AGREEMENT AND PLAN OF MERGER

by and among

GRIP ACQUISITION CORPORATION,

BRIDGESTONE AMERICAS HOLDING, INC.

and

BANDAG, INCORPORATED

Dated as of December 5, 2006

TABLE OF CONTENTS

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AGREEMENT AND PLAN OF MERGER

        THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is entered into as of December 5, 2006, among Grip Acquisition Corporation, an Iowa corporation (“ MergerCo ”), Bridgestone Americas Holding, Inc., a Nevada corporation (“ ParentCo ”), and Bandag, Incorporated, an Iowa corporation (the “ Company ”).

RECITALS

        WHEREAS, the parties intend that MergerCo be merged with and into the Company, with the Company surviving that merger on the terms and subject to the conditions set forth herein;

        WHEREAS, in the Merger (as defined below), upon the terms and subject to the conditions of this Agreement, each share of Common Stock, par value $1.00 per share, of the Company (the “ Common Stock ”), each share of Class A Common Stock, par value $1.00 per share, of the Company (the “ Class A Common Stock ”) and each share of Class B Common Stock, par value $1.00 per share, of the Company (the “ Class B Common Stock ,” and together with the Common Stock and the Class A Common Stock, the “ Common Equity ”) will be converted into the right to receive $50.75 per share in cash;

        WHEREAS, the Board of Directors of the Company has, by unanimous vote of all of the directors, (i) determined that it is in the best interests of the Company and its shareholders, and declared it advisable, to enter into this Agreement with MergerCo and ParentCo, (ii) approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, and (iii) resolved to recommend approval of this Agreement by the shareholders of the Company;

        WHEREAS, the respective Boards of Directors of each of MergerCo and ParentCo have unanimously approved this Agreement and declared it advisable for MergerCo and ParentCo to enter into this Agreement;

        WHEREAS, concurrently with the execution of this Agreement, as a condition and inducement to MergerCo’s willingness to enter into this Agreement, MergerCo and certain shareholders of the Company are entering into voting agreements, each of even date herewith (the “ Voting Agreement ”), pursuant to which such shareholders have agreed, subject to the terms thereof, to vote their Shares (as defined below) in favor of approval of this Agreement; and

        WHEREAS, the parties desire to make certain representations, warranties, covenants and agreements in connection with the Merger and the transactions contemplated by this Agreement and also to prescribe certain conditions to the Merger.

        NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants and agreements contained in this Agreement, the parties, intending to be legally bound, agree as follows:

ARTICLE I
THE MERGER

        Section 1.1     The Merger . On the terms and subject to the conditions set forth in this Agreement, and in accordance with the Iowa Business Corporations Act (the “ IBCA ”), at the Effective Time, (a) MergerCo will merge with and into the Company (the “ Merger ”) and (b) the separate corporate existence of MergerCo will cease and the Company will continue its corporate existence under Iowa law as the surviving corporation in the Merger (the “Surviving Corporation ”).

        Section 1.2     Closing . Unless otherwise mutually agreed in writing by the Company and MergerCo, the closing of the Merger (the “ Closing ”) will take place at the offices of Jones Day, 77 West Wacker, Chicago, Illinois, 60601, at 10:00 a.m. local time on a date selected by MergerCo, but not later than the third Business Day following the day on which all of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied by actions taken at the Closing, but subject to the satisfaction or waiver of those conditions) are satisfied or, if permissible, waived in accordance with this Agreement. The date on which the Closing actually occurs is hereinafter referred to as the “ Closing Date. ”

        Section 1.3     Effective Time . At the Closing, the Company and MergerCo will execute and acknowledge, and the Company will file with the Secretary of State of the State of Iowa, articles of merger (the “Articles of Merger”) in accordance with Section 490.1106 of the IBCA. The Merger will become effective at such time as the Articles of Merger has been duly filed with the Secretary of State of the State of Iowa or at such later date or time as may be agreed by MergerCo and the Company in writing and specified in the Articles of Merger in accordance with the IBCA (the effective time of the Merger being hereinafter referred to as the “ Effective Time ”).

        Section 1.4     Effects of the Merger . The Merger will have the effects set forth in this Agreement and the applicable provisions of the IBCA.

        Section 1.5     Organizational Documents . At the Effective Time, the articles of incorporation and bylaws of the Company, as in effect immediately prior to the date hereof, shall be the articles of incorporation and bylaws, respectively, of the Surviving Corporation until thereafter amended in accordance with applicable Law or provisions of the articles of incorporation and bylaws.

        Section 1.6     Directors and Officers of Surviving Corporation . The directors of MergerCo and the officers of the Company, in each case, as of the Effective Time shall, from and after the Effective Time, be the directors and officers, respectively, of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation or bylaws of the Surviving Corporation.

ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK

        Section 2.1     Effect of the Merger on Capital Stock . At the Effective Time, as a result of the Merger and without any action on the part of ParentCo, MergerCo or the Company or the holder of any capital stock of MergerCo or the Company:

            (a)     Cancellation of Certain Common Equity . Each share of Common Equity that is owned by MergerCo, ParentCo, the Company (as treasury stock or otherwise) or any of their respective direct or indirect wholly owned Subsidiaries (other than, in each case, Shares held on behalf of third parties) will automatically be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor.

            (b)     Conversion of Common Equity . Each share of Common Equity (each, a “ Share ” and collectively, the “Shares”) issued and outstanding immediately prior to the Effective Time (other than (i) Shares to be cancelled in accordance with Section 2.1(a) and (ii) Dissenting Shares, if any (each, an “ Excluded Share ” and collectively, the “ Excluded Shares ”)) will be converted into the right to receive $50.75 in cash, without interest (the “ Merger Consideration ”).

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            (c)     Cancellation of Shares . At the Effective Time, (i) all Shares will no longer be outstanding and all Shares will be cancelled and will cease to exist, and, in the case of book-entry shares (“ Book-Entry Shares ”), the names of the former registered holders shall be removed from the registry of holders of such shares, and (ii) subject to Section 2.3, each holder of a certificate formerly representing any such Shares (each, a “Certificate”) and each holder of a Book-Entry Share will cease to have any rights with respect thereto, except the right to receive the Merger Consideration, without interest, in accordance with Section 2.2.

            (d)     Conversion of MergerCo Capital Stock . Each share of common stock, par value $0.01 per share, of MergerCo issued and outstanding immediately prior to the Effective Time will be converted into one share of common stock, par value $1.00 per share, of the Surviving Corporation.

        Section 2.2     Surrender of Certificates and Book-Entry Shares . (a) Paying Agent. Prior to the Effective Time, for the benefit of the holders of Shares (other than Excluded Shares), ParentCo will (i) designate, or cause to be designated, a bank or trust company that is reasonably acceptable to the Company (the “ Paying Agent ”) and (ii) enter into a paying agent agreement, in form and substance reasonably acceptable to the Company, with such Paying Agent to act as agent for the payment of the Merger Consideration in respect of Certificates upon surrender of such Certificates (or effective affidavits of loss in lieu thereof) and Book-Entry Shares in accordance with this Article II from time to time after the Effective Time. At or prior to the Effective Time, ParentCo will deposit, or cause to be deposited, with the Paying Agent cash in amounts necessary for the payment of the Merger Consideration pursuant to Section 2.1(b) upon surrender of such Certificates or Book-Entry Shares (such cash being herein referred to as the “ Payment Fund ”). The Payment Fund shall not be used for any other purpose. The Payment Fund shall be invested by the Paying Agent as directed by the Surviving Corporation; provided , however , that such investments shall be in obligations of or guaranteed by the United States of America or any agency or instrumentality thereof and backed by the full faith and credit of the United States of America, in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively, or in certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $1 billion (based on the most recent financial statements of such bank which are then publicly available). Any net profit resulting from, or interest or income produced by, such investments shall be property of and payable to the Surviving Corporation.

            (b)     Payment Procedures . As promptly as practicable after the Effective Time, the Surviving Corporation will cause the Paying Agent to mail to each holder of record of Shares (other than Excluded Shares) a letter of transmittal in customary form as reasonably agreed by the parties specifying that delivery will be effected, and risk of loss and title to Certificates and Book-Entry Shares will pass, only upon proper delivery of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares, as the case may be, to the Paying Agent and instructions for use in effecting the surrender of the Certificates (or effective affidavits of loss in lieu thereof) and Book-Entry Shares in exchange for the Merger Consideration. Upon the proper surrender of a Certificate (or effective affidavit of loss in lieu thereof) or Book-Entry Share to the Paying Agent, together with a properly completed letter of transmittal, duly executed, and such other documents as may reasonably be requested by the Paying Agent, the holder of such Certificate or Book-Entry Share will be entitled to receive in exchange therefor cash in the amount (after giving effect to any required tax withholdings) that such holder has the right to receive pursuant to this Article II, and the Certificate or Book-Entry Share so surrendered will forthwith be cancelled. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates or Book-Entry Shares. In the event of a transfer of ownership of Shares that is not registered in the transfer records of the Company, cash to be paid upon due surrender of the Certificate or Book-Entry Share may be paid to such a transferee if the Certificate or Book-Entry Share formerly representing such Shares is presented to the Paying Agent, accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable stock transfer Taxes have been paid or are not applicable.

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            (c)     Withholding Taxes . The Surviving Corporation and the Paying Agent will be entitled to deduct and withhold from amounts otherwise payable pursuant to this Agreement to any holder of Shares or holder of Stock Options, Restricted Stock, Company RSUs, Company SARs, Performance Shares, Company PUs or Company DEUs any amounts required to be deducted and withheld with respect to such payments under the Code and the rules and Treasury Regulations promulgated thereunder, or any provision of state, local or foreign Tax law. Any amounts so deducted and withheld will be timely paid to the applicable Tax authority and will be treated for all purposes of this Agreement as having been paid to the holder of the Shares or holders of Stock Options, Restricted Stock, Company RSUs, Company SARs, Performance Shares, Company PUs or Company DEUs in respect of which such deduction and withholding was made.

            (d)     No Further Transfers . After the Effective Time, there will be no transfers on the stock transfer books of the Company of Shares that were outstanding immediately prior to the Effective Time other than to settle transfers of Shares that occurred prior to the Effective Time. If, after the Effective Time, Certificates or Book-Entry Shares are presented to the Paying Agent, they will be cancelled and exchanged for the Merger Consideration as provided in this Article II.

            (e)     Termination of Payment Fund . Any portion of the Payment Fund that remains undistributed to the holders of the Certificates or Book-Entry Shares nine months after the Effective Time will be delivered to the Surviving Corporation, on demand, and any holder of a Certificate or Book-Entry Share who has not theretofore complied with this Article II will thereafter look only to the Surviving Corporation for payment of his or her claims for Merger Consideration. Notwithstanding the foregoing, none of ParentCo, MergerCo, the Company, the Surviving Corporation, the Paying Agent or any other Person will be liable to any former holder of Shares for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar Laws.

            (f)     Lost, Stolen or Destroyed Certificates . In the event any Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond in customary amount and upon such terms as the Surviving Corporation may reasonably determine are necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration pursuant to this Agreement.

        Section 2.3     Dissenting Shares . Notwithstanding any provision of this Agreement to the contrary and to the extent available under the IBCA, any Shares outstanding immediately prior to the Effective Time that are held by a shareholder (a “ Dissenting Shareholder ”) who has neither voted in favor of the approval of this Agreement nor consented thereto in writing and who has demanded properly in writing appraisal for such Shares and otherwise properly perfected and not withdrawn or lost his or her rights (the “ Dissenting Shares ”) in accordance with the provisions of Section 490.1302 of the IBCA will not be converted into, or represent the right to receive, the Merger Consideration. Such Dissenting Shareholders will be entitled to receive payment of the appraised value of Dissenting Shares held by them in accordance with the provisions of such Section 490.1302, except that all Dissenting Shares held by shareholders who have failed to perfect or who effectively have withdrawn or lost their rights to appraisal of such Dissenting Shares pursuant to Section 490.1323 will thereupon be deemed to have been converted into, and represent the right to receive, the Merger Consideration in the manner provided in Article II and will no longer be Excluded Shares. The Company will give MergerCo prompt notice of any written demands for appraisal, attempted withdrawals of such demands, and any other instruments served pursuant to applicable Law received by the Company relating to shareholders’ rights of appraisal. The Company will give MergerCo the opportunity to participate in and direct all negotiations and proceedings with respect to demands for appraisal. The Company will not, except with the prior written consent of MergerCo, make any payment with respect to any demands for appraisals of Dissenting Shares, offer to settle or settle any such demands or approve any withdrawal or other treatment of any such demands.

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        Section 2.4     Adjustments to Prevent Dilution . In the event that the Company, between the date of this Agreement and the Effective Time, changes the number of Shares, or securities convertible or exchangeable into or exercisable for Shares, issued and outstanding prior to the Effective Time as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, subdivision, issuer tender or exchange offer, or other similar transaction, the Merger Consideration will be equitably adjusted to provide the holders of Shares and Company Equity Awards with the same economic effect as contemplated by this Agreement prior to such event; provided that nothing in this Section 2.4 shall be construed to permit the Company to take any action with respect to its securities that is prohibited by the terms of this Agreement.

        Section 2.5     Treatment of Stock Options and Other Equity Based Awards . (a) Each option to purchase Shares (collectively, the “ Stock Options ”) outstanding immediately prior to the Effective Time pursuant to the Common Equity Award Plans, whether or not then exercisable or vested, will at the Effective Time be cancelled and the holder of such Stock Option will, in full settlement of such Stock Option, receive from the Surviving Corporation an amount (subject to any applicable withholding tax) in cash equal to the product of (x) the excess, if any, of the Merger Consideration or, with respect to Stock Options granted under the 2004 Stock Grant Plan, the “Change of Control Price” as defined therein if greater than the Merger Consideration over the exercise price per Share of such Stock Option multiplied by (y) the number of Shares subject to such Stock Option (with the aggregate amount of such payment rounded up to the nearest whole cent). The holders of Stock Options will have no further rights in respect of any Stock Options from and after the Effective Time.

            (b)     Each Company SAR outstanding immediately prior to the Effective Time pursuant to the Common Equity Award Plans, whether or not then exercisable or vested, will at the Effective Time be cancelled and the holder of such Company SAR will, in full settlement of such Company SAR, receive from the Surviving Corporation an amount (subject to any applicable withholding tax) in cash equal to the product of (x) the excess, if any, of the Merger Consideration or, with respect to Company SARs granted under the 2004 Stock Grant Plan, the “Change of Control Price” as defined therein if greater than the Merger Consideration over the exercise price per Share of such Company SAR multiplied by (y) the number of Shares subject to such Company SAR (with the aggregate amount of such payment rounded up to the nearest whole cent). The holders of Company SARs will have no further rights in respect of any Company SARs from and after the Effective Time.

            (c)     As of the Effective Time, each share of Restricted Stock that is outstanding immediately prior to the Effective Time, whether or not then vested, will be cancelled and extinguished, and the holder thereof will be entitled to receive from the Surviving Corporation an amount in cash equal to the Merger Consideration or, with respect to Restricted Stock granted under the 2004 Stock Grant Plan, the “Change of Control Price” as defined therein if greater than the Merger Consideration, without interest, in respect of each cancelled share of Restricted Stock.

            (d)     As of the Effective Time, each Company RSU that is outstanding immediately prior to the Effective Time, whether or not then vested, will be cancelled and extinguished, and the holder thereof will be entitled to receive from the Surviving Corporation an amount in cash equal to the Merger Consideration or, with respect to Company RSUs granted under the 2004 Stock Grant Plan, the “Change of Control Price” as defined therein if greater than the Merger Consideration, without interest, in respect of each cancelled Company RSU.

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            (e)     As of the Effective Time, each Performance Share that is outstanding immediately prior to the Effective Time, whether or not then vested, will be cancelled and extinguished, and the holder thereof will be entitled to receive from the Surviving Corporation an amount in cash equal to the product of (i) the Merger Consideration or, with respect to Performance Shares granted under the 2004 Stock Grant Plan, the “Change of Control Price” as defined therein if greater than the Merger Consideration, without interest, in respect of each cancelled Performance Share, multiplied by (ii) a fraction the numerator of which is the number of whole months that have elapsed from the beginning of the performance period to which the Performance Share is subject to the date of the Effective Time and the dominator of which is the number of whole months in such performance period.

            (f)     As of the Effective Time, each Company PU that is outstanding immediately prior to the Effective Time, whether or not then vested, will be cancelled and extinguished, and the holder thereof will be entitled to receive from the Surviving Corporation an amount in cash equal to the product of (i) the Merger Consideration or, with respect to Company PUs granted under the 2004 Stock Grant Plan, the “Change of Control Price” as defined therein if greater than the Merger Consideration, without interest, in respect of each cancelled Company PU, multiplied by (ii) a fraction the numerator of which is the number of whole months that have elapsed from the beginning of the performance period to which the Company PU is subject to the date of the Effective Time and the dominator of which is the number of whole months in such performance period.

            (g)     Each Company DEU outstanding immediately prior to the Effective Time pursuant to the Common Equity Award Plans, whether or not then exercisable or vested, will, at the Effective Time, be fully vested and paid. The holders of Company DEUs will have no further rights in respect of any Company DEU from and after the Effective Time.

            (h)     Promptly as practicable after the Effective Time, the Surviving Corporation shall pay to each holder of a Company Equity Award that consents or is subject to the treatment that this Section 2.5 contemplates in respect of all of such holder’s Common Equity Awards the cash payments specified in this Section 2.5.

            (i)     Prior to the Effective Time, the Company will use its best efforts to obtain all necessary waivers, consents or releases, in form and substance reasonably satisfactory to ParentCo, from holders of Company Equity Awards under the Common Equity Award Plans and take all such other action, without incurring any Liabilities in connection therewith, as may be necessary to give effect to the transactions contemplated by this Section 2.5 (the “ Equity Award Waivers ”). Except as otherwise agreed to by the parties, (i) the Common Equity Award Plans shall terminate as of the Effective Time and the provisions in any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any Subsidiary thereof shall be cancelled as of the Effective Time and (ii) the Company shall assure that following the Effective Time participants holding Common Equity Awards representing rights to acquire at least 65% of Shares subject to such Common Equity Awards granted pursuant to the Bandag, Incorporated 1999 Stock Award Plan, as amended March 12, 2002, shall have executed Equity Award Waivers and shall have no right under the Common Equity Award Plans or other plans, programs or arrangements to acquire any equity securities of the Company, the Surviving Corporation or any Subsidiary thereof. As promptly as practicable following the date of this Agreement, the Company Board (or, if appropriate, any committee thereof administering the Common Equity Award Plans) shall adopt such resolutions or take such other actions as are required to give effect to the transactions contemplated by this Section 2.5.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        Except as set forth in the letter (the “Company Disclosure Letter”) delivered by the Company to ParentCo and MergerCo concurrently with the execution of this Agreement (which Company Disclosure Letter sets forth, among other things, items the disclosure of which is necessary or appropriate in response to an express disclosure requirement contained in this Article III, as an exception to one or more representations or warranties contained in this Article III or in response to one or more of Company’s covenants contained in this Agreement; provided , however , that notwithstanding anything to the contrary in this Agreement, (x) any matter disclosed in any section of the Company Disclosure Letter will be deemed to be disclosed in any other section of the Company Disclosure Letter to the extent that it is reasonably apparent that such disclosure is applicable to such other section, except that any matters disclosed for purposes of Sections 3.8(b) and 3.10(a) of this Agreement must be specifically disclosed in Sections 3.8(b) or 3.10(a) of the Company Disclosure Letter, respectively and (y) the mere inclusion of an item in the Company Disclosure Letter as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or a material fact, event or circumstance or that such item has had or would be reasonably expected to have a Company Material Adverse Effect) and except as set forth in the Company SEC Documents filed or furnished on or after December 31, 2005 and prior to the date of this Agreement (excluding, in each case, any disclosures set forth in any risk factor section, in any section relating to forward looking statements and any other disclosures included therein to the extent that they are cautionary, predictive or forward-looking in nature), the Company hereby represents and warrants to ParentCo and MergerCo as follows:

        Section 3.1     Organization; Power; Qualification . The Company and each of its Material Subsidiaries is a corporation, limited liability company or other legal entity duly organized, validly existing and in good standing (to the extent such concept is legally recognized) under the Laws of its jurisdiction of organization. Each of the Company and its Material Subsidiaries has the requisite corporate or similar power and authority to own, lease and operate its assets and to carry on its business as now conducted. Each of the Company and its Material Subsidiaries is duly qualified or licensed to do business as a foreign corporation, limited liability company or other legal entity and is in good standing (to the extent such concept is legally recognized) in each jurisdiction where the character of the assets and properties owned, leased or operated by it or the nature of its business makes such qualification or license necessary, except where the failure to be so qualified or licensed or in good standing would not reasonably be expected to have a Company Material Adverse Effect. Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any Company Joint Venture, is in violation of its organizational or governing documents, except for such violations that would not reasonably be expected to have a Company Material Adverse Effect.

        Section 3.2     Corporate Authorization; Enforceability . (a) The Company has all requisite corporate power and authority to enter into and to perform its obligations under this Agreement and, subject to approval of this Agreement by the Requisite Company Vote, to consummate the transactions contemplated by this Agreement. The Board of Directors of the Company (the “ Company Board ”), at a duly held meeting has, by unanimous vote of all of the directors, (i) determined that it is in the best interests of the Company and its shareholders, and declared it advisable, to enter into this Agreement with MergerCo and ParentCo, (ii) approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, and (iii) resolved to recommend that the shareholders of the Company approve this Agreement (the “ Company Board Recommendation ”) and directed that such matter be submitted for consideration of the shareholders of the Company at the Company Shareholders Meeting. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary corporate action on the part of the Company, subject to the Requisite Company Vote.

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            (b)     This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by MergerCo and ParentCo, constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other Laws affecting creditors’ rights generally and by general equitable principles.

        Section 3.3     Capitalization; Options . (a) The Company’s authorized capital stock consists solely of 21,500,000 shares of Common Stock, 50,000,000 shares of Class A Common Stock, and 8,500,000 shares of Class B Common Stock. As of the close of business on November 30, 2006 (the “ Measurement Date ”), 9,069,444 shares of Common Stock were issued and outstanding, 9,491,106 shares of Class A Common Stock were issued and outstanding, and 916,910 shares of Class B Common Stock were issued and outstanding. As of the Measurement Date, 3,498,912 shares of Common Stock, 5,108,894 shares of Class A Common Stock and no shares of Class B Common Stock were held in the treasury of the Company. No Shares are held by any Subsidiary of the Company. Since the Measurement Date until the date of this Agreement, other than in connection with the issuance of Shares pursuant to the exercise of Stock Options or Company SARs or the terms of Company RSUs or Company PUs outstanding as of the Measurement Date, there has been no change in the number of outstanding shares of capital stock of the Company or the number of outstanding Stock Options, Company SARs, Company RSUs or Company PUs. As of the Measurement Date, Stock Options to purchase 1,132,891 shares of Common Stock or Class A Common Stock were outstanding, Company SARs relating to 4,840 shares of Common Stock or Class A Common Stock were outstanding, and there were 3,204 Company RSUs and 70,729 Company PUs outstanding. Section 3.3(a) of the Company Disclosure Letter sets forth a complete and correct list of all Stock Options and Company SARs that were outstanding as of the Measurement Date and, with respect to the Persons specified thereon, the number of Stock Options or Company SARs held by each such Person and the exercise prices of such Stock Options and the grant prices of such Company SARs. As of the date of this Agreement, except as set forth in this Section 3.3 and for the 5,004,415 shares of Common Stock and 6,361,475 shares of Class A Common Stock reserved for issuance upon the exercise of rights granted under the Company Rights Agreement, there are no shares of capital stock or securities or other rights convertible or exchangeable into or exercisable for shares of capital stock of the Company (which term, for purposes of this Agreement, will be deemed to include “phantom” stock or other commitments that provide any right to receive value or benefits similar to such capital stock, securities or other rights). Since the Measurement Date through the date of this Agreement, other than in connection with the issuance of Shares pursuant to the exercise of Stock Options or Company SARs or pursuant to RSUs or PUs outstanding as of the Measurement Date, there have been no issuances of any equity securities of the Company.

            (b)     All outstanding Shares are duly authorized, validly issued, fully paid and non-assessable and are not subject to any pre-emptive rights.

            (c)     Except as set forth in this Section 3.3, there are no outstanding contractual obligations of the Company or any of its Subsidiaries to issue, sell, or otherwise transfer to any Person, or to repurchase, redeem or otherwise acquire from any Person, any Shares, capital stock of any Subsidiary of the Company, or securities or other rights convertible or exchangeable into or exercisable for shares of capital stock of the Company or any Subsidiary of the Company.

            (d)     Other than the issuance of Shares upon exercise of Stock Options or Company SARs or pursuant to the terms of Company RSUs or Company PUs, and other than previously announced regular quarterly dividends, since January 1, 2006 and through the date of this Agreement, the Company has not declared or paid any dividend or distribution in respect of any of the Company’s securities, and neither the Company nor any Subsidiary has issued, sold, repurchased, redeemed or otherwise acquired any of the Company’s securities, and their respective boards of directors have not authorized any of the foregoing.

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            (e)     Each Company Benefit Plan providing for the grant of Shares or of awards denominated in, or otherwise measured by reference to, Shares (each, a “ Common Equity Award Plan ”) is set forth (and identified as a Common Equity Award Plan) in Section 3.13(a) of the Company Disclosure Letter. The Company has provided or made available to MergerCo or any of its Affiliates correct and complete copies of all Common Equity Award Plans and all forms of options and other stock based awards (including award agreements) issued under such Common Equity Award Plans.

        Section 3.4     Subsidiaries and Company Joint Ventures . Section 3.4 of the Company Disclosure Letter sets forth a complete and correct list of all of the Company’s Subsidiaries and all Company Joint Ventures. All equity interests of the Material Subsidiaries and the Company Joint Ventures held by the Company or any other Subsidiary are validly issued, fully paid and non-assessable and were not issued in violation of any preemptive or similar rights, purchase option, call or right of first refusal or similar rights. All such equity interests owned by the Company or another Subsidiary of the Company are free and clear of any Liens or any other limitations or restrictions on such equity interests (including any limitation or restriction on the right to vote, pledge or sell or otherwise dispose of such equity interests) other than any Permitted Liens or restrictions contained in the Joint Venture Agreements related thereto. The Company has provided or made available to MergerCo or any of its Affiliates complete and correct copies of the Company Organizational Documents and the joint venture agreements of the Company Joint Ventures (and the Company represents that, to the Company’s Knowledge, any organizational documents of the Company Joint Ventures not made available to MergerCo do not contain provisions that conflict with the Joint Venture Agreements in any material respect).

        Section 3.5     Governmental Authorizations . The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement do not and will not require any consent, approval or other authorization of, or filing with or notification to, any international, national, federal, state, provincial or local governmental, regulatory or administrative authority, agency, commission, court, tribunal, arbitral body, self regulated entity or similar body, whether domestic or foreign (each, a “ Governmental Entity ”), other than: (i) the filing of the Articles of Merger with the Secretary of State of the State of Iowa; (ii) applicable requirements of the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder (the “ Exchange Act ”); (iii) the filing with the Securities and Exchange Commission (the “ SEC ”) of a proxy statement (the “ Company Proxy Statement ”) relating to the special meeting of the shareholders of the Company to be held to consider the approval of this Agreement (the “ Company Shareholders Meeting ”); (iv) any filings required by, and any approvals required under, the rules and regulations of the New York Stock Exchange (the “ NYSE ”) or the Chicago Stock Exchange; (v) compliance with and filings under (A) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), if applicable, (B) applicable requirements of Council Regulation (EC) No. 139/2004 of the Council of the European Union (the “ EC Merger Regulation ”), if any, (C) the Competition Act (Canada) and the Investment Canada Act of 1984 (Canada), and (D) applicable antitrust, competition, premerger notification, trade regulation or merger control Laws of any other jurisdiction; (vi) any consent, approval or other authorization of, or filing with or notification to, any Governmental Entity identified in Section 3.5(vi) of the Company Disclosure Letter; and (vii) in such other circumstances where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not reasonably be expected to have a Company Material Adverse Effect.

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        Section 3.6     Non-Contravention . The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement, including the Merger, do not and will not: (i) conflict with, or result in any violation or breach of, any provision of (x) the Company Organizational Documents or (y) any of the organizational or governing documents of the Company Joint Ventures and of each Company Subsidiary that is not a Material Subsidiary; (ii) conflict with, or result in any violation or breach of, any Laws or Orders applicable to the Company or any of its Subsidiaries or by which any assets of the Company or any of its Subsidiaries (“ Company Assets ”) are bound (assuming that all consents, approvals, authorizations, filings and notifications described in Section 3.5 have been obtained or made); (iii) result in any violation or breach of or loss of a material benefit under, or constitute a default (with or without notice or lapse of time or both) under, any Company Contract; (iv) require any consent, approval or other authorization of, or filing with or notification to, any Person under any Company Contract; (v) give rise to any termination, cancellation, amendment, modification or acceleration of any material rights or obligations under any Company Contract; or (vi) cause the creation or imposition of any Liens on any Company Assets, except for Permitted Liens, except, in the cases of clauses (i)(y) and (ii) – (vi), as would not reasonably be expected to have a Company Material Adverse Effect (without giving effect to clause (G) of Section 8.1(35)).

        Section 3.7     Voting . (a) The Requisite Company Vote is the only vote of the holders of any class or series of the capital stock of the Company or any of its Subsidiaries necessary to approve and adopt this Agreement and approve the Merger and the other transactions contemplated thereby.

            (b)     There are no voting trusts, proxies or similar agreements, arrangements or commitments to which the Company or any of its Subsidiaries, or to the Company’s Knowledge, any other Person, is a party with respect to the voting of any shares of capital stock of the Company or any of its Material Subsidiaries, other than the Voting Agreement. There are no bonds, debentures, notes or other instruments of indebtedness of the Company or any of its Material Subsidiaries that have the right to vote, or that are convertible or exchangeable into or exercisable for securities or other rights having the right to vote, on any matters on which shareholders of the Company may vote.

        Section 3.8     Financial Reports and SEC Documents . (a) The Company has filed or furnished all forms, statements, reports and documents required to be filed or furnished by it with the SEC since December 31, 2003 (the forms, statements, reports and documents filed or furnished with the SEC since December 31, 2003, including any amendments thereto, the “ Company SEC Documents ”). Each of the Company SEC Documents, at the time of its filing (except as and to the extent such Company SEC Document has been modified or superseded in any subsequent Company SEC Document filed or furnished and publicly available prior to the date of this Agreement), complied in all material respects with the applicable requirements of each of the Exchange Act and the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “ Securities Act ”). As of their respective dates, except as and to the extent modified or superseded in any subsequent Company SEC Document filed or furnished and publicly available prior to the date of this Agreement, the Company SEC Documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading. The Company SEC Documents included all certificates required to be included therein pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder (“ SOX ”), and the internal control report and attestation of the Company’s outside auditors required by Section 404 of SOX.

            (b)     Each of the consolidated balance sheets included in or incorporated by reference into the Company SEC Documents (including the related notes and schedules) fairly presents in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of its date, and each of the consolidated statements of income, changes in shareholders’ equity and cash flows included in or incorporated by reference into the Company SEC Documents (including any related notes and schedules) fairly presents in all material respects the results of operations and cash flows, as the case may be, of the Company and its consolidated Subsidiaries for the periods set forth therein (subject, in the case of unaudited statements, to the absence of notes and normal year-end audit adjustments that are not expected to be material in amount or effect), in each case in accordance with U.S. generally accepted accounting principles (“ GAAP ”) (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) consistently applied during the periods involved, except as may be noted therein.

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            (c)     The management of the Company has (x) implemented disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) that are reasonably designed to ensure that material information relating to the Company, including its consolidated Subsidiaries, required to be disclosed under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, by others within those entities, and (y) disclosed, based on its most recent evaluation, to the Company’s outside auditors and the audit committee of the Company Board (A) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial data and (B) any fraud known to the Company, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. Since December 31, 2003, any material change in internal control over financial reporting or failure or inadequacy of disclosure controls required to be disclosed in any Company SEC Document has been so disclosed.

            (d)     To the Company’s Knowledge, from December 31, 2003 through the date of this Agreement, none of the Company or any of its Subsidiaries, or any director, officer, or employee of the Company or any of its Subsidiaries, has obtained Knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls relating to periods after December 31, 2003 (except for any of the foregoing that have been resolved without any material impact on the Company and its Subsidiaries, taken as a whole, and except for any of the foregoing which have no reasonable basis), except, in the case of any of such matters above, as would not, reasonably be expected to have a Company Material Adverse Effect.

        Section 3.9     Undisclosed Liabilities . Except (i) as and to the extent disclosed or reserved against on the consolidated balance sheet of the Company dated as of September 30, 2006 (including the notes thereto) included in the Company SEC Documents or (ii) as incurred since the date thereof in the ordinary course of business consistent with past practice, neither the Company, any of its Subsidiaries nor, to the Knowledge of the Company, any Company Joint Venture has any liabilities or obligations of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due, that would reasonably be expected to have a Company Material Adverse Effect.

        Section 3.10     Absence of Certain Changes . (a) Since September 30, 2006, there has not been any Company Material Adverse Effect or any change, event or development that, individually or in the aggregate, would reasonably be expected to have a Company Material Adverse Effect.

            (b)     Since September 30, 2006 and through the date of this Agreement, the Company and each of its Material Subsidiaries have conducted their business in the ordinary course of business consistent with past practice in all material respects, and there has not been any (i) action or event that, if taken on or after the date of this Agreement without MergerCo’s consent, would violate the provisions of any of Sections 5.1(a), (b), (c)(i) – (ii), (c)(iv) – (v), (d)(i) – (iii) or (d)(v)), (e) (except with respect to mergers or consolidations between entities that were wholly owned by the Company at the time of merger or consolidation), (f) (except with respect to dispositions of assets or securities having an aggregate value not in excess of $2,000,000 for all such dispositions for fair market value and except for sales of receivables pursuant to the Company’s receivables facility and collection and other sales and dispositions of assets in the ordinary course of business consistent with past practice), (g), (h), (j), (k), (l), (m), (n), (o) (except with respect to the Company’s Subsidiaries or former Subsidiaries), (q) and (r) or (ii) agreement or commitment to do any of the foregoing.

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        Section 3.11     Litigation . There are no claims, actions, suits, judicial, administrative or regulatory proceedings, or investigations before any Governmental Entity (each, a “ Legal Action ”) pending or, to the Knowledge of the Company, threatened, against the Company or any of its Subsidiaries or any executive officer or director of Company or any of its Subsidiaries in connection with his or her status as a director or executive officer of the Company or any of its Subsidiaries which (i) is reasonably expected as of the date of this Agreement to involve an amount in controversy in excess of $1,000,000, (ii) would reasonably be expected to have the effect of preventing, making illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement, or (iii) would reasonably be expected to have a Company Material Adverse Effect. There is no outstanding Order against the Company or any of its Subsidiaries or by which any property, asset or operation of the Company or any of its Subsidiaries is bound or affected that would reasonably be expected to have a Company Material Adverse Effect. To the Knowledge of the Company, as of the date of this Agreement, neither the Company, any Subsidiary of the Company, nor any executive officer or director of the Company or any such Subsidiary is under investigation by any Governmental Entity related to the conduct of the Company’s or any such Subsidiary’s business which would reasonably be expected to have a Company Material Adverse Effect.

        Section 3.12     Contracts . (a) As of the date of this Agreement, neither the Company nor any of its Subsidiaries is a party to or bound by: (i) any Contract which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated under the Securities Act) to be performed in full or in part after the date of this Agreement that has not been filed or incorporated by reference in the Company SEC Documents; (ii) any Contract which is a Company Joint Venture Agreement; (iii) any Contract which constitutes a contract or commitment relating to indebtedness for borrowed money or the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) in excess of $1,000,000; (iv) any Contract which contains any non-competition, exclusivity or similar provision that would restrict or limit, in any material respect, the conduct of the business of the Company or any of its Subsidiaries; or (v) any Other Contract. Each contract, arrangement, commitment or understanding of the type described in this Section 3.12(a), whether or not set forth in the Company Disclosure Letter or in the Company SEC Documents, together with the Customer Contracts, is referred to herein as a “ Material Contract ” (for purposes of clarification, each “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated under the Securities Act) to be performed after the date of this Agreement, whether or not filed with the SEC, is a Material Contract).

            (b)     (i) Each Material Contract is valid and binding on the Company and any of its Subsidiaries that is a party thereto, as applicable, and in full force and effect, other than any such Material Contract that expires or is terminated after the date hereof in accordance with its terms or amended by agreement with the counterparty thereto ( provided that if any such Material Contract is so amended in accordance with its terms after the date hereof (provided such amendment is not prohibited by the terms of this Agreement), then to the extent the representation and warranty contained in this sentence is made or deemed made as of any date that is after the date of such amendment, the reference to “Material Contract” in the first clause of this sentence shall be deemed to be a reference to such contract as so amended), except where the failure to be valid, binding and in full force and effect would not reasonably be expected to have a Company Material Adverse Effect, (ii) the Company and each of its Subsidiaries has in all material respects performed all obligations required to be performed by it to date under each Material Contract, except where such noncompliance would not reasonably be expected to have a Company Material Adverse Effect, and (iii) neither the Company nor any of its Subsidiaries knows of, or has received notice of, the existence of any event or condition which constitutes, or, after notice or lapse of time or both, will constitute, a material default on the part of the Company or any of its Subsidiaries under any such Material Contract, except where such default would not reasonably be expected to have a Company Material Adverse Effect.

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        Section 3.13     Benefit Plans . (a) Section 3.13(a) of the Company Disclosure Letter contains a correct and complete list of each material Company Benefit Plan, other than a Foreign Benefit Plan. Each Company Benefit Plan, other than a Foreign Benefit Plan, that is a “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) (a “ Multiemployer Plan ”) or a plan that has two or more contributing sponsors at least two of whom are not under common control (within the meaning of Section 4063 of ERISA) (a “ Multiple Employer Plan ”) is denoted as such on Section 3.13(a) of the Company Disclosure Letter. No entity is a member of the Company’s “controlled group” (within the meaning of Section 414 of the Code) other than the Company and its Material Subsidiaries. The Company has no liability with respect to any plan, arrangement or practice of the type described in the definition of Company Benefit Plan other than the Company Benefit Plans.

            (b)     With respect to each material Company Benefit Plan, other than a Multiemployer Plan or a Foreign Benefit Plan, if applicable, the Company has provided to MergerCo correct and complete copies of (i) all plan texts and agreements and related trust agreements (or other funding vehicles); (ii) the most recent summary plan descriptions and material employee communications concerning the extent of the benefits provided under a Company Benefit Plan, other than a Multiemployer Plan; (iii) the two most recent annual reports (including all schedules); (iv) the two most recent annual audited financial statements and opinions; (v) if the plan is intended to qualify under Section 401(a) of the Code, the most recent determination letter received from the Internal Revenue Service (the “ IRS ”); (vi) all material communications with any domestic Governmental Entity given or received since December 31, 2003; and (vii) any other documents, forms or other instruments relating to any Company Benefit Plan reasonably requested by ParentCo. There is no present intention that any Company Benefit Plan, other than a Multiemployer Plan, be materially amended, suspended or terminated, or otherwise modified to change benefits (or the level thereof) under any Company Benefit Plan, other than a Multiemployer Plan, at any time within the twelve months immediately following the date of this Agreement.

            (c)     Since December 31, 2005, there has not been any amendment or change in interpretation relating to any Company Benefit Plan, other than a Multiemployer Plan, which would, in the case of any Company Benefit Plan, other than a Multiemployer Plan, materially increase the cost of such Company Benefit Plan.

            (d)     With respect to each Company Benefit Plan that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does not exist any accumulated funding deficiency within the meaning of Section 412 of the Code or Section 302 of ERISA, whether or not waived; (ii) the fair market value of the assets of such plan equals or exceeds the accumulated benefit obligation of such plan (whether or not vested) determined in accordance with Financial Accounting Standard No. 87; (iii) no reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has not been waived has occurred, and the consummation of the transactions contemplated by this agreement will not result in the occurrence of any such reportable event; (iv) no liability (other than for premiums to the PBGC) under Title IV of ERISA has been or is reasonably expected to be incurred by the Company or any of its Subsidiaries; and (v) the PBGC has not instituted proceedings to terminate any such plan or made any inquiry which would reasonably be expected to lead to termination of any such plan, and, to the Company’s Knowledge, no condition exists that is reasonably likely to cause such proceedings to be instituted or to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any such plan. Neither the Company nor any of its Subsidiaries has, at any time during the last six years, contributed to or been obligated to contribute to any Multiemployer Plan or Multiple Employer Plan. Neither the Company nor any of its Subsidiaries would be reasonably expected to be liable for any material liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan (as those terms are defined in Part I of Subtitle E of Title IV of ERISA) (a “ Withdrawal Liability ”) that has not been satisfied in full. With respect to each Company Benefit Plan that is a Multiemployer Plan, to the Company’s Knowledge, neither the Company nor any of its Subsidiaries has received any notification that any such plan is in reorganization, has been terminated, is insolvent, or may reasonably be expected to be in reorganization, to be insolvent, or to be terminated.

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            (e)     Each Company Benefit Plan, other than a Multiemployer Plan, that requires registration with a Governmental Entity has been properly registered, except where any failure to register, would not reasonably be expected to have a Company Material Adverse Effect. Each Company Benefit Plan, other than a Multiemployer Plan, which is intended to qualify under Section 401(a) of the Code is so qualified and has been issued a favorable determination letter by the IRS with respect to such qualification, its related trust has been determined to be exempt from taxation under Section 501(a) of the Code and no event has occurred since the date of such qualification or exemption that would reasonably be expected to adversely affect such qualification or exemption. Each Company Benefit Plan, other than a Multiemployer Plan, has been established and administered in material compliance with its terms and with the applicable provisions of ERISA, the Code and other applicable Laws. No event has occurred and no condition exists that would subject the Company by reason of its affiliation with any current or former member of its “controlled group” (within the meaning of Section 414 of the Code) to any material (i) Tax, penalty, fine, (ii) Lien (other than a Permitted Lien) or (iii) other liability imposed by ERISA, the Code or other applicable Laws.

            (f)     There are no (i) Company Benefit Plans under which welfare benefits are provided to past or present employees of the Company and its Subsidiaries beyond their retirement or other termination of service, other than coverage mandated by Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA or any similar state group health plan continuation Laws, the cost of which is fully paid by such employees or their dependents; or (ii) unfunded Company Benefit Plan obligations with respect to any past or present employees of the Company and its Subsidiaries that are not fairly reflected by reserves shown on the most recent financial statements contained in the Company SEC Documents, except as would not have or reasonably by expected to have a Company Material Adverse Effect.

            (g)     Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in combination with another event) (i) result in any payment becoming due, or increase the amount of any compensation or benefits due, to any current or former employee of the Company and its Subsidiaries or with respect to any Company Benefit Plan; (ii) increase any benefits otherwise payable under any Company Benefit Plan; (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits; (iv) result in a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code; (v) limit or restrict the right of the Company to merge, amend or terminate any of the Company Benefit Plans; or (vi) result in the payment of any amount or the provision of any benefit that would, individually or in combination with any other such payment, reasonably be expected to constitute an “excess parachute payment,” as defined in Section 280G(b)(1) of the Code.

            (h)     There have been no prohibited transactions or breaches of any of the duties imposed on “fiduciaries” (within the meaning of Section 3(21) of ERISA) by ERISA with respect to the Company Benefit Plans that could result in any material liability or excise tax under ERISA or the Code being imposed on the Company or any of its Subsidiaries. With respect to any Company Benefit Plan, other than a Multiemployer Plan, (i) no Legal Actions (including any administrative investigation, audit or other proceeding by the Department of Labor or the Internal Revenue Service but other than routine claims for benefits in the ordinary course) are pending or, to the Knowledge of the Company, threatened, and (ii) to the Knowledge of the Company, no events or conditions have occurred or exist that would reasonably be expected to give rise to any such Legal Actions, except in each case that would not reasonably be expected to have a Company Material Adverse Effect.

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            (i)     Except as would not reasonably be expected to have a Company Material Adverse Effect, all Company Benefit Plans subject to the Laws of any jurisdiction outside of the United States (i) have been maintained and funded in accordance with all applicable requirements, (ii) if they are intended to qualify for special tax treatment, meet all requirements for such treatment, and (iii) if they are intended to be funded and/or book-reserved, are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions.

            (j)     Each “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) of the Company (i) has been operated since December 31, 2004 in good faith compliance with Section 409A of the Code and IRS Notice 2005-1 and (ii) to the extent not subject to Section 409A of the Code because amounts were deferred in taxable years beginning before December 31, 2004, has not been “materially modified” (within the meaning of IRS Notice 2005-1) at any time after October 3, 2004. Each Stock Option that would otherwise be subject to Section 409A of the Code has been granted with an exercise price no lower than “fair market value” (within the meaning of Section 409A of the Code) as of the grant date of such option, and no term of exercise of a Stock Option that would otherwise be subject to Section 409A of the Code has been extended after the grant date of such Stock Option. With respect to any nonqualified deferred compensation plan of the Company or any of its Subsidiaries that is subject to Section 409A of the Code, neither the Company nor any of its Subsidiaries has any obligation to any Person to cause any such plan to comply with Section 409A of the Code or to provide any “gross-up” or similar payment to any person in the event any such plan fails to comply with Section 409A of the Code.

            (k)     No Company Benefit Plan is or at any time within the past 6 years was funded through a “welfare benefit fund” as defined in Section 419(e) of the Code, and no benefits under any Company Benefit Plan are or at any time have been provided through a voluntary employees’ beneficiary association (within the meaning of subsection 501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the meaning of Section 501(c)(17) of the Code).

            (l)     All contributions, transfers and payments in respect of any Company Benefit Plan, other than transfers incident to an incentive stock option plan within the meaning of Section 422 of the Code, have been or are fully deductible under the Code.

            (m)     All (i) insurance premiums required to be paid with respect to, (ii) benefits, expenses, and other amounts due and payable under, and (iii) contributions, transfers, or payments required to be made to, any Company Benefit Plan prior to the Closing Date will have been paid, made or accrued on or before the Closing Date.

            (n)     With respect to any insurance policy providing funding for benefits under any Company Benefit Plan, (i) there is no liability of the Company or any its Subsidiaries in the nature of a retroactive rate adjustment, loss sharing arrangement, or other actual or contingent liability, nor would there be any such liability if such insurance policy was terminated on the date hereof (provided that the representation in this clause (i) as to plans of Speedco, Inc. shall be limited to the Company’s Knowledge), and (ii) no insurance company issuing any such policy is in receivership, conservatorship, liquidation or similar proceeding and, to the Company’s Knowledge, no such proceedings with respect to any such insurer are imminent.

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            (o)     The Company has reserved all rights necessary to amend or terminate each of the Company Benefit Plans without the consent of any other person.

            (p)     No Company Benefit Plan provides benefits to any individual who is not a current or former employee or director of the Company or a Subsidiary, or the dependents or other beneficiaries of any such current or former employee or director.

        Section 3.14     Labor Relations . (a) (i) Except as would not reasonably be expected to have a Company Material Adverse Effect: (x) none of the employees of the Company or its Subsidiaries is represented by a union and, to the Knowledge of the Company, no union organizing efforts have been conducted or threatened since December 31, 2005 or are being conducted or threatened, (y) neither the Company nor any of its Subsidiaries is a party to or negotiating any collective bargaining agreement or other labor Contract, and (z) there is no pending and, to the Knowledge of the Company, there is no threatened material strike, picket, work stoppage, work slowdown or other organized labor dispute affecting the Company or any of its Subsidiaries.

            (b)     Except as would not reasonably be expected to have a Company Material Adverse Effect, there are no material unfair labor practice charges or complaints pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries.

        Section 3.15     Taxes . (a) Except as would not reasonably be expected to have a Company Material Adverse Effect:

                (i)     All Tax Returns required to be filed by or with respect to the Company or any of its Subsidiaries have been properly prepared and timely filed, and all such Tax Returns are correct and complete in all respects.

                (ii)     The Company and its Subsidiaries have fully and timely paid, or are contesting in good faith by appropriate proceedings, all Taxes (whether or not shown to be due on the Tax Returns) required to be paid by any of them, and have withheld and paid over all Taxes required to have been withheld and paid over and have otherwise complied with all rules and regulations relating to the withholding or remittance of Taxes (including, without limitation, employee-related Taxes).

                (iii)     Neither the Company nor any of its Subsidiaries will be required to make any disclosure of an uncertain tax position pursuant to FASB Interpretation No. 48 (Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109) (“ FIN 48 ”) with respect to any taxable year ending on or before December 31, 2006, except (a) to the extent any such uncertain position subject to disclosure, if determined adversely to the Company or one or more of its Subsidiaries, would not reasonably be expected to have a Company Material Adverse Effect and (b) to the extent any such uncertain position subject to disclosure is related to matters referred to in Section 5.15 hereof.

                (iv)     Neither the Company nor any of its Subsidiaries has taken or reported an uncertain position with respect to any item or items of Taxes, for any taxable period ending on or prior to the Closing Date, that are not income taxes covered by FIN 48, except to the extent such uncertain position, if determined adversely to the Company or one or more of its Subsidiaries, would not reasonably be expected to have a Company Material Adverse Effect.

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                (v)     As of the date of this Agreement, there are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection, assessment or reassessment of, Taxes due from the Company or any of its Subsidiaries for any taxable period and, to the Knowledge of the Company, no request for any such waiver or extension is currently pending.

                (vi)     No audit or other proceeding by any Governmental Entity is pending or, to the Knowledge of the Company, threatened with respect to any Taxes due from or with respect to the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries (including former Subsidiaries) has been informed by any jurisdiction that the jurisdiction may open an audit or other review of the Taxes of such entity or that the jurisdiction believes that such entity was required to file any Tax Return that was not filed.

                (vii)     Neither the Company nor any of its Subsidiaries is a party to any Tax sharing or similar Tax agreement (other than an agreement exclusively between or among the Company and its Subsidiaries) pursuant to which it will have any obligation to make any payments on account of indemnification for Taxes after the Closing Date.

                (viii)     Neither the Company nor any of its Subsidiaries has distributed stock of another Person or had its stock distributed by another Person in a transaction that was intended to be governed in whole or in part by Section 355 or 361 of the Code in the two years prior to the date of this Agreement.

                (ix)     Neither the Company nor any of its Subsidiaries has (i) filed any disclosure under Section 6662 of the Code or comparable or similar provision of state, local, or foreign Law to prevent the imposition of penalties with respect to any tax reporting position taken on any Tax Return, (ii) engaged in a “reportable transaction,” as defined in Treasury Regulation Section 1.6011-4(b), as modified by Notice 2006-6, 2006-5 I.R.B. 385, or (iii) engaged in any transaction identified as a “transaction of interest,” as defined in Proposed Treasury Regulation Section 1.6011-4(b)(6).

                (x)     Neither the Company nor any of its Subsidiaries has any actual or potential liability under Treasury Regulation section 1.1502-6 (or any comparable or similar provision of federal, state, local or foreign Law), as a transferee or successor, in accordance with any contractual obligation, or otherwise for any Taxes of any person other than the Company or any of its Subsidiaries.

                (xi)     Neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (A) change in method of accounting for a taxable period ending on or prior to the Closing Date, (B) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law) executed on or prior to the Closing Date, (C) installment sale or open transaction disposition made on or prior to the Closing Date or (D) prepaid amount received on or prior to the Closing Date.

            (b)     (i) The Company has provided to ParentCo or any of its Affiliates correct and complete copies of (A) all material income Tax Returns filed by the Company or any of its Subsidiaries and (B) all material ruling requests, private letter rulings, notices of proposed deficiencies, closing agreements, settlement agreements, and similar documents sent to or received by the Company or any of its Subsidiaries relating to Taxes, in each case for Tax years ending in 2003 and thereafter.

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                (ii)     The Company is not, and has not at any time during the last five years, been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.

        Section 3.16     Environmental Liability . Except for matters that would not reasonably be expected to have a Company Material Adverse Effect, (i) the Company and each of its Subsidiaries are in compliance with all applicable Environmental Laws, have been in compliance with all applicable Environmental Laws except for any such noncompliance that has been fully resolved, and have obtained or timely applied for or renewed all Environmental Permits necessary for their operations as currently conducted; (ii) there have been no Releases of any Hazardous Materials that require investigation or remediation by the Company or any of its Subsidiaries pursuant to any Environmental Law; (iii) there are no Environmental Claims pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries; (iv) neither the Company nor any of its Subsidiaries has retained or assumed, either contractually or by operation of law, any liability or obligation that would reasonably be expected to have formed the basis of any Environmental Claim against the Company or any of its Subsidiaries; and (v) there is not located at any property currently or formerly owned, operated or leased by the Company or any of its Subsidiaries any underground storage tanks, asbestos containing materials or assets or equipment containing polychlorinated biphenyls in excess of 50 parts per million. The Company and each of its Subsidiaries have delivered or otherwise made available for inspection to MergerCo true, complete and correct copies and results of any reports, studies, or analyses possessed or initiated by the Company or any of its Subsidiaries pertaining to Hazardous Materials in, on, beneath or adjacent to any Material Facility or regarding the Company’s or any of its Subsidiaries’ compliance with applicable Environmental Laws at such Facilities, in each case that disclose matters would reasonably be expected to have a Company Material Adverse Effect. Notwithstanding anything to the contrary in this Agreement, the representations and warranties set forth in this Section 3.16 and Section 3.19 shall be the sole and exclusive representations and warranties of the Company with respect to environmental matters.

        Section 3.17     Title to Real Properties . The Company and each of its Subsidiaries have good and valid title in fee simple to all their owned real property, as reflected in the most recent balance sheet included in the audited financial statements included in the Company SEC Documents, except for the properties and assets that have been disposed of in the ordinary course of business since the date of such balance sheet, free and clear of all Liens other than Permitted Liens, except as would not reasonably be expected to have a Company Material Adverse Effect. The Company and each of its Subsidiaries have good and valid leasehold interests in all real property leased by them, except as would not reasonably be expected to have a Company Material Adverse Effect. With respect to all leases under which the Company or any of its Subsidiaries lease any real property, such leases are in good standing, valid and effective against the Company and, to the Company’s Knowledge, the counterparties thereto, in accordance with their respective terms, and there is not, under any of such leases, any existing default by the Company or, to the Company’s Knowledge, the counterparties thereto, other than failures to be in good standing, valid and effective and defaults under such leases which would not reasonably be expected to have a Company Material Adverse Effect.

        Section 3.18     Intellectual Property . Section 3.18 of the Company Disclosure Letter lists all patents, patent applications, registrations of or applications for trademarks, trade names and service marks, and registered copyrights and applications therefor, if any, owned by the Company or any of its Subsidiaries as of the date of this Agreement, the absence of which would have a Company Material Adverse Effect. Except as would not have a Company Material Adverse Effect, (i) the Company and each of its Subsidiaries owns, or is licensed or otherwise has the right to use (in each case, free and clear of any Liens), all Intellectual Property used in and necessary to carry on its business as presently being conducted; (ii) none of the Company or any of its Subsidiaries is infringing on or otherwise violating the rights of any Person with regard to any Intellectual Property owned by, licensed to or otherwise used by the Company or any of its Subsidiaries, and the Company and each of its Subsidiaries is in compliance with the terms of all material licenses, agreements and contracts pursuant to which the Company or such Subsidiary has the right to use any Intellectual Property owned or developed by any other Person; (iii) there is no suit, claim, action, investigation or proceeding pending or, to the Company’s Knowledge, threatened with respect to, and the Company has not been notified of, any possible infringement by the Company or any of its Subsidiaries on the rights of any Person with regard to any Intellectual Property owned by, licensed to or otherwise used by the Company or any of its Subsidiaries and, to the Company’s Knowledge, no Person is infringing on or otherwise violating any right of the Company or any of its Subsidiaries with respect to any Intellectual Property owned by, licensed to or otherwise used by the Company or any of its Subsidiaries; and (iv) the Company and each of its Subsidiaries has taken commercially reasonable steps to protect their Intellectual Property and their rights thereunder, and to the Company’s Knowledge no rights to such Intellectual Property have been lost, diluted or otherwise impaired or are in jeopardy of being lost, diluted or otherwise impaired through failure to act by the Company or any of its Subsidiaries.

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        Section 3.19     Permits; Compliance with Laws . (a) Each of the Company and its Subsidiaries is in possession of all authorizations, licenses, consents, certificates, registrations, approvals and other permits of any Governmental Entity (“ Permits ”) necessary for it to own, lease and operate its properties and assets or to carry on its business as it is now being conducted in compliance with applicable Laws (collectively, the “ Company Permits ”), and all such Company Permits are in full force and effect, except where the failure to hold such Company Permits, or the failure to be in full force and effect, would not be reasonably expected to have a Company Material Adverse Effect. To the Knowledge of the Company, no suspension or cancellation of any of the Company Permits is pending or threatened, except where such suspension or cancellation would not be reasonably expected to have a Company Material Adverse Effect.

            (b)     Except as would not reasonably be expected to have a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries is, or since December 31, 2005, has been in default or violation of (A) any Laws applicable to the Company or such Subsidiary or by which any of the Company Assets is bound or (B) any Company Permit.

        Section 3.20     Takeover Statutes; Company Rights Agreement; Company Articles . (a) The approval by the Company Board of this Agreement, the Voting Agreement, the Merger and the other transactions contemplated by this Agreement and the Voting Agreement, constitutes approval of this Agreement, the Voting Agreement, the Merger and the other transactions contemplated by this Agreement and the Voting Agreement for purposes Section 490.1110 of the IBCA and represents the only action necessary to ensure that Section 490.1110 of the IBCA does not and will not apply to the execution, delivery, performance and consummation of this Agreement, the Voting Agreement, the Merger and the other transactions contemplated by this Agreement and the Voting Agreement.

            (b)     The Company has taken all actions necessary to (a) render the Rights Agreement dated as of August 21, 2006 between the Company and Computershare Trust Company, N.A. (the “Company Rights Agreement”), inapplicable to this Agreement, the Voting Agreement and the Merger and (b) ensure that (i) none of ParentCo, MergerCo, or any of their direct or indirect parent entities shall be deemed to