subsidiary;
(c) any amendment of any material term of any outstanding security
of the Company or of any Subsidiary;
(d) any incurrence, assumption or guarantee by the Company or any
Subsidiary of any material indebtedness for borrowed money or any creation
or assumption by the Company or any Subsidiary of any Lien on any material
asset other than in the ordinary course of business consistent with past
practices;
(e) any making of any loan, advance or capital contributions to or
investment in any person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries made in the
ordinary course of business consistent with past practices;
(f) any change in any method of accounting or accounting practice
by the Company or any Subsidiary, except for any such change required by
reason of a concurrent change in generally accepted accounting principles;
or
(g) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company or any Subsidiary, (ii)
entering into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any Subsidiary, (iii) any
increase in benefits payable under any existing severance or termination
pay policies or employment agreements, or
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(iv) any increase in compensation, bonus or other benefits payable to
directors, officers or employees of the Company or any Subsidiary, other
than in the ordinary course of business consistent with past practice
other than fees payable to the Special Committee of the Board of Directors
not exceeding the amounts disclosed in writing to Buyer.
SECTION 4.11. No Undisclosed Material Liabilities. Except as
previously disclosed to Buyer in writing, there are no liabilities of the
Company or any Subsidiary of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances which could reasonably be expected
to result in such a liability, other than:
(i) liabilities disclosed or provided for in the Balance Sheet or
in the Company 10-Q;
(ii) liabilities which in the aggregate are not material to the
Company and the Subsidiaries, taken as a whole; and
(iii) liabilities under this Agreement and fees and expenses related
thereto previously disclosed in writing to Buyer.
SECTION 4.12. Litigation. Except as set forth in the Company 10-K,
the Company 10-Q or disclosed in writing to Buyer prior to the date hereof,
there is no action, suit, investigation or proceeding (or, to the knowledge of
the Company, any basis for any Person to assert any claim likely to result in
liability or any other adverse determination) pending against, or to the
knowledge of the Company threatened against or affecting, the Company or any
Subsidiary or any of their respective properties before any court or arbitrator
or any governmental body, agency or official which, if determined or resolved
adversely to the Company or any Subsidiary in accordance with the plaintiff's
demands, would individually or in the aggregate reasonably be expected to have
a Material Adverse Effect or which in any manner challenges or seeks to
prevent, enjoin, alter or materially delay the Offer or the Merger or any of
the other transactions contemplated hereby.
SECTION 4.13. Taxes. Except as set forth in the Company 10-K or
10-Q, to the knowledge of the Company, (a) the Company and the Subsidiaries
have filed, been included in or sent, all material returns, declarations and
reports and information returns and statements required to
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be filed or sent by or relating to any of them relating to any Taxes (as
defined below) with respect to any material income, properties or operations of
the Company or any Subsidiary prior to the Effective Time (collectively,
"Returns"); (b) as of the time of filing, the Returns correctly reflected in
all material respects the facts regarding the income, business, assets,
operations, activities and status of the Company and the Subsidiaries and any
other information required to be shown therein; (c) the Company and the
Subsidiaries have timely paid or made provision for all material Taxes that
have been shown as due and payable on the Returns that have been filed; (d) the
Company and the Subsidiaries have made or will make provision for all material
Taxes payable for any periods that end before the Effective Time for which no
Returns have yet been filed and for any periods that begin before the Effective
Time and end after the Effective Time to the extent such Taxes are attributable
to the portion of any such period ending at the Effective Time; (e) the
charges, accruals and reserves for taxes reflected on the books of the Company
and the Subsidiaries are adequate to cover the Tax liabilities accruing or
payable by the Company and the Subsidiaries in respect of periods prior to the
date hereof; (f) neither the Company nor any Subsidiary is delinquent in the
payment of any material Taxes or has requested any extension of time within
which to file or send any material Return, which Return has not since been
filed or sent; (g) no material deficiency for any Taxes has been proposed,
asserted or assessed in writing against the Company or any Subsidiary (or any
member of any affiliated or combined group of which the Company or any
Subsidiary is or has been a member for which either the Company or any
Subsidiary could be liable) other than those Taxes being contested in good
faith; (h) neither the Company nor any Subsidiary has granted any extension of
the limitation period applicable to any material Tax claims other than those
Taxes being contested in good faith; and (i) neither the Company nor any
Subsidiary is or has been a party to any material tax sharing agreement with
any corporation which, as of the Effective Time, is not a member of the
affiliated group of which the Company is a member.
"Tax" means with respect to any person (i) any net income, gross
income, gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, value-added or windfall profit tax, custom duty or other
tax, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest and any penalty, addition to tax or
additional amount imposed by any taxing authority (domestic or foreign) on
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such person and (ii) any liability of the Company or any Subsidiary for the
payment of any amount of the type described in clause (i) as a result of being
a member of an affiliated or combined group.
SECTION 4.14. Employee Benefits. (a) The Company has provided
Buyer with complete age, salary, bonus, service and related data as of a date
no earlier than March 31, 1994 for employees and former employees of the
Company and its Subsidiaries or, to the extent not so provided shall provide
Buyer with such data as is maintained by the Company or its Subsidiaries or
reasonably obtainable as soon as practicable after the date hereof.
(b) Section I of Schedule 4.14 identifies each "employee benefit
plan", as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974 ("ERISA"), which (i) is subject to any provision of ERISA and (ii)
is maintained, administered or contributed to by the Company or any of its
ERISA Affiliates (as defined below) and covers any current or former employee
or director of the Company or any Subsidiary or under which the Company or any
of its ERISA Affiliates has any liability (collectively, the "Employee Plans").
Copies of each Employee Plan (and, if applicable, related trust agreements) and
all amendments thereto and written interpretations thereof have been furnished
to Buyer or, to the extent not so furnished, shall be furnished as soon as
practicable after the date hereof, in either case together with (x) the most
recent annual report (Form 5500 including, if applicable, Schedule B thereto)
prepared in connection with any such Employee Plan and (y) the most recent
actuarial valuation report prepared in connection with any such plan. For
purposes of this Section 4.14, "ERISA Affiliate" of any person means any other
person which, together with such person, would be treated as a single employer
under Section 414 of the Internal Revenue Code of 1986, as amended (the
"Code").
(c) To the knowledge of the Company, no condition exists and no
event has occurred that could constitute grounds for termination of any
Employee Plan subject to Title IV of ERISA (a "Title IV Plan") or, with respect
to any Employee Plan which is a multiemployer plan as defined in Section 3(37)
of ERISA (a "Multiemployer Plan"), presents a material risk of a complete or
partial withdrawal under Title IV of ERISA. To the knowledge of the Company,
if a "complete withdrawal" by the Company and all of its ERISA Affiliates were
to occur as of the Effective Time with respect to all Employee Plans which are
Multiemployer Plans, neither the Company nor any of its ERISA Affiliates would
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incur any material withdrawal liability under Title IV of ERISA.
(d) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to date (after giving effect to any timely effective
remedial amendments that may have been necessary to maintain such Employee
Plans qualified status), and each trust forming a part thereof is exempt from
tax pursuant to Section 501(a) of the Code; provided however, that in order to
maintain such qualified and tax exempt status, certain of such Employee Plans
may be required to be amended during the currently pending remedial amendment
period to conform to the Tax Reform Act of 1986 and subsequent legislation in a
manner that is consistent with the manner in which such Employee Plan has
operated. The Company has furnished to the Buyer copies of the most recent
Internal Revenue Service determination letters with respect to each such Plan.
Each Employee Plan has been maintained in compliance in all material respects
with its terms and with the requirements prescribed by any and all statutes,
orders, rules and regulations, including but not limited to ERISA and the Code,
which are applicable to such Employee Plan.
(e) Except to the extent specifically set forth and quantified in
Section II of Schedule 4.14, there is no contract, agreement, plan or
arrangement covering any employee or former employee of the Company or any
Subsidiary that, individually or collectively, could give rise to the payment
of any amount that would not be deductible pursuant to the terms of Section
280G of the Code.
(f) Section III of Schedule 4.14 identifies each employment,
severance or other similar contract, arrangement or policy and each plan or
arrangement (written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits or
for deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is not an Employee Plan, (ii) is
entered into, maintained or contributed to, as the case may be, by the Company
or any of its Subsidiaries and (iii) covers any current or former employee or
director of the Company or any of its Subsidiaries. Such contracts, plans and
arrangements as are described above, copies or descriptions of all of which
have been furnished previously to Buyer, or, to the extent not so furnished,
shall be furnished as soon as practicable after
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the date hereof, are referred to collectively herein as the "Benefit
Arrangements". Each Benefit Arrangement has been maintained in compliance in
all material respects with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations that are applicable to such
Benefit Arrangement.
(g) Except as disclosed in writing to Buyer prior to the date
hereof, there has been no amendment to, written interpretation or announcement
(whether or not written) by the Company or any of its Subsidiaries relating to,
or change in employee participation or coverage under, any Employee Plan or
Benefit Arrangement which would increase materially the expense of maintaining
such Employee Plan or Benefit Arrangement above the level of the expense
incurred in respect thereof for the fiscal year ended on the Balance Sheet
Date.
(h) (i) As of the Balance Sheet Date, the fair market value of the
assets of each Title IV Plan (excluding for these purposes any accrued but
unpaid contributions) exceeded the present value of all benefits accrued under
such Title IV Plan determined using the assumptions and methods set forth in
the most recent actuarial valuation report delivered by the Company's
independent auditors with respect to such Plan.
(ii) As of the Balance Sheet Date, the aggregate unfunded liability
of the Company and its ERISA Affiliates in respect to all Employee Plans
described under Sections 4(b)(5) or 401(a)(1) of ERISA, computed using
reasonable actuarial assumptions consistent with GAAP and determined as if all
benefits under such plans were vested as of such date, did not exceed
$14,000,000.
(iii) With respect to each Benefit Arrangement which is maintained for
the benefit of non United States employees of the Company or its Subsidiaries,
as of the Balance Sheet Date, according to the actuarial assumptions and
valuations most recently used for the purpose of funding each such Benefit
Arrangement (or, if the same has no such assumptions and valuations or is
unfunded, according to reasonable actuarial assumptions and valuations
consistent with GAAP), the total amount or value of the funds available under
such Benefit Arrangement to pay benefits accrued thereunder, together with any
reserve or accrual with respect thereto, exceeded the present value of all
benefits (actual or contingent) accrued as of the Balance Sheet Date of all
participants and past participants therein who are employees or former
employees of the Company or its Subsidiaries.
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(iv) Except for (x) the accelerated payment of Deferred Cash
Incentive Awards under the Company's Call-To-Action Incentive Plan which will
result in an aggregate payment of not more than $2,000,000, and (y) the
acceleration of vesting of stock options and stock appreciation rights which
are to be adjusted pursuant to Section 2.04, no employee or former employee of
the Company or any Subsidiary will become entitled to any compensation, bonus,
retirement, severance, job security or similar benefit or enhanced such benefit
solely as a result of the transactions contemplated hereby, without regard to
any events that may occur after the Effective Time. Immediately after giving
effect to the transactions contemplated hereby, the aggregate maximum
contingent liability of the Surviving Corporation and its subsidiaries in
respect of cash termination and severance benefits under the Employee Plans and
Benefit Arrangements will not exceed $355,000,000.
SECTION 4.15. Compliance with Laws. Except as previously disclosed
to Buyer in writing, to the knowledge of the Company, neither the Company nor
any Subsidiary is in violation of, or has violated, any applicable provisions
of any laws, statutes, ordinances or regulations which would, individually or
in the aggregate, result in or could reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.16. Finders' Fees. Except for Goldman, Sachs & Co.,
whose fees have been disclosed in writing to Buyer and will be paid by the
Company, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf, of the Company or
any Subsidiary who might be entitled to any fee or commission from Buyer or any
of its Affiliates upon consummation of the transactions contemplated by this
Agreement.
SECTION 4.17. Environmental Matters. (a) To the knowledge of the
Company, except as previously disclosed to Buyer in writing, there are no
Environmental Liabilities of the Company or any Subsidiary other than:
(i) Environmental Liabilities disclosed or provided for in the
Company 10-K or the Company 10-Q;
(ii) Environmental Liabilities that individually or in the aggregate
are not material to the Company and the Subsidiaries, taken as a whole;
and
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(iii) Environmental Liabilities that individually or in the aggregate
have not had and are not reasonably expected to have a Material Adverse
Effect.
(b) The following terms as used in this Section shall have the
following meanings:
"Environmental Liabilities" means any and all liabilities of the
Company or any Subsidiary (including any entity which is a predecessor of the
Company or any Subsidiary), whether accrued, contingent, absolute, determined,
determinable, vested, potential, known or otherwise, and any existing
condition, situation or set of circumstances which could reasonably be expected
to result in such a liability, which (i) arise under or relate to matters
covered by Environmental Laws and (ii) relate to actions occurring or
conditions existing on or prior to the Effective Time.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, and governmental restrictions, now in effect
or in effect at the Effective Time, relating to human health, the environment
or to emissions, discharges or releases of pollutants, contaminants or other
hazardous substances or wastes into the environment, including without
limitation ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or other hazardous
substances or wastes or the clean-up or other remediation thereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to the Company that:
SECTION 5.01. Corporate Existence and Power. Each of Buyer and
Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
Since the date of its incorporation, Merger Subsidiary has not engaged in any
activities other than in connection with or as contemplated
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by this Agreement or in connection with arranging any financing required to
consummate the transactions contemplated hereby.
SECTION 5.02. Corporate Authorization. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Buyer and Merger Subsidiary and have
been duly authorized by all necessary corporate action. This Agreement has
been duly and validly executed and delivered by each of Buyer and Merger
Subsidiary and constitutes a valid and binding agreement of Buyer and Merger
Subsidiary.
SECTION 5.03. Governmental Authorization. The execution, delivery
and performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated by
this Agreement, to the knowledge of Buyer and Merger Subsidiary, require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority other than (i) the filing of the articles of merger or
other appropriate documents in accordance with Panama Law and the Delaware GCL,
(ii) compliance with any applicable requirements of the HSR Act, (iii)
compliance with any applicable requirements of the 1934 Act, (iv) the filing of
a notice pursuant to Section 721 of the Defense Production Act of 1950, as
amended ("Exon-Florio") and (v) compliance with the applicable requirements of
the Securities Act of 1933 (the "1933 Act"), and (vi) compliance with any
applicable foreign or state securities or Blue Sky laws.
SECTION 5.04. Non-Contravention. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby do not and will not (i) contravene or conflict with the certificate or
articles of incorporation or bylaws of Buyer or Merger Subsidiary, (ii)
assuming compliance with the matters referred to in Section 5.03, contravene or
conflict with any provision of law, regulation, judgment, order or decree
binding upon Buyer or Merger Subsidiary or (iii) constitute a default under or
give rise to any right of termination, cancellation or acceleration of any
right or obligation of Buyer or Merger Subsidiary or to a loss of any benefit
to which Buyer or Merger Subsidiary is entitled under any agreement, contract
or other instrument binding upon Buyer or Merger Subsidiary.
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SECTION 5.05. Disclosure Documents. (a) The information with
respect to Buyer and its subsidiaries (including without limitation Merger
Subsidiary), Parent and their respective Affiliates that Buyer furnishes to the
Company in writing specifically for use in any Company Disclosure Document will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading (i) in
the case of the Company Proxy Statement, at the time the Company Proxy
Statement or any amendment or supplement thereto is first mailed to
stockholders of the Company, at the time the stockholders vote on adoption of
this Agreement and at the Effective Time and (ii) in the case of any Company
Disclosure Document other than the Company Proxy Statement, at the time of the
filing thereof and at the time of any distribution thereof to the Company's
stockholders.
(b) The Offer Documents, when filed, will comply as to form in all
material respects with the applicable requirements of the 1934 Act and will not
at the time of the filing thereof, at the time first published, sent or given
to the holders of Shares and at the time of consummation of the Offer, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, provided, that this representation and warranty will not apply to
statements included in or omissions from the Offer Documents based upon
information furnished to Buyer or Merger Subsidiary in writing by the Company
specifically for use therein.
(c) The Registration Statement to be filed by Buyer with the SEC
with respect to the offering of the LCPS in connection with the Merger (the
"Registration Statement") and any amendments or supplements thereto will, at
the time the Registration Statement becomes effective or at the Effective Time,
comply as to form in all material respects with the requirements of the 1933
Act 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 contained therein, not misleading; provided that the
foregoing representation shall not apply to statements or omissions in the
Registration Statement based upon information furnished to Buyer or Merger
Subsidiary in writing by the Company specifically for use therein.
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(d) Buyer agrees to cause the Surviving Corporation to satisfy any
claims or liabilities arising directly or indirectly as a result of Section
2.04(b) or the actions required thereby.
SECTION 5.06. Finders' Fees. Except for J.P. Morgan Securities
Inc., whose fees will be paid by Buyer, there is no investment banker, broker,
finder or other intermediary who might be entitled to any fee or commission
from the Buyer or any of its Affiliates upon consummation of the transactions
contemplated by this Agreement.
SECTION 5.07. Financing. Buyer has or will have, prior to the
expiration of the Offer and the Effective Date of the Merger, sufficient funds
available to purchase all of the Shares outstanding on a fully diluted basis in
the Offer and the Merger and to pay all related fees and expenses pursuant to
the Offer and the Merger.
SECTION 5.08. Capitalization. The authorized capital stock of
Buyer consists of 500 shares of Common Stock. As of April 28, 1994, there were
outstanding 500 shares of Common Stock. All outstanding shares of capital
stock of Buyer have been duly authorized and validly issued and are fully paid
and nonassessable. The shares of LCPS to be issued as part of the Merger
Consideration have been duly authorized and when issued and delivered in
accordance with the terms of this Agreement, will have been validly issued and
will be fully paid and nonassessable and the issuance thereof is not subject to
any preemptive or other similar right. The non-voting securities issuable upon
exchange of LCPS will, at the time of exchange be validly issued and will be
fully paid and non-assessable.
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ARTICLE VI
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.01. Conduct of the Company. From the date hereof until
the Effective Time, the Company and the Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall use
their best efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of their
present officers and key employees, subject to the terms of this Agreement.
Without limiting the generality of the foregoing, and except as otherwise
provided in this Agreement, from the date hereof until the Effective Time
without the consent of Buyer:
(a) the Company will not adopt or propose any change in its
articles of incorporation or bylaws;
(b) the Company will not, and will not permit any Subsidiary to,
merge or consolidate with any other Person or acquire a material amount of
assets of any other Person;
(c) the Company will not, and will not permit any Subsidiary to,
sell, lease, license or otherwise surrender, relinquish or dispose of any
assets or property which are material to the Company and its Subsidiaries as a
whole except (i) pursuant to existing contracts or commitments, (ii) in the
ordinary course consistent with past practice; or (iii) as Buyer may agree in
writing;
(d) the Company will not, and will not permit any Subsidiary to,
agree or commit to do any of the foregoing; and
(e) the Company will not, and will not permit any Subsidiary to (i)
take, or agree or commit to take, any action that would make any representation
and warranty of the Company hereunder inaccurate in any respect at, or as of
any time prior to, the Effective Time or (ii) omit, or agree or commit to omit,
to take any action necessary to prevent any such representation or warranty
from being inaccurate in any respect at any such time, provided however that
the Company shall be permitted to take or omit to take such action which can
(without any uncertainty) be cured at or prior to the Effective Time or a date
on which Shares can be purchased pursuant to the Offer.
SECTION 6.02. Stockholder Meeting; Proxy Material. The Company
shall cause a meeting of its
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stockholders (the "Company Stockholder Meeting") to be duly called and held as
soon as reasonably practicable for the purpose of voting on the approval and
adoption of this Agreement and the Merger. The Board of Directors of the
Company shall, subject to their fiduciary duties as advised by counsel,
recommend approval and adoption of this Agreement and the Merger by the
Company's stockholders. In connection with such meeting, the Company (i) will
promptly prepare and file with the SEC, will use all reasonable efforts to have
cleared by the SEC and will thereafter mail to its stockholders as promptly as
practicable a proxy statement and all other proxy materials for such meeting,
(ii) will, subject to the fiduciary duties of its Board of Directors, use all
reasonable efforts to obtain the necessary approvals by its stockholders of
this Agreement and the transactions contemplated hereby and (iii) will
otherwise comply with all legal requirements applicable to such meeting.
SECTION 6.03. Access to Information. From the date hereof until
the Effective Time, the Company will give Buyer, its counsel, financial
advisors, auditors and other authorized representatives reasonable access
during normal business hours to the offices, properties, books and records of
the Company and the Subsidiaries, will furnish to Buyer, its counsel, financial
advisors, auditors and other authorized representatives such financial and
operating data and other information as such persons may reasonably request and
will instruct the Company's employees, counsel and financial advisors to
cooperate with Buyer in its investigation of the business of the Company and
the Subsidiaries; provided that no investigation pursuant to this Section shall
affect any representation or warranty given by the Company to Buyer hereunder;
and provided, further, that the foregoing shall not require the Company to
permit any inspection, or to disclose any information, which in the reasonable
judgment of the Company would result in the disclosure of any trade secrets of
third parties or violate any obligation of the Company with respect to
confidentiality if the Company shall have used reasonable efforts to obtain the
consent of such third party to such inspection or disclosure. All requests for
information made pursuant to this Section shall be directed to an executive
officer of the Company or such person as may be designated by any such officer.
(b) Each of Buyer and Merger Subsidiary agrees to be bound by the
letter agreement dated February 28, 1994, between Parent and the Company as if
the references to Parent therein were to Buyer and Merger Subsidiary, except
that Buyer and Merger Subsidiary may (i) enter into this
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Agreement, (ii) acquire Shares pursuant to the Offer and the Merger so long as
this Agreement shall not have been breached by Buyer or Merger Subsidiary or
terminated in accordance with its terms and (iii) in the event described in the
last sentence of Section 2.02(g), agree with any shareholder of the Company to
exchange such shareholder's Shares for a security having terms no more
favorable to such shareholder than the terms of the LCPS (so long as all such
exchanges are effected on the same terms) and (iv) Buyer and its subsidiaries
may make such disclosures in the Offer Documents as Buyer may determine in its
reasonable discretion is required by applicable law.
SECTION 6.04. Other Offers. (a) From the date hereof until the
termination hereof, the Company and the Subsidiaries will not, and will use
their best efforts to cause their respective officers, directors, employees or
other agents not to, directly or indirectly, (i) take any action to solicit,
initiate or encourage any Acquisition Proposal (as hereinafter defined), (ii)
subject to the fiduciary duties of the Board of Directors under applicable law
as advised by counsel, waive any provision of any standstill or similar
agreements entered into by the Company or (iii) subject to the fiduciary duties
of the Board of Directors under applicable law as advised by counsel to the
Company, engage in negotiations with, or disclose any nonpublic information
relating to the Company or any Subsidiary or afford access to the properties,
books or records of the Company or any Subsidiary to, any Person that may be
considering making, or has made, an Acquisition Proposal; provided that, on or
prior to May 14, 1994 the provisions of this sentence shall not apply to any
party that is bound by a standstill or similar agreement with the Company on
the date hereof (an "Existing Bidder"). Nothing contained in this Section 6.04
shall prohibit the Company and its Board of Directors from (i) taking and
disclosing a position with respect to a tender offer by a third party pursuant
to Rules 14d-9 and 14e-2(a) promulgated under the 1934 Act, and (ii) making
such disclosures to the Company's stockholders which, in the judgment of and
subject to the fiduciary duties of the Board of Directors with the advice of
counsel, may be required under applicable law.
(b) The Company will (i) promptly notify Buyer after receipt of any
Acquisition Proposal or any inquiries indicating that any person is considering
making or wishes to make an Acquisition Proposal, (ii) promptly notify Buyer
after receipt of any request for nonpublic information relating to the Company
or any Subsidiary or for access to the properties, books or records of the
Company or any Subsidiary by any Person that may be considering making, or
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has made, an Acquisition Proposal and (iii) subject to the fiduciary duties of
the Board of Directors under applicable law as advised by counsel to the
Company, keep Buyer advised of the status and principal financial terms of any
such Acquisition Proposal, indication or request. The term "Acquisition
Proposal" as used herein means any offer or proposal for, or any indication of
interest in, a merger or other business combination involving the Company or
any Subsidiary or the acquisition of any equity interest in, or a substantial
portion of the assets of, the Company or any Subsidiary, other than the
transactions contemplated by this Agreement.
SECTION 6.05. Notice of Certain Events. The Company shall notify
Buyer, and Buyer shall notify the Company, as promptly as practicable following
its receipt of:
(i) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(iii) notice that any actions, suits, claims, investigations or
proceedings have been commenced or, to the knowledge threatened against,
or involving the Company or any Subsidiary, or Buyer, as applicable,
which, if pending on the date of this Agreement, would have been required
to have been disclosed pursuant to Section 4.12 or which relate to the
consummation of the transactions contemplated by this Agreement.
SECTION 6.06. Rule 145 Affiliates. Prior to the Effective Time,
the Company shall cause to be delivered to Buyer an opinion of Skadden, Arps,
Slate, Meagher & Flom or Holtzmann, Wise & Shepard in form and substance
satisfactory to counsel to Buyer, identifying all persons who might, in the
opinion of counsel to the Company, at the time of the meeting of the Company
Stockholder Meeting, be deemed to be "affiliates" of the Company for purposes
of Rule 145 under the 1933 Act (the "1933 Act Affiliates"). The Company shall
use its best efforts to cause each person who is identified as a possible 1933
Act Affiliate to enter into prior to the Effective Time an agreement in form
and substance reasonably acceptable to Buyer pursuant to which each such person
acknowledges his responsibilities as such an "affiliate".
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ARTICLE VII
COVENANTS OF BUYER
Buyer agrees that:
SECTION 7.01. Obligations of Merger Subsidiary. Buyer will take
all action necessary to cause Merger Subsidiary to perform its obligations
under this Agreement and to consummate the Merger on the terms and conditions
set forth in this Agreement.
SECTION 7.02. Voting of Shares. Buyer agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement and the Merger
at the Company Stockholder Meeting.
SECTION 7.03. Director and Officer Liability. Buyer will cause the
Surviving Corporation to indemnify and hold harmless the present and former
officers and directors of the Company in respect of acts or omissions occurring
prior to the Effective Time to the maximum extent permitted under the Company's
articles of incorporation and bylaws in effect on the date hereof; provided
that, such indemnification shall (to the maximum extent permitted by law) be
mandatory rather than permissive except in instances involving willful
misconduct or bad faith and that the Surviving Corporation shall advance
expenses, including attorneys' fees promptly on demand and delivery of any
required undertaking. For three years after the Effective Time, Buyer will
cause to be maintained the current policies of officers' and directors'
liability insurance in respect of acts or omissions occurring prior to the
Effective Time covering each such person currently covered by the Company's
officers' and directors' liability insurance policy; provided that the
Surviving Corporation may substitute therefore policies of at least the same
coverage containing terms and conditions which in all material respects are no
less advantageous for so long as such substitution does not result in gaps or
lapses in coverage; and provided further that in satisfying its obligation
under this Section, Buyer shall not be obligated to cause the Surviving
Corporation to pay premiums in excess of the amount per annum the Company paid
in its last full fiscal year, which amount has been disclosed to Buyer. Buyer
shall cause the Surviving Corporation to pay all expenses (including attorneys'
fees) that may be incurred by any indemnified party in enforcing the indemnity
and other obligations provided for in this Section 7.03. Buyer agrees that
should the Surviving Corporation fail to comply with the foregoing obligations,
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Buyer shall be responsible therefor. The obligations of Buyer under this
Section 7.03 shall not be terminated or modified in such manner as to adversely
affect directors and officers to whom this Section 7.03 applies without the
consent of such director or officer. Directors and officers to whom this
Section 7.03 applies shall be third party beneficiaries of this Section.
SECTION 7.04. Employee Matters.
(a) For a period of at least one year after the Effective Time,
Buyer shall cause the Company to continue to maintain the Company's existing
compensation, severance, welfare and pension benefit plans, programs and
arrangements (other than any stock based plans, programs and arrangements) for
the benefit of current and former employees and directors of the Company and
its Subsidiaries (subject to such modification as may be required by applicable
law or to maintain the tax exempt status of any such plan which is intended to
be qualified under Section 401(a) of the Code), provided that (i) nothing
herein shall prohibit Buyer from replacing any such existing plan or plans,
program(s) or arrangement(s) with a plan or plans, program(s) or arrangement(s)
which provide such employees and directors with benefits which are not less
favorable in the aggregate than the benefits that would have been provided
under the Company's existing plan(s), program(s) or arrangement(s) to the
extent such replacement is permitted under the terms of the applicable plan,
program or arrangement and (ii) nothing herein shall obligate the Buyer to
provide such employees and directors with any stock based compensation
(including, without limitation, stock options or stock appreciation rights)
after the Effective Time.
In the light of Buyer's desire that the Company provide appropriate
employee incentives in the future, the Buyer agrees promptly to develop, and
the Company and Buyer shall promptly cooperate in developing, a new performance
based incentive compensation plan for the benefit of employees of the Company
and its Subsidiaries as an appropriate substitute for the current Stock Plans.
(b) The Company hereby agrees not to, and to cause its Subsidiaries
not to, amend or modify any existing Employee Plan or Benefit Arrangement, nor
enter into or otherwise establish, adopt or maintain any new employee plans,
programs, agreements or arrangements, or grant any additional Free-standing
SARs or other awards based upon the value of the Company's equity securities
prior to and including the Effective Time without the prior written consent of
the Buyer.
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(c) It is the Buyer's current intention to maintain the Company's
headquarters at its present location in Palo Alto, California.
(d) From and after the Effective Time, for purposes of determining
eligibility, vesting and benefit accrual under any replacement compensation,
severance, welfare, pension benefit or savings plan of Buyer or any of its
affiliates in which employees of the Company and its Subsidiaries become
eligible to participate, service with the Company or any of its Subsidiaries
shall be credited as if such services were rendered to Buyer or any of its
affiliates; provided that (i) Buyer shall not be obligated to permit employees
of the Company and its Subsidiaries to participate in nor, upon participation,
to receive such credited service, with respect to, any plan maintained by Buyer
or its affiliates which is not intended to constitute a replacement plan for
any existing plan, program or arrangement of the Company and its Subsidiaries
and (ii) Buyer shall not be required to give any such employee credit for such
prior service with the Company or any of its Subsidiaries for purposes of any
plan which is a "defined benefit plan" within the meaning of Section 3(35) of
ERISA, other than the Syntex U.S. Employees Pension Plan or any successor plan
to the assets and liabilities thereof.
(e) No provision of this Section 7.04 shall create any third party
beneficiary rights in any current or former employee or director of the Company
or its Subsidiaries (including any beneficiary thereof) hereunder or in respect
of continued or resumed employment or in respect of any benefits that may be
provided, directly or indirectly, under any employee benefit plan or
arrangement.
SECTION 7.05. Registration Statement. Buyer shall promptly prepare
and file with the SEC under the 1933 Act the Registration Statement and shall
use its best efforts to cause the Registration Statement to be declared
effective by the SEC as promptly as practicable. Buyer shall promptly take any
action required to be taken under state securities or Blue Sky laws in connect
with the issuance of LCPS in the Merger. Notwithstanding the foregoing, this
Section 7.05 shall not require Buyer, Merger Subsidiary or Parent to furnish,
other than for Buyer and its Subsidiaries, financial statements prepared in
accordance with United States generally accepted accounting principles or any
reconciliation of financial statements with generally accepted accounting
principles.
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ARTICLE VIII
COVENANTS OF BUYER AND THE COMPANY
The parties hereto agree that:
SECTION 8.01. Best Efforts. (a) Subject to the terms and
conditions of this Agreement, each party will use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement; provided that Buyer
and its Affiliates shall not be required to agree to any consent decree or
order in connection with the objections of any HSR Authority to the
transactions contemplated by this Agreement; and provided further that the
foregoing shall not require Parent or Buyer to furnish, other than for Buyer
and its United States subsidiaries, financial statements prepared in accordance
with United States generally accepted accounting principles or any
reconciliation of financial statements with United States generally accepted
accounting principles.
(b) The Company will use its best efforts to take, or cause to be
taken, all actions and to do, or cause to be done all things reasonably
necessary, proper or advisable to permit Buyer to make the determination
provided for in paragraph (f) of Annex I to this Agreement as soon as
practicable after the date of this Agreement.
SECTION 8.02. Certain Filings. The Company and Buyer and Merger
Subsidiary shall cooperate with one another (a) in connection with the
preparation of the Company Disclosure Documents and the Offer Documents, (b) in
determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority, including the filing or
notification required under the Merger Control Regulation of the European
Community, or by the competition authorities of its Member States or any other
jurisdiction is required, proper or advisable or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the transactions contemplated
by this Agreement and (c) in seeking any such actions, consents, approvals or
waivers or making any such filings, furnishing information so required, proper
or advisable in connection with the transactions contemplated hereby or with
the Company Disclosure Documents or the Offer Documents and seeking timely to
obtain any such actions, consents, approvals or waivers.
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SECTION 8.03. Public Announcements. Buyer and the Company will
consult with each other before issuing any press release or making any public
statement or any filing with any governmental body, agency, official or
authority with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable law or any listing
agreement with any national securities exchange, will use all reasonable
efforts not to issue any such press release or make any such public statement
or such filing prior to such consultation.
SECTION 8.04. Further Assurances. At and after the Effective Time,
the officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or Merger Subsidiary, any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under
any of the rights, properties or assets of the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with,
the Merger.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party. The
respective obligations of the Company, Buyer and Merger Subsidiary to
consummate the Merger are subject to the satisfaction or waiver at or prior to
the Effective Time of the following conditions:
(i) this Agreement shall have been adopted by the affirmative vote
of the stockholders of the Company in accordance with Panama Law;
(ii) any applicable waiting period under the HSR Act relating to the
Merger shall have expired;
(iii) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of
the Merger; provided that neither party may assert this condition unless
it has used its best efforts to oppose such judgment, injunction, order or
decree and to avail itself of all rights of appeal or it has determined,
in its
38
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reasonable judgment, that such efforts would not have a substantial
likelihood of success;
(iv) all actions by or in respect of or filings with any governmental
body, agency, official, or authority required to permit the consummation
of the Merger, including, without limitation, filing articles of merger or
other appropriate documents for registration in the Mercantile Registry of
the Republic of Panama and pursuant to the Delaware GCL shall have been
obtained or made (other than those actions or filings which, if not
obtained or made prior to the consummation of the Merger, would not
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect); and
(v) the Registration Statement shall have been declared effective
and no stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall be
pending before or threatened by the SEC.
SECTION 9.02. Conditions to the Obligations of Buyer and Merger
Subsidiary. The obligations of Buyer and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following further conditions:
(a)(i) either (A) the Committee on Foreign Investment in the United
States shall have determined not to investigate the Offer and the Merger
under Exon-Florio (either by action or nonaction) or (B) if such Committee
shall have determined to make such an investigation, such investigation
shall have been completed and the President shall have determined (either
by action or nonaction) not to take any action under Exon-Florio with
respect to the transactions contemplated by this Agreement;
(ii) the Company shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to
the Effective Time pursuant to the terms hereof; and
(iii) the representations and warranties of the Company contained in
this Agreement and in any certificate or other writing delivered by the
Company pursuant hereto shall be true at and as of the Effective Time as
if made at and as of such time.
(b) In the event Buyer has not acquired Shares in the Offer, each of
the conditions set forth in Annex I
39
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hereto shall have been satisfied or waived prior to the Effective Time,
provided that for the purpose of this Section 9.02(b), the reference in
clause (d)(i) of Annex I to "25%" shall be deemed to read "50%" and the
phrase "or proposed to acquire" shall be deleted.
SECTION 9.03. Conditions to the Obligation of the Company to Effect
the Merger. The obligation of the Company to effect the Merger is further
subject to the satisfaction or waiver at or prior to the Effective Time of the
condition that Buyer and Merger Subsidiary shall have performed in all material
respects each of their obligations under this Agreement required to be
performed by them at or prior to the Effective Time pursuant to the terms
hereof and the representations and warranties of Buyer and Merger Subsidiary
contained in this Agreement and in any certificate or other writing delivered
by Buyer or Merger Subsidiary pursuant hereto shall be true at and as of the
Effective Time as if made at and as of such time.
ARTICLE X
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(i) by mutual written consent of the Company and Buyer;
(ii) by either the Company or Buyer if (x) either Buyer shall have
failed to commence the Offer within 15 days following the date of this
Agreement or (y) Buyer shall not have purchased any Shares pursuant to the
Offer prior to December 31, 1994; provided, however, that the passage of
the period referred to in clause (y) shall be tolled for any part thereof
during which any party shall be subject to a nonfinal order, decree or
ruling or action restraining, enjoining or otherwise prohibiting the
purchase of Shares pursuant to the Offer or the consummation of the
Merger; and provided further that the right to terminate this Agreement
under this clause (ii) shall not be available to any party whose failure
to fulfill any obligation under this Agreement has been the cause of or
resulted in any of the circumstances described in clauses (x) or (y);
40
<PAGE> 45
(iii) by Buyer or the Company if prior to the purchase of Shares
pursuant to the Offer or the Effective Time, the Board of Directors of the
Company shall have withdrawn or materially modified its approval or
recommendation of the Offer, the Merger or this Agreement, recommended
another Acquisition Proposal or entered into a definitive agreement or
agreement in principle with respect to another Acquisition Proposal, or
resolved to do any of the foregoing;
(iv) by either the Company or Buyer, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining Buyer
or the Company from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable;
(v) by either Buyer or the Company, if the Company Stockholder
Meeting shall have been held and the stockholders of the Company shall
have failed to approve and adopt this Agreement and the Merger at such
meeting; and
(vi) by Buyer, if Buyer shall have received any communication from
the Department of Justice or Federal Trade Commission (each an "HSR
Authority") (which communication shall be confirmed to the other parties
by the HSR Authority) that causes such party to reasonably believe that
any HSR Authority has authorized the institution of litigation challenging
the transactions contemplated by this Agreement under the U.S. antitrust
laws, which litigation will include a motion seeking an order or
injunction prohibiting the consummation of any of the transactions
contemplated by this Agreement.
SECTION 10.02. Effect of Termination. If this Agreement is
terminated pursuant to Section 10.01, this Agreement shall become void and of
no effect with no liability on the part of any party hereto, except for fraud
and for willful breach of a material obligation contained herein and except
that the agreements contained in Section 11.04 shall survive the termination
hereof.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy,
telex or similar writing) and shall be given,
if to Buyer or Merger Subsidiary, to:
Dr. Felix Amrein
Roche Capital Corporation
Grenzacherstrasse 124
CH - 4002 Basel
Telecopier: 011-41-61-688-1396
with a copy to: Peter R. Douglas
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopier: (212) 450-4800; and
if to the Company, to:
Syntex Corporation
3401 Hillview Avenue
Palo Alto, California 94304
Telecopier: (415) 852-1144
Attention: Neil Flanzraich
with a copy to: Holtzmann, Wise & Shepard
1271 Avenue of the Americas
New York, New York 10020
Telecopier: (212) 554-8181
Attention: Harvey Goldschmid
and a copy to: Skadden, Arps, Slate, Meagher
& Flom
919 Third Avenue
New York, New York 10022
Telecopier: (212) 735-2000
Attention: Joseph H. Flom
or such other address or telex number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request
or other communication shall be effective (i) if given by telex, when
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such telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received or (ii) if given by any other means, when
delivered at the address specified in this Section.
SECTION 11.02. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto (other than the Guaranty
of Roche Holding Ltd, dated May 1, 1994) shall not survive the Effective Time
except for the provisions of Article II and Sections 7.03, 7.04 and 8.04
hereof.
SECTION 11.03. Amendments; No Waivers. (a) Subject to the
provisions of Section 1.03 hereof, any provision of this Agreement may be
amended or waived prior to the Effective Time if, and only if, such amendment
or waiver is in writing and signed, in the case of an amendment, by the
Company, Buyer and Merger Subsidiary or in the case of a waiver, by the party
against whom the waiver is to be effective; provided that after the adoption of
this Agreement by the stockholders of the Company, no such amendment or waiver
shall, without the further approval of such stockholders, alter or change (i)
the amount or kind of consideration to be received in exchange for any shares
of capital stock of the Company, (ii) any term of the articles of incorporation
of the Surviving Corporation or (iii) any of the terms or conditions of this
Agreement if such alteration or change would adversely affect the holders of
any shares of capital stock of the Company.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.04. Expenses. (a) The Company will pay Buyer, in
immediately available funds, so long as Buyer shall not have materially
breached its obligations under this Agreement, promptly, but in no event later
than two business days, after the termination of this Agreement pursuant to
clause (iii) of Section 10.01 or if any Person or "group" (as defined in
Section 13(d)(3) of the Exchange Act), other than Buyer or its Affiliates or
any group of which any of them is a member, shall have acquired beneficial
ownership of more than 50% of any class or series of capital stock of the
Company (including the Shares), through acquisition of stock, the formation of
a group or otherwise, or shall have been
43
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granted any option, right, or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 50% of any class or series of capital stock
of the Company (including the Shares) hereof a fee for reimbursement of costs
and expenses of (x) $20,000,000, if such event occurs on or before May 14,
1994, or (y) $35,000,000, if such event occurs after May 14, 1994.
(b) Subject to Section 11.04(a), all costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost
or expense.
SECTION 11.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto except that Buyer may
transfer or assign, in whole or from time to time in part, to one or more of
its direct or indirect wholly owned subsidiaries of its ultimate parent entity,
the right to purchase shares pursuant to the Offer, but any such transfer or
assignment will not relieve Buyer of its obligations under the Offer or
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
SECTION 11.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware, without
regard to the principles of conflicts of laws.
SECTION 11.07. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
SECTION 11.08. Validity. If any provision of this Agreement, or
the application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
SECTION 11.09. Entire Agreement. This Agreement, the Guaranty of
Roche Holding Ltd. dated May 1, 1994 including
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<PAGE> 49
the documents and instruments referred to herein, together with the letter
agreement, dated February 28, 1994, between Parent and the Company, constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties or any of them, with respect to the
subject matter hereof.
SECTION 11.10. Definition. For purposes of this Agreement the
phrases "to the knowledge of the Company" or "known to the Company" mean (i)
known to any senior manager of the Company or any material Subsidiary or (ii)
could reasonably be expected to be known by any of such persons.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
SYNTEX CORPORATION
By: /s/ Paul E. Freiman
----------------------------
Name: Paul E. Freiman
Title: Chief Executive Officer
ROCHE CAPITAL CORPORATION
By: /s/ Henri B. Meier
----------------------------
Name: Henri B. Meier
Title: Vice President
ROCHE (PANAMA) CORPORATION
By: /s/ Henri B. Meier
---------------------------
Name: Henri B. Meier
Title: Vice President
45
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ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer pursuant to the
Acquisition Agreement and Plan of Merger (the "Agreement") dated as of May 1,
1994 among Syntex Corporation (the "Company"), Roche Capital Corporation
("Buyer") and Roche (Panama) Corporation (the "Merger Subsidiary"), Buyer
shall not be required to accept for payment or pay for any Shares, and may
terminate the Offer, unless (i) a majority of the outstanding Shares on a fully
diluted basis has been tendered pursuant to the Offer by the expiration of the
Offer and not withdrawn; (ii) the applicable waiting period under the HSR Act
shall have expired or been terminated; (iii) either (A) the Committee on
Foreign Investment in the United States shall have determined not to
investigate the Offer and the Merger under Exon-Florio (either by action or
nonaction) or (B) if such Committee shall have determined to make such an
investigation, such investigation shall have been completed and the President
shall have determined (either by action or nonaction) not to take any action
under Exon-Florio with respect to the transactions contemplated by this
Agreement; provided, however, that prior to December 31, 1994, Buyer shall not
terminate the Offer by reason of the nonsatisfaction of either of the
conditions set forth in clauses (ii) or (iii) above and shall extend the Offer
(it being understood that this provision shall not prohibit Buyer from
terminating the Offer or failing to extend the Offer by reason of the
nonsatisfaction of any other condition of the offer); or if prior to the
acceptance for payment of Shares, any of the following conditions exist:
(a) there shall be instituted or pending any action or proceeding
by any government or governmental authority or agency, domestic or
foreign, or by any other person, domestic or foreign, before any court or
governmental authority or agency, domestic or foreign, that has a
substantial likelihood of success, (i) challenging or seeking to make
illegal, to delay materially or otherwise directly or indirectly to
restrain or prohibit the making of the Offer, the acceptance for payment
of or payment for some of or all the Shares by Buyer or the consummation
by Buyer of the Merger, seeking to obtain material damages or otherwise
directly or indirectly relating to the transactions contemplated by the
Offer or the Merger, (ii) seeking to restrain or prohibit Buyer's
ownership or operation (or that of its subsidiaries or
<PAGE> 51
Affiliates) of all or any material portion of the business or assets of
the Company and its subsidiaries, taken as a whole, or of Buyer and its
subsidiaries or Affiliates, taken as a whole, or to compel Buyer or any of
its subsidiaries or Affiliates to dispose of or hold separate all or any
material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or of Buyer and its subsidiaries or
Affiliates, taken as a whole, (iii) seeking to impose or confirm material
limitations on the ability of Buyer or any of its subsidiaries or
Affiliates effectively to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote any Shares acquired or
owned by Buyer or any of its subsidiaries or Affiliates on all matters
properly presented to the Company's stockholders, (iv) seeking to require
divestiture by Buyer or any of its subsidiaries or Affiliates of any
Shares, or (v) that otherwise, in the reasonable judgment of Buyer, is
likely to materially adversely affect the Company and its subsidiaries,
taken as a whole, or Buyer and its subsidiaries or Affiliates, taken as a
whole;
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by
any court, government or governmental authority or agency, domestic or
foreign, other than the application of the waiting period provisions of
the HSR Act or Exon- Florio to the Offer or the Merger, that has a
substantial likelihood of resulting in any of the consequences referred to
in clauses (i) through (v) of paragraph (a) above;
(c) any material adverse change in the business, assets, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole, shall have occurred other than as disclosed to Buyer in
writing or there shall be any event, occurrence or development of a state
of circumstances or facts which individually or in the aggregate would
reasonably be expected to result in such a material adverse change;
(d) (i) it shall have been publicly disclosed or Buyer shall have
otherwise learned that any person or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Buyer or its Affiliates or any
group of which any of them is a member, shall have acquired or proposed to
acquire beneficial ownership of more than 25% of any class or series of
capital stock of the Company
ii
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(including the Shares), through the acquisition of stock, the formation of
a group or otherwise, or shall have been granted any option, right or
warrant, conditional or otherwise, to acquire beneficial ownership of more
than 25% of any class or series of capital stock of the Company (including
the Shares); (ii) any person or group shall have entered into a definitive
agreement or an agreement in principle with the Company with respect to a
merger, consolidation or other business combination with the Company; or
(iii) the Board of Directors of the Company (or any duly authorized
committee thereof) shall have withdrawn or materially modified its
approval or recommendation of the Offer or the Merger;
(e) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under this Agreement,
or any of the representations and warranties of the Company set forth in
this Agreement shall not be true when made or at and as of such time as if
made at and as of such time;
(f) Buyer, acting in good faith, shall not have satisfied itself
that there exists no potential environmental liability of the Company or
any Subsidiary that has a reasonable prospect individually or in the
aggregate of resulting in a Material Adverse Effect which liability (i)
relates to any site in Missouri or Illinois and is not specifically
disclosed in the footnotes to the financial statements in the Company 10-K
or Company 10-Q; or (ii) arises or may arise from (x) any site in Missouri
or Illinois identified or referred to in any writing delivered by the
Company to Buyer prior to the date hereof or (y) any circumstance or
condition identified in any such writing; or
(g) the Agreement shall have been terminated in accordance with its
terms;
which, in the judgment of Buyer in any such case, and regardless of the
circumstances (including any action or omission by Buyer) giving rise to any
such condition, makes it inadvisable to proceed with such acceptance for
payment or payment.
For purposes of this Annex I, the term "foreign" shall mean any
jurisdiction other than the United States, in which either the Company and its
Subsidiaries or Buyer and its Affiliates has any material assets or operations.
Each other term used herein that is defined in the Agreement shall have the
meaning assigned to such term in the Agreement.
iii
<PAGE> 1
EXHIBIT 99.1
SECTION 1. The Guaranty. (a) For valuable consideration, Roche
Holding Ltd, a Swiss corporation ("Guarantor"), hereby unconditionally and
irrevocably guarantees to Syntex Corporation, a Panama corporation (the
"Company") the prompt and full performance and discharge by Roche Capital
Corporation, a Panama corporation ("Buyer") and Roche (Panama) Corporation, a
Delaware corporation ("Merger Subsidiary") (together, the "Obligors") of all of
the covenants, agreements, obligations, liabilities, representations and
warranties of the Obligors under the Acquisition Agreement and Plan of Merger
dated as of May 1, 1994 (the "Agreement") among the Company, Buyer and Merger
Subsidiary (collectively, the "Obligations"), in accordance with the terms
hereof and thereof. Guarantor hereby guarantees to the Company full and
complete performance by the Obligors of each and all of the Obligations,
including, without limitation, the due and punctual payment of all amounts
which may become due and payable to the Company. Guarantor acknowledges and
agrees that, with respect to all obligations to pay money, such guaranty shall
be a guaranty of payment and not of collection. If the Obligors shall default
in the due and punctual performance of any of the Obligations or in the full
and timely payment of any amounts owed pursuant to the Obligations, Guarantor
will promptly cause to be performed such Obligations and will promptly cause
full payment to be made of any amount due with respect thereto at its sole cost
and expense.
(b) Guarantor further guarantees to those officers and directors
of the Company whom the Buyer has agreed will be indemnified and held harmless
pursuant to Section 7.03 of the Agreement the full and complete performance by
the Obligors of each and all of the obligations set forth in said Section 7.03,
including, without limitation, any amounts due and payable to such officers and
directors.
SECTION 2. Guaranty Unconditional. The liabilities and
obligations of Guarantor to the Company pursuant to this Guaranty shall be
unconditional and irrevocable and shall not be conditioned or contingent upon
the pursuit of any remedies against either Obligor or any other person.
<PAGE> 2
SECTION 3. Waivers of the Guarantor. (a) Guarantor hereby
waives any right, whether legal or equitable, statutory or non-statutory, to
require the Company to proceed against or take any action against or pursue any
remedy with respect to the Obligors or any other person or make presentment or
demand for performance or give any notice of nonperformance or pursue any other
remedy in their power whatsoever before the Company may enforce rights against
Guarantor hereunder. The unconditional obligation of Guarantor hereunder will
not be affected, impaired or released by any extension, waiver, amendment or
thing whatsoever which would release a guarantor (other than performance).
This Guaranty shall be construed as a continuing, absolute and unconditional
guaranty of payment without regard to the validity or enforceability of the
Agreement.
(b) Guarantor hereby waives irrevocably any defense other than
payment in full of the indebtedness, including without limitation any defense
based upon or arising by reason of any disability or incapacity of the Obligors
or lack of authority of any officer or director of the Obligors, the
unenforceability of the indebtedness or any part thereof for any cause, or the
cessation for any cause of the liability of the Obligors other than by payment
in full of the indebtedness and any immunity (whether on the basis of
sovereignty or otherwise) from the jurisdiction, attachment or execution to
which it or its property might otherwise be entitled in any action arising out
of or based upon this Guaranty which may be instituted in the courts of the
Republic of Panama, the State of New York, the United States of America, or any
other domestic or foreign jurisdiction.
SECTION 4. Definitions. Terms used herein that are defined in
the Acquisition Agreement are, unless otherwise defined, used herein as therein
defined.
SECTION 5. Representations and Warranties. (a) Corporate
Existence and Power. The Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of Switzerland, and has the
requisite corporate powers required to carry on its business as now conducted.
The Guarantor is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where the character of the property owned
or leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse effect on
the
2
<PAGE> 3
financial condition, business or results of operations of the Guarantor.
(b) Corporate Authorization. The execution, delivery and
performance by the Guarantor of this Guaranty and the consummation by the
Guarantor of the transactions contemplated hereby are within the Guarantor's
corporate powers and have been duly authorized by all necessary corporate
action. This Guaranty has been duly and validly executed and delivered by
Guarantor and constitutes a valid and binding obligation of the Guarantor,
enforceable in accordance with its terms, except as (i) the enforceability
hereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
(c) Governmental Authorization. The execution, delivery and
performance by the Guarantor of this Guaranty require no action by or in
respect of, or filing with, any governmental body, agency, official or
authority other than such filings or registrations with, or authorizations,
consents or approvals of, governmental bodies, agencies, officials or
authorities, the failure of which to make or obtain would not reasonably be
expected to have a material adverse effect on the financial condition, business
or results of operations of Guarantor.
(d) Non-Contravention. The execution, delivery and performance
by the Guarantor of this Guaranty and the consummation by the Guarantor of the
transactions contemplated hereby do not and will not (i) contravene or conflict
with the certificate of incorporation or bylaws of the Guarantor, (ii) assuming
compliance with the matters referred to in Section 5(c), contravene or conflict
with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to the
Guarantor or any of its subsidiaries or (iii) constitute a default under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of the Guarantor or to a loss of any benefit to which the
Guarantor is entitled under any provision of any agreement, contract or other
instrument binding upon the Guarantor or any license, franchise, permit or
other similar authorization held by the Guarantor, except such as would not
have a material adverse effect on the business, financial condition or results
of operations of the Guarantor and its subsidiaries, taken as a whole.
SECTION 6. Covenants of Guarantor. (a) Guarantor hereby agrees
to vote any Shares beneficially
3
<PAGE> 4
owned by it, and to cause any Shares beneficially owned by any of its
subsidiaries to be voted, in favor of adoption of the Agreement and the Merger
at the meeting of the Company's stockholders called for that purpose.
SECTION 7. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopier
or similar writing) and shall be given to:
Dr. Felix Amrein
Roche Holding Ltd
Grenzacherstrasse 124
CH - 4002 Basel
Switzerland
Telecopier: 011-41-61-688-1396
with a copy to:
Peter R. Douglas, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Telecopier: (212) 450-4800
or such other address or telecopier number as such party may hereafter specify
for the purpose by notice to the parties to the Agreement. Each such notice,
request or other communication shall be effective (i) if given by telecopier,
when such telecopy is transmitted to the telecopier number specified in this
Section and the appropriate confirmation is received or (ii) if given by any
other means, when delivered at the address specified in this Section.
SECTION 8. Authorized Agent and Venue. The Guarantor hereby
appoints Davis Polk & Wardwell as its authorized agent upon whom process may be
served in any action or proceeding arising out of or based upon this Guaranty.
Any dispute arising out of this Guaranty or out of any other agreement executed
in connection with the transactions contemplated by this guaranty shall be
brought in any State or Federal court in the State of New York, and, by
execution and delivery of this Guaranty, each of the parties to this Guaranty
accepts for itself the exclusive jurisdiction of such courts and irrevocably
agrees to be bound by any judgment rendered thereby.
SECTION 9. Successors and Assigns. The provisions of this
Guaranty shall be binding upon and inure to the benefit of and enforceable by
the Company and its respective successors and assigns. This Guaranty is
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<PAGE> 5
intended (i) to be for the benefit of holders of Shares outstanding at the
Effective Time and for the benefit of the officers and directors referred to in
Section 1(b) hereof and (ii) to grant to such holders, officers and directors,
respectively the rights of the Company specified herein.
SECTION 10. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW.
SECTION 11. Attorney's Fees and Costs. In addition to the
amounts guaranteed under this Guaranty, the Guarantor agrees to pay all
reasonable attorneys' fees and all other costs and expenses incurred by the
beneficiaries hereof in enforcing this Guaranty in any action or proceeding
arising out of, or relating to, this Guaranty.
SECTION 12. Nonwaiver of Rights of Obligees. No right or power
of any person under this Guaranty shall be deemed to have been waived by any
act or conduct on the part of such person, or by any neglect to exercise that
right or power, or by any delay in so doing; and every right or power shall
continue in full force and effect until specifically waived or released by an
instrument in writing executed by such person.
SECTION 13. Invalidity. If any provision of this Guaranty
contravenes or is held invalid under the laws of any jurisdiction, this
Guaranty shall be construed as though it did not contain that provision, and
the rights and liabilities of the parties shall be construed and enforced
accordingly.
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<PAGE> 6
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed as of this 1st day of May 1994.
ROCHE HOLDING LTD
By /s/ Henri B. Meier
-------------------
Name: Henri B. Meier
Title: Vice President
Agreed and Accepted:
SYNTEX CORPORATION
By /s/ Paul E. Freiman
-----------------------
Name: Paul E. Freiman
Title: Chief Executive Officer
6
<PAGE> 1
EXHIBIT 99.2
FORM OF
CERTIFICATE OF DESIGNATION OF
LIMITED CONVERSION PREFERRED STOCK
OF
ROCHE CAPITAL CORPORATION
We, _____________________, President, and ________________,
Secretary, of Roche Capital Corporation (the "Corporation"), a corporation
organized and existing under the Laws of the Republic of Panama (the "Panama
Corporate Law" or "PCL"), in accordance with the provisions of Section ____
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation, the Board of Directors
on ____________ __, 1994 adopted a resolution creating a series of preferred
stock of the Corporation titled Limited Conversion Preferred Stock the
designation and amount thereof and the relative powers, preferences, rights,
qualifications, limitations and restrictions of the shares of such series are
as follows:
SECTION 1. DESIGNATION, AMOUNT AND STATED VALUE. The shares
of such series shall be designated "Limited Conversion Preferred Stock" (the
"Limited Conversion Preferred Stock" or "LCPS"), and the authorized number of
shares constituting such series shall be ____________. The stated value of
each share of Limited Conversion Preferred Stock shall be $1000.00 ("Stated
Value"). No fractional shares of LCPS shall be issuable.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) The Holders of shares of the Limited Conversion Preferred
Stock ("Holders"), in preference to the holders of the Corporation's common
stock (the "Common Stock"), shall be entitled to receive, subject to paragraphs
B and C below, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, cumulative dividends in cash at
the rate of 3% per annum (computed on the basis of a 360-day year) on the
Liquidation Value of each share of Limited Conversion Preferred Stock on and as
of the most recent Dividend Payment Date (as defined below). Such dividends
shall be payable annually in arrears each year on the date of the anniversary
of the issuance of the LCPS (each such date
<PAGE> 2
being referred to herein as a "Dividend Payment Date"), commencing on the first
Dividend Payment Date after the issuance of such share. Accrued and unpaid
dividends on outstanding shares of Limited Conversion Preferred Stock, if any,
shall be added to the Liquidation Value (as defined in Section 6) of such
shares on and as of the Dividend Payment Date on which such dividends were
originally scheduled to be paid and shall thereupon cease to be accrued and
unpaid dividends.
(B) Dividends shall begin to accrue (whether or not declared)
and be cumulative on outstanding shares of the Limited Conversion Preferred
Stock from the date of issue of each such share of Limited Conversion Preferred
Stock. Accrued but unpaid dividends shall not bear interest. Dividends paid
on shares of the Limited Conversion Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all shares of
Limited Conversion Preferred Stock at the time outstanding. The Board of
Directors may fix a record date for the determination of Holders entitled to
receive payment of any dividend declared thereon, which record date shall not
be more than 60 days prior to the date fixed for any such payment.
(C) In no event shall any dividend in cash be paid or set
apart for payment on shares of stock ranking pari passu (either as to
dividends or upon liquidation, dissolution, or winding up) with the Limited
Conversion Preferred Stock unless, contemporaneously therewith, a like ratable
dividend in cash is declared by the Board of Directors, paid or set aside for
payment on or in respect of the shares of Limited Conversion Preferred Stock
outstanding at the time.
SECTION 3. VOTING RIGHTS. Except as otherwise provided under
applicable law, the Holders shall have no voting rights, except that the
approval of Holders of at least a majority of the outstanding shares of Limited
Conversion Preferred Stock shall be required to change the terms and provisions
of the Limited Conversion Preferred Stock (whether by amendment to the
Corporation's Certificate of Incorporation or otherwise) in a manner which
affects adversely the rights and preferences of the Holders of the Limited
Conversion Preferred Stock.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever dividends payable on the Limited Conversion
Preferred Stock as provided in Section 2 hereof are in arrears, thereafter and
until all accrued and unpaid dividends, whether or not declared, on outstanding
shares of
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the Limited Conversion Preferred Stock shall have been paid in full as provided
in Section 2, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Limited Conversion Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Limited Conversion Preferred Stock, except like dividends paid
ratably (according to respective aggregate Liquidation Values) on
shares of the Limited Conversion Preferred Stock and all other stock
ranking on a parity therewith on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of
all such shares are then entitled; or
(iii) redeem, purchase or otherwise acquire for value any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Limited Conversion
Preferred Stock; provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior stock
in exchange for shares of any stock of the Corporation ranking junior
(as to dividends and upon liquidation, dissolution and winding up) to
the Limited Conversion Preferred Stock.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for value any shares of the
capital stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such time
and in such manner.
(C) The Corporation shall not be a party to any
consolidation, merger or binding share exchange or a transfer of all or
substantially all of its assets in a transaction in which LCPSs are changed
into or mandatorily exchanged for other securities or property unless the
Holders of the LCPSs shall receive securities in such transaction which are
exchangeable for NESs (as defined in Section 9(A) hereof) and unless the
Corporation has received an opinion of Davis Polk & Wardwell (or other counsel
satisfactory to the Holders of a majority of the outstanding shares of LCPS at
the time of such transaction) to the effect that receipt of such securities or
other property shall be tax free to the holders of such LCPSs for U.S. federal
income tax purposes.
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<PAGE> 4
SECTION 5. REACQUIRED SHARES. Any shares of Limited
Conversion Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever (including by redemption or reclassification) may, in
the sole discretion of the Corporation, be retired and canceled promptly after
the acquisition thereof. All such shares shall upon their retirement and upon
the filing of any required certificate pursuant to the PCL, become authorized
but unissued shares of preferred stock without designation as to series and may
be reissued as part of a new series of preferred stock to be created by
resolution or resolutions of the Board of Directors or as otherwise permitted
under the PCL.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation, dissolution or winding up of the
Corporation, the Holder of each share of Limited Conversion Preferred Stock
shall be entitled to a payment in an amount equal to the Liquidation Value of
such share, together with any accrued and unpaid dividends thereon, at the time
fixed for such liquidation, dissolution or winding up, before any payment shall
be made or any assets distributed to the Holders of the Common Stock or any
other stock of the Corporation ranking junior (as to dividends and upon
distribution, liquidation or winding up) to the Limited Conversion Preferred
Stock. The Corporation shall give each Holder of LCPS notice of any such
liquidation, dissolution or winding up at least 60 days prior to consummation
thereof. "Liquidation Value" means, with respect to any share of Limited
Conversion Preferred Stock, (i) at any time on or prior to the first Dividend
Payment Date with respect to such share, the Stated Value thereof (the "Initial
Liquidation Value") and (ii) thereafter, the sum of the Initial Liquidation
Value and the aggregate of all accrued and unpaid dividends on such share on
and as of the immediately preceding Dividend Payment Date without regard to
whether any such dividends have been added to the Liquidation Value of such
share. If the assets of the Corporation, or the proceeds thereof, are not
sufficient to pay in full the aggregate Liquidation Value payable to the
Holders of outstanding shares of Limited Conversion Preferred Stock and all
shares of any stock ranking pari passu therewith (either as to dividends or
upon dissolution, liquidation or winding up), if any, then the Holders of all
such shares shall share ratably (according to respective aggregate Liquidation
Values) in such distribution of assets, or the proceeds thereof, in accordance
with the amount which would be payable on such distribution if the amounts to
which the Holders of all outstanding shares of Limited Conversion Preferred
Stock and the holders of all
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<PAGE> 5
outstanding shares of such parity stock are entitled were paid in full. Except
as provided in this Section 6, Holders of Limited Conversion Preferred Stock
shall not be entitled to any distribution in respect of the Limited Conversion
Preferred Stock in the event of liquidation, dissolution or winding up of the
affairs of the Corporation.
(B) For the purposes of this Certificate of Designation,
neither the voluntary sale, conveyance, exchange or transfer (for cash, shares
of stock, securities or other consideration) of all or substantially all the
property or assets of the Corporation nor the consolidation or merger (or
similar combination) of the Corporation with or into one or more other
corporations shall, without further corporate action, be deemed to be a
liquidation, dissolution or winding up of the Corporation, voluntary or
involuntary.
SECTION 7. REDEMPTION.
(A) Optional Redemption. The Corporation may redeem
outstanding shares of Limited Conversion Preferred Stock, at any time in whole
or from time to time in part, at a redemption price (the "Redemption Price")
equal to the aggregate Liquidation Value of such shares on and as of the date
(the "Redemption Date") on which such redemption is to occur, together with
accrued and unpaid dividends thereon to but not including the date fixed for
redemption if, and to the extent, the Corporation shall have funds legally
available for such payment (i) with the consent of the Holder of the Limited
Conversion Preferred Stock to be so redeemed, (ii) such redemption, in the
reasonable judgment of the Corporation, shall be necessary to terminate
reporting and registration requirements of the Corporation under the Exchange
Act of 1934, as amended ("Exchange Act") or (iii) such redemption, in the
reasonable judgment of the Corporation, shall be necessary to avoid application
of registration or reporting obligations under applicable securities laws to
the Corporation, any affiliate of the Corporation or securities issuable upon
exchange of the Limited Conversion Preferred Stock. In the event the
Corporation shall redeem less than all outstanding shares of the Limited
Conversion Preferred Stock for the purposes set forth in clauses (ii) or (iii)
of the preceding sentence, shares will be redeemed in the inverse order of size
of the aggregate number of shares held of record (within the meaning of Rule
12g5-1 under the Exchange Act, as amended from time to time) of each Holder or
in such other reasonable manner as may be selected by the Corporation in its
sole discretion from time to time.
(B) Mandatory Redemption. The Corporation shall, on the
date of the tenth anniversary of the issuance of the
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<PAGE> 6
shares, redeem all outstanding shares of Limited Conversion Preferred Stock at
the aggregate Liquidation Value.
(C) In the event the Corporation shall redeem any or all
shares of Limited Conversion Preferred Stock, notice of such redemption shall
be given by first class mail, postage prepaid, mailed not less than 10 days nor
more than 60 days prior to the Redemption Date, to each Holder of record of the
shares to be redeemed at such Holder's address as the same appears on the stock
register of the Corporation; provided, however, that no failure to give such
notice nor any defect therein shall affect the validity of the proceedings for
the redemption of any share of Limited Conversion Preferred Stock to be
redeemed except in respect of the Holder to whom the Corporation has failed to
give said notice or except as to the Holder whose notice was defective. Each
such notice shall state: (1) the Redemption Date; (2) the number of shares of
Limited Conversion Preferred Stock to be redeemed (the "Redeemed Shares") on
such Redemption Date and, if less than all the shares held by such Holder are
to be redeemed from such Holder, the number of Redeemed Shares to be redeemed
from such Holder; (3) the Redemption Price; (4) the place or places where
certificates for the Redeemed Shares are to be surrendered for payment of the
Redemption Price; and (5) that dividends on the Redeemed Shares will cease to
accrue on and as of the Redemption Date.
(D) Notice having been mailed as aforesaid, on and as of the
Redemption Date (unless the Corporation shall have defaulted in the payment of
the Redemption Price for the Redeemed Shares), dividends on the Redeemed Shares
shall cease to accrue, such shares shall no longer be deemed to be outstanding,
and all rights of the Holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the Redemption Price with
respect thereto) shall cease. In case fewer than all the shares of Limited
Conversion Preferred Stock represented by any certificate representing such
shares are redeemed, a new certificate shall be issued representing the number
of unredeemed shares without cost to the Holder thereof.
SECTION 8. RESTRICTIONS ON TRANSFER. Shares of Limited
Conversion Preferred Stock shall not be transferable except (i) in the case of
shares held by an individual, to the estate or the immediate family of such
individual (as that term is defined in Rule 16a-1(e) under the Exchange Act, as
amended from time to time) or to an entity all of the owners of which are
members of the immediate family of such individual, (ii) in the case of shares
held by a corporation or partnership, to a wholly-owned subsidiary of such
corporation or partnership, or (iii) in either case, to
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<PAGE> 7
an institution qualified as tax-exempt under Section 501(c)(3) of the Internal
Revenue Code of 1986.
SECTION 9. EXCHANGE.
(A) Description of the Exchange. Subject to the provisions
of Section 10(A) hereof, on the second anniversary of the date the Shares are
first issued (or, if earlier, adoption by the Corporation of a plan of
liquidation, dissolution or winding-up of the Corporation ("Liquidation"), and
on each anniversary thereafter prior to the Mandatory Redemption Date (or, in
the event of a Liquidation, the date 30 days prior to consummation of such
Liquidation) (the "Exchange Date"), Holders of the Limited Conversion Preferred
Stock may exchange their Shares for Genussscheine of Roche Holding Ltd, a Swiss
corporation ("Roche") ("Non-voting Equity Securities" or "NESs") (the
"Exchange"). The Exchange right is exercisable against the Corporation.
(B) Provided a Holder complies with the Exchange Conditions,
such Holder of outstanding shares of Limited Conversion Preferred Stock will be
entitled to receive in exchange for each share of LCPS to be exchanged by such
Holder a number of NESs equal to the Stated Value divided by $[ ] [150% of
U.S. $ equivalent of NES price based on the closing Zurich NES price, and Noon
Buying Rate, on April 29, 1994] (the "Exchange Ratio"). No fractional NESs
will be issued on exchange of shares of LCPS. A Holder who, in the absence of
the preceding sentence, would otherwise be entitled to a fractional NES will
receive cash in U.S. dollars equal to the value of such fractional NESs based
upon the Sale Price (as defined below) of a single NES on the Trading Day (as
defined below) immediately preceding the Exchange Date. At the time of any
exchange hereunder, the rights of the holders of LCPS so exchanged as
shareholders of the Corporation (with respect to such exchanged LCPS shares)
shall cease, and the person or persons entitled to receive the NESs issuable
upon exchange shall be treated for all purposes as the registered holder or
holders of such NESs as of the Exchange Date.
"Sale Price" means the closing sale price per Non-voting
Equity Security in Swiss Francs (or, if no closing sale price is reported, the
mean of the closing bid and closing asked prices) on the Zurich Stock Exchange
on such Trading Day. The equivalent price in U.S. dollars shall be based on
the Noon Buying Rate on such Trading Day, or if such Trading Day is a Saturday
or Sunday or other day on which commercial banks in The City of New York are
obligated or authorized to close, shall be based on the Noon Buying Rate on the
preceding day for which a Noon Buying Rate is available. "Trading Day" means
each day on which the Zurich
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Stock Exchange is open for trading, other than day a day on which such exchange
is scheduled to close prior to its regular weekday closing time. The "Noon
Buying Rate" as of any date means the noon buying rate in The City of New York
for cable transfers in Swiss francs (to purchase U.S. dollars and sell Swiss
francs) as certified for customs purposes by the Federal Reserve Bank of New
York in effect on such date.
(C) Exchange Conditions. Prior to effecting an Exchange, (i)
each exchanging Holder shall have delivered to the Corporation, not later than
20 days prior to the Exchange Date, a certification in a form to be provided by
the Corporation of such information as the Corporation deems necessary in order
to determine the availability of an exemption from registration under
applicable securities laws with respect to such exchanging holder, and (ii) the
Corporation shall have received an opinion of counsel to the Corporation that
such Exchange (together with all other relevant Exchanges) is exempt from
registration under applicable securities laws.
(D) Exchange Notice. The Corporation shall give notice of
each Exchange Date by first class mail, postage prepaid, mailed not less than
30 days nor more than 60 days prior to the Exchange Date, to each Holder of
record of the shares at such Holder's address as the same appears on the stock
register of the Corporation (the "Exchange Notice"); provided, however, that no
failure to give such notice nor any defect therein shall affect the validity of
the proceedings for the exchange of any share of Limited Conversion Preferred
Stock to be exchanged. Each such notice shall state: (1) the Exchange Date
and the date by which an Exchanging Holder must deliver the certification
required by Section 9(C); (2) the form of such certification; (3) the name and
address of the Exchange Agent (as defined in Section 9(E) hereof); and (4)
instructions for completion of the Exchange.
(E) Method for Exchange. To exchange shares of LCPS, a
Holder must (i) complete and manually sign the Notice of Intent to Exchange on
the back of the LCPS certificate (or complete and manually sign a facsimile
thereof) and deliver such notice to the agent acting on behalf of the
Corporation designated in the Exchange Notice ("Exchange Agent"), (ii)
surrender the LCPS certificate to the Exchange Agent, (iii) if required,
furnish appropriate endorsements and transfer documents and (iv) if required,
pay all transfer or similar taxes. Such Notice of Intent to Exchange shall
include, if required, an agreement to abide by the Post-Exchange Transfer
Restrictions.
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<PAGE> 9
(F) Adjustment of Exchange Ratio. The Exchange Ratio will be
adjusted if any of the following events occur:
(i) Rights Issues
If Roche shall by way of Subscription Rights (as defined
below) (otherwise than in lieu of a cash dividend), offer new Shares,
Non-voting Equity Securities, new participation certificates and
other new securities forming part of the capital of Roche for
subscription to the holders of existing Non-voting Equity Securities
(a "Rights Issue"), then the Exchange Ratio shall be adjusted by
multiplying the Exchange Ratio in effect immediately prior to the
issuance of the Subscription Rights by a fraction, the numerator of
which shall be the Value of a Non-voting Equity Security for the
period ending on the date immediately preceding the date on which the
Non-voting Equity Securities are traded ex such Subscription Rights
and the denominator of which is (x) such Value of a Non-voting Equity
Security for such period less (y) the Value of the Subscription Right
offered for each Non-voting Equity Security for the period commencing
on the date the Subscription Rights are first traded on the Zurich
Stock Exchange.
"Subscription Rights" means the entitlement or right, as the
case may be, attached to each existing Non-voting Equity Security to
subscribe or acquire, directly or indirectly, new Shares of Roche,
Non-voting Equity Securities or participation certificates of Roche
(as the case may be) (including, for the avoidance of doubt, any
issues of convertible bonds, exchangeable bonds or bonds with
warrants) pursuant to a Rights Issue by Roche (whether by the
exercise of one Subscription Right, a part of a Subscription Right or
an aggregate number of Subscription Rights).
"Value" means the average of the daily closing prices (the
"Price") of the Non-voting Equity Securities or the Subscription
Rights, as the case may be, on the Zurich Stock Exchange during the
relevant ten Trading Day period (or in the case of Subscription
Rights, such shorter period as the Subscription Rights may be traded)
rounded to the nearest whole Swiss franc, provided that if the
Subscription Right is not traded on the Zurich Stock Exchange, the
Price shall be the price published by the Zurich Stock Exchange in
respect of such Subscription Rights.
(ii) Bonus Issues
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<PAGE> 10
If Roche shall make an issue of Shares, Non-voting Equity
Securities or participation certificates of Roche credited as fully
paid to the holders of Non-voting Equity Securities by way of
capitalization of profits or reserves (a "Bonus Issue") (otherwise
than in lieu of a cash dividend and without any payment or other
consideration being made or given by such holders), then the Exchange
Ratio shall be adjusted by multiplying the Exchange Ratio in effect
immediately prior to such Bonus Issue by a fraction, the numerator of
which is the Value of a Non-voting Equity Security for the period
ending on the date immediately preceding the date on which the
Non-voting Equity Securities are traded ex such Bonus Issue and the
denominator of which is the Value of a Non-voting Equity Security for
the period commencing on such ex-date.
(iii) Non-voting Equity Security Splits
If Roche shall subdivide the Non-voting Equity Securities into
a greater number of Non-voting Equity Securities, then the Exchange
Ratio shall be multiplied by the number of subdivided Non-voting
Equity Securities replacing one former Non-voting Equity Security.
(iv) Non-Voting Equity Security Consolidations
If Roche shall consolidate its Non-voting Equity Securities
into a smaller number of Non-voting Equity Securities, then the
Exchange Ratio shall be divided by the number of former Non-voting
Equity Securities which corresponds to one consolidated Non-voting
Equity Security.
(v) Extraordinary Distributions
If Roche shall, by dividend or otherwise, distribute
securities, assets, or rights thereto, to holders of Non-voting
Equity Securities (but excluding any dividend, whether in cash or
property, that is distributed in the ordinary course, and any rights
or issues referred to above in subparagraph 9(F)(i) or 9(F)(ii)),
then the Exchange Ratio shall be adjusted by multiplying the Exchange
Ratio in effect immediately prior to such distribution by a fraction,
the numerator of which is the closing Sale Price of a Non-voting
Equity Security in Swiss francs (or, if no closing Sale Price is
reported, the mean of the bid and asked prices) on the Zurich Stock
Exchange on the day immediately preceding the date on which the
Non-voting Equity Security is traded ex such distribution and the
denominator of which is the closing Sale Price of a
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Non-voting Equity Security in Swiss francs (or, if no closing Sale
Price is reported, the mean of the bid and asked prices) on the
Zurich Stock Exchange on such ex-date.
(vi) Exchange and Liquidation
If the holders of Non-voting Equity Securities shall be
required to exchange Non-voting Equity Securities for one or more
Shares or participation certificates, other securities, cash and/or
property or if on a liquidation of Roche the Non-voting Equity
Securities shall receive a return of capital, whether in the form of
securities, cash and/or property, then the holder of the shares of
Limited Conversion Preferred Stock shall be entitled to receive on
exchange the kind and amount of securities, cash and/or property that
the Holder would have received if the Holder had exchanged such
Holder's shares of Limited Conversion Preferred Stock immediately
prior to the effective date of the transaction.
(vii) Other Adjustments
Adjustments will not be made in any other circumstances;
subject to the right of the Corporation (after consultation with
Roche) to make such adjustments as it believes appropriate in
circumstances where an event or events occur which it believes should
give rise to such adjustment provided that any such adjustments shall
only be made for the benefit of the Holders of the shares of LCPS
generally (without considering the circumstances of any individual
Holder or the tax or other consequences of such adjustments in any
particular jurisdiction).
The adjustments described in (i), (ii) and (v) shall be made
only if the Non-voting Equity Securities trade ex such Rights Issue,
Bonus Issue or extraordinary distribution on or prior to the
effective date of the transaction.
If Roche is a party to a consolidation, merger or binding
share exchange or a transfer of all or substantially all of its
assets, the right to exchange a share of LCPS for NESs shall be
converted into a right to exchange such share of LCPS into the kind
and amount of securities, cash or other assets that the Holder would
have received if the Holder had exchanged such Holder's shares of
LCPS immediately prior to the effective date of the transaction.
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(G) Post-Exchange Transfer Restrictions. The Non-voting
Equity Securities have not been and will not be registered under the Securities
Act. Therefore, the Non-voting Equity Securities may not be offered or sold in
the United States or to, or for the account or benefit of, U.S. persons (as
defined in Regulation S under the Securities Act), except to qualified
institutional buyers (as defined in Rule 144A) in reliance on Rule 144A or to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
and (7) under the Securities Act) in transactions exempt from the registration
requirements of the Securities Act. Upon exchange of LCPSs for NESs, the
exchanging Holder shall agree with Roche in the certification required by
Section 9(C) hereof to the foregoing.
SECTION 10. EXCHANGE TERMINATION. (A) The rights of Holders
to exchange shares of LCPS in accordance with the terms of Section 9 hereof
shall terminate at the election of the Corporation if, at any time, the
Securities and Exchange Commission ("SEC") requires that Roche
(i) become a reporting company subject to the
requirements of Section 12 of the Exchange Act or
(ii) provide to the SEC financial or other
information with respect to Roche not then published elsewhere by
Roche.
(B) In the event the rights of Holders of the LCPS to
exchange shares of LCPS are terminated by the Corporation pursuant to Section
10(A) hereof, Holders whose rights are so terminated shall have the right to
require the Corporation to redeem such Holders' shares of LCPS at a redemption
price equal to the aggregate Stated Value, plus any accrued and unpaid
dividends, as of the date such Holder requests redemption. The last sentence
of Section 7(A) shall not apply to any redemption of shares requested by
Holders under this Section 10(B).
SECTION 11. RANK. The Limited Conversion Preferred Stock
shall rank senior to the Common Stock with respect to dividend payments,
liquidation preference and redemption.
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IN WITNESS WHEREOF, this Certificate of Designation has been
duly executed on behalf of the Corporation by its President and attested by its
Secretary on this __th day of ____________, 1994.
ROCHE CAPITAL CORPORATION
By:
--------------------------
Name:
Title: President
ATTEST:
- - -----------------------------
Name:
Title: Secretary
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EXHIBIT 99.3
5/1 10 pm PDT draft
CONFIDENTIAL
CONTACT;
Kathleen Gary - Syntex Max Gurtner - Roche
(415) 855-5924 41-61-688-5554
Linda Thomas - Syntex
(415) 852-1321
FOR IMMEDIATE RELEASE:
ROCHE TO ACQUIRE SYNTEX;
SYNTEX BOARD UNANIMOUSLY RECOMMENDS CASH OFFER
PALO ALTO, Calif., and BASEL, Switzerland, May 2, 1994/PR
Newswire--Syntex Corporation (NYSE:SYN) and Roche Holding Ltd, Basel announced
today that they have entered into a definitive agreement for the acquisition of
Syntex by a subsidiary of Roche in a transaction in which Syntex shareholders
would receive $24.00 in cash per Syntex common share. The transaction values
Syntex at approximately $5.3 billion in total.
The $24.00 cash price represents a premium of approximately 57 percent
over last Friday's closing price of Syntex stock on the New York Stock
Exchange.
The transaction will be effected by means of a first-step cash tender
offer for all of Syntex's outstanding common stock. The tender offer is
expected to commence on or before May 9 and to remain open for at least 20
business days. The tender offer will be followed by a merger in which
shareholders whose shares are not purchased in the tender offer will receive
$24.00 per share in cash or, at their election, subject to certain
restrictions,
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shares of a limited conversion preferred stock of a new Syntex holding company.
The new preferred stock will pay dividends annually at a three percent rate and
will be subject to mandatory redemption ten years after issuance. The
preferred stock will be nontransferable, subject to limited exceptions, and
will be exchangeable, on a limited basis, for non-voting equity securities
(NESs) of Roche at a premium of 50 percent over Roche NES closing price on
Friday, April 29.
The tender offer is subject to certain conditions, including that at
least a majority of Syntex shares are tendered and certain regulatory approvals
are obtained.
After receiving the recommendation of a Special Committee of
directors, the Board of Directors of Syntex has approved the merger agreement
and has recommended that stockholders tender their shares in the offer and vote
in favor of the merger. The Board's approval was based on a number of factors,
including the opinion of Goldman, Sachs & Co. that the $24.00 per share in cash
to be received by the holders of Syntex shares in the transactions contemplated
by the agreement is fair.
Mr. Paul Freiman, Syntex Chairman and Chief Executive Officer, said,
"We have spent many months intensively studying the healthcare environment,
evaluating the increasingly competitive marketplace, and analyzing our current
and future prescription pharmaceutical product line. Given the speed of
changes in the industry and a radically different competitive situation, we
ultimately felt the need to align with a strong global partner. We now
strongly believe that the sale of Syntex to Roche would be in the best
interests of our shareholders, our customers and our employees.
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"Roche is truly a global company, with strong operations in major
parts of the world where Syntex has little or no presence, such as South
America, Japan and the Middle East. Roche has a far greater ability to fully
commercialize the compounds in our pipeline that we do. Roche and Syntex have
already successfully cooperated in the U.S., where we have co-promoted
Toradol(R) (ketorolac) since 1990. The proposed combination of our companies
would help us see that patients everywhere have access to the new drugs we have
discovered and are developing," Mr. Freiman said.
Roche Chairman and Chief Executive Officer Mr. Fritz Gerber said,
"Innovative products and critical mass in development, marketing and sales are
key to success in today's competitive environment. Syntex's substantial
ethical business and its leadership in the indication area of pain and
inflammation would ideally complement the pharma portfolio of Roche and add a
further center of excellence to the Roche group."
With Syntex's market share, Roche would move to position six in the
U.S. pharma market and in the world pharma market, it would become number four
in terms of sales.
Syntex is a multinational healthcare company, incorporated in Panama,
that discovers, develops, manufactures and markets prescription pharmaceutical
products, animal health products and medical diagnostic systems. The company
currently has more than 9,000 employees. There are research subsidiaries in
Palo Alto, Calif., Scotland, Mexico, and Japan. Syntex's leading prescription
pharmaceutical products are Naprosyn(R) (naproxen), a nonsteroidal
anti-inflammatory drug to treat inflammation and pain, and Toradol, a
nonsteroidal anti-inflammatory drug for the short-term management of pain.
Syntex's main products also include medicines to treat allergies,
cardiovascular and cerebrovascular diseases. In December 1993,
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Syntex launched its own generic version of naproxen. On the basis of R&D
spending of 19 percent sales, Syntex has built up a pharma pipeline which
offers the chance to enter into indications with a high market potential. The
company currently has in clinical trials compounds being studied for the
prevention and treatment of organ transplant rejection, and for the treatment
of Alzheimer's disease, osteoporosis, and peripheral artery disease, among
others. Total worldwide sales in fiscal 1993 were U.S.$2.1 billion, of which
70 percent were in the United States. Pharmaceutical sales accounted for
approximately 85 percent of Syntex's worldwide sales. Syntex's net income in
fiscal 1993 was U.S.$287 million, after pretax restructuring charges of U.S.
$320 million.
The international Roche Group is a leader in research-based healthcare
with activities in pharmaceuticals (55 percent of total sales), diagnostics,
vitamins and fine chemicals and fragrances and flavors. It has a long
tradition of innovative breakthroughs in drug development and is a pioneer in
pharmaceutical and other applications of gene technology. It has demonstrated
its commitment to this area by the acquisition of a majority stake in the
biotechnology company, Genentech, Inc., South San Francisco, and by the
purchase of exclusive rights to the polymerase chain reaction (PCR) technology,
which has a wide range of potential applications. Roche group sales in 1993
totaled 14.3 billion Swiss francs (approximately U.S.$9.7 billion, at 1993
year-average exchange rate of Sfr 1.48 to one U.S.$), an increase of 11
percent on the previous year. Net income in 1993 amounted to 2.5 billion Swiss
francs (approximately U.S.$1.7 billion) an increase of 29 percent over 1992.
Roche has operated in the United States since the beginning of this
century. The U.S. affiliate, Hoffman-La Roche Inc., based in Nutley, New
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Jersey, employs more than 17,000 people in its activities in pharmaceuticals,
vitamins and fine chemicals and diagnostics, including Roche Biomedical
Laboratories, the third largest clinical service laboratory chain in the United
States. Nutley is also one of the Roche Group's main research centers.
The Roche sub-holding, Givaudan-Roure, with its U.S. headquarters in
Clifton, New Jersey, is well-established in the United States as a major
supplier of fragrances and flavors.
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