AGREEMENT AND PLAN OF MERGER
DATED AS OF
AUGUST 17, 1999
AMONG
FOOD LION, INC.,
HANNAFORD BROS. CO.
AND
FL ACQUISITION SUB, INC.
TABLE OF CONTENTS
PAGE
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Article 1 The Merger........................................ A-1
Section 1.01 The Merger................................... A-1
Section 1.02 Articles of Incorporation.................... A-2
Section 1.03 Bylaws....................................... A-2
Section 1.04 Directors and Officers....................... A-2
Article 2 Conversion of Securities.......................... A-2
Section 2.01 Conversion of Securities..................... A-2
Section 2.02 Surrender of Certificates.................... A-5
Section 2.03 No Further Ownership Rights in Company Common
Stock................................................... A-6
Section 2.04 Lost, Stolen or Destroyed Certificates....... A-6
Section 2.05 Withholding Rights........................... A-6
Section 2.06 Dissenting Shares............................ A-7
Section 2.07 Stock Option and Other Stock Plans........... A-7
Article 3 Representations and Warranties of Company......... A-8
Section 3.01 Organization and Power....................... A-8
Section 3.02 Corporate Authorization...................... A-9
Section 3.03 Governmental Authorization................... A-9
Section 3.04 Non-Contravention............................ A-9
Section 3.05 Capitalization of Company.................... A-10
Section 3.06 Capitalization of Subsidiaries............... A-10
Section 3.07 SEC Filings.................................. A-11
Section 3.08 Financial Statements......................... A-11
Section 3.09 Disclosure Documents......................... A-11
Section 3.10 Information Supplied......................... A-12
Section 3.11 Absence of Certain Changes................... A-12
Section 3.12 No Undisclosed Material Liabilities.......... A-13
Section 3.13 Litigation................................... A-13
Section 3.14 Taxes........................................ A-13
Section 3.15 Employee Benefit Plans; ERISA................ A-14
Section 3.16 Compliance with Laws; No Default............. A-16
Section 3.17 No Default................................... A-16
Section 3.18 Finders' Fees................................ A-16
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PAGE
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Section 3.19 Environmental Matters........................ A-16
Section 3.20 Opinion of Financial Advisor................. A-17
Section 3.21 [Intentionally deleted]...................... A-17
Section 3.22 Takeover Statutes............................ A-17
Section 3.23 Affiliates................................... A-17
Section 3.24 Company's Articles of Incorporation.......... A-17
Section 3.25 Company Rights Agreement..................... A-17
Article 4 Representations and Warranties of Parent.......... A-18
Section 4.01 Organization and Power....................... A-18
Section 4.02 Corporate Authorization...................... A-18
Section 4.03 Governmental Authorization................... A-18
Section 4.04 Non-Contravention............................ A-18
Section 4.05 Capitalization of Parent..................... A-19
Section 4.06 Capitalization of Subsidiaries............... A-19
Section 4.07 SEC Filings.................................. A-20
Section 4.08 Financial Statements......................... A-20
Section 4.09 Disclosure Documents......................... A-20
Section 4.10 Information Supplied......................... A-20
Section 4.11 Absence of Certain Changes................... A-21
Section 4.12 No Undisclosed Material Liabilities.......... A-22
Section 4.13 Litigation................................... A-22
Section 4.14 Taxes........................................ A-22
Section 4.15 Employee Benefits, ERISA..................... A-22
Section 4.16 Compliance with Laws......................... A-23
Section 4.17 No Default................................... A-24
Section 4.18 Finders' Fees................................ A-24
Section 4.19 Environmental Matters........................ A-24
Section 4.20 [Intentionally Deleted]...................... A-24
Section 4.21 Takeover Statutes............................ A-24
Section 4.22 Affiliates................................... A-25
Section 4.23 Merger Subsidiary............................ A-25
Section 4.24 Financing.................................... A-25
Article 5 Covenants......................................... A-25
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PAGE
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Section 5.01 Conduct of Company........................... A-25
Section 5.02 Conduct of Parent............................ A-27
Section 5.03 Shareholder Meeting; Proxy Materials; Form
S-4..................................................... A-28
Section 5.04 Access to Information........................ A-29
Section 5.05 No Solicitation.............................. A-29
Section 5.06 Notice of Certain Events..................... A-30
Section 5.07 Reasonable Best Efforts...................... A-31
Section 5.08 Cooperation.................................. A-32
Section 5.09 Public Announcements......................... A-32
Section 5.10 Further Assurances........................... A-32
Section 5.11 Affiliates................................... A-32
Section 5.12 Director and Officer Liability............... A-33
Section 5.13 Obligations of Merger Subsidiary............. A-33
Section 5.14 Listing of Stock............................. A-33
Section 5.15 Antitakeover Statutes........................ A-33
Section 5.16 Parent Board................................. A-34
Section 5.17 Employee Benefits............................ A-34
Section 5.18 Stock Exchange Agreement..................... A-34
Section 5.19 Definitive Financing Documents............... A-34
Article 6 Conditions to the Merger.......................... A-35
Section 6.01 Conditions to the Obligations of Each
Party................................................... A-35
Section 6.02 Conditions to the Obligations of Parent and
Merger Subsidiary....................................... A-35
Section 6.03 Conditions to the Obligations of Company..... A-35
Article 7 Termination....................................... A-36
Section 7.01 Termination.................................. A-36
Section 7.02 Effect of Termination........................ A-37
Section 7.03 Payments..................................... A-37
Article 8 Miscellaneous..................................... A-37
Section 8.01 Certain Definitions.......................... A-37
Section 8.02 Notices...................................... A-38
Section 8.03 Entire Agreement;Non-Survival of
Representations and Warranties; Third Party
Beneficiaries........................................... A-38
Section 8.04 Amendments; No Waivers....................... A-38
Section 8.05 Successors and Assigns....................... A-39
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PAGE
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Section 8.06 Governing Law................................ A-39
Section 8.07 Jurisdiction................................. A-39
Section 8.08 Counterparts; Effectiveness.................. A-39
Section 8.09 Interpretation............................... A-39
Section 8.10 Severability................................. A-39
Section 8.11 Specific Performance......................... A-39
Section 8.12 Joint and Several Liability.................. A-40
Schedules
Exhibit A Form of Company Voting Agreement
Exhibit B Stock Exchange Agreement
Exhibit C Registration Rights Agreement
iv
[CONFORMED COPY]
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 17, 1999, among FOOD
LION, INC., a North Carolina corporation ("PARENT"), HANNAFORD BROS. CO., a
Maine corporation ("COMPANY"), and FL ACQUISITION SUB, INC., a Maine corporation
and a wholly-owned subsidiary of Parent ("MERGER SUBSIDIARY").
WHEREAS, the respective Boards of Directors of Parent and Company have
approved, and deem it advisable and in the best interests of their respective
shareholders to consummate, the merger of Merger Subsidiary with and into
Company on the terms and conditions set forth herein;
WHEREAS, pursuant to the Merger, among other things, each issued and
outstanding share of Company Common Stock, including Company Rights (each as
defined in Section 2.01(a)), issued and outstanding immediately prior to the
effective time, other than shares held directly by Parent or shares held by
Dissenting Holders (as defined in Section 2.06) will be converted into the right
to receive Merger Consideration (as defined in Section 2.02(b));
WHEREAS, as a condition and inducement to Parent's willingness to enter into
this Agreement, concurrently with the execution and delivery of this Agreement,
Parent and certain stockholders of Company (the "VOTING STOCKHOLDERS") are
entering into a voting agreement dated as of the date of this Agreement (the
"COMPANY VOTING AGREEMENT"), a form of which is attached hereto as Exhibit A,
pursuant to which such stockholders agree to vote their shares of Company Common
Stock (as hereinafter defined) in favor of the proposal to approve and adopt the
Merger and this Agreement;
WHEREAS, simultaneously with the execution of this Agreement, Parent and the
Voting Stockholders are entering into a Stock Exchange Agreement (the "STOCK
EXCHANGE AGREEMENT"), a form of which is attached hereto as Exhibit B, whereby
the Voting Stockholders agree to sell shares of Company Common Stock to Parent
in exchange for shares of Parent Common Stock (as defined herein) and cash as
set forth therein, such transaction to be consummated immediately prior to the
consummation of the Merger; and
WHEREAS, simultaneously with the execution of this Agreement, Parent and
certain stockholders are entering into a Registration Rights Agreement, a form
of which is attached hereto as Exhibit C, whereby Company has agreed to register
the resale of the shares of Parent Common Stock that such stockholders will
receive in connection with the Merger and the Stock Exchange Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE 1
THE MERGER
Section 1.01 THE MERGER. (a) Upon the terms and subject to the conditions
set forth in this Agreement, at the Effective Time (as hereinafter defined),
Merger Subsidiary shall be merged (the "Merger") with and into Company in
accordance with the Maine Business Corporation Act (the "Maine Law"), whereupon
the separate existence of Merger Subsidiary shall cease, and Company shall
continue as the surviving corporation (the "Surviving Corporation").
(b) Upon the terms and subject to the conditions of this Agreement, the
closing of the Merger (the "Closing") shall take place at 10:00 a.m. on a date
(the "Closing Date") which shall be the second business day after satisfaction
or waiver of the conditions set forth in Article 6, other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver
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of those conditions, at the offices of Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, New York 10153, or at such other time, date or place as agreed
to in writing by the parties hereto.
(c) Upon the Closing, Company and Merger Subsidiary will file articles of
merger, with an attached plan of merger in a form to be agreed upon by the
parties in accordance with the terms of this Agreement, with the Secretary of
State of the State of Maine and make all other filings or recordings required by
the Maine Law in connection with the Merger. The Merger shall become effective
at such time as the articles of merger are duly filed with the Secretary of
State of the State of Maine or at such later time as is agreed by Parent and
Company and specified in the articles of merger (the "Effective Time").
(d) The Merger shall have the effects set forth in Section 905 of the Maine
Law.
Section 1.02 ARTICLES OF INCORPORATION. The articles of incorporation of
Company shall be the articles of incorporation of the Surviving Corporation,
except that, at the Effective Time, certain amendments thereto as agreed to by
Parent and Company shall be effected in the articles of merger filed pursuant to
Section 1.01(c).
Section 1.03 BYLAWS. The bylaws of Merger Subsidiary in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
Section 1.04 DIRECTORS AND OFFICERS. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
the Maine Law and the articles of incorporation and bylaws of the Surviving
Corporation, (a) the directors of Merger Subsidiary at the Effective Time shall
be the directors of the Surviving Corporation, and (b) the officers of Company
at the Effective Time shall be the officers of the Surviving Corporation.
ARTICLE 2
CONVERSION OF SECURITIES
Section 2.01 CONVERSION OF SECURITIES. As of the Effective Time, by virtue
of the Merger and without any action on the part of any holder of any capital
stock of Parent, Merger Subsidiary or Company:
(a) COMPANY COMMON STOCK. Each share of common stock, par value $0.75 per
share, of Company ("Company Common Stock"), including the associated right (the
"Company Rights") to purchase shares of Series A Junior Participating Preferred
Stock, no par value, of Company, pursuant to the terms of the Rights Agreement,
dated as of December 16, 1997, between Company and Continental Stock Transfer
and Trust Company (the "Company Rights Agreement"), issued and outstanding
immediately prior to the Effective Time (other than any shares of Company Common
Stock held directly by Parent, all of which shares shall be cancelled and
extinguished, or shares held by Dissenting Holders (as defined in
Section 2.06)) automatically will be converted into the right to receive,
pursuant to the provisions of this Section 2.01:
(i) (A) $79.00 in cash, without interest (the "Per Share Cash Amount")
or (B) the number of fully paid and non-assessable shares of Class A common
stock ("Parent Common Stock"), of Parent equal to $79.00 divided by (i) the
average of the per share last sales prices, regular way (rounded to 4
decimal points, the "Average Parent Price") of the Parent Common Stock as
reported on the New York Stock Exchange, Inc. (the "NYSE") composite
transactions reporting system as reported in the New York City edition of
The Wall Street Journal, or, if not reported therein, another authoritative
source) for the ten consecutive trading days (the "Average Period") prior to
(but not including) the Closing Date or (ii) $ 9.00, whichever is higher
(the "Exchange Ratio") or (C) a combination of cash and shares of Parent
Common Stock, all as determined in accordance with this Section 2.01.
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(ii) The aggregate number of shares of Company Common Stock to be
converted into the right to receive cash in the Merger (the "Cash Election
Number") shall be 27,316,686 shares plus 86% of any shares of Company Common
Stock issued after the date hereof pursuant to the exercise of Company Stock
Options outstanding at the date hereof. The remaining number of shares of
Company Common Stock outstanding immediately prior to the Effective Time
(the "Stock Election Number"), will be converted into the right to receive
Parent Common Stock in the Merger.
(iii) Subject to the allocation and election procedures set forth in
this Section 2.01, each record holder of shares of Company Common Stock
immediately prior to the Effective Time will be entitled in respect of each
such share to (i) elect to receive cash for such share (a "Cash Election"),
(ii) elect to receive Parent Common Stock for such share (a "Stock
Election"), or (iii) indicate that such record holder has no preference as
to the receipt of cash or Parent Common Stock for such share (a
"Non-Election"). All such elections will be made on a form designated for
that purpose (a "Form of Election").
(iv) If the aggregate number of shares covered by Cash Elections (the
"Cash Election Shares") exceeds the Cash Election Number, all shares of
Company Common Stock covered by Stock Elections (the "Stock Election
Shares") and all shares of Company Common Stock covered by Non-Elections or
as to which no election is made (the "Non-Election Shares") will be
converted into the right to receive Parent Common Stock, and the Cash
Election Shares (which, for the purposes of the calculation below, shall
include Dissenting Shares, if any) will be converted into the right to
receive cash and Parent Common Stock in the following manner:
Each Cash Election Share will be converted into the right to receive
(A) an amount of cash, without interest, equal to the product of (x) the
Per Share Cash Amount and (y) a fraction (the "CASH FRACTION"), the
numerator of which is the Cash Election Number and the denominator of
which will be the total number of Cash Election Shares, and (B) a number
of shares of Parent Common Stock equal to the product of (x) the Exchange
Ratio and (y) a fraction equal to one minus the Cash Fraction.
(v) If the aggregate number of Stock Election Shares exceeds the Stock
Election Number, all Cash Election Shares and all Non-Election Shares will
be converted into the right to receive cash, and all Stock Election Shares
will be converted into the right to receive Parent Common Stock and cash in
the following manner:
Each Stock Election Share will be converted into the right to receive
(A) an amount of shares of Parent Common Stock equal to the product of
(x) the Exchange Ratio and (y) a fraction (the "STOCK FRACTION"), the
numerator of which will be the Stock Election Number and the denominator
of which will be the total number of Stock Election Shares, and (B) an
amount in cash, without interest, equal to the product of (x) the Per
Share Cash Amount and (y) a fraction equal to one minus the Stock
Fraction.
(vi) In the event that neither subparagraph (iv) or subparagraph
(v) above is applicable, all Cash Election Shares will be converted into the
right to receive cash, all Stock Election Shares will be converted into the
right to receive Parent Common Stock, and all Non-Election Shares will be
converted into the right to receive (A) an amount in cash equal to the
product of (x) the Per Share Cash Amount and (y) a fraction, the numerator
of which is the Cash Election Number less the Cash Election Shares (which,
for the purposes of this calculation, shall include Dissenting Shares, if
any) and the denominator of which is the Non-Election Shares and (B) a
number of shares of Parent Common Stock equal to the product of (x) the
Exchange Ratio and (y) a fraction, the numerator of which is the Stock
Election Number less the Stock Election Shares and the denominator of which
is the Non-Election Shares.
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(b) Election Procedure.
(i) Parent and Company each will use its reasonable best efforts to
cause a Form of Election to be mailed not less than thirty (30) days prior
to the anticipated Effective Time to all holders of record of shares of
Company Common Stock and to make the Form of Election available to all
persons who become record holders of Company Common Stock subsequent to such
time. Elections will be made by record holders of Company Common Stock by
mailing to the Exchange Agent a Form of Election. Holders of record of
shares of Company Common Stock who hold such shares as nominees, trustees or
in other representative capacities (a "Stock Representative") may submit
multiple Forms of Election, provided that such Stock Representative
certifies that each such Form of Election covers all the shares of Company
Common Stock held by each Stock Representative for a particular beneficial
owner. To be effective, a Form of Election must be properly completed,
signed and submitted to the Exchange Agent. Parent will have the discretion,
which it may delegate in whole or in part to the Exchange Agent, to
determine whether Forms of Election have been properly completed, signed and
submitted or revoked and to disregard immaterial defects in Forms of
Election. The decision of Parent (or the Exchange Agent) in such matters, if
reasonably reached, will be conclusive and binding. Neither Parent nor the
Exchange Agent will be under any obligation to notify any person of any
defect in a Form of Election submitted to the Exchange Agent. The Exchange
Agent will make all computations contemplated by this Section 2.01 and all
such computations will be conclusive and binding on the holders of Company
Common Stock.
(ii) For the purposes hereof, a record holder of Company Common Stock
who does not submit a Form of Election that is received by the Exchange
Agent prior to the Election Deadline (as defined herein) will be deemed to
have made a Non-Election. If Parent or the Exchange Agent determine that any
purported Cash Election or Stock Election was not properly made (and any
such defect is not subsequently cured), such purported Cash Election or
Stock Election will be deemed to be of no force and effect and the
shareholder making such purported election will for purposes hereof be
deemed to have made a Non-Election.
(iii) A Form of Election must be received by the Exchange Agent by the
close of business on the last business day prior to the day during which the
Effective Time occurs (the "Election Deadline") in order to be effective.
All elections may be revoked by record holders submitting the Forms of
Election if such revocation is in writing and received by the Exchange Agent
prior to the Election Deadline.
(c) CANCELLATION OF CERTAIN SHARES. Each share of Company Common Stock
held in the treasury of Company or owned by Parent or Merger Subsidiary
immediately prior to the Effective Time shall be cancelled and extinguished, and
no consideration shall be delivered therefor.
(d) CAPITAL STOCK OF MERGER SUBSIDIARY. Each share of Common Stock, $0.75
par value, of Merger Subsidiary issued and outstanding immediately prior to the
Effective Time shall automatically be converted into one validly issued, fully
paid and non-assessable share of common stock, $0.75 par value, of the Surviving
Corporation.
(e) ADJUSTMENT. The Exchange Ratio, all references to $9.00 in Section
2.07 hereof, the reference to 21,838,944 shares of Parent Common Stock contained
in Section 2.07(a) hereof and the reference to the per share cash dividend
amount contained in Section 5.02(f) hereof, shall be adjusted to reflect fully
the effect of any stock split, reverse split, stock dividend (including any
dividend or distribution of securities convertible into Parent Common Stock),
reorganization, recapitalization or other like change with respect to Parent
Common Stock occurring after the date hereof and having a record or effective
date prior to the Effective Time.
(f) FRACTIONAL SHARES. No fraction of a share of Parent Common Stock will
be issued by virtue of the Merger, but in lieu thereof each holder of shares of
Company Common Stock who would otherwise
A-4
be entitled to a fraction of a share of Parent Common Stock (after aggregating
all fractional shares of Parent Common Stock to be received by such holder)
shall receive from Parent an amount of cash (rounded down to the nearest whole
cent), without interest thereon, equal to the product of (i) such fraction and
(ii) the Closing Date Price.
For purposes hereof, the "CLOSING DATE PRICE" of a share of Parent Common
Stock shall be the closing sales price of a share of Parent Common Stock as
reported on the NYSE for the trading day immediately prior to the day during
which the Effective Time occurs.
Section 2.02 SURRENDER OF CERTIFICATES.
(a) EXCHANGE AGENT. Parent shall select a bank or trust company reasonably
acceptable to Company, which may be Parent's existing transfer agent, to act as
the exchange agent (the "Exchange Agent") in the Merger.
(b) PARENT TO PROVIDE MERGER CONSIDERATION. At the Closing, Parent shall
make available to the Exchange Agent for exchange in accordance with this
Article 2 certificates for the shares of Parent Common Stock issuable, and cash
payable, pursuant to Section 2.01(a) in exchange for outstanding shares of
Company Common Stock and cash in an amount sufficient for payment in lieu of
fractional shares pursuant to Section 2.01(f) and any dividends or distributions
to which holders of shares of Company Common Stock may be entitled pursuant to
Section 2.02(d). The shares of Parent Common Stock issuable pursuant to
Section 2.01(a) and the cash payable pursuant to Sections 2.01(a) and (f) and
Section 2.02(d) are referred to collectively as the "Merger Consideration."
(c) EXCHANGE PROCEDURES. Promptly after the Effective Time, Parent shall
cause the Exchange Agent to mail to each holder of record as of the Effective
Time a certificate or certificates (the "Certificates") that immediately prior
to the Effective Time represented outstanding shares of Company Common Stock
whose shares were converted into the right to receive a pro rata portion of the
Merger Consideration (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Parent shall reasonably specify)
and (ii) instructions for effecting the exchange of the Certificates for a pro
rata portion of the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal duly completed and
validly executed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor a pro rata portion
of the Merger Consideration in accordance with Section 2.01, and the Certificate
so surrendered shall forthwith be cancelled. Until so surrendered, each
outstanding Certificate will be deemed from and after the Effective Time, for
all corporate purposes, subject to Section 2.02(d) as to the payment of
dividends, to evidence only the ownership of the number of full shares of Parent
Common Stock and the aggregate Per Share Cash Amount into which the shares of
Company Common Stock evidenced by such Certificate shall have been so converted
and the right to receive an amount in cash in lieu of the issuance of any
fractional shares in accordance with Section 2.01(f) and any dividends or
distributions payable pursuant to Section 2.02(d).
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions declared or made after the date of this Agreement with
respect to Parent Common Stock with a record date after the Effective Time will
be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parent Common Stock represented thereby until the holder of record of
such Certificate shall surrender such Certificate. Subject to the effect of
applicable abandoned property, escheat or similar laws, following surrender of
any such Certificate, there shall be delivered to the record holder thereof,
(i) a certificate representing whole shares of Parent Common Stock and the
aggregate Per Share Cash Amount issuable and payable in exchange for such
Certificate, without interest, (ii) payments of the amount of dividends or other
distributions with a record date after the
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Effective Time then payable with respect to such whole shares of Parent Common
Stock and (iii) cash in lieu of any fractional shares in accordance with
Section 2.01(f).
(e) TRANSFERS OF OWNERSHIP. If any certificate for shares of Parent Common
Stock is to be issued in a name other than that in which the Certificate
surrendered in exchange therefor is registered or if any other portion of the
Merger Consideration is to be payable to a person other than the person to whom
such Certificate is registered, it will be a condition of the issuance and
payment thereof that the Certificate so surrendered will be properly endorsed,
accompanied by any documents required to evidence and effect such transfer and
otherwise be in proper form for transfer and that the person requesting such
exchange will have paid to Parent or any agent designated by it any applicable
transfer taxes required by reason of the issuance of a certificate for shares of
Parent Common Stock in any name, or the payment of any other portion of the
Merger Consideration to any person, other than that of the registered holder of
the Certificate surrendered, or shall provide evidence that any applicable
transfer taxes have been paid.
(f) NO LIABILITY. Notwithstanding anything to the contrary in this
Section 2.02, none of the Exchange Agent, Parent, the Surviving Corporation nor
any other party hereto shall be liable to any person in respect of any Merger
Consideration for any amount properly delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(g) TERMINATION OF EXCHANGE AGENT. Any Merger Consideration made available
to the Exchange Agent pursuant to Section 2.02(b) and not exchanged within
twelve months after the Effective Time pursuant to this Section 2.02 shall be
returned by the Exchange Agent to Parent, which shall thereafter act as Exchange
Agent, and thereafter any holder of unsurrendered Certificates shall look as a
general creditor only to Parent for payment of any funds to which such holder
may be due, subject to applicable law.
Section 2.03 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. The
Merger Consideration issued and paid in exchange of shares of Company Common
Stock in accordance with the terms hereof shall be deemed to have been issued
and paid in full satisfaction of all rights pertaining to such shares of Company
Common Stock, and there shall be no further registration of transfers on the
records of the Surviving Corporation of shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be cancelled and exchanged as provided in this Article 2.
Section 2.04 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
deliver in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the Merger
Consideration; provided, however, that Parent may, in its discretion and as a
condition precedent to such delivery, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Parent or the Exchange
Agent with respect to the Certificates alleged to have been lost, stolen or
destroyed.
Section 2.05 WITHHOLDING RIGHTS. Each of the Surviving Corporation and
Parent shall be entitled, or shall be entitled to cause the Exchange Agent, to
deduct and withhold from the Merger Consideration otherwise payable pursuant to
this Agreement to any holder of shares of Company Common Stock such amounts as
it is required to deduct and withhold with respect to the making of such payment
under the Code and the rules and regulations promulgated thereunder, or any
provision of a Tax law. To the extent that amounts are so withheld by the
Surviving Corporation, Parent or the Exchange Agent, as the case may be, such
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Company Common Stock in respect to which such
deduction and withholding was made by the Surviving Corporation or Parent, as
the case may be.
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Section 2.06 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the contrary, any
issued and outstanding shares of Company Common Stock held by a person who has
demanded appraisal of such shares in accordance with Section 909 of the Maine
Law ("Dissenting Holder") and as of the Effective Time has neither effectively
withdrawn nor lost his right to such appraisal ("Dissenting Shares"), shall not
be converted into or represent a right to receive cash and/or Parent Common
Stock pursuant to Section 2.01(a) but such Dissenting Holder thereof shall be
entitled to only such rights in respect thereof as are granted by Section 909 of
the Maine Law.
(b) Notwithstanding the provision of subsection (a) of this Section, if any
Dissenting Holder who demands appraisal of his shares of Company Common Stock
under the Maine Law shall effectively withdraw or lose his right to appraisal,
then as of the Effective Time or the occurrence of such event, whichever later
occurs, such shares automatically shall be converted into and represent only the
right to receive cash and/or Parent Common Stock as provided in
Section 2.01(a), without interest thereon, upon surrender of the certificate or
certificates representing such shares.
(c) Company shall give Parent (i) prompt notice of any written demands for
appraisal or payment of the fair value of any shares of Company Common Stock,
withdrawals of such demands and any other related instruments served pursuant to
the Maine Law received by Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under the
Maine Law. Company shall not voluntarily make any payment with respect to any
demands for appraisal and shall not, except with the prior written consent of
Parent and Merger Subsidiary, settle or offer to settle any such demands.
Section 2.07 STOCK OPTION AND OTHER STOCK PLANS.
(a) As soon as practicable following the date of this Agreement, Parent and
Company shall take such action with respect to Company's 1998 Stock Option Plan,
Employee Stock Purchase Plan, 1988 Stock Plan and Stock Ownership Plan for
Outside Directors (collectively, the "Company Option Plans") as may be required
to effect the following provisions of this Section 2.07(a). At the Effective
Time, each option to purchase shares of Company Common Stock pursuant to the
Company Option Plans that is then outstanding, whether vested or unvested (each
a "Company Stock Option"), shall be assumed by Parent and converted into an
immediately exercisable option (or a new substitute option shall be granted)
(each, as so adjusted, an "Adjusted Option") to purchase the number of shares of
Parent Common Stock (rounded up to the nearest whole share) equal to (x) the
number of shares of Company Common Stock subject to such option multiplied by
(y) $79 divided by the Average Parent Price, at an exercise price per share of
Parent Common Stock (rounded down to the nearest penny) equal to (A) the former
exercise price per share of Company Common Stock under such option immediately
prior to the Effective Time divided by (B) $79 divided by the Average Parent
Price; provided, however, that if the Average Parent Price is less than $9.00,
the total number of shares of Parent Common Stock which may be issued pursuant
to the exercise of Adjusted Options during the one-year period following the
Effective Time (excluding Adjusted Options exercised by any Company employee
following the termination of his or her employment by the Company during such
one-year period) shall not exceed 21,838,944; provided, further, however, that
in the case of any Company Stock Option to which Section 421 of the Code applies
by reason of its qualification under Section 422 of the Code, the conversion
formula in this paragraph shall be adjusted, if necessary, to comply with
Section 424(a) of the Code. Except as provided above, the Adjusted Options shall
be subject to the same terms and conditions as were applicable to the converted
option immediately prior to the Effective Time. After the date hereof, the
Company shall determine (with the prior consent of Parent) the manner in which
the maximum number of shares specified above will be apportioned among holders
of Adjusted Options if the Average Parent Price is less than $9.00.
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(b) As soon as practicable after the Effective Time (but in no event more
than 30 days thereafter), Parent shall deliver to the holders of Company Stock
Options appropriate notices setting forth such holders' rights pursuant to the
respective Company Option Plans and the agreements evidencing the grants of such
Company Stock Options and stating that such Company Stock Options and agreements
shall be assumed by Parent and shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 2.07 after
giving effect to the Merger). Parent shall comply with the terms of the Company
Option Plans and ensure that the Company Stock Options that qualified as
incentive stock options prior to the Effective Time continue to qualify as
incentive stock options after the Effective Time.
(c) Parent shall take such actions as are reasonably necessary for the
assumption of the Company Option Plans pursuant to this Section 2.07, including
the reservation, issuance and listing of Parent Common Stock as is necessary to
effectuate the transactions contemplated by this Section 2.07. Parent shall
prepare and file with the SEC (as hereinafter defined) a registration statement
on Form S-8 or other appropriate form with respect to shares of Parent Common
Stock subject to Adjusted Options issued under such Company Option Plans and
shall use its reasonable best efforts to have such registration statement
declared effective immediately following the Effective Time and to maintain the
effectiveness of such registration statement or registration statements covering
such Adjusted Options (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such Adjusted Options remain
outstanding.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent that:
Section 3.01 ORGANIZATION AND POWER. (a) Each of Company and its
Subsidiaries is a corporation, partnership or other entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, and has the requisite corporate or other power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted. Each of Company and its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification or licensing necessary,
except where the failure to be so duly qualified or licensed and in good
standing would not, individually or in the aggregate, have a Material Adverse
Effect on Company.
For purposes of this Agreement, a "MATERIAL ADVERSE EFFECT" with respect to
Company or Parent, as the case may be, means a material adverse effect (i) on
the financial condition, business, properties, or results of operations of such
person and its Subsidiaries, taken as a whole, or (ii) on the ability of such
person to perform its obligations under or to consummate the transactions
contemplated by this Agreement, provided that none of the following shall
constitute a Material Adverse Effect: (i) occurrences affecting Company's or
Parent's or any of their respective Subsidiaries' businesses as a result of the
announcement of the execution of this Agreement; (ii) general economic
conditions; (iii) any changes generally affecting the industries in which
Company and its Subsidiaries or Parent and its Subsidiaries operate; or
(iv) changes in Company's business after the date hereof attributable solely to
actions taken by Parent.
(b) Section 3.01 of the disclosure schedule delivered by Company to Parent
prior to the execution of this Agreement (the "Company Disclosure Schedule")
sets forth a complete list of Company's Subsidiaries that are "significant
subsidiaries", as such term is defined in Section 1-02 of Regulation S-X under
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "1934 Act") (each, a "Significant Subsidiary").
Company has heretofore
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delivered to Parent true and complete copies of Company's articles of
incorporation and bylaws as currently in effect.
Section 3.02 CORPORATE AUTHORIZATION. (a) The execution, delivery and
performance by Company of this Agreement and the consummation by Company of the
transactions contemplated hereby are within Company's corporate powers and,
except as set forth in the next succeeding sentence of this Section 3.02, have
been duly authorized by all necessary corporate action. The affirmative vote of
the holders of a majority of the outstanding shares of Company Common Stock
entitled to vote on this Agreement (the "Company Requisite Vote") is the only
vote of any class or series of Company's capital stock necessary to approve and
adopt this Agreement and the transactions contemplated by this Agreement. This
Agreement has been duly executed and delivered by Company and constitutes a
valid and binding agreement of Company, enforceable against Company in
accordance with its terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether in a proceeding at equity or at
law).
(b) The Board of Directors of Company (the "Company Board") has, by
unanimous vote of those present, duly and validly authorized the execution and
delivery of this Agreement and approved the consummation of the transactions
contemplated hereby, and taken all corporate actions required to be taken by the
Company Board for the consummation of the transactions, including the Merger,
contemplated hereby and has resolved to (i) deem this Agreement and the
transactions contemplated hereby, including the Merger, taken together,
advisable and fair to, and in the best interests of, Company and its
shareholders and (ii) recommend that the shareholders of Company approve and
adopt this Agreement. The Company Board has directed that this Agreement be
submitted to the shareholders of Company for their approval.
Section 3.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Company of this Agreement, and the consummation by Company of the
transactions contemplated hereby, require no action by or in respect of, or
filing with, any federal, state or local government or any court, administrative
agency or commission or other governmental agency or authority (a "Governmental
Authority") other than: (a) the filing of articles of merger with respect to the
Merger with the Secretary of State of the State of Maine and appropriate
documents with the relevant authorities of other states in which Company is
qualified to do business; (b) compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and similar state antitrust statutes; (c) compliance with any applicable
requirements of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "1933 Act"); (d) compliance with any
applicable requirements of the 1934 Act; (e) compliance with any other
applicable securities laws; (f) those that may be required solely by reason of
Parent's or Merger Subsidiary's (as opposed to any other third party's)
participation in the transactions contemplated by this Agreement; (g) actions or
filings which, if not taken or made, would not, individually or in the
aggregate, have a Material Adverse Effect on Company; and (h) filings and
notices not required to be made or given until after the Effective Time.
Section 3.04 NON-CONTRAVENTION. Except as set forth on Section 3.04 of the
Company Disclosure Schedule, the execution, delivery and performance by Company
of this Agreement do not, and the consummation by Company of the transactions
contemplated hereby will not: (a) assuming receipt of the approval of
shareholders referred to in Section 3.02, contravene or conflict with the
articles of incorporation, bylaws or similar organizational documents of Company
or any of its Significant Subsidiaries; (b) assuming compliance with the matters
referred to in Section 3.03, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to Company or its Subsidiaries;
(c) constitute a default (or an event which with notice, the lapse of time or
both would become a default) under or give rise to a
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right of termination, cancellation or acceleration of any right or obligation of
Company or any of its Subsidiaries or to a loss of any benefit to which Company
or any of its Subsidiaries is entitled under any provision of any agreement,
contract or other instrument binding upon Company or any of its Subsidiaries and
which either has a term of more than one year or involves the payment or receipt
of money in excess of $1,000,000 (a "Company Agreement") or any license,
franchise, permit or other similar authorization held by Company or any of its
Subsidiaries; or (d) result in the creation or imposition of any Lien on any
asset of Company or any of its Subsidiaries, except for such contraventions,
conflicts or violations referred to in clause (b) or defaults, rights of
termination, cancellation or acceleration, losses or Liens referred to in
clause (c) or (d) that would not, individually or in the aggregate, have a
Material Adverse Effect on Company. For purposes of this Agreement, "Lien"
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset.
Section 3.05 CAPITALIZATION OF COMPANY. (a) The authorized capital stock
of Company consists of 110,000,000 shares of Company Common Stock, 2,000,000
shares of preferred stock, no par value (the "Class A Serial Preferred Stock")
and 28,000,000 shares of preferred stock, par value $.01 per share (the
"Class B Serial Preferred Stock"). As of the close of business on August 16,
1999, 42,182,153 shares of Company Common Stock were issued and outstanding,
625,000 shares of Company Common Stock were reserved for issuance under
Company's Employee Stock Purchase Plan, 200,000 shares of Company Common Stock
were reserved for issuance under Company's 1998 Restricted Stock Plan (the
"Restricted Stock Plan"), 2,487,981 shares of Company Common Stock were reserved
for issuance pursuant to options previously granted pursuant to the Company
Stock Option Plans and no shares of Class A Serial Preferred Stock or Class B
Serial Preferred Stock were issued and outstanding. 2,000,000 shares of
Series A Junior Participating Preferred Stock have been designated from the
Class A Serial Preferred Stock and reserved for issuance pursuant to the Company
Rights Agreement. All the outstanding shares of Company's capital stock are, and
all shares which may be issued pursuant to the Company Stock Option Plans and
the Restricted Stock Plan will be, when issued in accordance with the respective
terms thereof, duly authorized, validly issued, fully paid and non-assessable.
Except (i) as set forth in this Section 3.05 or in Section 5.01 of the Company
Disclosure Schedule, (ii) for the transactions contemplated by this Agreement,
including those permitted in accordance with Section 5.01(f), (iii) for changes
since August 16, 1999 resulting from the exercise of employee and director stock
options outstanding on such date and (iv) for rights to purchase shares of
Series A Junior Participating Preferred Stock issuable pursuant to the Company
Rights Agreement, there are outstanding (x) no shares of capital stock or other
voting securities of Company, (y) no securities of Company convertible into or
exchangeable for shares of capital stock or voting securities of Company, and
(z) no options, warrants or other rights to acquire from Company, and no
preemptive or similar rights, subscriptions or other rights, convertible
securities, agreements, arrangements or commitments of any character, relating
to the capital stock of Company, obligating Company to issue, transfer or sell,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Company or obligating
Company to grant, extend or enter into any such option, warrant, subscription or
other right, convertible security, agreement, arrangement or commitment (the
items in clauses (x), (y) and (z) being referred to collectively as the "Company
Securities"). None of Company or its Subsidiaries has any contractual obligation
to redeem, repurchase or otherwise acquire any Company Securities or any Company
Subsidiary Securities (as hereinafter defined), including as a result of the
transactions contemplated by this Agreement.
(b) Except as set forth in Section 3.05 of the Company Disclosure Schedule,
there are no voting trusts or other agreements or understandings to which
Company or any of its Subsidiaries is a party with respect to the voting of the
capital stock of Company or any of its Subsidiaries.
Section 3.06 CAPITALIZATION OF SUBSIDIARIES. Except as set forth in
Section 3.06 of the Company Disclosure Schedule, all of the outstanding shares
of capital stock of, or other ownership interests in,
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each Subsidiary of Company, is owned by Company, directly or indirectly, free
and clear of any consensual Lien (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other ownership
interests). There are no outstanding (i) securities of Company or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary of Company, or
(ii) options or other rights to acquire from Company or any of its Subsidiaries,
and no other obligation of Company or any of its Subsidiaries to issue, any
capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable for, any capital stock, voting
securities or ownership interests in, any Subsidiary of Company (the items in
clauses (i) and (ii) being referred to collectively as the "Company Subsidiary
Securities").
Section 3.07 SEC FILINGS. (a) Company has filed all required reports,
schedules, forms, statements and other documents with the Securities and
Exchange Commission (the "SEC") since June 30, 1997 (the "Company SEC
Documents").
(b) As of its filing date, each Company SEC Document filed pursuant to the
1934 Act did not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except to the extent that such statements have been modified or superseded by a
later filed Company SEC Document.
(c) Each Company SEC Document that is a registration statement, as amended
or supplemented, if applicable, filed pursuant to the 1933 Act as of the date
such registration statement or amendment became effective did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
except to the extent that such statements have been modified or superseded by a
later filed Company SEC Document.
Section 3.08 FINANCIAL STATEMENTS. The audited consolidated financial
statements and unaudited consolidated interim financial statements of Company
included in Company's Annual Report on Form 10-K for the fiscal year ended
January 2, 1999 and its Quarterly Report on Form 10-Q for the fiscal quarter
ended July 3, 1999 (the "Company 10-Q") have been prepared in accordance with
GAAP (except, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present the consolidated
financial position of Company and its consolidated Subsidiaries as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended (subject to normal year-end adjustments in the case of the
unaudited interim financial statements). For purposes of this Agreement,
"Company Balance Sheet" means the consolidated balance sheet of Company as of
July 3, 1999 set forth in the Company 10-Q and "Company Balance Sheet Date"
means July 3, 1999.
Section 3.09 DISCLOSURE DOCUMENTS. Insofar as the information contained
therein relates solely to Company, neither the proxy statement of Company (the
"Company Proxy Statement") to be filed with the SEC in connection with the
Merger, nor any amendment or supplement thereto, will, at the date the Company
Proxy Statement or any such amendment or supplement is first mailed to
shareholders of Company or at the time such shareholders vote on the adoption
and approval of this Agreement, contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company Proxy Statement will, when filed, comply as to form in
all material respects with the requirements of the 1934 Act. No representation
or warranty is made by Company in this Section 3.09 with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Merger Subsidiary for inclusion or incorporation by reference in the
Company Proxy Statement.
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Section 3.10 INFORMATION SUPPLIED. None of the information supplied or to
be supplied by Company for inclusion or incorporation by reference in the
Form S-4 (as hereinafter defined) or any amendment or supplement thereto will,
at the time the Form S-4 or any such amendment or supplement becomes effective
under the 1933 Act or at the Effective Time, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
Section 3.11 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the
Company SEC Documents filed prior to the date of this Agreement or as disclosed
in Section 3.11 of the Company Disclosure Schedule, since July 3, 1999, Company
and its Subsidiaries have conducted their business in the ordinary course
consistent with past practice and there has not been:
(a) any event, occurrence or development which, individually or in the
aggregate, has had a Material Adverse Effect on Company;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of Company, or any
repurchase, redemption or other acquisition by Company or any of its
Subsidiaries of any amount of outstanding shares of capital stock or other
equity securities of, or other ownership interests in, Company or any of its
Subsidiaries;
(c) any amendment of any term of any outstanding security of Company or any
of its Subsidiaries that would materially increase the obligations of Company or
such Subsidiary under such security;
(d) (x) any incurrence or assumption by Company or any of its Subsidiaries
of any indebtedness for borrowed money other than under existing credit
facilities (or any renewals, replacements or extensions that do not increase the
aggregate commitments thereunder) (A) in the ordinary course of business
consistent with past practice (it being understood that any indebtedness
incurred prior to the date hereof in respect of capital expenditures shall be
considered to have been in the ordinary course of business consistent with past
practice) or (B) in connection with any acquisition or capital expenditure
permitted by Section 5.01 or (y) any guarantee, endorsement or other incurrence
or assumption of liability (whether directly, contingently or otherwise) by
Company or any of its Subsidiaries for the obligations of any other person
(other than any wholly owned Subsidiary of Company), other than in the ordinary
course of business consistent with past practice;
(e) any creation or assumption by Company or any of its Subsidiaries of any
consensual Lien on any material asset of Company or any of its Subsidiaries
other than in the ordinary course of business consistent with past practice;
(f) any making of any loan, advance or capital contribution to or investment
in any person by Company or any of its Subsidiaries other than (i) any
acquisition permitted by Section 5.01, (ii) loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries of Company or
(iii) loans or advances to employees of Company or any of its Subsidiaries made
in the ordinary course of business consistent with past practice;
(g) (i) any contract or agreement entered into by Company or any of its
Subsidiaries on or prior to the date hereof relating to any material acquisition
or disposition of any assets or business or (ii) any modification, amendment,
assignment, termination or relinquishment by Company or any of its Subsidiaries
of any contract, license or other right (including any insurance policy naming
it as a beneficiary or a loss payable payee) that, individually or in the
aggregate, would have a Material Adverse Effect on Company, other than, in the
case of (i) and (ii), transactions, commitments, contracts or agreements in the
ordinary course of business consistent with past practice and those contemplated
by this Agreement;
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(h) any material change in any method of accounting or accounting principles
or practice by Company or any of its Subsidiaries, except for any such change
required by reason of a change in GAAP; or
(i) except for items permitted by Section 5.17, any (i) grant of any
severance or termination pay to any director, officer or employee of Company or
any of its Subsidiaries, (ii) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such existing
agreement) with any director, officer or employee of Company or any of its
Subsidiaries, (iii) increase in benefits payable under any existing severance or
termination pay policies or employment agreements or (iv) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of Company or any of its Subsidiaries other than, in the case of
clause (iv) only, increases prior to the date hereof in compensation, bonus or
other benefits payable to employees of Company or any of its Subsidiaries in the
ordinary course of business consistent with past practice or merit increases in
salaries of employees at regularly scheduled times in customary amounts
consistent with past practices.
Section 3.12 NO UNDISCLOSED MATERIAL LIABILITIES. There have been no
liabilities or obligations (whether pursuant to contracts or otherwise) of any
kind whatsoever incurred by Company or any of its Subsidiaries since July 3,
1999, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than:
(a) liabilities or obligations disclosed or provided for in the Company
Balance Sheet or in the notes thereto or in the Company SEC Documents filed
prior to the date hereof;
(b) liabilities or obligations which, individually and in the aggregate,
have not had and would not have a Material Adverse Effect on Company; or
(c) liabilities or obligations under this Agreement or incurred in
connection with the transactions contemplated hereby.
Section 3.13 LITIGATION. Except as disclosed in the Company SEC Documents
filed prior to the date hereof, there is no action, suit, investigation or
proceeding pending against, or to the knowledge of Company, threatened against
or affecting, Company or any of its Subsidiaries or any of their respective
properties which, individually or in the aggregate, would have a Material
Adverse Effect on Company.
Section 3.14 TAXES. Except as set forth on Section 3.14 of the Company
Disclosure Schedule:
(a) Company and each of its Subsidiaries, and each affiliated group (within
the meaning of Section 1504 of the Code) of which Company or any of its
Subsidiaries is or has been a member, has timely filed (or has had timely filed
on its behalf) or will file or cause to be timely filed, all material Tax
Returns required by applicable law to be filed by it prior to or as of the
Effective Time, and all such material Tax Returns are, or will be at the time of
filing, true, correct and complete in all material respects;
(b) Company and each of its Subsidiaries has paid (or has had paid on its
behalf) all Taxes shown due with respect to Tax Returns for periods ending prior
to or as of the Effective Time;
(c) The federal income Tax Returns of Company have been examined and settled
with the Internal Revenue Service (the "Service") (or the applicable statutes of
limitation for the assessment of federal income Taxes for such periods have
expired) for all years through 1996;
(d) There are no material Liens or encumbrances for Taxes on any of the
assets of Company or its Subsidiaries (other than for current Taxes not yet due
and payable);
(e) Company and its Subsidiaries have complied in all material respects with
all applicable laws, rules and regulations relating to the payment and
withholding of Taxes;
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(f) None of Company or its Subsidiaries is a par
