SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: MAY 31, 1995
C. R. BARD, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
New Jersey 1-6926 22-1454160
(STATE OF COMMISSION FILE NUMBER IRS EMPLOYER
INCORPORATION) IDENTIFICATION NO.
730 Central Avenue, Murray Hill, New Jersey
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
07974
(ZIP CODE)
(908) 277-8000
(REGISTRANT'S TELEPHONE NUMBER)
<PAGE>
Item 5. Other Events
In a news release dated May 24, 1995, C. R. Bard, Inc. and
MedChem Products, Inc. jointly announced that their boards of
directors approved a definitive agreement for a stock-for-stock
merger of MedChem into Bard. Under the terms of the agreement,
each MedChem share would be valued at $9.25, subject to adjustment
under certain circumstances. The news release, issued by C. R.
Bard, Inc. on May 24, 1995, is incorporated herein by reference,
and is attached hereto as Exhibit 20.
The Agreement and Plan of Merger dated as of May 24, 1995
among C. R. Bard, Inc., CRB Acquisition Corp. and MedChem Products,
Inc. is incorporated herein by reference and is attached hereto as
Exhibit 2.
Item 7. Financial Statements and Exhibits
(c) Exhibits
2. Agreement and Plan of Merger dated as of May 24, 1995
among C. R. Bard, Inc., CRB Acquisition Corp. and MedChem
Products, Inc.
20. News release dated May 24, 1995, C. R. Bard, Inc.
announcing that the board of directors approved a
definitive agreement for a stock-for-stock merger of
MedChem Products, Inc. into Bard.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
C. R. BARD, INC.
(Registrant)
By: William C. Bopp /s/
William C. Bopp
Senior Vice President
and Chief Financial Officer
Dated: May 31, 1995
<PAGE>
EXHIBIT 2
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
dated as of May 24, 1995,
among
C.R. BARD, INC.,
CRB ACQUISITION CORP.
and
MEDCHEM PRODUCTS, INC.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time of the Merger . . . . . . . . . . . . . . . . . 2
1.4 Effects of the Merger. . . . . . . . . . . . . . . . . . . . . 3
1.5 Articles of Organization; By-Laws. . . . . . . . . . . . . . . 3
1.6 Directors; Officers. . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 Effect on Capital Stock. . . . . . . . . . . . . . . . . . . . 4
(a) Common Stock of Sub . . . . . . . . . . . . . . . . . . . 4
(b) Cancellation of Treasury Stock and Parent-
Owned Stock . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Conversion of Company Common Stock. . . . . . . . . . . . 4
2.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . . 6
(a) Exchange Agent. . . . . . . . . . . . . . . . . . . . . . 6
(b) Exchange Procedures . . . . . . . . . . . . . . . . . . . 7
(c) Distributions with Respect to Unexchanged
Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) No Further Ownership Rights in Company Common
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(e) No Fractional Shares. . . . . . . . . . . . . . . . . . . 9
(f) Termination of Exchange Fund. . . . . . . . . . . . . . . 10
(g) No Liability. . . . . . . . . . . . . . . . . . . . . . . 10
(h) Investment of Exchange Fund . . . . . . . . . . . . . . . 10
(i) Withholding Rights. . . . . . . . . . . . . . . . . . . . 10
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. . . . . . . . . 11
(a) Organization, Standing and Power. . . . . . . . . . . . . 11
(b) Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 12
(c) Capital Structure . . . . . . . . . . . . . . . . . . . . 13
(d) Authority . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) SEC Documents . . . . . . . . . . . . . . . . . . . . . . 17
(f) Information Supplied. . . . . . . . . . . . . . . . . . . 18
(g) Absence of Certain Changes or Events. . . . . . . . . . . 19
(h) Compliance with Applicable Laws . . . . . . . . . . . . . 19
(i) Environmental . . . . . . . . . . . . . . . . . . . . . . 20
(j) Litigation. . . . . . . . . . . . . . . . . . . . . . . . 22
(k) Product Liability Matters . . . . . . . . . . . . . . . . 23
(l) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(m) Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 25
<PAGE>
(n) Labor Controversies . . . . . . . . . . . . . . . . . . . 26
(o) Properties. . . . . . . . . . . . . . . . . . . . . . . . 27
(p) Intellectual Property . . . . . . . . . . . . . . . . . . 27
(q) Insurance . . . . . . . . . . . . . . . . . . . . . . . . 28
(r) Records . . . . . . . . . . . . . . . . . . . . . . . . . 28
(s) Company Rights Plan . . . . . . . . . . . . . . . . . . . 29
(t) Certain Chapters of the MBCL Not Applicable . . . . . . . 29
(u) Opinion of Financial Advisor. . . . . . . . . . . . . . . 29
(v) Vote Required . . . . . . . . . . . . . . . . . . . . . . 30
(w) Accounting Matters. . . . . . . . . . . . . . . . . . . . 30
3.2 Representations and Warranties of Parent and Sub . . . . . . . 30
(a) Organization, Standing and Power. . . . . . . . . . . . . 30
(b) Capital Structure . . . . . . . . . . . . . . . . . . . . 30
(c) Authority . . . . . . . . . . . . . . . . . . . . . . . . 32
(d) SEC Documents . . . . . . . . . . . . . . . . . . . . . . 33
(e) Information Supplied. . . . . . . . . . . . . . . . . . . 34
(f) Absence of Certain Changes or Events. . . . . . . . . . . 35
(g) Compliance with Applicable Laws . . . . . . . . . . . . . 35
(h) Litigation. . . . . . . . . . . . . . . . . . . . . . . . 36
(i) Interim Operations of Sub . . . . . . . . . . . . . . . . 36
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Covenants of Company . . . . . . . . . . . . . . . . . . . . . 37
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . 37
(b) Dividends; Changes in Stock . . . . . . . . . . . . . . . 37
(c) Issuance of Securities. . . . . . . . . . . . . . . . . . 38
(d) Governing Documents . . . . . . . . . . . . . . . . . . . 38
(e) No Solicitations. . . . . . . . . . . . . . . . . . . . . 38
(f) No Acquisitions . . . . . . . . . . . . . . . . . . . . . 40
(g) No Dispositions . . . . . . . . . . . . . . . . . . . . . 40
(h) Indebtedness. . . . . . . . . . . . . . . . . . . . . . . 41
(i) Other Actions . . . . . . . . . . . . . . . . . . . . . . 41
(j) Advice of Changes; Government Filings . . . . . . . . . . 41
(k) Accounting Methods. . . . . . . . . . . . . . . . . . . . 42
(l) Pooling and Tax-Free Reorganization
Treatment . . . . . . . . . . . . . . . . . . . . . . . . 42
(m) Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 42
(n) Tax Elections . . . . . . . . . . . . . . . . . . . . . . 43
4.2 Covenants of Parent. . . . . . . . . . . . . . . . . . . . . . 43
(a) Dividends, Distributions and Issuances. . . . . . . . . . 43
(b) Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 44
(c) Other Actions . . . . . . . . . . . . . . . . . . . . . . 44
(d) Government Filings. . . . . . . . . . . . . . . . . . . . 44
(e) Tax-Free Reorganization Treatment . . . . . . . . . . . . 45
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Preparation of S-4 and the Proxy Statement . . . . . . . . . . 45
5.2 Letter of Company's Accountants. . . . . . . . . . . . . . . . 46
5.3 Letter of Parent's Accountants . . . . . . . . . . . . . . . . 46
5.4 Stockholder Meeting. . . . . . . . . . . . . . . . . . . . . . 47
5.5 Legal Conditions to Merger . . . . . . . . . . . . . . . . . . 47
<PAGE>
5.6 Access to Information. . . . . . . . . . . . . . . . . . . . . 48
5.7 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.8 Stock Options. . . . . . . . . . . . . . . . . . . . . . . . . 49
5.9 Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . 51
5.10 Indemnification; Directors' and Officers'
Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation To Effect
the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(a) Stockholder Approval. . . . . . . . . . . . . . . . . . . 53
(b) NYSE Listing. . . . . . . . . . . . . . . . . . . . . . . 53
(c) Other Approvals . . . . . . . . . . . . . . . . . . . . . 53
(d) S-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(e) No Injunctions or Restraints; Illegality. . . . . . . . . 54
6.2 Conditions to Obligations of Parent and Sub. . . . . . . . . . 54
(a) Representations and Warranties. . . . . . . . . . . . . . 54
(b) Performance of Obligations of Company . . . . . . . . . . 54
(c) Consents Under Agreements . . . . . . . . . . . . . . . . 55
(d) Burdensome Condition. . . . . . . . . . . . . . . . . . . 55
6.3 Conditions to Obligations of Company . . . . . . . . . . . . . 55
(a) Representations and Warranties. . . . . . . . . . . . . . 55
(b) Performance of Obligations of Parent and Sub. . . . . . . 56
(c) Employment Agreement. . . . . . . . . . . . . . . . . . . 56
(d) Tax-Free Reorganization . . . . . . . . . . . . . . . . . 56
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . 59
7.3 Fees, Expenses and Other Payments. . . . . . . . . . . . . . . 59
7.4 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.5 Extension; Waiver. . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VIII
GENERAL PROVISIONS
8.1 Nonsurvival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.3 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . 64
8.4 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 65
8.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.6 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership. . . . . . . . . . . . . . . . . . . . . . 66
8.7 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 66
8.8 Limitations on Remedies. . . . . . . . . . . . . . . . . . . . 66
8.9 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.10 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.11 Adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . 67
<PAGE>
EXHIBIT A By-laws of Sub
EXHIBIT B Articles of Organization of Sub
EXHIBIT C Disclosure Schedule
EXHIBIT D Employment and Severance Agreements
EXHIBIT E Form of Company Affiliate Letter
<PAGE>
Index of Defined Terms
Page
affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Arthur Andersen. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Articles of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Average Closing Price. . . . . . . . . . . . . . . . . . . . . . . . . . .5
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
beneficial ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 64
beneficially own . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Business Combination . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Company Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . 25
Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Company Preferred Stock. . . . . . . . . . . . . . . . . . . . . . . . . 13
Company SEC Documents. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Company Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Company Stock Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Competing Transaction. . . . . . . . . . . . . . . . . . . . . . . . . . 40
Confidentiality Agreement. . . . . . . . . . . . . . . . . . . . . . . . 49
Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Conversion Fraction. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Disclosure Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Dissenting Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Environmental Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Environmental Permits. . . . . . . . . . . . . . . . . . . . . . . . . . 22
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Exchange Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
FDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
GII Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Governmental Entity. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
H&Q. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
HSR Filings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
incentive stock option . . . . . . . . . . . . . . . . . . . . . . . . . 50
KPMG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . . 12
<PAGE>
MBCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . .5
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Parent Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Parent Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . 30
Parent Rights Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Parent SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Parent Stock Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
pooling of interests . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Requisite Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . 53
Rights Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
S-4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 11
Sub. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . .2
tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
tax return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
taxable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Unaudited Financial Statements . . . . . . . . . . . . . . . . . . . . . 17
Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Voting Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Year-End Financial Statements. . . . . . . . . . . . . . . . . . . . . . 17
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of May 24, 1995
(this "Agreement"), among C.R. Bard, Inc., a New Jersey corporation
("Parent"), CRB Acquisition Corp., a Massachusetts corporation and
a wholly-owned subsidiary of Parent ("Sub"), and MedChem Products,
Inc., a Massachusetts corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, Sub and the
Company have approved, and deem it advisable and in the best
interests of their respective stockholders to consummate the
business combination transaction provided for herein in which Sub
would merge with and into the Company (the "Merger");
WHEREAS, Parent and the Company desire to make certain
representations, warranties and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
WHEREAS, for Federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization under the
provisions of Section 368 of the Internal Revenue Code of 1986, as
amended (the "Code");
WHEREAS, for accounting purposes, it is intended that the
Merger shall be accounted for as a "pooling of interests"; and
WHEREAS, in order to induce Parent to enter into this
Agreement, simultaneously with the execution hereof, the Company
and Parent are entering into an Option Agreement (the "Option
Agreement") pursuant to which the Company has granted to Parent the
option to purchase, upon the occurrence of certain events set
<PAGE>
forth therein, all of the issued and outstanding capital stock of
Gesco International, Inc. on the terms and subject to the further
conditions set forth therein;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
set forth herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Business
Corporation Law of the Commonwealth of Massachusetts (the "MBCL"),
Sub shall be merged with and into the Company at the Effective Time
(as defined in Section 1.3). At the Effective Time, the separate
existence of Sub shall cease, and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall
continue under the name "MedChem Products, Inc."
1.2 Closing Unless this Agreement shall have been terminated
pursuant to Section 7.1 and subject to the satisfaction or waiver
of the conditions set forth in Article VI, the closing of the
Merger (the "Closing") will take place as promptly as practicable
(and in any event within two business days) following satisfaction
or waiver of the conditions set forth in Article VI (the "Closing
Date"), at 10:00 a.m. at the offices of Simpson Thacher & Bartlett,
425 Lexington Avenue, New York, New York 10017, unless another
date, time or place is agreed to in writing by the parties hereto.
2
<PAGE>
1.3 Effective Time of the Merger As soon as practicable following
the satisfaction or waiver of the conditions set forth in Article
VI, the Surviving Corporation shall file articles of merger (the
"Articles of Merger") with the Secretary of State of the
Commonwealth of Massachusetts and make all other filings or
recordings required by the MBCL in connection with the Merger. The
Merger shall become effective at such time as the Articles of
Merger are duly filed with the Secretary of State of the
Commonwealth of Massachusetts, or such other time thereafter as is
provided in the Articles of Merger (the "Effective Time").
1.4 Effects of the Merger The Merger shall have the effects set
forth in Section 80 of the MBCL.
1.5 Articles of Organization; By-Lawsi. (a) The Articles of
Organization of Sub which are attached as Exhibit A hereto, as
amended as contemplated by Section 5.10 hereof and as in effect
immediately prior to the Effective Time, shall be the Articles of
Organization of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable law; provided that
Article I of the Articles of Organization of the Surviving
Corporation shall be amended in its entirety to read as follows:
"The name of the corporation is: MedChem Products, Inc."
(b) The By-laws of Sub which are attached as Exhibit B hereto
shall be the By-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
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1.6 Directors; Officers (a) The directors of Sub at the Effective
Time shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
(b) The officers of Sub at the Effective Time shall be the
officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 effect on Capital StockAs of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any
shares of capital stock of the Company or any shares of capital
stock of Parent or Sub:
(a) Common Stock of Sub Each share of common stock, par value
$.01 per share, of Sub issued and outstanding immediately prior to
the Effective Time shall be converted into one share of common
stock, par value $.01 per share, of the Surviving Corporation and
shall be the only issued and outstanding capital stock of the
Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned StockEach
share of common stock, par value $.01 per share, of the Company
("Company Common Stock") that is owned by the Company or by any
subsidiary of the Company, and each share of Company Common Stock
that is owned by Parent, Sub
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or any other subsidiary of Parent, shall automatically be cancelled
and retired and shall cease to exist, and no Merger Consideration
(as defined in Section 2.1(c)) or other consideration shall be
delivered or deliverable in exchange therefor.
(c) Conversion of Company Common Stock Subject to Section
2.2(e), each issued and outstanding share of Company Common Stock
(other than shares to be cancelled in accordance with Section
2.1(b) and Dissenting Shares (as defined below)) shall be converted
into the right to receive a fraction (calculated after taking into
account all shares of Company Common Stock then held by any holder
and subject to the provisions of Section 2.2(e)) (the "Conversion
Fraction") of a fully paid and nonassessable share of common stock,
par value $.25 per share, of Parent ("Parent Common Stock")
determined by dividing $9.25 by the average of the closing prices
(the "Average Closing Price") of Parent Common Stock on the New
York Stock Exchange (the "NYSE") for the fifteen consecutive
trading days immediately preceding the second trading day prior to
the Effective Time, provided, however, that the Conversion Fraction
shall in no event (i) exceed .3507109 or (ii) be less than .2857143
(the "Merger Consideration"). As of the Effective Time, all such
shares of Company Common Stock shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate previously representing any
such shares shall cease to have
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any rights with respect thereto, except the right to receive the
Merger Consideration (including any cash in lieu of fractional
shares to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.2(e),
without interest).
(d) Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock
outstanding immediately prior to the Effective Time held by any
holder who is entitled to demand, and who properly demands,
appraisal for such shares in accordance with Sections 85 through 98
of the MBCL ("Dissenting Shares") shall not be converted into a
right to receive the Merger Consideration (including any cash in
lieu of fractional shares of Parent Common Stock) unless such
holder fails to perfect or otherwise loses such holder's right to
appraisal, if any. If, after the Effective Time, such holder fails
to perfect or loses any such right to appraisal, such shares shall
be treated as if they had been converted as of the Effective Time
into the right to receive the Merger Consideration pursuant to
Section 2.1(c) (including any cash in lieu of fractional shares of
Parent Common Stock specified in Section 2.2(e)). The Company
shall give prompt notice to Parent of any demands received by the
Company for appraisal of shares of Company Common Stock, and Parent
shall have the right to participate in and direct all negotiations
and proceedings with respect to such demands. The Company shall
not, except with the prior
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written consent of Parent, make any payment with respect to, and
settle or offer to settle, any such demands.
2.2 Exchange of Certificates (a) Exchange AgentAs of the
Effective Time, Parent shall deposit, or shall cause to be
deposited, with a bank or trust company designated by the Company
(and reasonably acceptable to Parent) (the "Exchange Agent"), for
the benefit of the holders of shares of Company Common Stock, for
exchange in accordance with this Article II, through the Exchange
Agent, certificates representing the shares of Parent Common Stock
issuable pursuant to Section 2.1(b) in exchange for outstanding
shares of Company Common Stock (other than certificates
representing Dissenting Shares or shares to be cancelled in
accordance with Section 2.1), together with any cash in lieu of
fractional shares of Parent Common Stock, and any dividends or
distributions with a record date on or after the Effective Time
with respect to shares of Parent Common Stock which have not been
surrendered as of the time of payment thereof (such certificates
for shares of Parent Common Stock, together with any cash in lieu
of fractional shares of Parent Common Stock, and any such dividends
or distributions with respect to shares of Parent Common Stock,
being hereinafter referred to as the "Exchange Fund"). All such
shares of Parent Common Stock deposited in the Exchange Fund shall,
as of the Effective Time, have been registered under the Securities
Act of 1933, as amended (the "Securities Act") pursuant to a
registration statement on Form S-4 declared effective by the
Securities and Exchange Commission (the "SEC").
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(b) Exchange Procedures As soon as reasonably practicable
after the Effective Time, the Exchange Agent shall mail to each
holder of record of a certificate or certificates which immediately
prior to the Effective Time represented outstanding shares of
Company Common Stock (the "Certificates") whose shares were
converted into shares of Parent Common Stock pursuant to Section
2.1, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as
Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for
certificates representing shares of Parent Common Stock. Upon
surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares of
Parent Common Stock which such holder has the right to receive in
respect of the Certificate surrendered pursuant to the provisions
of this Article II (after taking into account all shares of Company
Common Stock then held by such holder), and the Certificate so
surrendered shall forthwith be cancelled. In the event that a
holder has lost or misplaced a Certificate, an affidavit of loss
thereof (together with an appropriate indemnity) satisfactory in
form and substance to the Company's transfer agent and the Exchange
Agent shall accompany such letter of transmittal in lieu
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<PAGE>
of the applicable Certificate. In the event of a transfer of
ownership of Company Common Stock which is not registered in the
transfer records of the Company, a certificate representing the
proper number of shares of Parent Common Stock may be issued to a
transferee if the Certificate representing such Company Common
Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and by
evidence that any applicable stock transfer taxes have been paid.
Until surrendered as contemplated by this Section 2.2, each
Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the
certificate representing shares of Parent Common Stock and cash in
lieu of any fractional shares of Parent Common Stock as
contemplated by this Section 2.2.
(c) Distributions with Respect to Unexchanged Shares
No dividends or other distributions declared or made after the
Effective Time with respect to Parent Common Stock with a record
date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Parent
Common Stock represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to
Section 2.2(e), until the holder of such Certificate shall
surrender such Certificate. Subject to the effect of applicable
laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificates representing whole shares of
Parent Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender or as promptly
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<PAGE>
thereafter as practicable, the amount of any cash payable with
respect to a fractional share of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e) and the amount of
dividends or other distributions with a record date on or after the
Effective Time theretofore paid with respect to such whole shares
of Parent Common Stock, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date
on or after the Effective Time but prior to surrender and a payment
date subsequent to surrender payable with respect to such whole
shares of Parent Common Stock. Dividends or other distributions
with a record date after the Effective Time but prior to surrender
of Certificates by holders thereof payable in respect of Parent
Common Stock held by the Exchange Agent shall be held in trust for
the benefit of such holders of Certificates, subject to Section
2.2(g).
(d) No Further Ownership Rights in Company Common Stock
All shares of Parent Common Stock issued upon conversion of shares
of Company Common Stock in accordance with the terms hereof
(including any cash paid pursuant to Section 2.2(c) or 2.2(e))
shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Company Common Stock, and there
shall be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the shares of Company Common
Stock which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be cancelled
and exchanged as provided in this
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<PAGE>
Article II, subject to applicable law in the case of Dissenting
Shares.
(e) No Fractional Shares No certificates or scrip
representing fractional shares of Parent Common Stock shall be
issued upon the surrender for exchange of Certificates, and such
fractional share interests will not entitle the owner thereof to
vote or to any rights of a stockholder of Parent. Notwithstanding
any other provisions of this Agreement, each holder of shares of
Company Common Stock who would otherwise have been entitled to
receive a fraction of a share of Parent Common Stock (after taking
into account all certificates delivered by such holder), shall
receive, in lieu thereof, a cash payment (without interest),
rounded to the nearest cent, equal to the product obtained by
multiplying the fractional share interest to which such holder
(after taking into account all shares of Company Common Stock then
held by such holder) would otherwise be entitled by the Average
Closing Price. As soon as practicable after the determination of
the amount of cash, if any, to be received by holders of Company
Common Stock with respect to any fractional share interests, the
Exchange Agent shall make available such amounts to such holders of
Company Common Stock subject to and in accordance with the terms of
Section 2.2(c).
(f) Termination of Exchange Fund Any portion of the Exchange
Fund which remains undistributed to the stockholders of the Company
for six months after the Effective Time shall be delivered to
Parent, upon demand, and any stockholders of the Company who have
not theretofore complied with this Article II
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<PAGE>
shall thereafter look only to Parent for payment of their claim for
Parent Common Stock, any cash in lieu of fractional shares of
Parent Common Stock and any dividends or distributions with respect
to Parent Common Stock.
(g) No Liability Neither Parent nor the Company shall be
liable to any holder of shares of Company Common Stock or Parent
Common Stock, as the case may be, for such shares, any cash in lieu
of fractional shares of Parent Common Stock or any dividends or
distributions with respect to Parent Common Stock delivered to a
public official pursuant to any applicable abandoned property,
escheat or similar law.
(h) Investment of Exchange Fund The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by
Parent in U.S. government securities. Any interest or other income
resulting from such investments shall be paid to Parent.
(i) Withholding Rights Parent or the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of
Company Common Stock such amounts (if any) as Parent or the
Exchange Agent is required to deduct and withhold with respect to
the making of such payment under the Code, or any provision of
state, local or foreign tax law. To the extent that amounts are so
withheld by Parent or the Exchange Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of
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<PAGE>
Company Common Stock in respect of which such deduction and
withholding was made by Parent or the Exchange Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the CompanyThe Company
represents and warrants to Parent and Sub that, except as
specifically disclosed in the Disclosure Schedule attached as
Exhibit C hereto (the "Disclosure Schedule"):
(a) Organization, Standing and Power Each of the Company
and its Significant Subsidiaries (as defined below) is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, has all
requisite power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted and is duly qualified and
in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties makes such qualification necessary, other than in such
jurisdictions where the failure so to qualify would not,
individually or in the aggregate, have a Material Adverse Effect
(as defined below) on the Company. To the Company's best
knowledge, neither the Company nor any of its subsidiaries has been
requested to qualify to do business in any jurisdiction where it is
not so qualified. As used in this Agreement, (i) a "Significant
Subsidiary" means any subsidiary of the Company or Parent, as the
case may be, that would constitute a Significant Subsidiary of such
party within the
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meaning of Rule 1-02 of Regulation S-X of the SEC, (ii) any
reference to any event, change or effect being "material" with
respect to any entity means an event, change or effect which is
material in relation to the condition (financial or otherwise),
properties, assets, liabilities, businesses or operations of such
entity and its subsidiaries taken as a whole, and (iii) the term
"Material Adverse Effect" means, with respect to the Company or
Parent, a material adverse effect on the business, assets,
properties, results of operations or financial condition of such
party and its subsidiaries taken as a whole or on the ability of
such party (and, with respect to Parent, of Sub) to perform its
obligations hereunder.
(b) Subsidiaries The Company owns, directly or indirectly,
all of the outstanding capital stock or other equity interests in
each of its subsidiaries free and clear of any claim, lien,
encumbrance, security interest or agreement with respect thereto.
Schedule 21 to the Company's Form 10-K for the year ended August
31, 1994 sets forth a complete list of the Company's subsidiaries.
Other than the capital stock or other interests held by the Company
in such subsidiaries, neither the Company nor any such subsidiary
owns any direct or indirect equity interest in any person, domestic
or foreign. All of the outstanding shares of capital stock in each
of its subsidiaries are duly authorized, validly issued, fully paid
and non-assessable and were issued free of preemptive rights and in
compliance with applicable securities laws and regulations. There
are no irrevocable proxies or similar obligations with
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<PAGE>
respect to such capital stock of such subsidiaries and no equity
securities or other interests of any of its subsidiaries are or may
become required to be issued or purchased by reason of any options,
warrants, rights to subscribe to, puts, calls or commitments of any
character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any capital stock
of any such subsidiary, and there are no agreements, contracts,
commitments, understandings or arrangements by which any such
subsidiary is bound to issue additional shares of its capital
stock, or options, warrants or rights to purchase or acquire any
additional shares of its capital stock or securities convertible
into or exchangeable for such shares.
(c) Capital Structure (i) The authorized capital stock of
the Company consists of 20,000,000 shares of Company Common Stock,
par value of $.01 per share, and 1,000,000 shares of Preferred
Stock of the Company, par value of $.01 per share ("Company
Preferred Stock"). At the close of business on May 19, 1995, (A)
10,242,089 shares of Company Common Stock were outstanding, no
shares of Company Common Stock were reserved for issuance upon the
exercise of outstanding warrants, 2,116,678 shares of Company
Common Stock were reserved for issuance upon the exercise of
outstanding stock options granted pursuant to the Company's Amended
and Restated Stock Option Plan, the 1993 Spin-Off Stock Option
Plan, the 1993 Stock Option Plan, the 1993 Director Stock Option
Plan and the 1994 Stock Option Plan (collectively, the "Company
Stock Plans") and 1,024,702 shares of
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<PAGE>
Company Common Stock were held by the Company in its treasury or by
its subsidiaries, and (B) no shares of Company Preferred Stock were
issued or outstanding.
(ii) No bonds, debentures, notes or other indebtedness having
the right to vote (or convertible into or exercisable for
securities having the right to vote) on any matters on which
stockholders may vote ("Voting Debt") of the Company were issued or
outstanding, other than the 7% Convertible Subordinated Notes in
the original principal amount of $4,103,204 (the "Gesco Notes").
(iii) All outstanding shares of Company capital stock are
validly issued, fully paid and nonassessable and free of preemptive
rights and were issued in compliance with applicable securities
laws and regulations.
(vi) Except for this Agreement, Company Stock Options (as
defined in Section 5.8), the Gesco Notes and the Company's Rights
Plan (as defined in Section 3.1(s)), there are no options,
warrants, calls, rights, commitments or agreements of any character
to which the Company or any subsidiary of the Company is a party or
by which it is bound obligating the Company or any subsidiary of
the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or any Voting
Debt of the Company or of any subsidiary of the Company or
obligating the Company or any subsidiary of the Company to grant,
extend or enter into any such option, warrant, call, right,
commitment or agreement. After the Effective Time, there will be
no option, warrant, call, right or agreement
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<PAGE>
obligating the Company or any subsidiary of the Company to issue,
deliver or sell, or cause to be issued, delivered or sold, any
shares of capital stock or any Voting Debt of the Company or any
subsidiary of the Company, or obligating the Company or any
subsidiary of the Company to grant, extend or enter into any such
option, warrant, call, right or agreement. There are no
outstanding contractual obligations of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any shares
of capital stock of the Company or any of its subsidiaries.
(v) Since March 31, 1995, the Company has not (A) issued or
permitted to be issued any shares of capital stock, or securities
exercisable for or convertible into shares of capital stock, of the
Company or any of its subsidiaries, other than pursuant to and as
required by the terms of any Company Stock Options that were issued
and outstanding on such date; (B) repurchased, redeemed or
otherwise acquired, directly or indirectly through one or more of
its subsidiaries, any shares of capital stock of the Company or any
of its subsidiaries; or (C) declared, set aside, made or paid to
the stockholders of the Company dividends or other distributions on
the outstanding shares of capital stock of the Company. For
purposes of clause (B) of this clause (v), the Company shall be
deemed to include any affiliate or associate (as defined in the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
or any person that the Company has caused to purchase such shares.
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<PAGE>
(d) Authority (i) The Company has all requisite corporate
power and authority to enter into this Agreement and, subject to
approval by the stockholders of the Company, 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 the Company, other than such
approval by the stockholders of the Company. This Agreement has
been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable in
accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(ii) Subject to compliance with the applicable requirements of
the Securities Act and any applicable state securities laws, the
Exchange Act, the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") and the filing of the Articles of
Merger as contemplated by Section 1.1, the execution and delivery
of this Agreement and the Articles of Merger, the consummation of
the transactions contemplated hereby and thereby, and compliance of
the Company with any of the provisions hereof or thereof will not
breach, constitute an ultra vires act under, or result in any
violation of, or default (with or without notice or lapse of time,
or both)
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under, or give rise to a right of termination, cancellation or
acceleration of any obligation or the loss of a material benefit
under, or the creation of a lien, pledge, security interest, charge
or other encumbrance on assets (any such breach, ultra vires act,
violation, default, right of termination, cancellation,
acceleration, loss or creation, a "Violation") pursuant to, (x) any
provision of the Articles of Organization or By-laws of the Company
or the other governing instruments of any subsidiary of the Company
or (y) subject to obtaining or making the consents, approvals,
orders, authorizations, registrations, declarations and filings
referred to in paragraph (iii) below, any loan or credit agreement,
note, mortgage, indenture, lease, Company Benefit Plan (as defined
in Section 3.l(m)) or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the
Company or any subsidiary of the Company or their respective
properties or assets except Violations under clause (y) which do
not or would not reasonably be expected to have a Material Adverse
Effect on the Company.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity"), is
required by or with respect to the Company or any subsidiary of the
Company in connection with the execution and delivery of this
Agreement and the Articles of Merger by the Company, the
consummation by the Company of the
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transactions contemplated hereby and thereby, and compliance of the
Company with any of the provisions hereof or thereof, the failure
to obtain which would have a Material Adverse Effect on the
Company, except for (A) the filing with the SEC of (1) a proxy
statement in definitive form relating to the meeting of the
Company's stockholders to be held in connection with the Merger
(the "Proxy Statement") and (2) such other filings under the
Exchange Act as may be required in connection with this Agreement
and the transactions contemplated hereby and the obtaining from the
SEC of such orders as may be required in connection therewith, (B)
the filing of the Articles of Merger as contemplated by Section 1.1
and appropriate documents with the relevant authorities of states
in which the Company is qualified to do business, (C) filings
pursuant to the rules of the NYSE, and (D) filings (the "HSR
Filings") under the HSR Act.
(e) SEC Documents The Company has made available to Parent
a true and complete copy of each report, schedule, registration
statement and definitive proxy statement filed by the Company with
the SEC since August 31, 1994 (as such documents have since the
time of their filing been amended, the "Company SEC Documents"),
which are all the documents (other than preliminary material) that
the Company was required to file with the SEC since such date. As
of their respective dates, (i) the Company SEC Documents complied
in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Company SEC
Documents, and (ii) none of the
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Company SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
financial statements of the Company included in the Company SEC
Documents (including, without limitation, the audited balance sheet
and related statements of operations, stockholders' equity and cash
flows of the Company and its subsidiaries for the fiscal year ended
August 31, 1994, as audited by KPMG Peat Marwick LLP ("KPMG") (such
balance sheet and related statements are referred to hereinafter as
the "Year-End Financial Statements"), and the unaudited financial
statements of the Company and its subsidiaries for the fiscal
quarters ended March 31, 1995 and November 30, 1994 and for the
transition period from September 1, 1994 to December 31, 1994
(collectively, the "Unaudited Financial Statements"), including the
balance sheet of the Company and its subsidiaries dated March 31,
1995 (the "Balance Sheet")) complied as to form in all material
respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto,
have been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto
or, in the case of the unaudited statements, as permitted by Form
10-Q of the SEC) and fairly present the consolidated financial
position of the Company and its consolidated subsidiaries as at the
dates thereof and the
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consolidated results of their operations, stockholders' equity and
cash flows for the periods then ended in accordance with GAAP. All
material agreements, contracts and other documents required to be
filed as exhibits to any of the Company SEC Documents have been so
filed.
(f) Information Supplied None of the information provided
by or on behalf of the Company relating to the Company and its
business for inclusion or incorporation by reference in the
registration statement on Form S-4 to be filed with the SEC by
Parent in connection with the issuance of shares of Parent Common
Stock in the Merger (the "S-4") will, at the time the S-4 is filed
with the SEC and at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. None of
the information included or incorporated by reference in the Proxy
Statement (other than information concerning Parent or Sub provided
by or on behalf of Parent or Sub for inclusion or incorporation by
reference therein) will, at the date of mailing to stockholders of
the Company and at the time of the meeting of stockholders to be
held in connection with the Merger, contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The Proxy Statement (except for information
concerning Parent or Sub provided by or on behalf of Parent or Sub
for inclusion or
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<PAGE>
incorporation by reference therein) will comply as to form in all
material respects with the provisions of the Exchange Act and the
rules and regulations thereunder.
(g) Absence of Certain Changes or Events Since March 31,
1995, except as disclosed in the Company SEC Documents filed since
such date, there has not been: (i) any event, occurrence, fact,
condition, change, development or effect ("Event") that has had or
would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company (other than any
Event that generally affects other companies in the Company's line
of business or that affects other companies generally); (ii) any
event which, if it had taken place following the execution of this
Agreement, would not have been permitted by Section 4.1(b), (c),
(f), (g) or (h) without the prior consent of Parent; (iii) any
condition, event or occurrence which could reasonably be expected
to prevent, hinder or materially delay the ability of the Company
to consummate the transactions contemplated by this Agreement; (iv)
any material change in accounting methods or practices (or any
disagreement with the Company's independent public accountants with
respect to such methods or practices) or any material change in
depreciation or amortization policies or rates applicable to the
Company or any of its subsidiaries; or (v) any incurrence of any
material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) not incurred in the ordinary
course of business consistent with past practice or any other
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failure by the Company or any of its subsidiaries to conduct its
business in the ordinary course consistent with past practice.
(h) Compliance with Applicable Laws The Company and its
subsidiaries are in compliance with all applicable laws and
regulations, except where the failure to be in such compliance
would not reasonably be expected to have a Material Adverse Effect
on the Company. The Company has received all necessary material
approvals from the Federal Food and Drug Administration ("FDA") and
any similar state agencies in connection with its and its
subsidiaries' products, and has made all material notifications,
registrations and listings to or with the FDA (including pursuant
to Section 510(k) of the Federal Food, Drug and Cosmetic Act) and
any similar state agencies with respect to the Company's and its
subsidiaries' medical devices. As of the date hereof, no
investigation by any Governmental Entity with respect to the
Company or any of its subsidiaries is pending or, to the Company's
best knowledge, threatened.
(i) Environmental (i) The Company and its subsidiaries
hold, and are and have been in material compliance with, all
Environmental Permits (as defined below), and are and have been
otherwise in material compliance with all applicable Environmental
Laws (as defined below); and there is no condition in existence on
the date hereof known to the Company that could reasonably be
expected to prevent or materially interfere with the reissuance of
any Environmental Permits or compliance with Environmental Laws in
the future;
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(ii) to the best of the Company's knowledge no modification,
revocation, reissuance, alteration, transfer, or amendment of the
Environmental Permits, or any review by, or approval of, any third
party of the Environmental Permits is required in connection with
the execution or delivery of this Agreement or the consummation of
the transactions contemplated hereby or the continuation of the
business of the Company or its subsidiaries following such
consummation;
(iii) neither the Company nor any of its subsidiaries has
received any Environmental Claim (as defined below), and neither
the Company nor any of its subsidiaries is aware of any threatened
Environmental Claim;
(iv) the Company and its subsidiaries have not entered into,
have not agreed to, and are not subject to any judgment, decree,
order or other similar requirement of any Governmental Entity under
any Environmental Laws, including without limitation those relating
to compliance with Environmental Laws or to investigation, cleanup,
remediation or removal of, or exposure to, Hazardous Substances (as
defined below);
(v) the Company and its subsidiaries have not assumed,
contractually or by operation of law, any liabilities or
obligations under any Environmental Laws; and
(vi) the Company and its subsidiaries have accrued or
otherwise provided, in accordance with generally accepted
accounting principles, for all damages, liabilities, penalties or
costs that they may incur in connection with
25
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any claim pending or threatened against them, or any requirement
that is or may be applicable to them, under any Environmental Laws,
and such accrual or other provision is reflected in the Company's
most recent consolidated financial statements, which have been
provided to Parent.
(vii) For purposes of this Agreement, the following terms
shall have the following meanings:
"Environmental Claim" means any written or oral notice, claim,
demand, action, suit, complaint, proceeding or other communication
by any person alleging liability or potential liability (including
without limitation liability or potential liability for
investigatory costs, cleanup costs, governmental response costs,
natural resource damages, property damage, personal injury, fines
or penalties) arising out of, relating to, based on or resulting
from (i) the presence, discharge, emission, release or threatened
release of any Hazardous Materials at any location, (ii)
circumstances forming the basis of any violation or alleged
violation of any Environmental Laws or Environmental Permits, or
(iii) otherwise relating to obligations or liabilities under any
Environmental Law.
"Environmental Permits" means all permits, licenses,
registrations and other governmental authorizations required under
Environmental Laws for the Company or any of its subsidiaries to
conduct their operations.
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"Environmental Laws" means all applicable foreign, federal,
state and local statutes, rules, regulations, ordinances, orders,
decrees and common law relating to the environment or occupational
health and safety.
"Hazardous Materials" means all hazardous, dangerous or toxic
substances, wastes, materials or chemicals, petroleum (including
crude oil or any fraction thereof) and petroleum products, asbestos
and asbestos-containing materials, pollutants, contaminants and all
other materials, substances and forces, including but not limited
to electromagnetic fields, regulated pursuant to any Environmental
Laws or that could result in liability under any Environmental
Laws.
(j) Litigation There are no material claims, actions,
suits or legal or administrative arbitrations or other proceedings
or investigations relating to matters other than product liability
matters pending against the Company or any of its subsidiaries, or,
to the Company's best knowledge, threatened against or affecting
the Company or any of its subsidiaries, or to which the Company or
any of its subsidiaries is a party, before or by any Federal,
foreign, state, local or other governmental or non-governmental
department, commission, board, bureau, agency, court or other
instrumentality, or by any private person or entity. There are no
existing or, to the best knowledge of the Company, threatened
material orders, judgments or decrees of any court or other
Governmental Entity which specifically apply to the Company, any of
its subsidiaries or any
27
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of their respective properties or assets.
(k) Product Liability Matters The Company and its
subsidiaries have submitted to its product liability insurance
carriers all material claims of product liability of the Company or
any of its subsidiaries and knows of no claims which should have
been submitted to its product liability insurance carriers but were
not so submitted. Parent has previously been afforded access to
all files containing relevant documents in the Company's possession
in connection with the foregoing. None of the Company, any of its
subsidiaries or, to the Company's best knowledge, any employee or
agent of the Company or any of its subsidiaries has made any untrue
statement of a material fact or omitted to state a material fact in
connection with obtaining or renewing any insurance policy
providing product liability coverage in respect of the products of
the Company or any of its subsidiaries which could result in the
loss of all or any portion of such coverage. The Company is not
aware of any notice or communication from any insurance company or
any representative thereof stating or indicating that any insurance
policy of the Company or any of its subsidiaries may not provide
coverage up to the limits of such policy for any liability, loss or
damage which may be incurred or suffered by the Company or any of
its subsidiaries in connection with the product liability claims
listed in the Disclosure Schedule, other than the possible lack of
coverage for punitive damages and claims for deductible amounts.
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(l) Taxes (i) The Company and each of its subsidiaries
(and any consolidated, combined, unitary or aggregate group for tax
purposes of which the Company or any of its subsidiaries is or has
been a member) have timely filed all tax returns required to be
filed by any of them and have paid (or had paid on their behalf),
or have set up an adequate reserve for the payment of, all taxes
required to be paid, and the most recent financial statements
contained in the Company SEC Documents reflect an adequate reserve
for all taxes payable by the Company and its subsidiaries accrued
through the date of such financial statements. No material
deficiencies for any taxes have been proposed, asserted or assessed
against the Company or any of its subsidiaries that are not
adequately reserved for, no audit of any tax return of the Company
or any of its subsidiaries is being conducted by a tax authority,
and no extension of the statute of limitations on the assessment of
any taxes has been granted to the Company or any of its
subsidiaries and is currently in effect. For the purpose of this
Agreement, the term "tax" (including, with correlative meaning, the
terms "taxes" and "taxable") shall include, except where the
context otherwise requires, all Federal, state, local and foreign
income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy and other
taxes, duties or assessments in the nature of a tax, together with
all interest, penalties and additions imposed with respect to
29
<PAGE>
such amounts, and the term "tax return" shall mean any return,
report or statement required to be filed with any governmental
authority with respect to taxes.
(ii) Neither the Company or any of its subsidiaries has
participated in an international boycott as defined in Code Section
999.
(iii)Neither the Company nor any of its subsidiaries is, and
none of them has been, a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii).
(iv) The Company has not made or become obligated to make, and
will not as a result of the Merger or any of the other transactions
contemplated hereby make or become obligated to make, any "excess
parachute payment" as defined in Code Section 280G (without regard
to subsection (b)(4) and (b)(5) thereof).
(m) Benefit Plans (i) With respect to each employee benefit
plan (including, without limitation, any "employee benefit plan",
as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") specifically, without
limitation, pension, profit sharing, stock bonus, medical
reimbursement, life insurance, disability and severance pay plans)
and all other material employee benefit plans and arrangements,
payroll practices, agreements, programs and policies (including,
without limitation, plans or arrangements providing for deferred
compensation, bonuses, stock
30
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options or any similar compensation or benefit plan, or arrangement
(all the foregoing being herein called "Benefit Plans"), maintained
or contributed to by the Company or any "Commonly Controlled
Entity" (within the meaning of Section 414 of the Code) (the
"Company Benefit Plans"), to the extent applicable, the Company has
delivered to Parent a true and correct copy of (A) the three most
recent annual reports (Form 5500 series) filed with the IRS, (B)
such Company Benefit Plan, (C) each trust agreement relating to
such Company Benefit Plan or a description of the material terms of
any such Company Benefit Plan, (D) the most recent summary plan
description for each Company Benefit Plan for which a summary plan
description is required, (E) the three most recent actuarial
reports or valuations relating to any Company Benefit Plan subject
to Title IV of ERISA and (F) the most recent determination letter
issued by the IRS with respect to any Company Benefit Plan
qualified under Section 401 (a) of the Code.
(ii) With respect to the Company Benefit Plans, individually
and in the aggregate, no event has occurred and, to the best
knowledge of the Company, there exists no condition or set of
circumstances, in connection with which the Company or any Commonly
Controlled Entity could be subject to any liability that is
reasonably likely to have a Material Adverse Effect on the Company
(other than routine benefit claims and funding obligations payable
in the ordinary course of business) under ERISA, the Code or any
other applicable law.
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(iii) Neither the Company nor any Commonly Controlled Entity
of the Company maintains or contributes to or has any liability in
respect of any "multiemployer plan" (as such term is defined in
section 3(37) of ERISA) and neither the Company nor any Commonly
Controlled Entity of the Company has incurred any material
liability that remains unsatisfied with respect to any such plans
or has incurred any material liability which remains unsatisfied
under Sections 4062, 4063, 4064, 4069 or 4201 of ERISA.
(iv) With respect to any Company Plan or the plan of any
Commonly Controlled Entity of the Company which is not a
multiemployer plan, but is subject to Title IV of ERISA, the
present value of all obligations under each such plan (based upon
the assumptions used to fund each such plan) did not, as of the
last annual valuation date prior to the date hereof, exceed the
value of the assets of each such plan allocable to such
obligations.
(v) No Company Benefit Plan, program or arrangement exists
which could result in the payment to any Company employee of any
money or other property or rights or accelerate or provide any
other rights or benefits to any such employee as a result of the
transactions contemplated by this Agreement, whether or not such
payment would constitute a parachute payment within the meaning of
Section 280G of the Code.
(n) Labor Controversies None of the Company or any of its
subsidiaries is a party to any collective bargaining agreement.
There have not been and are not now existing any
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threats of strikes, work stoppages or demands for collective
bargaining, or, to the best knowledge of the Company, any
organizational efforts, by any union or like organization
respecting the Company or any of its subsidiaries. There are no
present salaried employees of the Company or any of its
subsidiaries who have expressed to the Company an intention not to
continue in such employ upon the consummation of the Merger or the
other transactions contemplated hereunder, whose departure may have
a Material Adverse Effect.
(0) Properties The Disclosure Schedule sets forth list of
all real property owned by the Company or its subsidiaries. The
Company or one of its subsidiaries (i) has good, valid and
marketable title to all the properties and assets reflected in the
Year-End Financial Statements and Unaudited Financial Statements as
being owned by the Company or one of its subsidiaries or acquired
after the date thereof which are material to the Company's business
on a consolidated basis (except properties sold or otherwise
disposed of since the date thereof in the ordinary course of
business), free and clear of all claims, liens, charges, security
interests or encumbrances of any nature whatsoever except (A)
statutory liens securing payments not yet due and (B) such
imperfections or irregularities of title, claims, liens, charges,
security interests or encumbrances as do not materially affect the
use of the properties or assets subject thereto or affected thereby
or otherwise materially impair business operations at such
properties and (ii) is the lessee of all leasehold estates
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<PAGE>
reflected in the Year-End Financial Statements and Unaudited
Financial Statements or acquired after the date thereof which are
material to its business on a consolidated basis (except for leases
that have expired by their terms since the date thereof) and is in
possession of the properties purported to be leased thereunder, and
each such lease is valid without default thereunder by the lessee
or, to the Company's best knowledge, the lessor which default would
reasonably be expected to have a Material Adverse Effect on the
Company.
(p) Intellectual Property The Company or one of its
subsidiaries possess all those patents, patent applications, patent
licenses, trade names, trademarks, servicemarks, copyrights,
formulae and other proprietary rights which are material to the
Company's business on a consolidated basis and without any known
conflict with the rights of others, and to the best knowledge of
the Company, no person has made any claims or threatened that the
Company or any of its subsidiaries is in violation or has infringed
any patent, patent license, trade name, trademark, servicemark, or
copyright, of such third party, and no assignments, grants, or
licenses to use such marks, copyright, know-how, formulae or rights
have been granted by the Company or any of its subsidiaries. All
licenses, permits, and approvals listed in and described on the
Disclosure Schedule are to the Company's best knowledge valid and
in full force and effect and, to the Company's best knowledge, each
of such licenses, permits and approvals shall, following the
consummation of the Merger and the other transactions herein
contemplated, be
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<PAGE>
valid and fully enforceable, without the consent of any third
party.
(q) Insurance The Company and each of its subsidiaries are
insured in such amounts and against such risks as are usually
insured against by persons operating in the businesses in which the
Company and its subsidiaries operate, and all policies relating to
such insurance are in full force and effect.
(r) Records (i) The respective corporate record books of
or relating to the Company and each of its Significant Subsidiaries
made available to Parent by the Company contain accurate and
substantially complete records of (x) all material corporate
actions of the respective stockholders and directors (and
committees thereof) of the Company and its subsidiaries and (y) the
Articles of Organization, By-laws and/or other governing
instruments of the Company and its Significant Subsidiaries.
(ii) The books and records of the Company and its subsidiaries
are substantially complete and correct.
(s) Company Rights Plan (i) The Rights Agreement, dated as
of September 24, 1990 (the "Rights Plan") has been amended to
provide that (x) none of the approval, execution or delivery of
this Agreement, or the consummation of the Merger and the other
transactions contemplated hereby, will cause (1) the Rights (as
defined in the Rights Plan) issued pursuant to the Rights Plan to
become exercisable under the Rights Plan, (2) Parent, Sub and/or
any of their Affiliates or Associates (as such terms are defined in
the Rights Plan), individually or in the
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<PAGE>
aggregate, to be deemed an "Acquiring Person" (as defined in the
Rights Plan), or (3) the "Stock Acquisition Date" (as defined in
the Rights Plan) or the "Distribution Date" (as defined in the
Rights Plan) to occur upon any such event.
(ii) The "Distribution Date" (as defined in the Rights Plan)
has not occurred.
(t) Certain Chapters of the MBCL Not Applicable The
provisions of Chapters 110C, 110D and 110F of the MBCL will not,
prior to the termination of this Agreement, apply to this
Agreement, the Merger or the other transactions contemplated by
this Agreement. Other than Chapters 110C, 110D and 110F of the
MBCL, (i) no state takeover statute or similar statute or
regulation applies or purports to apply to this Agreement, the
Merger or the other transactions contemplated by this Agreement,
and (ii) no provision of the Articles of Organization, By-laws
and/or other governing instruments of the Company or any of its
subsidiaries would restrict or impair the ability of Parent to
vote, or otherwise to exercise the rights of a stockholder with
respect to, shares of the Company and any of its subsidiaries that
may be acquired or controlled by Parent.
(u) Opinion of Financial Advisor The Company has received
the opinion of Hambrecht & Quist LLC ("H&Q") dated May 23, 1995 to
the effect that, as of such date, the consideration to be received
by the stockholders of the Company pursuant to this Agreement is
fair to such stockholders from a financial point of view, a signed
copy of which opinion has been delivered to Parent.
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<PAGE>
(v) Vote RequiredThe affirmative vote of the holders of two-
thirds of the outstanding shares of Company Common Stock entitled
to vote thereon is the only vote of the holders of any class or
series of capital stock of the Company necessary to approve this
Agreement and the transactions contemplated hereby.
(w) Accounting Matters Neither the Company nor, to the
Company's best knowledge, any of its affiliates, has through the
date of this Agreement, taken or agreed to take any action that
would prevent Parent from accounting for the business combination
to be effected by the Merger as a "pooling of interests".
3.2 Representations and Warranties of Parent and Sub Parent
and Sub jointly and severally represent and warrant to the Company
as follows:
(a) Organization, Standing and Power Each of Parent, its
Significant Subsidiaries and Sub is a corporation, partnership or
other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, has all requisite power and authority and all
necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being
conducted, and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes such
qualification necessary, other than in such jurisdictions where the
failure so to qualify would not, individually or in the aggregate,
have a Material Adverse Effect on Parent.
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<PAGE>
(b) Capital Structure (i) The authorized capital stock of
Parent consists of 300,000,000 shares of Parent Common Stock and
5,000,000 shares of Preferred Stock of Parent, par value $1.00 per
share ("Parent Preferred Stock"). At the close of business on May
23, 1995, (A) 52,143,310 shares of Parent Common Stock were
outstanding, 2,831,662 shares of Parent Common Stock were reserved
for issuance upon the exercise of outstanding stock options granted
pursuant to the Parent stock option, the Parent stock award and the
Parent restricted stock plans (the "Parent Stock Plans") and no
shares of Parent Common Stock were held by Parent in its treasury
or by its subsidiaries; and (B) no shares of Parent Preferred Stock
were issued or outstanding.
(ii) As of the date hereof, no Voting Debt of Parent was
issued or outstanding. All outstanding shares of Parent capital
stock are, and the shares of Parent Common Stock (A) to be issued
pursuant to or as specifically contemplated by this Agreement, (B)
which may be issued pursuant to the Parent Stock Plans and (C) when
issued in accordance with this Agreement upon exercise of the
Company Stock Options, as the case may be, will be, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
(iii) As of the date hereof, except for this Agreement, the
Parent Stock Plans and the Rights Agreement, dated as of October 9,
1985, as the same may be amended pursuant to Section 4.2(a) hereof
(the "Parent Rights Plan"), there are no options, warrants, calls,
rights, commitments or agreements of any character to which Parent
or any Significant Subsidiary of Parent
38
<PAGE>
is a party or by which it is bound obligating Parent or any
Significant Subsidiary of Parent to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital
stock or any Voting Debt of Parent or of any Significant Subsidiary
of Parent or obligating Parent or any Significant Subsidiary of
Parent to grant, extend or enter into any such option, warrant,
call, right, commitment or agreement. As of the date hereof, there
are no outstanding contractual obligations of Parent or any of its
Significant Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of Parent or any of its Significant
Subsidiaries.
(iv) As of the date hereof, the authorized capital stock of
Sub consists of 1,000 shares of Common Stock, par value $.01 per
share, all of which are validly issued, fully paid and
nonassessable and are owned by Parent.
(c) Authority (i) Parent and Sub have 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 Parent or Sub, as the case may be.
This Agreement has been duly executed and delivered by Parent and
Sub and constitutes a valid and binding obligation of Parent or
Sub, as the case may be, enforceable in accordance with its terms,
except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights
39
<PAGE>
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(ii) Subject to compliance with the applicable requirements of
the Securities Act and any applicable state securities laws, the
Exchange Act, the HSR Act and the filing of the Articles of Merger,
the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not result in any
Violation pursuant to (x) any provision of the Certificate of
Incorporation or By-laws of Parent, the Articles of Organization or
By-laws of Sub, or the other governing instruments of any other
subsidiary of Parent or (y) except as disclosed in writing to the
Company prior to the date hereof and subject to obtaining or making
the consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph (iii) below, any
loan or credit agreement, note, mortgage, indenture, lease, Benefit
Plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Parent, Sub or any
other subsidiary of Parent or their respective properties or assets
except Violations under clause (y) above which do not or would not
reasonably be expected to have a Material Adverse Effect on Parent.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity
is required by or with respect to Parent, Sub or any other
40
<PAGE>
subsidiary of Parent in connection with the execution and delivery
of this Agreement by Parent and Sub, the consummation by Parent or
Sub, as the case may be, of the transactions contemplated hereby,
and compliance by Parent and Sub with any of the provisions hereof,
the failure to obtain which would have a Material Adverse Effect on
Parent, except for (A) the filing with the SEC of (1) the S-4, (2)
the Proxy Statement and (3) such other filings under the Exchange
Act as may be required in connection with this Agreement and the
transactions contemplated hereby and the obtaining from the SEC of
such orders as may be required in connection therewith, (B) such
filings and approvals as are required to be made or obtained under
the securities or blue sky laws of various states in connection
with the transactions contemplated by this Agreement, (C) the
filing of the Articles of Merger as contemplated by Section 1.1 and
appropriate documents with the relevant authorities of states in
which Parent and Sub are qualified to do business, (D) filings
pursuant to the rules of the NYSE, and (E) the HSR Filings.
(d) SEC Documents Parent has made available to the Company
a true and complete copy of each report, schedule, registration
statement and definitive proxy statement filed by Parent with the
SEC since December 31, 1994 (as such documents have since the time
of their filing been amended, the "Parent SEC Documents"), which
are all the documents (other than preliminary material) that Parent
was required to file with the SEC since such date. As of their
respective dates, the Parent SEC Documents complied in all material
respects with the requirements
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<PAGE>
of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such
Parent SEC Documents, and none of the Parent SEC Documents
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of
Parent included in the Parent SEC Documents complied as to form in
all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC) and fairly
present the consolidated financial position of Parent and its
consolidated subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended. All material agreements, contracts and other
documents required to be filed as exhibits to any of the Parent SEC
Documents have been so filed.
(e) Information Supplied None of the information included
or to be incorporated by reference in the S-4 (other than
information concerning the Company or its subsidiaries provided by
or on behalf of the Company for inclusion or incorporation by
reference therein) will, at the time the S-4 is filed with the SEC
and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact
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<PAGE>
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. None of
the information concerning Parent or Sub provided by or on behalf
of Parent or Sub for inclusion or incorporation by reference in the
Proxy Statement will, at the date of mailing to stockholders and at
the times of the meetings of stockholders to be held in connection
with the Merger, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The S-4
(except for information concerning the Company or its subsidiaries
provided by or on behalf of the Company or its subsidiaries for
inclusion or incorporation by reference therein) will comply as to
form in all material respects with the provisions of the Securities
Act and the rules and regulations thereunder.
(f) Absence of Certain Changes or Events Except as
disclosed in the Parent SEC Documents filed prior to the date of
this Agreement, since December 31, 1994, there has not been: (i)
any Event that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on
Parent (other than an Event that generally affects other companies
in Parent's line of business or that affects other companies
generally) or (ii) any condition, event or occurrence which could
reasonably be expected to prevent, hinder or materially delay the
ability of Parent to consummate the transactions contemplated by
this Agreement.
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<PAGE>
(g) Compliance with Applicable Laws Parent and its
subsidiaries are in compliance with all applicable laws and
regulations, except where the failure to be in such compliance
would not have a Material Adverse Effect on Parent. As of the date
hereof, no investigation by any Governmental Entity with respect to
the Parent or any of its subsidiaries is pending or, to Parent's
best knowledge, threatened, except as disclosed in the Parent SEC
Documents or in such other reports, schedules, registration
statements and definitive proxy statements filed by Parent with the
SEC since December 31, 1990.
(h) Litigation Except as disclosed in the Parent SEC
Documents or in such other reports, schedules, registration
statements and definitive proxy statements filed by Parent with the
SEC since December 31, 1990, there are no claims, actions, suits or
legal or administrative arbitrations or other proceedings or
investigations pending against Parent or any of its subsidiaries,
or, to the Parent's best knowledge, threatened against or affecting
Parent or any of its subsidiaries, or to which Parent or any of its
subsidiaries is a party, before or by any Federal, foreign, state,
local or other governmental or non-governmental department,
commission, board, bureau, agency, court or other instrumentality,
or by any private person or entity, which claim, action, suit or
legal or administrative arbitration or other proceeding or
investigation, if adversely determined, would reasonably be
expected to have a Material Adverse Effect on Parent. There are no
existing or, to the best knowledge of the Company, threatened
orders, judgments or decrees
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<PAGE>
of any court or other Governmental Entity which specifically apply
to Parent, any of its subsidiaries or any of their respective
properties or assets which would reasonably be expected to have a
Material Adverse Effect on Parent.
(i) Interim Operations of Sub Sub was incorporated on May
23, 1995, has engaged in no other business activities and has
conducted its operations only as contemplated hereby.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Covenants of Company During the period from the date
of this Agreement and continuing until the Effective Time, the
Company agrees as to itself and its subsidiaries that (except as
expressly contemplated or permitted by this Agreement or to the
extent that Parent shall otherwise consent in writing):
(A) Ordinary Course The Company and its subsidiaries
shall carry on their respective businesses in the usual, regular
and ordinary course and use reasonable efforts to preserve intact
their present business organizations, maintain their rights and
franchises and preserve their relationships with customers,
suppliers and others having business dealings with them. The
Company shall not, nor shall it permit any of its subsidiaries to,
(i) enter into any new material line of business or (ii) incur or
commit to any capital expenditures or any obligations or
liabilities in connection therewith other than capital expenditures
and obligations or liabilities incurred or committed to in the
ordinary course of business consistent with past practice.
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(b) Dividends; Changes in Stock The Company shall not, nor
shall it permit any of its subsidiaries to, nor shall the Company
propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, (ii) split,
combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
stock, or (iii) repurchase, redeem or otherwise acquire, or permit
any subsidiary to purchase or otherwise acquire any shares of its
capital stock or any securities convertible into or exercisable for
any shares of its capital stock.
(c) Issuance of Securities The Company shall not, nor shall
it permit any of its subsidiaries to, issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares
of its capital stock of any class, any Voting Debt or any
securities convertible into or exercisable for, or any rights,
warrants or options to acquire, any such shares or Voting Debt, or
enter into any agreement with respect to any of the foregoing,
other than issuances of Company Common Stock pursuant to exercises
of options to purchase shares of Company Common Stock pursuant to
Company Stock Plans.
(d) Governing Documents The Company shall not amend or
propose to amend, nor shall it permit any of its subsidiaries to
amend, their respective certificates of incorporation, articles of
organization, by-laws or other governing instruments.
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(e) No Solicitations The Company shall not, nor shall it
permit any of its subsidiaries to, directly or indirectly, through
any officer, director, employee or agent, initiate, solicit or
knowingly encourage (including by way of furnishing information or
assistance), or take any other action to facilitate knowingly, any
inquiries or the making of any proposal that constitutes, or would
reasonably be expected to lead to, any Competing Transaction (as
defined below), or enter into or maintain or continue discussions
or negotiate with any person in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any of the officers,
directors or employees of the Company or any of its subsidiaries or
any investment banker, financial advisor, attorney, accountant or
other representative retained by the Company or any of its
subsidiaries to take any such action. The Company shall notify
Parent in writing (as promptly as practicable) if any written or
oral proposal relating to a Competing Transaction is made and shall
keep Parent promptly advised of all such proposals, and shall
provide a copy of any written proposals and a summary of all oral
proposals. Nothing contained in this Section 4.1(e) shall prohibit
the Company from (i) furnishing information to, or entering into
discussions or negotiations with, any person that makes an
unsolicited written, bona fide proposal to acquire it pursuant to
a merger, consolidation, share exchange, business combination,
tender or exchange offer or other similar transaction, if, (A) the
Board of Directors of the Company, after
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consultation with independent legal counsel, determines in good
faith that the taking of such action would be consistent with, or
the failure to take such action would be inconsistent with, the
Board of Directors' fiduciary duties to stockholders under
applicable law, and (B) prior to furnishing such information to, or
entering into discussions or negotiations with, such person, the
Company (x) provides reasonable notice to Parent to the effect that
it is furnishing information to, or entering into discussions or
negotiations with, such person and (y) receives from such person an
executed confidentiality agreement no less favorable to the Company
than the Confidentiality Agreement (as defined in Section 5.6),
(ii) complying with Rule 14d-9 or Rule 14e-2 promulgated under the
Exchange Act with regard to a tender or exchange offer, or
(iii) failing to make or withdrawing or modifying its
recommendation referred to in Section 5.4, or recommending an
unsolicited, bona fide proposal to acquire the Company pursuant to
a merger, consolidation, share exchange, business combination,
tender or exchange offer or other similar transaction, following
the receipt of such a proposal, if the Board of Directors of the
Company, after consultation with independent legal counsel,
determines in good faith that the taking of such action would be
consistent with, or the failure to take such action would be
inconsistent with, the Board of Directors' fiduciary duties to
stockholders under applicable law. As used in this Agreement,
"Competing Transaction" shall mean any of the following (other than
the transactions contemplated by this Agreement) involving the
Company or any of its Significant
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Subsidiaries: (i) any merger, consolidation, share exchange,
exchange offer, business combination, recapitalization,
liquidation, dissolution or other similar transaction involving
such person; (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of the assets of such person and its
subsidiaries prohibited by Section 4.1(g); (iii) any tender offer
or exchange offer for 33-1/3% or more of the outstanding shares of
capital stock of such person or the filing of a registration
statement under the Securities Act in connection therewith; (iv)
any person or group having acquired beneficial ownership of 15% or
more of the outstanding shares of capital stock of such person
(other than Kaufmann Fund, Inc.) with respect to Company Common
Stock); or (v) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in
any of the foregoing.
(f) No Acquisitions The Company shall not, nor shall it
permit any of its subsidiaries to, (i) acquire or agree to acquire
by merging or consolidating with, or by purchasing a substantial
equity interest in or a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or
(ii) otherwise acquire or agree to acquire any assets which, in the
case of this clause (ii), are material, individually or in the
aggregate, to the Company.
(g) No Dispositions Other than as may be required by law
to consummate the transactions contemplated hereby (including
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the Option Agreement), the Company shall not, nor shall it permit
any of its subsidiaries to, sell, lease, encumber or otherwise
dispose of, or agree to sell, lease, encumber or otherwise dispose
of any of its assets (including capital stock of subsidiaries),
except as disclosed in the Disclosure Schedule and for dispositions
in the ordinary course of business consistent with past practice.
(h) Indebtedness The Company shall not, nor shall it permit
any of its subsidiaries to, (i) incur any indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any debt
securities or warrants or rights to acquire any long-term debt
securities of the Company or any of its subsidiaries or guarantee
any long-term debt securities of others or enter into or amend any
contract, agreement, commitment or arrangement with respect to any
of the foregoing, other than (x) in replacement for existing or
maturing debt, (y) indebtedness of any subsidiary of the Company to
the Company or to another subsidiary of the Company or (z) other
borrowing under existing lines of credit in the ordinary course of
business consistent with prior practice or (ii) make any loans,
advances or capital contributions to any person.
(i) Other Actions The Company shall not, nor shall it permit
any of its subsidiaries to, take any action that would, or might
reasonably be expected to, result in any of its representations and
warranties set forth in this Agreement being or becoming untrue in
any material respect, or in any of the conditions to the Merger set
forth in Article VI not being
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satisfied, or which would adversely affect the ability of any of
them to obtain any of the Requisite Regulatory Approvals (as
defined in Section 6.1(c)) without imposition of a condition or
restriction of the type referred to in Section 6.2(d).
(j) Advice of Changes; Government Filings The Company shall
confer on a regular basis with Parent, report on operational
matters and promptly advise Parent, orally and in writing of any
change or event having, or which would reasonably be expected to
have a Material Adverse Effect on the Company or which would cause
or constitute a material breach of any of the representations,
warranties or covenants of the Company contained herein. The
Company shall file all reports required to be filed by the Company
with the SEC between the date of this Agreement and the Effective
Time and shall deliver to Parent copies of all such reports
promptly after the same are filed. The Company shall cooperate
with Parent in determining whether any filings are required to be
made with, or consents required to be obtained from, any third
party or Governmental Entity prior to the Effective Time in
connection with this Agreement or the transactions contemplated
hereby, and shall cooperate in making any such filings promptly and
in seeking to obtain timely any such consents. The Company shall
promptly provide Parent with copies of all other filings made by
the Company with any state or Federal Governmental Entity
(excluding the HSR Filing) in connection with this Agreement, the
Merger or the other transactions contemplated hereby.
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(k) Accounting Methods The Company shall not change its
methods of accounting in effect at March 31, 1995, except as
required by changes in GAAP as concurred in by the Company's
independent auditors.
(l) Pooling and Tax-Free Reorganization Treatment The
Company shall not intentionally take or cause to be taken any
action, whether before or after the Effective Time, which would
disqualify the Merger as a "pooling of interests" for accounting
purposes or as a "reorganization" within the meaning of Section
368(a) of the Code.
(m) Benefit Plans During the period from the date of this
Agreement and continuing until the Effective Time, the Company
agrees as to itself and its subsidiaries that it will not, without
the prior written consent of Parent, except as set forth in the
Disclosure Schedule, (i) enter into, adopt, amend (except as may be
required by law) or terminate any Company Benefit Plan or any other
employee benefit plan or any agreement, arrangement, plan or policy
between the Company or any of its subsidiaries, on the one hand,
and one or more of its directors or officers, on the other hand,
(ii) except for normal increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not result
in a material increase in benefits or compensation expense to the
Company or any of its subsidiaries, increase in any manner the
compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any plan and
arrangement as in effect as of the date hereof (including, without
limitation, the granting of stock
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options, stock appreciation rights, restricted stock, restricted
stock units or performance units or shares) or enter into any
contract, agreement, commitment or arrangement to do any of the
foregoing or (iii) enter into or renew any contract, agreement,
commitment or arrangement providing for the payment to any
director, officer or employee of the Company or any of its
subsidiaries of compensation or benefits contingent, or the terms
of which are materially altered, upon the occurrence of any of the
transactions contemplated by this Agreement or the Stock Option
Agreements.
(n) Tax Elections Except in the ordinary course of business
and consistent with past practice, the Company shall not make any
material tax election or settle or compromise any material federal,
state, local or foreign income tax claim or liability or amend any
previously filed tax return in any respect.
4.2 Covenants of Parent Except as expressly contemplated by
this Agreement, after the date hereof and prior to the Effective
Time, without the prior written consent of the Company:
(a) Dividends, Distributions and Issuances Except pursuant
to, or in connection with any amendment of, Parent's Rights Plan,
Parent will not (i) declare, set aside or pay any dividends on, or
make any other distributions in respect of, any of its capital
stock, except for regular quarterly dividends on Parent Common
Stock, (ii) split, combine or reclassify or otherwise alter Parent
Common Stock or (iii) issue or authorize
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the issuance of any other securities in respect of, in lieu of or
in substitution for shares of its capital stock.
(b) Benefit Plans Following the Effective Time, Parent or
one of its subsidiaries shall provide employee benefit plans for
each continuing employee or participant on terms no less favorable
in the aggregate than those provided to employees in the Company
Benefit Plans. Notwithstanding any of the foregoing to the
contrary, Parent shall assume the employment and severance
agreements entered into between the Company and certain individuals
which are listed in Exhibit D hereto, and Parent agrees that,
notwithstanding the terms of such agreements, the severance
provisions therein with respect to the "change in control"
triggered by the consummation of the transactions contemplated
hereby shall remain in full force and effect for a period of not
less than one year after the Effective Time. Parent shall offer to
enter into an employment agreement with Edward J. Quilty which will
be effective upon the Effective Time and which shall provide, among
other things, that (a) such individual shall be granted options
under the Parent Option Plans commensurate with his position and
(b) the severance provisions contained in his current employment
and severance agreement shall remain in full force and effect as
provided in the preceding sentence.
(c) Other Actions Neither Parent nor Sub shall, nor shall it
permit any of their respective subsidiaries to, take any action
that would, or might reasonably be expected to, result in any of
its representations and warranties set forth in this
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Agreement being or becoming untrue in any material respect, or in
any of the conditions to the Merger set forth in Article VI not
being satisfied, or which would adversely affect the ability of any
of them to obtain any of the Requisite Regulatory Approvals (as
defined in Section 6.1(c)) without imposition of a condition or
restriction of the type referred to in Section 6.2(d).
(d) Government Filings The Parent shall file all reports
required to be filed by the Parent with the SEC between the date of
this Agreement and the Effective Time and shall deliver to the
Company copies of all such reports promptly after the same are
filed. The Parent shall cooperate with the Company in determining
whether any filings are required to be made with, or consents
required to be obtained from, any third party or Governmental
Entity prior to the Effective Time in connection with this
Agreement or the transactions contemplated hereby, and shall
cooperate in making any such filings promptly and in seeking to
obtain timely any such consents. The Parent shall promptly provide
the Company with copies of all other filings made by the Parent
with any state or Federal Governmental Entity (excluding the HSR
Filings) in connection with this Agreement, the Merger or the other
transactions contemplated hereby.
(e) Tax-Free Reorganization Treatment The Parent shall not
intentionally take or cause to be taken any action, whether before
or after the Effective Time, which would disqualify the Merger as
a "reorganization" within the meaning of
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Section 368(a) of the Code.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Preparation of S-4 and the Proxy StatementThe Company shall
promptly prepare and file with the SEC the Proxy Statement and
Parent shall prepare and file with the SEC the S-4, in which the
Proxy Statement will be included as a prospectus. Each of Parent
and the Company shall use all reasonable efforts to have the S-4
declared effective under the Securities Act as promptly as
practicable after such filing. Parent shall also take any action
required to be taken under any applicable state securities and Blue
Sky laws in connection with the issuance of Parent Common Stock in
the Merger and Parent Common Stock upon the exercise of the Company
Stock Options, and as contemplated by this Agreement; provided,
however, that with respect to such qualifications neither Parent
nor the Company shall be required to register or qualify as a
foreign corporation or to take any action which would subject it to
general service of process in any jurisdiction where any such
entity is not now so subject. Parent shall take any action
required to cause Parent Common Stock to be issued in the Merger to
be approved for listing on the NYSE, subject to official notice of
issuance thereof. The Company shall furnish all information
concerning the Company and the holders of Company Common Stock as
may be reasonably requested in connection with any such action.
Each of the Company and Parent will notify the other promptly of
the receipt of any comments from the SEC or its staff and of any
request by
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the SEC or its staff for amendments or supplements to the S-4 or
the Proxy Statement or for additional information and will supply
the other with copies of all correspondence with the SEC or its
staff with respect to the S-4 or the Proxy Statement.
5.2 Letter of Company's Accountants The Company shall use all
reasonable efforts to cause to be delivered to Parent a copy of a
letter of KPMG, the Company's independent auditors, dated a date
within two business days before the date on which the S-4 shall
become effective and addressed to the Company, in form and
substance reasonably satisfactory to Parent and customary in scope
and substance for letters delivered by independent public
accountants in connection with registration statements similar to
the S-4 (which shall be accompanied by a letter from KPMG to Parent
to the effect that Parent may rely on the letter referred to above
as if it had been addressed to Parent).
5.3 Letter of Parent's Accountants Parent shall use all
reasonable efforts to cause to be delivered to the Company a copy
of a letter of Arthur Andersen, LLP ("Arthur Andersen"), Parent's
independent auditors, dated a date within two business days before
the date on which the S-4 shall become effective and addressed to
Parent and the Company, in form and substance reasonably
satisfactory to the Company and customary in scope and substance
for letters delivered by independent public accountants in
connection with registration statements similar to the S-4.
5.4 Stockholder Meeting The Company shall call a meeting of its
stockholders to be held as promptly as practicable
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for the purpose of voting upon the approval of this Agreement, the
Merger and the other transactions contemplated hereby. The Company
will, through its Board of Directors, recommend to its stockholders
approval of such matters, unless the taking of such action would be
inconsistent with the Board of Directors' fiduciary duties to
stockholders under applicable laws, as determined by such directors
in good faith after consultation with independent legal counsel.
The Company shall coordinate and cooperate with Parent with respect
to the timing of such meeting and shall use its best efforts to
hold such meeting as soon as practicable after the date on which
the S-4 becomes effective. This Section 5.4 shall not prohibit
accurate disclosure by a party that is required in any Company SEC
Document or Parent SEC Document (including the Proxy Statement and
the S-4) or otherwise under applicable law of the opinion of the
Board of Directors of such party as of the date of such SEC
Document or such other required disclosure as to the transactions
contemplated hereby or as to any takeover proposal.
5.5 Legal Conditions to Merger Each of the Company and Parent
shall, and shall cause its subsidiaries to, use all reasonable
efforts (i) to take, or cause to be taken, all actions necessary to
comply promptly with all legal requirements which may be imposed on
such party or its subsidiaries with respect to the Merger and to
consummate the transactions contemplated by this Agreement, subject
to the appropriate vote of stockholders of the Company described in
Section 6.1(a), and (ii) to obtain (and to cooperate with the other
party to obtain) any consent,
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authorization, order or approval of, or any exemption by, any
Governmental Entity and of any other public or private third party
which is required to be obtained or made by such party or any of
its subsidiaries in connection with the Merger and the transactions
contemplated by this Agreement; provided, however, that a party
shall not be obligated to take any action pursuant to the foregoing
if the taking of such action or such compliance or the obtaining of
such consent, authorization, order, approval or exemption is
likely, in such party's reasonable opinion, (x) to be materially
burdensome to such party and its subsidiaries taken as a whole or
to impact in a materially adverse manner the economic or business
benefits of the transactions contemplated by this Agreement so as
to render uneconomic the consummation of the Merger or (y) in the
case of the Company to result in the imposition of a condition or
restriction on the Company, the Surviving Corporation or any of
their respective subsidiaries of the type referred to in Section
6.2(d). Each of the Company and Parent will promptly cooperate
with and furnish information to the other in connection with any
such burden suffered by, or requirement imposed upon, any of them
or any of their subsidiaries in connection with the foregoing.
5.6 Access to Information Upon reasonable notice, the Company
and Parent shall each (and shall cause each of their respective
subsidiaries to) afford to the officers, employees, accountants,
counsel and other representatives of the other, access, during
normal business hours during the period prior to the Effective
Time, to all its properties, books, contracts,
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commitments and records and, during such period, each of the
Company and Parent shall (and shall cause each of their respective
subsidiaries to) make available to the other (a) a copy of each
report, schedule, registration statement and other document filed
or received by it during such period pursuant to the requirements
of Federal securities laws and (b) all other information concerning
its business, properties and personnel as such other party may
reasonably request. The parties will hold any such information
which is nonpublic in confidence to the extent required by, and in
accordance with, the provisions of the letter dated December 29,
1994 between the Company and Parent (the "Confidentiality
Agreement"). No investigation by either Parent or the Company
shall affect the representations and warranties of the other,
except to the extent such representations and warranties are by
their terms qualified by disclosures made to such first party.
5.7 Affiliates At least 40 days prior to the Closing Date, the
Company shall deliver to Parent a letter identifying all persons
who are, at the time this Agreement is submitted for approval to
the stockholders of the Company, "affiliates" of the Company for
purposes of Rule 145 under the Securities Act. The Company shall
use all reasonable efforts to cause each person named on the letter
delivered by it to deliver to Parent on or prior to the Closing
Date a written agreement, substantially in the form attached as
Exhibit E hereto.
5.8 Stock Options (a) Except as otherwise agreed to between
Parent and the Company, (i) at the Effective Time, each
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outstanding option to purchase shares of Company Common Stock (a
"Company Stock Option") issued pursuant to any Company Stock Plan,
whether vested or unvested, shall be assumed by Parent, and (ii)
each Company Stock Option shall be deemed to constitute an option
to acquire, on substantially the same terms and conditions as were
applicable under such Company Stock Option, the same number of
shares of Parent Common Stock as the holder of such Company Stock
Option would have been entitled to receive pursuant to the Merger
had such holder exercised such option in full immediately prior to
the Effective Time, at a price per share equal to (y) the aggregate
exercise price for the shares of Company Common Stock otherwise
purchasable pursuant to such Company Stock Option divided by (z)
the number of shares of Parent Common Stock deemed purchasable
pursuant to such Company Stock Option (provided that Parent shall
not be required to assume options for partial shares of Parent
Common Stock, which shall be paid out in cash); provided, however,
that in the case of any option to which section 421 of the Code
applies by reason of its qualification under section 422 of the
Code ("incentive stock options"), the option price, the number of
shares purchasable pursuant to such option and the terms and
conditions of exercise of such option shall be determined in order
to comply with section 424(a) of the Code.
(b) As soon as practicable after the Effective Time, Parent
shall deliver to the holders of Company Stock Options appropriate
notices setting forth such holders' rights pursuant to the Company
Plans and the agreements evidencing the grants of
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such Company Stock Options shall continue in effect on the same
terms and conditions (subject to the adjustments required by this
Section 5.8 after giving effect to the Merger and the assumption by
Parent as set forth above and until otherwise determined). If
necessary, Parent shall comply with the terms of the Company Plans
and ensure, to the extent required by, and subject to the
provisions of, such Plan, that Company Stock Options which
qualified as incentive stock options prior to the Effective Time
continue to qualify as incentive stock options of Parent after the
Effective Time.
(c) Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Parent Common
Stock for delivery upon exercise of Company Stock Options assumed
by it in accordance with this Section 5.8. As soon as practicable
after the Effective Time, Parent shall file a registration
statement on Form S-3 or Form S-8, as the case may be (or any
successor or other appropriate forms), or another appropriate form
with respect to the shares of Parent Common Stock subject to such
options and shall use its best efforts to maintain the
effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such options remain
outstanding. With respect to those individuals who subsequent to
the Merger will be subject to the reporting requirements under
Section 16(a) of the Exchange Act, where applicable, Parent shall
administer the Company Plans assumed pursuant to this Section 5.8
in a manner that complies with Rule
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16b-3 promulgated under the Exchange Act to the extent the Company
Plans complied with such rule prior to the Merger.
5.9 Brokers or Finders Except as disclosed to the other party
prior to the date hereof, each of Parent and the Company
represents, as to itself, its subsidiaries and its affiliates, that
no agent, broker, investment banker, financial advisor or other
firm or person is or will be entitled to any broker's or finder's
fee or any other commission or similar fee in connection with any
of the transactions contemplated by this Agreement, except H&Q,
whose fees and expenses will be paid by the Company in accordance
with the Company's agreement with such firm (a copy of which has
been delivered by the Company to Parent prior to the date of this
Agreement), and C.S. First Boston, whose fees and expenses will be
paid by Parent in accordance with Parent's agreement with such firm
(a copy of which has been delivered by Parent to the Company prior
to the date of this Agreement), and each party agrees to indemnify
the other party and hold the other party harmless from and against
any and all claims, liabilities or obligations with respect to any
other fees, commissions or expenses asserted by any person on the
basis of any act or statement alleged to have been made by such
first party or its affiliates.
5.10 Indemnification; Directors' and Officers' Insurance (a) As
of the Effective Time, the Articles of Organization of the
Surviving Corporation shall contain provisions no less favorable
with respect to indemnification than are set forth in Article 6 of
the Articles of Organization of
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the Company, which provisions shall 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,
officers or employees of the Company. Parent hereby guarantees the
full and complete performance by the Surviving Corporation of the
indemnification obligations under the Articles of Organization of
the Surviving Corporation. Parent and Company agree that the
directors, officers and employees of the Company covered thereby
are intended to be third party beneficiaries under this Section
5.10 and shall have the right to enforce the obligations of the
Surviving Corporation and the Parent.
(b) The Surviving Corporation shall maintain in effect for
six years (or such shorter period as Parent maintains similar
policies for the benefit of its directors and officers) from the
Effective Time the current policies of the directors' and officers'
liability insurance maintained by the Company (provided that the
Surviving Corporation may substitute therefor policies of at least
the same coverage containing terms and conditions which are not
materially less advantageous) with respect to matters occurring
prior to the Effective Time to the extent available.
5.11 Employees. The Parent or one of its subsidiaries shall
offer to employ all employees of the Company and its subsidiaries
as of the Effective Time (other than those referred to in Exhibit
D) at the same salary, with substantially similar responsibilities
as each such employee had prior to the Effective
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Time, and with benefits no less favorable in the aggregate than
those provided to employees in equivalent positions at Parent or
its subsidiaries under the Benefit Plans of Parent or its
subsidiaries. Notwithstanding the foregoing, nothing contained in
this Agreement shall (i) restrict or otherwise inhibit Parent's or
any of its subsidiaries' rights to terminate the employment of any
such employees at any time following the Effective Time or (ii) be
construed or interpreted to restrict Parent's or any of its
subsidiaries' right or authority to amend or terminate any of its
employee benefit plans, policies, arrangements or programs
effective after the Effective Time.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation To Effect the MergerThe
respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the
following conditions:
(a) Stockholder Approval This Agreement shall have been
approved and adopted by the affirmative vote of the holders of a
two-thirds of the outstanding shares of Company Common Stock
entitled to vote thereon.
(b) NYSE Listing The shares of Parent Common Stock issuable
to the Company stockholders pursuant to this Agreement and such
other shares required to be reserved for issuance in connection
with the Merger shall have been authorized for listing on the NYSE
upon official notice of issuance.
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(c) Other Approvals All authorizations, consents, orders
or approvals of, or declarations or filings with, and all
expirations or early terminations of waiting periods imposed by,
any Governmental Entity (all the foregoing, "Consents") which are
necessary for the consummation of the Merger shall have been filed,
occurred or been obtained (all such permits, approvals, filings and
consents and the lapse of all such waiting periods being referred
to as the "Requisite Regulatory Approvals") and all such Requisite
Regulatory Approvals shall be in full force and effect. Parent
shall have received all state securities or Blue Sky permits and
other authorizations necessary to issue the Parent Common Stock in
exchange for Company Common Stock and to consummate the Merger.
(d) S-4 The S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or
proceeding seeking a stop order.
(e) No Injunctions or Restraints; Illegality No temporary
restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger
shall be in effect, nor shall any proceeding by any Governmental
Entity seeking any of the foregoing be pending. There shall not be
any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger,
which makes the consummation of the Merger illegal.
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6.2 Conditions to Obligations of Parent and Sub The obligations
of Parent and Sub to effect the Merger are subject to the
satisfaction of the following conditions unless waived by Parent
and Sub:
(a) Representations and Warranties The representations
and warranties of the Company set forth in this Agreement shall be
true and correct in all material respects as of the date of this
Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as
though made on and as of the Closing Date, and Parent shall have
received a certificate signed on behalf of the Company by the
President and Chief Executive Officer of the Company, and by the
Chief Financial Officer of the Company to such effect.
(b) Performance of Obligations of Company Company shall
have performed in all material respects all obligations required to
be performed by it under this Agreement at or prior to the Closing
Date, and Parent shall have received a certificate signed on behalf
of the Company by the President and Chief Executive Officer of the
Company and by the Chief Financial Officer of the Company to such
effect.
(c) Consents Under Agreements Company shall have obtained
the consent or approval of each person (other than the Governmental
Entities referred to in Section 6.1(c)) whose consent or approval
shall be required in order to permit the succession by the
Surviving Corporation pursuant to the Merger to any obligation,
right or interest of the Company or any
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subsidiary of the Company under any loan or credit agreement, note,
mortgage, indenture, lease, license or other agreement or
instrument, except those for which failure to obtain such consents
and approvals would not, individually or in the aggregate, have a
material adverse effect on the Surviving Corporation and its
subsidiaries taken as a whole or upon the consummation of the
transactions contemplated hereby.
(d) Burdensome Condition There shall not be any action
taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Merger, by any Governmental
Entity which, in connection with the grant of a Requisite
Regulatory Approval, imposes any requirement upon Parent, the
Surviving Corporation or their respective subsidiaries which would
so materially adversely impact the economic or business benefits of
the transactions contemplated by this Agreement as to render
uneconomic the consummation of the Merger, or which would require
Parent or any of its subsidiaries to dispose of any asset which is
material to Parent prior to the Effective Time.
6.3 Conditions to Obligations of Company The obligation of the
Company to effect the Merger is subject to the satisfaction of the
following conditions unless waived by the Company:
(a) Representations and WarrantiesThe representations and
warranties of Parent and Sub set forth in this Agreement shall be
true and correct in all material respects as of the date of this
Agreement and (except to the extent such
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representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date, and
the Company shall have received a certificate signed on behalf of
Parent by the President and Chief Executive Officer of Parent, or
a Corporate Vice President of Parent, and by the Senior Vice
President and Chief Financial Officer of Parent or the Corporate
Vice President and Treasurer of Parent to such effect.
(b) Performance of Obligations of Parent and SubParent and
Sub shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior
to the Closing Date, and the Company shall have received a
certificate signed on behalf of Parent by the President and Chief
Executive Officer of Parent or a Corporate Vice President of
Parent, and by the Senior Vice President and Chief Financial
Officer of Parent or the Corporate Vice President and Treasurer of
Parent to such effect.
(c) Employment Agreement Parent shall have offered to
enter into the employment agreement referred to in Section 4.2(b)
with Edward J. Quilty.
(d) Tax-Free Reorganization The Company shall have received
a written opinion from Hale and Dorr or another law firm reasonably
acceptable to the Company, dated the Closing Date, based upon
certain factual representations of the Company and the Parent, to
the effect that the Merger will constitute a reorganization for
federal income tax purposes within the meaning of Section 368(a) of
the Code and that gain or loss will not be
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recognized by any holder of Company Common Stock except to the
extent that such holder receives cash in lieu of fractional shares
of Parent Common Stock or holds Dissenting Shares.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of
the matters presented in connection with the Merger by the
stockholders of the Company:
(a) by mutual consent of Parent and the Company in a written
instrument;
(b) by Parent, upon a material breach of any representation,
warranty, covenant or agreement on the part of the Company set
forth in this Agreement, or if any representation or warranty of
the Company shall have become untrue such that the conditions set
forth in Section 6.2(a) or Section 6.2(b), as the case may be,
would be incapable of being satisfied by December 31, 1995;
(c) by the Company, upon a material breach of any
representation, warranty, covenant or agreement on the part of
Parent or Sub set forth in this Agreement, or if any representation
or warranty of Parent or Sub shall have become untrue such that the
conditions set forth in Section 6.3(a) or Section 6.3(b), as the
case may be, would be incapable of being satisfied by December 31,
1995;
(d) by either Parent or the Company, if any permanent
injunction or action by any Governmental Entity preventing the
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consummation of the Merger shall have become final and
nonappealable;
(e) by either Parent or the Company if the Merger shall not
have been consummated on or prior to December 31, 1995 (or such
later date as may be agreed to in writing by the Company and
Parent) (other than due to the failure of the party seeking to
terminate this Agreement to perform its obligations under this
Agreement required to be performed at or prior to the Effective
Time);
(f) by either Parent or the Company, if any approval of the
stockholders of the Company required for the consummation of the
Merger shall not have been obtained by reason of the failure to
obtain the required vote at a duly held meeting of stockholders or
at any adjournment thereof;
(g) by Parent, if the Board of Directors of the Company shall
have (i) withdrawn, modified or changed its approval or
recommendation of this Agreement, the Merger or any of the other
transactions contemplated herein in any manner which is adverse to
Parent or Sub or shall have resolved to do the foregoing; or (ii)
approved or have recommended to the stockholders of the Company a
Competing Transaction or shall have resolved to do the foregoing;
(h) by Parent, if (i) the Company shall have exercised a
right specified in clause (i) of the third sentence of Section
4.1(e) with respect to any transaction referred to therein and
shall, directly or through agents or representatives, continue
discussions with any third party concerning such transaction for
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more than 30 calendar days after the date of receipt of such
Competing Transaction; or (ii) (x) a tender offer or exchange offer
or a proposal by a third party to acquire the Company pursuant to
a merger, consolidation, share exchange, business combination,
tender or exchange offer or similar transaction shall have been
commenced or publicly proposed which contains a proposal as to
price (without regard to the specificity of such price proposal)
and (y) the Company shall not have rejected such proposal within 10
business days of its commencement or the date such proposal first
becomes publicly disclosed, if sooner; or
(i) by the Company, if the Board of Directors of the Company
(x) shall fail to make, or shall withdraw or modify, its
recommendation of this Agreement or the Merger if there shall exist
at such time a tender offer or exchange offer or a proposal by a
third party to acquire the Company pursuant to a merger,
consolidation, share exchange, business combination, tender or
exchange offer or similar transaction, or (y) recommends to the
Company's stockholders approval or acceptance of any of the
foregoing, in each case only if the Board of Directors of the
Company, after consultation with independent legal counsel,
determines in good faith that the taking of such action would be
consistent with, or the failure to take such action would be
inconsistent with, the Board of Directors' fiduciary duties to
stockholders under applicable law.
The right of any party hereto to terminate this Agreement
pursuant to this Section 7.1 shall remain operative and in full
force and effect regardless of any investigation made by
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or on behalf of any party hereto, any person controlling any such
party or any of their respective officers or directors, whether
prior to or after the execution of this Agreement.
7.2 Effect of Termination In the event of termination of this
Agreement and abandonment of the Merger by either the Company or
Parent as provided in Section 7.1, this Agreement shall forthwith
terminate and there shall be no liability or obligation on the part
of Parent, Sub or the Company or their respective officers or
directors except (i) with respect to the penultimate sentence of
Section 5.6, and Sections 5.9 and 7.3, and (ii) with respect to any
liabilities or damages incurred or suffered by a party as a result
of the material breach by the other party of any of its
representations, warranties, covenants or agreements set forth in
this Agreement except as provided in Section 8.8.
7.3 Fees, Expenses and Other Payments (a) Except as otherwise
provided in this Section 7.3, whether or not the Merger is
consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby (including,
without limitation, fees and disbursements of counsel, financial
advisors and accountants) shall be borne solely and entirely by the
party which has incurred such costs and expenses (with respect to
such party, its "Expenses"), except that Expenses related to
printing, filing and mailing the Proxy Statement and the S-4 shall
be shared equally by Parent and the Company.
(b) Company agrees that if this Agreement shall be terminated
pursuant to:
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(i) Section 7.1(b) and (x) such termination is the result of
material breach of any covenant, agreement, representation or
warranty contained herein and (y) at any time during the period
commencing on the date hereof and ending nine months after the date
of termination of this Agreement, a Business Combination (as
defined in Section 7.3(e)) involving the Company shall have
occurred or the Company shall have entered into a definitive
agreement providing for such a Business Combination, which Business
Combination contains a proposal as to the price per share which is
in excess of the Merger Consideration;
(ii)Section 7.1(f) because the Agreement, the Merger and the
other transactions contemplated hereby shall fail to receive the
requisite vote for approval and adoption by the stockholders of the
Company at a meeting of the stockholders of the Company called to
vote thereon, and at the time of such meeting there shall exist a
proposal with respect to a Business Combination with respect to the
Company which either (x) the Board of Directors of the Company has
not publicly opposed or (y) is consummated, or a definitive
agreement with respect to which is entered into, at any time during
the period commencing on the date hereof and ending nine months
after the date of termination of this Agreement; or
(iii) Section 7.1(g), Section 7.1(h) or Section 7.1(i);
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then the Company shall pay to Parent an amount equal to $3,000,000,
plus all of Parent's Expenses not to exceed $1,000,000; provided,
however, that such amounts shall not be payable if Parent shall be
in material breach of its covenants or agreements contained in this
Agreement; and provided further, however, that none of the
foregoing amounts shall be payable if Parent exercises its rights
under Section 2(a) of the Option Agreement unless (x) Parent,
within one year from the date the Option Agreement becomes
terminable pursuant to clause (ii) of Section 13(a) of the Option
Agreement, terminates the Option Agreement pursuant to such
provision or (y) the Option Agreement is terminated pursuant to
Section 13(b) thereof prior to the Closing referred to therein.
(c) The Company agrees that if this Agreement shall be
terminated pursuant to Section 7.1(b), then the Company shall pay
to Parent an amount equal to Parent's Expenses not to exceed
$1,000,000; provided that the Company shall not be obligated to
make any payment pursuant to this Section 7.3(c) if the Company
shall be obligated to make a payment to Parent pursuant to Section
7.3(b) or if Parent shall be in material breach of its covenants or
agreements contained in this Agreement.
(d) Any payment required to be made pursuant to Section
7.3(b) or Section 7.3(c) shall be made as promptly as practicable
but not later than five business days after termination of this
Agreement and shall be made by wire transfer of immediately
available funds to an account designated by Parent, except that any
payment to be made as the result of an
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event described in Section 7.3(b)(i) or clause (y) of Section
7.3(b)(ii) shall be made as promptly as practicable but not later
than five business days after the occurrence of the Business
Combination or the execution of the definitive agreement providing
for a Business Combination.
(e) For purposes of this Section 7.3, the term "Business
Combination" shall mean any of the following involving the Company:
(i) any merger, consolidation, share exchange, business combination
or similar transaction; (ii) any sale, lease, exchange, transfer or
other disposition of 25% or more of the assets of the Company and
its subsidiaries, taken as a whole, in a single transaction or
series of transactions; or (iii) the acquisition by a person or any
group of beneficial ownership of 50% or more of the capital stock
of the Company whether by tender offer or exchange offer or
otherwise.
7.4 Amendment This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective Boards of
Directors, at any time before or after approval of the matters
presented in connection with the Merger by the stockholders of the
Company or of Parent, but, after any such approval, no amendment
shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not
be amended except by an instrument in writing signed on behalf of
each of the parties hereto.
7.5 Extension; Waiver At any time prior to the Effective Time,
the parties hereto, by action taken or authorized
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by their respective Board of Directors, 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 contained
herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Nonsurvival of Representations, Warranties and Agreements
None of the representations, warranties, covenants and agreements
in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time, except for the
agreements contained in Sections 2.1, 2.2, 4.2(b), the penultimate
sentence of Section 5.6, 5.8, 5.9, 5.10, the last sentence of
Section 7.4 and Article VIII and the agreements of the "affiliates"
of the Company delivered pursuant to Section 5.7.
8.2 Notices All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to Parent or Sub, to
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C.R. Bard, Inc.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: Richard A. Flink
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attention: Philip T. Ruegger III, Esq.
(b) if to the Company, to:
MedChem Products, Inc.
232 West Cummings Park
Woburn, Massachusetts 01801
Attention: Edward J. Quilty
with a copy to:
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
Attention: Steven Singer, Esq.
and
Rosenman & Colin
575 Madison Avenue
New York, New York 10022-2585
Attention: Edward Cohen, Esq.
8.3 Certain Definitions For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
first person;
(b) "beneficially own" or "beneficial ownership" with respect
to any securities, means having "beneficial ownership" of such
securities in accordance with the provisions of Rule 13d-3 under
the Exchange Act. Without duplicative counting of the same
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securities by the same holder, securities beneficially owned by a
person include securities beneficially owned by all other persons
with whom such person would constitute a group.
(c) "group" means two or more persons acting together for the
purpose of acquiring, holding, voting or disposing of any
securities, which persons would be required to file a Schedule 13D
or Schedule 13G with the SEC as a "person" within the meaning of
Section 13(d)(3) of the Exchange Act if such persons beneficially
owned a sufficient amount of such securities to require such a
filing under the Exchange Act;
(d) "person" means an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or
other entity; and
(e) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if
there are no such voting interests, 50% or more of the equity
interests of which) is owned directly or indirectly by such first
person.
(f) Any accounting term that is used in the context of
describing or referring to an accounting concept and that is not
specifically defined herein shall be construed in accordance with
GAAP as applied in the preparation of the financial statements of
the Company included in the Company SEC Documents (including,
without limitation, the Year-End Financial Statements and the
Balance Sheet).
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8.4 Interpretation When a reference is made in this Agreement to
Sections or Exhibits, such reference shall be to a Section of or
Exhibit to this Agreement unless otherwise indicated. The recitals
hereto constitute an integral part of this Agreement. The table of
contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". The
phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the
party to whom such information is to be made available. The
phrases "the date of this Agreement", "the date hereof" and terms
of similar import, unless the context otherwise requires, shall be
deemed to refer to May 24, 1995.
8.5 Counterparts This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts
have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the
same counterpart.
8.6 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership This Agreement (including the documents and the
instruments referred to herein) (a) constitutes the entire
agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with
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respect to the subject matter hereof; provided that the
Confidentiality Agreement shall survive the execution and delivery
of this Agreement, and (b) except as provided in Section 4.2(b),
5.8 and 5.10, is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder. The parties
hereby acknowledge that, except as hereinafter agreed to in
writing, no party shall have the right to acquire or shall be
deemed to have acquired shares of common stock of the other party
pursuant to the Merger until consummation thereof.
8.7 Governing Law This Agreement shall be governed and construed
in accordance with the laws of the State of New Jersey, except to
the extent Massachusetts law shall govern the Merger, without
regard to any applicable conflicts of law.
8.8 Limitations on Remedies Each party agrees that, should any
court or other competent authority hold any provision or part of
this Agreement to be null, void or unenforceable, or order any
party to take any action inconsistent herewith or not to take any
action required herein, the other party shall not be entitled to
specific performance of such provision or part hereof or to any
other remedy, including but not limited to money damages, for
breach of this Agreement or of any other provision or part hereof
as a result of such holding or order. This provision is not
intended to render null or unenforceable any obligation hereunder
that would be valid and enforceable if this provision were not in
this Agreement.
8.8 Publicity Except as otherwise required by law or the rules of
the NYSE, so long as this Agreement is in effect,
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neither the Company nor Parent shall, or shall permit any of its
subsidiaries to, issue or cause the publication of any press
release or other public announcement with respect to the
transactions contemplated by this Agreement without the consent of
the other party, which consent shall not be unreasonably withheld.
8.10 Assignment Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without
the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their
respective successors and assigns.
8.11 Adjustment All dollar amounts and share numbers set forth
herein, including without limitation the dollar amounts set forth
in Section 2.2(c), shall be subject to equitable adjustment in the
event of any stock split, stock dividend, reverse stock split or
similar event affecting the Parent Common Stock or the Company
Common Stock, as the case may be, between the date of this
Agreement and the Effective Time, to the extent appropriate.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement, to be signed by their respective officers thereunto
duly authorized, all as of May 24, 1995.
C.R. BARD, INC.
Richard A. Flink /s/
_______________________________
Name: Richard A. Flink
Title: Vice President
CRB ACQUISITION CORP.
Richard A. Flink /s/
______________________________
Name: Richard A. Flink
Title: Clerk
MEDCHEM PRODUCTS, INC.
Edward J. Quilty /s/
_______________________________
Name: Edward J. Quilty
Title: President
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EXHIBIT 20
Contact: E. L. Parker
Vice President and Treasurer
(908) 277-8059
MEDCHEM PRODUCTS, INC. TO MERGE INTO C. R. BARD, INC.
MURRAY HILL, NJ - May 24, 1995 - C. R. Bard, Inc. (NYSE-BCR) and
MedChem Products, Inc. (NYSE-MCH) today jointly announced that
their boards of directors have approved a definitive agreement for
a stock-for-stock merger of MedChem into Bard. Under the terms of
the agreement signed today, each MedChem share would be valued at
$9.25, subject to adjustment under certain circumstances. MedChem
shares closed at $6.50 yesterday; Bard shares closed at $29.38.
MedChem will mail a proxy statement and prospectus to its
shareholders for a special meeting of shareholders to be called in
the summer to approve the merger. The transaction is expected to
be a tax-free reorganization and to be accounted for as a pooling
of interests. Under certain circumstances, if a transaction does
not occur, Bard has an option to purchase the Gesco subsidiary of
MedChem.
Bard president and CEO William H. Longfield commented, "This
merger brings a variety of complementary products to our surgical
products group. MedChem's products deliver significant health care
benefits to both patients and physicians."
For its most recent three-month period, MedChem reported revenue of
$9.4 million. MedChem's shareholders' equity was $55.2 million as
of March 31, 1995. MedChem has approximately 11 million shares
outstanding on a fully diluted basis.
Edward J. Quilty, MedChem president and CEO, commented, "We
believe that this merger with industry leader Bard is in the best
interests of all concerned: shareholders, employees and customers
alike. MedChem shareholders will receive a premium in recognition
of the value of MedChem products such as AVITENE and AVIFOAM
hemostasis products, SURE-CLOSURE wound closure devices and GESCO
catheters. The significantly larger resources of Bard will allow
these products to reach their full potential in synergy with Bard's
complementary product lines."
MedChem develops, manufacturers and markets technically superior
cost-effective specialty medical products.
C. R. Bard, Inc., headquartered in Murray Hill, NJ, is a leading
multinational developer, manufacturer and marketer of health care
products.
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