UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 11)
Thermo Power Corporation
(Name of Issuer)
Common Stock, par value $.10 per share
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(Title of Class of Securities)
883589 10 3
(CUSIP Number)
Seth H. Hoogasian, Esq.
General Counsel
(781)622-1000
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454-9046
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
May 5, 1999
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(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Thermo Electron Corporation
IRS No. 04-2209186
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP*
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(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
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NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON 9,311,789
WITH
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8 SHARED VOTING POWER
0
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9 SOLE DISPOSITIVE POWER
9,311,789
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
9,311,789
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
78.4%
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14 TYPE OF REPORTING PERSON *
CO
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Thermo Electron Corporation hereby amends its statement on Schedule 13D
relating to the shares (the "Shares") of common stock, par value $.10 per share,
of Thermo Power Corporation (the "Issuer"), as set forth below.
Item 2. Identity and Background
The first paragraph of Item 2 is hereby amended and restated in its
entirety as follows:
This Amendment is being filed by Thermo Electron Corporation (the
"Reporting Person"), pursuant to Rule 13d-2, to reflect a change in the
information previously reported under Items 4 and 6 of this Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby amended and restated in its entirety as follows:
Funds necessary for the proposed transaction described in Item 4 will be
paid out of the Reporting Person's working capital.
Item 4. Purpose of Transaction
Item 4 is hereby amended and restated in its entirety as follows:
On May 5, 1999, the Issuer issued a press release stating that it has
entered into a definitive agreement and plan of merger with the Reporting
Person, under which the Reporting Person would acquire all of the outstanding
Shares of the Issuer held by the public stockholders of the Issuer. The Issuer's
board of directors unanimously approved the merger agreement based on a
recommendation from a Special Committee of its board of directors.
Under the terms of the merger agreement, the Issuer would become a wholly
owned subsidiary of the Reporting Person. Each issued and outstanding Share not
already owned by the Reporting Person or the Issuer would be converted into the
right to receive $12.00 in cash. Following the merger, the Shares would cease to
be publicly traded.
Except as set forth in this Item 4 and in Item 6, neither the Reporting
Person nor, to the Reporting Person's knowledge, any of the executive officers
or directors of the Reporting Person has any current plans or proposals which
relate to or would result in any of the actions specified in clauses (a) through
(j) of Item 4 of Schedule 13D, although the Reporting Person and such other
persons do not rule out the possibility of effecting or seeking to effect any
such actions in the future.
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Item 6. Contracts, Arrangements, Understandings or Relationships with
respect to Securities of the Issuer.
The first paragraph of Item 6 is hereby amended and restated in its
entirety as follows:
As set forth in Item 4 hereof, the Issuer has entered into a definitive
agreement and plan of merger with the Reporting Person, under which the
Reporting Person would acquire all of the outstanding Shares of the Issuer held
by the public stockholders of the Issuer.
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended by adding the following as an exhibit:
(i) Agreement and Plan of Merger dated as of May 5, 1999, by and among
Thermo Electron Corporation, TP Acquisition Corporation and Thermo Power
Corporation.
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Signature
After reasonable inquiry and to the best of its knowledge and belief, the
Reporting Person certifies that the information set forth in this statement is
true, complete and correct.
Date: May 6, 1999 THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
Theo Melas-Kyriazi
Vice President and Chief
Financial Officer
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Exhibit (i)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THERMO ELECTRON CORPORATION,
TP ACQUISITION CORPORATION
AND
THERMO POWER CORPORATION
DATED AS OF MAY 5, 1999
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ARTICLE I THE MERGER.......................................................1
1.1. The Merger.......................................................1
1.2. Effective Time; Closing..........................................2
1.3. Effect of the Merger.............................................3
1.4. Articles of Organization; By-laws................................3
1.5. Directors and Officers...........................................3
1.6. Effect on Capital Stock..........................................3
1.7. Surrender of Certificates........................................4
1.8. No Further Ownership Rights in Thermo Power Common Stock.........5
1.9. Lost, Stolen or Destroyed Certificates...........................5
1.10. Dissenting Shares................................................6
1.11. Taking of Necessary Action; Further Action.......................6
ARTICLE II ....................REPRESENTATIONS AND WARRANTIES OF THERMO POWER
6
2.1. Organization of Thermo Power.....................................6
2.2. Thermo Power Capital Structure...................................7
2.3. Authority........................................................7
2.4. Board Approval...................................................8
2.5. Fairness Opinion.................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND MERGER SUB.8
3.1. Organization.....................................................8
3.2. Merger Sub Capitalization........................................9
3.3. Authority........................................................9
3.4. Financial Resources.............................................10
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME.............................10
4.1. Conduct of Business by Thermo Power.............................10
4.2. Certain Actions by Thermo Power.................................10
ARTICLE V ADDITIONAL AGREEMENTS............................................11
5.1. Schedule 13E-3; Proxy Statement; Other Filings..................11
5.2. Meeting of Thermo Power Stockholders............................12
5.3. Access to Information...........................................13
5.4. Public Disclosure...............................................13
5.5. Legal Requirements..............................................13
5.6. Notification of Certain Matters.................................13
5.7. Best Efforts and Further Assurances.............................14
5.8. Stock Option and Employee Stock Purchase Plans..................14
5.9. Thermo Electron Form S-8........................................15
5.10. Indemnification; Insurance......................................15
5.11. Deferred Compensation Plan......................................16
5.12. Competing Offers................................................16
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ARTICLE VI CONDITIONS TO THE MERGER........................................16
6.1. Conditions to Obligations of Each Party to Effect the Merger....16
6.2. Additional Conditions to Obligations of Thermo Power............17
6.3. Additional Conditions to the Obligations of Thermo Electron and
Merger Sub......................................................17
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER..............................18
7.1. Termination.....................................................18
7.2. Notice of Termination; Effect of Termination....................19
7.3 Fees and Expenses...............................................19
7.4. Amendment.......................................................19
7.5. Extension; Waiver...............................................19
ARTICLE VIII GENERAL PROVISIONS............................................19
8.1. Non-Survival of Representations and Warranties..................19
8.2. Notices.........................................................19
8.3. Counterparts....................................................21
8.4. Entire Agreement................................................21
8.5. Severability....................................................21
8.6. Other Remedies; Specific Performance............................21
8.7. Governing Law...................................................21
8.8. Assignment......................................................21
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of May 5, 1999
is by and among Thermo Electron Corporation ("Thermo Electron"), a Delaware
corporation, TP Acquisition Corporation ("Merger Sub"), a Massachusetts
corporation and a wholly-owned subsidiary of Thermo Electron, and Thermo Power
Corporation ("Thermo Power"), a Massachusetts corporation.
RECITALS
A. Thermo Electron owns approximately 78% of the outstanding shares of
common stock, par value $0.10 per share, of Thermo Power ("Thermo Power Common
Stock"), and Thermo Electron desires to acquire the remaining outstanding shares
of Thermo Power Common Stock.
B. On January 13, 1999, the Board of Directors of Thermo Power appointed a
Special Committee of the Board (the "Special Committee"), consisting of
independent directors, to act on behalf of, and in the interests of, the
stockholders of Thermo Power other than Thermo Electron, the officers and
directors of Thermo Power and the officers and directors of Thermo Electron (the
"Minority Stockholders"), for the purpose of evaluating the merits of, and
negotiating the terms of, any proposed transaction between Thermo Power and
Thermo Electron, considering such alternatives as the Special Committee deemed
appropriate and making a recommendation to the full Board of Directors of Thermo
Power on whether to approve any such transaction.
C. On May 4, 1999, the Special Committee recommended to the full Board of
Directors of Thermo Power approval of a business combination transaction
pursuant to which Merger Sub will merge with and into Thermo Power in accordance
with the Business Corporation Law of the Commonwealth of Massachusetts ("MBCL")
and upon the terms and subject to the conditions set forth in this Agreement
(the "Merger").
D. The respective Boards of Directors of Thermo Electron, Thermo Power and
Merger Sub have approved the Merger.
E. Thermo Electron, Thermo Power and Merger Sub desire to make certain
representations and warranties and other agreements in connection with the
Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
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applicable provisions of the MBCL, Merger Sub shall be merged with and into
Thermo Power, the separate corporate existence of Merger Sub shall cease and
Thermo Power shall continue as the surviving corporation. Thermo Power as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation." The Surviving Corporation will be authorized to
issue 1,000 shares of common stock, par value $.01 per share. The purposes of
the Surviving Corporation are:
(a) To manufacture, market, and service intelligent traffic-control
systems and related products, industrial refrigeration equipment, commercial
cooling systems, cogeneration units, propane-powered lighting products, and
lighting products for the automotive, sporting goods, and marine markets and to
conduct research and development in the areas of advanced power and
pollution-control technologies;
(b) To carry on any business, operation or activity through a
wholly-owned or partly-owned subsidiary;
(c) To carry on any business, operation or activity referred to in
the foregoing paragraphs to the same extent as might an individual, whether as
principal, agent, contractor or otherwise, and either alone or as a partner,
trustee, participant, member or stockholder of or in any form of partnership,
joint venture, corporation, association, trust or other form of entity or with
any individual, and, without limiting the generality of the foregoing, to be a
limited and/or general partner of any partnership organized to carry on any
business or activity of the type described herein;
(d) To engage in research and development activities, construction,
manufacturing, mercantile, selling, management, service or any other lawful
business act, operation or activity for which corporations may be organized
under the MBCL (as amended and in effect from time to time), whether or not
related or similar to the activities described in the preceding paragraphs; and
(e) To have as additional purposes all powers granted and conferred
by the laws of The Commonwealth of Massachusetts upon business corporations
organized under Chapter 156B of the General Laws of Massachusetts (as amended
and in effect from time to time), including, without limitation, the power to
make contracts of guarantee and suretyship.
The enumeration of these specific purposes or powers shall not be construed to
limit other statements of purposes or powers which the Surviving Corporation may
otherwise have under applicable law, all of the same being separate and
cumulative, and all of the same may be carried on, promoted and pursued,
transacted or exercised in any place in the world whatsoever.
1.2 EFFECTIVE TIME; CLOSING. Subject to the provisions of this Agreement,
the parties hereto shall cause the Merger to be consummated by submitting the
Articles of Merger (the "Articles of Merger") with the Secretary of State of the
Commonwealth of Massachusetts in accordance with the relevant provisions of the
MBCL (the time of such filing, or such later time as may be agreed in writing by
the parties and specified in the Articles of Merger, being the "Effective Time"
and the date on which the Effective Time occurs being the "Effective Date") as
soon as practicable on the Closing Date (as herein defined). Unless the context
otherwise requires, the term "Agreement" as used herein refers collectively to
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this Agreement and the Articles of Merger. The closing of the Merger (the
"Closing") shall take place at the executive offices of Thermo Electron at a
time and date to be specified by the parties, which shall be no later than the
second business day after the satisfaction or waiver of the conditions set forth
in Article VI, or at such other time, date and location as the parties hereto
agree in writing (the "Closing Date"). At the Closing, (i) Thermo Power shall
deliver to Thermo Electron the various certificates and instruments required
under Article VI, (ii) Thermo Electron and Merger Sub shall deliver to Thermo
Power the various certificates and instruments required under Article VI and
(iii) Thermo Power and Merger Sub shall execute and submit the Articles of
Merger with the Secretary of State of the Commonwealth of Massachusetts.
1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of the
MBCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of Thermo Power and Merger Sub shall be transferred to and vest in the Surviving
Corporation, and all liabilities and obligations of Thermo Power and Merger Sub
shall become the liabilities and obligations of the Surviving Corporation.
1.4 ARTICLES OF ORGANIZATION;BY-LAWS
(a) The Articles of Merger shall provide that the Articles of
Organization of the Surviving Corporation shall be amended to be identical to
the Articles of Organization of Merger Sub as in effect immediately prior to the
Effective Time except that the name of the Surviving Corporation shall be
"Thermo Power Corporation."
(b) The by-laws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the by-laws of the Surviving
Corporation until thereafter amended, except that the by-laws shall identify the
name of the Surviving Corporation as "Thermo Power Corporation."
1.5 DIRECTORS AND OFFICERS. The directors of Thermo Power immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, to serve until their respective successors are duly elected or
appointed and qualified. The officers of Thermo Power immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, to serve
until their successors are duly elected or appointed or qualified.
1.6 EFFECT ON CAPITALSTOCK. At the Effective Time, by virtue of the Merger
and without any action on the part of Merger Sub, Thermo Power or the holders of
any of the following securities:
(a) Conversion of Thermo Power Common Stock. Each share of Thermo
Power Common Stock issued and outstanding immediately prior to the Effective
Time (other than any shares of Thermo Power Common Stock held in the treasury of
Thermo Power, by Thermo Electron or Dissenting Shares, as defined in Section
1.10) will be automatically converted into the right to receive Twelve Dollars
($12.00) in cash (the "Exchange Price") upon surrender of the certificate
representing such share of Thermo Power Common Stock in the manner provided in
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Section 1.7 (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided in
Section 1.9).
(b) Stock Options. All options to purchase Thermo Power Common Stock
then outstanding under Thermo Power's Directors Stock Option Plan, Equity
Incentive Plan, Employee's Equity Incentive Plan, Incentive Stock Option Plan
and Nonqualified Stock Option Plan, each as amended, (together, the "Thermo
Power Stock Option Plans") shall be converted into options to purchase Thermo
Electron common stock, par value $1.00 per share ("Thermo Electron Common
Stock"), in accordance with Section 5.8 hereof.
(c) Capital Stock of Merger Sub. Each share of Common Stock, par
value $.01 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into one validly issued, fully paid and
nonassessable share of common stock, par value $.01, of the Surviving
Corporation.
(d) Affiliate Stock; Treasury Stock. Each share of Thermo Power
Common Stock issued and outstanding and owned by Thermo Electron and each share
of Thermo Power Common Stock held in treasury by Thermo Power immediately prior
to the Effective Time shall cease to be outstanding, be canceled and retired
without payment of any consideration therefor and cease to exist.
(e) Adjustments to Exchange Price. The Exchange Price shall be
adjusted to reflect fully the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of securities convertible
into Thermo Power Common Stock), recapitalization or other like change without
receipt of consideration with respect to Thermo Power Common Stock occurring on
or after the date hereof and prior to the Effective Time.
1.7 SURRENDER OF CERITIFICATES.
(a) Payment Agent. Thermo Electron shall authorize one or more
persons to act as the payment agent (the "Payment Agent") in the Merger.
(b) Thermo Electron to Provide Exchange Consideration. Promptly
after the Effective Time, Thermo Electron shall deposit with the Payment Agent
in trust for the benefit of the holders of certificates (the "Certificates")
representing shares of Thermo Power Common Stock converted pursuant to Section
1.6(a) for payment in accordance with this Article I cash in an amount equal to
the product of the Exchange Price multiplied by the number of shares of Thermo
Power Common Stock entitled to payment pursuant to Section 1.6(a).
(c) Exchange Procedures. Promptly after the Effective Time, Thermo
Electron shall cause the Payment Agent to mail to each holder of record (as of
the Effective Time) of a Certificate (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Payment
Agent and shall be in such form and have such other provisions as Thermo
Electron may reasonably specify) and (ii) instructions for effecting the
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exchange of the Certificates for the Exchange Price. Upon surrender of a
Certificate for cancellation to the Payment Agent or to such other agent or
agents as may be appointed by Thermo Electron, together with such letter of
transmittal duly completed and validly executed in accordance with the
instructions thereto, the holder of such Certificate shall be entitled to
receive in exchange therefor payment of the Exchange Price multiplied by the
number of shares of Thermo Power Common Stock represented by such Certificate,
without interest, and the Certificate so surrendered shall forthwith be
canceled. Until so surrendered, each outstanding Certificate will be deemed from
and after the Effective Time, for all corporate purposes, to evidence only the
right to receive payment of the Exchange Price for each share of Thermo Power
Common Stock represented on such Certificate.
(d) Transfers of Ownership. If payment of the Exchange Price is to
be made to any person other than the person in whose name the Certificate
surrendered in exchange therefor is registered, it will be a condition of such
payment that the Certificate so surrendered will be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
payment will have paid to Thermo Electron or any agent designated by it any
transfer or other taxes required by reason of payment to a person other than the
registered holder of the Certificate surrendered, or established to the
satisfaction of Thermo Electron or any agent designated by it that such tax has
been paid or is not payable.
(e) No Liability. Notwithstanding anything to the contrary in this
Section 1.7, neither the Payment Agent, Thermo Electron, the Surviving
Corporation nor any party hereto shall be liable to a holder of shares of Thermo
Power Common Stock for any amount properly paid to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(f) Responsibility; Term. The Payment Agent shall make the payments
referred to in Section 1.6(a) out of the funds supplied by Thermo Electron.
Promptly following the date that is six months after the Effective Date, the
Payment Agent shall, upon request by Thermo Electron, deliver to Thermo Electron
all cash, Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Payment Agent's duties shall
terminate. Thereafter, each holder of a Certificate formerly representing shares
of Thermo Power Common Stock may surrender such Certificate to Thermo Electron
and (subject to applicable abandoned property, escheat and similar laws) receive
in exchange therefor the Exchange Price multiplied by the number of shares of
Thermo Power Common Stock represented by such Certificate, without any interest
thereon, but shall have no greater rights against Thermo Electron than as may be
accorded to general creditors of Thermo Electron under applicable law.
1.8 NO FURTHER OWNERSHIP RIGHTS IN THERMO POWER COMMON STOCK. All amounts
paid upon the surrender of shares of Thermo Power Common Stock in accordance
with the terms hereof shall be deemed to have been paid in full satisfaction of
all rights pertaining to such shares of Thermo Power Common Stock, and there
shall be no further registration of transfers on the records of the Surviving
Corporation of shares of Thermo Power Common Stock that were outstanding
immediately prior to the Effective Time. If after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article I.
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1.9 LOST,STOLEN OR DESTROYED CERTIFICATES. In the event any Certificates
shall have been lost, stolen or destroyed, the Payment Agent shall pay the
aggregate Exchange Price in respect of such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the holder
thereof; provided, however, that, as a condition precedent to the payment
thereof, the owner of such lost, stolen or destroyed Certificates shall deliver
a bond in such sum as Thermo Electron or the Payment Agent may reasonably direct
as indemnity against any claim that may be made against Thermo Electron or the
Payment Agent with respect to the Certificates alleged to have been lost, stolen
or destroyed, unless Thermo Electron waives such requirement in writing.
1.10 DISSENTING SHARES. Notwithstanding any other provision of this
Agreement, pursuant to Sections 85 through 98, inclusive, of the MBCL, shares of
Thermo Power Common Stock that are outstanding immediately prior to the
Effective Time and which are held by stockholders who shall have demanded
properly in writing appraisal of such shares in accordance with the MBCL and who
shall not have withdrawn such demand or otherwise forfeited appraisal rights
(collectively, the "Dissenting Shares") shall not be converted into or represent
the right to receive the Exchange Price. Such stockholders shall, as of the
Effective Time, cease to retain any rights with respect to the Thermo Power
Common Stock, except as provided in Sections 85 through 98, inclusive, of the
MBCL including the right to receive payment of the appraised value of the shares
held by them, provided that all Dissenting Shares held by stockholders (i) who
shall have failed to perfect or lost their rights to appraisal of such shares,
or (ii) who have effectively withdrawn their demand for appraisal, shall
thereupon be, or be deemed to have been, converted into and to have become
exchangeable, as of the Effective Time, for the right to receive, without any
interest thereon, the Exchange Price, upon surrender, in the manner provided in
Section 1.7, of the Certificates that formerly evidenced such shares without the
prior consent of Thermo Electron.
1.11 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all property, rights, privileges, powers and
franchises of Thermo Power and Merger Sub, the officers and directors of Thermo
Power and Merger Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action, so long as such action is consistent with this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THERMO POWER
Thermo Power represents and warrants to Thermo Electron and Merger Sub as
follows:
2.1 ORGANIZATION OF THERMO POWER. Thermo Power and each of its subsidiaries
is a corporation or other legal entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, has the corporate or similar power to own, lease and operate its
property and to carry on its business as now being conducted and as proposed by
6
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Thermo Power to be conducted, and is duly qualified to do business and in good
standing as a foreign corporation or other legal entity in each jurisdiction in
which the failure to be so qualified would have a material adverse effect on
Thermo Power.
2.2 THERMO POWER CAPITAL STRUCTURE.
The authorized capital stock of Thermo Power consists of 30,000,000 shares
of Common Stock, par value $0.10 per share, of which there were 11,870,520
shares issued and outstanding as of April 3, 1999 and 622,851 shares in treasury
as of April 3, 1999. All outstanding shares of Thermo Power Common Stock are
duly authorized, validly issued, fully paid and non-assessable and are not
subject to preemptive rights created by statute, the Articles of Organization or
by-laws of Thermo Power or any agreement or document to which Thermo Power is a
party or by which it is bound. As of April 27, 1999, an aggregate of 1,906,626
shares of Thermo Power Common Stock, net of exercises, were reserved for
issuance to employees, consultants and non-employee directors pursuant to the
Thermo Power Stock Option Plans, under which options are outstanding for an
aggregate of 1,246,637 shares. All shares of Thermo Power Common Stock subject
to issuance pursuant to the Thermo Power Stock Option Plans, upon issuance on
the terms and conditions specified in the instruments pursuant to which they are
issuable, would be duly authorized, validly issued, fully paid and
nonassessable.
2.3 AUTHORITY.
(a) Thermo Power has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Thermo Power, subject only to the approval of
this Agreement by Thermo Power's stockholders and the submission of the Articles
of Merger pursuant to the MBCL. Under the MBCL, Thermo Power's stockholders may
approve this Agreement by vote of two-thirds of the holders of the outstanding
shares of Thermo Power Common Stock. This Agreement has been duly executed and
delivered by Thermo Power, and assuming the due authorization, execution and
delivery by Thermo Electron and Merger Sub, constitutes the valid and binding
obligation of Thermo Power, enforceable in accordance with its terms. The
execution and delivery of this Agreement by Thermo Power do not, and the
performance of this Agreement by Thermo Power will not, (i) conflict with or
violate the Articles of Organization or by-laws of Thermo Power, (ii) subject to
obtaining the approval by Thermo Power's stockholders of this Agreement as
contemplated in Section 5.2 and compliance with the requirements set forth in
Section 2.3(b), conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Thermo Power or any of its material
subsidiaries or by which its or their respective properties is bound, or (iii)
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or impair the rights of
Thermo Power or alter the rights or obligations of any third party under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of Thermo Power or any of its material subsidiaries
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Thermo
Power or any of its material subsidiaries is a party or by which Thermo Power or
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any of its material subsidiaries or its or any of their properties are bound or
affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, defaults or other occurrences that would not have a
material adverse effect on Thermo Power and its subsidiaries, taken as a whole.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental or regulatory body or authority or
instrumentality ("Governmental Entity") is required by or with respect to Thermo
Power in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated, except for (i) the submission of
the Articles of Merger with the Secretary of State of the Commonwealth of
Massachusetts, (ii) the filing of the Proxy Statement (as defined in Section
5.1) with the U.S. Securities and Exchange Commission ("SEC") in accordance with
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iii) the
filing of the Schedule 13E-3 (as defined in Section 5.1) with the SEC in
accordance with the Exchange Act, and (iv) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws.
2.4 BOARD APPROVAL. The Special Committee has, as of the date of this
Agreement, recommended approval of the Merger to the full Board of Directors of
Thermo Power. The Board of Directors of Thermo Power has, as of the date of this
Agreement, determined unanimously (i) that the Merger is fair to, and in the
best interests of, Thermo Power and its stockholders including the Minority
Stockholders, (ii) that the Merger is consistent with and in furtherance of the
business interests of Thermo Power and (iii) to recommend that the stockholders
of Thermo Power approve this Agreement.
2.5 FAIRNESS OPINION. The Special Committee has received an opinion from
Invemed Associates LLC, dated May 5, 1999, that, as of such date, the
consideration to be received by Thermo Power's Minority Stockholders in the
Merger is fair from a financial point of view to such Thermo Power stockholders
(the "Fairness Opinion").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND
MERGER SUB
Thermo Electron and Merger Sub represent and warrant to Thermo Power as
follows:
3.1 ORGANIZATION. Thermo Electron is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and Merger
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts, each has the corporate power to
own, lease and operate its property and to carry on its business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would have a material adverse effect on Thermo
Electron or Merger Sub.
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3.2 MERGER SUB CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of Merger Sub consists of 1,000 shares of common stock,
par value $.01 per share, of which 100 shares are issued and outstanding. All of
the issued and outstanding shares of capital stock of Merger Sub are validly
issued, fully paid and nonassessable and are not subject to preemptive rights
created by statute, the Articles of Organization or by-laws of Merger Sub or any
agreement or document to which Merger Sub is a party or by which it is bound.
3.3 AUTHORITY.
(a) Each of Thermo Electron and Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Thermo Electron and
Merger Sub, subject only to the submission of the Articles of Merger pursuant to
the MBCL. This Agreement has been duly executed and delivered by each of Thermo
Electron and Merger Sub and, assuming the due authorization, execution and
delivery of this Agreement by Thermo Power, this Agreement constitutes the valid
and binding obligation of each of Thermo Electron and Merger Sub, enforceable in
accordance with its terms. The execution and delivery of this Agreement by each
of Thermo Electron and Merger Sub do not, and the performance of this Agreement
by each of Thermo Electron and Merger Sub will not, (i) conflict with or violate
the Certificate of Incorporation or Bylaws of Thermo Electron or the Articles of
Organization or by-laws of Merger Sub, (ii) subject to compliance with the
requirements set forth in Section 3.2(b) below, conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to Thermo Electron
or any of its material subsidiaries (including Merger Sub, but excluding Thermo
Power and its subsidiaries) or by which its or any of their respective
properties is bound or affected, or (iii) result in any breach of or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or impair Thermo Electron's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Thermo
Electron or any of its material subsidiaries (including Merger Sub, but
excluding Thermo Power and its subsidiaries) pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Thermo Electron or any of its material
subsidiaries (including Merger Sub, but excluding Thermo Power and its
subsidiaries) is a party or by which Thermo Electron or any of its material
subsidiaries (including Merger Sub, but excluding Thermo Power and its
subsidiaries) or its or any of their respective properties are bound or
affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, defaults or other occurrences that would not have a
material adverse effect on Thermo Electron or Merger Sub.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Thermo Electron or Merger Sub in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the submission of the Articles of Merger
with the Secretary of State of the Commonwealth of Massachusetts, (ii) the
filing of the Schedule 13E-3 (as defined in Section 5.1) with the SEC in
accordance with the Exchange Act, and (iii) such consents, approvals, orders,
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authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws.
3.4 FINANCE RESOURCES. Thermo Electron has the financial resources to
consummate the transactions contemplated by this Agreement and to pay the
consideration in the Merger provided for in Section 1.6(a).
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 CONDUCT OF BUSINESS BY THERMO POWER. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Thermo Power shall,
except as otherwise contemplated by this Agreement or consented to by Thermo
Electron, carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted, pay its debts and taxes
when due subject to good faith disputes over such debts or taxes, pay or perform
other material obligations when due, and use its commercially reasonable efforts
consistent with past practices and policies to preserve intact its present
business organization, keep available the services of its present officers and
employees and preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings.
4.2 CERTAIN ACTIONS BY THERMO POWER. In addition, notwithstanding Section
4.1 above, without the prior consent of Thermo Electron, Thermo Power shall not
do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change
the period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant or director stock plans or authorize cash
payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint
development agreements or strategic alliances;
(c) Grant any severance or termination pay to any officer or
employee except payments in amounts consistent with policies and past practices
or pursuant to written agreements outstanding, or policies existing, on the date
hereof, or adopt any new severance plan;
(d) Declare or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any capital stock or split,
combine or reclassify any capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for any
capital stock;
(e) Issue, deliver, sell, authorize or propose the issuance,
delivery or sale of, any shares of capital stock or any securities convertible
into shares of capital stock, or subscriptions, rights, warrants or options to
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acquire any shares of capital stock or any securities convertible into shares of
capital stock, or enter into other agreements or commitments of any character
obligating it to issue any such shares or convertible securities, other than the
issuance of shares of Thermo Power Common Stock pursuant to the exercise of
stock options therefor;
(f) Cause, permit or propose any amendments to its Articles of
Organization or by-laws;
(g) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a material portion of the assets of, or
by any other manner, any business or any corporation, partnership interest,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets or enter into any joint ventures,
strategic partnerships or alliances;
(h) Sell, lease, license, encumber or otherwise dispose of any
properties or assets that are material, individually or in the aggregate, to the
business of Thermo Power;
(i) Incur any indebtedness for borrowed money (other than ordinary
course trade payables or pursuant to existing credit facilities in the ordinary
course of business) or guarantee any such indebtedness or issue or sell any debt
securities or warrants or guarantee any debt securities of others;
(j) Adopt or amend any employee benefit or stock purchase or option
plan, or enter into any employment contract, pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage rates
of its officers or employees, except increases in amounts consistent with
policies and past practices;
(k) Pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business;
(l) Make any grant of exclusive rights to any third party; or
(m) Agree in writing or otherwise to take any of the actions
described in this Section 4.2.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 SCHEDULE 13E-3; PROXY STATEMENT; OTHER FILINGS.
(a) Thermo Power agrees that the information supplied by Thermo
Power for inclusion or incorporation by reference in the Rule 13e-3 Transaction
Statement on Schedule 13E-3 (such Schedule as amended or supplemented is
referred to herein as the "Schedule 13E-3") or the proxy statement to be sent to
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the stockholders of Thermo Power in connection with the meeting of Thermo
Power's stockholders to consider approval of this Agreement (the "Thermo Power
Stockholders' Meeting") (such proxy statement as amended or supplemented is
referred to herein as the "Proxy Statement") shall not, on the date the Proxy
Statement is first mailed to Thermo Power's stockholders and at the time of the
Thermo Power Stockholders' Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not false or misleading; or omit to state any
material fact necessary to correct any statement in any earlier written
communication with respect to the solicitation of proxies for the Thermo Power
Stockholders' Meeting or the Schedule 13E-3 which has become false or
misleading.
(b) Thermo Electron agrees that the information supplied by Thermo
Electron and Merger Sub for inclusion or incorporation by reference in the
Schedule 13E-3 and the Proxy Statement shall not, on the date the Proxy
Statement is first mailed to Thermo Power's stockholders, and at the time of the
Thermo Power Stockholders' Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not false or misleading; or omit to state any
material fact necessary to correct any statement in any earlier written
communication with respect to the solicitation of proxies for the Thermo Power
Stockholders' Meeting or the Schedule 13E-3 which has become false or
misleading.
(c) As promptly as practicable after the execution of this
Agreement, Thermo Electron and Thermo Power jointly will prepare and file with
the SEC the Schedule 13E-3 and the Proxy Statement. Thermo Electron and Thermo
Power will cause the Schedule 13E-3 and the Proxy Statement to be mailed to
stockholders of Thermo Power at the earliest practicable time. Each party will
notify the other promptly upon the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff or any other government
officials for amendments or supplements to the Schedule 13E-3 or the Proxy
Statement or any other filing or for additional information and will supply the
other party with copies of all correspondence between such party or any of its
representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the Proxy Statement,
the Schedule 13E-3 or the Merger. Whenever any event occurs that is required to
be set forth in an amendment or supplement to the Schedule 13E-3 or the Proxy
Statement, the relevant party will promptly inform the other party of such
occurrence and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of Thermo Power, such
amendment or supplement.
(d) The Proxy Statement will include the recommendation of the Board
of Directors of Thermo Power in favor of approval of this Agreement (except that
the Board of Directors of Thermo Power may withdraw, modify or refrain from
making such recommendation to the extent that the Board determines in good faith
after consultation with outside legal counsel that the Board's fiduciary duties
under applicable law require it to do so).
5.2 MEETING OF THERMO POWER STOCKHOLDERS. Promptly after the date hereof,
Thermo Power will take all action necessary in accordance with the MBCL and its
Articles of Organization and by-laws to convene the Thermo Power Stockholders'
Meeting to be held as promptly as practicable for the purpose of voting upon
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this Agreement. Unless otherwise required by the fiduciary duties of the Thermo
Power Board of Directors, Thermo Power will use its best efforts to solicit from
its stockholders proxies in favor of the approval of this Agreement, and will
take all other action necessary or advisable to secure the vote or consent of
its stockholders required by the MBCL to obtain such approvals. Thermo Electron
shall vote, or cause to be voted, all of the Thermo Power Common Stock then
owned by it and any of its subsidiaries in favor of the approval of this
Agreement.
5.3 ACCESS TO INFORMATION. Thermo Power will afford Thermo Electron and its
accountants, counsel and other representatives reasonable access during normal
business hours to the properties, books, records and personnel of Thermo Power
during the period prior to the Effective Time to obtain all information
concerning the business, including the status of product development efforts,
properties, results of operations and personnel of Thermo Power, as Thermo
Electron may reasonably request. Thermo Electron agrees that it will, and will
cause its representatives and agents to, keep all such information confidential
and will not, and will cause its representatives or agents not to, use any
information obtained pursuant to this Section 5.3 for any purpose unrelated to
the consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing, Thermo Electron shall not be required to keep
confidential any information (i) which is or becomes generally available to the
public, other than by wrongful disclosure by Thermo Electron or Merger Sub in
violation of this Agreement, (ii) which was available to Thermo Electron on a
nonconfidential basis prior to disclosure to Thermo Electron, or (iii) which
becomes available to Thermo Electron on a nonconfidential basis from a source
other than Thermo Power.
5.4 PUBLIC DISCLOSURE. Thermo Electron and Thermo Power will consult with
each other before issuing any press release or otherwise making any public
statement with respect to the Merger or this Agreement and will not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with a national
securities exchange.
5.5 LEGAL REQUIREMENTS. Each of Thermo Electron, Merger Sub and Thermo
Power will take all reasonable actions necessary or desirable to comply promptly
with all legal requirements that may be imposed on them with respect to the
consummation of the transactions contemplated by this Agreement (including
furnishing all information required in connection with approvals of or filings
with any Governmental Entity, and including using its reasonable best efforts to
defend any litigation prompted hereby) and will promptly cooperate with and
furnish information to any party hereto necessary in connection with any such
requirements imposed upon any of them or their respective subsidiaries in
connection with the consummation of the transactions contemplated by this
Agreement.
5.6 NOTIFICATION OF CERTAIN MATTERS. Thermo Electron and Merger Sub will
give prompt notice to Thermo Power, and Thermo Power will give prompt notice to
Thermo Electron, of the occurrence, or failure to occur, of any event, which
occurrence or failure to occur would be reasonably likely to cause (a) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date of this Agreement
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to the Effective Time, or (b) any material failure of Thermo Electron and Merger
Sub or Thermo Power, as the case may be, or of any officer, director, employee
or agent thereof, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it under this Agreement. Notwithstanding the
above, the delivery of any notice pursuant to this section will not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice or the conditions to such party's obligation to consummate the Merger.
5.7 BEST EFFORTS AND FURTHER ASSURANCES. Subject to the respective rights
and obligations of Thermo Electron and Thermo Power under this Agreement, each
of the parties to this Agreement will use its reasonable best efforts to
effectuate the Merger and the other transactions contemplated hereby and to
fulfill and cause to be fulfilled the conditions to closing under this
Agreement, it being understood that such efforts shall not include any
obligation to settle any litigation prompted hereby. Each party hereto, at the
reasonable request of another party hereto, will execute and deliver such other
instruments and do and perform such other acts and things as may be reasonably
necessary or desirable for effecting completely the consummation of the
transactions contemplated hereby.
5.8 STOCK OPTION AND EMPLOYEE STOCK PURCHASE PLANS.
(a) At the Effective Time, each outstanding option to purchase shares of
Thermo Power Common Stock (each a "Thermo Power Stock Option") under the Thermo
Power Stock Option Plans, whether or not exercisable, will be assumed by Thermo
Electron. Each Thermo Power Stock Option so assumed by Thermo Electron under
this Agreement will continue to have, and be subject to, the same terms and
conditions set forth in the applicable Thermo Power Stock Option Plan
immediately prior to the Effective Time (including, without limitation, any
repurchase rights), except that (i) each Thermo Power Stock Option will be
exercisable (or will become exercisable in accordance with its terms) for that
number of whole shares of Thermo Electron Common Stock equal to the product of
the number of shares of Thermo Power Common Stock that were issuable upon
exercise of such Thermo Power Stock Option immediately prior to the Effective
Time multiplied by a fraction (the "Exchange Ratio"), the numerator of which is
the Exchange Price and the denominator of which is the closing price of the
Thermo Electron Common Stock on the day immediately preceding the Effective Date
as reported by the New York Stock Exchange, rounded down to the nearest whole
number of shares of Thermo Electron Common Stock, and (ii) the per share
exercise price for the shares of Thermo Electron Common Stock issuable upon
exercise of such assumed Thermo Power Stock Option will be equal to the quotient
determined by dividing the exercise price per share of Thermo Power Common Stock
at which such Thermo Power Stock Option was exercisable immediately prior to the
Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.
After the Effective Time, Thermo Electron will issue to each holder of an
outstanding Thermo Power Stock Option a notice describing the foregoing
assumption of such Thermo Power Stock Option by Thermo Electron.
(b) At the Effective Time, each outstanding option to purchase shares of
Thermo Power Common Stock (each a "Thermo Power ESPP Stock Option") under the
Thermo Power Employees' Stock Purchase Plan ("Thermo Power ESPP") will be
assumed by Thermo Electron. Each Thermo Power ESPP Stock Option so assumed by
Thermo Electron will continue to have, and be subject to, the same terms and
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conditions as are set forth in the Thermo Power ESPP immediately prior to the
Effective Time except that (i) the assumed option shall be exercisable for
shares of Thermo Electron Common Stock; (ii) the purchase price per share of
Thermo Electron Common Stock shall be the lower of (A) eighty-five percent (85%)
of (x) the per-share Market Value of Thermo Power Common Stock on the Grant Date
divided by (y) the Exchange Ratio, with the resulting price rounded up to the
nearest whole cent, and (B) eighty-five percent (85%) of the Market Value of
Thermo Electron Common Stock as of the Exercise Date; and (iii) the $25,000
limit under Section 9.2(i) of the Thermo Power ESPP shall be applied by taking
into account Thermo Electron's assumption of the Thermo Power ESPP Stock Options
in accordance with Section 423(b)(8) of the Internal Revenue Code of 1986, as
amended, and applicable regulations. For purposes of this subsection, "Market
Value," "Grant Date," and "Exercise Date" shall have the meaning given them in
the Thermo Power ESPP.
(c) Thermo Electron will reserve sufficient shares of Thermo Electron
Common Stock for issuance under this Section 5.8.
5.9 THERMO ELECTRON FORM S-8. Thermo Electron agrees to file a registration
statement on Form S-8 or, if required, an amendment to Thermo Electron's then
effective registration statement on Form S-8 (i) for the shares of Thermo
Electron Common Stock issuable with respect to the assumed Thermo Power Stock
Options no later than the Closing Date and (ii) for the shares of Thermo
Electron Common Stock issuable with respect to the assumed Thermo Power ESPP
Stock Options no later than October 31,1999, and shall, in each case, keep such
registration statement effective for so long as any such options remain
outstanding.
5.10 INDEMNIFICATION; INSURANCE. Each of the current and former directors
and officers of Thermo Power is a third party beneficiary of this Section 5.10,
and shall be entitled to the benefit (and to enforce) all covenants set forth
herein.
(a) From and for a period of six years after the Effective Time,
Thermo Electron will and will cause the Surviving Corporation to fulfill and
honor in all respects the indemnification obligations of Thermo Power pursuant
to the provisions of the Articles of Organization and the by-laws of Thermo
Power as in effect immediately prior to the Effective Time. The Articles of
Organization and by-laws of the Surviving Corporation will contain the
provisions with respect to indemnification and elimination of liability for
monetary damages set forth in the Articles of Organization and by-laws of Thermo
Power, which provisions will not be amended, repealed or otherwise modified for
a period of six years from the Effective Time in any manner that would adversely
affect the rights thereunder of individuals who, at the Effective Time, were
directors or officers of Thermo Power, unless such modification is required by
law.
(b) For a period of six years after the Effective Time, Thermo
Electron shall cause the Surviving Corporation to, either directly or through
participation in Thermo Electron's umbrella policy, maintain in effect a
directors' and officers' liability insurance policy covering those Thermo Power
directors and officers currently covered by Thermo Electron's liability
insurance policy with coverage in amount and scope at least as favorable as
existing coverage for such Thermo Power directors and officers (which coverage
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may be an endorsement extending the period in which claims may be made under
such existing policy); provided, however, that in no event shall the Surviving
Corporation be required to expend to maintain or procure insurance coverage
pursuant to this Section 5.10, directly or through participation in Thermo
Electron's policy, an amount per annum in excess of 175% of the current annual
premiums allocable and payable by Thermo Power (the "Maximum Premium") with
respect to such insurance, or, if the cost of such insurance exceeds the Maximum
Premium, the maximum amount of coverage that can be purchased or maintained for
the Maximum Premium.
5.11 DEFERRED COMPENSATION PLAN. At the Effective Time, the Thermo Power
directors' deferred compensation plan (the "Deferred Compensation Plan") will
terminate, and Thermo Power will distribute to each participant the sum in cash
equal to the balance of stock units credited to his or her deferred compensation
account under the Deferred Compensation Plan as of the Effective Time multiplied
by the Exchange Price.
5.12 COMPETING OFFERS. In the event that Thermo Power receives an
unsolicited proposal relating to the possible acquisition of Thermo Power
(whether by way of merger, purchase of capital stock, purchase of assets or
otherwise) or any material portion of its capital stock or assets by any person
other than Thermo Electron, which proposal is or may be, in the reasonable good
faith judgment of the Special Committee, financially more favorable to the
Minority Stockholders of Thermo Power than the terms of the Merger (a "Superior
Proposal"), nothing contained in this Agreement shall prevent the Board of
Directors of Thermo Power from providing information to the party making the
Superior Proposal, communicating the Superior Proposal to the stockholders of
Thermo Power, making a recommendation in favor of the Superior Proposal, or
terminating this Agreement to accept the Superior Proposal, if the Thermo Power
Board of Directors, acting upon the recommendation of the Special Committee,
determines in good faith, after consultation with outside legal counsel that the
Board's fiduciary duties under applicable law requires it to do so.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) Stockholder Approval. This Agreement shall have been approved by
the requisite vote under the MBCL by the stockholders of Thermo Power.
(b) No Order. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
(c) Fairness Opinion. Invemed Associates LLC shall not have
withdrawn or materially modified the Fairness Opinion.
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6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THERMO POWER. The obligations
of Thermo Power to consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, exclusively by Thermo Power:
(a) Representations and Warranties. The representations and
warranties of Thermo Electron and Merger Sub contained in this Agreement shall
be true and correct on and as of the Effective Time, except for changes
contemplated by this Agreement and except for those representations and
warranties that address matters only as of a particular date (which shall remain
true and correct as of such particular date), with the same force and effect as
if made on and as of the Effective Time, except, in all such cases, where the
failure to be so true and correct would not have a material adverse effect on
Thermo Electron; and Thermo Power shall have received a certificate to such
effect signed on behalf of Thermo Electron by the Chief Executive Officer,
President or Chief Operating Officer of Thermo Electron; and
(b) Agreements and Covenants. Thermo Electron and Merger Sub shall
have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by them on
or prior to the Effective Time, and Thermo Power shall have received a
certificate to such effect signed on behalf of Thermo Electron by the Chief
Executive Officer, President or Chief Operating Officer of Thermo Electron.
6.3. ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THERMO ELECTRON AND MERGER
SUB. The obligations of Thermo Electron and Merger Sub to consummate and effect
the Merger shall be subject to the satisfaction at or prior to the Effective
Time of each of the following conditions, any of which may be waived, in
writing, exclusively by Thermo Electron:
(a) Representations and Warranties. The representations and
warranties of Thermo Power contained in this Agreement shall be true and correct
on and as of the Effective Time, except for changes contemplated by this
Agreement and except for those representations and warranties that address
matters only as of a particular date (which shall remain true and correct as of
such particular date), with the same force and effect as if made on and as of
the Effective Time, except, in all such cases, where the failure to be so true
and correct would not have a material adverse effect on Thermo Power; and Thermo
Electron and Merger Sub shall have received a certificate to such effect signed
on behalf of Thermo Power by the Chief Executive Officer, President or Vice
President of Thermo Power; and
(b) Agreements and Covenants. Thermo Power shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and Thermo Electron shall have received a certificate to such
effect signed on behalf of Thermo Power by the Chief Executive Officer,
President or Vice President of Thermo Power.
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ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time of the Merger, whether before or after approval of this Agreement
by the stockholders of Thermo Power:
(a) by mutual written consent duly authorized by the Boards of
Directors of Thermo Electron and Thermo Power (upon approval of the Special
Committee);
(b) by either Thermo Power (upon approval of the Special Committee)
or Thermo Electron if the Merger shall not have been consummated by October 31,
1999; provided, however, that the right to terminate this Agreement under this
Section 7.1(b) shall not be available to any party whose action or failure to
act has been a principal cause of or resulted in the failure of the Merger to
occur on or before such date if such action or failure to act constitutes a
breach of this Agreement;
(c) by either Thermo Power (upon approval of the Special Committee)
or Thermo Electron if a Government Agency shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger; provided, however, that in the
case of an executive order, decree, ruling or other order, it is final and
nonappealable;
(d) by either Thermo Power (upon approval of the Special Committee)
or Thermo Electron if the required approval of the stockholders of Thermo Power
contemplated by this Agreement shall not have been obtained by reason of the
failure to obtain the required vote upon a vote taken at a meeting of
stockholders duly convened therefor or at any adjournment thereof (provided that
the right to terminate this Agreement under this Section 7.1(d) shall not be
available to Thermo Power where the failure to obtain stockholder approval of
Thermo Power shall have been caused by the action or failure to act of Thermo
Power in breach of this Agreement and the right to terminate this Agreement
under this Section 7.1(d) shall not be available to Thermo Electron where the
failure to obtain the requisite vote by the stockholders of Thermo Power shall
have been caused by the failure of Thermo Electron to vote its shares of Thermo
Power Common Stock in favor of this Agreement);
(e) by Thermo Power if the Thermo Power Board of Directors (upon
approval of the Special Committee) determines in good faith after consultation
with outside legal counsel that the Board's fiduciary duties under applicable
law requires it to do so (including without limitation to accept a Superior
Proposal);
(f) by Thermo Power (upon approval of the Special Committee), upon a
breach of any representation, warranty, covenant or agreement on the part of
Thermo Electron set forth in this Agreement, if (i) as a result of such breach
the conditions set forth in Section 6.2(a) or Section 6.2(b) would not be
satisfied as of the time of such breach and (ii) such breach shall not have been
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cured by Thermo Electron within ten business days following receipt by Thermo
Electron of written notice of such breach from Thermo Power; or
(g) by Thermo Electron, upon a breach of any representation,
warranty, covenant or agreement on the part of Thermo Power set forth in this
Agreement, if (i) as a result of such breach the conditions set forth in Section
6.3(a) or Section 6.3(b) would not be satisfied as of the time of such breach
and (ii) such breach shall not have been cured by Thermo Power within ten
business days following receipt by Thermo Power of written notice of such breach
from Thermo Electron.
7.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION. Any termination of this
Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties hereto.
In the event of the termination of this Agreement as provided in Section 7.1,
this Agreement shall be of no further force or effect, except that nothing
herein shall relieve any party from liability for any willful breach of this
Agreement.
7.3 FEES AND EXPENSES. All fees and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses, whether or not the Merger is consummated.
7.4 AMENDMENT. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of the parties hereto; provided, however, that Thermo Power
may not amend (or agree to any Thermo Electron amendment of) this Agreement
without the approval of the Special Committee.
7.5 EXTENSION;WAIVER. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein; provided, however, that Thermo Power may not take
any such actions without the approval of the Special Committee. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Thermo Power, Thermo Electron and Merger Sub contained in this
Agreement shall terminate at the Effective Time, and only the covenants that by
their terms survive the Effective Time shall survive the Effective Time.
8.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
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delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Thermo Electron or Merger Sub, to:
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: President
Telephone: (781) 622-1000
Facsimile: (781) 622-1207
with a copy to:
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: General Counsel
Telephone: (781) 622-1000
Facsimile: (781) 622-1283
(b) if to Thermo Power, to:
Thermo Power Corporation
44 First Avenue
Waltham, MA 02454
Attention: President
Telephone: (781) 622-1000
Facsimile: (781) 622-1025
with a required copy to the Special Committee:
Patlex Corporation
250 Cotorro Court, Suite 4
Las Cruces, NM 88005
Attention: Col. Frank Borman, Chairman
Telephone: (505) 524-4050
Facsimile: (505) 523-8081
and the Special Committee's counsel:
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Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Attention: Alan Singer
Telephone: (215) 963-5000
Facsimile: (215) 963-5299
8.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.4 ENTIRE AGREEMENT. This Agreement and the documents and instruments and
other agreements among the parties hereto as contemplated by or referred to
herein (a) constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof; and (b) are not intended to confer upon any other person any rights or
remedies hereunder, except as set forth herein.
8.5 SEVERABILITY. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
8.6 OTHER REMEDIES. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
8.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law
thereof.
8.8 ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties.
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IN WITNESS WHEREOF, Thermo Electron, Merger Sub, and Thermo Power have
caused this Agreement to be signed by themselves or their duly authorized
respective officers, all as of the date first written above.
(Seal) THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
-----------------------
Name: Theo Melas-Kyriazi
Title: Vice President
By: /s/ Kenneth J.Apicerno
------------------------
Name: Kenneth J.Apicerno
Title: Treasurer
(Seal) THERMO POWER CORPORATION
By: /s/ J. Timothy Corcoran
-----------------------
Name:J. Timothy Corcoran
Title: President
By: /s/ Kenneth J.Apicerno
----------------------
Name: Kenneth J.Apicerno
Title: Treasurer
(Seal) TP ACQUISITION CORPORATION
By: /s/ Brian D. Holt
-------------------
Name: Brian D.Holt
Title: President
By: /s/ Kenneth J. Apicerno
------------------------
Name: Kenneth J. Apicerno
Title: Treasurer
