EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BETWEEN
LUXOTTICA GROUP S.P.A.
COLORADO ACQUISITION CORP.
AND
COLE NATIONAL CORPORATION
DATED AS OF JANUARY 23, 2004
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TABLE OF CONTENTS
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ARTICLE I THE
MERGER.....................................................2
Section 1.01.The
Merger........................................2
Section 1.02.Effective Time;
Closing...........................2
Section 1.03.Effects of the
Merger.............................2
Section 1.04.Certificate of Incorporation and By-Laws of
the Surviving Corporation.........................3
Section
1.05.Directors.........................................3
Section
1.06.Officers..........................................3
Section 1.07.Conversion of
Shares..............................3
Section 1.08.Conversion of Merger Sub Common
Stock.............3
Section 1.09.Dissenting
Shares.................................4
Section 1.10.Company Stock-Based
Arrangements..................4
ARTICLE II PAYMENT FOR
SHARES.............................................6
Section 2.01.Payment for
Shares................................6
ARTICLE III REPRESENTATIONS AND
WARRANTIES OF THE COMPANY..................8
Section 3.01.Organization and Qualification;
Subsidiaries......8
Section 3.02.Certificate of Incorporation and
By-Laws..........9
Section
3.03.Capitalization....................................9
Section 3.04.Authority Relative to this
Agreement.............11
Section 3.05.No Conflict; Required Filings and
Consents.......12
Section 3.06.Compliance with
Agreements.......................12
Section 3.07.SEC Reports and Financial
Statements.............13
Section 3.08.Off-Balance Sheet
Arrangements...................14
Section
3.09.Information......................................14
Section
3.10.Litigation.......................................15
Section
3.11.Compliance with Applicable Laws..................15
Section 3.12.Employee Benefit Plans and
Arrangements..........15
Section 3.13.Intellectual
Property............................17
Section 3.14.Environmental
Matters............................17
Section
3.15.Taxes............................................18
Section 3.16.Absence of Certain Material Adverse
Changes......19
Section 3.17.Affiliate
Transactions...........................19
Section 3.18.Real
Property....................................19
Section 3.19.Labor
Matters....................................19
Section 3.20.Material
Contracts...............................20
Section 3.21.Opinion of Financial
Advisor.....................20
Section 3.22.Rights
Agreement.................................20
Section 3.23.HAL Standstill
Waiver............................21
Section
3.24.Brokers..........................................21
ARTICLE IV REPRESENTATIONS AND
WARRANTIES OF PARENT AND THE MERGER
SUB...........................................................22
Section 4.01.Organization and
Qualification...................22
Section 4.02.Authority Relative to this
Agreement.............22
Section 4.03.No Conflict; Required Filings and
Consents.......23
Section
4.04.Information......................................23
Section
4.05.Financing........................................24
Section 4.06.Ownership of
Shares..............................24
Section
4.07.Brokers..........................................24
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ARTICLE V
COVENANTS.....................................................24
Section 5.01.Conduct of Business of the
Company...............24
Section 5.02.Access to Information; Control of
Operations.....28
Section 5.03.Further Assurances; Reasonable Best
Efforts......29
Section 5.04.Filings;
Consents................................29
Section 5.05.Public
Announcements.............................31
Section 5.06.Indemnification; Employees and Employee
Benefits.........................................31
Section 5.07.No
Solicitation..................................34
Section 5.08.Preparation of the Proxy
Statement...............36
Section 5.09.Stockholder's
Meeting............................37
Section 5.10.Notification of Certain
Matters..................37
Section 5.11.State Takeover
Laws..............................38
Section 5.12.Stockholder
Litigation...........................38
Section 5.13.Merger
Sub.......................................38
Section 5.14.No Acquisition of
Shares.........................38
ARTICLE VI CONDITIONS TO
CONSUMMATION OF THE MERGER......................38
Section 6.01.Conditions to the Obligations of Each
Party......38
Section 6.02.Conditions to the Obligations of Parent and
Merger Sub.......................................39
Section 6.03.Conditions to the Obligations of the
Company.....39
ARTICLE VII TERMINATION; AMENDMENTS;
WAIVER...............................40
Section
7.01.Termination......................................40
Section 7.02.Effect of
Termination............................42
Section 7.03.Fees and
Expenses................................42
Section
7.04.Amendment........................................43
Section 7.05.Extension;
Waiver................................43
ARTICLE VIII
MISCELLANEOUS.................................................43
Section 8.01.Non-Survival of Representations and
Warranties.......................................43
Section 8.02.Entire Agreement;
Assignment.....................44
Section
8.03.Validity.........................................44
Section
8.04.Notices..........................................44
Section 8.05.Governing Law;
Jurisdiction......................45
Section 8.06.Waiver of Jury
Trial.............................45
Section 8.07.Descriptive Headings,
etc........................46
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Section 8.08.Counterparts; Execution and Delivery by
Facsimile........................................46
Section 8.09.Parties in Interest; No Third Party
Beneficiaries....................................46
Section 8.10.Certain
Definitions..............................46
Section 8.11.Specific
Performance.............................47
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AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER, dated as of January 23, 2004, by and among
Luxottica Group S.p.A., an Italian
corporation ("Parent"), Colorado Acquisition
Corp., a Delaware corporation and an
indirect wholly-owned subsidiary of Parent
("Merger Sub"), and Cole National
Corporation, a Delaware corporation (the
"Company").
WHEREAS,
the respective Boards of Directors of Parent, Merger Sub and
the
Company have approved and declared
advisable this Agreement, which contemplates
the merger of Merger Sub with and into the
Company, as set forth below (the
"Merger"), in accordance with the General
Corporation Law of the State of
Delaware (the "DGCL") and upon the terms
and subject to the conditions set forth
in this Agreement;
WHEREAS,
upon the consummation of the Merger, each issued and
outstanding
share of common stock, $.001 par value per
share, of the Company (each a "Share"
and collectively, the "Shares") will be
converted into the right to receive
$22.50 per share in cash (without interest)
(the "Merger Price"), upon the terms
and subject to the limitations and
conditions of this Agreement;
WHEREAS, concurrently
herewith, the Company has executed and delivered to
HAL International N.V., a Netherlands
Antilles corporation ("HAL"), a waiver
(the "HAL Standstill Waiver"), a copy of
which has been delivered to Parent,
pursuant to which the Company has waived
certain of the provisions of the
Standstill Agreement, dated as of November
22, 1999 (as it may thereafter have
been amended, the "HAL Standstill
Agreement"), between the Company and HAL, on
the terms and subject to the limitations
specified therein;
WHEREAS,
as an inducement to Parent and Merger Sub to enter into this
Agreement, concurrently herewith, Larry
Pollock ("Pollock") has entered into an
agreement (the "Pollock Voting Agreement")
with Parent and Merger Sub to vote
his Shares in favor of this Agreement and
the Merger on the terms and subject to
the limitations specified therein;
WHEREAS,
the Board of Directors of the Company (the "Board") has
approved
the terms of the Pollock Voting
Agreement;
WHEREAS,
the Board is recommending that the Company's stockholders
approve
this Agreement and the Merger;
WHEREAS,
the Board has taken such action as is necessary so that the
restrictions on transactions with
"interested stockholders" set forth in Section
203 of the DGCL (the "Interested
Stockholder Statute") and Article TENTH of the
Company's certificate of incorporation do
not apply and will not apply to
Parent, Merger Sub or affiliates or
associates of Parent or Merger Sub as a
result of the transactions contemplated by
this Agreement and the Pollock Voting
Agreement; and
WHEREAS,
Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and
agreements in connection with the
Merger and also to prescribe various
conditions to the Merger;
<PAGE>
NOW,
THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and
agreements set forth herein, Parent,
Merger Sub and the Company agree as
follows:
ARTICLE I
THE MERGER
Section 1.01.
THE MERGER. Upon the terms and subject to the satisfaction or
waiver of the conditions hereof, and in
accordance with the applicable
provisions of this Agreement and the DGCL,
at the Effective Time (as defined in
Section 1.02), Merger Sub shall be merged
with and into the Company. Following
the Merger, the separate corporate
existence of Merger Sub shall cease and the
Company shall continue as the surviving
corporation (the "Surviving
Corporation") and an indirect wholly-owned
subsidiary of Parent. At the option
of Parent and provided that such amendment
does not delay the Effective Time,
the Merger may be structured so that the
Company shall be merged with and into
Merger Sub or another direct or indirect
wholly-owned Subsidiary of Parent, with
Merger Sub or such other Subsidiary of
Parent continuing as the Surviving
Corporation, or that another direct or
indirect wholly-owned Subsidiary of
Parent shall be merged with and into the
Company, with the Company as the
Surviving Corporation; PROVIDED, HOWEVER,
that (y) the Company shall be deemed
not to have breached any of its
representations and warranties herein which,
absent such election, would not have been
breached, and (z) such election would
not adversely affect in any manner the
Company or the stockholders of the
Company. As a condition to such election,
the parties (and such additional
Subsidiary) shall execute an appropriate
amendment to this Agreement in order to
reflect such election.
Section 1.02.
EFFECTIVE TIME; CLOSING. The closing (the "Closing") will be
held at the offices of Winston &
Strawn, 200 Park Avenue, New York, New York at
10:00 A.M., New York, New York time, on the
fifth business day following the
date of the satisfaction or waiver of the
conditions set forth in Article VI
(other than those conditions that by their
nature are to be satisfied or waived
at the Closing, but subject to the
satisfaction or waiver of those conditions),
or such other place and time as Parent and
the Company may agree (the "Closing
Date"). On the Closing Date, the parties
hereto shall cause the Merger to be
consummated by filing a certificate of
merger (the "Certificate of Merger") with
the Secretary of State of the State of
Delaware, in such form as is required by,
and executed in accordance with, the
relevant provisions of Delaware law. The
Merger shall become effective at such time
at which such Certificate of Merger
shall be duly filed with the Secretary of
State of the State of Delaware, or at
such later time reflected in such
Certificate of Merger as shall be agreed by
Parent and Company (the time that such
Merger becomes effective, the "Effective
Time").
Section 1.03.
EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in Section 259 of the DGCL. Without
limiting the generality of the
foregoing, and subject thereto, at the
Effective Time, all the properties,
rights, privileges, powers and franchises
of the Company and Merger Sub shall
vest in the Surviving Corporation, and all
debts, liabilities and duties of the
Company and Merger Sub shall become the
debts, liabilities and duties of the
Surviving Corporation.
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Section 1.04.
CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE SURVIVING
CORPORATION.
(a) At the
Effective Time, the restated certificate of incorporation of
the
Company, as in effect immediately prior to
the Effective Time, shall be amended
and restated to read in its entirety as set
forth in Exhibit A attached hereto
and incorporated by reference herein, and,
as so amended and restated, shall be
the certificate of incorporation of the
Surviving Corporation, until thereafter
amended in accordance with the provisions
thereof and hereof and applicable law.
(b) At the
Effective Time, the by-laws of the Company, as in effect
immediately prior to the Effective Time,
shall be amended and restated to read
in their entirety as set forth in Exhibit B
attached hereto and incorporated by
reference herein, and, as so amended and
restated, shall be the by-laws of the
Surviving Corporation, until thereafter
amended in accordance with the
provisions thereof and hereof and
applicable law.
Section 1.05.
DIRECTORS. Subject to applicable law, the directors of Merger
Sub immediately prior to the Effective Time
shall be the initial directors of
the Surviving Corporation and shall hold
office until their respective
successors are duly elected and qualified,
or their earlier death, resignation
or removal.
Section 1.06.
OFFICERS. The individuals specified by Parent in writing to
the Company at least two business days
prior to the Closing Date shall be the
initial officers of the Surviving
Corporation and shall hold office until their
respective successors are duly elected and
qualified, or their earlier death,
resignation or removal.
Section 1.07.
CONVERSION OF SHARES. At the Effective Time, by virtue of the
Merger and without any action on the part
of the holders thereof, each Share
issued and outstanding immediately prior to
the Effective Time (other than any
Shares held by Parent, Merger Sub, any
wholly-owned Subsidiary of Parent or
Merger Sub, in the treasury of the Company
or by any wholly-owned Subsidiary of
the Company, which Shares, by virtue of the
Merger and without any action on the
part of the holder thereof, shall be
cancelled and shall cease to exist with no
payment being made with respect thereto,
and other than any Shares constituting
Dissenting Shares (as defined below)) shall
be converted into and represent the
right to receive in cash the Merger Price.
At the Effective Time, all Shares
that have been converted into the right to
receive the Merger Price as provided
in this Section 1.07 shall be automatically
cancelled and shall cease to exist
and the holders of certificates which
immediately prior to the Effective Time
represented such Shares shall cease to have
any rights with respect to such
Shares other than the right to receive the
Merger Price, without interest
thereon, upon surrender of such
certificates in accordance with Article II
hereof.
Section 1.08.
CONVERSION OF MERGER SUB COMMON STOCK. At the Effective Time,
by virtue of the Merger and without any
action on the part of the holder
thereof, each share of common stock, par
value $.01 per share, of Merger Sub
issued and outstanding immediately prior to
the Effective Time shall be
converted into and become one validly
issued, fully paid and nonassessable share
of common stock, par value $.001 per share,
of the Surviving Corporation and
shall constitute the only outstanding
shares of capital stock of the Surviving
Corporation.
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<PAGE>
Section 1.09.
DISSENTING SHARES. Notwithstanding anything contained in this
Agreement to the contrary, no Shares issued
and outstanding immediately prior to
the Effective Time, the holder of which (i)
has not voted in favor of the Merger
or consented thereto in writing, (ii) has
demanded its rights to appraisal in
accordance with Section 262 of the DGCL,
and (iii) has not effectively withdrawn
or lost its rights to appraisal (the
"Dissenting Shares"), shall be converted
into the right to receive the Merger Price.
At the Effective Time, by virtue of
the Merger and without any action on the
part of the holder thereof, all
Dissenting Shares shall be cancelled and
shall cease to exist and shall
represent the right to receive only those
rights provided under the DGCL. If,
after the Effective Time, any holder of
Dissenting Shares withdraws, loses or
fails to perfect its rights to appraisal,
then (i) such Dissenting Shares shall
be treated as if they had been converted
into the right to receive the Merger
Price as of the Effective Time and (ii)
such holder shall also be entitled to
those rights (without duplication) granted
under Section 262 of the DGCL. The
Company shall promptly notify Parent upon
the receipt of any written demands for
appraisal under Section 262 of the DGCL and
any withdrawals of such demands, and
Parent shall have the right to participate
in all negotiations and proceedings
with respect to such demands. The Company
shall not settle, offer to settle or
make any payment with respect to such
demands unless it receives prior written
consent from Parent.
Section 1.10.
COMPANY STOCK-BASED ARRANGEMENTS.
(a) COMPANY
OPTIONS. At the Effective Time, by virtue of the Merger and
without any action on the part of the
holder thereof, all outstanding and
unexpired options and similar rights to
acquire Shares (other than Company
Stock-Based Awards and rights to acquire
Shares pursuant to the Stock Purchase
Plan, as such terms are defined in Section
1.10(b) and Section 1.10(c) below),
regardless of whether or not such options
or rights have vested (the "Company
Options"), including, without limitation,
Company Options granted pursuant to
the Company's (i) 1992 Management Stock
Option Plan, (ii) 1993 Management Stock
Option Plan, as amended, (iii) 1996
Management Stock Option Plan, (iv) Amended
and Restated 1998 Equity and Performance
Incentive Plan, (v) 1999 Broad-Based
Employee Stock Plan, and (vi) Amended and
Restated Nonqualified Stock Option
Plan for Nonemployee Directors, as amended
(collectively, the "Option Plans"),
shall be cancelled and each holder of a
cancelled Company Option shall be
entitled to receive, at the Effective Time,
in consideration for the
cancellation of each such Company Option,
an amount in cash equal to the product
of (x) the number of Shares subject to such
Company Option immediately prior to
the Effective Time and (y) the excess, if
any, of the Merger Price over the
exercise price per Share subject to such
Company Option, payable to such holder,
without interest thereon.
(b) COMPANY
STOCK-BASED AWARDS. At the Effective Time, by virtue of
the Merger and without any action on the
part of the holder thereof: (i) all
restricted stock units, if any, outstanding
immediately prior to the Effective
Time under the Company's 1999 Broad-Based
Employee Stock Plan that shall not yet
have been replaced by issued Shares upon
the lapse of the applicable forfeiture
condition, and (ii) all rights to receive
Shares in lieu of fees for service as
a director of the Company, if any,
outstanding immediately prior to the
Effective Time under the Company's
Non-Employee Director and Employee Deferred
Compensation Plan that shall not yet have
been replaced by issued Shares (such
restricted stock units and rights to
receive Shares referred to in clauses (i)
and (ii) are referred to herein as "Company
Stock-Based Awards"), shall be
cancelled and each holder of a cancelled
Company Stock-Based Award shall be
entitled to
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receive, at the Effective Time, in
consideration for the cancellation of such
Company Stock-Based Award, an amount in
cash equal to the product of (x) the
number of Shares subject to such Company
Stock-Based Award immediately prior to
the Effective Time and (y) the Merger
Price, payable to such holder, without
interest thereon. All dividend equivalents,
if any, credited to the account of
each holder of a Company Stock-Based Award
as of the Effective Time shall be
distributed to the holder of such Company
Stock-Based Award at the Effective
Time, payable to such holder, without
interest thereon.
(c) STOCK
PURCHASE PLAN. At the Effective Time, the Company's Amended
and Restated 1999 Employee Stock Purchase
Plan (the "Stock Purchase Plan") shall
be cancelled and each participant therein
shall be entitled to receive, in lieu
of any other amounts otherwise payable to
such participant under the Stock
Purchase Plan with respect to the then
current Offering Period (as defined
therein), an amount in cash equal to the
product of (x) the number of whole and
fractional Shares, if any, that would have
been, but shall not yet have been,
purchased for such participant pursuant to
Section 9 of the Stock Purchase Plan
in connection with a change of control of
the Company (as defined therein) and
(y) the Merger Price, without interest
thereon.
(d) RESTRICTED
STOCK AWARDS. Any restrictions on each Share
("Restricted Share") issued under any of
the Plans (as defined in Section
3.12(a) below) or otherwise shall lapse
immediately prior to, and effective upon
the occurrence of, the Effective Time, and
each Restricted Share shall be fully
vested in each holder thereof at such time,
and each such Restricted Share will
be treated at the Effective Time the same
as, and have the same rights and be
subject to the same conditions (including
the condition set forth in Section
2.01(f)) as, each Share not subject to any
restrictions. All dividend
equivalents, if any, credited to the
account of each holder of a Restricted
Share as of the Effective Time shall be
distributed to the holder of such
Restricted Share at the Effective Time.
(e) ACTIONS.
Prior to the Effective Time, the Company shall deliver
to the holders of Company Options and
Company Stock-Based Awards and each
participant in the Stock Purchase Plan
appropriate notices, in form and
substance reasonably acceptable to Parent,
setting forth such holders' rights
pursuant to this Agreement. The Company
shall take all action as is necessary
prior to the Effective Time to terminate
all Option Plans and the Stock Purchase
Plan (including such actions as are
necessary to amend each Option Plan and the
Stock Purchase Plan to cancel the Company
Options, Company Stock-Based Awards
and other rights granted pursuant to such
Option Plan or Stock Purchase Plan) so
that at and after the Effective Time, no
current or former employee, director,
consultant or other person shall have any
option to purchase or right to receive
any Company Options or Company Stock-Based
Awards, or shall be entitled under
the Stock Purchase Plan to require the
Company to purchase Shares for his or her
benefit. Not more than ten nor less than
three business days prior to the
anticipated Effective Time, the Company
shall deliver to Parent a list, in form
reasonably acceptable to Parent, of (x) the
number of Company Options and
Company Stock-Based Awards expected to be
outstanding immediately prior to the
Effective Time, and the names of the
holders thereof and (y) the number of
Shares expected to be issuable pursuant to
the Stock Purchase Plan as of the
Effective Time and the names of the
participants in the Stock Purchase Plan to
whom such Shares are issuable, in each case
together with the applicable
addresses, tax identification numbers and
other information relating to such
holders and participants as Parent may
reasonably require in connection with the
payments to be made pursuant to this
Section 1.10. Parent may take such
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actions, as promptly as practicable, prior
to making any payment under this
Section 1.10, as are reasonably necessary
and appropriate in order to verify the
right of any person to receive such a
payment hereunder, the identifying
information relating to such person and
whether any withholding is required with
respect thereto and, if so, the amount
thereof.
ARTICLE II
PAYMENT FOR SHARES
Section 2.01.
PAYMENT FOR SHARES.
(a) From and
after the Effective Time, a bank or trust company
mutually acceptable to Parent and the
Company shall act as paying agent (the
"Paying Agent") in effecting the payment of
the Merger Price in respect of
certificates (the "Share Certificates")
that, prior to the Effective Time,
represented Shares entitled to payment of
the Merger Price pursuant to Section
1.07. Prior to the Effective Time, Parent
shall enter into a paying agent
agreement with the Paying Agent in form and
substance reasonably acceptable to
the Company. At or prior to the Effective
Time, Parent or Merger Sub shall
deposit, or cause to be deposited, in trust
with the Paying Agent the aggregate
Merger Price to which holders of Shares
shall be entitled at the Effective Time
pursuant to Section 1.07 (such funds being
hereinafter referred to as the
"Exchange Fund"). Parent shall be obligated
to, from time to time, deposit any
additional funds necessary to pay the
aggregate Merger Price with respect to
Shares outstanding at the Effective
Time.
(b) Promptly
after the Effective Time, the Paying Agent shall, and
Parent shall cause the Paying Agent to,
mail to each record holder of Share
Certificates that immediately prior to the
Effective Time represented Shares
(other than Share Certificates representing
Shares held by Parent or Merger Sub,
any wholly-owned Subsidiary of Parent or
Merger Sub, in the treasury of the
Company or by any wholly-owned Subsidiary
of the Company, and other than
Dissenting Shares) a form of letter of
transmittal, in form and substance
reasonably satisfactory to Parent, which
shall specify that delivery shall be
effected, and risk of loss and title to the
Share Certificates shall pass, only
upon proper delivery of the Share
Certificates to the Paying Agent, and
instructions for use in surrendering such
Share Certificates and receiving the
aggregate Merger Price in respect thereof.
Upon the surrender of each such Share
Certificate for cancellation to the Paying
Agent or to such additional agent or
agents as may be appointed by Parent,
together with such letter of transmittal,
duly executed, and such other documents as
may reasonably be required by the
Paying Agent, the holder of such Share
Certificate shall be paid the Merger
Price multiplied by the number of Shares
formerly represented by such Share
Certificate in consideration therefor, and
such Share Certificate shall
forthwith be cancelled. Until so
surrendered, each such Share Certificate (other
than Share Certificates representing Shares
held by Parent or Merger Sub, by any
wholly-owned Subsidiary of Parent or Merger
Sub, in the treasury of the Company
or by any wholly-owned Subsidiary of the
Company, and other than Dissenting
Shares) shall represent solely the right to
receive the aggregate Merger Price
relating thereto. No interest or dividends
shall be paid or accrued on the
Merger Price. If the Merger Price (or any
portion thereof) is to be delivered to
any person other than the person in whose
name the Share Certificate formerly
representing Shares surrendered therefor is
registered, it shall be a condition
to such right to receive such Merger Price
that the Share
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Certificate so surrendered shall be
properly endorsed or otherwise be in proper
form for transfer and that the person
surrendering such Share Certificate shall
pay to the Paying Agent any transfer or
other taxes required by reason of the
payment of the Merger Price to a person
other than the registered holder of the
Share Certificate surrendered, or shall
establish to the satisfaction of the
Paying Agent that such tax has been paid or
is not applicable.
(c) Promptly
following the date which is 180 days after the Effective
Time, the Paying Agent shall deliver to the
Surviving Corporation all cash,
Share Certificates and other documents in
its possession relating to the
transactions described in this Agreement,
and the Paying Agent's duties shall
terminate. Thereafter, each holder of a
Share Certificate formerly representing
a Share may surrender such Share
Certificate to the Surviving Corporation and,
subject to the applicable abandoned
property, escheat and similar laws, receive
in exchange therefor the aggregate
consideration relating thereto, without any
interest or dividends thereon, as provided
in this Agreement.
(d) After the
Effective Time, the stock transfer books of the Company
shall be closed and there shall be no
transfers on the stock transfer books of
the Company of any Shares which were
outstanding immediately prior to the
Effective Time. If, after the Effective
Time, Share Certificates formerly
representing Shares are presented to the
Surviving Corporation or the Paying
Agent, they shall be surrendered and
cancelled in exchange for the payment of
the aggregate consideration as provided in
this Agreement.
(e) None of
Parent, Merger Sub, the Company nor the Surviving
Corporation shall be liable to any holder
of the Shares, Company Options,
Company Stock-Based Awards or other
securities for any consideration to be paid
in the Merger delivered to a public
official pursuant to any applicable
abandoned property, escheat or similar
law.
(f) Each of the
Surviving Corporation, Parent and the Paying Agent
shall be entitled to deduct and withhold
from the consideration otherwise
payable pursuant to this Agreement to any
holder of Shares, Company Options,
Company Stock-Based Awards or other
securities such amounts as it is required to
deduct and withhold with respect to the
making of such payment under the
Internal Revenue Code of 1986, as amended
(the "Code") or any provision of
state, local or foreign tax law. To the
extent that amounts are so withheld by
the Surviving Corporation, Parent 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, Company Options,
Company Stock-Based Awards or other
securities in respect of which such
deduction and withholding was made by the
Surviving Corporation, Parent or the Paying
Agent, as the case may be.
(g) If any Share
Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit
of that fact by the person claiming
such Share Certificate to be lost, stolen
or destroyed and, if required by
Parent or the Surviving Corporation, the
posting by such person of a bond, in
such reasonable amount as Parent or the
Surviving Corporation may direct, as
indemnity against any claim that may be
made against it with respect to the
alleged loss, theft or destruction of such
Share Certificate, the Paying Agent
will issue in exchange for such lost,
stolen or destroyed Share Certificate, the
Merger Price, without any interest
thereon.
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<PAGE>
(h) The Paying
Agent shall invest the funds constituting the Exchange
Fund as directed by Parent. Any interest or
other income resulting from such
investment shall be paid to Parent. The
Exchange Fund shall not be used for any
other purpose except as provided in this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The
Company hereby represents and warrants to Parent and Merger
Sub,
except as set forth in the disclosure
schedule delivered by the Company to
Parent and Merger Sub prior to the date of
the execution and delivery of this
Agreement and identified as such by the
Company (the "Company Disclosure
Schedule"), that:
Section 3.01.
ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Company is
a corporation duly organized, validly
existing and in good standing under the
laws of the State of Delaware. Section 3.01
of the Company Disclosure Schedule
sets forth the number of shares of capital
stock or other equity interests owned
by the Company and its Subsidiaries in its
Significant Subsidiaries (as defined
below) and the number of shares held by the
Company in Pearle Europe B.V. and
the percentage of all of the issued and
outstanding shares of capital stock or
other equity interests of each such person
represented by such shares. Each of
the Company's Subsidiaries is duly
organized, validly existing and in good
standing under the laws of the jurisdiction
of its incorporation or
organization, except where the failure to
be so organized, existing or in good
standing would not, individually or in the
aggregate, have a Material Adverse
Effect on the Company (as defined below).
The Company and each of its
Subsidiaries has the requisite power
(corporate or otherwise) and authority to
own, operate or lease its properties and to
carry on its business as it is now
being conducted, and is duly qualified or
licensed to do business, and is in
good standing, in each jurisdiction in
which the nature of its business or the
properties owned, operated or leased by it
makes such qualification, licensing
or good standing necessary, except where
the failure to have such power or
authority or to be so qualified, licensed
or in good standing would not,
individually or in the aggregate, have a
Material Adverse Effect on the Company.
The term "Subsidiary," as used in this
Agreement, means, with respect to any
entity, any corporation, partnership,
limited liability company or other
organization, whether incorporated or
unincorporated, which is consolidated with
such entity for financial reporting
purposes. The term "Significant Subsidiary,"
as used in this Agreement, shall, as to the
Subsidiaries of the Company, have
the meaning set forth in Rule 1-02(w) of
Regulation S-X under the Securities Act
of 1933, as amended (the "Securities Act")
and as in effect on the date of this
Agreement, as determined for the fiscal
year ended February 1, 2003, and shall
also include certain Subsidiaries of the
Company that are not covered by such
definition but are specified as
"Significant Subsidiaries" in Section 3.01 of
the Company Disclosure Schedule. Section
3.01 of the Company Disclosure Schedule
sets forth the name, jurisdiction of
incorporation and principal line of
business of each Subsidiary of the Company
and identifies each Subsidiary that
is a Significant Subsidiary. The term
"Material Adverse Effect on the Company,"
as used in this Agreement, means any change
or effect that is or would
reasonably be expected to be materially
adverse to the business, financial
condition or revenues of the Company and
its Subsidiaries, taken as a whole,
except for any such effects or changes
arising out of or relating to (i) the
announcement of the transactions
contemplated by this Agreement or
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<PAGE>
actions by Parent, Merger Sub or the
Company required to be taken pursuant to
this Agreement, (ii) changes in general
economic or political conditions or the
securities markets, (iii) changes in laws,
rules, regulations or orders of any
Governmental Entity (as defined herein) or
interpretations thereof by any
Governmental Entity or changes in
accounting rules, (iv) changes affecting
generally the industries in which the
Company or its Subsidiaries conduct
business, (v) the termination or failure to
renew the license agreement to
operate optical departments in Target
Stores, whether at the end of the current
contract term or following any extensions
or renewals thereof, provided the
costs and expenses related thereto are not
materially greater than the estimates
disclosed in the Company's quarterly report
on Form 10-Q for the fiscal quarter
ended November 1, 2003, (vi) the SEC
Investigation Matters (as defined herein),
including any settlement, compromise or
consent made in compliance with the
terms of this Agreement or the entry of any
order or decree in connection
therewith or (vii) the case entitled People
of the State of California v. Cole
National Corporation, et. al. or related
cases (the "California Litigation
Matters"), including any settlement,
compromise or consent made in compliance
with the terms of this Agreement, but
excluding any other settlement, compromise
or consent or any change or effect arising
out of or relating to any other
judgment, order or decree in connection
therewith.
Section 3.02.
CERTIFICATE OF INCORPORATION AND BY-LAWS. The Company has
heretofore made available to Parent and
Merger Sub an accurate and complete copy
of the certificate of incorporation and
by-laws, each as amended to the date
hereof, of the Company. Such certificate of
incorporation and by-laws are in
full force and effect. The Company is not
in violation of any provision of its
certificate of incorporation or
by-laws.
Section 3.03.
CAPITALIZATION. The authorized capital stock of the Company
consists of 40,000,000 Shares and 5,000,000
shares of preferred stock
("Preferred Stock"), of which 400,000
shares of Preferred Stock are designated
as Series A Junior Participating Preferred
Stock. As of the close of business on
December 27, 2003, there were 16,645,571
Shares issued and outstanding, and
548,379 Shares were held in treasury and no
shares of Preferred Stock were
issued and outstanding. The Company has no
shares of capital stock reserved for
issuance, except that, as of December 27,
2003, there were (i) 3,378,045 Shares
reserved for issuance pursuant to the
Option Plans, the Stock Purchase Plan and
the Company Stock-Based Awards and (ii)
400,000 shares of Series A Junior
Participating Preferred Stock reserved for
issuance pursuant to the Company's
Rights Agreement, dated as of November 22,
1999, by and between the Company and
National City Bank, as Rights Agent (the
"Rights Agreement"). As of the date of
this Agreement, there are outstanding
Company Stock-Based Awards in the form of
restricted stock units which have not yet
been replaced by issued Shares
representing an aggregate of 59,026 Shares.
As of the date of this Agreement,
there are outstanding Company Stock-Based
Awards in the form of rights to
receive Shares in lieu of fees for service
as a director of the Company that
have not yet been replaced by issued Shares
representing an aggregate of 45,333
Shares. Set forth in Section 3.03 of the
Company Disclosure Schedule are: (i)
the number of Shares originally made
subject to the Stock Purchase Plan; (ii)
the number of Shares that, as of January 1,
2004, had been issued pursuant to
the Stock Purchase Plan or are issuable to
participants in respect of the cycle
ended December 31, 2003; (iii) the number
of Shares that, as of the date of this
Agreement, remain issuable pursuant to the
Stock Purchase Plan; and (iv) an
estimate of the maximum dollar amount that
could be contributed to the Stock
Purchase Plan in respect of the period from
January 1 through June 30, 2004
based on the current salary of the
participants. There are no other shares of
capital stock of the Company authorized,
or, as of
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<PAGE>
December 27, 2003, issued or outstanding.
Section 3.03 of the Company Disclosure
Schedule sets forth, as of December 27,
2003, (i) the names of the record
holders of all outstanding Company Options
and the number of Shares, exercise
prices and expiration dates of each grant
to each such holder and (ii) the names
of the record holders of all outstanding
Company Stock-Based Awards and the
number of Shares issuable to each such
holder. Since December 27, 2003, the
Company has not issued any shares of
capital stock or securities exchangeable or
convertible into capital stock except for
(A) rights to acquire Series A Junior
Participating Preferred Stock (the
"Preferred Stock Purchase Rights") issued
pursuant to the Rights Agreement that
attach to Shares issued since such date
and prior to the date of this Agreement or
pursuant to the following clause (E),
(B) Company Options granted pursuant to the
Option Plans since such date and
prior to the date of this Agreement or
granted pursuant to the Option Plans
since such date in compliance with the
terms of this Agreement, (C) Company
Stock-Based Awards granted since such date
and prior to the date of this
Agreement or Company Stock-Based Awards
issued in compliance with the terms of
this Agreement, (D) participation rights
granted pursuant to the Stock Purchase
Plan since such date and prior to the date
of this Agreement or participation
rights granted in compliance with the terms
of this Agreement, and (E) Shares
issued pursuant to the Stock Purchase Plan
or the exercise of Company Options or
the conversion to Shares of Company
Stock-Based Awards granted prior to the date
of this Agreement or in compliance with the
terms of this Agreement. All of the
outstanding Shares are, and all Shares
which may be issued pursuant to the
exercise of outstanding Company Options, in
respect of the Company Stock-Based
Awards or under the Stock Purchase Plan,
will be, when issued in accordance with
the respective terms thereof, duly
authorized, validly issued, fully paid and
nonassessable and are not subject to nor
were they issued in violation of any
preemptive rights (or similar rights).
There are no bonds, debentures, notes or
other indebtedness having general voting
rights (or convertible into, or
exchangeable for, securities having such
rights) ("Voting Debt") of the Company
or any of its Subsidiaries issued and
outstanding. Except for the Company
Options, the Company Stock-Based Awards,
participation rights granted pursuant
to the Stock Purchase Plan, the Preferred
Stock Purchase Rights referred to in
the preceding provisions of this Section
3.03 (including, for any period after
the date of this Agreement, those
constituting Permitted Issuances (as defined
in Section 5.01(c)) and options,
subscriptions or other rights issued and
outstanding which are held by the Company
or any Subsidiary in any other
Subsidiary, there are no existing options,
warrants, calls, subscriptions or
other rights, agreements, arrangements or
commitments of any character, relating
to the issued or unissued capital stock of
the Company or any of its
Subsidiaries, obligating the Company or any
of its Subsidiaries to issue,
transfer or sell or cause to be issued,
transferred or sold any shares of
capital stock or Voting Debt of, or other
equity interest in, the Company or any
of its Subsidiaries or securities
convertible into or exchangeable for such
shares or equity interests, nor are there
any obligations of the Company or any
of its Subsidiaries to grant, extend or
enter into any such option, warrant,
call, subscription or other right,
agreement, arrangement or commitment. There
are no outstanding contractual obligations
of the Company or any of its
Subsidiaries to any third-party to
repurchase, redeem or otherwise acquire any
Shares or other capital stock of the
Company or any of its Subsidiaries. Except
for the HAL Standstill Agreement and the
Pollock Voting Agreement, to the
knowledge of the Company, as of the date of
this Agreement, there are no voting
agreements with respect to the Shares which
affect or relate to the voting of,
or the execution of written consents with
respect to, or the solicitation of
proxies relating to the voting of, any
security of the Company or any of its
Subsidiaries. Each of the outstanding
shares of capital stock of each of the
Company's
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Subsidiaries is validly issued, fully paid
and nonassessable, and, such shares
of the Company's Subsidiaries are owned,
beneficially and of record, by the
Company or by a Subsidiary of the Company,
in each case, free and clear of any
lien, claim, option, charge, security
interest or encumbrance (any of the
foregoing being a "Lien"), other than Liens
imposed by or arising under
applicable law or which are not material,
but in any event excluding any Lien in
the nature of a consensual pledge or
security interest. Neither the Company nor
any Subsidiary owns, directly or
indirectly, any capital stock of, or any other
interest in, any entity other than its
Subsidiaries and Pearle Europe B.V. There
are no outstanding contractual obligations
of the Company or any of its
Subsidiaries to make a material investment
(in the form of a loan, capital
contribution or otherwise) in any entity
other than a Subsidiary.
Section 3.04.
AUTHORITY RELATIVE TO THIS AGREEMENT. Except for the approval
of the Company's stockholders in connection
with the consummation of the Merger,
the Company has all necessary corporate
power and authority to execute and
deliver this Agreement, to perform its
obligations hereunder and to consummate
the transactions contemplated hereby. The
execution, delivery and performance of
this Agreement by the Company and the
consummation by the Company of the
transactions contemplated hereby have been
duly and validly authorized, approved
and declared advisable by the Board and no
other corporate proceedings on the
part of the Company are necessary to
authorize or approve this Agreement (other
than, with respect to the Merger, the
adoption of this Agreement by holders of a
majority of the outstanding Shares and the
filing of the Certificate of Merger
as required by the DGCL). This Agreement
has been duly and validly executed and
delivered by the Company and, assuming the
due and valid authorization,
execution and delivery of this Agreement by
Parent and Merger Sub, constitutes a
legally valid and binding obligation of the
Company, enforceable against the
Company in accordance with its terms,
except that such enforceability (i) may be
limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or
relating to the enforcement of creditors'
rights generally and (ii) is subject
to general principles of equity. The Board,
at a meeting duly called and held on
January 23, 2004 by adopting resolutions
that, as of the date of this Agreement,
are in full force and effect and have not
been in any way modified or rescinded,
has duly taken all actions necessary under
the DGCL and the Company's
certificate of incorporation to (a) approve
and adopt this Agreement and the
transactions contemplated hereby (including
the Merger), (b) determine that this
Agreement and the transactions contemplated
hereby (including the Merger) are
fair to and in the best interests of the
Company and its stockholders, (c)
resolve to recommend that the stockholders
of the Company approve this Agreement
and the transactions contemplated hereby
and (d) ensure that none of the
restrictions set forth in the Interested
Stockholder Statute and Article TENTH
of the Company's certificate of
incorporation apply or will apply to Parent,
Merger Sub, or to any other Subsidiary of
Parent or the transactions
contemplated by this Agreement and the
Pollock Voting Agreement, including,
without limitation, the Merger. As a result
of the foregoing actions, the only
vote required to authorize and approve the
Merger is the affirmative vote of the
holders of a majority of the Shares.
Section 3.05. NO
CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming (i)
compliance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the
"HSR Act"), and any requirements of
any foreign, supranational or other
antitrust laws, (ii) the requirements of the
Securities Exchange Act of 1934, as
amended,
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<PAGE>
and the rules and regulations promulgated
thereunder (the "Exchange Act") and
any applicable state securities or "blue
sky" laws are met, (iii) the filing of
the Certificate of Merger and other
appropriate instruments, if any, as required
by the DGCL, is made, (iv) the Consents
referred to in Section 3.05(b) of the
Company Disclosure Schedule are obtained or
made and (v) compliance with any
requirements of any applicable state
franchise laws and regulations ("Required
Franchise Laws"), none of the execution and
delivery of this Agreement by the
Company, the performance or consummation by
the Company of the transactions
contemplated hereby or compliance by the
Company with any of the provisions
hereof will (w) conflict with or violate
the certificate of incorporation or
by-laws of the Company or the comparable
organizational documents of any of its
Significant Subsidiaries, (x) conflict with
or violate any law, statute,
ordinance, rule, regulation, order,
judgment, decree, injunction or other
binding action or requirement of any
Governmental Entity (as defined in Section
3.05(b) below) applicable to the Company or
any of its Subsidiaries, or by which
any of them or any of their respective
properties or assets may be bound or
affected, (y) other than the accelerated
vesting of Restricted Shares, Company
Options and Company Stock-Based Awards,
result in a breach or violation of, a
default under (or an event which with
notice or lapse of time or both would
become a default), or the triggering of any
payment or other obligations to any
of the Company's or any of its
Subsidiaries' present or former employees
pursuant to, any of the Company's or any of
its Subsidiaries' existing Employee
Benefit Arrangements (as defined in Section
5.01(g) below) or any grant or award
made under any of the foregoing, or (z)
result in a violation or breach of or
constitute a default (or an event which
with notice or lapse of time or both
would become a default) under, or give to
others any rights of termination,
amendment, acceleration or cancellation of,
or result in any loss of any benefit
under, or the creation of any Lien on any
of the property or assets of the
Company or any of its Subsidiaries pursuant
to, any note, bond, mortgage,
indenture, contract, agreement, lease,
license, permit, franchise or other
instrument or obligation to which the
Company or any of its Subsidiaries is a
party or by which the Company or any of its
Subsidiaries or any of their
respective assets or properties may be
bound or affected, except, with respect
to clauses (x), (y) and (z), as would not,
individually or in the aggregate,
have a Material Adverse Effect on the
Company or prevent the consummation of the
Merger.
(b) None of the
execution and delivery of this Agreement by the
Company, the performance or consummation by
the Company of the transactions
contemplated hereby or compliance by the
Company with any of the provisions
hereof will require any consent, waiver,
approval, authorization, order, decree,
license, or permit of, or registration or
filing with or notification to (any of
the foregoing being a "Consent"), any
government or subdivision thereof,
domestic, foreign or supranational, or any
administrative, governmental or
regulatory authority, agency, commission,
tribunal or body, domestic, foreign or
supranational (a "Governmental Entity") or
any third party, except for (i)
compliance with any applicable requirements
of the Exchange Act, (ii) the filing
of the Certificate of Merger pursuant to
the DGCL, (iii) compliance with the HSR
Act and any requirements of any foreign,
supranational or other antitrust laws,
(iv) compliance with any requirements of
the Required Franchise Laws, and (v)
Consents the failure of which to obtain or
make would not, individually or in
the aggregate, have a Material Adverse
Effect on the Company.
Section 3.06.
COMPLIANCE WITH AGREEMENTS.. Except as disclosed in the SEC
Reports (as defined in Section 3.07(a))
filed and publicly available prior to
the date of this Agreement, neither the
Company nor any of its Subsidiaries is
in conflict with, or in default or
violation of,
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any note, bond, mortgage, indenture,
contract, agreement, lease, license,
permit, franchise or other instrument or
obligation to which the Company or any
of its Subsidiaries is a party or, to the
knowledge of the Company, by which the
Company or any of its Subsidiaries, or any
property or asset of the Company or
any of its Subsidiaries is bound or
affected, including, without limitation, any
Contract (as defined in Section 3.20
below), except for such conflicts, defaults
and violations which would not,
individually or in the aggregate, have a
Material Adverse Effect on the Company.
Section 3.07.
SEC REPORTS AND FINANCIAL STATEMENTS.
(a) The Company
has filed with the United States Securities and
Exchange Commission (the "SEC") all
material forms, reports, schedules,
registration statements, definitive proxy
statements and other documents
required to be filed by the Company with
the SEC since May 18, 2003 (as they
have been amended since the time of their
filing and including any current
report on Form 8-K that has been filed with
or furnished to the SEC and any
documents filed, furnished or incorporated
by reference as exhibits to any such
filing, collectively, the "SEC Reports").
As of their respective dates, each SEC
Report (including, without limitation, any
financial statements or schedules
included or incorporated by reference
therein) complied as to form in all
material respects with the requirements of
the Exchange Act or the Securities
Act, and the rules and regulations of the
SEC promulgated thereunder, that were
applicable to such SEC Report, and none of
the SEC Reports contained when filed
any untrue statement of a material fact or
omitted to state a material fact
required to be stated therein or necessary
to make the statements made therein,
in light of the circumstances under which
they were made, not misleading. Other
than Cole National Group Inc., which is
required to file forms, reports and
other documents with the SEC in connection
with its issued and outstanding 8
5/8% Senior Subordinated Notes due 2007 and
8 7/8% Senior Subordinated Notes due
2012, since May 18, 2003, no Subsidiary of
the Company is or has been required
to file any form, report or other document
with the SEC.
(b) The
consolidated balance sheets as of February 1, 2003 and
February 2, 2002 and the related
consolidated statements of income,
stockholders' equity and cash flows for
each of the three fiscal years in the
period ended February 1, 2003 (including
the related notes and schedules
thereto) of the Company contained in the
Company's annual report on Form 10-K
for the fiscal year ended February 1, 2003
included in the SEC Reports present
fairly, in all material respects, the
consolidated financial position and the
consolidated results of operations and cash
flows of the Company and its
consolidated Subsidiaries as of the dates
or for the periods presented therein
in accordance with United States generally
accepted accounting principles
("GAAP") applied on a consistent basis
during the periods involved except as
otherwise noted therein.
(c) Except as
reflected, reserved against or otherwise disclosed in
the financial statements (including the
related notes and schedules thereto) of
the Company included in the SEC Reports
filed and publicly available prior to
the date of this Agreement, neither the
Company nor any of its Subsidiaries has
any liabilities or obligations (absolute,
accrued, fixed, contingent or
otherwise) required to be set forth in a
consolidated balance sheet of the
Company and its Subsidiaries under GAAP,
other than liabilities incurred in the
ordinary course of
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<PAGE>
business or which would not have,
individually or in the aggregate, a Material
Adverse Effect on the Company.
(d) The
Company's unaudited consolidated balance sheets as of May 3,
2003, August 2, 2003 and November 1, 2003,
and the related consolidated
statements of income, stockholders' equity
and cash flows for each period of
thirteen weeks then ended, as applicable
(collectively, the "Most Recent
Financial Statements"), contained in the
Company's quarterly reports on Form
10-Q for the fiscal quarters ended May 3,
2003, August 2, 2003 and November 1,
2003, present fairly, in all material
respects (subject to normal year-end
adjustments), the consolidated financial
position and the consolidated results
of operations and cash flows of the Company
and its consolidated Subsidiaries as
of the date or for the periods presented
therein in accordance with GAAP applied
on a consistent basis during the periods
involved, except as otherwise noted
therein (including the related notes and
schedules thereto).
(e) The Company
has heretofore furnished to Parent an accurate and
complete copy of all material agreements,
documents or other instruments
required to be, but which have not yet
been, filed with the SEC and any
amendments or modifications which have not
yet been filed with the SEC to
agreements, documents or other instruments
which previously had been filed by
the Company with the SEC pursuant to the
Securities Act and the rules and
regulations promulgated thereunder or the
Exchange Act and the rules and
regulations promulgated thereunder.
Section 3.08.
OFF-BALANCE SHEET ARRANGEMENTS. Section 3.08 of the Company
Disclosure Schedule describes, and the
Company has made available to Parent
accurate and complete copies of the
documentation creating or governing, all
securitization transactions and other
"off-balance sheet arrangements" (as
defined in Item 303(c) of Regulation S-K of
the SEC) to which the Company or any
of its Subsidiaries is a party and has any
continuing liability and which would
be required to be disclosed pursuant to the
Exchange Act in an annual or
quarterly report required to be filed with
the SEC.
Section 3.09.
INFORMATION. None of the information supplied by the Company
specifically for inclusion or incorporation
by reference in (i) the Proxy
Statement (as defined in Section 5.08
below) or (ii) any other document filed or
to be filed with the SEC in connection with
the transactions contemplated by
this Agreement (the "Other Filings") will,
at the respective times filed with
the SEC and, in addition, in the case of
the Proxy Statement, at the date it or
any amendment or supplement is mailed to
stockholders of the Company, and at the
time of the Special Meeting (as defined in
Section 5.09 below), 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 made therein,
in light of the circumstances under which
they were made, not misleading,
provided that no representation is made by
the Company with respect to
information furnished by Parent or Merger
Sub specifically for inclusion
therein. The Proxy Statement and the Other
Filings made by the Company will, at
the respective times filed with the SEC and
mailed to the stockholders, comply
as to form in all material respects with
the provisions of the Exchange Act and
the rules and regulations thereunder, if
applicable, except that no
representation is made by the Company with
respect to statements made therein
based on information supplied by Parent or
Merger Sub in writing specifically
for inclusion in the Proxy Statement.
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<PAGE>
Section 3.10.
LITIGATION. Except as disclosed in the SEC Reports filed and
publicly available prior to the date
hereof, there is no legal action, suit,
claim or legal, administrative or other
proceeding, or, to the knowledge of the
Company, investigation, pending or
threatened against the Company or any of its
Subsidiaries that would, individually or in
the aggregate, have a Material
Adverse Effect on the Company, or prevent
the consummation of the Merger, nor is
there any judgment, decree, injunction or
order of any Governmental Entity or
arbitrator outstanding against the Company
or any of its Subsidiaries that
would, individually or in the aggregate,
have a Material Adverse Effect on the
Company or prevent the consummation of the
Merger.
Section 3.11.
COMPLIANCE WITH APPLICABLE LAWS. The Company and its
Subsidiaries hold all permits, licenses,
variances, exemptions, orders and
approvals of all Governmental Entities
required in connection with the ownership
or occupancy of their respective properties
and assets and the operation of
their respective businesses, except for
such permits, licenses, variances,
exemptions, orders and approvals the
failure of which to hold would not,
individually or in the aggregate, have a
Material Adverse Effect on the Company.
Except as referred to in the SEC Reports
filed and publicly available prior to
the date hereof, the Company and its
Subsidiaries are not in violation of any
law, rule, regulation or order of any
Governmental Entity applicable to the
Company or its Subsidiaries or by which any
property or asset of the Company or
any of its Subsidiaries is bound or
affected, including, without limitation, the
Sarbanes-Oxley Act of 2002 (the
"Sarbanes-Oxley Act") (except that no
representation or warranty is made in this
Section 3.11 with respect to
Environmental Laws (as defined in Section
3.14) or the matters specifically
covered by Sections 3.12 and 3.15), except
for violations or possible violations
that would not, individually or in the
aggregate, have a Material Adverse Effect
on the Company.
Section 3.12.
EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS.
(a) "Plans"
means all severance, benefit, deferred compensation,
incentive compensation, stock option,
bonus, welfare benefit and other employee
benefit plans, programs and policies
providing benefits to any present or former
director, officer or employee of the
Company or any of its Subsidiaries, or any
beneficiary or dependent of any such person
(whether or not written), sponsored
or maintained by the Company or any of its
Subsidiaries to which the Company or
any of its Subsidiaries contributes or is
obligated to contribute. Without
limiting the generality of the foregoing,
the term "Plans" includes all employee
welfare benefit plans within the meaning of
Section 3(1) of the Employee
Retirement Income Security Act of 1974, as
amended, and the regulations
thereunder ("ERISA") and all employee
pension benefit plans within the meaning
of Section 3(2) of ERISA. An "ERISA
Affiliate" means, with respect to the
Company, any corporation, person or trade
or business which is a member of the
group which is under common control with
the Company, and which together with
the Company is treated as a single employer
within the meaning of Section
414(b), (c), (m) or (o) of the Code.
"Controlled Group Liability" means any and
all liabilities (i) under Title IV of
ERISA, (ii) under Section 302 of ERISA,
(iii) under Sections 412 and 4971 of the
Code, (iv) arising as a result of a
failure to comply with the continuation
coverage requirements of Section 601 et
seq. of ERISA and Section 4980B of the
Code, and (v) under corresponding or
similar provisions of foreign laws or
regulations.
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<PAGE>
(b) Section 3.12
of the Company Disclosure Schedule includes a
complete list of each material Plan. With
respect to each written Plan, the
Company has made available to Parent a
true, correct and complete copy of: (i)
all plan documents, benefit schedules,
trust agreements, and insurance contracts
and other funding vehicles; (ii) the most
recent Annual Report (Form 5500
Series) and accompanying schedule, if any;
(iii) the current summary plan
description, if any; (iv) the most recent
annual financial report, if any; (v)
the most recent actuarial report, if any;
and (vi) the most recent determination
letter from the Internal Revenue Service
(the "IRS"), if any. With respect to
each material unwritten Plan, the Company
has made available to Parent a summary
in reasonable detail of such Plan.
(c) Except as
would not, individually or in the aggregate, have a
Material Adverse Effect on the Company, the
Company and each of its Subsidiaries
has complied, and is now in compliance,
with all provisions of ERISA, the Code
and all laws and regulations applicable to
the Plans, and, with respect to each
Plan that is intended to be a "qualified
plan" within the meaning of Section
401(a) of the Code ("Qualified Plans"), the
IRS has issued a favorable
determination letter evidencing the Plan's
compliance with the GUST amendment or
an application for a favorable
determination letter has been or will be filed
with the IRS within the applicable remedial
amendment period under Code Section
401(b) and, to the knowledge of the
Company, nothing has occurred or is expected
to occur that would adversely affect the
qualified status of such Plan or any
related trust.
(d) Except as
would not, individually or in the aggregate, have a
Material Adverse Effect on the Company, all
contributions required to be made to
any Plan by applicable law or regulation or
by any Plan document, and all
premiums due or payable with respect to
insurance policies funding any Plan,
have been timely made or paid in full or,
to the extent not required to be made
or paid on or before the date hereof, have
been fully reflected in the financial
statements of the Company included in the
SEC Reports and in the Most Recent
Financial Statements to the extent required
under GAAP. There does not now
exist, nor do any circumstances exist that
would result in, any Controlled Group
Liability that would be a material
liability of the Company or its Subsidiaries,
taken as a whole, following the
Closing.
(e) Except as
would not, individually or in the aggregate, have a
Material Adverse Effect on the Company, (i)
as of the date hereof, each Plan
that is subject to Section 302 of ERISA and
Section 412 of the Code meets the
minimum funding standards of Section 302 of
ERISA and Section 412 of the Code
(without regard to any funding waiver); and
(ii) as of the date hereof, neither
the Company nor any of its ERISA Affiliates
is required to provide security to
such Plan pursuant to Section 307 of ERISA
or Section 501(a)(29) of the Code;
and since its last valuation date, there
have been no amendments to such Plan
that materially increase the present value
of accrued benefits.
(f) No Plan is a
multiemployer plan, as defined in Section 3(37) of
ERISA. Except for claims that would not,
individually or in the aggregate, have
a Material Adverse Effect on the Company,
no claims are pending against the
Plans, or the Company or any of its
Subsidiaries with respect to the Plans,
except for benefit payments in the normal
course of business. No Plan provides
benefits to current or former employees,
beneficiaries, or dependents of the
Company or its Subsidiaries which continue
after termination of employment,
other than as required by Section 601 et
seq. of ERISA.
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<PAGE>
Section 3.13.
INTELLECTUAL PROPERTY.
(a) The term
"Intellectual Property," as used herein, shall mean all
material patents, patent applications,
patent disclosures, trademark
registrations and trademark applications,
service mark registrations and service
mark applications, certification mark
registrations and certification mark
applications, copyright registrations and
copyright registration applications,
mask works registrations and mask works
registration applications, both domestic
and foreign, and internet domain names
which are owned or used by the Company or
any of its Subsidiaries.
(b) Except as
would not, individually or in the aggregate, have a
Material Adverse Effect on the Company and
except as disclosed in the SEC
Reports filed and publicly available prior
to the date of this Agreement: (i)
the Company and each of its Subsidiaries
owns all right, title and interest to,
is licensed or otherwise has a valid right
to use, all Intellectual Property
used in or necessary for the conduct of its
business as currently conducted;
(ii) to the knowledge of the Company, the
use of any Intellectual Property by
the Company and its Subsidiaries does not
infringe on or otherwise violate the
rights of any person and is in accordance
with any applicable license pursuant
to which the Company or any Subsidiary
acquired the right to use any
Intellectual Property; (iii) to the
knowledge of the Company, no person has
infringed upon or violated or is currently
infringing or otherwise violating any
right of the Company or any of its
Subsidiaries with respect to any Intellectual
Property owned by or licensed to the
Company or its Subsidiaries; (iv) to the
knowledge of the Company, since February 1,
2003, neither the Company nor any of
its Subsidiaries has received any notice of
any claim of infringement,
misappropriation or violation of the
intellectual property or other proprietary
rights of any person and no person has
asserted or threatened to assert any
challenge with respect to any Intellectual
Property used by the Company and its
Subsidiaries; and (v) to the knowledge of
the Company, no cancellation
proceedings have been filed or threatened
against the Company with respect to
any Intellectual Property owned or licensed
by it.
Section 3.14.
ENVIRONMENTAL MATTERS. Except as disclosed in the SEC Reports
filed and publicly available prior to the
date hereof, and except as would not,
individually or in the aggregate, have a
Material Adverse Effect on the Company,
(i) there has been no Release of Hazardous
Substances by the Company or any of
its Subsidiaries on any real property
currently or, to the knowledge of the
Company, formerly owned, leased or operated
by the Company or any of its
Subsidiaries that would require notice or
remedial action under applicable
Environmental Law and no real property
currently or, to the knowledge of the
Company, formerly owned, leased or operated
by the Company or any Subsidiary
thereof is contaminated with any Hazardous
Substances in a manner which would
require notice or remedial action under
Environmental Law; (ii) no judicial or
administrative proceeding, order, judgment,
decree, settlement or, to the
knowledge of the Company, investigation is
pending or, to the knowledge of the
Company, threatened against the Company or
its Subsidiaries relating to alleged
violations of Environmental Laws; (iii)
since February 1, 2003, the Company and
its Subsidiaries have not received in
writing any claims, notices or
correspondence alleging liability under any
Environmental Law related to
Releases or threatened Releases of
Hazardous Substances on real property
currently or formerly owned, leased or
operated by the Company or any of its
Subsidiaries, or liability for any off-site
disposal of Hazardous Substances or
contamination; and (iv) the business and
operations of the Company and its
Subsidiaries comply with all Environmental
Laws and the Company and its
Subsidiaries have obtained all material
permits,
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<PAGE>
authorizations and licenses relating to
Environmental Laws necessary for the
operation of their businesses; all such
permits, authorizations and licenses are
in full force and effect and the Company
and its Subsidiaries are in compliance,
in all material respects, with all terms
and conditions of such permits.
"Environmental Law" means any applicable
federal, state or local law,
regulation, permit, order, decree or
judicial opinion or other agency
requirement having the force and effect of
law and relating to noise, odor,
Hazardous Substances or protection of the
environment or human health as it
relates to the environment. "Hazardous
Substance" means any toxic or hazardous
substance or waste that is regulated by or
under authority of any Environmental
Law, including any petroleum products,
asbestos or polychlorinated biphenyls.
"Release" means spill, emission, leaking,
pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration
of a Hazardous Substance into the
environment, including the abandonment or
discarding of barrels, containers, and
other closed receptacles containing any
Hazardous Substance.
Section 3.15.
TAXES.
(a) The Company
and each of its Subsidiaries have timely filed with
the appropriate taxing authorities all
material Tax Returns required to be
filed, and all Tax Returns filed by the
Company and its Subsidiaries were
prepared in accordance with applicable Law
except as would not, individually or
in the aggregate, have a Material Adverse
Effect on the Company. All Taxes of
the Company and each of its Subsidiaries
shown to be due and payable on such Tax
Returns have been paid and the Company has
made adequate provisions in the
Company's financial statements for all
payments of Taxes anticipated to be
payable for all relevant taxable periods
(or portions thereof).
(b) Section
3.15(b) of the Company Disclosure Statement lists, as of
the date of this Agreement, the periods
through which the Tax Returns required
to be filed by the Company or any of its
Subsidiaries are being audited by the
appropriate taxing authority or examined by
the IRS, and the periods through
which any assessments may be made by the
IRS. All material deficiencies and
assessments asserted as a result of such
examinations or audits have been paid,
settled, or adequately provided for in the
Company's financial statements.
(c) No issue or
claim has been asserted in writing for Taxes (i) the
adverse determination of which would result
in a deficiency or (ii) that has
given rise to a Lien against property of
the Company or any of its Subsidiaries,
except for those issues or claims that
would not, individually or in the
aggregate, have a Material Adverse Effect
on the Company.
(d) As of the
date of this Agreement, there are no outstanding
agreements or waivers extending the
statutory period of limitations applicable
to any Tax Returns of the Company or any of
its Subsidiaries.
(e) Neither the
Company nor any of its Subsidiaries since they have
been Subsidiaries of the Company (i) has
been a member of a group filing
consolidated returns for federal income tax
purposes (except for a group that
has the Company as its common parent) or
(ii) is a party to a Tax sharing or a
material Tax indemnity agreement for the
benefit of a third party or a similar
agreement that remains in effect.
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<PAGE>
(f) The term
"Tax," as used in this Agreement, means any net income,
capital gains, gross income, gross
receipts, sales, use, transfer, ad valorem,
franchise, profits, license, capital,
withholding, payroll, employment, excise,
goods and services, severance, stamp,
occupation, premium, property, windfall
profits or other tax, charge, fee, levy,
custom duties, or other similar charge
imposed by a taxing authority of the United
States or any state, local, or
foreign government or agency or subdivision
thereof, including any interest,
penalties, additions to tax, or additional
amounts accrued under applicable law
or charged by any taxing authority.
(g) The term
"Tax Return," as used in this Agreement, means any
return, declaration, report, claim for
refund, or information return or other
statement in relation to Taxes, including
any schedule or attachment thereto or
amendment thereof.
Section 3.16.
ABSENCE OF CERTAIN MATERIAL ADVERSE CHANGES. Other than as
previously disclosed in the SEC Reports
filed and publicly available prior to
the date of this Agreement, since May 19,
2003, (i) there has not been an event
which, with all other events, would have a
Material Adverse Effect on the
Company and (ii) the business of the
Company and its Significant Subsidiaries
has been conducted, in all material
respects, only in the ordinary course of
business. In addition, other than as
previously disclosed in the SEC Reports
filed and publicly available prior to the
date of this Agreement, Section 3.16
of the Company Disclosure Schedule
describes any action taken or agreed to be
taken by the Company or its Subsidiaries
between February 1, 2003 and the date
of this Agreement that, if taken after the
date of this Agreement, would be
proscribed by Section 5.01(b), (d), (e),
(f), (h), (m), (n) or (r).
Section 3.17.
AFFILIATE TRANSACTIONS.
(a) Except as
previously disclosed in the SEC Reports filed and
publicly available prior to the date of
this Agreement, since February 1, 2003,
there have been no transactions,
agreements, arrangements or understandings
between the Company or any of its
Subsidiaries, on the one hand, and any
affiliate thereof, on the other hand, that
would be required to be disclosed
under Item 404 of Regulation S-K under the
Securities Act.
(b) Section
3.17(b) of the Company Disclosure Schedule lists all
outstanding loans to any executive officer
or director of the Company or any of
its Subsidiaries, other than loans in
connection with cashless exercises of
stock options or advancements of
relocation, travel or other business expenses,
including the date of the loan, the amount
of the loan and the date of any
amendment to the terms of the loan. Since
July 30, 2002, neither the Company nor
any of its Subsidiaries extended or
maintained credit, arranged for the
extension of credit, or renewed any
extension of credit in the form of a
personal loan to or for any director or
executive officer of the Company in
violation of the Sarbanes-Oxley Act.
Section 3.18.
REAL PROPERTY. Neither the Company nor any of its
Subsidiaries owns any real property.
Section 3.19.
LABOR MATTERS. As of the date of this Agreement, except for
employees, not in excess of 200 in the
aggregate, represented by Local 108,
Retail Wholesale and Department Store
Union, AFL-CIO and Local 888, United Food
and Commercials Workers Union, AFL-CIO, no
employee of the Company or of any of
its Subsidiaries is represented by
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<PAGE>
any labor union or any collective
bargaining organization. As of the date of
this Agreement, no labor organization or
group of employees of the Company or
any of its Subsidiaries has made a pending
demand for recognition or
certification, and there are no
representation or certification proceedings or
petitions seeking a representation
proceeding presently pending or, to the
knowledge of the Company, threatened to be
brought or filed, with the National
Labor Relations Board or any other labor
relations tribunal or authority.
Section 3.19 of the Company Disclosure
Schedule lists all employment agreements
covering employees of the Company or any of
its Subsidiaries providing for
annual salaries of more than $100,000.
Section 3.20.
MATERIAL CONTRACTS.
(a) Section
3.20(a) of the Company Disclosure Schedule lists all
written and oral contracts, agreements,
guarantees, leases, and executory
contracts that exist as of the date hereof
to which the Company or any of its
Subsidiaries is a party or by which it is
bound, other than those contracts that
are filed as exhibits to the SEC Reports
filed and publicly available prior to
the date of this Agreement (the "Filed
Contracts"), that (i) are required to be
filed as an exhibit to an SEC Report, (ii)
materially restrict or would
materially restrict the ability of the
Company, Parent (after giving effect to
the consummation of the Merger) or any of
their respective Subsidiaries from
competing or otherwise conducting their
respective businesses substantially as
such businesses are conducted on the date
of this Agreement, or (iii) contain
minimum annual purchase requirements of the
Company or its Subsidiaries of
$1,000,000 or more, and which have a term
of more than one year and cannot be
cancelled on less than 90 days notice
without a material penalty or other
material financial cost to the Company or
any of its Subsidiaries (the contracts
so described and the Filed Contracts are
referred to herein collectively as the
"Contracts").
(b) Neither the
Company nor any of its Subsidiaries has received any
notice from Sears to the effect, or has
otherwise been advised by Sears, that
Sears will not renew or will terminate its
licensing arrangements with the
Company and its Subsidiaries with respect
to one-third or more of the then
current total number of the Sears stores in
which the Company has a licensed
department and the stores in which it holds
a license to use the Sears name. As
of the date of this Agreement, neither the
Company nor any of its Subsidiaries
has received any notice from BJ's that it
will not renew or will terminate its
overall licensing arrangements with the
Company and its Subsidiaries.
Section 3.21.
OPINION OF FINANCIAL ADVISOR. The Board received, at its
meeting held on January 23, 2004, an
opinion of Lehman Brothers Inc. to the
effect that, as of such date, the
consideration to be received by the holders of
the Shares pursuant to the Merger is fair
to the holders of the Shares from a
financial point of view. As of the date of
this Agreement, such opinion is in
full force and effect and Lehman Brothers
Inc. has agreed to deliver such
opinion to the Board in writing and has
authorized the inclusion of such
opinion, to such effect, in the Proxy
Statement, provided that the disclosures
relating to such opinion set forth in the
Proxy Statement are reasonably
satisfactory in form and substance to
Lehman Brothers Inc. and its counsel.
Section 3.22.
RIGHTS AGREEMENT.
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<PAGE>
(a) The Company
has made available to Parent an accurate and complete
copy of the Rights Agreement. The Company
has taken all action necessary to
ensure that so long as this Agreement shall
not have been terminated pursuant to
Section 7.01: (i) neither Parent nor Merger
Sub shall, by virtue of the
approval, execution, delivery or
announcement of this Agreement or of the
Pollock Voting Agreement or the
consummation of the transactions contemplated
hereby or thereby, be deemed an "Acquiring
Person" (as that term is defined in
the Rights Agreement), (ii) no "Rights
Certificates" (as that term is defined in
the Rights Agreement) are issued or
required to be issued to the stockholders of
the Company by virtue of the approval,
execution, delivery or announcement of
this Agreement or of the Pollock Voting
Agreement or the consummation of the
transactions contemplated hereby or
thereby, (iii) no "Distribution Date,"
"Share Acquisition Date," or "Triggering
Event" (as each such term is defined in
the Rights Agreement) shall occur by virtue
of the approval, execution, delivery
or announcement of this Agreement or of the
Pollock Voting Agreement or the
consummation of the transactions
contemplated hereby or thereby and (iv) the
Rights shall expire immediately prior to
the Effective Time. So long as this
Agreement has not been terminated pursuant
to Section 7.01, no other action is
required to prevent the holders of Rights
from having any rights under the
Rights Agreement as a result of the Merger
or other transactions contemplated by
this Agreement or the Pollock Voting
Agreement.
(b) The
Company has not
amended the Rights
Agreement, redeemed
the
Rights thereunder or taken any other
action to make the Rights Agreement or the
Rights thereunder inapplicable,
in each case, with
respect to (i) any person or
entity other than Parent, Merger Sub or the Company or (ii) any Acquisition
Proposal (as defined in Section
5.07(d)) (or any other
substantially
similar
proposal).
Section 3.23.
HAL STANDSTILL WAIVER. The Company has executed and delivered
to HAL the HAL Standstill Waiver and has
delivered to Parent an accurate and
complete copy thereof. The HAL Standstill
Waiver has been duly and validly
executed and delivered by the Company, is
in full force and effect and is
enforceable against the Company in
accordance with its terms, except that such
enforceability (i) may be limited by
bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the
enforcement of creditors' rights
generally and (ii) is subject to general
principles of equity. As of the date of
this Agreement, no other amendment,
modification or waiver, or any termination,
of the HAL Standstill Agreement exists or
has been entered into.
Section 3.24.
BROKERS. Except for the engagement of Lehman Brothers Inc.,
whose fees will be paid by the Company,
none of the Company, any of its
Subsidiaries, or any of their respective
officers, directors, or employees has
employed any broker or finder or incurred
any liability for any investment
banking or brokerage fees, commissions or
finder's fees in connection with the
transactions contemplated by this Agreement
for which the Company or any of its
Subsidiaries is responsible. The Company
has heretofore delivered to Parent
accurate and complete copies of all written
agreements between the Company and
any attorneys, accountants, investments
bankers, financial advisors, public
relations consultants, proxy solicitation
firms and other experts and advisors
entered into on or prior to the date of
this Agreement pursuant to which any
such person would be entitled to any
payment of any Merger Fees. "Merger Fees"
means all fees and expenses paid or payable
by or on behalf of the Company or
any of its Subsidiaries to all attorneys,
accountants, investment bankers,
financial advisors, public relations
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<PAGE>
consultants, proxy solicitation firms and
other experts and advisors incident to
the negotiation, preparation and execution
of this Agreement and the
consummation of the transactions
contemplated hereby.
When used
in this Article III, references to "the knowledge of the
Company" or similar phrases shall mean to
the actual knowledge of the Chief
Executive Officer, Chief Financial Officer,
General Counsel or any Senior Vice
President of the Company after reasonable
inquiry.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE MERGER SUB
Parent and
Merger Sub represent and warrant to the Company that:
Section 4.01.
ORGANIZATION AND QUALIFICATION. Parent is a corporation duly
organized, validly existing and in good
standing under the laws of Italy. Merger
Sub is a corporation duly organized,
validly existing and in good standing under
the laws of the State of Delaware. Each of
Parent and Merger Sub has the
requisite corporate power and authority to
own, operate or lease its properties
and to carry on its business as it is now
being conducted, and is duly qualified
or licensed to do business, and is in good
standing, in each jurisdiction in
which the nature of its business or the
properties owned, operated or leased by
it makes such qualification, licensing or
good standing necessary, except where
the failure to be so qualified, licensed or
in good standing, would not,
individually or in the aggregate, prevent
or materially impair or delay the
consummation of the Merger or the other
transactions contemplated by this
Agreement or Parent or Merger Sub from
satisfying their respective obligations
under this Agreement.
Section 4.02.
AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Merger Sub has all necessary corporate
power and authority to execute and
deliver this Agreement, to perform its
obligations hereunder and to consummate
the transactions contemplated hereby. The
execution, delivery and performance of
this Agreement by Parent and Merger Sub and
the consummation by Parent and
Merger Sub of the transactions contemplated
hereby have been duly and validly
authorized, approved and declared advisable
by the Boards of Directors of Parent
and Merger Sub, and approved by Luxottica
U.S. Holdings Corp., a Delaware
corporation and the sole stockholder of
Merger Sub ("Luxottica U.S. Holdings"),
and no other corporate proceedings on the
part of Parent or Merger Sub are
necessary to authorize or approve this
Agreement or to consummate the
transactions contemplated hereby (other
than, with respect to the Merger, the
filing of the Certificate of Merger or
other instruments as required by the
DGCL). This Agreement has been duly and
validly executed and delivered by each
of Parent and Merger Sub and, assuming the
due and valid authorization,
execution and delivery by the Company,
constitutes a legally valid and binding
obligation of each of Parent and Merger
Sub, enforceable against each of them in
accordance with its terms, except that such
enforceability (i) may be limited by
bankruptcy, insolvency, moratorium or other
similar laws affecting or relating
to the enforcement of creditors' rights
generally and (ii) is subject to general
principles of equity.
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<PAGE>
Section 4.03. NO
CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming (i)
compliance with the HSR Act and any requirements of
any foreign, supranational or other
antitrust laws, (ii) the requirements of the
Exchange Act and any applicable state
securities or "blue sky" laws are met and
(iii) the filing of the Certificate of
Merger and other appropriate instruments,
if any, as required by the DGCL is made,
none of the execution and delivery of
this Agreement by Parent or Merger Sub, the
consummation by Parent or Merger Sub
of the transactions contemplated hereby or
compliance by Parent or Merger Sub
with any of the provisions hereof will (x)
conflict with or violate the
organizational documents of Parent or
Merger Sub, (y) conflict with or violate
any law, statute, ordinance, rule,
regulation, order, judgment, decree,
injunction or other binding action or
requirement of any Governmental Entity
applicable to Parent or Merger Sub, or any
of their Subsidiaries, or by which
any of them or any of their respective
properties or assets may be bound or
affected, or (z) result in a violation or
breach of or constitute a default (or
an event which with notice or lapse of time
or both would become a default)
under, or give to others any rights of
termination, amendment, acceleration or
cancellation of, or result in any loss of
any benefit under, or the creation of
any Lien on any of the property or assets
of Parent, Merger Sub, or any of their
respective Subsidiaries pursuant to, any
note, bond, mortgage, indenture,
contract, agreement, lease, license,
permit, franchise or other instrument or
obligation to which Parent or Merger Sub or
any of their respective Subsidiaries
is a party or by which Parent, Merger Sub,
or any of their respective
Subsidiaries or any of their respective
assets or properties may be bound or
affected, except with respect to clauses
(y) and (z), as would not, individually
or in the aggregate, prevent or materially
impair or delay the consummation of
the Merger or the other transactions
contemplated by this Agreement or Parent or
Merger Sub from satisfying their respective
obligations under this Agreement.
(b) None of the
execution and delivery of this Agreement by Parent
and Merger Sub, the performance or
consummation by Parent and Merger Sub of the
transactions contemplated hereby or
compliance by Parent and Merger Sub with any
of the provisions hereof will require
Parent or Merger Sub to obtain any Consent
of any Governmental Entity or any third
party, except for (i) compliance with
any applicable requirements of the Exchange
Act, (ii) the filing of the
Certificate of Merger pursuant to the DGCL,
(iii) compliance with the HSR Act
and any requirements of any foreign,
supranational or other antitrust laws, and
(iv) Consents the failure of which to
obtain or make would not, individually or
in the aggregate, prevent or materially
impair or delay the consummation of the
Merger or the other transactions
contemplated by this Agreement or Parent or
Merger Sub from satisfying their respective
obligations under this Agreement.
Section 4.04.
INFORMATION. None of the information supplied or to be
supplied by Parent or Merger Sub in writing
specifically for inclusion or
incorporation by reference in (i) the Proxy
Statement or (ii) the Other Filings
will, at the respective times filed with
the SEC or any Governmental Entity with
regulatory jurisdiction over enforcement of
any applicable antitrust laws and,
in addition, in the case of the Proxy
Statement, at the date it or any amendment
or supplement is mailed to stockholders,
and at the time of the Special Meeting
and the Effective Time, 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 made therein, in
light of the circumstances under which
they are made, not misleading, provided
that no representation is
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<PAGE>
made by either Parent or the Merger Sub
with respect to information furnished by
the Company specifically for inclusion
therein. The Other Filings made by Parent
or Merger Sub will, at the respective times
filed with the SEC, comply as to
form in all material respects with the
provisions of the Exchange Act and the
rules and regulations thereunder, if
applicable, except that no representation
is made by Parent or Merger Sub with
respect to statements made therein based on
information supplied by the Company in
writing specifically for inclusion in the
Other Filings.
Section 4.05.
FINANCING. Parent will have prior to the Effective Time the
funds necessary to pay, or cause Merger Sub
to pay, the Merger Price with
respect to the Shares outstanding
immediately prior to the Effective Time, to
fund payments contemplated hereby with
respect to the Company Options, Company
Stock-Based Awards and Stock Purchase Plan,
and to pay all fees and expenses
related to the transactions contemplated by
this Agreement to be paid by it.
Parent will provide such funds to Merger
Sub or the Paying Agent at or prior to
the Effective Time.
Section 4.06.
OWNERSHIP OF SHARES. As of the date hereof, Parent and its
Subsidiaries beneficially own 100
Shares.
Section 4.07. BROKERS. Except for the
engagement of Goldman Sachs SIM S.p.A.,
whose fees will be paid by Parent, none of
Parent, Merger Sub, or any of their
respective Subsidiaries, officers,
directors or employees, has employed any
broker or finder or incurred any liability
for any investment banking or
brokerage fees, commissions or finder's
fees in connection with the transactions
contemplated by this Agreement for or with
respect to which the Company is or
might be liable prior to the Effective
Time.
ARTICLE V
COVENANTS
Section 5.01.
CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated by
this Agreement, by Section 5.01 of the
Company Disclosure Schedule or with the
prior written consent of Parent (which
consent shall not unreasonably be
withheld, as and to the extent set forth in
the next sentence), during the
period from the date of this Agreement to
the earlier of (x) such time as this
Agreement is terminated in accordance with
Section 7.01, and (y) the Effective
Time, the Company will, and will cause each
of its Subsidiaries to, (i) conduct
its operations in all material respects
only in the ordi
