AGREEMENT AND PLAN OF
MERGER
Dated as of December 1,
2008
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ARTICLE I
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The Offer
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SECTION
1.01.
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2
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SECTION
1.02.
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4
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SECTION
1.03.
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5
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ARTICLE II
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The Merger
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SECTION
2.01.
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6
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SECTION
2.02.
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7
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SECTION
2.03.
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Effective Time of the Merger
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7
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SECTION
2.04.
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7
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SECTION
2.05.
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Articles of Incorporation and Bylaws
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7
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SECTION
2.06.
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7
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SECTION
2.07.
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7
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ARTICLE III
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Effect of the Merger on the Capital
Stock of the Constituent Corporations; Exchange of
Certificates
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SECTION
3.01.
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8
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SECTION
3.02.
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9
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ARTICLE IV
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Representations and
Warranties
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SECTION
4.01.
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Representations and Warranties of the
Company
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11
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SECTION
4.02.
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Representations and Warranties of Parent and
Sub
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42
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ARTICLE V
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Covenants Relating to Conduct of
Business; No Solicitation
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SECTION
5.01.
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45
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SECTION
5.02.
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51
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ARTICLE VI
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Additional Agreements
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SECTION
6.01.
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Preparation of the Proxy Statement;
Shareholders’ Meeting
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54
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SECTION
6.02.
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Access to Information;
Confidentiality
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55
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SECTION
6.03.
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Commercially Reasonable Efforts
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56
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SECTION
6.04.
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Company Stock Options; Company Restricted
Shares; Company PSU Awards; ESPP
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57
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SECTION
6.05.
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Indemnification; Advancement of Expenses;
Exculpation and Insurance
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59
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SECTION
6.06.
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60
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SECTION
6.07.
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61
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SECTION
6.08.
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61
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SECTION
6.09.
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61
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SECTION
6.10.
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Actions with Respect to the Company Convertible
Notes
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62
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SECTION
6.11.
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Actions with Respect to Lines of
Credit
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63
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SECTION
6.12.
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63
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SECTION
6.13.
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64
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ARTICLE VII
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Conditions Precedent
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SECTION
7.01.
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Conditions to Each Party’s Obligation to
Effect the Merger
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65
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ARTICLE VIII
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Termination, Amendment and
Waiver
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SECTION
8.01.
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66
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SECTION
8.02.
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67
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SECTION
8.03.
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67
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SECTION
8.04.
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67
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SECTION
8.05.
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Procedure for Termination
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68
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ARTICLE IX
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General Provisions
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SECTION
9.01.
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Nonsurvival of Representations and
Warranties
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68
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SECTION
9.02.
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68
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SECTION
9.03.
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69
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SECTION
9.04.
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71
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SECTION
9.05.
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71
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SECTION
9.06.
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71
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SECTION
9.07.
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Entire Agreement; No Third-Party
Beneficiaries
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72
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SECTION
9.08.
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72
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-ii-
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Page
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SECTION
9.09.
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72
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SECTION
9.10.
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Specific Enforcement; Consent to
Jurisdiction
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72
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SECTION
9.11.
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73
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SECTION
9.12.
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73
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Index of
Defined Terms
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Offer
Conditions
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Restated
Articles of Incorporation of the Surviving Corporation
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-iii-
AGREEMENT AND PLAN
OF MERGER (this “Agreement”) dated as of
December 1, 2008, among JOHNSON & JOHNSON, a New Jersey
corporation (“Parent”), MAPLE MERGER SUB, INC., a
Minnesota corporation and a wholly owned Subsidiary of Parent
(“Sub”), and MENTOR CORPORATION, a Minnesota
corporation (the “Company”).
WHEREAS
Parent desires to acquire the Company on the terms and subject to
the conditions set forth in this Agreement;
WHEREAS
in furtherance of the acquisition of the Company by Parent upon the
terms and subject to the conditions set forth in this Agreement,
Parent proposes to cause Sub to make a tender offer (as it may be
amended from time to time as permitted under this Agreement, the
“Offer”) to purchase all of the outstanding shares of
common stock, par value $0.10 per share, of the Company
(“Company Common Stock”) at a price per share of
Company Common Stock of $31.00 (such amount, or any other amount
per share paid pursuant to the Offer and this Agreement, the
“Offer Price”) net to the seller in cash, without
interest, on the terms and subject to the conditions set forth in
this Agreement;
WHEREAS
it is proposed that, on the terms and subject to the conditions set
forth in this Agreement, following the consummation of the Offer,
Sub shall, in accordance with the Minnesota Business Corporation
Act (the “MBCA”), merge with and into the Company (the
“Merger”), pursuant to which each share of Company
Common Stock, other than (i) shares of Company Common Stock
directly owned by Parent, Sub or the Company and (ii) the
Dissenting Shares, will be converted into the right to receive the
Offer Price in cash;
WHEREAS
the Board of Directors of Sub has approved and declared advisable,
and the Board of Directors of Parent has approved, this Agreement,
the Offer and the Merger on the terms and subject to the conditions
set forth in this Agreement;
WHEREAS
the Board of Directors of the Company (i) has determined that
the Offer and the Merger are advisable and in the best interest of
the Company and its shareholders, (ii) has approved this
Agreement, the Offer and the Merger upon the terms and subject to
the conditions set forth in this Agreement and (iii) is
recommending that the Company’s shareholders accept the
Offer, tender their shares of Company Common Stock in the Offer,
and, to the extent required by applicable law, approve the Merger
and adopt this Agreement; and
WHEREAS
Parent, Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Offer
and the Merger and also to prescribe various conditions to the
Offer and the Merger.
2
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:
SECTION
1.01. The Offer . (a) Subject to the conditions of this
Agreement, as promptly as practicable (but in no event later than
ten business days) after the date of this Agreement, Sub shall, and
Parent shall cause Sub to, commence, within the meaning of
Rule 14d-2 under the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated
thereunder, the “Exchange Act”), the Offer. The
obligations of Sub to, and of Parent to cause Sub to, accept for
payment, and pay for, any shares of Company Common Stock tendered
pursuant to the Offer are subject only to the conditions set forth
in Exhibit A (the “Offer Conditions”). The initial
expiration date of the Offer shall be midnight, New York City time,
on the 20th business day following the commencement of the Offer
(determined pursuant to Rule 14d-1(g)(3) under the Exchange Act).
Sub expressly reserves the right to, in its sole discretion, waive,
in whole or in part, any Offer Condition or modify the terms of the
Offer; provided , however , that, without the prior
written consent of the Company, Sub shall not (i) reduce the
number of shares of Company Common Stock subject to the Offer,
(ii) reduce the Offer Price, (iii) change, modify or
waive the Minimum Tender Condition, (iv) add to the conditions
set forth in Exhibit A or modify any Offer Condition in a
manner adverse to the holders of Company Common Stock,
(v) except as otherwise provided in this Section 1.01(a),
extend the Offer, (vi) change the form of consideration
payable in the Offer or (vii) otherwise amend the Offer in any
manner adverse to the holders of Company Common Stock.
Notwithstanding anything in this Agreement to the contrary, and
without limiting Parent’s or Sub’s obligations under
the following sentence, Sub (A) may, in its sole discretion,
without consent of the Company, extend the Offer on one or more
occasions for any period, if on any then-scheduled expiration date
of the Offer any of the Offer Conditions shall not be satisfied or,
in Sub’s sole discretion, waived, until such time as such
condition or conditions are satisfied or waived and (B) shall
extend the Offer for any period required by any rule, regulation,
interpretation or position of the Securities and Exchange
Commission (the “SEC”) or the staff thereof applicable
to the Offer; provided , however , that in no event
shall Sub be required to extend the Offer beyond the Termination
Date. Parent and Sub agree that (A) if, on any then-scheduled
expiration date of the Offer, any of the Offer Conditions set forth
in clauses (ii) through (vi) of Exhibit A is not
satisfied or, in Sub’s sole discretion, waived, then Sub
shall, and Parent shall cause Sub to, extend the Offer on one or
more occasions, in consecutive increments of up to ten business
days each, until such time as such Offer Conditions are satisfied
or, in Sub’s sole discretion, waived and (B) if, on any
then-scheduled expiration date of the Offer, the Minimum Tender
Condition is not satisfied but all of the other Offer Conditions
set forth in Exhibit A are satisfied or, in Sub’s sole
discretion, waived, then Sub shall, and Parent shall cause Sub to,
extend the Offer as provided by the terms of Section 8.01(f);
provided , however , that in no event shall Sub be
required to extend the Offer beyond the Termination Date. On the
terms and subject to
3
the conditions
of the Offer and this Agreement, Sub shall, and Parent shall cause
Sub to, accept and pay for (subject to any withholding of tax
pursuant to Section 1.01(d)) all shares of Company Common
Stock validly tendered and not validly withdrawn pursuant to the
Offer as soon as practicable after the expiration date of the Offer
(as it may be extended and re-extended in accordance with this
Section 1.01(a)). Acceptance for payment of shares of Company
Common Stock pursuant to and subject to the conditions of the Offer
upon the expiration of the Offer is referred to in this Agreement
as the “Offer Closing”, and the date on which the Offer
Closing occurs is referred to in this Agreement as the “Offer
Closing Date”. Sub expressly reserves the right to, in its
sole discretion, following the Offer Closing, extend the Offer for
a “subsequent offering period” in accordance with
Rule 14d-11 under the Exchange Act, and the Offer Documents
may, in Sub’s sole discretion, provide for such a reservation
of right. Nothing contained in this Section 1.01(a) shall affect
any termination rights in Article VIII.
(b) On
the date of commencement of the Offer, Parent and Sub shall file
with the SEC a Tender Offer Statement on Schedule TO with
respect to the Offer, which shall contain an offer to purchase and
a related letter of transmittal and summary advertisement (such
Schedule TO and the documents included therein pursuant to
which the Offer will be made, together with any supplements or
amendments thereto, the “Offer Documents”), and cause
the Offer Documents to be disseminated to the shareholders of the
Company as and to the extent required by Federal securities laws.
The Company shall promptly after the date hereof furnish to Parent
and Sub all information concerning the Company required by the
Exchange Act to be set forth in the Offer Documents. Each of
Parent, Sub and the Company shall promptly correct any information
supplied by it for inclusion or incorporation by reference in the
Offer Documents if and to the extent that such information shall
have become false or misleading in any material respect, and each
of Parent and Sub shall take all steps necessary to amend or
supplement the Offer Documents and to cause the Offer Documents as
so amended or supplemented to be filed with the SEC and
disseminated to the shareholders of the Company, in each case as
and to the extent required by applicable Federal securities laws.
Parent and Sub shall promptly notify the Company upon the receipt
of any comments from the SEC, or any request from the SEC for
amendments or supplements, to the Offer Documents, and shall
promptly provide the Company with copies of all correspondence and
summaries of all material oral communications between them and
their representatives, on the one hand, and the SEC, on the other
hand. Prior to the filing of the Offer Documents (including any
amendment or supplement thereto) with the SEC or dissemination
thereof to the shareholders of the Company, or responding to any
comments of the SEC with respect to the Offer Documents, Parent and
Sub shall provide the Company a reasonable opportunity to review
and comment on such Offer Documents or response (including the
proposed final version thereof), and Parent and Sub shall give
reasonable consideration to any such comments.
(c) Parent
shall provide or cause to be provided to Sub on a timely basis the
funds necessary to pay for any shares of Company Common Stock that
Sub becomes obligated to accept for payment, and pay for, pursuant
to the Offer and shall cause Sub to fulfill all of Sub’s
obligations under this Agreement.
4
(d) Parent,
Sub, the Surviving Corporation or the Paying Agent shall be
entitled to deduct and withhold from the consideration otherwise
payable pursuant to the Offer to any holder of shares of Company
Common Stock such amounts as Parent, Sub, 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, and applicable Treasury Regulations issued
pursuant thereto (the “Code”), or any provision of
state, local or foreign tax law. To the extent that amounts are so
withheld and paid over by Parent, Sub, the Surviving Corporation or
the Paying Agent to the appropriate taxing authority, 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, Sub, the Surviving Corporation or the Paying
Agent.
(e) Sub
shall timely file with the Commissioner of Commerce of the State of
Minnesota a registration statement related to the Offer required to
be filed pursuant to Chapter 80B of the Minnesota Statutes
(the “Minnesota Registration Statement”) and shall
disseminate the Minnesota Registration Statement as required by
Chapter 80B of the Minnesota Statutes. Sub shall promptly file
with the Commissioner of Commerce of the State of Minnesota all
materials referred to in Section 80B.04 of the Minnesota
Statutes that Parent and Sub file with the SEC or otherwise make
available to the shareholders of the Company.
SECTION
1.02. Company Actions . (a) The Company hereby approves
of and consents to the Offer, the Merger and the other transactions
contemplated by this Agreement.
(b) On
the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such
Schedule 14D-9, together with any supplements or amendments
thereto, the “Schedule 14D-9”) containing the
recommendation described in Section 4.01(d) and shall mail the
Schedule 14D-9 to the shareholders of the Company as required
by Rule 14d-9 under the Exchange Act. Parent and Sub shall
promptly furnish to the Company all information concerning Parent
and Sub required by the Exchange Act to be set forth in the
Schedule 14D-9. Each of the Company, Parent and Sub shall
promptly correct any information supplied by it for inclusion or
incorporation by reference in the Schedule 14D-9 if and to the
extent that such information shall have become false or misleading
in any material respect, and the Company shall take all steps
necessary to amend or supplement the Schedule 14D-9 and to
cause the Schedule 14D-9 as so amended or supplemented to be
filed with the SEC and disseminated to the shareholders of the
Company, in each case as and to the extent required by applicable
Federal securities laws. The Company shall promptly notify Parent
upon the receipt of any comments from the SEC, or any request from
the SEC for amendments or supplements, to the Schedule 14D-9,
and shall promptly provide Parent with copies of all correspondence
and summaries of all material oral communications between the
Company and its representatives, on the one hand, and the SEC, on
the other hand. Prior to the filing of the Schedule 14D-9
(including any amendment or supplement thereto) with the SEC or
mailing thereof to the shareholders of the Company, or responding
to
5
any comments of
the SEC with respect to the Schedule 14D-9, the Company shall
provide Parent a reasonable opportunity to review and comment on
such Schedule 14D-9 or response (including the proposed final
version thereof), and the Company shall give reasonable
consideration to any such comments. The Company hereby consents to
the inclusion in the Offer Documents of the recommendation of the
Board of Directors of the Company contained in the
Schedule 14D-9.
(c) In
connection with the Offer and the Merger, the Company shall cause
its transfer agent to furnish Parent and Sub promptly after the
date hereof with mailing labels containing the names and addresses
of the record holders of Company Common Stock as of a recent date
and of those persons becoming record holders subsequent to such
date, together with copies of all lists of shareholders, security
position listings and computer files and all other information in
the Company’s possession or control regarding the beneficial
owners of Company Common Stock, and shall furnish to Sub such
information and assistance (including updated lists of
shareholders, security position listings and computer files) as
Parent may reasonably request in communicating the Offer to holders
of Company Common Stock. Subject to the requirements of applicable
law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the
transactions contemplated by this Agreement, Parent and Sub shall
hold in confidence the information contained in any such labels,
listings and files in accordance with the requirements of the
Confidentiality Agreement dated June 14, 2007, as amended on
May 7, 2008 and as further amended on September 4, 2008,
between Ethicon, Inc. and the Company (as it may be further amended
from time to time, the “Confidentiality Agreement”),
shall use such information only in connection with the Offer and
the Merger and, if this Agreement shall be terminated, shall, upon
request, destroy all copies of such information then in their
possession or control.
(d) The
Company shall promptly file with the Commissioner of Commerce of
the State of Minnesota all materials referred to in
Section 80B.04 of the Minnesota Statutes that the Company
files with the SEC or otherwise makes available to the shareholders
of the Company.
SECTION
1.03. Top-Up Option. (a)The Company hereby grants to Sub an
irrevocable option (the “Top-Up Option”), exercisable
only on the terms and conditions set forth in this
Section 1.03, to purchase at a price per share equal to the
Offer Price paid in the Offer up to that number of newly issued
shares of Company Common Stock (the “Top-Up Shares”)
equal to the lowest number of shares of Company Common Stock that,
when added to the number of shares of Company Common Stock owned by
Parent and its Subsidiaries at the time of exercise of the Top-Up
Option, shall constitute one share more than 90% of the shares of
Company Common Stock outstanding immediately after the issuance of
the Top-Up Shares on a “fully diluted basis” (which
assumes conversion or exercise of all derivative securities
regardless of the conversion or exercise price, the vesting
schedule or other terms and conditions thereof); provided ,
however , that the Top-Up Option shall not be exercisable
for a number of shares of Company Common Stock in excess of
(i) the number of shares of Company Common Stock authorized
and unissued or held in the treasury of the Company (giving effect
to
6
the shares of
Company Common Stock issuable pursuant to all then-outstanding
stock options, restricted stock units and any other rights to
acquire Company Common Stock as if such shares were outstanding) or
(ii) 19.90% of the number of outstanding shares of Company
Common Stock or voting power of the Company, in each case as of
immediately prior to and after giving effect to the issuance of the
Top-Up Shares. The Top-Up Option shall be exercisable at any one
time following the Offer Closing and prior to the earlier to occur
of (a) the Effective Time and (b) the termination of this
Agreement in accordance with its terms. The obligation of the
Company to issue and deliver the Top-Up Shares upon the exercise of
the Top-Up Option is subject only to the condition that no
Restraint preventing the exercise of the Top-Up Option or the
issuance and delivery of the Top-Up Shares in respect of such
exercise shall be in effect.
(b) The
parties shall cooperate to ensure that the issuance and delivery of
the Top-Up Shares comply with all applicable laws, including
compliance with an applicable exemption from registration of the
Top-Up Shares under the Securities Act. In the event Sub wishes to
exercise the Top-Up Option, Sub shall give the Company at least
three business days prior written notice, specifying (i) the
number of shares of the Company Common Stock directly or indirectly
owned by Parent at the time of such notice and (ii) a place
and a time for the closing of such purchase. The Company shall, as
soon as practicable following receipt of such notice, deliver
written notice to Sub specifying, based on the information provided
by Sub in its notice, the number of Top-Up Shares. At the closing
of the purchase of Top-Up Shares, the purchase price owed by Sub to
the Company therefor shall be paid to the Company (i) in cash,
by wire transfer or cashier’s check or (ii) by issuance
by Sub to the Company of a promissory note on terms reasonably
satisfactory to the Company.
(c) Parent
and Sub acknowledge that the Top-Up Shares that Sub may acquire
upon exercise of the Top-Up Option will not be registered under the
Securities Act, and will be issued in reliance upon an exemption
thereunder for transactions not involving a public offering. Sub
agrees that the Top-Up Option and the Top-Up Shares to be acquired
upon exercise of the Top-Up Option are being and will be acquired
by Sub for the purpose of investment and not with a view to, or for
resale in connection with, any distribution thereof in violation of
the Securities Act. Any certificates evidencing the Top-Up Shares
shall include any legends required by applicable securities
laws.
SECTION
2.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the
MBCA, 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
MBCA.
7
SECTION
2.02. 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 VII
(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, date
or place is agreed to in writing by Parent and the Company;
provided , however , that if all the conditions set
forth in Article VII 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
2.03. Effective Time of the Merger. Subject to the
provisions of this Agreement, as soon as practicable on the Closing
Date, the Company shall file with the Secretary of State of the
State of Minnesota a certificate of merger (the “Certificate
of Merger”) executed and acknowledged by the parties in
accordance with the relevant provisions of the MBCA. The Merger
shall become effective upon the filing of the Certificate of Merger
with the Secretary of State of the State of Minnesota, 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
2.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 302A.641 of the MBCA.
SECTION
2.05. Articles of Incorporation and Bylaws. (a) The
Amended and Restated Articles of Incorporation of the Company (the
“Company Certificate”) shall be amended at the
Effective Time as set forth in Exhibit B and, as so amended,
such Company Certificate shall be the Amended and Restated Articles
of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable
law.
(b) The
Bylaws of Sub, as in effect immediately prior to the Effective
Time, shall be the Bylaws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable
law.
SECTION
2.06. 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
2.07. 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.
8
Effect of the Merger on the
Capital Stock of the
Constituent Corporations; Exchange of
Certificates
SECTION
3.01. 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)
Cancellation 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 3.01(b) and the Dissenting Shares) shall be converted
into the right to receive, in cash and without interest, an amount
equal to the Offer Price paid in the Offer (the “Merger
Consideration”). At the Effective Time, all such shares of
Company Common Stock 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. As provided in Section 3.02(h), 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)
Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock
outstanding immediately prior to the Effective Time and held of
record or beneficially by any person who has not voted in favor of
approval and adoption of this Agreement and who is entitled to
demand and properly demands appraisal of such shares
(“Dissenting Shares”) pursuant to, and who complies in
all respects with, Sections 302A.471 and 302A.473 of the MBCA
(the “Dissenter Rights Statutes”), shall not be
converted into or represent the right to receive the Merger
Consideration for such Dissenting Shares but instead shall be
entitled to payment of the fair value (including interest
determined in accordance with Section 302A.473 of the MBCA) of
such Dissenting Shares in accordance with the Dissenter Rights
Statutes; provided , however , that if any such
holder shall fail to perfect or otherwise shall waive, withdraw or
lose the right to dissent under the Dissenter Rights Statutes, then
the right of such holder to be paid the fair value of such
holder’s Dissenting Shares shall cease and such Dissenting
Shares shall be deemed to have been converted as of the Effective
Time into, and to have become exchangeable solely for the right
to
9
receive, the
Merger Consideration as provided in Section 3.01(c). The
Company shall serve prompt notice to Parent of any demands for
appraisal of any shares of Company Common Stock received by the
Company in accordance with the Dissenter Rights Statutes,
withdrawals of such demands and any other instruments served on the
Company in relation to the Dissenting Shares or rights under the
Dissenter Rights Statutes, and Purchaser 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, make any
payment with respect to, or settle or compromise or offer to settle
or compromise, any such demand, or agree to do any of the
foregoing.
SECTION
3.02. Exchange of Certificates. (a) Paying Agent.
Prior to the Effective Time, Parent shall appoint Computershare
Inc. or another comparable bank or trust company reasonably
acceptable to the Company 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 3.01(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 whose shares of Company
Common Stock were converted into the right to receive the Merger
Consideration (i) a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title
to the Certificates held by such person 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 completed and validly
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
previously represented by such Certificate shall have been
converted into the right to receive pursuant to
Section 3.01(c), and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of
Company Common Stock that 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, upon presentation to the Paying
Agent, such Certificate is properly endorsed or otherwise in proper
form for transfer and the person requesting such payment pays 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 establishes to the reasonable satisfaction
of Parent that such taxes have been paid or are not applicable.
Until surrendered as contemplated by this Section 3.02(b),
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 III. No
10
interest shall
be paid or will accrue on any cash payable to holders of
Certificates pursuant to the provisions of this
Article III.
(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 III shall be deemed to have been paid in
full satisfaction of all rights pertaining to the shares of Company
Common Stock 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 or Paying Agent for any reason, it shall
be canceled against delivery of cash to the holder thereof as
provided in this Article III.
(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 III shall thereafter look only to Parent for, and
Parent shall remain liable for, payment of their claim for the
Merger Consideration in accordance with this Article
III.
(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 immediately prior to the 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 to
Parent.
(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 shall deliver in exchange for such
lost, stolen or destroyed Certificate the applicable Merger
Consideration with respect thereto.
(h)
Withholding Rights. Parent, Sub, the Surviving Corporation
or the Paying Agent shall be entitled to deduct and withhold from
the Merger Consideration or any other consideration otherwise
payable pursuant to this Agreement (including any
11
payments made
in respect of the Dissenting Shares) to any holder of shares of
Company Common Stock such amounts as Parent, Sub, the Surviving
Corporation or the Paying Agent is required to deduct and withhold
with respect to the making of such payment under the Code, or any
provision of state, local or foreign tax law. To the extent that
amounts are so withheld and paid over to the appropriate taxing
authority by Parent, Sub, 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, Sub, the Surviving Corporation or
the Paying Agent.
(i)
Tax Treatment. The parties agree and acknowledge that the
Merger will be treated as a taxable purchase of the outstanding
shares of Company Common Stock for the Merger Consideration (and
not as a reorganization, within the meaning of Section 368(a) of
the Code) for United States federal, state and local income tax
purposes.
Representations and
Warranties
SECTION
4.01. Representations and Warranties of the Company. Except
as set forth in the disclosure letter (with specific reference to
the particular Section or subsection of this Agreement to which the
information set forth in such disclosure letter relates;
provided , however , that any information set forth
in one section of such disclosure letter shall be deemed to apply
to each other Section or subsection thereof or hereof to which its
relevance is readily apparent on the face of such information)
delivered by the Company to Parent prior to the execution of this
Agreement (the “Company Disclosure Letter”), 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 (in the jurisdictions that
recognize the concept of good standing) under the laws of the
jurisdiction of its incorporation or formation, as the case may be,
and 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 presently conducted and as
currently proposed by its management to be conducted, except where
the failure to be in good standing, have such power or authority or
possess such governmental 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 jurisdictions that
recognize the concept of 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 or to be in good standing individually or
in the aggregate has not had and would not reasonably be
12
expected to
have a Material Adverse Effect. The Company has made available to
Parent, prior to the execution of this Agreement, complete and
accurate copies of the Company Certificate and its Bylaws (the
“Company Bylaws”), 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
shareholders 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 April 1, 2006 and prior to the date
hereof.
(b)
Subsidiaries. Section 4.01(b) of the Company Disclosure
Letter lists as of the date hereof each of the Subsidiaries of the
Company and, for each such Subsidiary, the jurisdiction of
incorporation or formation and, as of the date hereof, each
jurisdiction in which such Subsidiary is qualified or licensed to
do business. 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, encumbrances or security interests of any
kind or nature whatsoever (other than liens, charges and
encumbrances for current taxes not yet due and payable)
(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 150,000,000 shares of Company Common Stock and
25,000,000 shares of preferred stock, par value $0.01 per share
(“Company Preferred Stock”). At the close of business
on November 28, 2008, (i) 33,777,968 shares of Company Common
Stock were issued and outstanding (including 223,385 Company
Restricted Shares granted under the Company Stock Plans),
(ii) no shares of Company Common Stock were held by the
Company in its treasury, (iii) 7,573,117 shares of Company
Common Stock were reserved and available for issuance pursuant to
the Amended and Restated 2005 Long-Term Incentive Plan of the
Company (the “2005 Plan”), the 2007 Strategic Equity
Incentive Plan of the Company under the 2005 Plan, the 1991
Long-Term Incentive Plan of the Company and the Employee Stock
Purchase Plan of the Company (the “ESPP”, and such
plans, collectively, the “Company Stock Plans”), of
which 5,084,733 shares of Company Common Stock were subject to
outstanding Company Stock Options and 302,160 shares of Company
Common Stock were subject to outstanding Company PSU Awards, (iv)
5,206,625 shares of Company Common Stock were reserved and
available for issuance upon exercise of the warrants (the
“Company Warrants”) granted or issued pursuant to the
warrant agreements listed in Section 4.01(c) of the Company
Disclosure Letter, true and correct copies of which have been
delivered to Parent prior to the date of this Agreement (the
“Company Warrant Agreements”), (v) 5,206,625 shares of
Company Common Stock were reserved and available for issuance upon
conversion of the Company’s outstanding 2.75% Convertible
Subordinated Notes due 2024 (the “Company Convertible
Notes”) issued pursuant to the Indenture dated as of
December 22, 2003
13
between the
Company and U.S. Bank National Association, as Trustee (the
“Company Convertible Notes Indenture”) and (vi) no
shares of Company Preferred Stock were issued or outstanding or
were held by the Company as treasury shares. Except as set forth
above in this Section 4.01(c) and for shares issued or to be
issued upon the exercise of the Company Stock Options outstanding
on the date hereof and included in clause (iii) of the first
sentence of this Section 4.01(c), at the close of business on
November 28, 2008, 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 shares of
Company Common Stock or Company Preferred Stock subject to vesting
or restrictions on transfer imposed by the Company, 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 the Company Stock
Options, the Company Restricted Shares, the Company PSU Awards, the
Company Convertible Notes and the Company Warrants) that are linked
to the value of Company Common Stock (collectively, but exclusive
of rights under the ESPP, “Company Stock-Based
Awards”). Section 4.01(c) of the Company Disclosure
Letter sets forth a complete and accurate list, as of
November 28, 2008, of (A) all outstanding options to
purchase shares of Company Common Stock (collectively, together
with any options granted after November 28, 2008, as permitted
by this Agreement, but exclusive of rights under the ESPP,
“Company Stock Options”) under the Company Stock Plans
or otherwise, the number of shares of Company Common 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, (B) all shares of Company Common Stock that
were outstanding but were subject to vesting or other forfeiture
restrictions or were subject to a right of repurchase by the
Company at a fixed purchase price as of such time (shares so
subject, the “Company Restricted Shares”) under the
Company Stock Plans or otherwise, the grant and issuance dates,
vesting schedules and repurchase price (if any) thereof and the
names of the holders thereof, (C) all outstanding performance stock
unit awards in respect of shares of Company Common Stock
(collectively, the “Company PSU Awards”) under the
Company Stock Plans or otherwise, the number of shares of Company
Common Stock subject thereto, the grant dates and vesting schedules
thereof and the names of the holders thereof and (D) all
outstanding Company Warrants, the number of shares of Company
Common Stock subject thereto, the grant dates, expiration dates,
exercise price and vesting schedules thereof and the names of the
holders thereof. All (i) Company Restricted Shares, (ii)
Company Stock Options and (iii) Company PSU Awards are
evidenced by stock option agreements, restricted stock award
agreements, performance stock unit award agreements or other award
agreements, in each case substantially in the forms set forth in
Section 4.01(c) of the Company Disclosure Letter, except that
the forms of such agreements differ with respect to the number of
options, performance stock unit awards or shares covered thereby,
the exercise price, regular vesting schedule, repurchase price and
expiration date applicable thereto and other similar terms and,
except for such differences, no stock option agreement, restricted
stock award agreement, performance stock unit award agreement or
other award agreement contains terms that are inconsistent in any
material respect with, or material terms in addition to, such
forms. Each grant of a Company Stock Option was duly authorized no
later than the date on which the grant of such Company Stock Option
was by its terms to be effective (the
14
“Grant
Date”) by all necessary corporate action, including, as
applicable, approval by the Board of Directors of the Company (or a
duly constituted and authorized committee thereof) and any required
shareholder approval by the necessary number of votes or written
consents, and the award agreement governing such grant (if any) was
duly executed and delivered by each party thereto, each such grant
was made in accordance with the terms of the applicable
compensation plan or arrangement of the Company, the Exchange Act
and all other applicable laws and regulatory rules or requirements,
including the rules of the New York Stock Exchange (the
“NYSE”), the per share exercise price of each Company
Stock Option was equal to the fair market value (within the meaning
of Section 422 of the Code, in the case of each Company Stock
Option intended to qualify as an “incentive stock
option”, and within the meaning of Section 409A of the
Code, in the case of each other Company Stock Option) of a share of
Company Common Stock on the applicable Grant Date and each such
grant was properly accounted for in accordance with GAAP in the
financial statements (including the related notes) of the Company
and disclosed in the Company SEC Documents in accordance with the
Exchange Act and all other applicable laws. The Company has not
knowingly granted, and there is no and has been no Company policy
or practice to knowingly grant, Company Stock Options prior to, or
otherwise knowingly coordinate the grant of Company Stock Options
with, the release or other public announcement of material
information regarding the Company or its Subsidiaries or their
financial results or prospects. Each Company Stock Option intended
to qualify as an “incentive stock option” under
Section 422 of the Code, if any, so qualifies. As of the close
of business on November 28, 2008, there were outstanding
Company Stock Options to purchase 1,234,080 shares of Company
Common Stock with exercise prices on a per share basis lower than
the Merger Consideration, and the weighted average exercise price
of such Company Stock Options was equal to $19.897590. 1,249 shares
of Company Common Stock were subject to outstanding rights under
the ESPP based on payroll information for the period ending
September 26, 2008 (assuming the fair market value per share
of Company Common Stock determined in accordance with the terms of
the ESPP on the last day of the offering period in effect under the
ESPP on the date hereof was equal to the Merger Consideration and
that payroll deductions continue at the current rate). Each Company
Stock Option, each Company Restricted Share and each Company PSU
Award may, by its terms, be treated at the Effective Time as set
forth in Section 6.04(a)(i), 6.04(a)(ii) or 6.04(a)(iii), as
applicable. Each of the Company Warrants has an exercise price in
excess of the Offer Price. The Company Warrants terminate and
expire in accordance with their terms on January 1, 2009, and no
payments in respect of the Company Warrants are payable by the
Company or any of its Subsidiaries in respect of the execution and
delivery of this Agreement or the consummation of the Offer, the
Merger or any of the other transactions contemplated by this
Agreement or in respect of such termination or expiration. All
outstanding shares of capital stock of the Company are, and all
shares which may be issued pursuant to the Company Stock Options,
the Company PSU Awards, rights under the ESPP, the Company
Convertible Notes and the Company Warrants will be, when issued in
accordance with the terms thereof, duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
There are no bonds, debentures, notes or other indebtedness of the
Company having the right to vote (or, except for the Company
Convertible Notes, convertible into,
15
or exchangeable
for, securities having the right to vote) on any matters on which
shareholders of the Company may vote. Except as set forth above in
this Section 4.01(c), as of the date hereof, (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 4.01(c), as of the date hereof, there are no
outstanding (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 of any Subsidiary of the Company or to
issue, deliver or sell, or cause to be issued, delivered or sold,
any such securities of any Subsidiary of the Company.
(d)
Authority; Noncontravention. The Company has all requisite
corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated by this Agreement,
subject, in the case of the Merger if required by applicable law,
to receipt of the Shareholder Approval. 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 if required by applicable
law, to receipt of the Shareholder 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 Offer, the Merger and the other
transactions contemplated by this Agreement, (ii) declaring
that it is in the best interests of the shareholders of
the
Company that
the Company enter into this Agreement and consummate the
transactions contemplated by this Agreement on the terms and
subject to the conditions set forth in this Agreement, (iii)
declaring that the terms of the Offer and the Merger are fair to
the Company and the shareholders of the Company,
(iv) directing that, if required by applicable law, the
adoption of this Agreement be submitted as promptly as practicable
to a vote at a meeting of the shareholders of the Company and
(v) recommending that the shareholders of the Company accept
the Offer, tender their shares of Company Common Stock pursuant to
the Offer and, if required by applicable law, approve and adopt
this Agreement, which resolutions, except to the extent permitted
by Section 5.02, have not been subsequently rescinded,
modified or withdrawn in any way. A committee of disinterested
directors of the Board of Directors of the Company, at a meeting
duly called and held, has (i) approved this Agreement and the
transactions contemplated by this Agreement (including the Offer
and the Merger), which approval, to the extent applicable,
constituted approval under the provisions of Sections 302A.011,
Subd. 38(h) and 302A.673, Subd. 1 of the MBCA, as a result of which
this Agreement and the transactions contemplated by this Agreement
(including the Offer and the Merger), are not and will not be
subject to the restrictions on control share acquisitions or
business combinations under the provisions of
Sections 302A.671 and 302A.673, respectively, of the MBCA, and
(ii) recommended to the Board of Directors of the Company that the
Board of Directors of the Company approve this agreement and the
transactions contemplated by this Agreement (including the Offer
and the Merger). The execution and delivery of this Agreement by
the Company do not, and the consummation of the Offer, the Merger
and the other transactions contemplated by this Agreement and
compliance by the Company 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, or result in, termination,
cancellation 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 or the Company
Bylaws or the comparable organizational documents of any of the
Company’s Subsidiaries, (y) any loan or credit
agreement, bond, debenture, note, mortgage, indenture, lease,
supply agreement, license agreement, development agreement,
distribution agreement or other legally binding 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 (1) in the case of the Merger if required by
applicable law, to obtaining receipt of the Shareholder Approval
and (2) to the governmental filings and the 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 Offer, 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
competition, merger control, antitrust or similar law or
regulation, (2) the filing with the SEC of (A) the
Schedule 14D-9, (B) if required by applicable law, a
proxy statement relating to the adoption by the shareholders of the
Company of this Agreement (as amended or supplemented from time to
time, the “Proxy Statement”), (C) an information
statement required in connection with the Offer under
Rule 14f-1 under the Exchange Act (as amended or supplemented
from time to time, the “Information Statement”) and
(D) such reports under the Exchange Act as may be required in
connection with this Agreement, the Offer, the Merger and the other
transactions contemplated by this Agreement, (3) the filing of
the Certificate of Merger with the Secretary of State of the State
of Minnesota 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 NYSE, (5) any
filings as may be required under the MBCA or Chapter 80B of the
Minnesota Statutes in connection with the transactions contemplated
by this Agreement and (6) 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.
(e)
Company SEC Documents. (i) The Company has filed all
reports, schedules, forms, statements and other documents
(including exhibits and other information incorporated therein)
with the SEC required to be filed by the Company since
April 1, 2006 (such documents, together with any documents
filed during such period by the Company with the SEC on a voluntary
basis on Current Reports on Form 8-K, 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 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, which individually
or
in the
aggregate would require an amendment, supplement or corrective
filing to any such Company SEC Document. Each of the financial
statements (including the related notes) of the Company included in
the Company SEC Documents complied at the time it was filed as to
form in all material respects with the applicable accounting
requirements and the published rules and regulations of the SEC
with respect thereto in effect at the time of filing, has been
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 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 is, or has at any time
been, subject to the reporting requirements of Sections 13(a) and
15(d) of the Exchange Act.
(ii) Each of the
principal executive officer of the Company and the principal
financial officer of the Company (or each former principal
executive officer of the Company and each former principal
financial officer of the Company, as applicable) has made all
certifications required by Rule 13a-14 or 15d-14 under the
Exchange Act and Sections 302 and 906 of SOX with respect to
the Company SEC Documents, and the statements contained in such
certifications are true and accurate. For purposes of this
Agreement, “principal executive officer” and
“principal financial officer” shall have the meanings
given to such terms in SOX. Neither the Company nor any of its
Subsidiaries has 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)
of the Exchange Act) sufficient to provide reasonable assurance
(A) regarding the reliability of the Company’s financial
reporting and the preparation of financial statements for external
purposes in accordance with GAAP, (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 directors of the Company 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
“disclosure controls and procedures” (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act) of the
Company are 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 required to be disclosed
by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding
required disclosure and to enable the chief executive officer and
chief financial officer of the Company to make the certifications
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 and 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 under the Exchange
Act)), 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
April 1, 2006, the Company has not received any oral or
written notification of any (x) “significant
deficiency” or (y) “material weakness” in the
Company’s internal control 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 Release
2004-001 of the Public Company Accounting Oversight Board, as in
effect on the date hereof.
(f)
Information Supplied. None of the information included or
incorporated by reference in the Schedule 14D-9, the
Information Statement or the Proxy Statement (and none of the
information supplied or to be supplied by or on behalf of the
Company in writing specifically for inclusion or incorporation by
reference in the Offer Documents or in the Minnesota Registration
Statement and any amendment thereof or supplement thereto will,
(i) in the case of the Schedule 14D-9, the Information
Statement and the Offer Documents, at the respective times the
Schedule 14D-9, the Information Statement and the Offer Documents
are filed with the SEC or first published, sent or given to the
shareholders of the Company, (ii) in the case of the Minnesota
Registration Statement and any amendment thereof or supplement
thereto, at the time the Minnesota Registration Statement or such
amendment or supplement is filed with the Commissioner of Commerce
of the State of Minnesota and at any time of distribution or
dissemination thereof to the shareholders of the Company or
(iii) in the case of the Proxy Statement, at
the date it is
first mailed to the shareholders of the Company and at the time of
the Shareholders’ 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 the 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 in the Schedule 14D-9, the Information Statement
or the Proxy Statement based on information supplied by or on
behalf of Parent or Sub in writing specifically for inclusion or
incorporation by reference therein. The Schedule 14D-9, the
Information Statement and 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. Except for liabilities
incurred in connection with this Agreement and except as disclosed
in the Filed Company SEC Documents or as expressly permitted or
contemplated by this Agreement, since the date of the most recent
financial statements included in the Filed Company SEC Documents,
the Company and its Subsidiaries have conducted their respective
businesses only in the ordinary course consistent with past
practice, and there has not been any Material Adverse Change, and
from such date until the date hereof there has not been
(i) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with
respect to any capital stock of the Company or any of its
Subsidiaries, other than any declaration setting aside or payment
from a wholly owned Subsidiary of the Company to the Company in the
ordinary course of business consistent with past practice, (ii) any
purchase, redemption or other acquisition by the Company or any of
its Subsidiaries of any shares of capital stock or any other
securities of the Company or any of its Subsidiaries or any
options, warrants, calls or rights to acquire such shares or other
securities, (iii) any split, combination or reclassification
of any capital stock of the Company or any of its Subsidiaries or
any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares
of their respective capital stock, (iv) (A) any granting by
the Company or any of its Subsidiaries to any current or former
director, officer, employee or consultant of the Company or any of
its Subsidiaries (each a “Participant”) of any increase
in compensation, bonus or fringe or other benefits or any granting
of any type of compensation or benefits to any Participant not
previously receiving or entitled to receive such type of
compensation or benefit, except (1) in the case of employees
and consultants who are neither directors nor officers, for normal
increases in cash compensation in the ordinary course of business
consistent with past practice or (2) as was required under any
Company Benefit Agreement or Company Benefit Plan in effect as of
the date of the most recent financial statements included in the
Filed Company SEC Documents, (B) any granting by the Company
or any of its Subsidiaries to any Participant of any right to
receive any increase in change of control, severance or termination
pay, (C) any entry by the Company or any of its Subsidiaries
into, or any amendment or termination of (1) any employment,
deferred compensation, consulting, severance, change of control,
termination, retention, indemnification, loan or similar agreement
between the Company or any of its Subsidiaries, on the one hand,
and any Participant, on the other hand, or (2) any agreement
between the Company or any of its Subsidiaries, on the one hand,
and any Participant, on the other hand, the benefits of which are
contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving the Company
of a nature
contemplated by this Agreement (all such agreements under this
clause (C), collectively, “Company Benefit
Agreements”), (D) any payment of any benefit under, or
the grant of any award under, or any amendment to, or termination
of, any bonus, incentive, performance or other compensation plan or
arrangement, Company Benefit Agreement or Company Benefit Plan
(including in respect of Company Stock Options, Company Restricted
Shares, Company PSU Awards, Company Stock-Based Awards,
“phantom” stock, stock appreciation rights, restricted
stock, “phantom” stock rights, restricted stock units,
deferred stock units, other equity or equity-based compensation,
performance stock units or other stock-based or stock-related
awards or the removal or modification of any restrictions in any
Company Benefit Agreement or Company Benefit Plan or awards made
thereunder) except as required to comply with applicable Legal
Provisions or any Company Benefit Agreement or Company Benefit Plan
in effect as of the date of the most recent financial statements
included in the Filed Company SEC Documents, (E) the taking of
any action to fund or in any other way secure the payment of
compensation or benefits under any Company Benefit Plan or Company
Benefit Agreement or (F) the taking of any action to
accelerate the vesting or payment of any compensation or benefits
under any Company Benefit Plan or Company Benefit Agreement,
(v) any damage, destruction or loss to any asset of the
Company or any of its Subsidiaries, whether or not covered by
insurance, that individually or in the aggregate has had or would
reasonably be expected to have a Material Adverse Effect,
(vi) any change in accounting methods, principles or practices
by the Company materially affecting its assets, liabilities or
businesses, except insofar as may have been required by a change in
GAAP or (vii) any material tax election or change in such
election, any change in material method of accounting for tax
purposes or any settlement or compromise of any material income tax
liability.
(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) Except as disclosed in the Filed Company
SEC Documents and except with respect to licenses and other
agreements relating to intellectual property, which are the subject
of Section 4.01(p), 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 and the
rules and regulations promulgated thereunder. None of the Company,
any of its Subsidiaries or, to the Knowledge of the Company, any
other party thereto is in violation of or in default under (nor
does there exist any condition which upon the passage of time or
the giving of notice or both would cause such a violation of or
default under) any
Contract, to
which it is a party or by which it or any of its properties or
other assets is bound, except for violations or defaults that
individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. Neither
the Company nor any of its Subsidiaries has entered into any
Contract with any Affiliate of the Company that is in effect as of
the date hereof other than Contracts that are disclosed in the
Filed Company SEC Documents. Neither the Company nor any of its
Subsidiaries is a party to or otherwise bound by any agreement or
covenant (A) restricting in any material respect the
Company’s or its Subsidiaries’ ability to compete,
(B) restricting in any respect the Company’s
Affiliates’ ability to compete (other than the
Company’s Subsidiaries), (C) restricting in any material
respect the research, development, distribution, sale, supply,
license, marketing or manufacturing of products or services of the
Company or any of its Subsidiaries, (D) restricting in any
respect the research, development, distribution, sale, supply,
license, marketing or manufacturing of products or services of any
of the Company’s Affiliates (other than the Company’s
Subsidiaries) or (E) containing a right of first refusal,
right of first negotiation or right of first offer in favor of a
party other than the Company or its Subsidiaries.
(ii) Each
Participant who has proprietary knowledge of or information
relating to the material elements of the design, the manufacturing
processes or the formulation of the products of the Company or any
of its Subsidiaries has executed and delivered to the Company or
the applicable Subsidiary of the Company an agreement or
agreements, substantially in the form(s) set forth in
Section 4.01(i)(ii) of the Company Disclosure Letter
restricting such person’s right to use and disclose
confidential information of the Company or any of its
Subsidiaries.
(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 4.01(j)(ii), 4.01(l) and
4.01(n), respectively, and except as set forth in the Filed Company
SEC Documents, each of the Company and its Subsidiaries is in
compliance with all statutes, laws, ordinances, rules, regulations,
judgments, orders and decrees of any Governmental Entity applicable
to it, its properties or other assets or its business or operations
(collectively, “Legal Provisions”), 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. Except with respect to Regulatory Permits, which are the
subject of Section 4.01(v)(viii), 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 (collectively,
“Permits”), necessary for it to own, lease and operate
its properties and other assets and to carry on its business and
operations as presently conducted and as currently proposed by its
management to be 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 Offer or the
Merger, in and of itself, would not cause the revocation or
cancellation of any such
Permit that
individually or in the aggregate would reasonably be expected to
have a Material Adverse Effect. No action, demand, requirement or
investigation by any Governmental Entity 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 or other assets under any Legal Provision, is pending,
or to the Knowledge of the Company, is threatened, except, in each
case, as individually or in the aggregate has not had and would not
reasonably be expected to have a Material Adverse
Effect.
(ii) Except for
those matters disclosed in the Filed Company SEC Documents:
(A) each of the Company and its Subsidiaries is, and has been,
in compliance in all material respects with all Environmental Laws
and has obtained and complied with all material Permits required
under any Environmental Laws to own, lease or operate its
properties or other assets and to carry on its business and
operations as presently conducted; (B) there have been no
Releases of Hazardous Materials in, on, under or affecting any
properties currently or formerly owned, leased or operated by the
Company or any of its Subsidiaries that would require any material
investigation or clean-up under Environmental Laws; (C) there is no
material investigation, suit, claim, action or proceeding pending,
or to the Knowledge of the Company, threatened against 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; (D) neither the Company nor
any of its Subsidiaries is subject to any material restriction on
the sale or distribution of its products as a result of any
existing or pending (but not yet final) requirement of
Environmental Law, and such products are not subject to any
material restriction regarding post-consumer use, handling or
recycling; (E) neither the Company nor any of its Subsidiaries has
entered into or assumed, by contract or operation of law or
otherwise, any material obligation, liability, order, settlement,
judgment, injunction or decree relating to or arising under
Environmental Laws; and (F) there are no facts, circumstances or
conditions, and there has been no exposure to Hazardous Materials,
that would reasonably be expected to form the basis for any
material investigation, suit, claim, action, proceeding or
liability against or affecting the Company or any of its
Subsidiaries relating to or arising under Environmental Laws. The
term “Environmental Laws” means all applicable Federal,
state, local and foreign laws (including common law), statutes,
rules, regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices, Permits, treaties or binding agreements
issued, promulgated or entered into by any Governmental Entity,
relating in any way to the environment, the climate, pollution, the
preservation or reclamation of natural resources, the protection of
endangered species or human health or safety. The term
“Hazardous Materials” means any chemical, material,
substance, waste, pollutant or contaminant that is prohibited,
limited or regulated by or pursuant to any Environmental Law,
including certain metals (e.g., lead, mercury or cadmium),
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. The term “Release” means
any spilling,
leaking,
pumping, pouring, emitting, emptying, discharging, injecting,
escaping, evaporating, 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. Except as disclosed in the Filed Company SEC
Documents or as expressly permitted or contemplated by this
Agreement, since the date of the most recent financial statements
included in the Filed Company SEC Documents, 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, other equity or equity-based compensation, performance,
retirement, thrift, savings, stock bonus, paid time off,
perquisite, fringe benefit, vacation, change of control, severance,
retention, disability, death benefit, hospitalization, medical,
welfare benefit or other plan, program, policy, arrangement,
agreement or understanding (whether or not legally binding)
sponsored, maintained, contributed to or required to be sponsored,
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
Participant, but not including any Company Benefit Agreement
(collectively, the “Company Benefit Plans”), or any
material change in any actuarial or other assumption used to
calculate funding obligations with respect to any Company Pension
Plans, or any change in the manner in which contributions to any
Company Pension Plans 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 compliance with applicable Legal Provisions, 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 hereof, there exist no
currently binding Company Benefit Agreements, other than agreements
that provide for at-will employment and under which neither the
Company nor any of its Subsidiaries has or would reasonably be
expected to have any material liability in respect of severance,
termination, retention, change in control, relocation or similar
compensation or benefits or any other material liability (other
than for base salary) with respect to individuals whose annual base
salary is greater than $100,000. As of the date hereof, 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. As of the date hereof,
none of the employees of the Company or any of its Subsidiaries are
represented by any union with respect to their employment by the
Company or such Subsidiary. As of the date hereof, since
April 1, 2006, neither the Company nor any of its Subsidiaries
has experienced any labor disputes, union organization attempts or
work stoppages, slowdowns or lockouts due to labor
disagreements.
(l)
ERISA Compliance. (i) Section 4.01(l)(i) of the
Company Disclosure Letter contains a complete and accurate list as
of the date hereof of each
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 Company
Benefit Plan that is an “employee welfare benefit plan”
(as defined in Section 3(1) of ERISA) and all other Company
Benefit Plans and Company Benefit Agreements. The Company has made
available to Parent complete and accurate copies of (A) each
Company Benefit Plan and Company Benefit Agreement (or, in the case
of any unwritten Company Benefit Plans or Company Benefit
Agreements, written descriptions thereof), (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 that has a trust agreement or insurance or group
annuity. Each Company Benefit Plan has been administered in all
material respects in accordance with its terms. The Company, its
Subsidiaries and all the Company Benefit Plans are all in
compliance in all material respects with the applicable provisions
of ERISA, the Code and all other applicable laws, including laws of
foreign jurisdictions, and the terms of all collective bargaining
agreements.
(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 no event has
occurred since the date of the most recent determination letter or
application therefor relating to any such Company Pension Plan that
would reasonably be expected to adversely affect the qualification
of such Company Pension Plan or materially increase the costs
relating thereto or require security under Section 307 of
ERISA. All Company Pension Plans required to have been approved by
any foreign Governmental Entity have been so approved, no such
approval has been revoked (nor, to the Knowledge of the Company,
has revocation been threatened) and no event has occurred since the
date of the most recent approval or application therefor relating
to any such Company Pension Plan that would reasonably be expected
to materially affect any such approval relating thereto or
materially increase the costs relating thereto. The Company has
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, as well as a complete and
accurate copy of each pending application for a determination
letter, if any. The Company has also made available to Parent a
complete and accurate list of all amendments to any Company Pension
Plan in effect as of the date hereof as to which a favorable
determination letter has not yet been received.
(iii) Neither the
Company nor any Commonly Controlled Entity (A) has sponsored,
maintained, contributed to or been required to contribute
to
any Company
Benefit Plan that is subject to Title IV of ERISA or that is
otherwise a defined benefit pension plan or (B) has any
unsatisfied liability under Title IV of ERISA.
(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 in all material respects. 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 asserting any
rights or claims to benefits under any Company Benefit Plan that
would give rise to any material liability (except claims for
benefits payable in the normal operation of the Company Benefit
Plan), and, to the Knowledge of the Company, there are not any
facts that could give rise to any material liability in the event
of any such investigation, claim, suit or proceeding.
(v) 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. Neither any Company
Pension Plan nor any single employer plan of any Commonly
Controlled Entity has an “accumulated funding
deficiency” or has failed to meet any “minimum funding
standards”, as applicable (as such terms are 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) there has not occurred any prohibited
transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) in which the Company or any of its
Subsidiaries or any of their respective employees, or, to the
Knowledge of the Company, any trustee, administrator or other
fiduciary of such Company Benefit Plan, or any agent of the
foregoing, has engaged that would reasonably be expected to subject
the Company or any of its Subsidiaries or any of their respective
employees, or, to the Knowledge of the Company, a trustee,
administrator or other fiduciary of any trust created under any
Company Benefit Plan, to a tax or penalty on prohibited
transactions imposed by Section 4975 of the Code or the
sanctions imposed under Title I of ERISA or any applicable law and
(B) neither the Company nor any of its Subsidiaries nor, to
the Knowledge of the Company, any trustee, administrator or other
fiduciary of any Company Benefit Plan nor any agent of any of the
foregoing, 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 or any of its Subsidiaries or, to the Knowledge
of the Company, any trustee, administrator or other fiduciary, to
any liability for breach of fiduciary duty under ERISA or
any
other
applicable law. During the last five years, no Company Benefit Plan
or related trust has been terminated, nor has there 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, and no notice of a reportable event will be required to be
filed in connection with the transactions contemplated by this
Agreement.
(vii)
Section 4.01(l)(vii) of the Company Disclosure Letter
discloses whether each Company Benefit Plan and each Company
Benefit Agreement that is an employee welfare benefit plan is
(A) unfunded or self-insured, (B) funded through a
“welfare benefit fund”, as such term is defined in
Section 419(e) of the Code, or other funding mechanism, or
(C) insured. Each such employee welfare benefit plan may be
amended or terminated (including with respect to benefits provided
to retirees and other former employees) without material liability
(other than benefits then payable under such plan without regard to
such amendment or termination) to the Company or any of its
Subsidiaries at any time after the Effective Time. Each of the
Company and its Subsidiaries complies in all material respects with
the applicable requirements of Section 4980B(f) of the Code,
Sections 601-609 of ERISA 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. Neither the Company nor any of its
Subsidiaries has any material obligations for post-termination
health or life insurance benefits under any Company Benefit Plan or
Company Benefit Agreement (other than for continuation coverage
required under Section 4980B(f) of the Code and any similar state
or local law).
(viii) None of the
execution and delivery of this Agreement, the obtaining of the
Shareholder Approval or the consummation of the Offer or the Merger
or any other transaction expressly contemplated by this Agreement
(including as a result of any termination of employment on or
following the Effective Time) will, except as expressly
contemplated by this Agreement, (A) entitle any Participant to
severance, termination, retention, change in control or similar
compensation 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 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. The
total amount of all payments and the fair market value of all
non-cash benefits (other than the payments provided pursuant to
Section 6.04) that may become payable or provided any
Participant under the Company Benefit Plans and Company Benefit
Agreements (assuming for such purpose that such individuals’
employment were terminated immediately following the Effective Time
as if the Effective Time were the date hereof) will not exceed the
amount set forth with respect to such Participant in Section
4.01(l)(viii) of the Company Disclosure Letter.
(ix) No persons
engaged to provide services to the Company or any of its
Subsidiaries as consultants or independent contractors could
reasonably be deemed to be misclassified as employees of the
Company or any of its Subsidiaries.
(x) 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.
(xi) Each Company
Benefit Plan and each Company Benefit Agreement that is a
“nonqualified deferred compensation plan” within the
meaning of Section 409A(d)(1) of the Code (a
“Nonqualified Deferred Compensation Plan”) subject to
Section 409A of the Code has been operated in compliance with
Section 409A of the Code since January 1, 2005, based
upon a good faith, reasonable interpretation of
(A) Section 409A of the Code and (B) the then
applicable guidance issued by the IRS thereunder (clauses
(A) and (B), together, the “409A Authorities”). No
Company Benefit Plan or Company Benefit Agreement that would be a
Nonqualified Deferred Compensation Plan subject to
Section 409A of the Code but for the effective date provisions
that are applicable to Section 409A of the Code, as set forth
in Section 885(d) of the American Jobs Creation Act of 2004, as
amended (the “AJCA”), has been “materially
modified” within the meaning of Section 885(d)(2)(B) of
the AJCA after October 3, 2004, based upon a good faith reasonable
interpretation of the AJCA and the 409A Authorities. No Participant
is entitled to any gross-up, make-whole or other additional payment
from the Company or any of its Subsidiaries in respect of any tax
(including Federal, state, local or foreign income, excise or other
taxes (including taxes imposed under Section 409A of the
Code)) or interest or penalty related thereto.
(xii)
Section 4.01(l)(xii) of the Company Disclosure Letter contains
a complete and accurate list as of the date hereof of each Company
Benefit Plan that is maintained outside the jurisdiction of the
United States, or covers any employee residing or working outside
the United States (collectively, the “ Foreign Benefit
Plans ”). All Foreign Benefit Plans that are required to
be funded are fully funded (including, irrespective of whether such
plan is required to be funded, the defined contribution scheme for
employees in The Netherlands), and with respect to all other
Foreign Benefit Plans, adequate reserves therefor have been
established on the accounting statements of the applicable Company
or Subsidiary thereof.
(xiii) All amounts
payable to holders of Company Common Stock and other securities of
the Company pursuant to the Company Benefit Plans and the Company
Benefit Agreements (i) are being paid or granted as compensation
for past services performed, future services to be performed or
future services to be refrained from performing by such holders
(and matters incidental thereto) and (ii) are not calculated
based on the number of shares tendered or to be tendered
into the Offer
by the applicable holder. The Compensation Committee of the Board
of Directors of the Company (the “Compensation
Committee”) (each member of which the Board of Directors of
the Company determined is an “independent director”
within the meaning of Section 303A.02 of the NYSE Listed
Company Manual and is an “independent director” in
accordance with the requirements of Rule 14d-10(d)(2) under
the Exchange Act) (A) at a meeting duly called and held at
which all members of the Compensation Committee were present, duly
and unanimously adopted resolutions approving as an
“employment compensation, severance or other employee benefit
arrangement” within the meaning of Rule 14d-10(d)(1)
under the Exchange Act (an “Employment Compensation
Arrangement”) (1) each Company Stock Plan, (2) the
treatment of the Company Stock Options, Company PSU awards and
Company Restricted Shares in accordance with the terms set forth in
this Agreement, the applicable Company Stock Plan and any
applicable Company Benefit Plans and Company Benefit Agreements,
(3) the terms of Section 6.04 of this Agreement and
(4) each other Company Benefit Plan and Company Benefit
Agreement, which resolutions have not been rescinded, modified or
withdrawn in any way, and (B) has taken all other actions
necessary to satisfy the requirements of the non-exclusive safe
harbor under Rule 14d-10(d)(2) under the Exchange Act with
respect to the foregoing arrangements.
(m)
No Excess Parachute Payments. Other than payments or
benefits that may be made to the persons listed in
Section 4.01(m) of the Company Disclosure Letter
(“Primary Company Executives”), no amount or other
entitlement or economic benefit that could 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
Shareholder Approval or the consummation of the Offer, the Merger
or any other transaction contemplated by this Agreement (alone or
in combination with any other event, including as a result of
termination of employment on or following the Effective Time) by or
for the benefit of any director, officer, employee or consultant of
the Company or any of its Affiliates 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 otherwise would be characterized as an
“excess parachute payment” (as such term is defined in
Section 280G(b)(1) of the Code), and no disqualified
individual is entitled to receive any additional payment from the
Company, any of its Subsidiaries, 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 (a “Parachute Gross Up Payment”).
Section 4.01(m) of the Company Disclosure Letter sets forth,
calculated as of the date of this Agreement, (i) the
“base amount” (as such term is defined in
Section 280G(b)(3) of the Code) for each Primary Company
Executive and each other disqualified individual (defined as set
forth above) who holds any Company Stock Options, Company
Restricted Shares or Company PSU Awards that will vest in
connection with the execution and delivery of this Agreement, the
obtaining of the Shareholder Approval or the consummation of the
Offer, the Merger or any other transaction contemplated by this
Agreement (alone or in combination with any other event, including
as a result of any termination of employment on or following the
Effective Time) and (ii) the estimated maximum amount of
“parachute payments” as
defined in
Section 280G of the Code that could be paid or provided to
each Primary Company Executive as a result of the execution and
delivery of this Agreement, the obtaining of the Shareholder
Approval or the consummation of the Offer, the Merger or any other
transaction contemplated by this Agreement (alone or in combination
with any other event, including as a result of any termination of
employment on or following the Effective Time).
(n)
Taxes. (i) Each of the Company, its Subsidiaries and
each Company Consolidated Group has filed, or has caused to be
filed, in a timely
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