\n 3<\/p>\nSECTION 6.10. Directors……………………………………………………………………..46
\nSECTION 6.11. Rights Agreement;
\n Consequences if Rights Triggered…………………………………….47
\nSECTION 6.12. Shareholder Litigation………………………………………………………….48
\nSECTION 6.13. Charitable Giving………………………………………………………………48
\nSECTION 6.14. Employment Matters……………………………………………………………..48<\/p>\n
ARTICLE VII<\/p>\n
CONDITIONS PRECEDENT<\/p>\n
SECTION 7.01. Conditions to Each Party’s Obligation to
\n Effect the Merger………………………………………………….48<\/p>\n
ARTICLE VIII<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
SECTION 8.01. Termination……………………………………………………………………49
\nSECTION 8.02. Effect of Termination…………………………………………………………..51
\nSECTION 8.03. Amendment……………………………………………………………………..51
\nSECTION 8.04. Extension; Waiver………………………………………………………………51
\nSECTION 8.05. Procedure for Termination, Amendment,
\n Extension or Waiver………………………………………………..51<\/p>\n
ARTICLE IX<\/p>\n
GENERAL PROVISIONS<\/p>\n
SECTION 9.01. Nonsurvival of Representations
\n and Warranties…………………………………………………….53
\nSECTION 9.02. Notices……………………………………………………………………….53
\nSECTION 9.03. Definitions……………………………………………………………………54
\nSECTION 9.04. Interpretation; Disclosure Letter………………………………………………..56
\nSECTION 9.05. Severability…………………………………………………………………..56
\nSECTION 9.06. Counterparts…………………………………………………………………..57
\nSECTION 9.07. Entire Agreement;
\n No Third-Party Beneficiaries………………………………………..57
\nSECTION 9.08. Governing Law………………………………………………………………….57
\nSECTION 9.09. Assignment…………………………………………………………………….57
\nSECTION 9.10. Enforcement……………………………………………………………………57
\n<\/c><\/c><\/s><\/table>\n
EXHIBIT A – Conditions of the Offer<\/p>\n
AGREEMENT AND PLAN OF MERGER dated as of
\n January 28, 2002, among WEYERHAEUSER COMPANY, a
\n Washington corporation (“PARENT”), COMPANY HOLDINGS,
\n INC., a Washington corporation (“SUB”), and a direct
\n wholly owned subsidiary of Parent, and WILLAMETTE
\n INDUSTRIES, INC., an Oregon corporation (the
\n “COMPANY”).<\/p>\n
WHEREAS Sub has outstanding an offer (the “EXISTING OFFER”,
\nand, as amended from time to time in accordance with this Agreement, the
\n“OFFER”) to purchase all the outstanding shares of common stock, par value $0.50
\nper share, of the Company (the “COMPANY COMMON STOCK”), including the associated
\nCompany Rights (as defined in Section 3.03), on the terms and subject to the
\nconditions set forth in the Offer to Purchase dated November 29, 2000 (as
\nsupplemented by the Supplement to the Offer to Purchase dated May 7, 2001), and
\nin the related letter of transmittal;<\/p>\n
WHEREAS the board of directors of the Company (the “COMPANY
\nBOARD”) has approved the acquisition of the Company by Parent and resolved and
\nagreed to recommend that holders of Company Common Stock tender their shares of
\nCompany Common Stock pursuant to the Offer;<\/p>\n
WHEREAS, in furtherance of such transaction, the respective
\nBoards of Directors of Parent, Sub and the Company have approved the merger (the
\n“MERGER”) of Sub into the Company on the terms and subject to the conditions set
\nforth in this Agreement, whereby each issued share of Company Common Stock not
\nowned directly by Parent, Sub or the Company (other than Dissent Shares (as
\ndefined in Section 2.01(d))) shall be converted into the right to receive the
\nper share consideration paid pursuant to the Offer; and<\/p>\n
WHEREAS Parent, Sub and the Company desire to make certain
\nrepresentations, warranties, covenants and agreements in connection with the
\nOffer and the Merger and also to prescribe various conditions to the Offer and
\nthe Merger.<\/p>\n
2<\/p>\n
NOW, THEREFORE, the parties hereto agree as follows:<\/p>\n
ARTICLE I<\/p>\n
THE OFFER AND MERGER<\/p>\n
SECTION 1.01. THE OFFER. (a) Subject to the conditions of this
\nAgreement, as promptly as practicable after the date of this Agreement, Sub
\nshall, and Parent shall cause Sub to, amend the Existing Offer to reflect the
\nterms and conditions of this Agreement, including the purchase price of $55.50
\nper share of Company Common Stock (and associated Right), net to the seller in
\ncash, without interest thereon (the “OFFER PRICE”), and to set February 8, 2002
\n(the “INITIAL EXPIRATION DATE”), as the expiration date for the Offer. The
\nobligations of Sub to, and of Parent to cause Sub to, accept for payment, and
\npay for, any shares of Company Common Stock tendered pursuant to the Offer are
\nsubject only to the satisfaction or waiver by Sub of the conditions set forth in
\nExhibit A. Sub expressly reserves the right to waive any condition to the Offer
\nor modify the terms of the Offer, except that, without the consent of the
\nCompany, Sub shall not (i) reduce the number of shares of Company Common Stock
\nsubject to the Offer, (ii) reduce the Offer Price, (iii) waive or change the
\nMinimum Tender Condition (as defined in Exhibit A), (iv) add to the conditions
\nset forth in Exhibit A, modify any condition set forth in Exhibit A or amend any
\nterm of the Offer set forth in this Agreement, in each case, in any manner
\nadverse to the holders of Company Common Stock, (v) extend the Offer or (vi)
\nchange the form of consideration payable in the Offer (other than by adding
\nconsideration). Notwithstanding the foregoing, Sub (i) shall extend the Offer,
\nif at the scheduled expiration date of the Offer any of the conditions set forth
\nin Exhibit A (other than the Minimum Tender Condition or condition (c), (d) or
\n(g)) to Sub’s obligation to purchase shares of Company Common Stock are not
\nsatisfied, until such time as such conditions are satisfied or waived but in no
\nevent later than March 29, 2002, and (ii) may, without the consent of the
\nCompany, extend the Offer (x) for any period required by any rule, regulation,
\ninterpretation or position of the Securities and Exchange Commission (the “SEC”)
\nor the staff thereof applicable to the Offer or (y) if at the scheduled
\nexpiration date of the Offer any of the Minimum Condition or condition (c), (d)
\nor (g) set forth in Exhibit A to Sub’s obligation to purchase shares of Company
\nCommon Stock are not satisfied until such time as such conditions are satisfied
\nor waived. In addition, if, at the scheduled or extended expiration date<\/p>\n
3<\/p>\n
of the Offer, all the conditions to the Offer have been satisfied or waived but
\nthe Company Common Stock tendered and not withdrawn pursuant to the Offer
\nconstitutes less than 90 percent of the outstanding Company Common Stock,
\nwithout the consent of the Company, Sub shall (subject to applicable law) have
\nthe right to provide for a “subsequent offering period” (as contemplated by Rule
\n14d-11 under the Securities Exchange Act of 1934, as amended (the “EXCHANGE
\nACT”)), for up to 20 business days after Sub’s acceptance for payment of the
\nshares of Company Common Stock then tendered and not withdrawn pursuant to the
\nOffer. On the terms and subject to the conditions of the Offer and this
\nAgreement, Sub shall, and Parent shall cause Sub to, pay for all shares of
\nCompany Common Stock validly tendered and not withdrawn pursuant to the Offer
\nthat Sub becomes obligated to purchase pursuant to the Offer as soon as
\npracticable after the expiration of the Offer or (in the case of shares tendered
\nduring any subsequent offering period) as soon as practicable following the
\nvalid tender thereof.<\/p>\n
(b) As promptly as practicable after the date of this
\nAgreement, Parent and Sub shall amend the Tender Offer Statement on Schedule TO
\n(the “SCHEDULE TO”) with respect to the Offer that was originally filed on
\nNovember 29, 2000, and file such amendment (the “SCHEDULE TO AMENDMENT”) with
\nthe SEC. The Schedule TO Amendment shall contain a supplement to the Offer to
\nPurchase dated November 29, 2000 (as supplemented by the Supplement to the Offer
\nto Purchase dated May 7, 2001), and a revised form of the letter of transmittal
\nand summary advertisement (such Schedule TO and the documents included therein
\npursuant to which the Offer will be made, together with any supplements or
\namendments thereto, the “OFFER DOCUMENTS”). Parent and Sub shall mail the
\nsupplement to the Offer to Purchase and revised letter of transmittal to holders
\nof shares of Company Common Stock. Each of Parent, Sub and the Company shall
\npromptly correct any information provided by it for use in the Offer Documents
\nif and to the extent that such information shall have become false or misleading
\nin any material respect, and each of Parent and Sub shall take all steps
\nnecessary to amend or supplement the Offer Documents and to cause the Offer
\nDocuments as so amended or supplemented to be filed with the SEC and to be
\ndisseminated to the Company’s shareholders, in each case as and to the extent
\nrequired by applicable federal securities laws. Parent and Sub shall provide the
\nCompany and its counsel in writing with any comments Parent, Sub or their
\ncounsel may receive after the date of this Agreement from the SEC or its staff
\nwith respect to the Offer Documents promptly after the receipt of such comments.<\/p>\n
4<\/p>\n
(c) Parent shall provide or cause to be provided to Sub on a
\ntimely basis the funds necessary to purchase any shares of Company Common Stock
\nthat Sub becomes obligated to purchase pursuant to the Offer.<\/p>\n
SECTION 1.02. COMPANY ACTIONS. (a) The Company hereby approves
\nof and consents to the Offer, the Merger and the other transactions contemplated
\nby this Agreement (collectively, the “TRANSACTIONS”).<\/p>\n
(b) On the date the Schedule TO Amendment is filed with the
\nSEC, the Company shall file with the SEC an amendment (the “SCHEDULE 14D-9
\nAMENDMENT”) to its Solicitation\/Recommendation Statement on Schedule 14D-9
\noriginally filed on December 5, 2000 with respect to the Offer, including an
\nInformation Statement (as defined in Section 3.05(b)) (such Schedule 14D-9, as
\namended from time to time, the “SCHEDULE 14D-9”), and shall mail the Schedule
\n14D-9 Amendment (including the Information Statement) to the holders of Company
\nCommon Stock. Each of the Company, Parent and Sub shall promptly correct any
\ninformation provided by it for use in the Schedule 14D-9 (including the
\nInformation Statement) if and to the extent that such information shall have
\nbecome false or misleading in any material respect, and the Company shall take
\nall steps necessary to amend or supplement the Schedule 14D-9 (including the
\nInformation Statement) and to cause the Schedule 14D-9 (including the
\nInformation Statement) as so amended or supplemented to be filed with the SEC
\nand disseminated to the Company’s shareholders, in each case as and to the
\nextent required by applicable federal securities laws. The Company shall provide
\nParent and its counsel in writing with any comments the Company or its counsel
\nmay receive after the date of this Agreement from the SEC or its staff with
\nrespect to the Schedule 14D-9 or the Information Statement promptly after the
\nreceipt of such comments.<\/p>\n
(c) In connection with the Offer, the Company shall cause its
\ntransfer agent to furnish Sub promptly with mailing labels containing the names
\nand addresses of the record holders of Company Common Stock as of a recent date
\nand of those persons becoming record holders subsequent to such date, together
\nwith copies of all lists of shareholders, security position listings and
\ncomputer files and all other information in the Company’s possession or control
\nregarding the beneficial owners of Company Common Stock, and shall furnish to
\nSub such information and assistance (including updated lists of shareholders,
\nsecurity position listings and computer files) as Parent may reasonably request
\nin communicating the Offer to the Company’s shareholders.<\/p>\n
5<\/p>\n
SECTION 1.03. THE MERGER. On the terms and subject to the
\nconditions set forth in this Agreement, and in accordance with the Oregon
\nRevised Statutes (the “ORS”) and the Revised Code of Washington (“RCW”), Sub
\nshall be merged with and into the Company at the Effective Time (as defined in
\nSection 1.05). At the Effective Time, the separate corporate existence of Sub
\nshall cease and the Company shall continue as the surviving corporation (the
\n“SURVIVING CORPORATION”). At the election of Parent, any direct wholly owned
\nsubsidiary of Parent may be substituted for Sub as a constituent corporation in
\nthe Merger. In such event, the parties shall execute an appropriate amendment to
\nthis Agreement in order to reflect the foregoing.<\/p>\n
SECTION 1.04. CLOSING. The closing (the “CLOSING”) of the
\nMerger shall take place at the offices of Cravath, Swaine & Moore, 825 Eighth
\nAvenue, New York, New York 10019 at 10:00 a.m. on the second business day
\nfollowing the satisfaction (or, to the extent permitted by applicable Law (as
\ndefined in Section 3.05), waiver by all parties) of the conditions set forth in
\nSection 7.01, or at such other place, time and date as shall be agreed in
\nwriting between Parent and the Company. The date on which the Closing occurs is
\nreferred to in this Agreement as the “CLOSING DATE”.<\/p>\n
SECTION 1.05. EFFECTIVE TIME. Subject to the provisions of
\nthis Agreement, the parties shall file with the Secretary of State of the State
\nof Oregon and the Secretary of State of the State of Washington, articles of
\nmerger or other appropriate documents (in each such case, “ARTICLES OF MERGER”)
\nexecuted in accordance with the relevant provisions of the ORS and the RCW, as
\nthe case may be, and shall make all other filings or recordings required under
\nthe ORS and the RCW. The Merger shall become effective at such time as the
\napplicable Articles of Merger are duly filed with the Secretary of State of the
\nState of Oregon and the Secretary of State of the State of Washington, or at
\nsuch other time as Parent and the Company shall agree and specify in the
\nArticles of Merger (the time the Merger becomes effective being the “EFFECTIVE
\nTIME”).<\/p>\n
SECTION 1.06. EFFECTS. The Merger shall have the effects set
\nforth in Section 60.497 of the ORS and Section 23B.11.060 of the RCW.<\/p>\n
SECTION 1.07. ARTICLES OF INCORPORATION AND BY- LAWS. (a) The
\nArticles of Incorporation of the Company at the Effective Time shall be the
\nArticles of Incorporation of the Surviving Corporation until thereafter changed
\nor amended as provided therein or by applicable Law.<\/p>\n
6<\/p>\n
(b) The By-laws of the Company as in effect immediately prior
\nto the Effective Time shall be the By-laws of the Surviving Corporation until
\nthereafter changed or amended as provided therein or by applicable Law.<\/p>\n
SECTION 1.08. DIRECTORS. The directors of Sub immediately
\nprior to the Effective Time shall be the directors of the Surviving Corporation,
\nuntil the earlier of their resignation or removal or until their respective
\nsuccessors are duly elected and qualified, as the case may be.<\/p>\n
SECTION 1.09. OFFICERS. The officers of the Company
\nimmediately prior to the Effective Time shall be the officers of the Surviving
\nCorporation, until the earlier of their resignation or removal or until their
\nrespective successors are duly elected or appointed and qualified, as the case
\nmay be.<\/p>\n
ARTICLE II<\/p>\n
EFFECT ON THE CAPITAL STOCK OF THE
\n CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES<\/p>\n
SECTION 2.01. EFFECT ON CAPITAL STOCK. At the Effective Time,
\nby virtue of the Merger and without any action on the part of the holder of any
\nshares of Company Common Stock or any shares of capital stock of Sub:<\/p>\n
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of
\ncapital stock of Sub shall be converted into and become one fully paid and
\nnonassessable share of common stock, par value $0.50 per share, of the Surviving
\nCorporation.<\/p>\n
(b) CANCELLATION OF COMPANY-OWNED STOCK AND PARENT-OWNED
\nSTOCK. Each share of Company Common Stock that is held by the Company, Parent or
\nSub shall no longer be outstanding and shall automatically be canceled and
\nretired and shall cease to exist, and no consideration shall be delivered or
\ndeliverable in exchange therefor.<\/p>\n
(c) CONVERSION OF COMPANY COMMON STOCK. Subject to Sections
\n2.01(b) and 2.01(d), each issued and outstanding share of Company Common Stock
\nshall be converted into the right to receive the Offer Price in cash. The cash
\npayable upon the conversion of shares of Company Common Stock pursuant to this
\nSection 2.01(c) is referred to collectively as the “MERGER CONSIDERATION”. As of
\nthe Effective Time, all such shares of Company Common Stock shall no longer be<\/p>\n
7<\/p>\n
outstanding and shall automatically be canceled and retired and shall cease to
\nexist, and each holder of a certificate representing any such shares of Company
\nCommon Stock shall cease to have any rights with respect thereto, except the
\nright to receive Merger Consideration upon surrender of such certificate in
\naccordance with Section 2.02, without interest.<\/p>\n
(d) DISSENT RIGHTS. Notwithstanding anything in this Agreement
\nto the contrary, shares (“DISSENT SHARES”) of Company Common Stock that are
\noutstanding immediately prior to the Effective Time and that are held by any
\nperson who is entitled to demand and properly demands payment of the fair value
\nof such Dissent Shares pursuant to, and who complies in all respects with,
\nSection 60.551 et seq. of the ORS shall not be converted into Merger
\nConsideration as provided in Section 2.01(c), but rather the holders of Dissent
\nShares shall be entitled to payment of the fair value of such Dissent Shares in
\naccordance with Section 60.551 et seq. of the ORS; PROVIDED, HOWEVER, that if
\nany such holder shall fail to perfect or otherwise shall waive, withdraw or lose
\nthe right to receive payment of fair value under Section 60.551 et seq. of the
\nORS, then the right of such holder to be paid the fair value of such holder’s
\nDissent Shares shall cease and such Dissent Shares shall be deemed to have been
\nconverted as of the Effective Time into, and to have become exchangeable solely
\nfor the right to receive, Merger Consideration as provided in Section 2.01(c).
\nThe Company shall serve prompt notice to Parent of any demands received by the
\nCompany for payment of fair value in respect of any shares of Company Common
\nStock, and Parent shall have the right to participate in and direct all
\nnegotiations and proceedings with respect to such demands. Prior to the
\nEffective Time, the Company shall not, without the prior written consent of
\nParent, make any payment with respect to, or settle or offer to settle, any such
\ndemands, or agree to do any of the foregoing.<\/p>\n
SECTION 2.02. EXCHANGE OF CERTIFICATES. (a) PAYING AGENT.
\nMellon Investor Services LLC shall act as paying agent (the “PAYING AGENT”) for
\nthe payment of the Merger Consideration upon surrender of certificates repre
\nsenting Company Common Stock. Parent shall take all steps necessary to enable
\nand cause the Surviving Corporation to provide to the Paying Agent on a timely
\nbasis, as and when needed after the Effective Time, cash necessary to pay for
\nthe shares of Company Common Stock converted into the right to receive cash
\npursuant to Section 2.01(c) (such cash being hereinafter referred to as the
\n“EXCHANGE FUND”).<\/p>\n
8<\/p>\n
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable
\nafter the Effective Time, the Paying Agent shall mail to each holder of record
\nof a certificate or certificates (the “CERTIFICATES”) that immediately prior to
\nthe Effective Time represented outstanding shares of Company Common Stock whose
\nshares were converted into the right to receive Merger Consideration pursuant to
\nSection 2.01, (i) a letter of transmittal (which shall specify that delivery
\nshall be effected, and risk of loss and title to the Certificates shall pass,
\nonly upon delivery of the Certificates to the Paying Agent and shall be in such
\nform and have such other provisions as Parent may reasonably specify) and (ii)
\ninstructions for use in effecting the surrender of the Certificates in exchange
\nfor Merger Consideration. Upon surrender of a Certificate for cancellation to
\nthe Paying Agent or to such other agent or agents as may be appointed by Parent,
\ntogether with such letter of transmittal, duly executed, and such other
\ndocuments as may reasonably be required by the Paying Agent, the holder of such
\nCertificate shall be entitled to receive in exchange therefor the amount of cash
\ninto which the shares of Company Common Stock theretofore represented by such
\nCertificate shall have been converted pursuant to Section 2.01, and the
\nCertificate so surrendered shall forthwith be canceled. In the event of a
\ntransfer of ownership of Company Common Stock that is not registered in the
\ntransfer records of the Company, payment may be made to a person other than the
\nperson in whose name the Certificate so surrendered is registered if such
\nCertificate shall be properly endorsed or otherwise be in proper form for
\ntransfer and the person requesting such payment shall pay any transfer or other
\ntaxes required by reason of the payment to a person other than the registered
\nholder of such Certificate or establish to the satisfaction of Parent that such
\ntax has been paid or is not applicable. Until surrendered as contemplated by
\nthis Section 2.02, each Certificate shall be deemed at any time after the
\nEffective Time to represent only the right to receive upon such surrender Merger
\nConsideration as contemplated by this Section 2.02.<\/p>\n
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. The
\nMerger Consideration paid in accordance with the terms of this Article II upon
\nconversion of any shares of Company Common Stock shall be deemed to have been
\nissued in full satisfaction of all rights pertaining to such shares of Company
\nCommon Stock, SUBJECT, HOWEVER, to the Surviving Corporation’s obligation to pay
\nany dividends or make any other distributions with a record date prior to the
\nEffective Time that may have been declared or made by the Company on such shares
\nof Company Common Stock in accordance<\/p>\n
9<\/p>\n
with the terms of this Agreement or prior to the date of this Agreement and
\nwhich remain unpaid at the Effective Time, and after the Effective Time there
\nshall be no further registration of transfers on the stock transfer books of the
\nSurviving Corporation of shares of Company Common Stock that were outstanding
\nimmediately prior to the Effective Time. If, after the Effective Time, any
\ncertificates formerly representing shares of Company Common Stock are presented
\nto the Surviving Corporation or the Paying Agent for any reason, they shall be
\ncanceled and exchanged as provided in this Article II.<\/p>\n
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
\nFund that remains undistributed to the holders of Company Common Stock for
\ntwelve months after the Effective Time shall be delivered to Parent, upon
\ndemand, and any holder of Company Common Stock who has not theretofore complied
\nwith this Article II shall thereafter look only to Parent for payment of its
\nclaim for Merger Consideration.<\/p>\n
(e) NO LIABILITY. None of Parent, Sub, the Company or the
\nPaying Agent shall be liable to any person in respect of any cash from the
\nExchange Fund delivered to a public official pursuant to any applicable
\nabandoned property, escheat or similar Law. If any Certificate has not been
\nsurrendered prior to five years after the Effective Time (or immediately prior
\nto such earlier date on which Merger Consideration in respect of such
\nCertificate would otherwise escheat to or become the property of any
\nGovernmental Entity (as defined in Section 3.05(b)), any such shares, cash,
\ndividends or distributions in respect of such Certificate shall, to the extent
\npermitted by applicable Law, become the property of the Surviving Corporation,
\nfree and clear of all claims or interest of any person previously entitled
\nthereto.<\/p>\n
(f) INVESTMENT OF EXCHANGE FUND. The Paying Agent shall invest
\nany cash included in the Exchange Fund, as directed by Parent, on a daily basis;
\nPROVIDED, HOWEVER, that such investments shall be in obligations of or
\nguaranteed by the United States of America, in commercial paper obligations
\nrated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively, or in certificates of deposit, bank repurchase
\nagreements or banker’s acceptances of commercial banks with capital exceeding
\n$500 million. Any interest and other income resulting from such investments
\nshall be paid to Parent.<\/p>\n
10<\/p>\n
(g) WITHHOLDING RIGHTS. Parent and the Surviving Corporation
\nshall be entitled to deduct and withhold from the consideration otherwise
\npayable to any holder of Company Common Stock pursuant to this Agreement such
\namounts as may be required to be deducted and withheld with respect to the
\nmaking of such payment under the Code (as defined in Section 3.09), or under any
\nprovision of state, local or foreign tax Law. To the extent that amounts are so
\nwithheld by Parent or the Surviving Corporation and paid over to the appropriate
\ntaxing authority, such withheld amounts will be treated for all purposes of this
\nAgreement as having been paid to the holder of Company Common Stock in respect
\nof which such deduction and withholding was paid by Parent or the Surviving
\nCorporation.<\/p>\n
ARTICLE III<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company represents and warrants to Parent and Sub as
\nfollows:<\/p>\n
SECTION 3.01. ORGANIZATION, STANDING AND POWER. Each of the
\nCompany and each of its subsidiaries (the “COMPANY SUBSIDIARIES”) is duly
\norganized, validly existing and in good standing under the laws of the
\njurisdiction in which it is organized and has full corporate power and authority
\nand possesses all governmental franchises, licenses, permits, authorizations and
\napprovals necessary to enable it to own, lease or otherwise hold its properties
\nand assets and to conduct its businesses as presently conducted, except for
\nfailures which, individually or in the aggregate, have not had and would not
\nreasonably be expected to have a material adverse effect on the Company or a
\nmaterial adverse effect on the ability of the Company to consummate the Merger
\nand the other Transactions (together, a “COMPANY MATERIAL ADVERSE EFFECT”). The
\nCompany and each Company Subsidiary is duly qualified or licensed to do business
\nin each jurisdiction where the nature of its business or its ownership or
\nleasing of its properties make such qualification or licensing necessary or the
\nfailure to so qualify or be licensed has had or would reasonably be expected to
\nhave a Company Material Adverse Effect. The Company has delivered to Parent true
\nand complete copies of the restated articles of incorporation of the Company, as
\namended to the date of this Agreement (as so amended, the “COMPANY CHARTER”),
\nand the By-laws of the Company, as amended to the date of this Agreement (as so
\namended, the “COMPANY BY-LAWS”), and the comparable charter and<\/p>\n
11<\/p>\n
organizational documents of each Company Subsidiary, in each case as amended
\nthrough the date of this Agreement.<\/p>\n
SECTION 3.02. COMPANY SUBSIDIARIES; EQUITY INTERESTS. (a) The
\nletter, dated as of the date of this Agreement, from the Company to Parent and
\nSub (the “COMPANY DISCLOSURE LETTER”) lists each Company Subsidiary and its
\njurisdiction of organization. All the outstanding shares of capital stock of
\neach Company Subsidiary have been validly issued and are fully paid and
\nnonassessable and, except as set forth in the Company Disclosure Letter, are
\nowned by the Company, by another Company Subsidiary or by the Company and
\nanother Company Subsidiary, free and clear of all pledges, liens, charges,
\nmortgages, encumbrances and security interests of any kind or nature whatsoever
\n(collectively, “LIENS”), except for such Liens as have not had and would not
\nreasonably be expected to have a Company Material Adverse Effect.<\/p>\n
(b) Except for its interests in the Company Subsidiaries and
\nexcept for the ownership interests set forth in the Company Disclosure Letter,
\nthe Company does not own, directly or indirectly, any capital stock, membership
\ninterest, partnership interest, joint venture interest or other equity interest
\nin any person other than any such capital stock or other interests with a
\ncurrent book value, in the aggregate, not in excess of $1,000,000.<\/p>\n
SECTION 3.03. CAPITAL STRUCTURE. The authorized capital stock
\nof the Company consists of 150,000,000 shares of Company Common Stock and
\n5,000,000 shares of preferred stock, par value $0.50 per share (“COMPANY
\nPREFERRED STOCK” and, together with the Company Common Stock, the “COMPANY
\nCAPITAL STOCK”). At the close of business on January 23, 2002, (i) 110,171,443
\nshares of Company Common Stock were issued and outstanding, (ii) 3,986,801
\nshares of Company Common Stock were subject to outstanding Company Employee
\nStock Options (as defined in Section 6.04(e)), (iii) 1,842,942 additional shares
\nof Company Common Stock were reserved for issuance pursuant to the Company Stock
\nPlans (as defined in Section 6.04(e)), (iv) 5,000,000 shares of Company
\nPreferred Stock were reserved for issuance in connection with the rights (the
\n“COMPANY RIGHTS”) issued pursuant to the Rights Agreement dated as of February
\n25, 2000 (as amended from time to time, the “COMPANY RIGHTS AGREEMENT”), between
\nthe Company and Mellon Investor Services LLC (formerly known as ChaseMellon
\nShareholder Services, L.L.C.), as Rights Agent, and (v) 76,910 stock
\nappreciation rights linked to the price of Company Common Stock and granted
\nunder a Company Stock Plan, but not in tandem with any Company Employee Stock
\nOption (each, a<\/p>\n
12<\/p>\n
“COMPANY NON-TANDEM SAR”), were outstanding. Except as set forth above, at the
\nclose of business on January 23, 2002, no restricted shares or other shares of
\ncapital stock or other voting securities of the Company were issued, reserved
\nfor issuance or outstanding. Except as set forth in the Company Disclosure
\nLetter, between January 23, 2002 and the date of this Agreement, the Company has
\nnot issued any shares of Company Capital Stock (other than shares of Company
\nCommon Stock issued upon exercise of Company Employee Stock Options) or granted
\nor agreed to grant any options to purchase Company Common Stock. All outstanding
\nshares of Company Capital Stock are, and all such shares that may be issued
\nprior to the Effective Time will be when issued, duly authorized, validly
\nissued, fully paid and nonassessable and not subject to or issued in violation
\nof any purchase option, call option, right of first refusal, preemptive right,
\nsubscription right or any similar right under any provision of the ORS, the
\nCompany Charter, the Company By-laws or any Contract (as defined in Section
\n3.05(a)) to which the Company is a party or otherwise bound. There are not any
\nbonds, debentures, notes or other indebtedness of the Company having the right
\nto vote (or convertible into, or exchangeable for, securities having the right
\nto vote) on any matters on which holders of Company Common Stock may vote
\n(“VOTING COMPANY DEBT”). Except as set forth above, as of the date of this
\nAgreement, there are not any options, warrants, rights, convertible or
\nexchangeable securities, “phantom” stock, “phantom” stock rights, stock
\nappreciation rights, stock-based performance units, commitments, Contracts,
\narrangements or undertakings of any kind to which the Company or any Company
\nSubsidiary is a party or by which any of them is bound (i) obligating the
\nCompany or any Company Subsidiary to issue, deliver or sell, or cause to be
\nissued, delivered or sold, additional shares of capital stock or other equity
\ninterests in, or any security convertible or exercisable for or exchangeable
\ninto any capital stock of or other equity interest in, the Company or of any
\nCompany Subsidiary or any Voting Company Debt (or to make any payment based on
\nthe value of any equity interest in the Company or in any Company Subsidiary) or
\n(ii) obligating the Company or any Company Subsidiary to issue, grant, extend or
\nenter into any such option, warrant, call, right, security, commitment,
\nContract, arrangement or undertaking. As of the date of this Agreement, there
\nare not any outstanding contractual obligations of the Company or any Company
\nSubsidiary to repurchase, redeem or otherwise acquire any shares of capital
\nstock of the Company or any Company Subsidiary. The Company has delivered to
\nParent a complete and correct copy of the Company Rights Agreement, as amended
\nto the date of this Agreement.<\/p>\n
13<\/p>\n
SECTION 3.04. AUTHORITY; EXECUTION AND DELIVERY;
\nENFORCEABILITY. (a) The Company has all requisite corporate power and authority
\nto execute and deliver this Agreement and to consummate the Transactions. The
\nexecution and delivery by the Company of this Agreement and the consummation by
\nthe Company of the Transactions have been duly authorized by all necessary
\ncorporate action on the part of the Company, subject, in the case of the Merger,
\nto receipt of the Company Shareholder Approval (as defined in Section 3.04(c)).
\nThe Company has duly executed and delivered this Agreement, and, assuming the
\ndue authorization, execution and delivery hereof by Parent and Sub, this
\nAgreement constitutes its legal, valid and binding obligation, enforceable
\nagainst it in accordance with its terms, subject to the effects of bankruptcy,
\ninsolvency, fraudulent conveyance, reorganization, moratorium and other similar
\nlaws relating to or affecting creditors’ rights generally, general equitable
\nprinciples (whether considered in a proceeding in equity or at law) and an
\nimplied covenant of good faith and fair dealing.<\/p>\n
(b) The Company Board, at a meeting duly called and held duly
\nand unanimously adopted resolutions (i) approving this Agreement, the Offer, the
\nMerger and the other Transactions, (ii) determining that the terms of the Offer,
\nthe Merger and the other Transactions are fair to and in the best interests of
\nthe Company and its shareholders, (iii) recommending that the holders of Company
\nCommon Stock accept the Offer and tender their shares of Company Common Stock
\npursuant to the Offer (the “COMPANY RECOMMENDATION”), (iv) recommending that the
\nCompany’s shareholders approve this Agreement, (v) adopting a plan of merger
\nrelating to the Merger as required by the ORS and (vi) directing that such plan
\nof merger be submitted for approval by the Company’s shareholders. In addition,
\nthe Company Board has taken all action necessary to render (x) (i) Sections
\n60.801 to 60.816 of the ORS and (ii) if applicable, Article VI of the Company
\nCharter inapplicable (A) to Parent and Sub and (B) to the Offer, the Merger and
\nthe other Transactions and (y) Sections 60.825 to 60.845 of the ORS inapplicable
\nto the Offer, the Merger and the other Transactions. To the Company’s knowledge,
\nno other state takeover statute or similar statute or regulation applies or
\npurports to apply to the Company with respect to this Agreement, the Offer, the
\nMerger or any other Transaction. Unless otherwise required by its fiduciary
\nduties (as determined in good faith by a majority of its members after
\nconsultation with outside legal counsel to the Company) the Company Board shall
\nnot amend, modify, withdraw, condition or qualify the Company Recommendation in
\na manner adverse to Parent or Sub.<\/p>\n
14<\/p>\n
(c) Unless the Merger can be effected pursuant to Section
\n60.491 of the ORS (in which case no approval of holders of any class or series
\nof Company Capital Stock is required), the only vote of holders of any class or
\nseries of Company Capital Stock necessary to approve and adopt this Agreement
\nand the Merger is the approval of this Agreement by the holders of shares of
\nCompany Common Stock representing a majority of all the votes entitled to be
\ncast thereon (the “COMPANY SHAREHOLDER APPROVAL”). The affirmative vote of the
\nholders of Company Capital Stock, or any of them, is not necessary to consummate
\nany Transaction (including the Offer) other than the Merger.<\/p>\n
(d) The members of the Company Board have advised the Company
\nthat they intend to tender all shares of Company Common Stock owned by them into
\nthe Offer, except for (i) the tender of shares of Company Common Stock that
\nwould subject a member of the Company Board to liability under Section 16(b)
\nunder the Exchange Act and (ii) shares of Company Common Stock which, or with
\nrespect to which, any such member of the Company Board acts in a fiduciary or
\nrepresentative capacity or is subject to the instructions of a third party with
\nrespect to such tender.<\/p>\n
SECTION 3.05. NO CONFLICTS; CONSENTS. (a) The execution and
\ndelivery by the Company of this Agreement do not, and the consummation of the
\nOffer, the Merger and the other Transactions and compliance with the terms
\nhereof will not, conflict with, or result in any violation of or default (with
\nor without notice or lapse of time, or both) under, or give rise to a right of
\ntermination, cancelation or acceleration of any material obligation or to loss
\nof a material benefit under, or result in the creation of any Lien upon any of
\nthe properties or assets of the Company or any Company Subsidiary under, any
\nprovision of (i) the Company Charter, the Company By-laws or the comparable
\ncharter or organizational documents of any Company Subsidiary, (ii) any
\ncontract, lease, license, indenture, note, bond, agreement, permit, concession,
\nfranchise or other instrument (a “CONTRACT”) to which the Company or any Company
\nSubsidiary is a party or by which any of their respective properties or assets
\nis bound or (iii) subject to the filings and other matters referred to in
\nSection 3.05(b), any judgment, order or decree (“JUDGMENT”) or statute, law,
\nordinance, rule or regulation (“LAW”) applicable to the Company or any Company
\nSubsidiary or their respective properties or assets, other than, in the case of
\nclauses (ii) and (iii) above, any such items that, individually or in the
\naggregate, have not had and would not reasonably be expected to have a Company
\nMaterial Adverse Effect.<\/p>\n
15<\/p>\n
(b) No consent, approval, license, permit, order or
\nauthorization (“CONSENT”) of, or registration, declaration or filing with, or
\npermit from, any federal, state, local or foreign government or any court of
\ncompetent jurisdiction, administrative agency or commission or other
\ngovernmental authority or instrumentality, domestic or foreign (a “GOVERNMENTAL
\nENTITY”), is necessary for the execution, delivery and performance of this
\nAgreement or the consummation of the Transactions by the Company or any Company
\nSubsidiary, other than (i) the filing with the SEC of (A) the Schedule 14D-9
\nAmendment, (B) a proxy or information statement relating to the approval of this
\nAgreement by the Company’s shareholders (the “PROXY STATEMENT”), (C) any
\ninformation statement (the “INFORMATION STATEMENT”) required to be filed in
\nconnection with the Offer pursuant to Rule 14f-1 of the Exchange Act, and (D)
\nsuch reports under Section 13(a) of the Exchange Act as may be required in
\nconnection with this Agreement, the Offer, the Merger and the other
\nTransactions, (ii) the filing of Articles of Merger with the Secretary of State
\nof the State of Oregon and the Secretary of State of the State of Washington and
\nappropriate documents with the relevant authorities of the other jurisdictions
\nin which the Company is qualified to do business, (iii) compliance with and such
\nfilings as may be required under applicable Environmental Laws (as defined in
\nSection 3.13(d)), (iv) such filings as may be required in connection with the
\ntaxes described in Section 6.09, (v) compliance with the rules and regulations
\nof the New York Stock Exchange and (vi) such other items (A) that may be
\nrequired under the applicable Law of any foreign country, (B) required solely by
\nreason of the participation of Parent or Sub (as opposed to any third party) in
\nthe Transactions, (C) that, individually or in the aggregate, have not had and
\nwould not reasonably be expected to have a Company Material Adverse Effect or
\n(D) as are set forth in the Company Disclosure Letter.<\/p>\n
(c) The Company and the Company Board have taken all action
\nnecessary to (i) render the Company Rights inapplicable to this Agreement, the
\nOffer, the Merger and the other Transactions and (ii) ensure that (A) neither
\nParent nor any of its affiliates or associates is or will become an “Acquiring
\nPerson” (as defined in the Company Rights Agreement) by reason of this
\nAgreement, the Offer, the Merger or any other Transaction, (B) a “Distribution
\nDate” or a “Shares Acquisition Date” (each as defined in the Company Rights
\nAgreement) shall not occur by reason of this Agreement, the Offer, the Merger or
\nany other Transaction and (C) the Company Rights shall expire immediately prior
\nto the Effective Time.<\/p>\n
16<\/p>\n
SECTION 3.06. SEC DOCUMENTS; UNDISCLOSED LIABILITIES. The
\nCompany has filed all reports, schedules, forms, statements and other documents
\nrequired to be filed by the Company with the SEC since January 1, 2000 (the
\n“COMPANY SEC DOCUMENTS”). As of its respective date, each Company SEC Document
\ncomplied in all material respects with the applicable requirements of the
\nExchange Act or the Securities Act of 1933, as amended (the “SECURITIES ACT”),
\nas the case may be, and the rules and regulations of the SEC promulgated
\nthereunder applicable to such Company SEC Document, each as in effect on the
\ndate so filed, and did not contain any untrue statement of a material fact or
\nomit to state a material fact required to be stated therein or necessary in
\norder to make the statements therein, in light of the circumstances under which
\nthey were made, not misleading. Except to the extent that information contained
\nin any Company SEC Document has been revised or superseded by a later filed
\nCompany SEC Document, none of the Company SEC Documents contains any untrue
\nstatement of a material fact or omits to state any material fact required to be
\nstated therein or necessary in order to make the statements therein, in light of
\nthe circumstances under which they were made, not misleading. The consolidated
\nfinancial statements of the Company included in the Company SEC Documents comply
\nas to form in all material respects with applicable account ing requirements and
\nthe published rules and regulations of the SEC with respect thereto, have been
\nprepared in accordance with generally accepted accounting principles (“GAAP”)
\n(except, in the case of unaudited statements, as permitted by Form 10-Q of the
\nSEC) applied on a consistent basis during the periods involved (except as
\notherwise stated in such financial statements) and fairly present the
\nconsolidated financial position of the Company and its consolidated subsidiaries
\nas of the dates thereof and the consolidated results of their operations and
\ncash flows for the periods then ended (subject, in the case of unaudited
\nstatements, to normal year-end audit adjustments). Except as set forth in the
\nFiled Company SEC Documents (as defined in Section 3.08), neither the Company
\nnor any Company Subsidiary has any liabilities or obligations of any nature
\n(whether accrued, absolute, contingent or otherwise) required by GAAP to be set
\nforth on a consolidated balance sheet of the Company and its consolidated
\nsubsidiaries or in the notes thereto and that, individually or in the aggregate,
\nwould reasonably be expected to have a Company Material Adverse Effect.<\/p>\n
SECTION 3.07. INFORMATION SUPPLIED. None of the information
\nsupplied or to be supplied by the Company expressly for inclusion or
\nincorporation by reference in (i) the Offer Documents, the Schedule 14D-9 or the<\/p>\n
17<\/p>\n
Information Statement will, at the time such document is filed with the SEC, at
\nany time it is amended or supplemented or at the time it is first published,
\nsent or given to the Company’s shareholders, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated therein
\nor necessary to make the statements therein not misleading, or (ii) the Proxy
\nStatement will, at the date it is first mailed to the Company’s shareholders or
\nat the time of the Company Shareholders Meeting (as defined in Section 6.01(b)),
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary in order to make the statements
\ntherein, in light of the circumstances under which they are made, not
\nmisleading. The Schedule 14D-9, the Information Statement and the Proxy
\nStatement will comply as to form in all material respects with the requirements
\nof the Exchange Act and the rules and regulations thereunder, except that no
\nrepresentation or warranty is made by the Company with respect to statements
\nmade or incorporated by reference therein based on information supplied by
\nParent or Sub for inclusion or incorporation by reference therein.<\/p>\n
SECTION 3.08. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
\ndisclosed in the Company SEC Documents filed pursuant to Section 13(a) of the
\nExchange Act and publicly available prior to the date of this Agreement (the
\n“FILED COMPANY SEC DOCUMENTS”) or in the Company Disclosure Letter, from the
\ndate of the most recent audited financial statements included in the Filed
\nCompany SEC Documents to the date of this Agreement, the Company has conducted
\nits business only in the ordinary course, and during such period there has not
\nbeen:<\/p>\n
(i) any event, change, effect or development that,
\n individually or in the aggregate, has had or would reasonably be
\n expected to have a Company Material Adverse Effect;<\/p>\n
(ii) any declaration, setting aside or payment of any dividend
\n or other distribution (whether in cash, stock or property) with respect
\n to any Company Capital Stock, other than regular quarterly cash
\n dividends not in excess of $0.23 per share on Company Common Stock,
\n with usual declaration, record and payment dates and in accordance with
\n the Company’s past dividend policy;<\/p>\n
(iii) any repurchase for value by the Company of any
\n Company Capital Stock;<\/p>\n
18<\/p>\n
(iv) any split, combination or reclassification of any Company
\n Capital Stock or any issuance or the authorization of any issuance of
\n any other securities in respect of, in lieu of or in substitution for
\n shares of Company Capital Stock, except for issuances of Company Common
\n Stock (and associated Company Rights) upon the exercise of Company
\n Employee Stock Options awarded prior to the date hereof in accordance
\n with their present terms or issued in compliance with Section 5.01(a);<\/p>\n
(v) (A) any granting by the Company or any Company Subsidiary
\n to any director or executive officer of the Company or any Company
\n Subsidiary of any increase in compensation, except in the ordinary
\n course of business consistent with prior practice or as was required
\n under employment agreements in effect as of the date of the most recent
\n audited financial statements included in the Filed Company SEC
\n Documents or (B) any granting by the Company or any Company Subsidiary
\n to any such director or executive officer of any increase in severance
\n or termination pay, except as was required under any employment,
\n severance or termination agreements in effect as of the date of the
\n most recent audited financial statements included in the Filed Company
\n SEC Documents;<\/p>\n
(vi) any change in accounting methods, principles or practices
\n by the Company or any Company Subsidiary materially affecting the
\n consolidated assets, liabilities or results of operations of the
\n Company, except insofar as may have been required by a change in GAAP;
\n or<\/p>\n
(vii) any material elections with respect to Taxes (as defined
\n in Section 3.09(f)) by the Company or any Company Subsidiary or
\n settlement or compromise by the Company or any Company Subsidiary of
\n any material Tax liability or refund.<\/p>\n
SECTION 3.09. TAXES. (a) Each of the Company and each Company
\nSubsidiary has timely filed, or has caused to be timely filed on its behalf, all
\nTax Returns required to be filed by it, and all such Tax Returns are true,
\ncomplete and accurate, except to the extent any failure to file or any
\ninaccuracies in any filed Tax Returns, individually or in the aggregate, have
\nnot had and would not reasonably be expected to have a Company Material Adverse
\nEffect. All material Taxes shown to be due on such Tax Returns, or otherwise
\nowed, have been, or will be, timely paid.<\/p>\n
19<\/p>\n
(b) The most recent financial statements contained in the
\nFiled Company SEC Documents reflect an adequate reserve for all Taxes payable by
\nthe Company and the Company Subsidiaries (in addition to any reserve for
\ndeferred Taxes established to reflect timing differences between book and Tax
\nitems) for all Taxable periods and portions thereof through the date of such
\nfinancial statements. No deficiency with respect to any Taxes has been proposed,
\nasserted or assessed against the Company or any Company Subsidiary, and no
\nrequests for waivers of the time to assess any such Taxes are pending, except to
\nthe extent any such deficiencies or requests for waiver, individually or in the
\naggregate, have not had and would not reasonably be expected to have a Company
\nMaterial Adverse Effect.<\/p>\n
(c) The Federal income Tax Returns of the Company and each
\nCompany Subsidiary consolidated in such Tax Returns have been examined by and
\nsettled with the United States Internal Revenue Service or have closed by virtue
\nof the applicable statute of limitations for all years through 1991.<\/p>\n
(d) There are no material Liens for Taxes (other than for
\ncurrent Taxes not yet due and payable) on the assets of the Company or any
\nCompany Subsidiary. Neither the Company nor any Company Subsidiary is bound by
\nany Tax sharing or material Tax indemnification agreement other than the
\nAgreement Allocating Federal Tax Liability, dated May 11, 1972, a copy of which
\nhas been provided to Parent.<\/p>\n
(e) Neither the Company nor any Company Subsidiary has
\nconstituted either a “distributing corporation” or a “controlled corporation” in
\na distribution of stock qualifying for tax-free treatment under Section 355 of
\nthe Code (i) in the two years prior to the date of this Agreement or (ii) in a
\ndistribution which could otherwise constitute part of a “plan” or “series of
\nrelated transactions” (within the meaning of Section 355(e) of the Internal
\nRevenue Code of 1986, as amended (the “CODE”)) in conjunction with the Merger.<\/p>\n
(f) For purposes of this Agreement:<\/p>\n
“TAXES” includes all (i) forms of taxation, whenever created
\nor imposed, and whether of the United States or elsewhere, and whether imposed
\nby a local, municipal, governmental, state, foreign, federal or other
\nGovernmental Entity, or in connection with any agreement with respect to Taxes,
\nincluding all interest, penalties and additions imposed with respect to such
\namounts,<\/p>\n
20<\/p>\n
(ii) liability for the payment of any amounts of the type described in clause
\n(i) as a result of being a member of an affiliated, consolidated, combined or
\nunitary group and (iii) liability for any Tax sharing agreement or as a result
\nof any express or implied obligation to indemnify any other person with respect
\nto the payment of any amounts of the type described in clause (i) or (ii).<\/p>\n
“TAX RETURN” means all federal, state, local, provincial and
\nforeign Tax returns, declarations, statements, reports, schedules, forms and
\ninformation returns and any amended Tax return relating to Taxes.<\/p>\n
SECTION 3.10. ABSENCE OF CHANGES IN BENEFIT PLANS. Except as
\ndisclosed in the Filed Company SEC Documents or in the Company Disclosure
\nLetter, from the date of the most recent audited financial statements included
\nin the Filed Company SEC Documents to the date of this Agreement, there has not
\nbeen any adoption or amendment in any material respect by the Company or any
\nCompany Subsidiary of any Company Benefit Plan (as defined in Section 3.11).
\nExcept as disclosed in the Filed Company SEC Documents or in the Company
\nDisclosure Letter, (i) as of the date of this Agreement there are not any
\nemployment, consulting, indemnification, personal service, change in control,
\nseverance or termination agreements or arrangements between the Company or any
\nCompany Subsidiary and any current or former employee, officer or director of,
\nor independent contractor with respect to, the Company or any Company
\nSubsidiary, nor does the Company or any Company Subsidiary have any general
\nseverance plan or policy and (ii) from the date of the most recent audited
\nfinancial statements included in the Filed Company SEC Documents, none of such
\nagreements or arrangements have been amended.<\/p>\n
SECTION 3.11. ERISA COMPLIANCE; EXCESS PARACHUTE PAYMENTS. (a)
\nThe Company Disclosure Letter contains a list of all “employee pension benefit
\nplans” (as defined in Section 3(2) of the Employee Retirement Income Security
\nAct of 1974, as amended (“ERISA”)) (sometimes referred to herein as “COMPANY
\nPENSION PLANS”), all “employee welfare benefit plans” (as defined in Section
\n3(1) of ERISA) and any severance, change in control, deferred compensation, or
\nemployment plan, program or agreement, and vacation, incentive, bonus, stock
\noption, stock purchase and restricted stock plan, program, agreement,
\narrangement or policy entered into, maintained, or contributed to, by the
\nCompany or any Company Subsidiary for the benefit of any current or former
\nemployees, officers or directors of, or independent contractor with respect to,
\nthe Company or any Company Subsidiary (or under which the Company or any<\/p>\n
21<\/p>\n
Company Subsidiary has any current potential liabilities or obligations)
\n(together with the Company Pension Plans, the “COMPANY BENEFIT PLANS”). The
\nCompany has delivered or made available to Parent complete and correct copies of
\n(i) each Company Benefit Plan (or, in the case of any unwritten Company Benefit
\nPlan, a description thereof), (ii) the most recent annual report on Form 5500
\nfiled with the Internal Revenue Service or the U.S. Department of Labor with
\nrespect to each Company Benefit Plan (if any such report was required), (iii)
\nthe most recent summary plan description for each Company Benefit Plan for which
\nsuch summary plan description is required and (iv) each trust agreement and
\ngroup annuity contract relating to any Company Benefit Plan. The Company, each
\nCompany Subsidiary, and each Company Benefit Plan and, to the knowledge of the
\nCompany, each officer of the Company or a Company Subsidiary is in substantial
\ncompliance in all material respects with all applicable provisions of any
\napplicable collective bargaining or other labor agreement, and ERISA, the Code
\nand all other applicable U.S. and non-U.S. laws, rules and regulations relating
\nto any benefits, compensation or employment matters, except where the failure to
\ncomply would not, individually or in the aggregate, reasonably be expected to
\nhave a Company Material Adverse Effect. No Company Benefit Plan is an employee
\nStock Purchase Plan which is intended to comply with the requirements of Section
\n423 of the Code.<\/p>\n
(b) Each U.S. Company Pension Plan is qualified and exempt
\nfrom Federal income taxes under Sections 401(a) and 501(a), respectively, of the
\nCode, except where the failure to be so qualified or exempt would, individually
\nor in the aggregate, reasonably be expected to have a Company Material Adverse
\nEffect. The Company has delivered or made available to Parent a complete and
\ncorrect copy of each determination letter from the Internal Revenue Service to
\nthe effect that each such Company Pension Plan is qualified and no such
\ndetermination letter has been revoked nor, to the knowledge of the Company, has
\nrevocation been threatened. Each non-U.S. Company Pension Plan that is capable
\nof formal approval or qualification by the appropriate local tax authorities has
\nobtained such approval or qualification and, to the knowledge of the Company and
\nthe Company Subsidiaries, nothing has been done or omitted to be done, and there
\nare no circumstances, which would reasonably be expected to result in the loss
\nof such approval or qualification, except where the failure to obtain, or the
\nloss of, such approval or qualification would not individually or in the
\naggregate reasonably be expected to have a Company Material Adverse Effect.<\/p>\n
22<\/p>\n
(c) None of the Company Pension Plans has an “accumulated
\nfunding deficiency” (as such term is defined in Section 302 of ERISA or Section
\n412 of the Code), whether or not waived, except where such deficiency would not,
\nindividually or in the aggregate, reasonably be expected to have a Company
\nMaterial Adverse Effect. There has not been any “reportable event” (as that term
\nis defined in Section 4043 of ERISA) with respect to any Company Benefit Plan
\nduring the last five years that would result in a liability that would have a
\nCompany Material Adverse Effect. Neither the Company nor any Company Subsidiary
\nhas incurred a “complete withdrawal” or a “partial withdrawal” (as such terms
\nare defined in Sections 4203 and 4205, respectively, of ERISA) since the
\neffective date of such Sections 4203 and 4205 with respect to any Company
\nPension Plan that is a “multiemployer plan” within the meaning of Section
\n4001(a)(3) of ERISA that would result in liability that would have a Company
\nMaterial Adverse Effect.<\/p>\n
(d) Set forth in the Company Disclosure Letter is the
\nCompany’s most recent calculation of the estimated maximum amount that could be
\npaid to each of the persons listed in the Company Disclosure Letter (including
\nall of the employees who are party to an individual agreement with the Company
\ncontaining change-in-control provisions) as a result of the Merger and the other
\nTransactions under all employment, severance and termination agreements, other
\ncompensation arrangements and Company Benefit Plans currently in effect.<\/p>\n
SECTION 3.12. LITIGATION. Except as disclosed in the Filed
\nCompany SEC Documents or in the Company Disclosure Letter, there is no suit,
\naction or proceeding pending or, to the knowledge of the Company, threatened
\nagainst the Company or any Company Subsidiary that, individually or in the
\naggregate, has had or would reasonably be expected to have a Company Material
\nAdverse Effect, nor is there any Judgment outstanding against the Company or any
\nCompany Subsidiary that has had or would reasonably be expected to have a
\nCompany Material Adverse Effect; PROVIDED, HOWEVER, that the Company makes no
\nrepresentation or warranty as to suits, actions or proceedings commenced or
\nfirst threatened after the date of this Agreement and challenging the Offer, the
\nMerger or any other Transaction.<\/p>\n
SECTION 3.13. COMPLIANCE WITH APPLICABLE LAWS. (a) Except as
\ndisclosed in the Filed Company SEC Documents or in the Company Disclosure
\nLetter, the Company and Company Subsidiaries are in compliance with all
\napplicable Laws, except for instances of noncompliance that, individually and in
\nthe aggregate, have not had and would not reasonably be<\/p>\n
23<\/p>\n
expected to have a Company Material Adverse Effect. As of the date of this
\nAgreement, except as set forth in the Filed Company SEC Documents or in the
\nCompany Disclosure Letter, neither the Company nor any Company Subsidiary has
\nreceived any written communication during the past two years from a Governmental
\nEntity that alleges that the Company or a Company Subsidiary is not in
\ncompliance in any material respect with any applicable Law, except for such
\ninstances of noncompliance that have not had and would not reasonably be
\nexpected to have a Company Material Adverse Effect. This Section 3.13(a) does
\nnot relate to matters with respect to Taxes, which are the subject of Section
\n3.09, or to matters involving Environmental Laws, which are the subject of
\nSections 3.13(b) through 3.13(d).<\/p>\n
(b) Except as disclosed in the Filed Company SEC Documents or
\nthe Company Disclosure Letter,<\/p>\n
(i) the Company and each of the Company Subsidiaries are in
\n compliance with all applicable Environmental Laws, except for instances
\n of noncompliance that, individually or in the aggregate, have not had
\n and would not reasonably be expected to have a Company Material Adverse
\n Effect, and the Company and each of the Company Subsidiaries hold, and
\n are in compliance with, all permits, licenses and other authorizations
\n required to conduct their respective businesses under Environmental
\n Laws, except for the failure to hold or comply with such permits,
\n licenses and other authorizations that, individually or in the
\n aggregate, have not had and would not reasonably be expected to have a
\n Company Material Adverse Effect;<\/p>\n
(ii) neither the Company nor any of the Company Subsidiaries
\n has (A) placed, held, located, released, transported or disposed of any
\n Hazardous Substances on, under, from or at any of the Company’s or any
\n of the Company Subsidiaries’ currently or formerly owned, leased or
\n operated properties or any other properties, other than in a manner
\n that has not had and would not reasonably be expected to have, in all
\n such cases taken individually or in the aggregate, a Company Material
\n Adverse Effect, or (B) any knowledge of the presence of any Hazardous
\n Substances on, under or at any of the Company’s or any of the Company
\n Subsidiaries’ currently or formerly owned, leased or operated
\n properties or any other property arising from the Company’s or any of
\n the Company Subsidiaries’ currently or formerly owned, leased or
\n operated properties, other than in a manner that has not had and would
\n not reasonably be expected<\/p>\n
24<\/p>\n
to have, in all such cases taken individually or in the aggregate, a
\n Company Material Adverse Effect;<\/p>\n
(iii) there are no notices of violation or any other
\n enforcement proceedings, investigations, actions, suits or claims under
\n Environmental Laws that have been asserted, or are pending or, to the
\n knowledge of the Company and the Company Subsidiaries, threatened, that
\n would reasonably be expected to result in (A) fines or penalties, (B)
\n any obligation on the part of the Company to undertake supplemental
\n environmental projects or comparable mitigative environmental measures,
\n (C) any obligation on the part of the Company to install emission or
\n pollution control devices, (D) any restrictions on operations or
\n production at any of the facilities owned, leased or operated by the
\n Company or any of the Company Subsidiaries, including the temporary or
\n permanent shutdown of any such facility, or (E) the placement of a Lien
\n upon any of the Company’s or the Company Subsidiaries’ properties, in
\n any such case that would reasonably be expected to have, individually
\n or in the aggregate, a Company Material Adverse Effect; and<\/p>\n
(iv) there are no restrictions, limitations or controls in
\n effect, pending, or, to the knowledge of the Company and the Company
\n Subsidiaries, threatened or contemplated under Environmental Laws on
\n the Company’s or any Company Subsidiary’s operations relating to
\n harvesting forest products, whether such restrictions, limitations or
\n controls are voluntary or have been imposed by any Governmental Entity,
\n except for such restrictions, limitations or controls that,
\n individually or in the aggregate, have not had and would not reasonably
\n be expected to have a Company Material Adverse Effect.<\/p>\n
(c) Except as disclosed in the Filed SEC Documents or in the
\nCompany Disclosure Letter, and except as would not reasonably be expected to
\nhave, individually or in the aggregate, a Company Material Adverse Effect, no
\nEnvironmental Law imposes any obligation upon the Company or the Company
\nSubsidiaries arising out of or as a condition to any Transaction, including any
\nrequirement to modify or transfer any permit or license, file any notice or
\nother submission with any Governmental Entity, place any notice, acknowledgment
\nor covenant in any land records, or modify or provide notice under any
\nagreement, consent order or consent decree.<\/p>\n
25<\/p>\n
(d) For purposes of this Agreement, (i) “ENVIRONMENTAL LAWS”
\nmeans any applicable Federal, state, local or foreign law, regulation, order,
\ndecree, permit, authorization, common law or legally enforceable requirement of
\nany Governmental Entity in effect as of the Closing Date relating to: (A)
\nprotection or restoration of the environment, human health (to the extent
\nrelating to the environment or exposure to Hazardous Substances) or protection
\nof or damage to natural resources and endangered species, (B) the handling, use,
\npresence, disposal, release or threatened release of any Hazardous Substance or
\n(C) noise, odor, indoor air, employee exposure to Hazardous Substances,
\npollution, contamination or any injury or threat of injury to persons or
\nproperty relating to any Hazardous Substance; and (ii) “HAZARDOUS SUBSTANCE”
\nmeans (A) any hazardous, toxic, radioactive, explosive or flammable material,
\nchemical, waste or substance or (B) any petroleum product or by-product,
\nasbestos containing material or any other material, chemical, waste or substance
\nthat is harmful to human health or the environment.<\/p>\n
SECTION 3.14. BROKERS; SCHEDULE OF FEES AND EXPENSES. No
\nbroker, investment banker, financial advisor or other person, other than
\nGoldman, Sachs & Co., the fees and expenses of which will be paid by the
\nCompany, is entitled to any broker’s, finder’s, financial advisor’s or other
\nsimilar fee or commission in connection with the Offer, the Merger and the other
\nTransactions based upon arrangements made by or on behalf of the Company. The
\nestimated fees and expenses incurred and to be incurred by the Company in
\nconnection with the Offer, the Merger, the other Transactions and any proposed
\nGP Transaction (as defined in Section 3.20) (including the fees of Goldman,
\nSachs & Co. and the fees of the Company’s legal counsel) are set forth in the
\nCompany Disclosure Letter. All arrangements between the Company and Goldman,
\nSachs & Co. relating to the Offer, the Merger and the other Transactions have
\nbeen disclosed to Parent prior to the date hereof.<\/p>\n
SECTION 3.15. OPINION OF FINANCIAL ADVISOR. The Company has
\nreceived the opinion of Goldman, Sachs & Co., to the effect that, as of the date
\nhereof, the consideration to be received in the Offer and the Merger by the
\nholders of Company Common Stock is fair to such holders from a financial point
\nof view.<\/p>\n
SECTION 3.16. LABOR MATTERS. The Company Disclosure Letter
\nsets forth each collective bargaining or other labor union contract to which the
\nCompany or any of its subsidiaries is a party applicable to persons employed by
\nthe Company or any Company Subsidiary and no collective<\/p>\n
26<\/p>\n
bargaining agreement is currently being negotiated by the Company or any Company
\nSubsidiary. Except as set forth in the Company Disclosure Letter, as of the date
\nof this Agreement, there is no labor dispute, strike or work stoppage against
\nthe Company or any of the Company Subsidiaries pending or, to the knowledge of
\nthe Company, threatened, which may interfere with the respective business
\nactivities of the Company or any of the Company Subsidiaries, except where such
\ndispute, strike or work stoppage, individually or in the aggregate, would not
\nreasonably be expected to have a Company Material Adverse Effect. Except as set
\nforth in the Company Disclosure Letter, as of the date of this Agreement, there
\nis no charge or complaint against the Company or any of the Company Subsidiaries
\nby the National Labor Relations Board or any comparable governmental agency
\npending or, to the knowledge of the Company, threatened.<\/p>\n
SECTION 3.17. CONTRACTS; DEBT INSTRUMENTS. As of the date of
\nthis Agreement, there are no Contracts that are required to be filed as part of
\nthe Company SEC Documents and are not so filed. To the knowledge of the Company,
\nneither the Company nor any of the Company Subsidiaries is in violation of or in
\ndefault under (nor does there exist any condition which upon the passage of time
\nor the giving of notice would cause such a violation of or default under) any
\nContract to which it is a party or by which it or any of its properties or
\nassets is bound that, individually or in the aggregate, has had or would
\nreasonably be expected to have a Company Material Adverse Effect.<\/p>\n
SECTION 3.18. INTELLECTUAL PROPERTY. The Company and the
\nCompany Subsidiaries own, or are validly licensed or otherwise have the right to
\nuse, all patents, trademarks, trade names, service marks, copyrights, computer
\nprograms and other intellectual property rights (collectively, “INTELLECTUAL
\nPROPERTY RIGHTS”) that are material to the conduct of the business of the
\nCompany and the Company Subsidiaries taken as a whole. Except as set forth in
\nthe Company Disclosure Letter, no claims are pending or, to the knowledge of the
\nCompany, threatened, that the Company or any of the Company Subsidiaries is
\ninfringing or otherwise adversely affecting the rights of any person with regard
\nto any Intellectual Property Right, except for such claims that would not,
\nindividually or in the aggregate, reasonably be expected to have a Company
\nMaterial Adverse Effect. To the knowledge of the Company, no person is
\ninfringing the rights of the Company or any of the Company Subsidiaries with
\nrespect to any Intellectual Property Rights, except for such infringements that,
\nindividually or in the aggregate, have<\/p>\n
27<\/p>\n
not had and would not reasonably be expected to have a Company Material Adverse
\nEffect.<\/p>\n
SECTION 3.19. CHARITABLE CONTRIBUTIONS. The Company Disclosure
\nLetter sets forth (i) the individual and aggregate monetary contributions made
\nby the Company to charitable organizations in Oregon during the year ended
\nDecember 31, 2001, and (ii) all outstanding pledges to charitable organizations
\n(wherever located) as of the date of this Agreement (the charitable
\norganizations in Oregon to which the Company has made or pledged to make
\ncharitable donations in the year ended December 31, 2001 being referred to
\nherein as the “OREGON CHARITIES”).<\/p>\n
SECTION 3.20. TERMINATION OF GEORGIA-PACIFIC DISCUSSIONS. The
\nCompany and its representatives have terminated all discussions and negotiations
\nwith Georgia- Pacific Corp. (“GP”) and its representatives regarding any
\nproposed (i) acquisition by the Company of any portion of the business of GP,
\nincluding the building products business thereof, or (ii) combination of any
\nportion of the business of GP, including without limitation, the building
\nproducts business thereof, with all or any portion of the business of the
\nCompany (any such acquisition or combination being referred to herein as a “GP
\nTRANSACTION”). In connection with the termination of such discussions and
\nnegotiations, the Company has paid to GP the amount set forth in the Company
\nDisclosure Letter, and, except as set forth in the Company Disclosure Letter,
\nsuch payment has discharged in full all obligations of the Company to GP in
\nrespect of such discussions and negotiations.<\/p>\n
ARTICLE IV<\/p>\n
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB<\/p>\n
Parent and Sub, jointly and severally, represent and warrant
\nto the Company as follows:<\/p>\n
SECTION 4.01. ORGANIZATION, STANDING AND POWER. Each of Parent
\nand Sub is duly organized, validly existing and in good standing under the laws
\nof the jurisdiction in which it is organized and has full corporate power and
\nauthority and possesses all governmental franchises, licenses, permits,
\nauthorizations and approvals necessary to enable it to own, lease or otherwise
\nhold its properties and assets and to conduct its businesses as presently
\nconducted, except for failures which, individually or in the aggregate, have not
\nhad and would not reasonably be expected to have a material adverse effect on
\nParent or on the ability of<\/p>\n
28<\/p>\n
Parent or Sub to consummate the Offer, the Merger and the other Transactions (a
\n“PARENT MATERIAL ADVERSE EFFECT”).<\/p>\n
SECTION 4.02. SUB. (a) Since the date of its incorporation,
\nSub has not carried on any business or conducted any operations other than the
\nexecution of this Agreement, the performance of its obligations hereunder and
\nmatters ancillary thereto (including, matters ancillary to the Existing Offer
\nprior to the date of this Agreement).<\/p>\n
(b) The authorized capital stock of Sub consists of 1,000
\nshares of common stock, par value $1.00 per share, all of which have been
\nvalidly issued, are fully paid and nonassessable and are owned by Parent free
\nand clear of any Lien.<\/p>\n
SECTION 4.03. AUTHORITY; EXECUTION AND DELIVERY;
\nENFORCEABILITY. Each of Parent and Sub has all requisite corporate power and
\nauthority to execute and deliver this Agreement and to consummate the
\nTransactions. The execution and delivery by each of Parent and Sub of this
\nAgreement and the consummation by it of the Transactions have been duly
\nauthorized by all necessary corporate action on the part of Parent and Sub.
\nParent, as sole shareholder of Sub, has approved the Offer, the Merger, this
\nAgreement and the Transactions. Each of Parent and Sub has duly executed and
\ndelivered this Agreement, and, assuming the due authorization, execution and
\ndelivery hereof by the Company, this Agreement constitutes its legal, valid and
\nbinding obligation, enforceable against it in accordance with its terms, subject
\nto the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
\nmoratorium and other similar laws relating to or affecting creditors’ rights
\ngenerally, general equitable principles (whether considered in a proceeding in
\nequity or at law) and an implied covenant of good faith and fair dealing.<\/p>\n
SECTION 4.04. NO CONFLICTS; CONSENTS. (a) The execution and
\ndelivery by each of Parent and Sub of this Agreement, do not, and the
\nconsummation of the Offer, the Merger and the other Transactions and compliance
\nwith the terms hereof will not, conflict with, or result in any violation of or
\ndefault (with or without notice or lapse of time, or both) under, or give rise
\nto a right of termination, cancellation or acceleration of any material
\nobligation or to loss of a material benefit under, or result in the creation of
\nany Lien upon any of the properties or assets of Parent or Sub under, any
\nprovision of (i) the charter or organizational documents of Parent or Sub, (ii)
\nany Contract to which Parent or Sub is a party or by which any of their
\nrespective properties or assets is bound or<\/p>\n
29<\/p>\n
(iii) subject to the filings and other matters referred to in Section 4.04(b),
\nany Judgment or Law applicable to Parent or Sub or their respective properties
\nor assets, other than, in the case of clauses (ii) and (iii) above, any such
\nitems that, individually or in the aggregate, have not had and would not
\nreasonably be expected to have a Parent Material Adverse Effect.<\/p>\n
(b) No Consent of, or registration, declaration or filing
\nwith, or permit from, any Governmental Entity is necessary for the execution,
\ndelivery and performance of this Agreement or the consummation of the
\nTransactions by Parent or Sub, other than (i) the filing with the SEC of (A) the
\nOffer Documents and (B) such reports under Section 13 and 16 of the Exchange Act
\nas may be required in connection with this Agreement, the Offer, the Merger and
\nthe other Transactions, (ii) the filing of Articles of Merger with the Secretary
\nof State of the State of Oregon and the Secretary of State of the State of
\nWashington, (iii) compliance with and such filings as may be required under
\napplicable Environmental Laws, (iv) such filings as may be required in
\nconnection with the taxes described in Section 6.09, (v) compliance with the
\nrules and regulations of the New York Stock Exchange and (vi) such other items
\n(A) that may be required under the applicable Law of any foreign country, (B)
\nrequired solely by reason of the participation of the Company (as opposed to any
\nthird party) in the Transactions or (C) that, individually or in the aggregate,
\nhave not had and would not reasonably be expected to have a Parent Material
\nAdverse Effect.<\/p>\n
SECTION 4.05. INFORMATION SUPPLIED. None of the information
\nsupplied or to be supplied by Parent or Sub expressly for inclusion or
\nincorporation by reference in (i) the Offer Documents, the Schedule 14D-9
\nAmendment or the Information Statement will, at the time such document is filed
\nwith the SEC, at any time it is amended or supplemented or at the time it is
\nfirst published, sent or given to the Company’s shareholders, contain any untrue
\nstatement of a material fact or omit to state any material fact required to be
\nstated therein or necessary to make the statements therein not misleading, or
\n(ii) the Proxy Statement will, at the date it is first mailed to the Company’s
\nshareholders or at the time of the Company Shareholders Meeting, contain any
\nuntrue statement of a material fact or omit to state any material fact required
\nto be stated therein or necessary in order to make the statements therein, in
\nlight of the circumstances under which they are made, not misleading. The Offer
\nDocuments will comply as to form in all material respects with the requirements
\nof the Exchange Act and the rules and<\/p>\n
30<\/p>\n
regulations thereunder, and the Offer shall comply in all material respects with
\nthe Exchange Act and the rules and regulations promulgated thereunder.
\nNotwithstanding the foregoing, no representation or warranty is made by Parent
\nor Sub with respect to statements made or incorporated by reference therein
\nbased on information supplied by the Company for inclusion or incorporation by
\nreference therein.<\/p>\n
SECTION 4.06. BROKERS. No broker, investment banker, financial
\nadvisor or other person, other than Morgan Stanley & Co. Incorporated, the fees
\nand expenses of which will be paid by Parent, is entitled to any broker’s,
\nfinder’s, financial advisor’s or other similar fee or commission in connection
\nwith the Offer, the Merger and the other Transactions based upon arrangements
\nmade by or on behalf of Parent or Sub.<\/p>\n
SECTION 4.07. FINANCING. At the expiration of the Offer and
\nthe Effective Time, Parent and Sub will have available all of the funds
\nnecessary for the acquisition of shares of Company Common Stock to be purchased
\npursuant to the Offer, to perform their respective obligations under this
\nAgreement and to pay all fees and expenses related to the Transactions payable
\nby them.<\/p>\n
SECTION 4.08. STOCK OWNERSHIP; INTERESTED SHAREHOLDER. As of
\nthe date hereof, except for (i) 500 shares of Company Common Stock owned by Sub,
\n(ii) 500 shares of Company Common Stock owned by Parent and (iii) an aggregate
\nof 56,324 shares of Company Common Stock owned by members of the board of
\ndirectors of Parent, none of Parent, Sub or any of their respective affiliates
\nbeneficially owns any Company Capital Stock and none of Parent, Sub or any of
\ntheir respective affiliates is an “Interested Shareholder”, as such term is
\ndefined in Section 60.825 of the ORS.<\/p>\n
ARTICLE V<\/p>\n
COVENANTS RELATING TO CONDUCT OF BUSINESS<\/p>\n
SECTION 5.01. CONDUCT OF BUSINESS. (a) CONDUCT OF BUSINESS BY
\nTHE COMPANY. Except for matters set forth in the Company Disclosure Letter or
\nexpressly contemplated by this Agreement, from the date of this Agreement to the
\nEffective Time the Company shall, and shall cause each Company Subsidiary to,
\nconduct its business in the usual, regular and ordinary course in substantially
\nthe same manner as previously conducted and, to the extent consistent therewith,
\nuse all reasonable efforts to (i) preserve intact its current business
\norganization, (ii) keep available the<\/p>\n
31<\/p>\n
services of its current officers and employees and (iii) keep its relationships
\nwith customers, suppliers, licensors, licensees, distributors and others having
\nbusiness dealings with them to the end that its goodwill and ongoing business
\nshall be unimpaired at the Effective Time. In addition, and without limiting the
\ngenerality of the foregoing, except for matters set forth in the Company
\nDisclosure Letter or otherwise expressly permitted by this Agreement, from the
\ndate of this Agreement to the Effective Time, the Company shall not, and shall
\nnot permit any Company Subsidiary to, do any of the following without the prior
\nwritten consent of Parent:<\/p>\n
(i) (A) declare, set aside or pay any dividends on, or make
\n any other distributions in respect of, any of its capital stock, other
\n than dividends and distri butions by a direct or indirect wholly owned
\n subsidiary of the Company to its parent, (B) split, combine or
\n reclassify any of its capital stock or issue or author ize the issuance
\n of any other securities in respect of, in lieu of or in substitution
\n for shares of its capital stock, or (C) purchase, redeem or otherwise
\n acquire any shares of capital stock of the Company or any Company
\n Subsidiary or any other securities thereof or any rights, warrants or
\n options to acquire any such shares or other securities;<\/p>\n
(ii) issue, deliver, sell or grant (A) any shares of its
\n capital stock, (B) any Voting Company Debt or other voting securities,
\n (C) any securities convertible into or exchangeable for, or any
\n options, warrants or rights to acquire, any such shares, Voting Company
\n Debt, voting securities or convertible or exchangeable securities or
\n (D) any “phantom” stock, “phantom” stock rights, stock appreciation
\n rights or stock-based performance units, or any similar stock, rights
\n or units, other than the issuance of Company Common Stock (and
\n associated Company Rights) upon the exercise of Company Employee Stock
\n Options outstanding on the date of this Agreement and in accordance
\n with their present terms;<\/p>\n
(iii) amend its articles of incorporation, by-laws or other
\n comparable charter or organizational documents (other than any
\n amendment to the Company By-laws to exempt the acquisition of shares of
\n Company Capital Stock from the applicability of Sections 60.801 to
\n 60.816 of the ORS);<\/p>\n
(iv) (A) enter into any discussions, negotiations or
\n agreements with respect to a GP Transaction or<\/p>\n
32<\/p>\n
(B) acquire or agree to acquire (1) by merging or consolidating with,
\n or by purchasing a substantial portion of the assets of, or by any
\n other manner, any equity interest in or business or any corporation,
\n partnership, joint venture, association or other business organization
\n or division thereof or (2) any assets that are material, individually
\n or in the aggregate, to the Company and the Company Subsidiaries, taken
\n as a whole, except purchases of inventory in the ordinary course of
\n business consistent with past practice;<\/p>\n
(v) (A) grant to any officer or director of the Company or any
\n Company Subsidiary any increase in compensation, except in the ordinary
\n course of business consistent with prior practice or to the extent
\n required under employment agreements in effect as of the date of the
\n most recent audited financial statements included in the Filed Company
\n SEC Documents, (B) grant to any employee, officer or director of the
\n Company or any Company Subsidiary any increase in severance or
\n termination pay, except to the extent required under any agreement in
\n effect as of the date of the most recent audited financial statements
\n included in the Filed Company SEC Documents, (C) enter into, amend or
\n terminate any employment, consulting, indemnification, severance or
\n termination agreement with any such employee, officer or director, (D)
\n establish, adopt, enter into or amend in any material respect any
\n collective bargaining agreement or other union agreement or Company
\n Benefit Plan, except as required by applicable Law or (E) take any
\n action to accelerate any rights or benefits, or make any material
\n determinations not in the ordinary course of business consistent with
\n prior practice, under any collective bargaining agreement or Company
\n Benefit Plan;<\/p>\n
(vi) make any change in accounting methods, principles or
\n practices materially affecting the reported consolidated assets,
\n liabilities or results of operations of the Company, except insofar as
\n may have been required by a change in GAAP;<\/p>\n
(vii) sell, lease (as lessor), license or otherwise dispose of
\n or subject to any Lien any properties or assets that are material,
\n individually or in the aggregate, to the Company and the Company
\n Subsidiaries, taken as a whole, except sales of inventory and excess or
\n obsolete assets in the ordinary course of business consistent with past
\n practice;<\/p>\n
33<\/p>\n
(viii) (A) incur any indebtedness for borrowed money or
\n guarantee any such indebtedness of another person, issue or sell any
\n debt securities or warrants or other rights to acquire any debt
\n securities of the Company or any Company Subsidiary, guarantee any debt
\n securities of another person, enter into any “keep well” or other
\n agreement to maintain any financial statement condition of another
\n person or enter into any arrangement having the economic effect of any
\n of the foregoing, except for short-term borrowings incurred in the
\n ordinary course of business consistent with past practice, or (B) make
\n any loans, advances or capital contributions to, or investments in, any
\n other person, other than to or in the Company or any direct or indirect
\n wholly owned subsidiary of the Company;<\/p>\n
(ix) make or agree to make any new capital expenditures that
\n in the aggregate are in excess of $5.0 million over the amount budgeted
\n for capital expenditures on the date hereof (as reflected on the
\n capital expenditure budgets included in the Company Disclosure Letter),
\n other than as required by law;<\/p>\n
(x) make any material Tax election or settle or compromise any
\n material Tax liability or refund other than in the ordinary course of
\n business consistent with past practice;<\/p>\n
(xi) (A) pay, discharge or satisfy any claims, liabilities or
\n obligations (absolute, accrued, asserted or unasserted, contingent or
\n otherwise), other than the payment, discharge or satisfaction, in the
\n ordinary course of business consistent with past practice or in
\n accordance with their terms, of liabilities reflected or reserved
\n against in, or contemplated by, the most recent consolidated financial
\n statements (or the notes thereto) of the Company included in the Filed
\n Company SEC Documents or incurred in the ordinary course of business
\n consistent with past practice, (B) cancel any material indebtedness
\n (individually or in the aggregate) or waive any claims or rights of
\n substantial value, (C) waive the benefits of, or agree to modify in any
\n manner, any confidentiality, standstill or similar agreement to which
\n the Company or any Company Subsidiary is a party or (D) other than in
\n the ordinary course of business consistent with past practice, enter
\n into any interest rate, currency or commodity swaps, hedges or other
\n similar financial instruments; or<\/p>\n
(xii) authorize any of, or commit or agree to take any of, the
\n foregoing actions.<\/p>\n
34<\/p>\n
(b) OTHER ACTIONS. The Company and Parent shall not, and shall
\nnot permit any of their respective subsidi aries to, take any action that would,
\nor that would reason ably be expected to, result in (i) any of the representa
\ntions and warranties of such party set forth in this Agreement that is qualified
\nas to materiality becoming untrue, (ii) any of such representations and
\nwarranties that is not so qualified becoming untrue in any material respect or
\n(iii) subject to Section 8.01(f), any condition to the Offer set forth in
\nExhibit A or any condition to the Merger set forth in Article VII not being
\nsatisfied.<\/p>\n
(c) ADVICE OF CHANGES. The Company shall promptly advise
\nParent orally and in writing of any change or event that has or would reasonably
\nbe expected to have a Company Material Adverse Effect.<\/p>\n
SECTION 5.02. ACTIONS OF COMPANY BOARD; COMPANY TAKEOVER
\nPROPOSALS. (a) Subject to Section 8.01(f), neither the Company Board nor any
\ncommittee thereof shall (i) approve any letter of intent, agreement in
\nprinciple, acquisition agreement or similar agreement relating to any Company
\nTakeover Proposal, (ii) approve or recommend, or propose to approve or
\nrecommend, any Company Takeover Proposal, (iii) take any action that would
\nresult in the holders of the Company Capital Stock no longer being legally
\ncapable under the ORS of validly approving the Merger or this Agreement or (iv)
\nadopt any amendment to the Company Charter or Company By-Laws or any resolution
\nor take any other action that would have the effect of rescinding the actions
\ntaken to render (A) Sections 60.801 to 60.816 of the ORS, (B) Article VI of the
\nCompany Charter inapplicable to Parent and Sub and to the Offer, the Merger and
\nthe other Transactions or (C) Sections 60.825 to 60.845 of the ORS inapplicable
\nto the Offer, the Merger and the other Transactions.<\/p>\n
(b) The Company promptly shall advise Parent orally and in
\nwriting of any Company Takeover Proposal and the identity of the person making
\nany such Company Takeover Proposal. The Company shall keep Parent fully informed
\nof the status, including any change to the material terms of, any such Company
\nTakeover Proposal.<\/p>\n
(c) For purposes of this Agreement:<\/p>\n
“COMPANY TAKEOVER PROPOSAL” means (i) any proposal or offer
\n for a merger, consolidation, dissolution, recapitalization or other
\n business combination involving the Company, (ii) any proposal for the
\n issuance by the Company of over 10% of its equity<\/p>\n
35<\/p>\n
securities as consideration for the assets or securities of another
\n person or (iii) any proposal or offer to acquire in any manner,
\n directly or indirectly, over 10% of the equity securities or
\n consolidated total assets of the Company, in each case other than the
\n Transactions.<\/p>\n
ARTICLE VI<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
SECTION 6.01. PREPARATION OF THE PROXY STATEMENT; SHAREHOLDERS
\nMEETING. (a) If the approval of this Agreement by the Company’s shareholders is
\nrequired by Law, as soon as reasonably practicable following the expiration of
\nthe Offer, the Company and Parent shall, at Parent’s request, prepare and file
\nwith the SEC the Proxy Statement in preliminary form, and each of the Company
\nand Parent shall use its reasonable best efforts to respond as promptly as
\nreasonably practicable to any comments of the SEC with respect thereto. The
\nCompany shall notify Parent promptly of the receipt of any comments from the SEC
\nor its staff and of any request by the SEC or its staff for amendments or
\nsupplements to the Proxy Statement or for additional information and shall
\nsupply Parent with copies of all correspondence between the Company or any of
\nits representatives, on the one hand, and the SEC or its staff, on the other
\nhand, with respect to the Proxy Statement. If at any time prior to receipt of
\nthe Company Shareholder Approval there shall occur any event that should be set
\nforth in an amendment or supplement to the Proxy Statement, the Company shall as
\npromptly as reasonably practicable prepare and mail to its shareholders such an
\namendment or supplement. The Company shall not mail any Proxy Statement, or any
\namendment or supplement thereto, to which Parent reasonably objects. Subject to
\nthe foregoing, the Company shall use its reasonable best efforts to cause the
\nProxy Statement to be mailed to the Company’s shareholders as promptly as
\nreasonably practicable after filing with the SEC.<\/p>\n
(b) If the approval of this Agreement by the Company’s
\nshareholders is required by Law, at Parent’s request, as soon as reasonably
\npracticable following the expiration of the Offer, the Company shall duly call,
\ngive notice of, convene and hold a meeting of its shareholders (the “COMPANY
\nSHAREHOLDERS MEETING”) for the purpose of seeking the Company Shareholder
\nApproval. Without limiting the generality of the foregoing, the Company agrees
\nthat its obligations pursuant to the first sentence of this<\/p>\n
36<\/p>\n
Section 6.01(b) shall not be affected by (i) the commencement, public proposal,
\npublic disclosure or communication to the Company of any Company Takeover
\nProposal or (ii) the withdrawal or modification by the Company Board of its
\napproval or recommendation of this Agreement or the Merger. Notwithstanding the
\nforegoing, if Sub or any other subsidiary of Parent shall acquire at least 90%
\nof the outstanding shares of each series of Company Capital Stock, the parties
\nshall, at the request of Parent, take all necessary and appropriate action to
\ncause the Merger to become effective as soon as reasonably practicable after the
\nexpiration of the Offer without a shareholders meeting in accordance with
\nSection 60.491 of the ORS.<\/p>\n
(c) Parent shall cause all shares of Company Common Stock
\npurchased pursuant to the Offer and all other shares of Company Common Stock
\nowned by Parent, Sub or any other subsidiary of Parent to be voted in favor of
\nthis Agreement and the transactions contemplated hereby.<\/p>\n
SECTION 6.02. ACCESS TO INFORMATION. Subject to applicable
\nLaw, upon reasonable prior notice, the Company shall, and shall cause each
\nCompany Subsidiary to, afford to Parent and to the officers, employees,
\naccountants, counsel, financial advisors and other representatives of Parent,
\nreasonable access during normal business hours during the period prior to the
\nEffective Time to all their respective properties, books, contracts,
\ncommitments, personnel and records and, during such period, the Company shall,
\nand shall cause each Company Subsidiary to, furnish promptly to the Parent (a) a
\ncopy of each report, schedule, registration statement and other document filed
\nby it during such period pursuant to the requirements of federal or state
\nsecurities laws and (b) all other information concerning its business,
\nproperties and personnel as Parent may reasonably request. Without limiting the
\ngenerality of the foregoing, the Company shall, within two business days of
\nrequest therefor, provide to Parent the information described in Rule 14a-
\n7(a)(2)(ii) under the Exchange Act and any information to which a holder of
\nCompany Common Stock would be entitled under Section 60.774 of the ORS (assuming
\nsuch holder met the requirements of such Section). No information or knowledge
\nobtained pursuant to this Section 6.02 shall affect or be deemed to modify any
\nrepresentation or warranty made by the Company hereunder.<\/p>\n
SECTION 6.03. REASONABLE BEST EFFORTS; NOTIFICATION. (a) Upon
\nthe terms and subject to the conditions set forth in this Agreement, each of the
\nparties shall use its reasonable best efforts to take, or cause to be taken, all
\nactions, and to do, or cause to be done, and<\/p>\n
37<\/p>\n
to assist and cooperate with the other parties in doing, all things necessary,
\nproper or advisable to consummate and make effective, in the most expeditious
\nmanner practicable, the Offer, the Merger and the other Transactions, including
\n(i) the obtaining of all necessary actions or nonactions, waivers, consents and
\napprovals from Governmental Entities and the making of all necessary
\nregistrations and filings (including filings with Governmental Entities, if any)
\nand the taking of all reasonable steps as may be necessary to obtain an approval
\nor waiver from, or to avoid an action or proceeding by, any Governmental Entity,
\n(ii) the obtaining of all necessary consents, approvals or waivers from third
\nparties, (iii) the defending of any lawsuits or other legal proceedings, whether
\njudicial or administrative, challenging this Agreement or the consummation of
\nthe Transactions, including seeking to have any stay or temporary restraining
\norder entered by any court or other Governmental Entity vacated or reversed and
\n(iv) the execution and delivery of any additional instruments necessary to
\nconsummate the Transactions and to fully carry out the purposes of this
\nAgreement. In connection with and without limiting the foregoing, the Company
\nand the Company Board shall (i) take all action necessary to ensure that no
\nstate takeover statute or similar statute or regulation is or becomes applicable
\nto any Transaction or this Agreement and (ii) if any state takeover statute or
\nsimilar statute or regulation becomes applicable to any Transaction or this
\nAgreement, take all action necessary to ensure that the Offer, the Merger and
\nthe other Transactions may be consummated as promptly as practicable on the
\nterms contemplated by this Agreement.<\/p>\n
(b) The Company shall give prompt notice to Parent, and Parent
\nor Sub shall give prompt notice to the Company, of (i) any representation or
\nwarranty made by it contained in this Agreement that is qualified as to
\nmateriality becoming untrue or inaccurate in any respect or any such
\nrepresentation or warranty that is not so qualified becoming untrue or
\ninaccurate in any material respect or (ii) the failure by it to comply with or
\nsatisfy in any material respect any covenant, condition or agreement to be
\ncomplied with or satisfied by it under this Agreement; PROVIDED, HOWEVER, that
\nno such notification shall affect the representations, warranties, covenants or
\nagreements of the parties or the conditions to the obligations of the parties
\nunder this Agreement.<\/p>\n
SECTION 6.04. AWARDS UNDER THE COMPANY STOCK PLANS. (a) As
\nsoon as practicable following the date of this Agreement, the Company Board
\nshall, or shall cause the relevant committee administering the Company Stock
\nPlans to,<\/p>\n
38<\/p>\n
adopt such resolutions or take such other actions as may be required to adjust
\nthe terms of all outstanding Company Non- Tandem SARs as necessary to provide
\nthat, as of the Effective Time, each Company Non-Tandem SAR which is then
\noutstanding shall be cancelled at such time with the holder thereof becoming
\nentitled to receive an amount of cash equal to the excess, if any, of (i) the
\nOffer Price over (ii) the strike price.<\/p>\n
(b) As soon as practicable following the date of this
\nAgreement, the Company Board shall, or shall cause the relevant committee
\nadministering the Company Stock Plans to, adopt such resolutions or take such
\nother actions as may be required to adjust the terms of all outstanding Company
\nEmployee Stock Options, whether vested or unvested, as necessary to provide
\nthat:<\/p>\n
(i) each Company Employee Stock Option (and any Company SAR
\n related thereto) outstanding immediately prior to acceptance for
\n payment of shares pursuant to the Offer may be surrendered at that
\n time, with the holder thereof becoming entitled to receive a cash
\n payment from the Company one business day after the purchase of shares
\n of Company Common Stock pursuant to the Offer of an amount equal to (i)
\n the excess, if any, of (x) the Offer Price over (y) the exercise price
\n per share of Company Common Stock subject to such Company Employee
\n Stock Option, multiplied by (ii) the number of shares of Company Common
\n Stock for which such Company Employee Stock Option shall not
\n theretofore have been exercised; and each Company Employee Stock Option
\n (and each Company SAR related thereto) not surrendered for cash
\n immediately prior to the acceptance for payment of shares pursuant to
\n the Offer shall be treated as follows: the Company SAR shall be
\n terminated at the Effective Time and the Company Employee Stock Option
\n shall be amended and converted at the Effective Time into a vested
\n option to acquire, on the same terms and conditions as are applicable
\n under Parent’s employee stock option plan, the number of shares of
\n common stock of Parent, par value $1.25 per share (“PARENT COMMON
\n STOCK”), equal to the product (rounded down to the nearest whole share)
\n obtained by multiplying (A) the number of shares of Company Common
\n Stock the holder of such Company Employee Stock Option would have been
\n entitled to receive had such holder exercised such Company Employee
\n Stock Option in full immediately prior to the Effective Time and (B)
\n the quotient (rounded to the nearest one-thousandth) obtained by
\n dividing the Offer Price by the average (rounded to the nearest one-
\n thousandth) of the 4:00 p.m. closing prices per share<\/p>\n
39<\/p>\n
of Parent Common Stock on the NYSE Composite tape over the 20
\n consecutive trading days immediately preceding the date of the
\n Effective Time as reported in the Wall Street Journal, New York City
\n edition (such quotient, the “CONVERSION RATIO”), at an exercise price
\n per share of Parent Common Stock (rounded up to the nearest cent) equal
\n to (x) the exercise price per share set forth in such Company Employee
\n Stock Option divided by (y) the Conversion Ratio (each, as so adjusted,
\n an “ADJUSTED OPTION”); PROVIDED, HOWEVER, that any Company Employee
\n Stock Option which is intended to be an “incentive stock option” (as
\n defined in Section 422 of the Code), and which may not be adjusted in
\n the foregoing manner and remain an incentive stock option, shall be
\n adjusted in accordance with the requirements of Section 424 of the Code
\n (in a manner which most closely produces the economic results obtained
\n with respect to other Adjusted Options); and<\/p>\n
(ii) ensure that a holder of an Adjusted Option may only
\n exercise such Adjusted Option in whole or in part in accordance with
\n its terms by delivering a properly executed notice of exercise to
\n Parent, together with the consideration therefor and the federal
\n withholding tax information, if any, required in accordance with the
\n related Company Stock Plan.<\/p>\n
(c) As soon as practicable after the Effective Time, Parent
\nshall deliver to the holders of Adjusted Options appropriate notices setting
\nforth such holders’ rights and specifying that such Adjusted Options shall be
\nassumed by Parent and shall thereafter have terms and conditions consistent in
\nall material respects with options granted under Parent’s 1998 Long-Term
\nIncentive Compensation Plan, as amended and restated (a complete and correct
\ncopy of which Parent has provided to the Company’s advisors and which sets forth
\nthe material terms which will be applicable to the Adjusted Options) (subject to
\nthe adjustments required by Section 6.04(b)). Prior to the Effective Time,
\nParent shall take all actions as may be reasonably required to cause the
\nacquisition of equity securities of Parent, as contemplated by this Section
\n6.04, by any person who is or will become a director or officer of Parent to be
\neligible for exemption under Rule 16b-3(d) of the SEC. Parent shall file, no
\nlater than 30 business days after the Closing Date, a registration statement on
\nForm S-8 covering the shares of Parent Common Stock issuable pursuant to
\noutstanding Adjusted Options, provided that such Company Employee Stock Options
\nqualify for registration on such Form S-8. The Company shall cause to be
\ndelivered to Parent prior to the Closing all relevant information relating to
\nthe outstanding<\/p>\n
40<\/p>\n
Company Employee Stock Options which become Adjusted Options, and, in the event
\nsuch delivery is delayed, Parent’s obligation to file the registration statement
\non Form S-8 shall be commensurately delayed.<\/p>\n
(d) All cash amounts payable pursuant to this Section 6.04
\nshall be subject to any required withholding of Taxes and shall be paid without
\ninterest.<\/p>\n
(e) In this Agreement:<\/p>\n
“COMPANY EMPLOYEE STOCK OPTION” means any option to purchase
\n Company Common Stock granted in 2002 or under any Company Stock Plan.<\/p>\n
“COMPANY SAR” means any stock appreciation right linked to the
\n price of Company Common Stock and granted under any Company Stock Plan
\n in tandem with a Company Employee Stock Option.<\/p>\n
“COMPANY STOCK PLANS” means the Company’s 1995 Long-Term
\n Compensation Incentive Program, as amended, and the Company’s 1986
\n Stock Option and Stock Appreciation Rights Plan, as amended.<\/p>\n
SECTION 6.05. EMPLOYEE BENEFITS. (a) For one year following
\nthe Closing, Parent shall or shall cause the Surviving Corporation to (i)
\nprovide each individual who is an employee of the Company immediately prior to
\nthe Effective Time (other than those employees whose terms and conditions of
\nemployment are subject to a collective bargaining agreement) (the “AFFECTED
\nEMPLOYEES”) an annual salary or hourly wage rate, as applicable, that is no less
\nthan the annual salary or hourly wage rate payable to such Affected Employees by
\nthe Company immediately prior to the Effective Time; and (ii) provide Affected
\nEmployees with employee benefits and coverage and other fringe benefits that are
\nno less favorable than the employee benefits and coverage and fringe benefits
\nprovided to similarly situated employees of the Parent. For purposes of Section
\n6.05(a)(ii), “employee benefits” shall include, but shall not be limited to,
\nqualified and nonqualified retirement plans (I.E., 401(k) plans), severance pay
\nand retention plans, deferred compensation plans, retiree medical plans, health
\nand welfare plans, dental and vision plans, life insurance and AD&D plans, and
\nsalary continuation, short- term and long-term disability plans; PROVIDED,
\nHOWEVER, that neither “employee benefits” nor “fringe benefits” shall include
\nany incentive compensation, bonus, stock option or other equity-related plans,
\nopportunities or arrangements.<\/p>\n
41<\/p>\n
(b) At the Effective Time, Parent shall, or shall cause the
\nSurviving Corporation to, maintain the Company’s Management Retention Benefits
\nPlan and the Broad-Based Retention Benefits Plan for Salaried Employees (the
\n“RETENTION PLANS”) in accordance with their terms for a period of not less than
\n24 months following a Change in Control (as defined in the Retention Plans).
\nParent shall assume all liabilities and honor all obligations of the Retention
\nPlans. Parent is not permitted at any time to amend any provision of the
\nRetention Plans or terminate the Retention Plans, except as required by law.<\/p>\n
(c) Parent agrees that the consummation of the Offer shall
\nconstitute a “Change in Control” for all purposes under each applicable Company
\nBenefit Plan, including, without limitation, any change in control agreement
\nbetween the Company and any current or former employee, officer, director or
\nindependent contractor of the Company. Parent agrees to honor all terms and
\nobligations of each such Company Benefit Plan, related trust or any other
\nseverance or employment agreement set forth in the Company Disclosure Letter,
\nincluding, without limitation, any change in control agreement between the
\nCompany and any current or former employee, officer, director or independent
\ncontractor of the Company, and to withhold only the minimum amount required by
\nlaw in making payments thereunder. It is also generally the intention of Parent
\nto treat an Affected Employee who is terminated by Parent or the Surviving
\nCorporation as a result of the integration of the businesses of Parent and the
\nCompany as having incurred a “position elimination” for purposes of his or her
\nAdjusted Options. With respect to Adjusted Options, Parent acknowledges that:
\n(i) any Affected Employee whose employment is terminated after the Closing by
\nParent or the Surviving Corporation, other than for “Cause” (as defined in the
\nCompany’s Broad- Based Retention Benefits Plan for Salaried Employees), within
\none year following the Effective Time will be treated as having experienced a
\n“position elimination”; (ii) any Affected Employee who terminates employment for
\n“Good Reason” (within the meaning of the Company’s Broad-Based Retention
\nBenefits Plan for Salaried Employees, including paragraph 2.7(e), but excluding
\nparagraph 2.7(d) thereof, or, in the case of an Affected Employee listed in
\nSection 3.11(a)(2) or (a)(5) of the Company Disclosure Letter, such Affected
\nEmployee’s individual change-in-control agreement), within one year following
\nthe Effective Time will be treated as having experienced a “position
\nelimination”; and (iii) any Affected Employee whose employment terminates
\nfollowing the Effective Time and after having reached (A) age 55 shall be
\ntreated as having terminated employment coincident with “Early Retirement” and
\n(B) age 65 shall be treated as having terminated employment coincident with
\n“Retirement.” The foregoing sentence shall not limit the ability of any Affected
\nEmployee to otherwise assert “position<\/p>\n
42<\/p>\n
elimination.” Such treatment of Adjusted Options shall in no way affect an
\nAffected Employee’s rights under any other plans, agreements or arrangements.<\/p>\n
(d) Parent shall, or shall cause the Surviving Corporation to,
\nrecognize each Affected Employee’s service with the Company for vesting and
\neligibility to participate purposes only under each employee benefit plan or
\narrangement maintained by Parent or the Surviving Corporation in which such
\nAffected Employee is or becomes eligible to participate, but only to the extent
\nthat such service was recognized for such purposes under the corresponding
\nCompany Benefit Plan; PROVIDED, HOWEVER, that any defined benefit plan benefit
\nthat any Affected Employee is, or otherwise becomes, entitled to under any
\nqualified or nonqualified defined benefit pension plan maintained by Parent or
\nthe Surviving Corporation shall be computed under such Parent plan using all of
\nsuch Affected Employee’s years of service with the Company, the Surviving
\nCorporation, Parent and their respective affiliates and predecessors, but shall
\nbe offset, if applicable, by the Company Benefit Plan defined benefit payable to
\nsuch Affected Employee, so that no duplication of such benefit results.<\/p>\n
(e) To the extent that Affected Employees become eligible to
\nparticipate in new plans after the Effective Time, Parent shall, or shall cause
\nthe Surviving Corporation to, (i) waive all limitations as to preexisting
\nconditions exclusions and waiting periods with respect to participation and
\ncoverage requirements applicable to the Affected Employees under any welfare
\nbenefit plans in which such Affected Employees may be eligible to participate
\nafter the Effective Time, other than limitations or waiting periods that are
\nalready in effect with respect to such Affected Employees and that have not been
\nsatisfied as of the Effective Time under any welfare plan maintained for the
\nAffected Employees immediately prior to the Effective Time, and (ii) provide
\neach Affected Employee with credit for any co-payments and deductibles paid
\nprior to the Effective Time in satisfying any applicable deductible or
\nout-of-pocket requirements under any welfare plans that such Affected Employees
\nare eligible to participate in after the Effective Time.<\/p>\n
(f) Vacation earned as of the Effective Time and to be taken
\nin calendar year 2002 by Affected Employees under Company’s vacation policy
\nshall be credited to Affected Employees at the Effective Time to the extent not
\nthen taken. Parent shall grant Affected Employees time off with pay (vacation)
\nfor this full credited amount, or pay (to the extent an Affected Employee is
\nterminated during<\/p>\n
43<\/p>\n
2002), in lieu of time off, for any portion not taken by December 31, 2002.
\nUnless otherwise required under an individual agreement, vacation accruing in
\ncalendar year 2002 to be taken in calendar year 2003 by Affected Employees shall
\nbe determined in accordance with Parent’s vacation policy.<\/p>\n
(g) Nothing in this Section 6.05 shall be interpreted as
\npreventing Parent or the Surviving Corporation from (i) amending, modifying or
\nterminating any Company Benefit Plan (subject to the provisions of Sections
\n6.05(b) and 6.05(c)), consistent with its terms and applicable law, or (ii)
\nterminating the employment of any Affected Employee or any employee of the
\nCompany whose terms and conditions of employment are subject to a collective
\nbargaining agreement.<\/p>\n
SECTION 6.06. INDEMNIFICATION. (a) Parent shall, to the
\nfullest extent permitted by applicable Law, cause the Surviving Corporation to
\nhonor all the Company’s obligations to indemnify (including any obligations to
\nadvance funds for expenses) the present or former directors or officers of the
\nCompany and the Company Subsidiaries for acts or omissions by such directors and
\nofficers occurring at or prior to the Effective Time to the extent that such
\nobligations of the Company exist on the date of this Agreement, whether pursuant
\nto the Company Charter, the Company By-laws, individual indemnity agreements or
\notherwise, and such obligations shall survive the Merger and shall continue in
\nfull force and effect in accordance with the terms of the Company Charter, the
\nCompany By-laws and such individual indemnity agreements from the Effective
\nTime.<\/p>\n
(b) Without limiting any additional rights that any employee
\nmay have under any employment agreement or Company Benefit Plan, from the
\nEffective Time through the sixth anniversary of the date on which the Effective
\nTime occurs, Parent shall, or shall cause the Surviving Corporation to,
\nindemnify and hold harmless the present officers and directors of the Company
\nand the Company Subsidiaries and any persons who were directors or officers of
\nthe Company or the Company Subsidiaries at any time between November 29, 2000
\nand the Effective Time (each an “INDEMNIFIED PARTY”) against all losses, claims,
\ndamages, liabilities, fees and expenses (including attorneys’ fees and
\ndisbursements), judgments, fines and amounts paid in settlement (collectively,
\n“LOSSES”) arising out of actions or omissions occurring at or prior to the
\nEffective Time in connection with this Agreement, the Offer, the Merger and the
\nother Transactions; PROVIDED, HOWEVER, that an Indemnified Party shall not be
\nentitled to indemnification<\/p>\n
44<\/p>\n
under this Section 6.06(b) for Losses arising out of actions or omissions by the
\nIndemnified Party constituting (i) a breach of this Agreement, (ii) criminal
\nconduct or (iii) any violation of Federal, state or foreign securities laws.
\nEach Indemnified Party will be entitled to advancement of expenses incurred in
\nthe defense of any claim, action, suit, proceeding or investigation from Parent
\nor the Surviving Corporation within ten business days of receipt by Parent from
\nthe Indemnified Party of a request therefor; PROVIDED, HOWEVER, that any person
\nto whom expenses are advanced provides an undertaking to repay such advances if
\nit is ultimately determined that such person is not entitled to indemnification.
\nNotwithstanding anything herein to the contrary, if any claim, action, suit,
\nproceeding or investigation is made against any Indemnified Party and with
\nrespect to which such Indemnified Party is entitled to indemnification under
\nthis Section 6.06(b), on or prior to the sixth anniversary of the Effective
\nTime, the provisions of this Section 6.06(b) shall continue in effect with
\nrespect to such claim, action, suit, proceeding or investigation until the final
\ndisposition thereof.<\/p>\n
(c) The Articles of Incorporation and by-laws of the Surviving
\nCorporation shall contain provisions no less favorable with respect to
\nindemnification, advancement of expenses and exculpation of former or present
\ndirectors, officers and employees than are presently set forth in the Company
\nCharter and the Company By-laws, which provisions shall not be amended, repealed
\nor otherwise modified for a period of six years from the Effective Time in any
\nmanner that would adversely affect the rights thereunder of any such
\nindividuals.<\/p>\n
(d) For a period of six years after the Effective Time, Parent
\nshall cause to be maintained in effect, at no expense to the beneficiaries, the
\ncurrent policies of directors’ and officers’ liability insurance maintained by
\nthe Company (provided that Parent may substitute therefor policies with
\nreputable and financially sound carriers of at least the same coverage and
\namounts containing terms and conditions which are no less advantageous) with
\nrespect to claims arising from or related to facts or events which occurred at
\nor before the Effective Time; PROVIDED, HOWEVER, that Parent shall not be
\nobligated to make annual premium payments for such insurance to the extent such
\npremiums exceed 300% of the annual premiums paid as of the date hereof by the
\nCompany for such insurance (such 300% amount, the “MAXIMUM PREMIUM”). If such
\ninsurance coverage cannot be obtained at all, or can only be obtained at an
\nannual premium in excess of the Maximum Premium, Parent shall maintain the most
\nadvantageous policies of directors’ and<\/p>\n
45<\/p>\n
officers’ insurance obtainable for an annual premium equal to the Maximum
\nPremium; PROVIDED, HOWEVER, if such insurance coverage cannot be obtained at
\nall, Parent shall purchase all available extended reporting periods with respect
\nto pre-existing insurance in an amount which, together with all other insurance
\npurchased pursuant to this Section 6.06(d), does not exceed the Maximum Premium.
\nThe Company represents to Parent that the Maximum Premium is $1,485,000. Parent
\nshall not, and shall cause the Company not to, take any action that would have
\nthe effect of limiting the aggregate amount of insurance coverage required to be
\nmaintained for the individuals referred to in this Section 6.06(d).
\nNotwithstanding any other provision of this Agreement to the contrary, if Parent
\nhas not procured replacement coverage meeting the criteria set forth in the
\nfirst sentence of this Section 6.06(d) for the directors’ and officers’
\nliability insurance policies currently maintained by the Company prior to the
\nexpiration of such policies, the Company may renew such policies for a period of
\nnot longer than one year on the terms set forth in the quotation of Aon Risk
\nServices previously provided to Parent.<\/p>\n
(e) In order to be entitled to indemnification under this
\nSection 6.06, an Indemnified Party must give Parent and the Surviving
\nCorporation written notice of any third party claim which may give rise to any
\nindemnity obligation under this Section 6.06, and Parent and the Surviving
\nCorporation shall have the right to assume the defense of any such claim through
\ncounsel of their own choosing, subject to such counsel’s reasonable judgment
\nthat separate defenses that would create a conflict of interest on the part of
\nsuch counsel are not available. If Parent and the Surviving Corporation do not
\nassume any such defense, they shall be liable for all reasonable costs and
\nexpenses of defending such claim incurred by the Indemnified Party, including
\nreasonable fees and disbursements of counsel and shall advance such reasonable
\ncosts and expenses to the Indemnified Party; PROVIDED, HOWEVER, that such
\nadvance shall be made only after receiving an undertaking from the Indemnified
\nParty that such advance shall be repaid if it is determined that such
\nIndemnified Party is not entitled to indemnification therefor. Neither Parent
\nnor the Surviving Corporation shall be liable under this Section 6.06 for any
\nLosses resulting from any settlement, compromise or offer to settle or
\ncompromise any such claim or litigation or other action, without the prior
\nwritten consent of Parent or the Surviving Corporation.<\/p>\n
(f) This Section 6.06 is intended to be for the benefit of,
\nand shall be enforceable by, each of the Indemnified Parties and their
\nrespective heirs and legal<\/p>\n
46<\/p>\n
representatives. The indemnification provided for herein shall not be deemed
\nexclusive of any other rights to which an Indemnified Party is entitled, whether
\npursuant to law, contract or otherwise.<\/p>\n
(g) In the event that the Surviving Corporation or Parent or
\nany of their respective successors or assigns (i) consolidates with or merges
\ninto any other person and shall not be the continuing or surviving corporation
\nor entity of such consolidation or merger or (ii) transfers or conveys all or a
\nmajority of its properties and assets to any person, then, and in each such
\ncase, proper provision shall be made so that the successors and assigns of the
\nSurviving Corporation or Parent, as the case may be, shall succeed to the
\nobligations set forth in this Section 6.06.<\/p>\n
SECTION 6.07. FEES AND EXPENSES. All fees and expenses
\nincurred in connection with the Merger and the other Transactions shall be paid
\nby the party incurring such fees or expenses, whether or not the Merger is
\nconsummated.<\/p>\n
SECTION 6.08. PUBLIC ANNOUNCEMENTS. Parent and Sub, on the one
\nhand, and the Company, on the other hand, shall consult with each other before
\nissuing, and provide each other the opportunity to review and comment upon, any
\npress release or other public statements with respect to the Offer, the Merger
\nand the other Transactions and shall not issue any such press release or make
\nany such public statement prior to such consultation, except as may be required
\nby applicable Law, court process or by obligations pursuant to any listing
\nagreement with any national securities exchange.<\/p>\n
SECTION 6.09. TRANSFER TAXES. All stock transfer, real estate
\ntransfer, documentary, stamp, recording and other similar Taxes (including
\ninterest, penalties and additions to any such Taxes) (“TRANSFER TAXES”) incurred
\nin connection with the Transactions shall be paid by either Sub or the Surviving
\nCorporation, and the Company shall cooperate with Sub and Parent in preparing,
\nexecuting and filing any Tax Returns with respect to such Transfer Taxes.<\/p>\n
SECTION 6.10. DIRECTORS. Promptly upon the acceptance for
\npayment of, and payment by Sub for, any shares of Company Common Stock pursuant
\nto the Offer, Sub shall be entitled to designate such number of directors on the
\nCompany Board as will give Sub, subject to compliance with Section 14(f) of the
\nExchange Act, representation on the Company Board equal to at least that number
\nof directors, rounded up to the next whole number, which is the<\/p>\n
47<\/p>\n
product of (a) the total number of directors on the Company Board (giving effect
\nto the directors elected pursuant to this sentence) multiplied by (b) the
\npercentage that (i) such number of shares of Company Common Stock so accepted
\nfor payment and paid for by Sub plus the number of shares of Company Common
\nStock otherwise owned by Parent, Sub or any other subsidiary of Parent bears to
\n(ii) the number of such shares outstanding, and the Company shall, at such time,
\ncause Sub’s designees to be so elected; PROVIDED, HOWEVER, that in the event
\nthat Sub’s designees are appointed or elected to the Company Board, until the
\nEffective Time the Company Board shall have at least three directors who are
\nDirectors on the date of this Agreement and who are not officers of the Company
\n(the “INDEPENDENT DIRECTORS”); and PROVIDED FURTHER that, in such event, if the
\nnumber of Independent Directors shall be reduced below three for any reason
\nwhatsoever, any remaining Independent Directors (or Independent Director, if
\nthere shall be only one remaining) shall be entitled to designate persons to
\nfill such vacancies who shall be deemed to be Independent Directors for purposes
\nof this Agreement or, if no Independent Directors then remain, the other
\ndirectors shall designate three persons to fill such vacancies who are not
\nofficers, shareholders or affiliates of the Company, Parent or Sub, and such
\npersons shall be deemed to be Independent Directors for purposes of this
\nAgreement. Sub’s designees shall be elected to the classes of directors of the
\nCompany Board as evenly as possible among the class of directors whose term is
\nexpiring in 2002, the class of directors whose term is expiring in 2003 and the
\nclass of directors whose term is expiring in 2004. Subject to applicable Law,
\nthe Company shall take all action reasonably requested by Parent necessary to
\neffect any such election, including mailing to its shareholders the Information
\nStatement containing the information required by Section 14(f) of the Exchange
\nAct and Rule 14f-1 promulgated thereunder, and the Company shall make such
\nmailing with the mailing of the Schedule 14D-9 Amendment (provided that Sub
\nshall have provided to the Company on a timely basis all information required to
\nbe included in the Information Statement with respect to Sub’s designees). In
\nconnection with the foregoing, the Company shall promptly, at the option of Sub,
\neither increase the size of the Company Board or obtain the resignation of such
\nnumber of its current directors as is necessary to enable Sub’s designees to be
\nelected or appointed to the Company Board as provided above.<\/p>\n
SECTION 6.11. RIGHTS AGREEMENT; CONSEQUENCES IF RIGHTS
\nTRIGGERED. The Company Board shall take all action reasonably requested in
\nwriting by Parent in order to render the Company Rights inapplicable to the
\nOffer, the Merger and<\/p>\n
48<\/p>\n
the other Transactions. Except as approved in writing by Parent, the Company
\nBoard shall not (i) amend the Company Rights Agreement, (ii) redeem the Company
\nRights, (iii) take any action with respect to, or make any determination under,
\nthe Company Rights Agreement or (iv) enter into any other rights agreement or
\ntake any other action that would discriminate against, or adversely effect,
\nParent or Sub if it acquires shares of Company Common Stock. If any Distribution
\nDate or Shares Acquisition Date occurs under the Company Rights Agreement at any
\ntime during the period from the date of this Agreement to the Effective Time,
\nthe Company and Parent shall make such adjustment to the Offer Price and\/or
\nMerger Consideration as the Company and Parent shall mutually agree so as to
\npreserve the economic benefits that the Company and Parent each reasonably
\nexpected on the date of this Agreement to receive as a result of the
\nconsummation of the Merger and the other Transactions.<\/p>\n
SECTION 6.12. SHAREHOLDER LITIGATION. The Company shall give
\nParent the opportunity to participate in the defense or settlement of any
\nshareholder litigation against the Company or its directors or officers relating
\nto any of the Transactions; PROVIDED, HOWEVER, that no such settlement shall be
\nagreed to without Parent’s consent, which shall not be unreasonably withheld.<\/p>\n
SECTION 6.13. CHARITABLE GIVING. During each of the years in
\nthe five-year period ending December 31, 2006, Parent shall make or cause to be
\nmade through one or more foundations annual aggregate monetary contributions to
\nthe Oregon Charities of no less than $1.0 million.<\/p>\n
SECTION 6.14. EMPLOYMENT MATTERS. Parent shall ensure that the
\nSurviving Corporation will continue to be bound by the terms of the collective
\nbargaining agreements set forth in the Company Disclosure Letter, and shall
\nfurther ensure that the Surviving Corporation complies with its obligations
\nunder such collective bargaining agreements and all other statutory bargaining
\nobligations.<\/p>\n
ARTICLE VII<\/p>\n
CONDITIONS PRECEDENT<\/p>\n
SECTION 7.01. CONDITIONS TO EACH PARTY’S OBLIGATION TO EFFECT
\nTHE MERGER. The respective obligation of each party to effect the Merger is
\nsubject to the satisfaction or waiver on or prior to the Closing Date of the
\nfollowing conditions:<\/p>\n
49<\/p>\n
(a) SHAREHOLDER APPROVAL. If required by law, the Company
\nshall have obtained the Company Shareholder Approval.<\/p>\n
(b) ANTITRUST. Any consents, approvals and filings under any
\nforeign antitrust law, the absence of which would prohibit the consummation of
\nMerger, shall have been obtained or made.<\/p>\n
(c) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining
\norder, preliminary or permanent injunction or other order issued by any court of
\ncompetent jurisdiction or other legal restraint or prohibition preventing the
\nconsummation of the Merger shall be in effect; PROVIDED, HOWEVER, that prior to
\nasserting this condition, subject to Section 6.03, each of the parties shall
\nhave used its reasonable best efforts to prevent the entry of any such
\ninjunction or other order and to appeal as promptly as possible any such
\ninjunction or other order that may be entered.<\/p>\n
(d) OFFER. Parent, Sub or their affiliates shall have
\npurchased, or caused to be purchased, shares of Company Common Stock, pursuant
\nto the Offer.<\/p>\n
ARTICLE VIII<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
SECTION 8.01. TERMINATION. This Agreement may be terminated at
\nany time prior to the Effective Time, whether before or after receipt of the
\nCompany Shareholder Approval:<\/p>\n
(a) by mutual written consent of Parent, Sub and the Company;<\/p>\n
(b) by either Parent or the Company:<\/p>\n
(i) unless Company Common Stock has been purchased
\n pursuant to the Offer, if the Merger is not consummated on or
\n before April 30, 2002 (the “OUTSIDE DATE”), unless the failure
\n to consummate the Merger is the result of a material breach of
\n this Agreement by the party seeking to terminate this
\n Agreement;<\/p>\n
(ii) if any Governmental Entity issues an order,
\n decree or ruling or takes any other action permanently
\n enjoining, restraining or otherwise prohibiting the Offer or
\n the Merger and such<\/p>\n
50<\/p>\n
order, decree, ruling or other action shall have
\n become final and nonappealable; or<\/p>\n
(iii) if the Offer has expired or has been terminated
\n in accordance with the terms set forth in this Agreement
\n (including Exhibit A) without Company Common Stock having been
\n purchased pursuant to the Offer; PROVIDED, HOWEVER, that the
\n terminating party is not then in material breach of any
\n representation, warranty or covenant contained in this
\n Agreement;<\/p>\n
(c) by Parent prior to the acceptance of shares of Company
\n Common Stock for payment pursuant to the Offer, if the Company breaches
\n or fails to perform in any material respect any of its representations,
\n warranties or covenants contained in this Agreement, which breach or
\n failure to perform (i) would give rise to the failure of a condition
\n set forth in Exhibit A, and (ii) cannot be or has not been cured within
\n 30 days after the giving of written notice to the Company of such
\n breach (provided that Parent is not then in material breach of any
\n representation, warranty or covenant contained in this Agreement);<\/p>\n
(d) by Parent if the Company Board or any committee thereof
\n withdraws or proposes to withdraw the Company Recommendation or its
\n approval or recommendation of this Agreement or the Merger (it being
\n understood and agreed that a communication by the Company Board to the
\n shareholders of the Company pursuant to Rule 14d-9(f)(3) under the
\n Exchange Act (or any similar communication to the stockholders of the
\n Company in connection with the commencement of a tender offer or
\n exchange offer) shall not be deemed to constitute a withdrawal of the
\n Company Recommendation or its recommendation of this Agreement or the
\n Merger) or approves or recommends, or proposes to approve or recommend,
\n any Company Takeover Proposal;<\/p>\n
(e) by the Company prior to the acceptance of shares of
\n Company Common Stock for payment pursuant to the Offer, if Parent
\n breaches or fails to perform in any material respect any of its
\n representations, warranties or covenants contained in this Agreement,
\n which breach or failure to perform cannot be or has not been cured
\n within 30 days after the giving of written notice to Parent of such
\n breach (provided that the Company is not then in material breach of any
\n representation, warranty or covenant in this Agreement); or<\/p>\n
51<\/p>\n
(f) by the Company prior to the acceptance of shares of
\n Company Common Stock for payment pursuant to the Offer in accordance
\n with Section 8.05(b); PROVIDED, HOWEVER, that the Company shall have
\n complied with all provisions thereof, including the notice provisions
\n therein.<\/p>\n
SECTION 8.02. EFFECT OF TERMINATION. In the event of
\ntermination of this Agreement by either the Company or Parent as provided in
\nSection 8.01, this Agreement shall forthwith become void and have no effect,
\nwithout any liability or obligation on the part of Parent, Sub or the Company,
\nother than Section 3.14, Section 4.06, the last sentence of Section 6.02, this
\nSection 8.02 and Article IX, which provisions shall survive such termination,
\nand except to the extent that such termination results from the wilful breach by
\na party of any representation, warranty or covenant set forth in this Agreement.<\/p>\n
SECTION 8.03. AMENDMENT. This Agreement may be amended by the
\nparties at any time before or after receipt of the Company Shareholder Approval;
\nPROVIDED, HOWEVER, that after receipt of the Company Shareholder Approval, there
\nshall be made no amendment that by law requires further approval by the
\nshareholders of the Company without the further approval of such shareholders.
\nThis Agreement may not be amended except by an instrument in writing signed on
\nbehalf of each of the parties.<\/p>\n
SECTION 8.04. EXTENSION; WAIVER. At any time prior to the
\nEffective Time, the parties may (a) extend the time for the performance of any
\nof the obligations or other acts of the other parties, (b) waive any
\ninaccuracies in the representations and warranties contained in this Agreement
\nor in any document delivered pursuant to this Agreement or (c) subject to the
\nproviso of Section 8.03, waive compliance with any of the agreements or
\nconditions contained in this Agreement. Any agreement on the part of a party to
\nany such extension or waiver shall be valid only if set forth in an instrument
\nin writing signed on behalf of such party. The failure of any party to this
\nAgreement to assert any of its rights under this Agreement or otherwise shall
\nnot constitute a waiver of such rights.<\/p>\n
SECTION 8.05. PROCEDURE FOR TERMINATION, AMEND MENT, EXTENSION
\nOR WAIVER. (a) A termination of this Agreement pursuant to Section 8.01, an
\namendment of this Agreement pursuant to Section 8.03 or an extension or waiver
\npursuant to Section 8.04 shall, in order to be effective, require in the case of
\nParent, Sub or the Company, action by its Board of Directors or the duly
\nauthorized designee of<\/p>\n
52<\/p>\n
its Board of Directors; PROVIDED, HOWEVER, that after the appointment of Sub’s
\ndesignees to the Company Board pursuant to Section 6.10, the approval of a
\nmajority of the Independent Directors shall be required for the Company to (i)
\nterminate this Agreement, (ii) exercise or waive any right of the Company under
\nthis Agreement, (iii) amend this Agreement or the Company Charter or Company
\nBy-laws in any manner adverse to the holders of Company Common Stock, (iv)
\nextend the time for performance of any obligation of Parent or Sub under this
\nAgreement, (v) extend or alter the Effective Time or (vi) grant any consent or
\ntake any other action with respect to this Agreement other than compliance
\nherewith.<\/p>\n
(b) The Company may terminate this Agreement pursuant to
\nSection 8.01(f) only if (i) the Company Board has received a Company Takeover
\nProposal that is a Superior Company Proposal, (ii) the Company has notified
\nParent in writing of its determination that such Company Takeover Proposal is a
\nSuperior Company Proposal, (iii) at least three business days following receipt
\nby Parent of the notice referred to in clause (ii) above, and taking into
\naccount any revised proposal made by Parent since receipt of the notice referred
\nto in clause (ii) above, such Superior Company Proposal remains a Superior
\nCompany Proposal, (iv) the Company is in compliance with Section 5.02 and (v)
\nthe Company Board concurrently approves, and the Company concurrently enters
\ninto, a definitive agreement providing for the implementation of such Superior
\nCompany Proposal.<\/p>\n
(c) For purposes of this Agreement:<\/p>\n
“SUPERIOR COMPANY PROPOSAL” means any proposal made
\n by a third party to merge with, combine or acquire
\n substantially all the equity securities or assets of the
\n Company, pursuant to a tender or exchange offer, a merger, a
\n consolidation, a liquidation or dissolution, a
\n recapitalization, a sale of its assets or otherwise, (i) on
\n terms which the Company Board determines in good faith, after
\n consultation with the Company’s independent financial advisor
\n and outside counsel, to provide greater financial value to the
\n holders of Company Common Stock than the Transactions, taking
\n into account all the terms and conditions of such proposal and
\n this Agreement (including any proposal by Parent to amend the
\n terms of the Transactions), and (ii) that is reasonably
\n capable of being completed, taking into account all financial,<\/p>\n
53<\/p>\n
regulatory, legal and other aspects of such proposal.<\/p>\n
ARTICLE IX<\/p>\n
GENERAL PROVISIONS<\/p>\n
SECTION 9.01. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.
\nNone of the representations and warranties in this Agreement or in any
\ninstrument delivered pursuant to this Agreement shall survive the Effective Time
\nor any termination of this Agreement pursuant to Section 8.01. This Section 9.01
\nshall not limit any covenant or agreement of the parties which by its terms
\ncontemplates performance after the Effective Time.<\/p>\n
SECTION 9.02. NOTICES. All notices, requests, claims, demands
\nand other communications under this Agree ment shall be in writing and shall be
\ndeemed given upon receipt by the parties at the following addresses (or at such
\nother address for a party as shall be specified by like notice):<\/p>\n
(a) if to Parent or Sub, to<\/p>\n
Weyerhaeuser Company
\n 33663 Weyerhaeuser Way South
\n Federal Way, WA 98003<\/p>\n
Attention: Robert A. Dowdy, Esq.<\/p>\n
with a copy to:<\/p>\n
Cravath, Swaine & Moore
\n Worldwide Plaza
\n 825 Eighth Avenue
\n New York, NY 10013
\n Attention: Alan C. Stephenson, Esq.<\/p>\n
(b) if to the Company, to<\/p>\n
Willamette Industries, Inc.
\n 1300 S.W. Fifth Avenue, Suite 3800
\n Portland, Oregon 97201<\/p>\n
Attention: Mr. Duane C. McDougall<\/p>\n
54<\/p>\n
with a copy to:<\/p>\n
Simpson Thacher & Bartlett
\n 425 Lexington Avenue
\n New York, NY 10017
\n Attention: Gary L. Sellers, Esq.
\n Mario A. Ponce, Esq.<\/p>\n
SECTION 9.03. DEFINITIONS. (a) For purposes of this Agreement:<\/p>\n
An “AFFILIATE” of any person means another person that
\ndirectly or indirectly, through one or more intermediaries, controls, is
\ncontrolled by, or is under common control with, such first person.<\/p>\n
A “MATERIAL ADVERSE EFFECT” on a party means a material
\nadverse effect on the business, assets, condition (financial or otherwise) or
\nresults of operations of such party and its subsidiaries, taken as a whole,
\nexcept to the extent resulting from (i) any changes in general United States or
\nglobal economic conditions or (ii) any changes in general economic conditions in
\nthe forest products industry.<\/p>\n
A “PERSON” means any individual, firm, corporation,
\npartnership, company, limited liability company, trust, joint venture,
\nassociation, Governmental Entity or other entity.<\/p>\n
A “SUBSIDIARY” of any person means another person, an amount
\nof the voting securities, other voting ownership or voting partnership interests
\nof which is sufficient to elect at least a majority of its board of directors or
\nother governing body (or, if there are no such voting interests, 50% or more of
\nthe equity interests of which) is owned directly or indirectly by such first
\nperson.<\/p>\n
(b) The following terms have the meanings give such terms in
\nthe Sections set forth below:<\/p>\n
\n\n Term Section
\n —- ——-<\/p>\n
\nAdjusted Option 6.04(b)(i)
\nAffected Employees 6.05
\naffiliate 9.03(a)
\nArticles of Merger 1.05
\nCertificates 2.02(b)
\nClosing 1.04
\nClosing Date 1.04
\nCode 3.09(e)
\n<\/c><\/s><\/caption>\n<\/table>\n 55<\/p>\n
\n
\nCompany Recitals
\nCompany Benefit Plans 3.11(a)
\nCompany Board Recitals
\nCompany By-laws 3.01
\nCompany Capital Stock 3.03
\nCompany Charter 3.01
\nCompany Common Stock Recitals
\nCompany Disclosure Letter 3.02(a)
\nCompany Employee Stock Option 6.04(e)
\nCompany Material Adverse Effect 3.01
\nCompany Non-Tandem SAR 3.03
\nCompany Pension Plans 3.11(a)
\nCompany Preferred Stock 3.03
\nCompany Recommendation 3.04(b)
\nCompany Rights 3.03
\nCompany Rights Agreement 3.03
\nCompany SAR 6.04(e)
\nCompany SEC Documents 3.06
\nCompany Shareholder Approval 3.04(c)
\nCompany Shareholders Meeting 6.01(b)
\nCompany Stock Plans 6.04(e)
\nCompany Subsidiaries 3.01
\nCompany Takeover Proposal 5.02(c)
\nConsent 3.05(b)
\nContract 3.05(a)
\nConversion Ratio 6.04(b)(i)
\nDissent Shares 2.01(d)
\nEffective Time 1.05
\nEnvironmental Laws 3.13(d)
\nERISA 3.11(a)
\nExchange Act 1.01(a)
\nExchange Fund 2.02(a)
\nExisting Offer Recitals
\nFiled Company SEC Documents 3.08
\nGAAP 3.06
\nGP 3.20
\nGP Transaction 3.20
\nGovernmental Entity 3.05(b)
\nHazardous Substance 3.13(d)
\nIndemnified Party 6.06(b)
\nIndependent Directors 6.10
\nInformation Statement 3.05(b)
\nInitial Expiration Date 1.01(a)
\nIntellectual Property Rights 3.18
\nJudgment 3.05(a)
\nLaw 3.05(a)
\nLiens 3.02(a)
\nLosses 6.06(b)
\nmaterial adverse effect 9.03(a)
\nMaximum Premium 6.06(d)
\nMerger Recitals
\n<\/c><\/s><\/table>\n 56<\/p>\n
\n
\nMerger Consideration 2.01(c)
\nOffer Recitals
\nOffer Documents 1.01(b)
\nOffer Price 1.01(a)
\nOregon Charities 3.19
\nOutside Date 8.01(b)(i)
\nORS 1.03
\nParent Recitals
\nParent Common Stock 6.04(b)(i)
\nParent Material Adverse Effect 4.01
\nPaying Agent 2.02(a)
\nperson 9.03(a)
\nProxy Statement 3.05(b)
\nRetention Plans 6.05(b)
\nRCW 1.03
\nSchedule 14D-9 1.02(b)
\nSchedule 14D-9 Amendment 1.02(b)
\nSchedule TO 1.01(b)
\nSchedule TO Amendment 1.01(b)
\nSEC 1.01(a)
\nSecurities Act 3.06
\nSub Recitals
\nsubsidiary 9.03(a)
\nSuperior Company Proposal 8.05(c)
\nSurviving Corporation 1.03
\nTax Return 3.09(f)
\nTaxes 3.09(f)
\nTransfer Taxes 6.09
\nTransactions 1.02(a)
\nVoting Company Debt 3.03
\n<\/c><\/s><\/table>\n SECTION 9.04. INTERPRETATION; DISCLOSURE LETTER. When a
\nreference is made in this Agreement to a Section, such reference shall be to a
\nSection of this Agreement unless otherwise indicated. The table of contents and
\nheadings contained in this Agreement are for reference purposes only and shall
\nnot affect in any way the meaning or interpretation of this Agreement. Whenever
\nthe words “include”, “includes” or “including” are used in this Agreement, they
\nshall be deemed to be followed by the words “without limitation”. Any matter
\ndisclosed in any section of either the Company Disclosure Letter shall be deemed
\ndisclosed for all purposes and all sections of the Company Disclosure Letter to
\nwhich such disclosure is clearly relevant.<\/p>\n
SECTION 9.05. SEVERABILITY. If any term or other provision of
\nthis Agreement is invalid, illegal or incapable of being enforced by any rule or
\nLaw, or public policy, all other conditions and provisions of this Agreement
\nshall nevertheless remain in full force and effect so long as the<\/p>\n
57<\/p>\n
economic or legal substance of the transactions contemplated hereby is not
\naffected in any manner materially adverse to any party. Upon such determination
\nthat any term or other provision is invalid, illegal or incapable of being
\nenforced, the parties hereto shall negotiate in good faith to modify this
\nAgreement so as to effect the original intent of the parties as closely as
\npossible in an acceptable manner to the end that transactions contemplated
\nhereby are fulfilled to the extent possible.<\/p>\n
SECTION 9.06. COUNTERPARTS. This Agreement may be executed in
\none or more counterparts, all of which shall be considered one and the same
\nagreement and shall become effective when one or more counterparts have been
\nsigned by each of the parties and delivered to the other parties.<\/p>\n
SECTION 9.07. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
\nThis Agreement, taken together with the Company Disclosure Letter, (a)
\nconstitute the entire agreement, and supersede all prior agreements and
\nunderstandings, both written and oral, among the parties with respect to the
\nTransactions and (b) except for the provisions of Article II, Section 6.04 and
\nSection 6.06, are not intended to confer upon any person other than the parties
\nany rights or remedies.<\/p>\n
SECTION 9.08. GOVERNING LAW. This Agreement shall be governed
\nby, and construed in accordance with, the laws of the State of Oregon,
\nregardless of the laws that might otherwise govern under applicable principles
\nof conflicts of laws thereof.<\/p>\n
SECTION 9.09. ASSIGNMENT. Neither this Agreement nor any of
\nthe rights, interests or obligations under this Agreement shall be assigned, in
\nwhole or in part, by opera tion of law or otherwise by any of the parties
\nwithout the prior written consent of the other parties, except that Sub may
\nassign, in its sole discretion, any of or all its rights, interests and
\nobligations under this Agreement to Parent or to any direct wholly owned
\nsubsidiary of Parent, but no such assignment shall relieve Sub of any of its
\nobligations under this Agreement. Any purported assignment without such consent
\nshall be void. Subject to the preceding sentences, this Agreement will be
\nbinding upon, inure to the benefit of, and be enforceable by, the parties and
\ntheir respective successors and assigns.<\/p>\n
SECTION 9.10. ENFORCEMENT. The parties agree that irreparable
\ndamage would occur in the event that any of the provisions of this Agreement
\nwere not performed in accordance with their specific terms or were otherwise<\/p>\n
58<\/p>\n
breached. It is accordingly agreed that the parties shall be entitled to an
\ninjunction or injunctions to prevent breaches of this Agreement and to enforce
\nspecifically the terms and provisions of this Agreement in any Federal court
\nlocated in the State of Oregon, this being in addition to any other remedy to
\nwhich they are entitled at law or in equity. In addition, each of the parties
\nhereto (a) consents to submit itself to the personal jurisdiction of any Federal
\ncourt located in the State of Oregon in the event any dispute arises out of this
\nAgreement or any Transaction, (b) agrees that it will not attempt to deny or
\ndefeat such personal jurisdiction by motion or other request for leave from any
\nsuch court, (c) agrees that it will not bring any action relating to this
\nAgreement or any Transaction in any court other than any Federal court sitting
\nin the State of Oregon and (d) waives any right to trial by jury with respect to
\nany action related to or arising out of this Agreement or any Transaction.<\/p>\n
59<\/p>\n
IN WITNESS WHEREOF, Parent, Sub and the Company have duly
\nexecuted this Agreement, all as of the date first written above.<\/p>\n
WEYERHAEUSER COMPANY,<\/p>\n
by \/s\/ STEVEN R. ROGEL
\n ————————–
\n Name: Steven R. Rogel
\n Title: President and Chief
\n Executive Officer<\/p>\n
COMPANY HOLDINGS, INC.,<\/p>\n
by \/s\/ RICHARD J. TAGGART
\n ————————–
\n Name: Richard J. Taggart
\n Title: Vice President and
\n Treasurer<\/p>\n
WILLAMETTE INDUSTRIES, INC.,<\/p>\n
by \/s\/ DUANE C. MCDOUGALL
\n ————————–
\n Name: Duane C. McDougall
\n Title: President and Chief
\n Executive Officer<\/p>\n
WILLAMETTE INDUSTRIES, INC.,<\/p>\n
by \/s\/ GREG W. HAWLEY
\n ————————–
\n Name: Greg W. Hawley
\n Title: Executive Vice President,
\n Chief Financial Officer,
\n Secretary and Treasurer<\/p>\n
EXHIBIT A<\/p>\n
CONDITIONS OF THE OFFER<\/p>\n
Notwithstanding any other term of the Offer or this Agreement,
\nSub shall not be required to accept for payment or, subject to any applicable
\nrules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
\n(relating to Sub’s obligation to pay for or return tendered shares of Company
\nCommon Stock promptly after the termination or withdrawal of the Offer), to pay
\nfor any shares of Company Common Stock tendered pursuant to the Offer unless
\nthere shall have been validly tendered and not withdrawn prior to the expiration
\nof the Offer that number of shares of Company Common Stock which would represent
\nat least a majority of the Fully Diluted Shares (the “MINIMUM TENDER
\nCONDITION”). The term “FULLY DILUTED SHARES” means all outstanding securities
\nentitled generally to vote in the election of directors of the Company on a
\nfully diluted basis, after giving effect to the exercise or conversion of all
\noptions, rights and securities exercisable or convertible into such voting
\nsecurities, other than potential dilution attributable to the Company Rights.
\nFurthermore, notwithstanding any other term of the Offer or this Agreement, Sub
\nshall not be required to accept for payment or, subject as aforesaid, to pay for
\nany shares of Company Common Stock not theretofore accepted for payment or paid
\nfor, and may terminate or amend the Offer, with the consent of the Company or
\nif, at the time of the acceptance of such shares for payment or the payment
\ntherefor, any of the following conditions exists:<\/p>\n
(a) there shall be pending any suit, action or proceeding by
\n any Governmental Entity that has a reasonable likelihood of success,
\n (i) challenging the acquisition by Parent or Sub of any Company Common
\n Stock, seeking to restrain or prohibit the making or consummation of
\n the Offer or the Merger or any other Transaction, or seeking to obtain
\n from the Company, Parent or Sub any damages that are material in
\n relation to the Company and the Company Subsidiaries taken as whole,
\n (ii) seeking to prohibit or limit the ownership or operation by the
\n Company, Parent or any of their respective subsidiaries of any material
\n portion of the business or assets of the Company and the Company
\n Subsidiaries taken as a whole or Parent and its subsidiaries taken as a
\n whole, or to compel the Company, Parent or any of their respective
\n subsidiaries to dispose of or hold separate any material portion of the
\n business or assets of the Company and the Company Subsidiaries taken as
\n a whole or Parent and its subsidiaries taken as a whole as a result of
\n the Offer, the Merger or any other Transaction, (iii) seeking to<\/p>\n
2<\/p>\n
impose limitations on the ability of Parent or Sub to acquire or hold,
\n or exercise full rights of ownership of, any shares of Company Common
\n Stock, including the right to vote the Company Common Stock purchased
\n by it on all matters properly presented to the shareholders of the
\n Company or (iv) seeking to prohibit Parent or any of its subsidiaries
\n from effectively controlling in any material respect the business or
\n operations of the Company and the Company Subsidiaries;<\/p>\n
(b) any statute, rule, regulation, legislation,
\n interpretation, judgment, order or injunction shall be enacted,
\n entered, enforced, promulgated, amended or issued with respect to, or
\n deemed applicable to, or any consent or approval withheld with respect
\n to, (i) Parent, the Company or any of their respective subsidiaries or
\n (ii) the Offer, the Merger or any other Transaction, by any
\n Governmental Entity that is reasonably likely to result, directly or
\n indirectly, in any of the consequences referred to in paragraph (a)
\n above;<\/p>\n
(c) except as disclosed in the Filed Company SEC Documents or
\n the Company Disclosure Letter, since the date of the most recent
\n audited financial statements included in the Filed Company SEC
\n Documents, there shall have occurred any event, change, effect or
\n development that, individually or in the aggregate, has had or is
\n reasonably likely to have, a Company Material Adverse Effect other than
\n any event, change, effect or development to the extent resulting from
\n the announcement of this Agreement and compliance by the Company with
\n the covenants set forth herein;<\/p>\n
(d) the Company Board of Directors or any committee thereof
\n shall have withdrawn or proposed to withdraw the Company Recommendation
\n or its approval or recommendation of this Agreement or the Merger or
\n approved or recommended, or proposed to approve or recommend, any
\n Company Takeover Proposal;<\/p>\n
(e) any representation and warranty of the Company in this
\n Agreement that is qualified as to materiality shall not be true and
\n correct or any such representation and warranty that is not so
\n qualified shall not be true and correct in any material respect, as of
\n such time, except to the extent such representation and warranty
\n expressly relates to an earlier date (in which case on and as of such
\n earlier date);<\/p>\n
3<\/p>\n
(f) the Company shall have failed to perform in any material
\n respect any obligation or to comply in any material respect with any
\n agreement or covenant of the Company to be performed or complied with
\n by it under this Agreement; or<\/p>\n
(g) this Agreement shall have been terminated in
\n accordance with its terms;<\/p>\n
which, in the sole judgment of Sub or Parent, in any such case, and regardless
\nof the circumstances giving rise to any such condition (including any action or
\ninaction by Parent or any of its affiliates), makes it inadvisable to proceed
\nwith such acceptance for payment or payment.<\/p>\n
The foregoing conditions are for the sole benefit of Sub and
\nParent and may be asserted by Sub or Parent regardless of the circumstances
\ngiving rise to such condition or may (subject to Section 1.01) be waived by Sub
\nand Parent in whole or in part at any time and from time to time in their sole
\ndiscretion. The failure by Parent, Sub or any other affiliate of Parent at any
\ntime to exercise any of the foregoing rights shall not be deemed a waiver of any
\nsuch right, the waiver of any such right with respect to particular facts and
\ncircumstances shall not be deemed a waiver with respect to any other facts and
\ncircumstances and each such right shall be deemed an ongoing right that may be
\nasserted at any time and from time to time.<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9336],"corporate_contracts_industries":[9457],"corporate_contracts_types":[9622,9626],"class_list":["post-43146","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-willamette-industries-inc","corporate_contracts_industries-manufacturing__paper","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43146"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43146"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43146"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}