§12.108 PROXY STATEMENTS: STRATEGY & FORMS
APPENDIX A
AGREEMENT AND PLAN OF MERGERDated as of June 1, 1994, As Amended Among
CORNING INCORPORATED,
APPLE ACQUISITION CORP.
And
NICHOLS INSTITUTE
July 1995 12-787
TABLE OF CONTENTSPage
ARTICLE IThe Merger
SECTION 1.01. The Merger ...............................................................................................................................A-4
SECTION 1.02. Closing ......................................................................................................................................A-4
SECTION 1.03. Effective Time ..........................................................................................................................A-4
SECTION 1.04. Effects of the Merger ................................................................................................................A-4
SECTION 1.05. Certificate of Incorporation and By-laws .................................................................................A-4
SECTION 1.06. Directors ...................................................................................................................................A-5
SECTION 1.07. Officers .....................................................................................................................................A-5
ARTICLE II
Effect of the Merger on the Capital
Stock of the Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock .............................................................................................................A-5
SECTION 2.02. Exchange of Certificates ...........................................................................................................A-6
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company ....................................................................A-8
SECTION 3.02. Representations and Warranties of Parent and Sub ................................................................A-15
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business ...............................................................................................................A-19
SECTION 4.02. No Solicitation ........................................................................................................................A-21
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of Form S-4 and the Proxy Statement; Stockholders’ Meeting ..........................A-21
SECTION 5.02. Access to Information; Confidentiality ..................................................................................A-21
SECTION 5.03. Reasonable Efforts; Notification ............................................................................................A-22
SECTION 5.04. Stock Option Plans .................................................................................................................A-22
SECTION 5.05. Benefit Plans and Employee Matters .....................................................................................A-23
SECTION 5.06. Indemnification, Exculpation and Insurance ..........................................................................A-23
SECTION 5.07. Letters of Accountants ............................................................................................................A-23
SECTION 5.08. Fees and Expenses ..................................................................................................................A-24
SECTION 5.09. Public Announcements ...........................................................................................................A-24
SECTION 5.10. Affiliates; Accounting and Tax Treatment .............................................................................A-24
SECTION 5.11. Conveyance Taxes ..................................................................................................................A-24
SECTION 5.12. Senior Notes ...........................................................................................................................A-24
SECTION 5.13. Employment Agreements .......................................................................................................A-24
SECTION 5.14. Company Preferred Stock .......................................................................................................A-25
SECTION 5.15. No Restrictions on Parent’s Activities ...................................................................................A-25
SECTION 5.16. New Employment Agreement ................................................................................................A-25
ARTICLE VI
Conditions Precedent
§12.108 PROXY STATEMENTS: STRATEGY & FORMS
SECTION 6.01. Conditions to Each Party’s Obligations to Effect the Merger ................................................A-25
SECTION 6.02. Additional Conditions to Obligations of Parent and Sub .......................................................A-25
SECTION 6.03. Additional Conditions to Obligations of the Company ..........................................................A-26ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination ............................................................................................................................A-27
SECTION 7.02. Effect of Termination .............................................................................................................A-27
SECTION 7.03. Amendment ............................................................................................................................A-27
SECTION 7.04. Extension; Waiver ..................................................................................................................A-27
SECTION 7.05. Procedure for Termination, Amendment, Extension or Waiver .............................................A-27
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties ....................................................................A-28
SECTION 8.02. Notices ....................................................................................................................................A-28
SECTION 8.03. Definitions ..............................................................................................................................A-28
SECTION 8.04. Interpretation ..........................................................................................................................A-29
SECTION 8.05. Counterparts ...........................................................................................................................A-29
SECTION 8.06. Entire Agreement; No Third-Party Beneficiaries ...................................................................A-29
SECTION 8.07. Governing Law .......................................................................................................................A-29
SECTION 8.08. Assignment .............................................................................................................................A-29
SECTION 8.09. Enforcement ...........................................................................................................................A-29
EXHIBIT 5.10 FORM OF AFFILIATE LETTER ..........................................................................................A-31
EXHIBIT 5.13(a) EMPLOYMENT AGREEMENT AMENDMENTS .............................................................A-33
EXHIBIT 5.16 FORM OF NEW EMPLOYMENT AGREEMENT ..............................................................A-34
AGREEMENT AND PLAN OF MERGER, dated as of June 1, 1994, as amended, among CORNING
INCORPORATED, a New York corporation (“ Parent”), APPLE ACQUISITION CORP., a Delaware
corporation (“ Sub”) and a direct wholly owned subsidiary of Parent, and NICHOLS INSTITUTE, a
Delaware corporation (the “Company”).
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company have approved the
merger of Sub with and into the Company (the “ Merger”), upon the terms and subject to the conditions
set forth in this Agreement and in accordance with the General Corporation Law of the State of Delaware
(the “ DGCL ”), whereby each issued and outstanding share of Company Common Stock (as defined in
Section 3.01(c)) (including shares of Company Common Stock issuable upon the automatic conversion of
Company Preferred Stock (as defined in Section 3.01(c)) in accordance with the terms there of as of the
Effective Time) other than shares to be cancelled in accordance with Section 2.01(b), will be converted
into the right to receive shares of common stock, par value $.50 per share, of Parent (“ Parent Common
Stock ”);
WHEREAS, the Merger requires the approval of the holders of a majority of the votes which t he
outstanding shares of the Company Common Stock are entitled to cast on such matter voting as a single
class (the “ Company Stockholder Approval ”);
WHEREAS, concurrently with the execution of this Agreement and as an inducement to Pa rent to
enter into this Agreement, Dr. Albert L. Nichols, a stockholder of the Company (the “ Significant
Stockholder ”), has entered into an agreement with Parent (the “ Significant Stockholder Agreement”)
pursuant to which the Significant Stockholder has, among other things, agreed to vote his shares of
Company Common Stock in favor of the Merger;
July 1995 12-789
WHEREAS, Parent, Sub and the Company desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe various conditi ons to the
Merger;
WHEREAS, for Federal income tax purposes, it is intended that the Merger shall qualify a s a
reorganization within the meaning of Sections 368(a)(1)(A) and (a)(2)(E) of the Internal Revenue Code of
1986, as amended (the “ Code”); and
WHEREAS, for accounting purposes, it is intended that the Merger shall be accounted for as a
“pooling-of-interests”;
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreement s
contained in this Agreement, the parties agree as follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the DGCL, Sub shall be merged with and into the Compa ny at the
Effective Time (as hereinafter defined). Following the Merger, the separate corporate existence of Sub
shall cease and the Company shall continue as the surviving corporation (the “ Surviving Corporation”)
and shall succeed to and assume all the rights and obligations of the Company and of Sub in accordance
with the DGCL.
SECTION 1.02. Closing. The closing of the Merger will take place at 10:00 a.m. on a date to be
specified by the parties, which shall be no later than the second business. day after sat isfaction or waiver
of the conditions set forth in Article VI (the “ Closing Date”), at the offices of Wachtell, Lipton, Rosen &
Katz, 51 West 52nd Street, New York, NY 10019 unless another time, date or place is agreed to in
writing by the parties hereto.
SECTION 1.03. Effective Time. Subject to the provisions of this Agreement, as soon as
practicable on or after the Closing Date, the parties shall file a certific ate of merger or other appropriate
documents (in any such case, the “ Certificate of Merger”) executed in accordance with the relevant
provisions of the DGCL and shall make all other filings or recordings required under the DGCL. The
Merger shall become effective at such time as the Certificate of Merger is duly filed with the Delaware
Secretary of State, or at such other time as Sub and the Company shall agree should be spe cified in the
Certificate of Merger (the date and time of such filing, or such later date or time as may be set forth
therein, being the “ Effective Time”).
SECTION 1.04. Effects of the Merger. The Merger shall have the effects set forth in Section 259
of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws. (a) The certificate of incorporation of
Sub as in effect immediately prior to the Effective Time shall be the certificate of incorporation of the
Surviving Corporation (except that such certificate of incorporation shall be amended at the Effective
Time to provide that the name of the Surviving Corporation shall be “Nichols Institut e”) until thereafter
changed or amended as provided therein or by applicable law.
(b) The by-laws of Sub as in effect at the Effective Time shall be the by-laws of the Surviving
Corporation, until thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06. Directors. The directors of Sub at the Effective Time shall continue as the
directors of the Surviving Corporation, until the earlier of their resignation or removal or unt il their
respective successors are duly elected and qualified, as the case may be.
SECTION 1.07. Officers. The officers of the Company immediately prior to the Effective Time
shall become the officers of the Surviving Corporation, until the earlier of their resignat ion or removal or
until their respective successors are duly elected and qualified, as the case may be.
§12.108 PROXY STATEMENTS: STRATEGY & FORMS
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. At the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Sub, the Company, or the holders of any shares of Compa ny
Common Stock or any shares of capital stock of Sub:
(a)Capital Stock of Sub. Each share of the capital stock of Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and exchanged for one fully paid and
nonassessable share · of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Stock. Each share of Company Common
Stock that is owned by the Company or by any subsidiary of the Company and each share of
Company Common Stock that is owned by Parent, Sub or any other subsidiary of Parent immediatel y
prior to the Effective Time shall automatically be cancelled and reti red without any conversion
thereof and no consideration shall be delivered with respect thereto.
(c) Conversion of Common Stock. Each share of Company Common Stock issued and
outstanding as of the Effective Time other than shares to be cancelled in acc ordance with Section 2.01
(b) and other than shares of Class B Stock which are Objecting Shares (as defined in cl ause (d)
below) shall be converted, subject to Section 2.02(e), into the right to receive that numbe r (the
“ Exchange Ratio ”) of shares of Parent Common Stock, rounded to the nearest thousandth, or if there
shall not he a nearest thousandth, to the next lower thousandth, equal to the quotient deri ved by
dividing $13.00 by the average of the per share closing prices on the New York Stock Exchange, Inc.
(the “ NYSE ”) of Parent Common Stock (as reported in the NYSE Composite Transactions) during the
10 consecutive trading days ending on the fifth trading day prior to the Company Stockholders’
Meeting (as defined in Section 5.01(b)); provided, however, that in no event will the Exchange Ratio
be greater than 0.491 and if the Exchange Ratio, as calculated, would be above that limit, then it shall
be fixed at such maximum limit; provided, further, that in the event the Exchange Ratio, as calculated
(without reference to the foregoing proviso), would equal or be greater than 0.638, then the Company
may terminate this Agreement. If, prior to the Effective Time, Parent should split or combine the
Parent Common Stock, or pay a stock dividend or other stock distribution in Parent Common Stoc k,
then the Exchange Ratio (including the maximum limit thereof) will be appropriate ly adjusted to
reflect such split, combination, dividend or other distribution. Each share of the Company Preferred
Stock issued and outstanding as of the Effective Time (other than shares of Company Preferre d Stock
which are Objecting Shares) shall be converted, subject to Section 2.02(e), into the right to receive
Parent Common Stock in the manner and amount provided for pursuant to the terms of the Company
Preferred Stock. Each share of Parent Common Stock issued pursuant to this Section 2.01(c) shall be
accompanied by one Right (as defined in Section 3.02(b)) unless the Rights shall not be outstandi ng
as of the Effective Time.
As of the Effective Time, all such shares of Company Common Stock and Company Preferred
Stock shall no longer be outstanding and shall automatically be cancelled and reti red and shall cease
to exist, and each certificate previously representing any such shares (including any ce rtificate
theretofore representing Company Preferred Stock) shall thereafter represent the right to rece ive a
certificate representing the shares of Parent Common Stock into which such Company Com mon
Stock was converted in the Merger. The holders of such certificates previously evidencing such
shares of Company Common Stock and Company Preferred Stock outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such shares of Company Common
Stock or Company Preferred Stock as of the Effective Time except as otherwise provided here in or by
law. Such certificates previously representing shares of Company Common Stock and Company
Preferred Stock shall be exchanged for certificates representing whole shares of Parent Common
Stock issued in consideration therefor upon the surrender of such certificates in accordance wi th the
July 1995 12-791
provisions of Section 2.02, without interest. No fractional share of Parent Common Stock shall be
issued, and, in lieu thereof, a cash payment shall be made pursuant to Section 2.02(e).(d) Notwithstanding anything in this Agreement to the contrary, each share of Class B Stock
and each share of Company Preferred Stock which is issued and outstanding immediately pri or to the
Effective Time and which is held by a stockholder who has not voted such shares in favor of adoption
of the Merger Agreement or consented thereto in writing (in the case of shares of Class B Stock) and
who has demanded appraisal rights with respect thereto in the manner provided in Secti on 262 of the
DGCL (collectively, the “ Objecting Shares”) shall not be converted into or represent the right to
receive the merger consideration provided for in paragraph (c) above but, instead, the holders the reof
shall be entitled to receive payment of the appraised value of such shares in acc ordance with the
provisions in Section 262 of the DGCL; provided, however, that if any holder of Objecting Shares
shall subsequently withdraw such demand for appraisal of such shares, or lose the right to appraisal a s
provided in Section 262 of the DGCL, such holder or holders (as the case may be) shall forfeit t he
right to appraisal of such shares and such shares shall thereupon be deemed to have been
automatically converted into the right to receive, as of the Effective Tim e, the merger consideration
provided for in paragraph (c) above, without any interest thereon.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. Prior to the Effective Time, Parent
shall enter into an agreement with such bank or trust company as may be designated by Parent and as
shall be reasonably satisfactory to the Company (the “ Exchange Agent”), and as contemplated by such
agreement, Parent shall deposit, or shall cause to be deposited, with the Exchange Agent as of the
Effective Time (or otherwise when requested by the Exchange Agent from time to time in order to effect
any exchange pursuant to this Section 2.02), for the benefit of the holders of shares of Company C ommon
Stock, for exchange in accordance with this Article II through the Exchange Agent, certific ates
representing the shares of Parent Common Stock issuable pursuant to Section 2.01 in exchange for
outstanding shares of Company Common Stock (such certificates representing shares of Parent Common
Stock, together with any dividends or distributions with respect thereto, being collective ly referred to as
the “ Exchange Fund ”). The Exchange Agent shall, pursuant to irrevocable instructions, deliver the Parent
Common Stock contemplated to be issued pursuant to Section 2.01 out of the Exchange Fund. Exc ept as
contemplated by Section 2.02(e), the Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedure. As soon as reasonably practicable after the Effective Time, Parent shall
instruct the Exchange Agent to mail to each holder of record of a certificate or c ertificates which
immediately prior to the Effective Time represented outstanding shares of Company C ommon Stock or
Company Preferred Stock (the “ Certificates”), (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass, onl y upon proper delivery of the
Certificates to the Exchange Agent and which shall be in a customary form) and (i i) instructions for use in
effecting the surrender of the Certificates in exchange for certificates representing sha res of Parent
Common Stock. Upon surrender of a Certificate for cancellation to the Exchange Agent, toge ther with
such letter of transmittal, duly executed, and such other documents as may reasonabl y be required by the
Exchange Agent, the holder of such Certificate shall be entitled to receive i n exchange therefor a
certificate evidencing that number of whole shares of Parent Common Stock which such holde r has the
right to receive in respect of the shares of Company Common Stock or Company Preferred Stock
formerly evidenced by such Certificate (after taking into account all shares of Com pany Common Stock
and Company Preferred Stock then held of record by such holder), cash in lieu of fractional shares of
Parent Common Stock to which such holder is entitled pursuant to Section 2.02(e) and any di vidends or
other distributions to which such holder is entitled pursuant to Section 2.02(c), and the Ce rtificate so
surrendered shall forthwith be cancelled. In the event of a transfer of ownership of Company Common
Stock or Company Preferred Stock which is not registered in the transfer records of the Company, a
certificate representing the proper number of shares of Parent Common Stock may be issued t o a person
other than the person in whose name the Certificate so surrendered is registered, if such Certificate,
accompanied by all documents required to evidence and effect such transfer, shall be properly endorsed or
§12.108 PROXY STATEMENTS: STRATEGY & FORMS
otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or
other taxes required by reason of the issuance of shares of Parent Common Stock to a person othe r than
the registered holder of such Certificate or establish to the satisfaction of Parent t hat such tax has been
paid or is not applicable. Until surrendered as contemplated by this Section 2.02, eac h Certificate shall be
deemed at any time after the Effective Time to represent only the right t o receive upon such surrender the
certificate evidencing whole shares of Parent Common Stock, cash in lieu of any fract ional shares of
Parent Common Stock to which such holder is entitled pursuant to Section 2.02(e) and any di vidends or
other distributions to which such holder is entitled pursuant to Section 2.02(c). No interest will be paid or
will accrue on any cash payable pursuant to Section 2.02(c) or 2.02(e). (c) Distributions with Respect to Unexchanged Shares. No dividends or other distributions
declared or made after the Effective Time with respect to Parent Common Stoc k with a record date after
the Effective Time shall be paid to the holder of any unsurrendered Certificate wi th respect to the shares
of Parent Common Stock represented thereby, and no cash payment in lieu of fractional sha res shall be
paid to any such holder pursuant to Section 2.02(e), in each case until the surrender of such Ce rtificate in
accordance with this Article II. Subject to the effect of applicable escheat laws, following surrender of
such Certificate, there shall be paid to the holder of the certificate repre senting whole shares of Parent
Common Stock issued in exchange therefor, without interest, (i) at the time of such surre nder, the amount
of any cash payable in lieu of a fractional share of Parent Common Stock to which such holder is entitled
pursuant to Section 2.02(e) and the amount of dividends or other distributions with a record date aft er the
Effective Time theretofore paid with respect to such whole shares of Parent Common Stoc k, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a record date a fter the
Effective Time but prior to such surrender and with a payment date subsequent to such surrender payable
with respect to such whole shares of Parent Common Stock.
(d) No Further Ownership Rights in Company Stock. All shares of Parent Common Stock issued
upon the surrender for exchange of Certificates in accordance with the terms of this Articl e II (including
any cash paid pursuant to Section 2.02(c) or 2.02(e)) shall be deemed to have been issued (and pa id) in
full satisfaction of all rights pertaining to the shares of Company Common Stock and Com pany Preferred
Stock theretofore represented by such Certificates, subject, however, to the Surviving Corporation’s
obligation to pay any dividends or make any other distributions with a record date prior to the Effective
Time which may have been declared or made by the Company on such shares of Company Comm on
Stock or Company Preferred Stock in accordance with the terms of this Agreement or prior to t he date of
this Agreement and which remain unpaid at the Effective Time and have not be en paid prior to surrender.
At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no
further registrations of transfers of shares of Company Common Stock or Company Preferred Stock
thereafter on the records of the Company. If, after the Effective Time, Certificat es are presented to the
Surviving Corporation, Parent or the Exchange Agent for any reason, they shall be cancelled and
exchanged as provided in this Article II.
(e) No Fractional Shares. (i) No certificates or scrip representing fractional shares of Parent
Common Stock shall be issued upon the surrender for exchange of Certificates, and such fractiona l share
interests will not entitle the owner thereof to vote or to any rights of a stockholder of Parent.
(ii) As promptly as practicable following the Effective Time, Parent shall instruc t the Exchange
Agent to determine the excess of (x) the number of full shares of Parent Common Stock deli vered to the
Exchange Agent by Parent pursuant to Section 2.02(a) over (y) the aggregate number of full shares of
Parent Common Stock to be distributed to holders of Certificates pursuant to Section 2.02(b) (such excess
being herein called the “ Excess Shares”). As soon after the Effective Time as practicable, the Exchange
Agent, as agent for such holders of Certificates, shall sell the Excess Shares at the then prevailing prices
on the NYSE, all in the manner provided in paragraph (iii) of this Section 2.02(e).
(iii) The sale of the Excess Shares by the Exchange Agent shall be executed on the NYSE and shall
be executed in round lots to the extent practicable. Until the net proceeds of such sale or sales have been
July 1995 12-793
distributed to such holders of Certificates, the Exchange Agent will hold such proceeds in trust for such
holders of Certificates (the “ Trust”). Parent shall pay all commissions, transfer taxes and other out-of-
pocket transaction costs of the Exchange Agent incurred in connection with such sale or sale s of Excess
Shares. in addition, Parent shall pay the Exchange Agent’s compensation and expenses in connect ion with
such sales. The Exchange Agent shall determine the portion of the Trust to which each hol der of one or
more Certificates shall be entitled, if any, by multiplying the amount of the aggregate net proceeds
comprising the Trust by a fraction the numerator of which is the amount of the fractional share interest to
which such holder of Certificates is entitled (after taking into account all sha res of Company Common
Stock and Company Preferred Stock held of record immediately prior to the Effective Tim e by such
holder) and the denominator of which is the aggregate amount of fractional share interests to which all
holders of Certificates are entitled.
(iv) As soon as practicable after the determination of the amount of cash, if any, to be paid to
holders of Certificates with respect to any fractional share interests, the Exchange Age nt shall promptly
pay such amounts to such holders of Certificates subject to and in accordance with the terms of Section
2.02(c).
(f) Termination of Exchange Fund and Trust. Any portion of the Exchange Fund and Trust that
remains undistributed to the holders of Certificates for six months after the Effective T ime shall be
delivered to Parent, upon demand, and any holders of Certificates who have not theretofore compl ied with
this Article II shall thereafter look only to Parent for the shares of Parent Common Stock, a ny cash in lieu
of fractional shares of Parent Common Stock and any dividends or distributions with respect to Pa rent
Common Stock to which they are entitled.
(g) No Liability. None of Parent, Sub, the Company or the Exchange Agent shall be liable to any
holder of shares of Company Common Stock or Company Preferred Stock for any shares of Parent
Common Stock (or dividends or distributions with respect thereto) or cash from the Exchange Fund or t he
Trust delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.
(h) Withholding Rights. Parent or the Exchange Agent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any holder of Certifica tes such
amounts as Parent or the Exchange Agent, as the case may be, is required to deduct and withhold with
respect to the making of such payment under the Code, or any provision of state, local or foreign tax law.
To the extent that amounts are so withheld by Parent or the Exchange Agent, such withhe ld amounts shall
be treated for all purposes of this Agreement as having been paid to the holder of the Certificates in
respect of which such deduction and withholding shall have been made by Parent or the Exchange Agent.
(i) Investment of Exchange Fund and Trust. The Exchange Agent shall invest any cash included in
the Exchange Fund and the Trust, as directed by Parent, on a daily basis. Any interest a nd other income
resulting from such investments shall be paid to Parent.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company. Except as set forth on the
Disclosure Schedule delivered by the Company to Parent prior to the execution of this Agreem ent (the
“ Company Disclosure Schedule ”), the Company represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. The Company and each of its subsidiaries is
a corporation duly organized, validly existing and in good standing under the laws of the jurisdi ction
in which it is organized and has the requisite corporate power and authority to carry on i ts business as
now being conducted. The Company and each of its subsidiaries is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing necessary, ot her than in
such jurisdictions where the failure to be so qualified or licensed (individually or in t he aggregate)
would not have a material adverse effect on the Company. The Company has delivered t o Parent
§12.108 PROXY STATEMENTS: STRATEGY & FORMS
complete and correct copies of its certificate of incorporation and by-laws and the certificates of
incorporation and by-laws or other organizational documents of its Material Subsidiaries, in e ach case
as amended to the date of this Agreement. For purposes of this Agreement, “ Material Subsidiary”
means each subsidiary of the Company designated as a Material Subsidiary in Schedule 3.01 (b)(i ) of
the Company Disclosure Schedule.
(b) Subsidiaries. Schedule 3.01(b)(i) of the Company Disclosure Schedule lists each subsidiary
of the Company and its jurisdiction of incorporation or organization. All the outstanding shares of
capital stock of each such subsidiary have been validly issued and are fully paid and nonassessa ble
and are owned by the Company, by another subsidiary of the Company or by the Company and
another such subsidiary, free and clear of all pledges, claims, liens, charges, encum brances and
security interests of any kind or nature whatsoever (collectively, “ Liens”) except as disclosed in
Schedule 3.01(b)(ii) of the Company Disclosure Schedule. Except for the capital stock of its
subsidiaries, the Company does not own, directly or indirectly, any capital stock or other ownershi p
interest in any corporation, partnership, joint venture or other entity except as disclosed in Schedule
3.01(b)(ii) of the Company Disclosure Schedule.
(c) Capital Structure. The authorized capital stock of the Company consists of 20,000,000
shares of Class A Common Stock, $.10 par value (the “ Class A Stock”), 13,333,333 shares of Class B
Common Stock, $.10 par value (the “ Class B Stock”), 30,000,000 shares of Class C Common Stock,
$.10 par value (the “ Class
July 1995 12-795
C Stock” and, together with the Class A Stock and the Class B Stock, the “ Company Common Stock”)
and 1,000,000 shares of preferred stock, $.10 par value. At the close of business on May 30, 1994, (i)
6,098,373 shares of Class A Stock, 1,603,301 shares of Class B Stock, 8,995,262 shares of Class C
Stock and 14,698 shares of Series E Convertible Preferred Stock (“ Company Preferred Stock”) were
issued and outstanding, (ii) there were no shares of Company Common Stock or shares of Company
Preferred Stock held by the Company in its treasury, (iii) 1,603,301 shares of Class A Stock were
reserved for issuance upon conversion of the Class B Stock and 557,527 shares of Class A Stock and
2,759,553 shares of Class C Stock were reserved for issuance upon exercise of outstanding Stock
Options (as defined in Section 5.04), (iv) 1,028,860 shares of Class A Stock and 1,028,860 shares of
Class C Stock were reserved for issuance upon conversion of the Company Preferred Stock, (v)
512,280 shares of Class A Stock were reserved for issuance upon conversion of the Company’s
Convertible Subordinated Promissory Notes (the “ Convertible Notes”), (vi) 120,709 shares of Class C
Stock were reserved for issuance upon exercise of the Common Stock Purchase Warrants expiring
May 31, 1999 (the “ Warrants”), (vii) 6,780 shares of Class A Stock and 6,780 shares of Class C
Stock were held by the Company in trust in connection with certain noncompete agreeme nts to which
the Company is a party (the “ Noncompete Agreements”) and (viii) 1,028,860 shares of Class A Stock
and 1,028,860 shares of Class C Stock were reserved for issuance upon conversion of the new Series
F Convertible Preferred Stock which the Company had been considering exchanging on a share-for-
share basis for the issued and outstanding Company Preferred Stock. The Company makes no
representation or warranty that the number of shares reserved for issuance is not greater than t he
number of shares actually issuable upon the exercise of Stock Options or Warrants or upon the
conversions or payments set forth above in (iii) through (viii). Except as set forth above, at the close
of business on May 30, 1994, no shares of capital stock or other voting securities of the Company
were issued, reserved for issuance or outstanding. There are no outstanding stock appreciation rights
of the Company which were not granted in tandem with a related Stock Option and no outst anding
limited stock appreciation rights or other rights to redeem for cash options or warrants of the
Company. All outstanding shares of capital stock of the Company (including shares held in trust
under the Noncompete Agreements) are, and all shares which may be issued upon the exercise of
Stock Options or the Warrants or upon conversion of the Company Preferred Stock or the Convertible
Notes will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. Except for the Convertible Notes and Non-compete Agreements, there
are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on any matte rs on which
stockholders of the Company may vote. Except for the right to convert Class B Stock into Class A
Stock on a share-for-share basis, and as set forth above, as of the date of this Agreement, there are no
outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of its subsidiaries is a party or by which any
of them is bound obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock or other voting securit ies of the
Company or of any of its subsidiaries or obligating the Company or any of its subsidiaries to i ssue,
grant, extend or enter into any such security, option, warrant, call, right, commitment, agre ement,
arrangement or undertaking. Except as provided in the Stock Option Plans which permit
optionholders to pay the exercise price with Company Common Stock, there are no outstanding
contractual obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwi se
acquire any shares of capital stock (or options to acquire any such shares) of the Company or a ny of
its subsidiaries. There are no agreements, arrangements or commitments of any charac ter (contingent
or otherwise) pursuant to which any person is or may be entitled to receive any payment based on the
revenues, earnings or financial performance of the Company or any of its subsidiaries or assets or
calculated in accordance therewith (other than ordinary course payments or commissions t o sales
representatives of the Company based upon revenues generated by them without augmentation a s a
result of the transactions contemplated hereby) or (except as disclosed in Schedule 3.01(c) of the
§12.108 PROXY STATEMENTS: STRATEGY & FORMS
Company Disclosure Schedule) to cause the Company or any of its subsidiaries to file a registration
statement under the Securities Act of 1933 or which otherwise relate to the registrati on of any
securities of the Company.
(d) Authority; Noncontravention. The Company has the requisite corporate power and
authority to enter into this Agreement and, subject to the Company Stockholder Approval, to
consummate the transactions contemplated by this Agreement. The execution and de livery of this
Agreement by the Company and the consummation by the Company of the transactions contem plated
by this Agreement have been duly authorized by all necessary corporate action on the part of the
Company, subject to the Company Stockholder Approval of this Agreement. This Agreement has
been duly executed and delivered by the Company and constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms. The exe cution and
delivery of this Agreement does not, and the consummation of the transactions contempl ated by this
Agreement and compliance with the provisions of this Agreement will not, conflict with, or result in
any violation of or default (with or without notice or lapse of time, or both) under, or give ri se to a
right of termination, cancellation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or assets of the Company or any
of its subsidiaries under, (i) the certificate of incorporation or by-laws of the Company or the
comparable charter or organizational documents of any of its subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, c oncession,
franchise or license applicable to the Company or any of its subsidiaries or their respec tive properties
or assets or (iii) subject to the governmental filings and other matters referred to i n the following
sentence, any judgment, order, decree, statute, laws, ordinance, rule or regulation applicabl e to the
Company or any of its subsidiaries or their respective properties or assets, other than, in the case of
clauses (ii) or (iii), any such conflicts, violations, defaults, rights or Liens that indivi dually or in the
aggregate would not (x) have a material adverse effect on the Company, (y) impair in a ny material
respect the ability of the Company to perform its obligations under this Agreement or (z ) prevent or
materially delay the consummation of any of the transactions contemplated by this Agreement. No
consent, approval, order or authorization of, or registration, declaration or filing with, any Fede ral,
state or local government or any court, administrative or regulatory agency or commission or ot her
governmental authority or agency, domestic or foreign (a “ Governmental Entity”), is required by the
Company or any of its subsidiaries in connection with the execution and delivery of this Agreement
by the Company or the consummation by the Company of the transactions contemplated by t his
Agreement, except for (i) the filing with the Federal Trade Commission and the Antit rust Division of
the Department of Justice (the “ Specified Agencies”) of a premerger notification and report form by
the Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “ HSR Act”), (ii)
the filing with the Securities and Exchange Commission (the “ SEC”) of (x) the Proxy Statement (as
defined in Section 5.01) and (y) such reports under Section 13(a) of the Securities Exchange Act of
1934, as amended (the “ Exchange Act”), as may be required in connection with this Agreement and
the transactions contemplated by this Agreement, (iii) the filing of the Certifi cate of Merger with the
Delaware Secretary of State and appropriate documents with the relevant authoriti es of other states in
which the Company is qualified to do business and (iv) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to be obtained or made
would not, individually or in the aggregate, have a material adverse effect on the C ompany or prevent
or materially delay the consummation of any of the transactions contemplated by this Agreement.
(e) SEC Documents; Financial Statements. Since January 1, 1992, the Company has filed with
the SEC all required reports and forms and other documents (the “ SEC Documents”). As of their
respective dates, the SEC Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the “ Securities Act”), or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Doc uments,
and none of the SEC Documents contained any untrue statement of a material fact or omitted to state
July 1995 12-797
a material fact required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Except to the extent that
information contained in any SEC Document has been revised or superseded by a later-file d SEC
Document filed and publicly available prior to the date of this Agreement, none of the SEC
Documents contains any untrue statement of a material fact or omits to state a ny material fact
required to be stated therein or necessary in order to make the statements there in, in light of the
circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Documents comply as to form in all material respects with a pplicable accounting
requirements and the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in t he 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 the Company and its consolidated subsidiaries as of the dates the reof and the
consolidated results of their operations and cash flows for the periods then ended (subject, in t he case
of unaudited statements, to normal year-end audit adjustments). Except as set forth i n the SEC
Documents filed prior to the date of this Agreement (or, with respect to any future repetit ion of this
representation, prior to the time of such repetition), and except for liabilities a nd obligations incurred
in the ordinary course of business consistent with past practice since the date of the most recent
consolidated balance sheet included in the SEC Documents, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, cont ingent or
otherwise) required by generally accepted accounting principles to be set forth on a consoli dated
balance sheet of the Company and its consolidated subsidiaries or in the notes thereto.
(f) Information Supplied. None of the information supplied or to be supplied by the Company
specifically for inclusion or incorporation by reference in (i) the Form S-4 (as defined in Sec tion
5.01(a)) will, at the time the Form S-4 is filed with the SEC, at any time it is amended or
supplemented or at the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact requi red to be stated therein or necessary
to make the statements therein not misleading or (ii) the Proxy Statement will, at the date it is first
mailed to the Company’s stockholders or at the time of the Company Stockholders’ Meeting (a s
defined in Section 5.01(b)), contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the sta tements therein, in light
of the circumstances under which they are made, not misleading. The Proxy Statement will comply as
to form in all material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty is made by the Company wi th
respect to statements made or incorporated by reference therein based on information suppl ied by
Parent or Sub specifically for inclusion or incorporation by reference in the Proxy Statement.
(g) Absence of Certain Changes or Events. Except as disclosed in the SEC Documents filed
prior to the date of this Agreement, since January 1, 1994, the Company has conducted its busine ss
only in the ordinary course consistent with prior practice. and there has not been (i) any ma terial
adverse change in the Company and its subsidiaries on a consolidated basis, (ii) any decla ration,
setting aside or payment of any dividend or other distribution (whether in cash. stock or property)
with respect to any of the Company’s capital stock, (iii) any split, combination or reclassification of
any of its capital stock or any issuance or the authorization of any issuance of any other securities in
respect of. in lieu of or in substitution for shares of its capital stock, (iv) (x) any grant ing by the
Company or any of its subsidiaries to any officer, general manager or laboratory manager of the
Company or any of its subsidiaries of any increase in compensation, except in the ordinary course of
business consistent with prior practice or as was required under employment agreements in effe ct as
of the date of the most recent audited financial statements included in the SEC Documents filed prior
to the date of this Agreement (a list of all such employment agreements being se t forth in Section
3.01(g) of the Company Disclosure Schedule), (y) any granting by the Company or any of its
§12.108 PROXY STATEMENTS: STRATEGY & FORMS
subsidiaries to any such officer, general manager or laboratory manager of any increase in severance
or termination pay, except as was required under employment, severance or termination agreements
in effect as of the date of the most recent audited financial statements i ncluded in the SEC Documents
filed prior to the date of this Agreement or (z) any entry into, or renewal or modifica tion of, any
employment, consulting, severance or termination agreement with any such officer, general manager
or laboratory manager by the Company or any of its subsidiaries, (v) any damage, destruction or loss,
whether or not covered by insurance, that has or could have a material adverse effect on the Company
or (vi) any change in accounting methods, principles or practices by the Company materia lly affecting
its assets, liabilities or business, except insofar as may have been required by a c hange in generally
accepted accounting principles.
(h) Litigation. Except as disclosed in the SEC Documents filed prior to the date of this
Agreement or in Schedule 3.01(h) of the Company Disclosure Schedule, as of the date of this
Agreement there is no suit, action, investigation, audit or proceeding pending or, to the knowle dge of
the Company, threatened against the Company or any of its subsidiaries that, individuall y or in the
aggregate, could reasonably be expected to (i) have a material adverse effect on the Company, (ii)
impair in any material respect the ability of the Company to perform its obliga tions under this
Agreement or (iii) prevent the consummation of any of the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Ent ity or
arbitrator outstanding against the Company or any of its subsidiaries having, or which is reasonabl y
likely to have, any effect referred to in the foregoing clauses (i)-(iii).
(i) Absence of Changes in Benefit Plans. Except as disclosed in the SEC Documents filed prior
to the date of this Agreement or as required by applicable law, since January 1, 1994, the re has not
been any adoption or amendment in any material respect by the Company or any of i ts subsidiaries of
any collective bargaining agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or ot her plan, arrangement or
understanding (whether or not legally binding) (collectively, “ Benefit Plans”) providing benefits to
any current or former employee, officer or director of the Company or any of its subsidiaries. Exce pt
as disclosed in the SEC Documents filed prior to the date of this Agreement, there e xist no
employment, consulting, severance, termination or indemnification agreements, arrangements or
understandings between the Company or any of its subsidiaries and any current or former officer or
director of the Company or any of its subsidiaries. Except as disclosed in the SEC Docume nts filed
prior to the date of this Agreement, since January 1, 1994, neither the Company nor any of its
subsidiaries has taken any action to accelerate any rights or benefits under any coll ective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement, trust, fund, poli cy or
arrangement for the benefit of any director, officer or general manager, or for the benefit of laboratory
managers generally or employees generally.
(j) ERISA Compliance. (i) The Company has delivered to Parent true, complete and correct
copies of all “employee pension benefit plans” (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended (“ ERISA”)) (sometimes referred to herein as
“ Pension Plans ”), “employee welfare benefit plans” (as defined in Section 3(1) of ERISA) and all
other Benefit Plans currently maintained, or contributed to, or required to be maintaine d or
contributed to, with the Company or any other person or entity that, together with the Compa ny, is
treated as a single employer under Section 414(b), (c), (m) or (o) of the Code (each a “ Commonly
Controlled Entity ”), including all employment, termination, severance, or other contracts for the
benefit of any current or former employees, officers or directors of the Company or any of its
subsidiaries. The Company has delivered to Parent true, complete and correct copies of (v) the most
recent annual report on Form 5500 filed with the Internal Revenue Service with respect to each of its
Benefit Plans (if any such report was required), (w) the most recently prepared actua rial report for
July 1995 12-799
each such Benefit Plan, (x) the most recent summary plan description for each such Benefit Plan for
which such summary plan description is required, (y) the most recently received Internal Revenue
Service determination letter for each such Benefit Plan and (z) each trust agreement and group
annuity contract relating to any such Benefit Plan.
(ii) Each of the Company’s and its subsidiaries’ Benefit Plans has been administered in all
material respects in accordance with its terms. The Company, each of its subsidi aries and all such
Benefit Plans are all in compliance in all material respects with appl icable provisions of ERISA and
the Code.
(iii) All of the Company’s and its subsidiaries’ Pension Plans intended to be qualified under
Section 401(a) of the Code have been the subject of determination letters from the Int ernal Revenue
Service to the effect that such Pension Plans are qualified and exempt from Federal income taxes
under Section 401(a) and 501(a), respectively, of the Code and no such determination letter has been
revoked nor, to the knowledge of the Company, has revocation been threatened, nor has any such
Pension Plan been amended since the date of its most recent determination lett er or application
therefor in any respect except for any of the foregoing which could reasonably be expected to re sult in
a material adverse effect on the Company.
(iv) No Pension Plan that the Company or any of its subsidiaries maintains is subject t o Title IV
of ERISA.
(v) None of the Company, any of its subsidiaries, any officer of the Company or any of its
subsidiaries or any of its Benefit Plans which are subject to ERISA, including its Pension Plans, any
trusts created thereunder or any trustee or administrator thereof, has engaged in a non-exempt
“prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the
Code) or any other breach of fiduciary responsibility that could subject the Company, or any of its
subsidiaries or any officer of the Company or any of its subsidiaries to tax or penalty under ERISA,
the Code or other applicable law that could result in a material adverse effec t on the Company.
Neither any of such Benefit Plans nor any of such trusts has been terminated, nor has there been any
“reportable event” (as that term is defined in Section 4043 of ERISA) with respect the reto, during the
last five years.
(vi) Except as disclosed in Schedule 3.01(j), the consummation of the transactions contempla ted
by this Agreement will not result in an increase in the amount of compensation or benefi ts or
accelerate the vesting or timing of payment of any benefits payable to or in respe ct of any employee
or former employee of the Company or any subsidiary of the Company or the beneficiary or
dependent of any such employee or former employee.
(vii) With respect to any of the Company’s or any of its subsidiaries’ Benefit Plans that is an
employee welfare benefit plan, (except as disclosed in Schedule 4.01), (x) no such Benefit Pl an is
funded through a “welfare benefit fund”, as such term is defined in Section 419(e) of the Code, (y)
each such Benefit Plan that is a “group health plan”, as such term is defined in Section 5000(b)(1) of
the Code, complies with the applicable requirements of Section 4980B(f) of the Code exc ept where
the failure to so comply could not reasonably be expected to result in a materia l adverse effect on the
Company and (z) each such Benefit Plan (including any such Benefit Plan covering retire es or other
former employees) may be amended or terminated without resulting in a material adverse effect on
the Company on or at any time after the Effective Time.
(viii) No Commonly Controlled Entity has incurred any material liability to a Pension Plan of the
Company or any of its subsidiaries (other than for contributions not yet due).
(k) Taxes. (i) Each of the Company and its subsidiaries has timely filed all Federal, stat e, local
and foreign tax returns and reports required to be filed by it through the date hereof and sha ll timely
file all such returns and reports required to be filed on or before the Effective Time . All such returns
and reports are and will be true, complete and correct in all material respe cts. The Company and each
§12.108 PROXY STATEMENTS: STRATEGY & FORMS
of its subsidiaries has paid and discharged (or the Company has paid and discharged on its behalf) all
taxes due from them, other than such taxes as are being contested in good faith by appropria te
proceedings and are adequately reserved for on the most recent financial statements contained in the
SEC Documents filed prior to the date of the Agreement. The most recent financial statements
contained in the SEC Documents filed prior to the date of this Agreement properly reflec t in
accordance with generally accepted accounting principles all taxes payable by t he Company and its
subsidiaries for all taxable periods and portions thereof through the date of such financial statements.
(ii) Except as disclosed in Schedule 3.01(k) of the Company Disclosure Schedule, no claim or
deficiency for any taxes has been proposed, threatened, asserted or assessed by the Internal Revenue
Service or any other taxing authority or agency against the Company, or any of its subsidiarie s which,
if resolved against the Company or any of its subsidiaries, would, individually or in the aggregat e,
have a material adverse effect upon the Company, and no requests for waivers of the time to assess
any taxes are pending. The Federal income tax returns of the Company and each of it s subsidiaries
consolidated in such returns have been examined by and settled with the Internal Revenue Service for
all years through 1990, except as disclosed in Schedule 3.01(k) of the Company Disclosure Schedule.
(iii) Neither the Company nor any of its subsidiaries has t
