AGREEMENT AND PLAN OF MERGER
AMONG
GENERAL DYNAMICS CORPORATION,
MARS ACQUISITION CORPORATION
AND
PRIMEX TECHNOLOGIES, INC.
2
TABLE OF CONTENTS
DESCRIPTION PAGE
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ARTICLE 1 THE MERGER......................................................................................1
Section 1.1 The Merger.............................................................................1
Section 1.2 The Closing............................................................................1
Section 1.3 Effective Time.........................................................................2
Section 1.4 Effects of the Merger..................................................................2
Section 1.5 Articles of Incorporation and Bylaws...................................................2
Section 1.6 Directors..............................................................................2
Section 1.7 Officers...............................................................................2
Section 1.8 Conversion of Company Common Stock.....................................................2
Section 1.9 Stock Options; Equity-Based Awards.....................................................3
Section 1.10 Conversion of Acquisition Corporation Common Stock.....................................4
Section 1.11 Dissenters' Rights.....................................................................4
ARTICLE 2 STOCKHOLDER APPROVAL............................................................................5
Section 2.1 Company Actions........................................................................5
Section 2.2 SEC Comments...........................................................................5
ARTICLE 3 PAYMENT.........................................................................................5
Section 3.1 Surrender of Certificates..............................................................5
Section 3.2 Paying Agent; Certificate Surrender Procedures.........................................6
Section 3.3 Transfer Books.........................................................................6
Section 3.4 Termination of Payment Fund............................................................7
Section 3.5 Lost Certificates......................................................................7
Section 3.6 No Rights as Stockholder...............................................................7
Section 3.7 Withholding............................................................................7
Section 3.8 Escheat................................................................................7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................8
Section 4.1 Organization...........................................................................8
Section 4.2 Authorization of Transaction; Enforceability...........................................8
Section 4.3 Noncontravention; Consents.............................................................9
Section 4.4 Capitalization.........................................................................9
Section 4.5 Company Reports; Proxy Statement......................................................11
Section 4.6 No Undisclosed Liabilities............................................................11
Section 4.7 Absence of Material Adverse Change....................................................12
Section 4.8 Litigation and Legal Compliance.......................................................12
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Section 4.9 Contract Matters......................................................................12
Section 4.10 Tax Matters...........................................................................15
Section 4.11 Employee Benefit Matters..............................................................16
Section 4.12 Environmental Matters.................................................................20
Section 4.13 Title.................................................................................22
Section 4.14 Intellectual Property Matters.........................................................22
Section 4.15 Labor Matters.........................................................................23
Section 4.16 Rights Agreement......................................................................23
Section 4.17 State Takeover Laws...................................................................23
Section 4.18 Brokers' Fees.........................................................................23
Section 4.19 Representations and Warranties........................................................24
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE PARENT CORPORATION.......................................24
Section 5.1 Organization..........................................................................24
Section 5.2 Authorization of Transaction; Enforceability..........................................24
Section 5.3 Noncontravention; Consents............................................................25
Section 5.4 Adequate Cash Resources...............................................................25
Section 5.5 No Capital Ownership in the Company...................................................25
ARTICLE 6 COVENANTS......................................................................................25
Section 6.1 General...............................................................................25
Section 6.2 Notices and Consents..................................................................25
Section 6.3 Interim Conduct of the Company........................................................26
Section 6.4 Preservation of Organization..........................................................28
Section 6.5 Full Access...........................................................................28
Section 6.6 Notice of Developments................................................................28
Section 6.7 Nonsolicitation of Acquisition Proposals..............................................29
Section 6.8 Indemnification.......................................................................30
Section 6.9 Public Announcements..................................................................32
Section 6.10 Preservation of Programs and Agreements..............................................32
Section 6.11 Actions Regarding Antitakeover Statutes...............................................32
Section 6.12 Defense of Orders and Injunctions.....................................................32
Section 6.13 Employee Benefit Matters..............................................................32
Section 6.14 Standstill Provisions.................................................................34
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ARTICLE 7 CONDITIONS TO THE CONSUMMATION OF THE MERGER...................................................35
Section 7.1 Conditions to the Obligations of Each Party...........................................35
Section 7.2 Conditions to the Obligation of the Company...........................................35
Section 7.3 Conditions to the Obligation of the Parent Corporation and the Acquisition
Corporation...........................................................................36
Section 7.4 Frustration of Closing Conditions.....................................................36
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER..............................................................36
Section 8.1 Termination...........................................................................36
Section 8.2 Effect of Termination.................................................................37
Section 8.3 Termination Fee.......................................................................38
ARTICLE 9 MISCELLANEOUS..................................................................................39
Section 9.1 Nonsurvival of Representations........................................................39
Section 9.2 Remedies..............................................................................39
Section 9.3 Successors and Assigns................................................................39
Section 9.4 Amendment.............................................................................39
Section 9.5 Extension and Waiver..................................................................40
Section 9.6 Severability..........................................................................40
Section 9.7 Counterparts..........................................................................40
Section 9.8 Descriptive Headings..................................................................40
Section 9.9 Notices...............................................................................40
Section 9.10 No Third Party Beneficiaries..........................................................41
Section 9.11 Entire Agreement......................................................................41
Section 9.12 Construction..........................................................................41
Section 9.13 Submission to Jurisdiction............................................................42
Section 9.14 Governing Law.........................................................................42
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TABLE OF DEFINED TERMS
Acquisition Corporation Preamble
Acquisition Proposal Section 6.7(b)
Antitrust Laws Section 4.3
Certificate Section 3.1
Closing Section 1.2
Closing Date Section 1.2
Code Section 4.10(f)
Coli Policy Section 4.11(j)
Company Preamble
Company Common Stock Section 1.8(a)
Company Disclosure Letter Article 4
Company Material Adverse Effect Section 4.1
Company Plans Section 4.11(a)
Company SEC Documents Section 4.5(a)
Company Stock-Based Award Section 1.9(a)(ii)
Company Stockholder Approval Section 2.1(a)
Company Stockholders Meeting Section 2.1(a)
Confidentiality Agreement Section 6.5
Delaware Act Section 1.1
Effective Time Section 1.3
Employee Pension Benefit Plan Section 4.11(a)
Employee Welfare Benefit Plan Section 4.11(a)
Employees Section 6.13(a)
Environmental Law Section 4.12(b)
ERISA Section 4.11(a)
Government Contract Section 4.9(b)
Government Subcontract Section 4.9(b)
Hazardous Materials Section 4.12(c)
HSR Act Section 4.3
Indemnified Parties Section 6.8(a)
Intellectual Property Section 4.14(b)
Lien Section 4.3
Merger Section 1.1
Merger Consideration Section 1.8(a)
Option Consideration Section 1.9(a)(iii)
Parent Corporation Preamble
Parent Corporation Disclosure Letter Article 5
Parent Corporation Material Adverse Effect Section 6.2
Paying Agent Section 3.1
Payment Fund Section 3.2(a)
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Permitted Liens Section 4.13
Proxy Statement Section 2.1(b)
Rights Agreement Section 4.16
SAR Section 1.9(a)
SEC Section 2.1(b)
Securities Act Section 4.5(a)
Securities Exchange Act Section 1.9(d)
Stock Option Section 1.9(a)
Stock Plans Section 1.9(a)
Subsidiary Section 1.8(c)
Superior Proposal Section 6.7(b)
Surviving Corporation Section 1.1
Taxes Section 4.10(a)
Tax Returns Section 4.10(a)
Termination Fee Section 8.3(a)
Third Party Acquisition Section 8.3(b)
Virginia Act Section 1.1
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of November 9, 2000 among General
Dynamics Corporation, a Delaware corporation (the "Parent Corporation"), Mars
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of
the Parent Corporation (the "Acquisition Corporation"), and Primex Technologies,
Inc., a Virginia corporation (the "Company").
The Boards of Directors of the Parent Corporation, the Acquisition
Corporation, and the Company have each determined that a business combination
among the Parent Corporation, the Acquisition Corporation and the Company is
desirable and in the best interests of the Parent Corporation, the Acquisition
Corporation and the Company and their respective stockholders. The Boards of
Directors of the Parent Corporation, the Acquisition Corporation and the Company
accordingly have each duly adopted resolutions approving this Agreement and the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the value, receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, at the Effective Time (as defined in Section 1.3)
the Acquisition Corporation will be merged (the "Merger") with and into the
Company in accordance with the provisions of the Delaware General Corporation
Law (the "Delaware Act") and the Virginia Stock Corporation Act (the "Virginia
Act"). Following the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and the separate corporate existence
of the Acquisition Corporation will cease.
Section 1.2 The Closing. Upon the terms and subject to the conditions
set forth in this Agreement, the consummation of the Merger and the other
transactions contemplated by this Agreement (the "Closing") will take place at
the offices of Jenner & Block, 601 13th Street, N.W., Washington, D.C. 20005, at
10:00 a.m., local time, no later than the third business day following the
satisfaction or waiver, to the extent permitted by applicable laws, of the
conditions set forth in Article 7 (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or,
where permitted, waiver of those conditions), or at such other date, time or
place as the Parent Corporation and the Company may agree. The date upon which
the Closing occurs is referred to in this Agreement as the "Closing Date."
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Section 1.3 Effective Time. The Merger will be consummated by the
filing of articles of merger with the State Corporation Commission of Virginia
in accordance with Section 720 of the Virginia Act and a certificate of merger
in accordance with Section 252 of the Delaware Act. The time the Merger becomes
effective in accordance with Section 720 of the Virginia Act is referred to in
this Agreement as the "Effective Time."
Section 1.4 Effects of the Merger. The Merger will have the effects set
forth in Section 721 of the Virginia Act and Section 259 of the Delaware Act.
Without limiting the generality of the foregoing, as of the Effective Time, all
properties, rights, privileges, powers and franchises of the Company and the
Acquisition Corporation will vest in the Surviving Corporation and all debts,
liabilities and duties of the Company and the Acquisition Corporation will
become debts, liabilities and duties of the Surviving Corporation.
Section 1.5 Articles of Incorporation and Bylaws. At the Effective
Time, the articles of incorporation and bylaws of the Company in the respective
forms delivered by the Company to the Parent Corporation prior to the date of
this Agreement will be the articles of incorporation and bylaws of the Surviving
Corporation, until amended by the Surviving Corporation pursuant to applicable
law.
Section 1.6 Directors. The directors of the Acquisition Corporation at
the Effective Time will be the initial directors of the Surviving Corporation
and will hold office from the Effective Time until their respective successors
are duly elected or appointed and qualified in the manner provided in the
articles of incorporation and bylaws of the Surviving Corporation or as
otherwise provided by law.
Section 1.7 Officers. The officers of the Acquisition Corporation at
the Effective Time will be the initial officers of the Surviving Corporation and
will hold office from the Effective Time until their respective successors are
duly elected or appointed and qualified in the manner provided in the articles
of incorporation and bylaws of the Surviving Corporation or as otherwise
provided by law.
Section 1.8 Conversion of Company Common Stock.
(a) Subject to the provisions of Section 1.8(b), each
share of the Company's Common Stock, par value $1.00 per share (the
"Company Common Stock"), issued and outstanding immediately prior to
the Effective Time (other than shares of Company Common Stock held in
the treasury of the Company, held by any Subsidiary of the Company or
held by the Parent Corporation or any Subsidiary of the Parent
Corporation) will, by virtue of the Merger and without any action on
the part of the holder thereof, be canceled and converted into the
right to receive, upon the surrender of the certificate formerly
representing such share, $32.10 in cash (the "Merger Consideration").
In the event that, subsequent to the date of this Agreement but prior
to the Effective Time, (i) the outstanding shares of Company Common
Stock are changed into a different
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number of shares or a different class as a result of a stock split,
reverse stock split, stock dividend, subdivision, reclassification,
combination, exchange, recapitalization or similar transaction, or (ii)
there is any dividend, other than the regular quarterly dividend of
$0.075 per share of Company Common Stock, the Merger Consideration into
which each share of Company Common Stock will be converted as a result
of the Merger will be adjusted appropriately.
(b) Each share of Company Common Stock held in the
treasury of the Company, held by any Subsidiary of the Company or held
by the Parent Corporation or any Subsidiary of the Parent Corporation
immediately prior to the Effective Time will, by virtue of the Merger
and without any action on the part of the holder thereof, be canceled
and retired and will cease to exist. For purposes of this Section
1.8(b), shares of Company Common Stock owned beneficially or held of
record by any plan, program or arrangement sponsored or maintained for
the benefit of any current or former employee of the Company, the
Parent Corporation or any of their respective Subsidiaries will not be
deemed to be held by the Company, the Parent Corporation or any such
Subsidiary, regardless of whether the Company, the Parent Corporation
or any such Subsidiary has the power, directly or indirectly, to vote
or control the disposition of such shares.
(c) The term "Subsidiary" as used in this Agreement means
any corporation, partnership, limited liability company or other
business entity 50 percent or more of the outstanding voting equity
securities of which are owned, directly or indirectly, by the Company
or the Parent Corporation, as applicable.
Section 1.9 Stock Options; Equity-Based Awards
(a) (i) The Company will take all necessary actions to
cause each option to purchase shares of Company Common Stock (a "Stock
Option") and each stock appreciation right linked to the price of
Company Common Stock (a "SAR") granted under any stock option plan,
program, agreement or arrangement of the Company or any of its
Subsidiaries (collectively, the "Stock Plans") which is outstanding and
unexercised immediately prior to the Effective Time, whether vested or
unvested, to be cancelled as of the Effective Time and to be converted
at the Effective Time into the right to receive in cash from the
Company an amount equal to the product of (a) the excess, if any, of
the Merger Consideration over the exercise price per share of Company
Common Stock of such Stock Option or SAR and (b) the number of shares
of Company Common Stock subject to such Stock Option or SAR; provided,
however, that no cash payment shall be made with respect to any SAR
that is related to a Stock Option in respect of which such a cash
payment is made.
(ii) The Company will take all necessary actions to cause
each right of any kind, whether vested or unvested, contingent or
accrued, to acquire or receive shares of Company Common Stock or to
receive benefits measured by the value of a number of
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shares of Company Common Stock, that may be held, awarded, outstanding,
credited, payable or reserved for issuance under the Stock Plans
(including, without limitation, restricted stock, restricted stock
units, performance awards and deferred stock units), except for Stock
Options and SARs converted in accordance with Section 1.9(a)(i) above
(each, a "Company Stock-Based Award") outstanding immediately prior to
the Effective Time to fully vest and become immediately distributable
and payable, and each Company Stock-Based Award shall be cancelled as
of the Effective Time and converted as of the Effective Time into the
right to receive in cash from the Company an amount equal to the
product of (x) the Merger Consideration (less any applicable exercise
price) and (y) the number of shares of Company Common Stock subject to
such Company Stock-Based Award.
(iii) Any cash payments required to be made pursuant to
this Section 1.9(a) (the "Option Consideration") will be made (subject
to applicable withholding and payroll taxes) promptly following the
Effective Time.
(b) No additional Stock Options, SARs, or other equity-based
awards or other rights to acquire Company Common Stock will be granted pursuant
to the Stock Plans or otherwise after the date of this Agreement.
(c) The Board of Directors, or applicable committee thereof, of
the Company will grant all approvals and take all other actions required
pursuant to Rules 16b-3 under the Securities Exchange Act of 1934, as amended
(together with the rules and regulations of the SEC thereunder, the "Securities
Exchange Act"), to cause the disposition in the Merger of Company Common Stock,
Stock Options and SARs to be exempt from the provisions of Section 16(b) of the
Securities Exchange Act.
Section 1.10 Conversion of Acquisition Corporation Common Stock. Each
share of the Common Stock, par value $1.00 per share, of the Acquisition
Corporation issued and outstanding immediately prior to the Effective Time will,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into one share of the Common Stock, par value $1.00 per
share, of the Surviving Corporation.
Section 1.11 Dissenters' Rights. Subject to the consummation of the
Merger on the terms and conditions contained in this Agreement, the parties
hereto confirm that the holders of shares of Company Common Stock will not have
dissenters' rights under Article 15 of the Virginia Act.
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ARTICLE 2
STOCKHOLDER APPROVAL
Section 2.1 Company Actions. The Company, acting through its Board of
Directors, in accordance with applicable law, including the Virginia Act, its
Articles of Incorporation and Bylaws and the rules applicable to companies
listed on of The Nasdaq Stock Market, will:
(a) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Company Stockholders Meeting"), to be
held as soon as practicable after the date of this Agreement, for the
purpose of submitting this Agreement for approval by the holders of
more than two-thirds of the outstanding shares of Company Common Stock
(the "Company Stockholder Approval");
(b) prepare and file with the Securities and Exchange
Commission (the "SEC") as promptly as practicable after the date of
this Agreement a Proxy Statement and related materials (the "Proxy
Statement") with respect to the Company Stockholders Meeting satisfying
the requirements of the Securities Exchange Act, respond promptly to
any comments raised by the SEC with respect to the preliminary version
of the Proxy Statement, and cause the definitive version of the Proxy
Statement to be mailed to its stockholders as soon as it is legally
permitted to do so; and
(c) include in the Proxy Statement (i) subject to Section
6.7(d), the recommendation of the Board of Directors of the Company
that the stockholders of the Company vote in favor of the approval of
this Agreement and the transactions contemplated hereby and (ii) the
written opinion dated as of the date of this Agreement of Goldman,
Sachs & Co., financial advisor to the Board of Directors of the
Company, to the effect that as of the date of this Agreement the Merger
Consideration is fair to the stockholders of the Company, other than
the Parent Corporation and its affiliates, from a financial point of
view.
Section 2.2 SEC Comments. The Company will promptly advise the Parent
Corporation of receipt by the Company of, and will promptly furnish the Parent
Corporation with copies of, all comments received from the SEC with respect to
the Proxy Statement and will consult with the Parent Corporation in responding
to such comments.
ARTICLE 3
PAYMENT
Section 3.1 Surrender of Certificates. From and after the Effective
Time, each holder of a certificate that immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (a "Certificate") will be
entitled to receive in exchange therefor, upon
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surrender thereof to a paying agent (the "Paying Agent") to be designated by the
Parent Corporation prior to the Effective Time with approval of the Company,
which approval shall not be unreasonably withheld, the Merger Consideration into
which the shares of Company Common Stock evidenced by such Certificate were
converted pursuant to the Merger. No interest will be payable on the Merger
Consideration to be paid to any holder of a Certificate irrespective of the time
at which such Certificate is surrendered for exchange.
Section 3.2 Paying Agent; Certificate Surrender Procedures.
(a) As soon as reasonably practicable following the
Effective Time, the Parent Corporation will deposit, or cause to be
deposited, with the Paying Agent, an amount in cash sufficient to
provide all funds necessary for the Paying Agent to make payment of the
Merger Consideration pursuant to Section 1.8 (the "Payment Fund").
Pending payment of such funds to the holders of certificates for shares
of Company Common Stock, such funds will be held and may be invested by
the Paying Agent as Parent Corporation directs (so long as such
directions do not impair the rights of holders of Company Common Stock)
in the direct obligations of the United States, obligations for which
the full faith and credit of the United States is pledged to provide
for the payment of principal and interest or commercial paper rated of
the highest quality by Moody's Investors Services, Inc. or Standard & Poor's Corporation. Any net profit resulting from, or interest or
income produced by, such investments will be payable to the Surviving
Corporation or Parent Corporation, as Parent Corporation directs.
Parent Corporation will promptly replace any monies lost through any
investment made pursuant to this Section 3.2.
(b) As soon as reasonably practicable after the Effective
Time, the Parent Corporation will instruct the Paying Agent to mail to
each record holder of a Certificate (i) a letter of transmittal (which
will specify that delivery will be effected, and risk of loss and title
to such Certificates will pass, only upon delivery of the Certificate
to the Paying Agent and will be in such form and have such other
provisions as the Parent Corporation will reasonably specify) and (ii)
instructions for use in effecting the surrender of Certificates for the
Merger Consideration. Commencing immediately after the Effective Time,
upon the surrender to the Paying Agent of such Certificate or
Certificates, together with a duly executed and completed letter of
transmittal and all other documents and other materials required by the
Paying Agent to be delivered in connection therewith, the holder will
be entitled to receive the Merger Consideration into which the
Certificate or Certificates so surrendered have been converted in
accordance with the provisions of Section 1.8.
Section 3.3 Transfer Books. The stock transfer books of the Company
will be closed at the Effective Time and no transfer of any shares of Company
Common Stock will thereafter be recorded on any of the stock transfer books. In
the event of a transfer of ownership of any Company Common Stock prior to the
Effective Time that is not registered in the stock transfer
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records of the Company at the Effective Time, the Merger Consideration into
which such Company Common Stock has been converted in the Merger will be paid to
the transferee in accordance with the provisions of Section 3.2(b) only if the
Certificate is surrendered as provided in Section 3.2 and accompanied by all
documents required to evidence and effect such transfer and by evidence of
payment of any applicable stock transfer taxes.
Section 3.4 Termination of Payment Fund. Any portion of the Payment
Fund which remains undistributed one hundred eighty (180) days after the
Effective Time will be delivered to the Parent Corporation upon demand, and each
holder of Company Common Stock who has not theretofore surrendered Certificates
in accordance with the provisions of this Article 3 will thereafter look only to
the Parent Corporation for satisfaction of such holder's claims for the Merger
Consideration.
Section 3.5 Lost Certificates. If any Certificate has been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Parent Corporation, the posting by such person of a bond in such reasonable
amount as the Parent Corporation may direct as indemnity against any claim that
may be made against it with respect to such Certificate, the Paying Agent will
deliver in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration pursuant to Section 1.8.
Section 3.6 No Rights as Stockholder. From and after the Effective
Time, the holders of Certificates will cease to have any rights as a stockholder
of the Surviving Corporation except as otherwise provided in this Agreement or
by applicable law, and the Parent Corporation will be entitled to treat each
Certificate that has not yet been surrendered for exchange solely as evidence of
the right to receive the Merger Consideration into which the shares of Company
Common Stock evidenced by such Certificate have been converted pursuant to the
Merger; provided, however, that each holder of a Certificate that has become
entitled to any declared and unpaid dividend will continue to be entitled to
such dividend following the Effective Time, and the Surviving Corporation will
pay such dividend to such holder in the amount and on the date specified
therefor by the Board of Directors of the Company at the time of declaration
thereof.
Section 3.7 Withholding. The Parent Corporation will be entitled to
deduct and withhold from the Merger Consideration otherwise payable to any
former holder of Company Common Stock all amounts relating to federal and state
income and payroll taxes required by law to be deducted or withheld therefrom.
Section 3.8 Escheat. Neither the Parent Corporation, the Acquisition
Corporation nor the Company will be liable to any former holder of Company
Common Stock for any portion of the Merger Consideration delivered to any public
official pursuant to any applicable abandoned property, escheat or similar law.
In the event any Certificate has not been surrendered for the Merger
Consideration prior to the sixth anniversary of the Closing Date, or prior to
such earlier date as of which such Certificate or the Merger Consideration
payable upon the surrender thereof
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would otherwise escheat to or become the property of any governmental entity,
then the Merger Consideration otherwise payable upon the surrender of such
Certificate will, to the extent permitted by applicable law, become the property
of the Surviving Corporation, free and clear of all rights, interests and
adverse claims of any person.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent Corporation and the
Acquisition Corporation that except as disclosed in the reports, schedules,
forms, statements and other documents filed by the Company with the SEC since
December 31, 1999 and publicly available prior to the date of this Agreement or
as disclosed in the letter dated as of the date of this Agreement from the
Company to the Parent Corporation (the "Company Disclosure Letter"):
Section 4.1 Organization. The Company and each of its Subsidiaries is
(a) a corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation, (b) has all requisite power and authority to
own, lease and operate its properties and to carry on its business as presently
being conducted, and (c) is in good standing under the laws of the jurisdiction
of its incorporation and is duly qualified to conduct business as a foreign
corporation in each other jurisdiction where such qualification is required,
except, in the case of clauses (b) and (c) above, where such failure,
individually or in the aggregate, is not reasonably likely to have a material
adverse effect on the business, financial condition, operations or results of
operations of the Company and its Subsidiaries taken as a whole (other than
changes or effects resulting from occurrences relating to the economy in
general, the securities markets in general or the Company's industry in general
and not specifically relating to the Company) or the ability of the Company to
consummate the Merger and to perform its obligations under this Agreement (a
"Company Material Adverse Effect"). The Company has delivered to the Parent
Corporation correct and complete copies of its articles of incorporation and
bylaws, as presently in effect, and, upon request, will make available to the
Parent Corporation after the date of this Agreement correct and complete copies
of the articles of incorporation and bylaws, as presently in effect, of each of
its Subsidiaries.
Section 4.2 Authorization of Transaction; Enforceability. Subject to
obtaining the Company Stockholder Approval, the Company has full corporate power
and authority and has taken all requisite corporate action to enable it to
execute and deliver this Agreement, to consummate the Merger and the other
transactions contemplated hereby and to perform its obligations hereunder. The
Board of Directors of the Company, at a meeting thereof duly called and held,
has duly adopted resolutions, by more than the required vote, approving this
Agreement, the Merger and the other transactions contemplated hereby,
determining that the terms and conditions of this Agreement, the Merger and the
other transactions contemplated hereby are in the best interests of the Company
and its stockholders and recommending that the Company's stockholders approve
this Agreement. The foregoing resolutions of the Board of
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Directors of the Company have not been modified, supplemented or rescinded and
remain in full force and effect as of the date of this Agreement. In connection
with its adoption of the foregoing resolutions, the Board of Directors of the
Company received the written opinion of Goldman, Sachs & Co., financial advisor
to the Board of Directors of the Company, dated as of the date of this
Agreement, to the effect that, as of such date, the Merger Consideration is fair
to the stockholders of the Company, other than the Parent Corporation and its
affiliates, from a financial point of view. The foregoing opinion has not been
modified, supplemented or rescinded prior to the date of this Agreement. The
Company will deliver to the Parent Corporation promptly after the date of this
Agreement correct and complete copies of the foregoing resolutions and opinion.
Assuming due execution and authorization by the Parent Corporation and the
Acquisition Corporation, this Agreement constitutes the valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms and conditions.
Section 4.3 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Securities
Exchange Act and the "blue sky" laws and regulations of various states, (b) the
filing of a Notification and Report Form and related material with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice under the Hart-Scott-Rodino Act of 1976, as amended (the "HSR Act"), and
any other filing required pursuant to any other applicable competition, merger
control, antitrust or similar law or regulation (together with the HSR Act, the
"Antitrust Laws"), (c) the filing of articles of merger pursuant to the Virginia
Act, a certificate of merger pursuant to the Delaware Act and any applicable
documents with the relevant authorities of other jurisdictions in which the
Company or any of its Subsidiaries is qualified to do business, and (d) any
filings required under the rules and regulations of The NASDAQ Stock Market,
neither the execution and delivery of this Agreement by the Company, nor the
consummation by the Company of the transactions contemplated hereby, will
constitute a violation of, be in conflict with, constitute or create (with or
without notice or lapse of time or both) a default under, give rise to any right
of termination, cancellation, amendment or acceleration with respect to, or
result in the creation or imposition of any lien, encumbrance, security interest
or other claim (a "Lien") upon any property of the Company or any of its
Subsidiaries pursuant to (i) the articles of incorporation or bylaws of the
Company or any of its Subsidiaries, (ii) any constitutional provision, law,
rule, regulation, permit, order, writ, injunction, judgment or decree to which
the Company or any of its Subsidiaries is subject or (iii) any agreement or
commitment to which the Company or any of its Subsidiaries is a party or by
which the Company, any of its Subsidiaries or any of their respective properties
is bound or subject, except, in the case of clauses (ii) and (iii) above, for
such matters which, individually or in the aggregate, are not reasonably likely
to have a Company Material Adverse Effect.
Section 4.4 Capitalization.
(a) As of the date of this Agreement, the authorized
capital stock of the Company consists of 60,000,000 shares of Company
Common Stock and 10,000,000
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shares of Preferred Stock, par value $1.00 per share, none of which
shares of Preferred Stock have been issued. As of the close of business
on November 3, 2000, 10,401,241 shares of Company Common Stock were
issued and outstanding, 129,480 shares of Company Common Stock were
reserved for restricted stock grants or awards (including stock grants
or awards to non-employee directors), no shares were held by the
Company as treasury shares and 1,641,732 shares were reserved for
issuance upon the exercise of outstanding Stock Options. All of the
issued and outstanding shares of capital stock of the Company have been
duly authorized and are validly issued, fully paid and nonassessable.
(b) Other than Stock Options to acquire an aggregate of
not more than 1,560,952 shares of Company Common Stock and not more
than 80,823 shares of Company Common Stock which are subject to
restricted stock granted or awarded (including stock grants or awards
to non-employee directors) by the Company to current and former
directors, officers, employees and advisors of the Company and its
Subsidiaries, there are no outstanding or authorized options, warrants,
subscription rights, conversion rights, exchange rights or other
contracts or commitments that could require the Company or any of its
Subsidiaries to issue, sell or otherwise cause to become outstanding
any of its capital stock. There are no outstanding stock appreciation,
phantom stock, profit participation or similar rights with respect to
the Company or any of its Subsidiaries. The schedule of Stock Options
and SARs set forth in the Company Disclosure Letter sets forth a list
of all outstanding Stock Options and SARs as of the date set forth
therein, the respective exercise prices thereof or amount of such
rights and the holders thereof.
(c) Neither the Company nor any of its Subsidiaries is a
party to any voting trust, proxy or other agreement or understanding
with respect to the voting of any capital stock of the Company or any
of its Subsidiaries.
(d) The Board of Directors of the Company has not
declared any dividend or distribution with respect to the Company
Common Stock the record or payment date for which is on or after the
date of this Agreement (other than any regular quarterly dividend of
$0.075 per share of Company Common Stock).
(e) All of the outstanding shares of the capital stock of
each of the Company's Subsidiaries have been validly issued, are fully
paid and nonassessable and are owned by the Company or one of its
Subsidiaries, free and clear of any Lien. Except for its Subsidiaries
set forth in the Company Disclosure Letter, the Company does not
control directly or indirectly or have any direct or indirect equity
participation in any corporation, partnership, limited liability
company, joint venture or other entity.
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Section 4.5 Company Reports; Proxy Statement.
(a) The Company has since December 31, 1996 filed all
reports, forms, statements and other documents (collectively, together
with all financial statements included or incorporated by reference
therein, the "Company SEC Documents") required to be filed by the
Company with the SEC pursuant to the provisions of the Securities Act
of 1933, as amended (the "Securities Act") or the Securities Exchange
Act. Each of the Company SEC Documents, as of its filing date, complied
in all material respects with the applicable requirements of the
Securities Act and the Securities Exchange Act. None of the Company SEC
Documents, as of their respective filing dates, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. No Subsidiary of the Company is required to file
any reports, forms, statements or other documents pursuant to the
Securities Act or the Securities Exchange Act.
(b) Each of the consolidated financial statements
(including related notes) included in the Company SEC Documents
presented fairly in all material respects the consolidated financial
condition, cash flows and results of operations of the Company and its
Subsidiaries for the respective periods or as of the respective dates
set forth therein. Each of the financial statements (including related
notes) included in the Company SEC Documents has been prepared in
accordance with United States generally accepted accounting principles,
consistently applied during the periods involved, except (i) as noted
therein, (ii) to the extent required by changes in United States
generally accepted accounting principles or (iii) in the case of
unaudited interim financial statements, normal recurring year-end audit
adjustments.
(c) The Company has delivered to the Parent Corporation
correct and complete copies of any proposed or contemplated amendments
or modifications to the Company SEC Documents (including any exhibit
documents included therein) that have not yet been filed by the Company
with the SEC.
(d) The Proxy Statement will comply in all material
respects with the applicable requirements of the Securities Exchange
Act and will not, at the time the definitive Proxy Statement is filed
with the SEC and mailed to the stockholders of the Company, contain any
untrue statement of 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. No representation or warranty is made herein by
the Company with respect to any information, if any, supplied in
writing by the Parent Corporation for inclusion in the Proxy Statement.
Section 4.6 No Undisclosed Liabilities. The Company and its
Subsidiaries have no liabilities or obligations (whether absolute or contingent,
liquidated or unliquidated, or due or to
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become due) except for (a) liabilities and obligations referenced (whether by
value or otherwise) or reflected in the Company SEC Documents, (b) liabilities
and obligations incurred in the ordinary course of business, consistent with
past practice, since October 1, 2000, and (c) other liabilities and obligations
which, individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect.
Section 4.7 Absence of Material Adverse Change. Since October 1, 2000
there has not been a Company Material Adverse Effect nor has there occurred any
event, change, effect or development which, individually or in the aggregate, is
reasonably likely to have a Company Material Adverse Effect.
Section 4.8 Litigation and Legal Compliance.
(a) As of the date of this Agreement, the Company
Disclosure Letter sets forth each instance in which the Company or any
of its Subsidiaries is (i) subject to any material unsatisfied judgment
order, decree, stipulation, injunction or charge or (ii) a party to or,
to the Company's knowledge, threatened to be made a party to any
material charge, complaint, action, suit, proceeding, hearing or, to
the Company's knowledge, investigation of or in any court or
quasi-judicial or administrative agency of any federal, state, local or
foreign jurisdiction, except for judgments, orders, decrees,
stipulations, injunctions, charges, complaints, actions, suits,
proceedings, hearings and investigations which, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse
Effect. As of the date of this Agreement, there are no judicial or
administrative actions, proceedings or, to the Company's knowledge,
investigations pending or, to the Company's knowledge, threatened that
question the validity of this Agreement or any action taken or to be
taken by the Company in connection with this Agreement,
(b) Except for instances of noncompliance which,
individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect, and except for Environmental Laws,
which are the subject of Section 4.12, the Company and its Subsidiaries
are in compliance with each constitutional provision, law, rule,
regulation, permit, order, writ, injunction, judgment or decree to
which the Company or any of its Subsidiaries is subject.
Section 4.9 Contract Matters.
(a) Neither the Company nor any of its Subsidiaries is in
default or violation of (and no event has occurred which with notice or
the lapse of time or both would constitute a default or violation) of
any term, condition or provision of any note, mortgage, indenture, loan
agreement, other evidence of indebtedness, guarantee, license, lease,
agreement or other contract, instrument or contractual obligation to
which the Company or any of its Subsidiaries is a party or by which any
of their respective assets is
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bound, except for any such default or failure which, individually or in
the aggregate, is not reasonably likely to have a Company Material
Adverse Effect.
(b) With respect to each contract, agreement, bid or
proposal between the Company or any of its Subsidiaries and any
domestic or foreign government or governmental agency, including any
facilities contract for the use of government-owned facilities (a
"Government Contract"), and each contract, agreement, bid or proposal
that is a subcontract between the Company or any of its Subsidiaries
and a third party relating to a contract between such third party and
any domestic or foreign government or governmental agency (a
"Government Subcontract"), (i) the Company and each of its Subsidiaries
have complied with all terms and conditions of such Government Contract
or Government Subcontract, including all clauses, provisions and
requirements incorporated expressly, by reference or by operation of
law therein, (ii) the Company and each of its Subsidiaries have
complied with all requirements of all laws, rules, regulations or
agreements pertaining to such Government Contract or Government
subcontract, including where applicable the Cost Accounting Standards
disclosure statement of the Company or such Subsidiary, (iii) all
representations and certifications executed, acknowledged or set forth
in or pertaining to such Government Contract or Government Subcontract
were complete and correct as of their effective dates and the Company
and its Subsidiaries have complied with all such representations and
certifications, (iv) neither the United States government nor any prime
contractor, subcontractor or other person or entity has notified the
Company or any of its Subsidiaries, in writing or orally, that the
Company or any of its Subsidiaries has breached or violated any law,
rule, regulation, certification, representation, clause, provision or
requirement pertaining to such Government Contract or Government
Subcontract, (v) neither the Company nor any of its Subsidiaries has
received any notice of termination for convenience, notice of
termination for default, cure notice or show cause notice pertaining to
such Government Contract or Government Subcontract, (vi) other than in
the ordinary course of business, no cost incurred by the Company or any
of its Subsidiaries pertaining to such Government Contract or
Government Subcontract has been questioned or challenged, is the
subject of any audit or investigation or has been disallowed by any
government or governmental agency, and (vii) no payments due to the
Company or any of its Subsidiaries pertaining to such Government
Contract or Government Subcontract has been withheld or set off, nor
has any claim been made to withhold or set off money, and the Company
and its Subsidiaries are entitled to all progress payments received to
date with respect thereto, except for any such failure, noncompliance,
inaccuracy, breach, violation, termination, cost, investigation,
disallowance or payment which, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect.
(c) To the Company's knowledge, neither the Company nor
any of its Subsidiaries any of the respective directors, officers,
employees, consultants or agents of the Company or any of its
Subsidiaries is or since January 1, 1997 has been under administrative,
civil or criminal investigation, indictment or information by any
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government or governmental agency or any audit or in investigation by
the Company or any of its Subsidiaries with respect to any alleged act
or omission arising under or relating to any Government Contract or
Government Subcontract.
(d) There exist (i) no material outstanding claims
against the Company or any of its Subsidiaries, either by any
government or governmental agency or by any prime contractor,
subcontractor, vendor or other person or entity, arising under or
relating to any Government Contract or Government Subcontract, and (ii)
no disputes between the Company or any of its Subsidiaries and the
United States government under the Contract Disputes Act or any other
federal statute or between the Company or any of its Subsidiaries and
any prime contractor, subcontractor or vendor arising under or relating
to any Government Contract or Government Subcontract, except for any
such claim or dispute which, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect. Neither
the Company nor any of its Subsidiaries has (i) any interest in any
pending or potential material claim against any government or
governmental agency or (ii) any interest in any pending claim against
any prime contractor, subcontractor or vendor arising under or relating
to any Government Contract or Government Subcontract, which, if
adversely determined against the Company, individually or in the
aggregate, is reasonably likely to have a Company Material Adverse
Effect.
(e) Since January 1, 1997, neither the Company nor any of
its Subsidiaries has been debarred or suspended from participation in
the award of contracts with the United States government or any other
government or governmental agency (excluding for this purpose
ineligibility to bid on certain contracts due to generally applicable
bidding requirements). To the Company's knowledge, there exists no
facts or circumstances that would warrant the institution of suspension
or debarment proceedings or the finding of nonresponsibility or
ineligibility on the part of the Company, any of its Subsidiaries or
any of their respective directors, officers or employees. No payment
has been made by or on behalf of the Company or any of its Subsidiaries
in connection with any Government Contract or Government Subcontract in
violation of applicable procurement laws, rules and regulations or in
violation of, or requiring disclosure pursuant to, the Foreign Corrupt
Practices Act, as amended, except for any such violation or failure to
disclose which, individually or in the aggregate, is not reasonably
likely to have a Company Material Adverse Effect.
(f) The Company Disclosure Letter sets forth, as of the
date of this Agreement, a list of each contract by the Company or any
of its Subsidiaries with any customer or supplier that (i) involves an
obligation of $3,000,000 or more (per annum, if applicable) or (ii)
represents one of the top three contracts (in dollar value) for any
particular business unit of the Company, provided the value of any such
contract exceeds $500,000 (per annum, if applicable), and identifies
the parties to the contract, the general
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nature of the contract and the term and amount of each contract,
whether a prime contract, subcontract or otherwise.
Section 4.10 Tax Matters.
(a) For each taxable period beginning on or after January
1, 1997, the Company and each of its Subsidiaries have timely filed all
required returns, declarations, reports, claims for refund or
information returns and statements, including any schedule or
attachment thereto (collectively "Tax Returns"), relating to any
federal, state, local or foreign net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other tax, fee, assessment or charge,
including any interest, penalty or addition thereto and including any
liability for the taxes of any other person or entity under Treasury
Regulation Section 1.1502-6 (or any similar state, local or foreign
law, rule or regulation), and any liability in respect of any tax as a
transferee or successor, by law, contract or otherwise (collectively
"Taxes"), and all such Tax Returns are accurate and complete in all
respects, except to the extent any such failure to file or any such
inaccuracy in any filed Tax Return, individually or in the aggregate,
is not reasonably likely to have a Company Material Adverse Effect. All
Taxes owed by the Company or any of its Subsidiaries (whether or not
shown on any Tax Return) have been paid or adequately reserved for in
accordance with generally accepted accounting principles in the
financial statements of the Company, except (i) for any Taxes related
to any period prior to January 1, 1997 for which the Company would be
entitled to indemnification from Olin Corporation and are not required
to be reserved in the financial statements of the Company in accordance
with generally accepted accounting principles or (ii) except to the
extent any such failure to pay or reserve, individually or in the
aggregate, is not reasonably likely to have a Company Material Adverse
Effect.
(b) The most recent financial statements contained in the
Company SEC Documents reflect adequate reserves in accordance with
generally accepted accounting principles for all Taxes payable by the
Company and its Subsidiaries for all Tax periods and portions thereof
through the date of such financial statements, except to the extent
that any failure to so reserve, individually or in the aggregate, is
not reasonably likely to have a Company Material Adverse Effect. No
deficiency with respect to Taxes has been proposed, asserted or
assessed against the Company or any of its Subsidiaries and no requests
for waivers of the time to assess any such Taxes are pending, except to
the extent any such deficiency or request for waiver, individually or
in the aggregate, is not reasonably likely to have a Company Material
Adverse Effect.
(c) For each taxable period beginning on or after January
1, 1997, none of the federal income Tax Returns of the Company or any
of its Subsidiaries consolidated in such Tax Returns have been examined
by and settled with the Internal Revenue Service.
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(d) Except for Liens for current Taxes not yet due and
payable or which are being contested in good faith, there is no Lien
affecting any of the assets or properties of the Company or any of its
Subsidiaries that arose in connection with any failure or alleged
failure to pay any Tax, except for Liens which, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse
Effect.
(e) Neither the Company nor any of its Subsidiaries is a
party to any Tax allocation or Tax sharing agreement with any person
other than the Company or any of its Subsidiaries.
(f) No amount payable by either the Company or any of its
Subsidiaries will be subject to disallowance under Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code").
(g) Neither the Company nor any of its Subsidiaries has
made any payments, is obligated to make any payments or is a party to
any agreement that could obligate it to make any payments as a result
of the execution and delivery of this Agreement, the obtaining of the
Company Stockholder Approval or the consummation of the Merger or any
other transaction contemplated by this Agreement (including as a result
of termination of employment on or following the Effective Time) that
would not be fully deductible by reason of Section 280G of the Code.
Section 4.11 Employee Benefit Matters.
(a) The Company Disclosure Letter lists each plan,
program, agreement or arrangement constituting a material employee
welfare benefit plan (an "Employee Welfare Benefit Plan") as defined in
Section 3(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or a material employee pension benefit plan (an
"Employee Pension Benefit Plan") as defined in Section 3(2) of ERISA,
and each other material employee benefit plan, agreement, program or
arrangement or employment practice maintained by the Company or any of
its Subsidiaries with respect to any of its current or former employees
or to which the Company or any of the Company Subsidiaries contributes
or is required to contribute with respect to any of its current or
former employees (collectively, the "Company Plans"). With respect to
each Company Plan:
(i) such Company Plan (and each related trust,
insurance contract or fund) has been administered in a manner
consistent in all respects with its written terms and complies
in form and operation with the applicable requirements of
ERISA and the Code and other applicable laws, except for
failures of administration or compliance which, individually
or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect;
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(ii) all required reports and descriptions
(including Form 5500 Annual Reports, Summary Annual Reports,
PBGC-1's and Summary Plan Descriptions) have been filed or
distributed appropriately with respect to such Company Plan,
except for failures of filing or distribution which,
individually or in the aggregate, are not reasonably likely to
have a Company Material Adverse Effect;
(iii) the requirements of Part 6 of Subtitle B of
Title I of ERISA and Section 4980B of the Code have been met
with respect to each such Company Plan which is an Employee
Welfare Benefit Plan, except for failures which, individually
or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect;
(iv) all material contributions, premiums or
other payments (including all employer contributions and
employee salary reduction contributions) that are required to
be made under the terms of any Company Plan have been timely
made or have been reflected on the financial statements
contained in the Company's most recent Form 10-Q filed with
the SEC;
(v) each such Company Plan which is an Employee
Pension Benefit Plan intended to be a "qualified plan" under
Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service, and no
event has occurred which could reasonably be expected to cause
the loss, revocation or denial of any such favorable
determination letter;
(vi) the Company has made available and will
continue to make available to the Parent Corporation, upon its
request, correct and complete copies of the plan documents and
most recent summary plan descriptions, the most recent
determination letter received from the Internal Revenue
Service, the most recent Form 5500 Annual Report, the most
recent actuarial report, the most recent audited financial
statements, and all related trust agreements, insurance
contracts and other funding agreements that implement such
Company Plan (but excluding the failure to make available any
such document which is not material). The valuation summaries
provided by the Company to the Parent Corporation reasonably
represent the assets and liabilities attributable to Company
Plans calculated in accordance with the Company's past
practices, but excluding any failure which, individually or in
the aggregate, is not reasonably likely to have a Company
Material Adverse Effect;
(vii) no Company Plan which is an Employee Pension
Benefit Plan has been amended in any manner which would
require the posting of security under Section 401(a)(29) of
the Code or Section 307 of ERISA, except any such action
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which, individually or in the aggregate, is not reasonably
likely to have a Company Material Adverse Effect;
(viii) neither the Company nor any of its
Subsidiaries has communicated to any employee (excluding
internal memoranda to management) any plan or commitment,
whether or not legally binding, to create any additional
employee benefit plan or to modify or change any Company Plan
affecting any employee or terminated employee of the Company
or any of its Subsidiaries, except any such action which,
individually or in the aggregate, is not reasonably likely to
have a Company Material Adverse Effect;
(ix) the Company Disclosure Letter includes a
workers' compensation paid loss summary through the date of
this Agreement on an accident year basis; the Company
Disclosure Letter additionally includes a recent listing of
all open workers compensation claims showing claimant name,
claim number, description, paid loss and case reserve, except
for any such claim which, individually or in the aggregate, is
not reasonably likely to have a Company Material Adverse
Effect;
(x) the Company has never been nor is a party to
or otherwise bound by any advance agreement or similar
arrangement with any foreign, federal, state or local
government or regulatory body relating to the allowability,
allocation or reimbursement of benefit costs or other matters
in connection with any Company Plan;
(xi) any Company Plan is by its terms able to be
amended or terminated by the Company; and
(xii) there are no liabilities or obligations
relating to any individual's current or former employment with
the Company or its Subsidiaries or related entities arising in
connection with any violation of any applicable law, except
for any liabilities or obligations which, individually or in
the aggregate, is not reasonably likely to have a Company
Material Adverse Effect.
(b) With respect to each Employee Welfare Benefit Plan or
Employee Pension Benefit Plan that the Company or any of its
Subsidiaries maintains or ever has maintained, or to which any of them
contributes, ever has contributed or ever has been required to
contribute:
(i) no such Employee Pension Benefit Plan (other
than any Multiemployer Plan) has been completely or partially
terminated (other than any termination which, individually or
in the aggregate, is not reasonably likely to have a Company
Material Adverse Effect), no reportable event (as defined in
Section 4043 of ERISA) for which the 30-day reporting
requirement has not been waived, as to which notices would be
required to be filed with the Pension Benefit
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25
Guaranty Corporation, has occurred but has not yet been so
reported (but excluding any failure to report which,
individually or in the aggregate, is not reasonably likely to
have a Company Material Adverse Effect), and no proceeding by
the Pension Benefit Guaranty Corporation to terminate such
Employee Pension Benefit Plan (other than any Multiemployer
Plan) has been instituted;
(ii) there have been no non-exempt prohibited
transactions (as defined in Section 406 of ERISA and Section
4975 of the Code) with respect to such plan, no fiduciary has
any liability for breach of fiduciary duty or any other
failure to act or comply in connection with the administration
or investment of the assets of such plan, and no action, suit,
proceeding, hearing or, to the Company's knowledge,
investigation with respect to the administration or the
investment of the assets of such plan (other than routine
claims for benefits) is pending or, to the Company's
knowledge, threatened, but excluding, from each of the
foregoing, events or circumstances which, individually or in
the aggregate, are not reasonably likely to have a Company
Material Adverse Effect; and
(iii) other than routine claims for benefits, none
of the Company or any of its Subsidiaries or related entities
has incurred, and the Company has no reason to expect that the
Company or any of its Subsidiaries or related entities will
incur, any liability under Subtitle C or D Title IV of ERISA
or under the Code with respect to any Company Plan that is an
Employee Pension Benefit Plan.
(c) Neither the Company nor any of its Subsidiaries
presently contributes to, nor, since January 1, 1997, have they been
obligated to contribute to, a Multiemployer Plan.
(d) Other than pursuant to a Company Plan, neither the
Company nor any of its Subsidiaries has any obligation to provide
medical, health, life insurance or other welfare benefits for current
or future retired or terminated employees, their spouses or their
dependents (other than in accordance with Section 4980B of the Code).
(e) No Company Plan contains any provision that would
prohibit the transactions contemplated by this Agreement, would give
rise to any severance, termination or other payments as a result of the
transactions contemplated by this Agreement (alone or together with the
occurrence of any other event), or would cause any payment,
acceleration or increase in benefits provided by any Company Plan as a
result of the transactions contemplated by this Agreement (alone or
together with the occurrence of any other event), but excluding from
this paragraph (e) any payment or any benefit, acceleration or increase
to directors and employees, as to the top tier employees in the amounts
(based on the Company's good faith estimates as of the date of this
Agreement) and to the individuals specifically set forth in, and as to
other employees in the aggregate amount (based on the Company's good
faith estimates as of the date of this Agreement) specifically set
forth in, the Company Disclosure Letter and excluding any
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non-employee or non-director payment or benefit acceleration or
increase which is not material.
(f) No individual classified as a non-employee for
purposes of receiving employee benefits (such an independent
contractor, leased employee, consultant or special consultant),
regardless of treatment for other purposes, is eligible pursuant to the
terms thereof to participate in or receive benefits under any Company
Plan intended to qualify under Section 401(a) of the Code.
(g) The provisions of Section 6.01(a) of the Distribution
Agreement by and between Olin Corporation and Company dated December
30, 1996 shall continue to apply to affected employees following the
Effective Time.
(h) The PRIME Plan does not take into account as
compensation for plan allocation purposes any bonus bank payment from
the Company Incentive Compensation Plan that may be paid on account of
the Merger contemplated herein.
(i) Certain of the Company Plans have been amended as
stated in the Company Disclosure Letter.
(j) The Company has previously provided to the Parent
Corporation a list of each Company owned life insurance policy (each a
"Coli Policy"). With respect to each Coli Policy:
(i) for purposes of Code Section 264(a)(4), each
Coli Policy qualifies as a contract purchased on or before
June 20, 1986, no change has taken place prior to the date of
this Agreement and will not be taken on or before the Closing
Date to affect such status, and this status has never been
challenged by the Internal Revenue Service (or any other
government agency) in any audit or any other administrative or
judicial proceeding;
(ii) the aggregate cash surrender value of the
Coli Policies as of December 31, 1999 is set forth in the
materials previously disclosed to the Parent Corporation; and
(iii) there are no loans against such policies.
Section 4.12 Environmental Matters.
(a) Except for matters which, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse
Effect: (i) the Company and its Subsidiaries are, and, to the Company's
knowledge, since January 1, 1997 have been in compliance in all
respects with all Environmental Laws (as defined in Section 4.12(b)) in
connection with the ownership, use, maintenance and operation of their
owned, operated
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27
or leased real property used by them and otherwise in connection with
their operations, (ii) neither the Company nor any of its Subsidiaries
has any liability, whether contingent or otherwise, under, or for any
violations of, any Environmental Law, (iii) no notices of any violation
or alleged violation of, non-compliance or alleged noncompliance with
or any liability under, any Environmental Law have been received by the
Company or any of its Subsidiaries since January 1, 1997 that are
currently outstanding and unresolved as of the date of this Agreement,
and, to the Company's knowledge, there are no other outstanding notices
that are unresolved for which the Company or any of its Subsidiaries
have responsibility, (iv) there are no administrative, civil or
criminal writs, injunctions, decrees, orders or judgments outstanding
or any administrative, civil or criminal actions, suits, claims,
proceedings or, to the Company's knowledge, investigations pending or,
to the Company's knowledge, threatened, relating to compliance with or
liability under any Environmental Law affecting the Company or any of
its Subsidiaries, (v) the Company and its Subsidiaries possess valid
environmental permits required by any Environmental Law in connection
with the ownership, use, maintenance and operation of its owned,
operated and leased real property, and (vi) to the knowledge of the
Company, no material changes or alterations in the practices or
operations of the Company or any of its Subsidiaries as presently
conducted are anticipated to be required in the future in order to
permit the Company and its Subsidiaries to continue to comply in all
material respects with all applicable Environmental Laws. The Company
Disclosure Letter sets forth the amount reserved as of October 1, 2000
by the Company for compliance with all Environmental Laws.
(b) The term "Environmental Law" as used in this
Agreement means any law, rule, regulation, permit, order, writ,
injunction, judgment or decree with respect to the preservation of the
environment or the promotion of worker health and safety, including any
law, rule, regulation, permit, order, writ, injunction, judgment or
decree relating to Hazardous Materials (as defined in Section 4.12(c)).
Without limiting the generality of the foregoing, the term will
encompass each of the following statutes and the regulations
promulgated thereunder, and any similar applicable state, local or
foreign law, rule or regulation, each as amended (i) the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, (ii)
the Solid Waste Disposal Act, (iii) the Hazardous Materials
Transportation Act, (iv) the Toxic Substances Control Act, (v) the
Clean Water Act, (vi) the Clean Air Act, (vii) the Safe Drinking Water
Act, (viii) the National Environmental Policy Act of 1969, (ix) the
Superfund Amendments and Reauthorization Act of 1986, (x) Title III of
the Superfund Amendments and Reauthorization Act, (xi) the Federal
Insecticide, Fungicide and Rodenticide Act and (xii) the provisions of
the Occupational Safety and Health Act of 1970 relating to the handling
of and exposure to Hazardous Materials.
(c) The term "Hazardous Materials" as used in this
Agreement means each and every element, compound, chemical mixture,
contaminant, pollutant, material, waste or other substance (i) that is
defined, determined or identified as hazardous or toxic under any
Environmental Law or (ii) the spilling, leaking, pumping, pouring,
emitting,
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emptying, discharging, injecting, storing, escaping, leaching, dumping,
discarding, burying, abandoning or disposing into the environment of
which is prohibited under any Environmental Law. Without limiting the
generality of the foregoing, the term will include (i) "hazardous
substances" as defined in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, and regulations promulgated
thereunder, each as amended, (ii) "extremely hazardous substance" as
defined in the Superfund Amendments and Reauthorization Act of 1986, or
Title III of the Superfund Amendments and Reauthorization Act and
regulations promulgated thereunder, each as amended, (iii) "hazardous
waste" as defined in the Solid Waste Disposal Act and regulations
promulgated thereunder, each as amended, (iv) "hazardous materials" as
defined in the Hazardous Materials Transportation Act and the
regulations promulgated thereunder, each as amended, (v) "chemical
substance or mixture" as defined in the Toxic Substances Control Act
and regulation promulgated thereunder, each as amended, (vi) petroleum
and petroleum products and byproducts and (vii) asbestos.
Section 4.13 Title. The Company and its Subsidiaries has good and, in
the case of real property, marketable title to all the properties and assets
purported to be owned by them, free and clear of all Liens except (a) Liens for
current Taxes or assessments not delinquent, (b) builder, mechanic,
warehousemen, materialmen, contractor, workmen, repairmen, carrier or other
similar Liens arising and continuing in the ordinary course of business for
obligations that are not delinquent, (c) the rights, if any, of vendors having
possession of tooling of the Company and its Subsidiaries, (d) liens arising
from the receipt by the Company and its Subsidiaries of progress payments by the
United States government, (e) Liens securing rental payments under capital lease
arrangements and (f) other Liens which, individually or in the aggregate, are
not reasonably likely to have a Company Material Adverse Effect (collectively,
"Permitted Liens").
Section 4.14 Intellectual Property Matters.
(a) The Company and its Subsidiaries own or have the
right to use pursuant to valid license, sublicense, agreement or
permission all items of Intellectual Property necessary for their
operations as presently conducted and as presently proposed to be
conducted, except where the failure to have such rights, individually
or in the aggregate, are not reasonably likely to have a Company
Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received any charge, complaint, claim, demand or
notice alleging any interference, infringement, misappropriation or
violation of the Intellectual Property rights of any third party. Since
January 1, 1997, to the Company's knowledge, no third party has
interfered with, infringed upon, misappropriated or otherwise come into
conflict with any Intellectual Property rights of the Company or any of
its Subsidiaries, except for misappropriations and violations which,
individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect.
(b) The term "Intellectual Property" as used in this
Agreement means, collectively, patents, patent disclosures, trademarks,
service marks, logos, trade names, copyrights and mask works, and all
registrations, applications, reissuances, continuations,
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continuations-in-part, revisions, extensions, reexaminations and
associated good will with respect to each of the foregoing, computer
software (including source and object codes), computer programs,
computer data bases and related documentation and materials, data,
documentation, trade secrets, confidential business information
(including ideas, formulas, compositions, inventions, know-how,
manufacturing and production processes and techniques, research and
development information, drawings, designs, plans, proposals and
technical data, financial, marketing and business data and pricing and
cost information) and all other intellectual property rights (in
whatever form or medium).
Section 4.15 Labor Matters. There are no controversies pending or, to
the Company's knowledge, threatened between the Company or any of its
Subsidiaries and any of their current or former employees or any labor or other
collective bargaining unit representing any such employee that are reasonably
likely to have a Company Material Adverse Effect or are reasonably likely to
result in a material labor strike, dispute, slow-down or work stoppage. The
Company is not aware of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees of the
Company or any of its Subsidiaries. To the Company's knowledge, as of the date
of this Agreement no executive, key employee or group of employees of the
Company or any of its Subsidiaries has any plan to terminate employment with the
Company and its Subsidiaries, which termination, individually or in the
aggregate, is reasonably likely to have a Company Material Adverse Effect. As of
the date of this Agreement, there are no current DOL, OFCCP or EEOC audits. As
of the date of this Agreement, there are no OFCCP concilliation agreements in
effect.
Section 4.16 Rights Agreement. The Company has taken all requisite
action under the Rights Agreement dated as of February 1, 2000 between the
Company and The Bank of New York (the "Rights Agreement") to cause the
provisions of the Rights Agreement or any other similar agreement not to be
applicable to this Agreement, the Merger or the other transactions contemplated
hereby.
Section 4.17 State Takeover Laws. The resolutions adopted by the Board
of Directors of the Company approving this Agreement are sufficient to cause the
provisions of Article 14 of the Virginia Act to be inapplicable to this
Agreement, the Merger and the other transactions contemplated hereby. Article
14.1 of the Virginia Act is not applicable to this Agreement, the Merger and the
other transactions contemplated hereby pursuant to Article VII, Section 5 of the
Bylaws of the Company as in effect on the date of this Agreement. To the
Company's knowledge, no other fair price, moratorium, control share acquisition
or other form of antitakeover statute, rule or regulation of any state or
jurisdiction applies or purports to apply to this Agreement, the Merger or the
other transactions contemplated hereby.
Section 4.18 Brokers' Fees. Except for the fees and expenses payable by
the Company to Goldman, Sachs & Co., neither the Company nor any of its
Subsidiaries has any liability or obligation to pay any fees or commissions to
any financial advisor, broker, finder or agent with respect to the transactions
contemplated by this Agreement. The Company has delivered to the Parent
Corporation a correct and complete copy of the engagement letter between the
Company
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and Goldman, Sachs & Co. relating to the transactions contemplated by this
Agreement, which letter describes the fees payable to Goldman, Sachs & Co. in
connection with this Agreement.
Section 4.19 Representations and Warranties. The representations and
warranties of the Company contained in this Agreement in the aggregate,
disregarding all qualifications and exceptions contained therein relating to
materiality or Company Material Adverse Effect, are true and correct with only
such exceptions which in the aggregate are not reasonably likely to have a
Company Material Adverse Effect. In the event a representation and warranty is
qualified by a Company Material Adverse Effect exception and there occurs a
Company Material Adverse Effect with respect thereto, such representation and
warranty shall be conclusively deemed breached without regard to whether the
Company Material Adverse Effect was or was not reasonably likely.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PARENT CORPORATION
Each of the Parent Corporation and the Acquisition Corporation, as the
case may be, represents and warrants to the Company that:
Section 5.1 Organization. Each of the Parent Corporation and the
Acquisition Corporation is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as presently being conducted. All of the outstanding
shares of the capital stock of the Acquisition Corporation have been validly
issued, are fully paid and nonassessable and are owned by the Parent Corporation
free and clear of any Lien. The Acquisition Corporation has been organized
solely for the purpose of engaging in the Merger and the other transactions
contemplated by this Agreement and has not engaged in any business other than
contemplated by this Agreement.
Section 5.2 Authorization of Transaction; Enforceability. Each of the
Parent Corporation and the Acquisition Corporation has full corporate power and
authority and has taken all requisite corporate action to enable it to execute
and deliver this Agreement, to consummate the Merger and the other transactions
contemplated hereby and to perform its obligations hereunder. Each of the Board
of Directors of the Parent Corporation and the Board of Directors of the
Acquisition Corporation has duly adopted resolutions, by the requisite majority
vote, approving this Agreement, the Merger and the other transactions
contemplated hereby and determining that the terms and conditions of this
Agreement, the Merger and the other transactions contemplated hereby are in the
best interests of the Parent Corporation and its stockholders and of the
Acquisition Corporation and its sole stockholder, as the case may be. The
foregoing resolutions of each such Board of Directors have not been modified,
supplemented or rescinded and remain in full force and effect as of the date of
this Agreement. This Agreement constitutes the valid and legally binding
obligation of each of the Parent
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Corporation and the Acquisition Corporation, enforceable against the Parent
Corporation and the Acquisition Corporation in accordance with its terms and
conditions.
Section 5.3 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Securities
Exchange Act and the "blue sky" laws and regulations of various states, (b) the
filing of a Notification and Report Form and related material with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice under the HSR Act and any other filing required by any other Antitrust
Law, (c) the filing of articles of merger pursuant to the Virginia Act and a
certificate of merger under the Delaware Act, and (d) any filings required under
the rules and regulations of the New York Stock Exchange, neither the execution
and delivery of this Agreement by the Parent Corporation or the Acquisition
Corporation, nor the consummation by the Parent Corporation or the Acquisition
Corporation of the transactions contemplated hereby, will constitute a violation
of, be in conflict with, or result in the breach of (i) the charter or bylaws of
the Parent Corporation or the Acquisition Corporation, (ii) any constitutional
provision, law, rule, regulation, permit, order, writ, injunction, judgment or
decree to which the Parent Corporation or the Acquisition Corporation is subject
or (iii) any material agreement or commitment to which the Parent Corporation or
the Acquisition Corporation is a party or by which either of them is bound or
subject.
Section 5.4 Adequate Cash Resources. The Parent Corporation has
adequate resources to provide the aggregate Merger Consideration and the Option
Consideration in cash in the amount and at the time required by Section 1.9 or
by Article 3.
Section 5.5 No Capital Ownership in the Company. Neither the Parent
Corporation nor any of its Subsidiaries owns any shares of Company Common Stock.
ARTICLE 6
COVENANTS
Section 6.1 General. Each of the parties will use its respective best
efforts to take all action and to do all things necessary, proper or advisable
to consummate and make effective the transactions contemplated by this
Agreement.
Section 6.2 Notices and Consents. Each of the parties prior to the
Closing Date will give all notices to third parties and governmental entities
and will use its respective best efforts to obtain all third party and
governmental consents and approvals that are required in connection with the
transactions contemplated by this Agreement. Within five business days following
the execution and delivery of this Agreement, each of the parties will file a
Notification and Report Form and related material with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the HSR Act, will use its respective best efforts to obtain early
termination of the applicable waiting period and will make all further filings
pursuant thereto or any other Antitrust Law that may be necessary, proper or
advisable. The
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foregoing two sentences will not be deemed to require the Parent Corporation to
enter into any agreement, consent decree or other commitment requiring the
Parent Corporation or any of its Subsidiaries to divest or hold separate any
assets (including any assets of the Company or any of its Subsidiaries) or to
take any other action which, individually or in the aggregate, is reasonably
likely to have a material adverse effect on the business, financial condition,
operations or results of operations of the Parent Corporation and its
Subsidiaries taken as a whole (other than changes or effects resulting from
occurrences relating to the economy in general, the securities markets in
general or the Parent Corporation's industry in general and not specifically
relating to the Parent Corporation) (a "Parent Corporation Material Adverse
Effect").
Section 6.3 Interim Conduct of the Company. Except as expressly
contemplated by this Agreement, as set forth in the Company Disclosure Letter,
as required by law or by the terms of any contract in effect on the date of this
Agreement or as the Parent Corporation may approve, which approval will not be
unreasonably withheld or delayed, from and after the date of this Agreement
through the Closing Date, the Company will, and will cause each of its
Subsidiaries to, conduct its operations in accordance with its ordinary course
of business, consistent with past practice, and in accordance with such covenant
will not, and will not cause or permit any of its Subsidiaries to:
(a) amend its articles of incorporation or bylaws or file
any certificate of designation or similar instrument with respect to
any shares of its authorized but unissued capital stock;
(b) authorize or effect any stock split or combination or
reclassification of shares of its capital stock;
(c) declare or pay any dividend or distribution with
respect to its capital stock (other than the regular quarterly dividend
of $0.075 per share of Company Common Stock and dividends payable by a
Subsidiary of the Company to the Company or another Subsidiary), issue
or authorize the issuance of any shares of its capital stock (other
than in connection with the exercise of currently outstanding Stock
Options listed in the Company Disclosure Letter) or any other
securities exercisable or exchangeable for or convertible into shares
of its capital stock, or repurchase, redeem or otherwise acquire for
value any shares of its capital stock or any other securities
exercisable or exchangeable for or convertible into shares of its
capital stock;
(d) merge or consolidate with any entity;
(e) sell, lease or otherwise dispose of any of its
capital assets, including any shares of the capital stock of any of its
Subsidiaries, other than sales, leases or other dispositions of
machinery, equipment, tools, vehicles and other operating assets no
longer required in its operations made in the ordinary course of
business, consistent with past practice;
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(f) liquidate, dissolve or effect any recapitalization or
reorganization in any form;
(g) acquire any interest in any business (whether by
purchase of assets, purchase of stock, merger or otherwise) or enter
into any joint venture;
(h) create, incur, assume or suffer to exist any
indebtedness for borrowed money (including capital lease obligations),
other than indebtedness existing as of the date of this Agreement,
borrowings under existing credit lines in the ordinary course of
business, consistent with past practice, and intercompany indebtedness
among the Company and its Subsidiaries arising in the ordinary course
of business, consistent with past practice;
(i) create, incur, assume or suffer to exist any Lien
(other than Permitted Liens) affecting any of its material assets or
properties;
(j) except as required as the result of changes in United
States generally accepted accounting principles, change any of the
accounting principles or practices used by it or revalue in any
material respect any of its assets or properties, other than
write-downs of inventory or accounts receivable in the ordinary course
of business, consistent with past practice;
(k) except as required under the terms of any collective
bargaining agreement in effect as of the date of this Agreement or as
required by applicable law, grant any general or uniform increase in
the rates of pay of its employees or grant any increase in the benefits
under any bonus or employee benefit plan or other arrangement, contract
or commitment;
(l) except for any increase required under the terms of
any collective bargaining agreement or consulting, executive or
employment agreement in effect on the date of this Agreement or as
required by applicable law, increase the compensation payable or to
become payable to officers and salaried employees with a base salary in
excess of $100,000 per year or increase any bonus, insurance, pension
or other benefit plan, payment or arrangement made to, for or with any
such officers or salaried employees;
(m) enter into any contract or commitment or engage in
any transaction with any affiliated person or entity (other than the
Company or its Subsidiaries) or enter into any contract or commitment
or engage in any transaction with any unaffiliated person or entity
which, to the Company's knowledge, is reasonably likely to have a
Company Material Adverse Effect;
(n) make any material Tax election or settle or
compromise any material Tax liability, except in the ordinary course of
business;
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(o) pay, discharge or satisfy any claims, liabilities or
obligations other than the payment, discharge and satisfaction in the
ordinary course of business of liabilities reflected or reserved for in
the consolidated financial statements of the Company or otherwise
incurred in the ordinary course of business, consistent with past
practice;
(p) settle or compromise any material pending or
threatened suit, action or proceeding; or
(q) commit to do any of the foregoing.
Section 6.4 Preservation of Organization. Subject to compliance with
the provisions of Section 6.3, the Company will, and will cause each of its
Subsidiaries to, use its best efforts to preserve its business organization
intact in all material respects, use its reasonable efforts to keep available to
the Company and its Subsidiaries, the present officers and employees of the
Company and its Subsidiaries as a group and use its best efforts to preserve the
present relationships of the Company and its Subsidiaries with suppliers and
customers and others having business relations with the Company and its
Subsidiaries.
Section 6.5 Full Access. The Company will, and will cause its
Subsidiaries and its and their representatives to, afford the Parent Corporation
and its representatives reasonable access, upon reasonable notice at all
reasonable times to all premises, properties, books, records, contracts and
documents of or pertaining to the Company and its Subsidiaries. Notwithstanding
the foregoing, neither party will be required to provide access or to disclose
information where such access or disclosure would contravene any law or contract
or would result in the waiver of any legal privilege or work-product protection.
Any information disclosed will be subject to the provisions of the
Confidentiality Agreement, dated March 17, 2000, between the Company and the
Parent Corporation (the "Confidentiality Agreement").
Section 6.6 Notice of Developments. The Company will give prompt
written notice to the Parent Corporation of any material development affecting
the Company or any of its Subsidiaries. Each party will give prompt written
notice to the other of any material development which would give rise to a
failure of a condition set forth in Section 7.2 (in the case of the Parent
Corporation or the Acquisition Corporation) or Section 7.3 (in the case or the
Company). No such written notice of such a material development will be deemed
to have amended any of the disclosures set forth in the Company Disclosure
Letter, to have qualified the representations and warranties contained herein
and to have cured any misrepresentation or breach of warranty that otherwise
might have existed hereunder by reason of such material development.
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Section 6.7 Nonsolicitation of Acquisition Proposals.
(a) The Company and each of its Subsidiaries, and each of
their respective directors, officers, employees, agents and
representatives, will immediately cease any discussions or negotiations
presently being conducted with respect to any Acquisition Proposal. The
Company and its Subsidiaries will not and will use their best efforts
to cause their respective directors, officers, employees, agents and
representatives not to (i) initiate or solicit, directly or indirectly,
any inquiries with respect to, or the making of, any Acquisition
Proposal or (ii) engage in any negotiations or discussions with,
furnish any information or data to or enter into any letter of intent,
agreement in principle, acquisition agreement or similar agreement with
any party relating to any Acquisition Proposal; provided, however, that
the Board of Directors of the Company may, in response to an
Acquisition Proposal that the Board of Directors of the Company
determines in good faith is reasonably likely to lead to a Superior
Proposal, (A) furnish information with respect to the Company and its
Subsidiaries to the person making such Acquisition Proposal (and its
representatives) pursuant to a confidentiality agreement containing
provisions at least as restrictive with respect to such person as the
restrictions on the Parent Corporation contained in the Confidentiality
Agreement (as modified by Section 6.14) and (B) participate in
discussions or negotiations with the person making such Acquisition
Proposal (and its representatives) regarding such Acquisition Proposal.
The Company will be responsible for any breach of the provisions of
this Section 6.7 by any director, officer, employee, agent or
representative of the Company or any of its Subsidiaries.
(b) The term "Acquisition Proposal" as used in this
Agreement means any bona fide proposal, whether or not in writing, made
by a party that if consummated would result in such party acquiring
beneficial ownership (as defined under Rule 13(d) promulgated under the
Securities Exchange Act) of more than 20% of the consolidated assets
(determined based on book or fair market value) of, or more than 20% of
the voting power in, the Company and its Subsidiaries, taken as a
whole, pursuant to a merger, consolidation or other business
combination, sale of shares of capital stock, sale of assets, tender or
exchange offer or similar transaction involving the Company or any of
its Subsidiaries, including any single or multi-step transaction or
series of related transactions that is structured to permit such party
to acquire such beneficial ownership.
(c) The term "Superior Proposal" as used in this
Agreement means any bona fide proposal, in writing, made by a party
that (i) if consummated, would result in such party acquiring
beneficial ownership of more than 50% of the consolidated assets
(determined based on book or fair market value) of, or more than 50% of
the voting power in, the Company and its Subsidiaries, taken as a
whole, pursuant to a merger, consolidation or other business
combination, sale of shares of capital stock, sale of assets, tender or
exchange offer or similar transaction involving the Company or any of
its Subsidiaries, including any single or multi-step transaction or
series of related transactions that is structured to permit such party
to acquire such beneficial ownership,
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and (ii) the Board of Directors of the Company, after consultation with
its outside legal counsel and financial advisers, determines in its
good faith business judgment (x) is superior from a financial view to
the stockholders of the Company and (y) is reasonably capable of being
completed, taking into account all legal, financial, regulatory and
other aspects of such proposal.
(d) Nothing contained in this Agreement will prohibit the
Company from (i) taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Securities Exchange
Act or (ii) making any disclosure or recommendation, including a
withdrawal or adverse amendment of its recommendation of the Merger
that would permit the Parent Corporation to terminate this Agreement
pursuant to Section 8.1(c)(ii), to the Company's stockholders if the
Board of Directors of the Company, after consultation with its outside
legal counsel, determines in good faith that failure to so disclose or
recommend would be inconsistent with applicable law.
Section 6.8 Indemnification.
(a) From and after the Closing Date, the Parent
Corporation will cause the Surviving Corporation to indemnify, defend
and hold harmless each person who is now, or has been at any time prior
to the Effective Time, an officer or director of the Company or any of
its present or former Subsidiaries or corporate parents (collectively,
the "Indemnified Parties") from and against all losses, claims, damages
and expenses (including reasonable attorney's fees and expenses)
arising out of or relating to actions or omissions, or alleged actions
or omissions, occurring at or prior to the Effective Time to the
fullest extent permitted from time to time by the Virginia Act or any
other applicable laws as presently or hereafter in effect.
(b) Any determination required to be made with respect to
whether any Indemnified Party may be entitled to indemnification will,
if requested by such Indemnified Party, be made by independent legal
counsel selected by the Indemnified Party and reasonably satisfactory
to the Surviving Corporation.
(c) For a period of six years after the Closing Date, the
Parent Corporation will cause to be maintained in effect the policies
of directors and officers liability insurance and fiduciary liability
insurance currently maintained by the Company with respect to claims
arising from or relating to actions or omissions, or alleged actions or
omissions, occurring on or prior to the Closing Date. The Parent
Corporation may at its discretion substitute for such policies
currently maintained by the Company directors and officers liability
insurance and fiduciary liability insurance policies with reputable and
financially sound carriers providing for no less favorable coverage.
Notwithstanding the provisions of this Section 6.8(c), the Parent
Corporation will not be obligated to make annual premium payments with
respect to such policies of insurance to the extent such premiums
exceed 200 percent of the annual premiums paid by the Company as of the
date of this Agreement. If the annual premium costs necessary to
maintain such
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insurance coverage exceed the foregoing amount, the Parent Corporation
will maintain the most advantageous policies of directors and officers
liability insurance and fiduciary liability insurance obtainable for an
annual premium equal to the foregoing amount.
(d) To the fullest extent permitted from time to time
under the law of the Commonwealth of Virginia, the Parent Corporation
will cause the Surviving Corporation to pay on an as-incurred basis
the reasonable fees and expenses of each Indemnified Party (including
reasonable fees and expenses of counsel) in advance of the final
disposition of any action, suit, proceeding or investigation that is
the subject of the right to indemnification, subject to reimbursement
in the event such Indemnified Party is not entitled to
indemnification.
(e) The provisions providing for director and officer
indemnification, abrogation of liability and advancement of expenses
set forth in Article VII of the articles of incorporation of the
Company, as in effect immediately prior to the Effective Time, will
apply to each Indemnified Party with respect to all matters occurring
on or prior to the Effective Time. The foregoing will not be deemed to
restrict the right of the Surviving Corporation to modify the
provisions of its articles of incorporation relating to director and
officer indemnification, abrogation of liability or advancement of
expenses with respect to events or occurrences after the Closing Date
but such modifications shall not adversely affect the rights of the
Indemnified Parties hereunder. The Parent Corporation shall cause the
Surviving Corporation to honor the provisions of this Section 6.8(e).
(f) In the event of any action, suit, investigation or
proceeding, the Indemnified Party will be entitled to control the
defense thereof with counsel of its own choosing reasonably acceptable
to the Parent Corporation, and the Parent Corporation and the Surviving
Corporation will cooperate in the defense thereof, provided that
neither the Parent Corporation nor the Surviving Corporation will be
liable for the fees of more than one counsel for all Indemnified
Parties, other than local counsel, unless the use of a single counsel
would present conflict of interest issues which would make it
impracticable for all Indemnified Parties to be represented by a single
counsel, and provided further that neither the Parent Corporation nor
the Surviving Corporation will be liable for any settlement effected
without its written consent (which consent will not be unreasonably
withheld or delayed).
(g) The rights of each Indemnified Party hereunder will
be in addition to any other rights such Indemnified Party may have
under the articles of incorporation or bylaws of the Surviving
Corporation or any of their respective Subsidiaries, under the law of
the Commonwealth of Virginia or otherwise. Notwithstanding anything to
the contrary contained in this Agreement or otherwise, the provisions
of this Section 6.8 will survive the consummation of the Merger, and
each Indemnified Party will, for all purposes, be a third party
beneficiary of the covenants and agreements contained in this Section
6.8 and, accordingly, will be treated as a party to this Agreement for
purposes of
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the rights and remedies relating to enforcement of such covenants and
agreements and will be entitled to enforce any such rights and exercise
any such remedies directly against the Parent Corporation and the
Surviving Corporation.
(h) Nothing in this Section 6.8 will diminish any rights
or entitlements available to any director or officer of the Company
under the Company's articles of incorporation as in effect immediately
prior to the Effective Time.
Section 6.9 Public Announcements. The initial press release announcing
the transactions contemplated by this Agreement will be a joint press release.
Thereafter, the Parent Corporation and the Company will consult with one another
before issuing any press releases or otherwise making any public announcements
with respect to the transactions contemplated by this Agreement and, except as
may be required by applicable law or by the rules and regulations of the New
York Stock Exchange or of The Nasdaq Stock Market, will not issue any such press
release or make any such announcement prior to such consultation.
Section 6.10 Preservation of Programs and Agreements. From and after
the date of this Agreement through the Closing Date, the Company will not enter
into any agreement which it knows or has reason to know is reasonably likely to
cause a major customer of the Company or any of its Subsidiaries to terminate
any material program or agreement, the overall effect of which, after taking
into account the anticipated benefits of the new agreement and the anticipated
detriments of such termination, is reasonably likely to have a Company Material
Adverse Effect.
Section 6.11 Actions Regarding Antitakeover Statutes. If any fair
price, moratorium, control share acquisition or other form of antitakeover
statute, rule or regulation is or becomes applicable to the transactions
contemplated by this Agreement, the Board of Directors of the Company will grant
such approvals and take such other actions as may be required so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms and conditions set forth in this Agreement.
Section 6.12 Defense of Orders and Injunctions. In the event either
party becomes subject to any order or injunction of a court of competent
jurisdiction which prohibits the consummation of the transactions contemplated
by this Agreement, each party will use its best efforts to overturn or lift such
order or injunction. The foregoing will not be deemed to require the Parent
Corporation to enter into any agreement, consent decree or other commitment
requiring the Parent Corporation or any of its Subsidiaries to divest or hold
separate any assets or to take any other action which, individually or in the
aggregate, is reasonably likely to have a Parent Corporation Material Adverse
Effect.
Section 6.13 Employee Benefit Matters.
(a) Subject to applicable collective bargaining
agreements, until (or in respect of the period ending on )
December 31, 2001, Parent Corporation shall cause to be
maintained for the employees and former employees of the
Company and its Subsidiaries (the "Employees"), benefits and
benefit levels which are, in
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the aggregate, substantially similar to benefits and benefit
levels as provided by the Company and its Subsidiaries through
any Company Plan that is an Employee Pension Benefit Plan, an
Employee Welfare Benefit Plan, or a fringe benefit program
(providing, for example, sick pay, vacation pay and tuition
reimbursement) prior to the Effective Time. Notwithstanding
the foregoing, without limitation, this Section 6.13(a) shall
not apply to any bonus, incentive, or equity-based
compensation plan or arrangement. Further, subject to Section
6.3(k), this Section 6.13(a) shall not prohibit any change in
benefits or benefit levels adopted prior to the Effective Time
and effective on or after the Effective Time or any other
change in benefits (such as a change in vendor, co-pay,
deductible, lifetime maximum, etc.) that would have been made
by the Company in the ordinary course during the 2001 year to
reflect market conditions for the provision of these benefits.
(b) The Parent Corporation will honor and will
cause the Surviving Corporation to honor, in accordance with
their respective terms, the Company Plans and all of the
Company's other employee benefit, compensation, employment,
severance and termination plans, programs, policies, and
arrangements, including any rights or benefits arising as a
result of the transactions contemplated by this Agreement
(either alone or in combination with any other event).
(c) Solely for purposes of eligibility and
vesting under the employee benefit plans of the Parent
Corporation and its Subsidiaries (including the Surviving
Corporation) providing benefits to any Employees after the
Effective Time, each Employee will be credited with his or her
years of service with the Company and its Subsidiaries (and
any predecessor entities thereof) before the Effective Time,
to the same extent as such employee was entitled, before the
Effective Time, to credit for such service under any similar
Company Plan. Following the Effective Time, the Parent
Corporation will, or will cause its Subsidiaries to, (i) waive
any pre-existing condition limitation under any Employee
Welfare Benefit Plan maintained by the Parent Corporation or
any of its Subsidiaries in which Employees and their eligible
dependents participate (except to the extent that such
pre-existing condition limitation would have been applicable
under the comparable Company Employee Welfare Benefit Plans
immediately prior to the Effective Time), and (ii) provide
each Employee with credit for any co-payments and deductibles
incurred prior to the Effective Time (or such earlier or later
transition date to new Employee Welfare Benefits Plans) for
the calendar year in which the Effective Time (or such earlier
or later transaction date) occurs, in satisfying any
applicable deductible or out-of-pocket requirements under any
welfare plans that the Employees participate in after the
Effective Time.
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(d) The Parent Corporation will, and will cause
the Surviving Corporation and their respective representatives
to, afford any officer (as of the Effective Time) of the
Company and any of his or her representatives reasonable
access, upon reasonable notice, to such books and records of
the Company and the Surviving Corporation as are reasonably
required by such officer to determine amounts owing to such
officer under any Company Plan.
(e) The Parent Corporation and the Company agree
to implement the provisions of Section 6.13(e) of the Company
Disclosure Letter.
(f) Subject to applicable collective bargaining
agreements, notwithstanding any provision to the contrary
contained in this Agreement, through the period ending on
December 31, 2001, the Parent Corporation and its Subsidiaries
(including the Surviving Corporation) will provide severance
benefits and severance compensation to the Employees that, in
the aggregate, are not less favorable to the Employees than
those provided by the Company under a Company Plan to the
Employees immediately prior to the Effective Time.
(g) Nothing contained herein will create any
rights in any third party, including without limitation, any
right to employment or right to any particular benefit (except
as set forth in Sections 6.13(d) and (e)). Except as
specifically provided, nothing contained herein shall be
construed as prohibiting or restricting in any way the right
of the Parent Company or the Company (or any successor
thereto) to modify, amend or terminate any employee benefit
plan, program or arrangement in whole or in part at any time
after the Effective Time.
(h) The Company agrees that an independent
trustee, either a bank or a trust company, will act with
respect to the Merger on behalf of each Company Plan (and its
participants) that holds Company Common Stock in accordance
with the terms and conditions of such Plan.
Section 6.14 Standstill Provisions. The restrictions on the Parent
Corporation and the Acquisition Corporation contained in the Standstill
Provisions of the Confidentiality Agreement between the Parent Corporation and
the Company are hereby waived by the Company to the extent reasonably required
to permit the Parent Corporation and the Acquisition Corporation to comply with
their obligations or enforce their rights under this Agreement.
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ARTICLE 7
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Section 7.1 Conditions to the Obligations of Each Party. The respective
obligation of each party to effect the Merger is subject to the satisfaction at
or prior to the Closing Date of each of the following conditions:
(a) the Company will have obtained the Company
Stockholder Approval;
(b) all applicable waiting periods (and any extensions
thereof) under the HSR Act will have terminated or expired;
(c) all other consents, authorizations, orders and
approvals of or filings with any governmental commission, board or
other regulatory authority (other than in its capacity as a customer of
the Company or its Subsidiaries) required in connection with the
consummation of the transactions contemplated by this Agreement will
have been obtained or made, except where the failure to obtain or make
such consents, authorizations, orders, approvals or filings, from and
after the Closing Date, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect; and
(d) no party will be subject to any order or injunction
of a court of competent jurisdiction or other legal restraint which
prohibits the consummation of the Merger.
Section 7.2 Conditions to the Obligation of the Company. The obligation
of the Company to effect the Merger is subject to the satisfaction at or prior
to the Closing Date of each of the following conditions:
(a) the representations and warranties of each of the
Parent Corporation and the Acquisition Corporation contained herein (i)
that are qualified as to materiality will be true and correct and (ii)
that are not qualified by materiality will be true and correct in all
material respects, in each case (i) and (ii), as of the date of this
Agreement and as of the Closing Date with the same effect as though
made as of the Closing Date, except that the accuracy of
representations and warranties that by their terms speak as of a
specified date will be determined as of such date; and
(b) each of the Parent Corporation and the Acquisition
Corporation will have in all material respects performed and complied
with all of its obligations under this Agreement required to be
performed by it at or prior to the Closing Date.
The Parent Corporation and the Acquisition Corporation will furnish the
Company with a customary bring down certificate with respect to the satisfaction
of the conditions set forth in Sections 7.2(a) and (b).
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Section 7.3 Conditions to the Obligation of the Parent Corporation and
the Acquisition Corporation. The obligation of the Parent Corporation and the
Acquisition Corporation to effect the Merger is subject to the satisfaction at
or prior to the Closing Date of each of the following conditions:
(a) the representations and warranties of the Company
contained herein (i) that are subject to a Company Material Adverse
Effect qualification will be true and correct and (ii) that are not
subject to a Company Material Adverse Effect qualification will be true
and correct, except that this clause (ii) will be deemed satisfied so
long as any failures of such representations and warranties, taken
together, are not reasonable likely to have a Company Material Adverse
Effect, in each case (i) and (ii), as of the date of this Agreement and
as of the Closing Date with the same effect as though made as of the
Closing Date, except that the accuracy of representations and
warranties that by their terms speak as of a specified date will be
determined as of such date; and
(b) the Company will have in all material respects
performed and complied with all of its obligations under this Agreement
required to be performed by it at or prior to the Closing Date;
The Company will furnish the Parent Corporation with a customary bring
down certificate with respect to the satisfaction of the conditions set forth in
Sections 7.3(a) and (b) .
Section 7.4 Frustration of Closing Conditions. None of the Company, the
Parent Corporation or the Acquisition Corporation may rely on the failure of any
condition set forth in Section 7.1, 7.2 or 7.3, as the case may be, to be
satisfied if such party's breach of this Agreement has been a principal reason
that such condition has not been satisfied.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination . This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
the receipt of the Company Stockholder Approval):
(a) with the mutual written consent of the Parent
Corporation and the Company;
(b) by the Parent Corporation or the Company if any court
of competent jurisdiction or other governmental agency has issued a
final order, decree or ruling or taken any other final action
restraining, enjoining or otherwise prohibiting the consummation of the
Merger, and such order, decree, ruling or other action is or has become
nonappealable;
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(c) by the Parent Corporation if (i) the Company has
breached any of its representations, warranties or covenants set forth
in this Agreement, which breach (A) would give rise to the failure of a
condition set forth in Section 7.3 and (B)is not cured within 30 days
after the date written notice of such breach is given by the Parent
Corporation to the Company, (ii) the Board of Directors of the Company
has withdrawn or amended in any manner adverse to the Parent
Corporation and the Acquisition Corporation its recommendation and
approval of the Merger, (iii) the Company Stockholder Approval has not
been obtained at a meeting duly called for such purpose or (iv) the
Merger has not been consummated on or before March 31, 2001; or
(d) by the Company if (i) either the Parent Corporation
or the Acquisition Corporation has breached any of its representations,
warranties or covenants set forth in this Agreement, which breach (A)
would give rise to the failure of a condition set forth in Section 7.2
and (B) is not cured within 30 days after the date written notice of
such breach is given by the Company to the Parent Corporation, (ii) the
Company Stockholder Approval has not been obtained at a meeting called
for such purpose or (iii) the Merger has not been consummated on or
before March 31, 2001.
Section 8.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1, this Agreement will
forthwith become void and will be deemed to have terminated without liability to
any party (except for any liability of any party then in willful material breach
of any covenant or agreement); provided that the provisions of the
Confidentiality Agreement and the last sentence of Section 6.5, this Section
8.2, Section 8.3 and Article 9 (other than the exception clause in Section 9.10)
of this Agreement will continue in full force and effect notwithstanding such
termination and abandonment.
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Section 8.3 Termination Fee.
(a) If an Acquisition Proposal has been made to the
Company or its stockholders or any person has announced an intention to
make an Acquisition Proposal and thereafter
(i) the Parent Corporation terminates this
Agreement pursuant to Section 8.1(c)(ii) or Section
8.1(c)(iii),
(ii) the Company terminates this Agreement
pursuant to Section 8.1(d)(ii), or
(iii) a vote of the stockholders of the Company
does not occur and either the Parent Corporation terminates
this Agreement pursuant to Section 8.1(c) (iv) or the Company
terminates this Agreement pursuant to Section 8.1(d)(iii)
and
(x) the Company enters into an agreement with
respect to a Third Party Acquisition within 12 months of the
date of such termination, or
(y) a Third Party Acquisition occurs within 12
months after the date of such termination,
then the Company will pay to the Parent Corporation, within one
business day following the occurrence of such event referred to in
clause (x) or clause (y), a termination fee equal to $10 million (the
"Termination Fee"), payable by wire transfer of immediately available
funds to an account designated by the Parent Corporation.
(b) The term "Third Party Acquisition" as used in this
Agreement means (i) the acquisition of the Company by merger or
otherwise by any person (including for purposes of this Section 8.3(b)
any "person" or "group" as defined in Section 13(d)(3) of the
Securities Exchange Act) or entity other than the Parent Corporation or
any of its affiliates, (ii) the acquisition by any person or entity
other than the Parent Corporation or any of its affiliates of more than
50 percent of the consolidated assets (determined based on book or fair
market value) of the Company and its Subsidiaries or (iii) the
acquisition by any person or entity other than the Parent Corporation
or any of its affiliates of more than 50 percent of the outstanding
shares of Company Common Stock, (iv) the adoption by the Company of any
plan of liquidation or the declaration by the Company of any
extraordinary dividend or distribution (including any distribution of
any shares of the capital stock of any material Subsidiary) of cash or
property constituting more than 50 percent of the consolidated assets
(determined based on book or fair market value) of the Company and its
Subsidiaries or (v) the purchase by the Company or any of its
Subsidiaries of more than 50 percent of the outstanding shares of
Company Common Stock.
(c) Except as specifically provided in this Section 8.3,
each party will bear its own expenses incurred in connection with the
transactions contemplated by this Agreement, whether or not such
transactions are consummated.
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(d) The Company acknowledges that the agreements
regarding the payment of fees contained in this Section 8.3 are an
integral part of the transactions contemplated by this Agreement and
that, in the absence of such agreements, the Parent Corporation and the
Acquisition Corporation would not have entered into this Agreement. The
Company accordingly agrees that in the event the Company fails to pay
the Termination Fee promptly, the Company will in addition to the
payment of such amount also pay to the Parent Corporation all of the
reasonable costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Parent Corporation in the enforcement of its
rights under this Section 8.3, together with interest on such amount at
a rate of 11 percent per annum from the date upon which such payment
was due, to and including the date of payment. Provided that the
Company was not in breach of the provisions of Section 6.7, payment of
the Termination Fee will constitute full and complete satisfaction, and
will constitute the Parent Corporation's sole and exclusive remedy for
any loss, liability, damage or claim arising out of or in connection
with any such termination of this Agreement or the facts and
circumstances resulting in or related to this Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Nonsurvival of Representations. The representations and
warranties contained in this Agreement will not survive the Merger or the
termination of this Agreement.
Section 9.2 Remedies. The parties agree that irreparable damage would
occur in the event that the provisions of this Agreement were not performed in
accordance with their specific terms. It is accordingly agreed that the parties
will be entitled to specific performance of the terms of this Agreement, without
posting a bond or other security, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section 9.3 Successors and Assigns. No party hereto may assign or
delegate any of such party's rights or obligations under or in connection with
this Agreement without the written consent of the other parties hereto. Except
as otherwise expressly provided herein, all covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto or thereto will
be binding upon and enforceable against the respective successors and assigns of
such party and will be enforceable by and will inure to the benefit of the
respective successors and permitted assigns of such party.
Section 9.4 Amendment. This Agreement may be amended by the execution
and delivery of an written instrument by or on behalf of the Parent Corporation,
the Acquisition Corporation and the Company at any time before or after the
Company Stockholder Approval, provided that after the date of the Company
Stockholder Approval, no amendment to this Agreement will be made without the
approval of stockholders of the Company to the extent such approval is required
under the Virginia Act.
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Section 9.5 Extension and Waiver. At any time prior to the Effective
Time, the parties may extend the time for performance of or waive compliance
with any of the covenants or agreements of the other parties to this Agreement
and may waive any breach of the representations or warranties of such other
parties. No agreement extending or waiving any provision of this Agreement will
be valid or binding unless it is in writing and is executed and delivered by or
on behalf of the party against which it is sought to be enforced.
Section 9.6 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
Section 9.7 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
Section 9.8 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
Section 9.9 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally to
the recipient or when sent to the recipient by telecopy (receipt confirmed), one
business day after the date when sent to the recipient by reputable express
courier service (charges prepaid) or three business days after the date when
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
will be sent to the Parent Corporation and the Company at the addresses
indicated below:
If to the Parent
Corporation General Dynamics Corporation
3190 Fairview Park Drive
Falls Church, Virginia 22041-4523
Attention: David A. Savner, Esq.
Senior Vice President and
General Counsel
Facsimile No: (703) 876-3125
With a copy (which will
not constitute notice) to: Jenner & Block
One IBM Plaza, 40th Floor
Chicago, IL 60611
Attention: Charles J. McCarthy, Esq.
Facsimile No.: (312) 840-7745
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If to the Company: Primex Technologies, Inc.
10101 9th Street North
St. Petersburg, FL 33716
Attention: George H. Pain
Vice President and
General Counsel
Facsimile No.: (727) 578-8286
With a copy (which will
not constitute notice) to Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Robert I. Townsend, III, Esq.
Facsimile No.: (212) 474-3700
or to such other address or to the attention of such other party as the
recipient party has specified by prior written notice to the sending party.
Section 9.10 No Third Party Beneficiaries. This Agreement will not
confer any rights or remedies upon any person or entity other than the Parent
Corporation, the Acquisition Corporation and the Company and their respective
successors and permitted assigns, except that the respective beneficiaries as of
the Closing Date of the provisions of Section 6.8 and Sections 6.13(d) and (e)
will, for all purposes, be third party beneficiaries of the covenants and
agreements contained therein and, accordingly, will be treated as a party to
this Agreement for purposes of the rights and remedies relating to enforcement
of such covenants and agreements and will be entitled to enforce any such rights
and exercise any such remedies directly against the Parent Corporation and the
Surviving Corporation.
Section 9.11 Entire Agreement. This Agreement (including the
Confidentiality Agreement, the Company Disclosure Letter and the other documents
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, that may have related in any way to the subject
matter hereof.
Section 9.12 Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent
and no rule of strict construction will be applied against any party. The use of
the word "including" in this Agreement means "including without limitation" and
is intended by the parties to be by way of example rather than limitation. As
used in this Agreement, the qualification "to the Company's knowledge" and
clauses of similar effect will mean the actual knowledge by any executive
officer of the Company or of its Subsidiaries (or other officer or manager of
the Company or of its Subsidiaries if such officer or manager has primary
responsibility over the subject matter in question) of the
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existence or absence of facts which would contradict a particular representation
and warranty of the Company.
Section 9.13 Submission to Jurisdiction. Each of the parties to this
Agreement submits to the jurisdiction of any state or federal court sitting in
Alexandria, Virginia, in any action or proceeding arising out of or relating to
this Agreement, agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court, and agrees not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court. Each of the parties to this Agreement waives any defense of inconvenient
forum to the maintenance of any action or proceeding so brought and waives any
bond, surety or other security that might be required of any other party with
respect thereto.
Section 9.14 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE SCHEDULES HERETO WILL BE
GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE COMMONWEALTH
OF VIRGINIA, EXCEPT THE DELAWARE ACT SHALL GOVERN THE CORPORATE MERGER
PROCEDURES AND EFFECT WITH RESPECT TO THE ACQUISITION CORPORATION.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first written above.
GENERAL DYNAMICS CORPORATION
By: /s/ Nicholas D. Chabraja
---------------------------------------
Nicholas D. Chabraja
Chairman and Chief Executive Officer
MARS ACQUISITION CORPORATION
By: /s/ Arthur J. Veith
---------------------------------------
Arthur J. Veitch
President
PRIMEX TECHNOLOGIES, INC.
By: /s/ James G. Hascall
---------------------------------------
James G. Hascall
Chairman and Chief Executive Officer
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