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Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Dated as of September 25, 2006
Among
OVERSEAS SHIPHOLDING GROUP, INC.,
MARLIN ACQUISITION CORPORATION,
And
MARITRANS INC.
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TABLE OF CONTENTS
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ARTICLE I
The Merger
SECTION 1.01.
The Merger...............................................
1
SECTION 1.02.
Closing..................................................
1
SECTION 1.03.
Effective Time...........................................
2
SECTION 1.04.
Effects of the Merger....................................
2
SECTION 1.05.
Certificate of Incorporation and By-laws.................
2
SECTION 1.06.
Directors................................................
2
SECTION 1.07.
Officers.................................................
2
ARTICLE II
Effect of the Merger on the Capital Stock of the Constituent
Corporations; Exchange of Certificates
SECTION 2.01.
Effect on Capital Stock..................................
3
SECTION 2.02.
Exchange of Certificates.................................
4
ARTICLE
III
Representations and Warranties
SECTION 3.01.
Representations and Warranties of the Company............
6
SECTION 3.02.
Representations and Warranties of Parent and Sub.........
28
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01.
Conduct of Business......................................
30
SECTION 4.02. No
Solicitation.......................................... 35
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ARTICLE V
Additional Agreements
SECTION 5.01.
Preparation of the Proxy Statement; Stockholders'
Meeting............................................... 38
SECTION 5.02.
Access to Information; Confidentiality...................
39
SECTION 5.03.
Reasonable Best Efforts..................................
40
SECTION 5.04.
Equity-Based Awards......................................
41
SECTION 5.05.
Indemnification; Advancement of Expenses; Exculpation
and Insurance......................................... 42
SECTION 5.06.
Fees and Expenses........................................
43
SECTION 5.07.
Public Announcements.....................................
44
SECTION 5.08.
Stockholder Litigation...................................
45
SECTION 5.09.
Employee Matters.........................................
45
SECTION 5.10.
Rights Agreement.........................................
46
ARTICLE VI
Conditions Precedent
SECTION 6.01.
Conditions to Each Party's Obligation to Effect
the Merger............................................ 46
SECTION 6.02.
Conditions to Obligations of Parent and Sub..............
47
SECTION 6.03.
Conditions to Obligation of the Company..................
48
SECTION 6.04.
Frustration of Closing Conditions........................
49
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01.
Termination..............................................
49
SECTION 7.02.
Effect of Termination....................................
50
SECTION 7.03.
Amendment................................................
50
SECTION 7.04.
Extension; Waiver........................................
51
SECTION 7.05.
Procedure for Termination or Amendment...................
51
ARTICLE VIII
General Provisions
SECTION 8.01.
Nonsurvival of Representations and Warranties............
51
SECTION 8.02.
Notices..................................................
51
SECTION 8.03.
Definitions..............................................
52
SECTION 8.04.
Interpretation...........................................
54
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SECTION 8.05.
Consents and Approvals...................................
55
SECTION 8.06.
Counterparts.............................................
55
SECTION 8.07.
Entire Agreement; No Third-Party Beneficiaries...........
55
SECTION 8.08.
GOVERNING LAW............................................
55
SECTION 8.09.
Assignment...............................................
55
SECTION 8.10.
Specific Enforcement; Consent to Jurisdiction............
55
SECTION 8.11.
Severability.............................................
56
SECTION 8.12.
Waiver of Jury Trial.....................................
56
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Annex I Index of Defined
Terms
Exhibit A
Restated Certificate of Incorporation of the Surviving
Corporation
Exhibit B
Officer's Certificate of Parent
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AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
September 25, 2006, among OVERSEAS SHIPHOLDING GROUP, INC., a
Delaware corporation ("Parent"), MARLIN ACQUISITION
CORPORATION,
a Delaware corporation and a wholly owned Subsidiary of Parent
("Sub"), and MARITRANS INC., a Delaware corporation (the
"Company").
WHEREAS the Board of Directors of each of the Company and Sub
has
approved and declared advisable, and the Board of Directors of
Parent has
approved, this Agreement and the merger of Sub with and into the
Company (the
"Merger"), upon the terms and subject to the conditions set forth
in this
Agreement, whereby each issued and outstanding share of common
stock, par value
$.01 per share, of the Company ("Company Common Stock"), other than
the
Appraisal Shares and shares of Company Common Stock directly owned
by Parent,
Sub or the Company, together with the associated Rights, will be
converted into
the right to receive $37.50 in cash; and
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 conditions to the Merger.
NOW, THEREFORE, in consideration of the representations,
warranties,
covenants and agreements contained in this Agreement, and subject
to the
conditions set forth herein, the parties hereto 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 General
Corporation Law
of the State of Delaware (the "DGCL"), Sub shall be merged with and
into the
Company at the Effective Time. Following the Effective Time, the
separate
corporate existence of Sub shall cease and the Company shall
continue as the
surviving corporation in the Merger (the "Surviving Corporation")
and shall
succeed to and assume all the rights and obligations of Sub in
accordance with
the DGCL.
SECTION 1.02. Closing. The closing of the Merger (the "Closing")
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 satisfaction or (to
the extent
permitted by law) waiver of the conditions set forth in Article VI
(other than
those conditions that by their terms are to be satisfied at the
Closing, but
subject to the satisfaction or (to the extent permitted by law)
waiver of those
conditions), at the offices of Cravath, Swaine & Moore LLP,
Worldwide Plaza, 825
Eighth Avenue, New York, New York 10019, unless another time,
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2
date or place is agreed to in writing by Parent and the Company;
provided,
however, that if all the conditions set forth in Article VI shall
not have been
satisfied or (to the extent permitted by law) waived on such second
business
day, then the Closing shall take place on the first business day on
which all
such conditions shall have been satisfied or (to the extent
permitted by law)
waived. The date on which the Closing occurs is referred to in this
Agreement as
the "Closing Date".
SECTION 1.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the parties
shall file
with the Secretary of State of the State of Delaware a certificate
of merger
(the "Certificate of Merger") executed and acknowledged by the
parties in
accordance with the relevant provisions of the DGCL and, as soon as
practicable
on or after the Closing Date, shall make all other filings or
recordings
required under the DGCL. The Merger shall become effective upon the
filing of
the Certificate of Merger with the Secretary of State of the State
of Delaware,
or at such later time as Parent and the Company shall agree and
shall specify in
the Certificate of Merger (the time the Merger becomes effective
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 (as amended) of the Company (the
"Company
Certificate") shall be amended at the Effective Time to be in the
form of
Exhibit A and, as so amended, such Company Certificate shall be the
Restated
Certificate of Incorporation of the Surviving Corporation until
thereafter
changed or amended as provided therein or by applicable law.
(b) The By-laws of Sub, as in effect immediately prior to 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 immediately prior to
the
Effective Time shall be the directors of the Surviving Corporation
until the
earlier of their resignation or removal or until their respective
successors are
duly elected and qualified, as the case may be.
SECTION 1.07. Officers. The officers of the Company immediately
prior
to the Effective Time shall be the officers of the Surviving
Corporation until
the earlier of their resignation or removal or until their
respective successors
are duly elected and qualified, as the case may be.
ARTICLE II
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3
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 the
holder of any
shares of Company Common Stock or any shares of capital stock of
Parent or Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital
stock of Sub shall be converted into and become one validly issued,
fully paid
and nonassessable share of common stock, par value $0.01 per share,
of the
Surviving Corporation.
(b)
Cancelation of Treasury Stock and Parent-Owned Stock. Each
share
of Company Common Stock that is directly owned by the Company,
Parent or Sub
immediately prior to the Effective Time shall automatically be
canceled and
shall cease to exist, and no consideration shall be delivered in
exchange
therefor.
(c) Conversion of Company Common Stock. Each share of Company
Common
Stock issued and outstanding immediately prior to the Effective
Time (other than
shares to be canceled in accordance with Section 2.01(b) and the
Appraisal
Shares), together with the Rights associated therewith, shall be
converted into
the right to receive $37.50 in cash, without interest (the
"Merger
Consideration"). At the Effective Time, all such shares of Company
Common Stock
and associated Rights shall no longer be outstanding and shall
automatically be
canceled and shall cease to exist, and each holder of a certificate
which
immediately prior to the Effective Time represented any such shares
of Company
Common Stock (each, a "Certificate") shall cease to have any rights
with respect
thereto, except the right to receive the Merger Consideration. The
right of any
holder of a Certificate to receive the Merger Consideration shall
be subject to
and reduced by the amount of any withholding that is required under
applicable
tax law.
(d) Appraisal Rights. Notwithstanding anything in this Agreement
to
the contrary, shares (the "Appraisal Shares") of Company Common
Stock issued and
outstanding immediately prior to the Effective Time that are held
by any holder
who is entitled to demand and properly demands appraisal of such
Appraisal
Shares pursuant to, and who complies in all respects with, the
provisions of
Section 262 of the DGCL ("Section 262") shall not be converted into
the right to
receive the Merger Consideration as provided in Section 2.01(c),
but instead
such holder shall be entitled to payment of the fair value of such
Appraisal
Shares in accordance with the provisions of Section 262. At the
Effective Time,
all Appraisal Shares shall no longer be outstanding, shall
automatically be
canceled and shall cease to exist, and each holder of Appraisal
Shares shall
cease to have any rights with respect thereto, except the right to
receive the
fair value of such Appraisal Shares in accordance with the
provisions of Section
262. Notwithstanding the foregoing, if any such holder shall fail
to perfect or
otherwise shall waive, withdraw or lose the right to appraisal
under Section
262, or a court of competent
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4
jurisdiction shall determine that such holder is not entitled to
the relief
provided by Section 262, then the right of such holder to be paid
the fair value
of such holder's Appraisal Shares under Section 262 shall cease and
such
Appraisal Shares shall be deemed to have been converted at the
Effective Time
into, and shall have become, the right to receive the Merger
Consideration as
provided in Section 2.01(c). The Company shall serve prompt notice
to Parent of
any demands for appraisal of any shares of Company Common Stock,
and Parent
shall have the right to participate in and direct all negotiations
and
proceedings with respect to such demands. Prior to the Effective
Time, the
Company shall not, without the prior written consent of Parent,
voluntarily make
any payment with respect to, or settle or offer to settle, any such
demands, or
agree to do any of the foregoing.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to
the
Effective Time, Parent shall appoint an agent, which shall be a
nationally
recognized financial institution or other person that routinely
acts in such
capacity, to act as paying agent (the "Paying Agent") for the
payment of the
Merger Consideration. At the Effective Time, Parent shall deposit,
or cause the
Surviving Corporation to deposit, with the Paying Agent, for the
benefit of the
holders of Certificates, cash in an amount sufficient to pay the
aggregate
Merger Consideration required to be paid pursuant to Section
2.01(c) (such cash
being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable after
the
Effective Time, Parent shall cause the Paying Agent to mail to each
holder of
record of a Certificate (i) a form of letter of transmittal (which
shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates
shall pass, only upon proper delivery of the Certificates to the
Paying Agent
and which shall be in customary form and have such other provisions
as Parent
may reasonably specify) and (ii) instructions for use in effecting
the surrender
of the Certificates in exchange for the Merger Consideration. Each
holder of
record of a Certificate shall, upon surrender to the Paying Agent
of such
Certificate, together with such letter of transmittal, duly
executed, and such
other documents as may reasonably be required by the Paying Agent,
be entitled
to receive in exchange therefor the amount of cash which the number
of shares of
Company Common Stock (together with the associated Rights)
previously
represented by such Certificate shall have been converted into the
right to
receive pursuant to Section 2.01(c), and the Certificate so
surrendered shall
forthwith be canceled. In the event of a transfer of ownership of
Company Common
Stock which is not registered in the transfer records of the
Company, payment of
the Merger Consideration may be made to a person other than the
person in whose
name the Certificate so surrendered is registered if such
Certificate shall be
properly endorsed or 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 payment of the Merger Consideration to a person other than
the registered
holder of such Certificate or establish to the reasonable
satisfaction of Parent
that such taxes have been paid or are not applicable. Until
surrendered as
contemplated by this Section 2.02(b),
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5
each Certificate shall be deemed at any time after the Effective
Time to
represent only the right to receive upon such surrender the Merger
Consideration
which the holder thereof has the right to receive in respect of
such Certificate
pursuant to this Article II. No interest shall be paid or will
accrue on any
cash payable to holders of Certificates pursuant to the provisions
of this
Article II.
(c) No Further Ownership Rights in Company Common Stock. All cash
paid
upon the surrender of Certificates in accordance with the terms of
this Article
II shall be deemed to have been paid in full satisfaction of all
rights
pertaining to the shares of Company Common Stock (together with the
associated
Rights) formerly represented by such Certificates. At the close of
business on
the day on which the Effective Time occurs, the stock transfer
books of the
Company shall be closed, and there shall be no further registration
of transfers
on the stock transfer books of the Surviving Corporation of the
shares of
Company Common Stock that were outstanding immediately prior to the
Effective
Time. If, after the Effective Time, any Certificate is presented to
the
Surviving Corporation for transfer, it shall be canceled against
delivery of
cash to the holder thereof as provided in this Article II.
(d) Termination of the Exchange Fund. Any portion of the Exchange
Fund
which remains undistributed to the holders of the Certificates for
six months
after the Effective Time shall be delivered to Parent, upon demand,
and any
holders of the Certificates who have not theretofore complied with
this Article
II shall thereafter look only to Parent for, and Parent shall
remain liable for,
payment of their claim for the Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company, the
Surviving
Corporation or the Paying Agent shall be liable to any person in
respect of any
cash from the Exchange Fund properly delivered to a public official
pursuant to
any applicable abandoned property, escheat or similar law. If any
Certificate
shall not have been surrendered prior to two years after the
Effective Time (or
immediately prior to such earlier date on which any Merger
Consideration would
otherwise escheat to or become the property of any Governmental
Entity), any
such Merger Consideration shall, to the extent permitted by
applicable law,
become the property of Parent, free and clear of all claims or
interest of any
person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest
the
cash in the Exchange Fund as directed by Parent. Any interest and
other income
resulting from such investments shall be paid from time to time to
Parent, upon
request.
(g) Lost Certificates. If any Certificate shall have been lost,
stolen
or destroyed, upon the making of an affidavit of that fact by the
person
claiming such Certificate to be lost, stolen or destroyed and, if
required by
Parent, the posting by such person of a bond in such reasonable
amount as Parent
may direct as indemnity against any claim that may be made against
it with
respect to such Certificate, the Paying Agent
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6
shall deliver in exchange for such lost, stolen or destroyed
Certificate the
applicable Merger Consideration with respect thereto.
(h) Withholding Rights. Parent, the Surviving Corporation or
the
Paying Agent shall be entitled to deduct and withhold from the
consideration
otherwise payable pursuant to this Agreement to any holder of
shares of Company
Common Stock such amounts as Parent, the Surviving Corporation or
the Paying
Agent is required to deduct and withhold with respect to the making
of such
payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any
provision of state, local or foreign tax law. To the extent that
amounts are so
withheld and paid over to the appropriate taxing authority by
Parent, the
Surviving Corporation or the Paying Agent, such withheld 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 of which such
deduction and
withholding was made by Parent, the Surviving Corporation or the
Paying Agent.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company. Except
as
set forth in the disclosure schedule (with specific reference to
the particular
Section or subsection of this Agreement to which the information
set forth in
such disclosure schedule relates; provided, however, that any
information set
forth in one section of such disclosure schedule shall be deemed to
apply to
each other Section or subsection thereof to which its relevance is
readily
apparent on its face) delivered by the Company to Parent prior to
the execution
of this Agreement (the "Company Disclosure Schedule"), the Company
represents
and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. Each of the
Company
and its Subsidiaries has been duly organized and is validly
existing and in good
standing under the laws of the jurisdiction of its incorporation or
formation,
as the case may be. Each of the Company and its Subsidiaries has
all requisite
power and authority and possesses all governmental licenses,
permits,
authorizations and approvals necessary to enable it to use its
corporate or
other name and to own, lease or otherwise hold and operate its
properties and
other assets and to carry on its business as currently conducted,
except where
the failure to have such government licenses, permits,
authorizations or
approvals individually or in the aggregate has not had and would
not reasonably
be expected to have a Material Adverse Effect. Each of the Company
and 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, leasing or operation of its properties makes such
qualification or
licensing necessary, other than in such jurisdictions where the
failure to be so
qualified or licensed individually or in the aggregate has not had
and would not
reasonably be expected to have a Material Adverse Effect. The
Company has made
available to Parent, prior to the execution of this Agreement,
complete and
accurate
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7
copies of the Company Certificate and its By-laws (the "Company
By-laws"), and
the comparable organizational documents of each of its
Subsidiaries, in each
case as amended to the date hereof. The Company has made available
to Parent
complete and accurate copies of the minutes (or, in the case of
minutes that
have not yet been finalized, drafts thereof) of all meetings of the
stockholders
of the Company and each of its Subsidiaries, the Boards of
Directors of the
Company and each of its Subsidiaries and the committees of each of
such Boards
of Directors, in each case held since January 1, 2004 and prior to
the date
hereof.
(b) Subsidiaries. Section 3.01(b) of the Company Disclosure
Schedule
lists each of the Subsidiaries of the Company and, for each such
Subsidiary, the
jurisdiction of its incorporation or formation, and the executive
officers and
directors thereof. All the issued and outstanding shares of capital
stock of, or
other equity interests in, each such Subsidiary have been validly
issued and are
fully paid and nonassessable and are owned directly or indirectly
by the Company
free and clear of all pledges, liens, charges, claims, options,
mortgages,
restrictions, encumbrances or security interests of any kind or
nature
whatsoever (collectively, "Liens"), and free of any restriction on
the right to
vote, sell or otherwise dispose of such capital stock or other
equity interests.
Except for the capital stock of, or voting securities or equity
interests in,
its Subsidiaries, the Company does not own, directly or indirectly,
any capital
stock of, or other voting securities or equity interests in, any
corporation,
partnership, joint venture, association or other entity.
(c) Capital Structure. The authorized capital stock of the
Company
consists of 30,000,000 shares of Company Common Stock and 5,000,000
shares of
preferred stock, par value $.01 per share (the "Company Preferred
Stock"). At
the close of business on September 22, 2006, (i) 12,029,048 shares
of Company
Common Stock were issued and outstanding (including 132,736 shares
of Company
Common Stock subject to vesting or other forfeiture restrictions or
repurchase
conditions (shares so subject, "Company Restricted Stock"), but
excluding shares
of Company Common Stock held by the Company in its treasury), (ii)
5,541,713
shares of Company Common Stock were held by the Company in its
treasury, (iii)
480,676 shares of Company Common Stock were reserved and available
for issuance
pursuant to the Maritrans Inc. Equity Compensation Plan, the
Company's 1999
Directors' and Key Employees' Equity Compensation Plan and the 2005
Omnibus
Equity Compensation Plan (such plans, together, the "Company Stock
Plans"), of
which 200,533 shares of Company Common Stock were subject to
outstanding Company
Stock Options, and (iv) no shares of Company Preferred Stock were
issued or
outstanding or were held by the Company as treasury shares. At the
close of
business on September 22, 2006, 500,000 shares of Company Preferred
Stock
designated as Series A Junior Participating Preferred Shares were
reserved for
issuance in connection with the rights (the "Rights") to be issued
pursuant to
the Rights Agreement, dated as of August 1, 2002, between the
Company and
American Stock Transfer & Trust Company (the "Rights
Agreement"). Except as set
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8
forth above in this Section 3.01(c), at the close of business on
September 22,
2006, no shares of capital stock or other voting securities or
equity interests
of the Company were issued, reserved for issuance or outstanding.
There are no
outstanding stock appreciation rights, "phantom" stock rights,
performance
units, rights to receive shares of Company Common Stock on a
deferred basis or
other rights (other than Company Restricted Stock and Company Stock
Options)
that are linked to the value of Company Common Stock or the value
of the Company
or any part thereof granted under the Company Stock Plans or
otherwise. Section
3.01(c) of the Company Disclosure Schedule sets forth a complete
and accurate
list, as of September 22, 2006, of all (a) outstanding options to
purchase
shares of Company Common Stock from the Company pursuant to the
Company Stock
Plans or otherwise (together with any other stock options granted
after
September 22, 2006, in accordance with the terms of this Agreement,
the "Company
Stock Options"), the number of shares of Company Common Stock (or
other stock)
subject thereto, the grant dates, expiration dates, exercise or
base prices (if
applicable) and vesting schedules thereof and the names of the
holders thereof
and (b) all outstanding shares of Company Restricted Stock, the
grant dates,
vesting schedules, repurchase prices (if any) and names of the
holders thereof.
The terms and conditions of each outstanding Company Stock Option
and share of
Company Restricted Stock permit such option or share to be treated
at the
Effective Time as set forth in Section 5.04. All outstanding shares
of capital
stock of the Company are, and all shares which may be issued
pursuant to the
Company Stock Options will be, when issued in accordance with the
terms thereof,
duly authorized, validly issued, fully paid and nonassessable and
not subject to
preemptive rights. From September 22, 2006, until the date of this
Agreement,
there have been no issuances by the Company of shares of capital
stock of, or
other equity or voting interests in, the Company, other than the
issuance of
shares of Company Common Stock pursuant to the exercise of Company
Stock Options
outstanding as of September 22, 2006, in accordance with their
terms as in
effect on September 22, 2006. 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
matters on which
stockholders of the Company may vote. Except as set forth above in
this Section
3.01(c), as of the date of this Agreement, (x) there are not
issued, reserved
for issuance or outstanding (A) any shares of capital stock or
other voting
securities or equity interests of the Company, (B) any securities
of the Company
convertible into or exchangeable or exercisable for shares of
capital stock or
other voting securities or equity interests of the Company or (C)
any warrants,
calls, options or other rights to acquire from the Company or any
of its
Subsidiaries, and no obligation of the Company or any of its
Subsidiaries to
issue, any capital stock, voting securities, equity interests or
securities
convertible into or exchangeable or exercisable for capital stock
or voting
securities of the Company and (y) there are not any outstanding
obligations of
the Company or any of its Subsidiaries to repurchase, redeem or
otherwise
acquire any such securities or to issue, deliver or sell, or cause
to be issued,
delivered or sold, any such securities. Neither the Company nor any
of its
Subsidiaries is a party to any voting agreement with respect to the
voting of
any such securities. Except as set forth above in this Section
3.01(c), there
are no outstanding
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9
(1) securities of the Company or any of its Subsidiaries
convertible into or
exchangeable or exercisable for shares of capital stock or voting
securities or
equity interests of any Subsidiary of the Company, (2) warrants,
calls, options
or other rights to acquire from the Company or any of its
Subsidiaries, and no
obligation of the Company or any of its Subsidiaries to issue, any
capital
stock, voting securities, equity interests or securities
convertible into or
exchangeable or exercisable for capital stock or voting securities
of any
Subsidiary of the Company or (3) obligations of the Company or any
of its
Subsidiaries to repurchase, redeem or otherwise acquire any such
outstanding
securities or to issue, deliver or sell, or cause to be issued,
delivered or
sold, any such securities.
(d) Authority; Noncontravention. The Company has all requisite
corporate power and authority to execute and deliver this Agreement
and, subject
to receipt of the Stockholder Approval, to consummate the
transactions
contemplated by this Agreement. The execution and delivery of this
Agreement by
the Company and the consummation by the Company of the transactions
contemplated
by this Agreement have been duly authorized by all necessary
corporate action on
the part of the Company and no other corporate proceedings on the
part of the
Company are necessary to authorize this Agreement or to consummate
the
transactions contemplated hereby, subject, in the case of the
consummation of
the Merger, to the obtaining of the Stockholder Approval. This
Agreement has
been duly executed and delivered by the Company and, assuming the
due
authorization, execution and delivery by each of the other parties
hereto,
constitutes a legal, valid and binding obligation of the Company,
enforceable
against the Company in accordance with its terms, subject to
bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting
the rights of
creditors generally and the availability of equitable remedies. The
Board of
Directors of the Company, at a meeting duly called and held at
which all
directors of the Company were present, duly and unanimously adopted
resolutions
(i) approving and declaring advisable this Agreement, the Merger
and the other
transactions contemplated by this Agreement, (ii) declaring that it
is in the
best interests of the stockholders of the Company that the Company
enter into
this Agreement and consummate the Merger and the other transactions
contemplated
by this Agreement on the terms and subject to the conditions set
forth in this
Agreement, (iii) directing that the adoption of this Agreement be
submitted as
promptly as practicable to a vote at a meeting of the stockholders
of the
Company and (iv) recommending that the stockholders of the Company
adopt this
Agreement, which resolutions, as of the date of this Agreement,
have not been
subsequently rescinded, modified or withdrawn in any way. Except as
otherwise
contemplated in Section 5.04, the execution and delivery of this
Agreement do
not, and the consummation of the Merger and the other transactions
contemplated
by this Agreement and compliance by the Company and its
Subsidiaries with the
provisions of this Agreement will not, conflict with, or result in
any violation
or breach of, or default (with or without notice or lapse of time,
or both)
under, or give rise to a right of termination, cancelation or
acceleration of
any obligation or to the loss of a benefit under, or result in the
creation of
any Lien in or upon any of the properties or other assets of the
Company or any
of its Subsidiaries under, (x) the Company Certificate
<PAGE>
10
or the Company By-laws or the comparable organizational documents
of any of its
Subsidiaries, (y) any loan or credit agreement, bond, debenture,
note, mortgage,
indenture, lease, sublease, supply agreement, license agreement,
development
agreement or other contract, agreement, obligation, commitment,
arrangement,
understanding, instrument, permit, franchise or license, whether
oral or written
(each, including all amendments thereto, a "Contract"), to which
the Company or
any of its Subsidiaries is a party or any of their respective
properties or
other assets is subject or (z) subject to the obtaining of the
Stockholder
Approval and the governmental filings and other matters referred to
in the
following sentence, any (A) statute, law, ordinance, rule or
regulation
applicable to the Company or any of its Subsidiaries or their
respective
properties or other assets or (B) order, writ, injunction, decree,
judgment or
stipulation, in each case applicable to the Company or any of its
Subsidiaries
or their respective properties or other assets, other than, in the
case of
clauses (y) and (z), any such conflicts, violations, breaches,
defaults, rights,
losses or Liens that individually or in the aggregate have not had
and would not
reasonably be expected to have a Material Adverse Effect. No
consent, approval,
order or authorization of, action by or in respect of, or
registration,
declaration or filing with, any Federal, state, local or foreign
government, any
court, administrative, regulatory or other governmental agency,
commission or
authority or any non-governmental self-regulatory agency,
commission or
authority (each, a "Governmental Entity") is required by or with
respect to the
Company or any of its Subsidiaries in connection with the execution
and delivery
of this Agreement by the Company or the consummation of the Merger
or the other
transactions contemplated by this Agreement, except for (1) the
filing of a
premerger notification and report form by the Company under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(including the
rules and regulations promulgated thereunder, the "HSR Act"), and
the receipt,
termination or expiration, as applicable, of approvals or waiting
periods
required under the HSR Act or any other applicable foreign
competition, merger
control, antitrust or similar law or regulation, (2) the filing
with the
Securities and Exchange Commission (the "SEC") of (A) a proxy
statement relating
to the adoption by the stockholders of the Company of this
Agreement (as amended
or supplemented from time to time, the "Proxy Statement") and (B)
such reports
under the Securities Exchange Act of 1934, as amended (including
the rules and
regulations promulgated thereunder, the "Exchange Act"), as may be
required in
connection with this Agreement and the transactions contemplated by
this
Agreement, (3) the filing of the Certificate of Merger with the
Secretary of
State of the State of Delaware and appropriate documents with the
relevant
authorities of other states in which the Company or any of its
Subsidiaries is
qualified to do business, (4) any filings required under the rules
and
regulations of the New York Stock Exchange and (5) such other
consents,
approvals, orders, authorizations, actions, registrations,
declarations and
filings the failure of which to be obtained or made individually or
in the
aggregate has not had and would not reasonably be expected to have
a Material
Adverse Effect.
<PAGE>
11
(e) Company SEC Documents. (i) The Company has filed or furnished
all
reports, schedules, forms, statements and other documents
(including exhibits
and other information incorporated therein) with the SEC required
to be filed or
furnished by the Company since January 1, 2004 (the "Company SEC
Documents"). As
of their respective filing dates, the Company SEC Documents
complied in all
material respects with the requirements of the Securities Act of
1933, as
amended (including the rules and regulations promulgated
thereunder, the
"Securities Act"), the Exchange Act and the Sarbanes Oxley Act of
2002
(including the rules and regulations promulgated thereunder, "SOX")
applicable
to such Company SEC Documents, and none of the Company SEC
Documents contained,
when filed or furnished, any untrue statement of a material fact or
omitted to
state a material fact required to be stated therein or necessary in
order to
make the statements therein, in light of the circumstances under
which they were
made, not misleading. Except to the extent that information
contained in any
Company SEC Document has been revised, amended, supplemented or
superseded by a
later-filed Company SEC Document, none of the Company SEC Documents
contains any
untrue statement of a material fact or omits to state any material
fact required
to be stated therein or necessary in order to make the statements
therein, in
light of the circumstances under which they were made, not
misleading. Each of
the financial statements (including the related notes) of the
Company included
in the Company SEC Documents was prepared in accordance with, in
all material
respects, the applicable accounting requirements and the published
rules and
regulations of the SEC with respect thereto, was prepared in
accordance with
generally accepted accounting principles in the United States
("GAAP") (except,
in the case of unaudited statements, as permitted by the rules and
regulations
of the SEC) applied on a consistent basis during the periods
involved (except as
may be indicated in the notes thereto) and fairly presented in all
material
respects the consolidated financial position of the Company and its
consolidated
Subsidiaries as of the dates thereof and the consolidated results
of their
operations and cash flows for the periods then ended (subject, in
the case of
unaudited statements, to normal year-end audit adjustments). Except
as disclosed
in the Company SEC Documents filed or furnished by the Company and
publicly
available prior to the date of this Agreement (the "Filed Company
SEC
Documents"), neither the Company nor any of its Subsidiaries has
any liabilities
or obligations of any nature (whether accrued, absolute, contingent
or
otherwise) which individually or in the aggregate have had or would
reasonably
be expected to have a Material Adverse Effect. None of the
Subsidiaries of the
Company are, or have at any time since January 1, 2004 been,
subject to the
reporting requirements of Sections 13(a) and 15(d) of the Exchange
Act.
(ii) Neither the Company nor any of its Subsidiaries has any
outstanding, or has arranged any outstanding, "extensions of
credit" to
directors or executive officers within the meaning of Section 402
of SOX.
(iii) The Company maintains a system of "internal control over
financial reporting" (as defined in Rules 13a-15(f) and 15d-15(f)
under the
Exchange Act)
<PAGE>
12
sufficient to provide reasonable assurance (A) that records are
maintained
that
in reasonable detail accurately and fairly reflect the
transactions
and
dispositions of the assets of the Company, (B) that transactions
are
recorded as necessary to permit preparation of financial statements
in
accordance with GAAP, (C) that receipts and expenditures of the
Company are
being made only in accordance with the authorization of management
and (D)
regarding prevention or timely detection of the unauthorized
acquisition,
use
or disposition of the Company's assets that could have a
material
effect on the Company's financial statements.
(iv) The Company's "disclosure controls and procedures" (as defined
in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are
reasonably
designed to ensure that all information (both financial and
non-financial)
required to be disclosed by the Company in the reports that it
files or
submits under the Exchange Act is recorded, processed, summarized
and
reported within the time periods specified in the rules and forms
of the
SEC,
and that all such information is accumulated and communicated to
the
Company's management as appropriate to allow timely decisions
regarding
required disclosure and to make the certifications of the chief
executive
officer and chief financial officer of the Company required under
the
Exchange Act with respect to such reports.
(v) Neither the Company nor any of its Subsidiaries is a party to,
or
has
any commitment to become a party to, any joint venture,
off-balance
sheet partnership or any similar Contract (including any Contract
or
arrangement relating to any transaction or relationship between or
among
the
Company or any of its Subsidiaries, on the one hand, and any
unconsolidated Affiliate, including any structured finance, special
purpose
or
limited purpose entity or person, on the other hand, or any
"off-balance
sheet arrangements" (as defined in Item 303(a) of Regulation S-K of
the
SEC)), where the result, purpose or intended effect of such
Contract is to
avoid disclosure of any material transaction involving, or
material
liabilities of, the Company or any of its Subsidiaries in the
Company's or
such
Subsidiary's published financial statements or other Company
SEC
Documents.
(vi) Since January 1, 2004, the Company has not received any oral
or
written notification of any (x) "significant deficiency" or (y)
"material
weakness" in the Company's internal controls over financial
reporting.
There is no outstanding "significant deficiency" or "material
weakness"
which the Company's independent accountants certify has not
been
appropriately and adequately remedied by the Company. For purposes
of this
Agreement, the terms "significant deficiency" and "material
weakness" shall
have
the meanings assigned to them in the Public Company Accounting
Oversight Board's Auditing Standard No. 2, as in effect on the date
hereof.
<PAGE>
13
(f) Information Supplied. None of the information supplied or to
be
supplied by or on behalf of the Company specifically for inclusion
or
incorporation by reference in the Proxy Statement will, at the date
it is first
mailed to the stockholders of the Company and at the time of the
Stockholders'
Meeting, contain any untrue statement of a material fact or omit to
state any
material fact required to be stated therein or necessary in order
to make the
statements therein, in light of the circumstances under which they
are made, not
misleading, except that no representation or warranty is made by
the Company
with respect to statements made or incorporated by reference
therein based on
information supplied by or on behalf of Parent or Sub in writing
specifically
for inclusion or incorporation by reference in the Proxy Statement.
The Proxy
Statement will comply as to form in all material respects with the
requirements
of the Exchange Act.
(g) Absence of Certain Changes or Events. Since December 31,
2005,
there has not been any Material Adverse Change. During the period
since June 30,
2006, through the date of this Agreement, (i) the Company and its
Subsidiaries
have conducted their businesses only in the ordinary course
consistent with past
practice and (ii) neither the Company nor any of its Subsidiaries
has taken any
action that, if taken after the date of this Agreement, would
constitute a
breach of any of the covenants set forth in Section 4.01(a).
(h) Litigation. Except as disclosed in the Filed Company SEC
Documents, there is no suit, action or proceeding pending or, to
the Knowledge
of the Company, threatened against the Company or any of its
Subsidiaries or any
of their respective assets that individually or in the aggregate
has had or
would reasonably be expected to have a Material Adverse Effect, nor
is there any
judgment, decree, injunction, rule or order of any Governmental
Entity or
arbitrator outstanding against, or, to the Knowledge of the
Company,
investigation by any Governmental Entity involving, the Company or
any of its
Subsidiaries or any of their respective assets that individually or
in the
aggregate has had or would reasonably be expected to have a
Material Adverse
Effect.
(i) Contracts. (i) Section 3.01(i) of the Company Disclosure
Schedule
lists each of the following types of Contracts to which the Company
or any of
its Subsidiaries is a party (such Contracts, the "Material
Contracts"):
(A) any material operating agreement, management agreement,
crewing agreement, contract of affreightment or financial lease
(including
any
sale/leaseback agreement or similar arrangement) with respect to
any
Vessel;
(B) any Contract for or relating to the purchase or sale of any
Vessel or other vessel;
(C) any Contract including an option with respect to the
purchase
or
sale of any Vessel or other vessel;
<PAGE>
14
(D) any Contract with a third party for the charter of any
Vessel;
(E) any Contract relating to indebtedness for borrowed money
(including any obligation to guarantee the indebtedness for
borrowed money
of
any person other than any Subsidiary of the Company) having an
outstanding principal amount in excess of $2,500,000, and, for each
such
Contract, the aggregate principal amount outstanding as of the date
of this
Agreement;
(F) any Contract relating to a security interest imposed on any
asset or property of the Company or any of its Subsidiaries, other
than
Permitted Liens;
(G) any Contract with any supplier or for the furnishing of
services to the Company or any of its Subsidiaries involving
consideration
of
more than $2,500,000 over its remaining term (including any
automatic
extensions
thereto);
(H) any partnership, joint venture or similar agreement or
arrangement with a third party;
(I) any Contract that limits or purports to limit the ability
of
the
Company or any of its Subsidiaries to compete with any person or in
any
geographic area or during any period of time;
(J) any Contract between or among the Company or any of its
Subsidiaries, on the one hand, and any director, officer or
Affiliate of
the
Company (other than any of its Subsidiaries) or any person that
beneficially owns 5% or more of the outstanding shares of Company
Common
Stock (including, in each case, any "associates" or members of
the
"immediate family" (as such terms are defined in Rule 12b-2 and
Rule 16a-1
of
the Exchange Act, respectively) of any such person), on the other
hand;
(K) any arrangement for receipt or repayment of any grant,
subsidy or financial assistance from any Governmental Entity;
and
(L) any effective power of attorney granted by the Company or
any
of
its Subsidiaries.
(ii) Each Material Contract is a valid and binding obligation of
the
Company or its Subsidiary, as the case may be, and, to the
Knowledge of the
Company, a valid and binding obligation of each other party
thereto. None
of
the Company, any Subsidiary of the Company or, to the Knowledge of
the
Company, any other party is in breach of, or in default under, or
has
repudiated, and no
event has occurred which, with notice or lapse of time
or
both, would constitute a breach of, or a default under, any
such
Material Contract, except for such breach, default or repudiation
that has
not
had and would not reasonably be
<PAGE>
15
expected to have, individually or in the aggregate, a Material
Adverse
Effect. The Company has made available to Parent a true and correct
copy of
each
Material Contract (as amended to date). Neither the Company nor any
of
its
Subsidiaries is a party to any material oral Contract.
(iii) Except as disclosed in the Filed Company SEC Documents, as
of
the
date hereof, neither the Company nor any of its Subsidiaries is a
party
to,
and none of their respective properties or other assets is subject
to,
any
Contract that is of a nature required to be filed as an exhibit to
a
report or filing under the Securities Act or the Exchange Act.
(j) Compliance with Laws; Environmental Matters. (i) Except
with
respect to Environmental Laws, the Employee Retirement Income
Security Act of
1974, as amended ("ERISA") and taxes, which are the subjects of
Sections
3.01(j)(ii), 3.01(l) and 3.01(n), respectively, each of the Company
and its
Subsidiaries is in compliance with all statutes, laws, ordinances,
rules,
regulations, judgments, orders and decrees of all Governmental
Entities
(collectively, "Legal Provisions") and all Maritime Guidelines
applicable to it,
its properties, facilities or other assets (including its Vessels),
its business
or operations or any product or service that is developed,
performed,
distributed and/or marketed by it, except for failures to be in
compliance that
individually or in the aggregate have not had and would not
reasonably be
expected to have a Material Adverse Effect. The Company and each of
its
Subsidiaries are citizens of the United States within the meaning
of Section
2(c) of the Shipping Act of 1916, as amended. Each of the Company
and its
Subsidiaries has in effect all approvals, authorizations,
certificates, filings,
franchises, licenses, notices and permits of or with all
Governmental Entities
or pursuant to any Maritime Guideline (collectively, "Permits")
necessary for it
to own, lease or operate its properties (including its Vessels) and
other assets
and to carry on its business and operations as currently conducted,
except where
the failure to have such Permits individually or in the aggregate
has not had
and would not reasonably be expected to have a Material Adverse
Effect. There
has occurred no default under, or violation of, any such Permit,
except for any
such default or violation that individually or in the aggregate has
not had and
would not reasonably be expected to have a Material Adverse Effect.
The
consummation of the Merger by the Company, in and of itself, would
not cause the
revocation or cancelation of any such Permit that individually or
in the
aggregate would reasonably be expected to have a Material Adverse
Effect. To the
Knowledge of the Company, no action, demand, requirement or
investigation by any
Governmental Entity, including any written notice or warning from
any
Governmental Entity regarding deficiencies in compliance with any
Legal
Provision or Maritime Guideline, and no suit, action or proceeding
by any other
person, in each case with respect to the Company or any of its
Subsidiaries or
any of their respective properties, facilities or other assets
(including their
Vessels) or products or services, under any Legal Provision or
Maritime
Guideline is pending or threatened, other than, in each case,
those
<PAGE>
16
the outcome of which individually or in the aggregate have not had
and would not
reasonably be expected to have a Material Adverse Effect.
(ii) Except for those matters that individually or in the
aggregate
have
not had and would not reasonably be expected to have a Material
Adverse Effect: (A) each of the Company and its Subsidiaries, and
each
currently owned, operated or leased Vessel of the Company or any of
its
Subsidiaries, is, and has been, in compliance with all
Environmental Laws,
and
each of the Company and its Subsidiaries has obtained and complied
with
all
Permits required under any Environmental Laws to own, lease or
operate
its
properties or other assets (including its Vessels) and to carry on
its
business and operations as currently conducted; (B) to the
Knowledge of the
Company, during the period of the Company's or its Subsidiaries'
ownership,
operation or use thereof, no formerly owned, operated or used
Vessel
violated any Environmental Law; (C) there have been no Releases
or
threatened Releases of Hazardous Materials in, on, from, under or
affecting
any
properties or Vessels currently or formerly owned, leased or
operated
by
the Company, any of its Subsidiaries or any of its former
Subsidiaries;
(D)
there is no investigation, suit, claim, action or proceeding
pending,
or
to the Knowledge of the Company, threatened against or affecting
the
Company or any of its Subsidiaries relating to or arising under
Environmental Laws, and neither the Company nor any of its
Subsidiaries has
received any notice of any such investigation, suit, claim, action
or
proceeding; (E) neither the Company nor any of its Subsidiaries has
entered
into
or assumed by Contract or operation of law or otherwise any
obligation, liability, order, settlement, judgment, injunction or
decree
relating to or arising under Environmental Laws; (F) to the
Knowledge of
the
Company, there are no facts, circumstances or conditions that
would
reasonably be expected to form the basis for any investigation,
suit,
claim, action, proceeding, compliance obligation or liability
against or
affecting the Company or any of its Subsidiaries relating to or
arising
under Environmental Laws; and (G) neither the Company nor any of
its
Subsidiaries is subject to any claim, action, obligation or
liability
arising under any Environmental Law as such relates to human
exposure to
asbestos, with respect to the presence or alleged presence of
asbestos or
asbestos-containing materials in any product or at or upon any
current
property or Vessels, and, to the Knowledge of the Company, neither
the
Company nor any of its Subsidiaries has manufactured, sold,
marketed,
installed, removed, imported or distributed any
asbestos-containing
products in such a manner that would reasonably be expected to form
the
basis of any such claim, action, obligation or liability. The
Company has
made
available to Parent all material environmental audits, reports
and
other material environmental documents prepared in the last five
years,
which are in its possession or under its reasonable control,
relating to
the
Company's or any of its Subsidiary's past or current
properties,
including Vessels, or operations. The term "Environmental Laws"
means all
applicable
<PAGE>
17
Federal, state, local and foreign laws (including common law),
statutes,
rules, regulations, codes, ordinances, orders, decrees,
judgments,
injunctions, notices, Permits, treaties or binding Contracts
issued,
promulgated or entered into by any Governmental Entity relating in
any way
to
the environment, preservation or reclamation of natural resources,
the
presence, management, Release or threat of Release of, or exposure
to,
Hazardous Materials, or to human health and safety, including
the
Comprehensive Environmental Response, Compensation and Liability
Act of
1980, as amended, and the Oil Pollution Act of 1990, as amended.
The term
"Hazardous Materials" means (1) petroleum products and
by-products,
asbestos and asbestos-containing materials, urea formaldehyde
foam
insulation, medical or infectious wastes, polychlorinated
biphenyls, radon
gas,
radioactive substances, chlorofluorocarbons and all other
ozone-depleting substances or (2) any chemical, material,
substance, waste,
pollutant or contaminant that is prohibited, limited or regulated
by or
pursuant to any Environmental Law. The term "Release" means any
spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting,
escaping, leaching, dumping, disposing or migrating into or through
the
environment or any natural or man-made structure.
(k) Absence of Changes in Company Benefit Plans; Labor Relations.
(i)
From the date of the most recent audited financial statements
included in the
Filed Company SEC Documents to the date of this Agreement, there
has not been
any adoption, amendment or termination by the Company or any of its
Subsidiaries
of any collective bargaining agreement or any employment, bonus,
pension, profit
sharing, deferred compensation, incentive compensation, stock
ownership, stock
purchase, stock appreciation, restricted stock, stock option,
"phantom" stock,
performance, retirement, thrift, savings, stock bonus, paid time
off,
perquisite, fringe benefit, vacation, severance, disability, death
benefit,
hospitalization, medical, welfare benefit or other plan, program,
policy,
arrangement, agreement or understanding (whether or not legally
binding)
maintained, contributed to or required to be maintained or
contributed to by the
Company or any of its Subsidiaries or any other person or entity
that, together
with the Company, is treated as a single employer under Section
414(b), (c), (m)
or (o) of the Code (each, a "Commonly Controlled Entity"), in each
case
providing benefits to any current or former director, officer,
employee,
independent contractor or consultant of the Company or any of its
Subsidiaries
(each, a "Participant"), but not including the Company Benefit
Agreements (all
such plans, programs, policies, arrangements, agreements and
understandings,
including any such plan, program, policy, arrangement, agreement
or
understanding entered into or adopted on or after the date of this
Agreement,
collectively, the "Company Benefit Plans"), or any change in any
actuarial or
other assumption used to calculate funding obligations with respect
to any
Company Pension Plan, or any change in the manner in which
contributions to any
Company Pension Plan are made or the basis on which such
contributions are
determined, other than amendments or other changes as required to
ensure that
such Company Pension Plan is not then out of
<PAGE>
18
compliance with applicable law, or reasonably determined by the
Company to be
necessary or appropriate to preserve the qualified status of a
Company Pension
Plan under Section 401(a) of the Code. Except as disclosed in the
Filed Company
SEC Documents, as of the date of this Agreement, there are not any
other
material Company Benefit Agreements.
(ii) There are no collective bargaining or other labor union
agreements to which the Company or any of its Subsidiaries is a
party or by
which the Company or any of its Subsidiaries is bound. No employees
of the
Company or any of its Subsidiaries are or since January 1, 2004,
have been,
represented by any union with respect to their employment by the
Company or
such
Subsidiary. There is not pending, and, since January 1, 2004,
there
has
not been, any labor dispute, labor strike, union organization
attempt
or
work stoppage, slowdown or lockout involving the Company or any of
its
Subsidiaries. Neither the Company nor any of its Subsidiaries is,
or since
January 1, 2004, has been, the subject of any suit, action or
proceeding
which is pending or, to the Knowledge of the Company, threatened,
asserting
that
the Company or any of its Subsidiaries has committed an unfair
labor
practice (within the meaning of the National Labor Relations Act
or
applicable state statutes) or seeking to compel it to bargain with
any
labor union or labor organization. Each of the Company and its
Subsidiaries
is,
and since January 1, 2004, has been, in compliance with all
applicable
laws
relating to employment and employment practices, occupational
safety
and
health standards, terms and conditions of employment and wages
and
hours, except where such non-compliance has not had and would
not
reasonably be expected to result in a material liability to the
Company,
and
since January 1, 2004, has not, engaged in any material unfair
labor
practice.
(l) ERISA Compliance. (i) Section 3.01(l)(i) of the Company
Disclosure
Schedule contains a complete and accurate list of each material
Company Benefit
Plan that is an "employee pension benefit plan" (as defined in
Section 3(2) of
ERISA) (sometimes referred to herein as a "Company Pension Plan"),
each material
Company Benefit Plan that is an "employee welfare benefit plan" (as
defined in
Section 3(1) of ERISA) and all other material Company Benefit Plans
and material
Company Benefit Agreements in effect as of the date of this
Agreement. The
Company has made available to Parent complete and accurate copies
of (A) each
such Company Benefit Plan and Company Benefit Agreement, (B) the
two most recent
annual reports on Form 5500 required to be filed with the Internal
Revenue
Service (the "IRS") with respect to each Company Benefit Plan (if
any such
report was required under applicable law), (C) the most recent
summary plan
description for each Company Benefit Plan for which a summary plan
description
is required under applicable law and (D) each trust agreement and
insurance or
group annuity contract relating to any Company Benefit Plan. Each
Company
Benefit Plan has been administered in accordance with its terms and
with the
applicable provisions of ERISA, the Code and all other applicable
laws and the
terms of
<PAGE>
19
all applicable collective bargaining agreements, except where
such
non-compliance has not had and would not reasonably be expected to
result in a
material liability to the Company.
(ii) All Company Pension Plans intended to be tax qualified
have
received favorable determination letters from the IRS with respect
to all
tax
law changes with respect to which the IRS is currently willing
to
provide a determination letter, to the effect that such Company
Pension
Plans are qualified and exempt from Federal income taxes under
Sections
401(a) and 501(a), respectively, of the Code, no such determination
letter
has
been revoked (nor, to the Knowledge of the Company, has revocation
been
threatened) and, to the Knowledge of the Company, no event has
occurred
since the date of the most recent determination letter or
application
therefor relating to any such Company Pension Plan that has had or
would
reasonably be expected to result in a material liability to the
Company.
The
Company has delivered or made available to Parent a complete
and
accurate copy of the most recent determination letter received
prior to the
date
hereof with respect to each Company Pension Plan.
(iii) Neither the Company nor, within the last six years, any
Commonly
Controlled Entity, (A) has maintained, contributed to or been
required to
contribute to, or has any actual or contingent liability under, any
Company
Benefit Plan that is subject to Title IV of ERISA or Section 412 of
the
Code
or that is otherwise a defined benefit pension plan or (B) has
any
unsatisfied liability under Title IV of ERISA or Section 412 of the
Code
which would reasonably be expected to result in a material
liability to the
Company.
(iv) All reports, returns and similar documents with respect to
all
Company Benefit Plans required to be filed with any Governmental
Entity or
distributed to any Company Benefit Plan participant have been duly
and
timely filed or distributed, except where such failure has not had
and
would not reasonably be expected to result in a material liability
to the
Company. None of the Company or any of its Subsidiaries has
received notice
of,
and to the Knowledge of the Company, there are no investigations by
any
Governmental Entity with respect to, termination proceedings or
other
claims (except claims for benefits payable in the normal operation
of the
Company Benefit Plans), suits or proceedings against or involving
any
Company Benefit Plan or Company Benefit Agreement or asserting any
rights
or
claims to benefits under any Company Benefit Plan or Company
Benefit
Agreement that would reasonably be expected to give rise to any
material
liability, and, to the Knowledge of the Company, there are not any
facts
that
would reasonably be expected to give rise to any material liability
in
the
event of any such investigation, claim, suit or proceeding.
<PAGE>
20
(v) Except where such failure has not had and would not reasonably
be
expected to result in a material liability to the Company, all
contributions, premiums and benefit payments under or in connection
with
the
Company Benefit Plans that are required to have been made as of
the
date
hereof in accordance with the terms of the Company Benefit Plans
have
been
timely made or have been reflected on the most recent
consolidated
balance sheet filed or incorporated by reference into the Filed
Company SEC
Documents. No Company Pension Plan has an "accumulated funding
deficiency"
(as
such term is defined in Section 302 of ERISA or Section 412 of
the
Code), whether or not waived.
(vi) With respect to each Company Benefit Plan, (A) to the
Knowledge
of
the Company, there has not occurred any prohibited transaction
(within
the
meaning of Section 406 of ERISA or Section 4975 of the Code) that
would
reasonably be expected to result in a material liability to the
Company and
(B)
to the Knowledge of the Company, none of the Company, any of
its
Subsidiaries or any of their respective officers, directors or
employees
has
engaged in any transaction or acted in a manner, or failed to act
in a
manner, that would reasonably be expected to subject the Company to
any
liability for breach of fiduciary duty under ERISA that would
reasonably be
expected to result in a material liability to the Company. There
has not
been
any "reportable event" (as that term is defined in Section 4043
of
ERISA) for which the 30-day reporting requirement has not been
waived with
respect to any Company Benefit Plan during the last five years.
(vii) To the Knowledge of the Company, each of the Company and
its
Subsidiaries complies in all material respects with the
applicable
requirements of Section 4980B(f) of the Code or any similar state
or local
law
with respect to each Company Benefit Plan that is a group health
plan,
as
such term is defined in Section 5000(b)(1) of the Code or such
state or
local law. Except as required by Section 4980B(f) of the Code, no
Company
Benefit Plan or Company Benefit Agreement that is an employee
welfare
benefit plan provides benefits after termination of employment.
(viii) Except as contemplated by this Agreement, no Participant
will
be
entitled to any additional compensation, severance or other
benefits or
any
acceleration of the time of payment or vesting of any
compensation,
severance or other benefits as a result of the Merger or any
other
transaction contemplated by this Agreement (alone or in combination
with
any
other event) or any benefits the value of which will be calculated
on
the
basis of the Merger or any other transaction contemplated by
this
Agreement (alone or in combination with any other event). None of
the
execution and delivery of this Agreement, the obtaining of the
Stockholder
Approval or the consummation of the Merger or
<PAGE>
21
any
other transaction expressly contemplated by this Agreement will
(including as a result of any termination of employment on or
following the
Effective Time) (A) entitle any Participant to severance,
termination,
change in control or similar pay or benefits, (B) accelerate the
time of
payment or vesting, or trigger any payment or funding (through a
grantor
trust or otherwise) of, compensation or benefits under, increase
the amount
payable or trigger any other material obligation pursuant to, or
increase
the
cost of, any Company Benefit Plan or Company Benefit Agreement or
(C)
result in any breach or violation of, or a default under, any
Company
Benefit Plan or Company Benefit Agreement.
(ix)
No deduction by the Company or any of its Subsidiaries in
respect
of
any "applicable employee remuneration" (within the meaning of
Section
162(m) of the Code) has been disallowed or is subject to
disallowance by
reason of Section 162(m) of the Code, except where such
disallowance has
not
had and would not reasonably be expected to result in a
material
liability to the Company.
(m) No Excess Parachute Payments. Other than payments that may be
made
to persons set forth on Section 3.01(m) of the Company Disclosure
Schedule (the
"Primary Company Executives"), (i) no amount or other entitlement
or economic
benefit that would be received (whether in cash or property or the
vesting of
property) as a result of the execution and delivery of this
Agreement, the
obtaining of the Stockholder Approval, the consummation of the
Merger or any
other transaction contemplated by this Agreement (including as a
result of
termination of employment on or following the Effective Time) by or
for the
benefit of any Participant who is a "disqualified individual" (as
such term is
defined in Treasury Regulation Section 1.280G-1) under any Company
Benefit Plan,
Company Benefit Agreement or other compensation arrangement would
be
characterized as an "excess parachute payment" (as such term is
defined in
Section 280G(b)(1) of the Code), and (ii) no such disqualified
individual is
entitled to receive any additional payment (e.g., any tax gross up
or other
payment) from the Company, Parent, the Surviving Corporation or any
other person
in the event that the excise tax required by Section 4999(a) of the
Code is
imposed on such disqualified individual.
(n) Taxes. (i) Each of the Company and its Subsidiaries has filed
or
has caused to be filed in a timely manner (within any applicable
extension
period) all material tax returns required to be filed. All such tax
returns are
complete and accurate in all material respects and have been
prepared in
compliance in all material respects with all applicable laws and
regulations.
Each of the Company and its Subsidiaries has timely paid or caused
to be paid
(or the Company has paid on its behalf) all material taxes due and
owing, and
the most recent financial statements contained in the Filed Company
SEC
Documents reflect an adequate reserve, determined in accordance
with GAAP, for
all
<PAGE>
22
material taxes payable by the Company and its Subsidiaries for all
taxable
periods and portions thereof accrued through the date of such
financial
statements.
(ii) To the Knowledge of the Company, no tax return of the Company
or
any
of its Subsidiaries is or has been within the last five years
under
audit or examination by any taxing authority, and no written notice
has
been
received by the Company or any of its Subsidiaries that any
audit,
examination or similar proceeding is pending, proposed or asserted
with
regard to any taxes or tax returns of the Company or any of its
Subsidiaries. There is no deficiency, refund litigation,
proposed
adjustment or matter in controversy with respect to any material
amount of
taxes due and owing by the Company or any of its Subsidiaries.
Each
deficiency resulting from any completed audit or examination
relating to
taxes by any taxing authority has been timely paid or is being
contested in
good
faith and has been reserved for on the books of the Company.
The
general statute of limitations with respect to federal income taxes
as set
forth in Section 6501 of the Code is closed with respect to the tax
returns
of
the Company and each of its Subsidiaries for all years through
2002.
There is no currently effective agreement or other document
extending, or
having the effect of extending, the period of assessment or
collection of
any
taxes of the Company or any of its Subsidiaries, nor has any
written
request been made for any such extension, and no currently
effective power
of
attorney (other than powers of attorney authorizing employees of
the
Company or any of its Subsidiaries to act on behalf of the Company
or any
of
its Subsidiaries) with respect to any taxes has been executed or
filed
with
any taxing authority.
(iii) None of the Company or any of its Subsidiaries will be
required
to
include in a taxable period ending after the Effective Time a
material
amount of taxable income attributable to income that accrued (for
purposes
of
the financial statements of the Company included in the Filed
Company
SEC
Documents) in a prior taxable period (or portion of a taxable
period)
but
was not recognized for tax purposes in any prior taxable period as
a
result of (A) an open transaction disposition made on or before
the
Effective Time, (B) a prepaid amount received on or prior to the
Effective
Time, (C) the installment method of accounting, (D) the completed
contract
method of accounting, (E) the long-term contract method of
accounting, (F)
the
cash method of accounting or Section 481 of the Code or (G) any
comparable provisions of state or local tax law, domestic or
foreign, or
for
any other reason, other than any amounts that are specifically
reflected in a reserve for taxes on the financial statements of the
Company
included in the Filed Company SEC Documents.
(iv) The Company and each of its Subsidiaries have complied in
all
material respects with all applicable statutes, laws, ordinances,
rules and
regulations relating to the payment and withholding of any material
amount
of
<PAGE>
23
taxes (including Section 482 of the Code and withholding of taxes
pursuant
to
Sections 1441, 1442, 3121 and 3402 of the Code and similar
provisions
under any Federal, state, local or foreign tax laws) and have,
within the
time
and the manner prescribed by law, withheld from and paid over to
the
proper governmental authorities all material amounts required to be
so
withheld and paid over under applicable laws.
(v) None of the Company or any of its Subsidiaries has within the
last
two
years constituted either a "distributing corporation" or a
"controlled
corporation" as such terms are defined in Section 355 of the Code
in a
distribution of stock qualifying or intended to qualify for
tax-free
treatment (in whole or in part) under Section 355(a) or 361 of the
Code.
(vi) Neither the Company nor any of its Subsidiaries joins or
has
joined, for any taxable period in the filing of any affiliated,
aggregate,
consolidated, combined or unitary tax return other than
consolidated tax
returns for the consolidated group of which the Company is the
common
parent.
(vii) Neither the Company nor any of its Subsidiaries has ever
entered
into
a "listed transaction" within the meaning of Treasury
Regulation
Section 1.6011-4(b)(2).
(viii) No written claim has ever been made by any authority in
a
jurisdiction where any of the Company or its Subsidiaries does not
file a
tax
return that the Company or any of its Subsidiaries is, or may
be,
subject to a material amount of tax by that jurisdiction.
(ix) Other than with respect to the consolidated group of
corporations
of
which the Company is the common parent, neither the Company nor any
of
its
Subsidiaries is a party to or bound by any tax sharing agreement,
tax
indemnity obligation or similar agreement, arrangement or practice
with
respect to taxes (including any advance pricing agreement,
closing
agreement or other agreement relating to taxes with any taxing
authority).
(x) No taxing authority has asserted in writing any material liens
for
taxes with respect to any assets or properties of the Company or
any of its
Subsidiaries, except for statutory liens for taxes not yet due and
payable.
(xi) Neither the Company nor any of its Subsidiaries has been a
United
States real property holding corporation within the meaning of
Section
897(c)(2) of the Code during the applicable period specified in
Section
897(c)(1)(A)(ii) of the Code.
<PAGE>
24
(xii) Neither the Company nor any of its Subsidiaries (A) is, to
the
Knowledge of the Company, a "passive foreign investment company"
within the
meaning of Section 1297(a) of the Code and the Treasury
Regulations
promulgated thereunder or (B) has ever made an election under
Section 1362
of
the Code to be treated as an S corporation for Federal income
tax
purposes or made a similar election under any comparable provision
of any
tax
law.
(xiii) As used in this Agreement (A) "tax" or "taxes" shall
include
(whether disputed or not) all (x) Federal, state, local and foreign
income,
property, sales, use, excise, withholding, payroll, employment,
social
security, value-added, ad valorem, capital gain, alternative
minimum,
transfer and other taxes, including taxes based on or measured by
gross
receipts, profits, sales, use or occupation, tariffs, levies,
impositions,
assessments, duties and similar governmental charges or fees of any
kind
whatsoever, including any interest, penalties and additions with
respect
thereto, (y) liability for the payment of any amounts of the type
described
in
clause (x) as a result of being or having been a me
