Exhibit 2.1
EXECUTION COPY
--=============================================================================
AGREEMENT AND PLAN OF MERGER
Dated as of December 15, 2004
Among
JOHNSON & JOHNSON,
SHELBY MERGER SUB, INC.
And
GUIDANT CORPORATION
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
The Merger
SECTION 1.01. The
Merger...................................................1
SECTION 1.02.
Closing......................................................1
SECTION 1.03. Effective
Time...............................................2
SECTION 1.04. Effects of the
Merger........................................2
SECTION 1.05. Articles of
Incorporation and By-laws........................2
SECTION 1.06.
Directors....................................................2
SECTION 1.07.
Officers.....................................................2
ARTICLE II
Effect of the Merger on the Capital Stock of the Constituent
Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital
Stock......................................3
SECTION 2.02. Exchange of
Certificates.....................................4
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and
Warranties of the Company................7
SECTION 3.02. Representations and
Warranties of Parent and Sub............28
ARTICLE IV
Covenants Relating to Conduct of Business; No Solicitation
SECTION 4.01. Conduct of
Business.........................................32
SECTION 4.02. No
Solicitation.............................................37
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the
Form S-4 and the Proxy Statement;
Shareholders' Meeting.......................................40
SECTION 5.02. Access to Information;
Confidentiality......................41
SECTION 5.03. Reasonable Best
Efforts.....................................42
SECTION 5.04. Company Stock Options;
ESPP.................................44
(i)
<PAGE>
SECTION 5.05. Indemnification,
Exculpation and Insurance..................45
SECTION 5.06. Fees and
Expenses...........................................46
SECTION 5.07. Public
Announcements........................................48
SECTION 5.08.
Affiliates..................................................48
SECTION 5.09. Stock Exchange
Listing......................................48
SECTION 5.10. Shareholder
Litigation......................................48
SECTION 5.11. Employee
Matters............................................48
SECTION 5.12. Company
Notes...............................................50
SECTION 5.13. Rights
Agreement............................................50
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each
Party's Obligation to Effect the Merger..50
SECTION 6.02. Conditions to
Obligations of Parent and Sub.................51
SECTION 6.03. Conditions to
Obligation of the Company.....................52
SECTION 6.04. Frustration of Closing
Conditions...........................53
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01.
Termination.................................................53
SECTION 7.02. Effect of
Termination.......................................54
SECTION 7.03.
Amendment...................................................54
SECTION 7.04. Extension;
Waiver...........................................54
SECTION 7.05. Procedure for
Termination or Amendment......................54
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of
Representations and Warranties...............55
SECTION 8.02.
Notices.....................................................55
SECTION 8.03.
Definitions.................................................56
SECTION 8.04.
Interpretation..............................................57
SECTION 8.05. Consents and
Approvals......................................57
SECTION 8.06.
Counterparts................................................58
SECTION 8.07. Entire Agreement; No
Third-Party Beneficiaries..............58
SECTION 8.08. GOVERNING
LAW...............................................58
SECTION 8.09.
Assignment..................................................58
SECTION 8.10. Specific Enforcement;
Consent to Jurisdiction...............58
SECTION 8.11. Waiver of Jury
Trial........................................58
SECTION 8.12.
Severability................................................59
(ii)
<PAGE>
Annex I
Index of Defined Terms
Exhibit A
Restated Articles of Incorporation of the Surviving Corporation
Exhibit B
Affiliate Letter
(iii)
<PAGE>
AGREEMENT AND PLAN OF MERGER (this
"Agreement") dated as of December 15, 2004, among
JOHNSON
& JOHNSON, a New Jersey corporation
("Parent"), SHELBY MERGER SUB, INC., an Indiana
corporation and a wholly owned Subsidiary of Parent
("Sub"), and GUIDANT CORPORATION, an Indiana
corporation (the "Company").
WHEREAS the Board of Directors of each of the Company and Sub
has
adopted, and the Board of Directors of
Parent has approved, this Agreement and
the merger of Sub with and into the Company
(the "Merger"), upon the terms and
subject to the conditions set forth in this
Agreement, whereby each issued and
outstanding share of common stock, without
par value, of the Company ("Company
Common Stock"), other than shares of
Company Common Stock directly owned by
Parent, Sub or the Company, will be
converted into the right to receive (a) a
number of validly issued, fully paid and
nonassessable shares of common stock,
par value $1.00 per share, of Parent
("Parent Common Stock") and (b) $30.40 in
cash, without interest; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and
agreements in connection with the
Merger and also to prescribe various
conditions to the Merger.
NOW, THEREFORE, in
consideration of the representations, warranties,
covenants and agreements contained in this
Agreement, and subject to the
conditions set forth herein, the parties
hereto agree as follows:
ARTICLE I
The Merger
----------
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions
set forth in this Agreement, and in
accordance with the Business Corporation
Law of the State of Indiana (the "IBCL"),
Sub shall be merged with and into the
Company at the Effective Time. Following
the Effective Time, the separate
corporate existence of Sub shall cease and
the Company shall continue as the
surviving corporation in the Merger (the
"Surviving Corporation") and shall
succeed to and assume all the rights and
obligations of Sub in accordance with
the IBCL.
SECTION 1.02. Closing. The closing of the Merger (the
"Closing")
will take place at 10:00 a.m. on a date to
be specified by the parties,
which shall be no later than the second
business day after satisfaction or
(to the extent permitted by applicable Law)
waiver of the conditions set
forth in Article VI (other than those
conditions that by their terms are to
be satisfied at the Closing, but subject to
the satisfaction or (to the
extent permitted by applicable Law) waiver
of those conditions), at the
offices of Cravath, Swaine & Moore LLP,
Worldwide Plaza, 825 Eighth Avenue,
New York, New York 10019, unless another
time, date or place is agreed to
in writing by Parent and the Company;
provided, however, that if all the
conditions set forth in Article VI shall no
longer be satisfied or (to the
extent permitted by applicable Law) waived
on such second business day,
then the Closing shall take place on the
first business day
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2
on which all such conditions shall again
have been satisfied or (to the
extent permitted by applicable Law) waived
unless another time is agreed to
in writing by Parent and the Company. The
date on which the Closing occurs
is referred to in this Agreement as the
"Closing Date".
SECTION 1.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the
Closing Date, the parties shall file
with the Secretary of State of the State of
Indiana articles of merger (the
"Articles of Merger") executed and
acknowledged by the parties in accordance
with the relevant provisions of the IBCL
and, as soon as practicable on or
after the Closing Date, shall make all
other filings or recordings required
under the IBCL. The Merger shall become
effective upon the filing of the
Articles of Merger with the Secretary of
State of the State of Indiana, or at
such later time as Parent and the Company
shall agree and shall specify in the
Articles of Merger (the time the Merger
becomes effective being the "Effective
Time").
SECTION 1.04. Effects of the Merger. The Merger shall have the
effects
set forth in Section 23-1-40-6 of the
IBCL.
SECTION 1.05. Articles of Incorporation and By-laws. (a) The
Articles
of Incorporation of the Company (the
"Company Articles") shall be amended at
the Effective Time to be in the form of
Exhibit A and, as so amended, such
Company Articles shall be the Restated
Articles of Incorporation of the
Surviving Corporation until thereafter
changed or amended as provided therein
or by applicable Law.
(b) The By-laws of Sub, as in effect immediately prior to the
Effective Time, shall be the By-laws of the
Surviving Corporation until
thereafter changed or amended as provided
therein or by applicable Law.
SECTION 1.06. Directors. The directors of Sub immediately prior to
the
Effective Time shall be the directors of
the Surviving Corporation until the
earlier of their resignation or removal or
until their respective successors
are duly elected and qualified, as the case
may be.
SECTION 1.07. Officers. The officers of the Company immediately
prior
to the Effective Time shall be the officers
of the Surviving Corporation until
the earlier of their resignation or removal
or until their respective
successors are duly elected and qualified,
as the case may be.
<PAGE>
3
ARTICLE II
Effect of the Merger on the Capital Stock of the
------------------------------------------------
Constituent Corporations; Exchange of Certificates
--------------------------------------------------
SECTION 2.01. Effect on Capital Stock. At the Effective Time,
by
virtue of the Merger and without any action
on the part of the holder of any
shares of Company Common Stock or any
shares of capital stock of Parent or Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of
Sub shall be converted into and become one validly
issued, fully
paid and nonassessable share of common stock, without par
value, of the
Surviving Corporation.
(b) Cancelation of Treasury Stock and Parent-Owned Stock. Each
share of Company
Common Stock that is directly owned by the Company,
Parent or Sub
immediately prior to the Effective Time shall automatically
be canceled and
shall cease to exist, and no consideration shall be
delivered in
exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section
2.02(e), each
share of Company Common Stock issued and outstanding
immediately
prior to the Effective Time (other than shares to be
canceled in
accordance with Section 2.01(b)) shall be converted into
the right to
receive (i) that number (rounded to the nearest 1/10,000
of a share) (the
"Exchange Ratio") of validly issued, fully paid and
nonassessable
shares of Parent Common Stock (the "Stock Portion") equal
to the number
determined by dividing $45.60 by the Average Parent Stock
Price; provided,
however, that (x) if the number determined by dividing
$45.60 by the
Average Parent Stock Price is less than or equal to
0.6797, the
Exchange Ratio shall be 0.6797 and (y) if the number
determined by
dividing $45.60 by the Average Parent Stock Price is
greater than or
equal to 0.8224, the Exchange Ratio shall be 0.8224 and
(ii) $30.40 in
cash, without interest (the "Cash Portion" and, together
with the Stock
Portion, the "Merger Consideration"). At the Effective
Time, all such
shares of Company Common Stock shall no longer be
outstanding and
shall automatically be canceled and shall cease to
exist, and each
holder of a certificate which immediately prior to the
Effective Time
represented any such shares of Company Common Stock
(each, a
"Certificate") shall cease to have any rights with respect
thereto, except
the right to receive the Merger Consideration, any
dividends or
other distributions payable pursuant to Section 2.02(c)
and cash in lieu of
any fractional shares payable pursuant to Section
2.02(e), in each
case to be issued or paid in consideration therefor
upon surrender
of such Certificate in accordance with Section 2.02(b),
without
interest. Notwithstanding the foregoing, if between the date of
this Agreement
and the Effective Time, (A) the outstanding shares of
Parent Common
Stock shall have been changed into a different number of
shares or a
different class, by reason of the occurrence or record date
of any stock
dividend, subdivision, reclassification, recapitalization,
split,
combination, exchange of shares or similar transaction, (B)
Parent declares
or pays cash dividends in any fiscal quarter in excess
of 200% of the
amount of regularly quarterly dividends paid by the
Parent
immediately prior to the date hereof or (C) Parent engages in
any spin-off or
split-off, then in any such case the Exchange Ratio
shall be
appropriately adjusted to reflect such action. The right
<PAGE>
4
of any holder of
a Certificate to receive the Merger Consideration, any
dividends or
other distributions payable pursuant to Section 2.02(c)
and cash in lieu
of any fractional shares payable pursuant to Section
2.02(e) shall be
subject to and reduced by the amount of any
withholding that
is required under applicable tax Law. "Average Parent
Stock Price"
means the average of the volume weighted averages of the
trading prices
of Parent Common Stock, as such price is reported on the
New York Stock
Exchange, Inc. (the "NYSE") Composite Transaction Tape
(as reported by
Bloomberg Financial Markets or such other source as the
parties shall
agree in writing), for the 15 trading days ending on the
third trading
day immediately preceding the Effective Time.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. Prior
to
the Effective Time, Parent shall appoint
EquiServe Trust Company or another
bank or trust company that is reasonably
satisfactory to the Company to act as
exchange agent (the "Exchange Agent") for
the payment of the Merger
Consideration. At the Effective Time,
Parent shall deposit, or cause the
Surviving Corporation to deposit, with the
Exchange Agent, for the benefit of
the holders of Certificates, certificates
representing shares of Parent Common
Stock and cash in an amount sufficient to
pay the aggregate Merger
Consideration required to be paid pursuant
to Section 2.01(c). In addition,
Parent shall deposit with the Exchange
Agent, as necessary from time to time
after the Effective Time, any dividends or
other distributions payable pursuant
to Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant
to Section 2.02(e). All shares of Parent
Common Stock, cash, dividends and
distributions deposited with the Exchange
Agent pursuant to this Section
2.02(a) shall hereinafter be referred to as
the "Exchange Fund".
(b) Exchange Procedures. As soon as reasonably practicable after
the
Effective Time, Parent shall cause the
Exchange Agent to mail to each holder
of record of a Certificate whose shares of
Company Common Stock were converted
into the right to receive the Merger
Consideration, any dividends or other
distributions payable pursuant to Section
2.02(c) and cash in lieu of any
fractional shares payable pursuant to
Section 2.02(e) (i) a form of letter of
transmittal (which shall specify that
delivery shall be effected, and risk of
loss and title to the Certificates shall
pass, only upon proper delivery of
the Certificates to the Exchange Agent and
which shall be in customary form
and contain customary provisions) and (ii)
instructions for use in effecting
the surrender of the Certificates in
exchange for the Merger Consideration,
any dividends or other distributions
payable pursuant to Section 2.02(c) and
cash in lieu of any fractional shares
payable pursuant to Section 2.02(e).
Each holder of record of one or more
Certificates shall, upon surrender to the
Exchange Agent of such Certificate or
Certificates, together with such letter
of transmittal, duly executed, and such
other documents as may reasonably be
required by the Exchange Agent, be entitled
to receive in exchange therefor
(i) the amount of cash to which such holder
is entitled pursuant to Section
2.01(c), (ii) a certificate or certificates
representing that number of whole
shares of Parent Common Stock (after taking
into account all Certificates
surrendered by such holder) to which such
holder is entitled pursuant to
Section 2.01(c) (which shall be in
uncertificated book entry form unless a
physical certificate is requested), (iii)
any dividends or distributions
payable pursuant to Section 2.02(c) and
(iv) cash in lieu of any fractional
shares payable pursuant to Section 2.02(e),
and the Certificates so
surrendered shall forthwith be canceled. In
the event of a transfer of
ownership of Company Common Stock which is
not registered in the transfer
records of the Company, payment of the
Merger Consideration in accordance with
this Section 2.02(b) may be made to a
person other than the person in whose
name the Certificate so surrendered is
registered if such Certificate
<PAGE>
5
shall be properly endorsed or otherwise be
in proper form for transfer and the
person requesting such payment shall pay
any transfer or other taxes required
by reason of the payment of the Merger
Consideration, any dividends or other
distributions payable pursuant to Section
2.02(c) and cash in lieu of any
fractional shares payable pursuant to
Section 2.02(e) to a person other than
the registered holder of such Certificate
or establish to the reasonable
satisfaction of Parent that such taxes have
been paid or are not applicable.
Until surrendered as contemplated by this
Section 2.02(b), each Certificate
shall be deemed at any time after the
Effective Time to represent only the
right to receive upon such surrender the
Merger Consideration, any dividends or
other distributions payable pursuant to
Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to
Section 2.02(e). No interest shall be
paid or will accrue on any payment to
holders of Certificates pursuant to the
provisions of this Article II.
(c) Distributions with Respect to Unexchanged Shares. No dividends
or
other distributions with respect to Parent
Common Stock with a record date
after the Effective Time shall be paid to
the holder of any unsurrendered
Certificate with respect to the shares of
Parent Common Stock that the holder
thereof has the right to receive upon the
surrender thereof, and no cash
payment in lieu of fractional shares of
Parent Common Stock shall be paid to
any such holder pursuant to Section
2.02(e), in each case until the holder of
such Certificate shall have surrendered
such Certificate in accordance with
this Article II. Following the surrender of
any Certificate, there shall be
paid to the record holder of the
certificate representing whole shares of
Parent Common Stock issued in exchange
therefor, without interest, (i) at the
time of such surrender, the amount of
dividends or other distributions with a
record date after the Effective Time
theretofore paid with respect to such
whole shares of Parent Common Stock and the
amount of any cash payable in lieu
of a fractional share of Parent Common
Stock to which such holder is entitled
pursuant to Section 2.02(e) and (ii) at the
appropriate payment date, the
amount of dividends or other distributions
with a record date after the
Effective Time but prior to such surrender
and a payment date subsequent to
such surrender payable with respect to such
whole shares of Parent Common
Stock.
(d) No Further Ownership Rights in Company Common Stock. The
Merger
Consideration, any dividends or other
distributions payable pursuant to
Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to
Section 2.02(e) paid upon the surrender of
Certificates in accordance with the
terms of this Article II shall be deemed to
have been paid in full
satisfaction of all rights pertaining to
the shares of Company Common Stock
formerly represented by such Certificates.
At the close of business on the day
on which the Effective Time occurs, the
share transfer books of the Company
shall be closed, and there shall be no
further registration of transfers on
the share transfer books of the Surviving
Corporation of the shares of Company
Common Stock that were outstanding
immediately prior to the Effective Time.
If, after the Effective Time, any
Certificate is presented to the Surviving
Corporation for transfer, it shall be
canceled against delivery of the Merger
Consideration, any dividends or other
distributions payable pursuant to
Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to
Section 2.02(e) to the holder thereof as
provided in this Article II.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of Parent
Common Stock shall be issued upon
the surrender for exchange of Certificates,
no dividends or other
distributions of Parent shall relate to
such fractional share interests and
<PAGE>
6
such fractional share interests will not
entitle the owner thereof to vote
or to any rights of a shareholder of
Parent.
(ii) In lieu of such fractional share interests, Parent shall
pay
to each holder of a Certificate an amount
in cash equal to the product obtained
by multiplying (A) the fractional share
interest to which such holder (after
taking into account all shares of Company
Common Stock formerly represented by
all Certificates surrendered by such
holder) would otherwise be entitled by (B)
the per share closing price of Parent
Common Stock on the Closing Date (the
"Closing Price"), as such price is reported
on the NYSE Composite Transaction
Tape (as reported by Bloomberg Financial
Markets or such other source as the
parties shall agree in writing).
(f) Termination of the Exchange Fund. Any portion of the
Exchange
Fund which remains undistributed to the
holders of the Certificates for six
months after the Effective Time shall be
delivered to Parent, upon demand, and
any holders of the Certificates who have
not theretofore complied with this
Article II shall thereafter look only to
Parent for, and Parent shall remain
liable for, payment of their claim for the
Merger Consideration, any dividends
or other distributions payable pursuant to
Section 2.02(c) and cash in lieu of
any fractional shares payable pursuant to
Section 2.02(e) in accordance with
this Article II.
(g) No Liability. None of Parent, Sub, the Company, the
Surviving
Corporation or the Exchange Agent shall be
liable to any person in respect of
any shares of Parent Common Stock, cash,
dividends or other distributions from
the Exchange Fund properly delivered to a
public official pursuant to any
applicable abandoned property, escheat or
similar Law. If any Certificate shall
not have been surrendered prior to four
years after the Effective Time (or
immediately prior to such earlier date on
which any Merger Consideration (and
any dividends or other distributions
payable with respect thereto pursuant to
Section 2.02(c) and cash in lieu of any
fractional shares payable with respect
thereto pursuant to Section 2.02(e)) would
otherwise escheat to or become the
property of any Governmental Entity), any
such Merger Consideration (and any
dividends or other distributions payable
with respect thereto pursuant to
Section 2.02(c) and cash in lieu of any
fractional shares payable with respect
thereto pursuant to Section 2.02(e)) shall,
to the extent permitted by
applicable Law, become the property of
Parent, free and clear of all claims or
interest of any person previously entitled
thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall
invest
the cash included in the Exchange Fund as
directed by Parent. Any interest and
other income resulting from such
investments shall be paid to and be income of
Parent. If for any reason (including
losses) the cash in the Exchange Fund
shall be insufficient to fully satisfy all
of the payment obligations to be
made in cash by the Exchange Agent
hereunder, Parent shall promptly deposit
cash into the Exchange Fund in an amount
which is equal to the deficiency in
the amount of cash required to fully
satisfy such cash payment obligations.
(i) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an
affidavit of that fact by the
person claiming such Certificate to be
lost, stolen or destroyed and, if
required by Parent, the posting by such
person of a bond in such reasonable
amount as Parent may direct as indemnity
against any claim that may be made
against it with respect to such
Certificate, the Exchange Agent shall
deliver in exchange for such lost,
<PAGE>
7
stolen or destroyed Certificate the Merger
Consideration, any dividends or
other distributions payable pursuant to
Section 2.02(c) and cash in lieu of
any fractional shares payable pursuant to
Section 2.02(e), in each case
pursuant to this Article II.
(j) Withholding Rights. Parent, the Surviving Corporation or
the
Exchange Agent shall be entitled to deduct
and withhold from the consideration
otherwise payable pursuant to this
Agreement to any holder of Certificates such
amounts as Parent, the Surviving
Corporation or the Exchange Agent is required
to deduct and withhold with respect to the
making of such payment under the
Internal Revenue Code of 1986, as amended
(the "Code"), or any provision of
state, local or foreign tax Law. To the
extent that amounts are so withheld and
paid over to the appropriate taxing
authority by Parent, the Surviving
Corporation or the Exchange Agent, such
withheld amounts shall be treated for
all purposes of this Agreement as having
been paid to the holder of
Certificates in respect of which such
deduction and withholding was made by
Parent, the Surviving Corporation or the
Exchange Agent.
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Representations and Warranties of the Company.
Except
as disclosed in the Company SEC Documents
filed by the Company and publicly
available prior to the date of this
Agreement ("Filed Company SEC Documents")
and except as set forth in the disclosure
schedule (with specific reference to
the particular Section or subsection of
this Agreement to which the information
set forth in such disclosure schedule
relates; provided, however, that any
information set forth in one section of the
Company Disclosure Schedule shall
be deemed to apply to each other Section or
subsection thereof to which its
relevance is readily apparent on its face)
delivered by the Company to Parent
prior to the execution of this Agreement
(the "Company Disclosure Schedule"),
the Company represents and warrants to
Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. Each of the
Company
and its
Subsidiaries has been duly organized, and is validly existing
and
in good standing
(with respect to jurisdictions that recognize that
concept) under
the Laws of the jurisdiction of its incorporation or
formation, as
the case may be, and has all requisite power and authority
and possesses
all governmental licenses, permits, authorizations and
approvals
necessary to enable it to use its corporate or other name and
to
own, lease or
otherwise hold and operate its properties and other assets
and to carry on
its business as currently conducted, except where the
failure to have
such governmental licenses, permits, authorizations or
approvals
individually or in the aggregate has not had and would not
reasonably be
expected to have a Material
<PAGE>
8
Adverse Effect.
Each of the Company and its Subsidiaries is duly qualified
or licensed to
do business and is in good standing (with respect to
jurisdictions
that recognize that concept) in each jurisdiction in which
the nature of
its business or the ownership, leasing or operation of its
properties makes
such qualification, licensing or good standing necessary,
other than in
such jurisdictions where the failure to be so qualified,
licensed or in
good standing individually or in the aggregate has not had
and would not
reasonably be expected to have a Material Adverse Effect.
The Company has
made available to Parent, prior to the execution of this
Agreement,
complete and accurate copies of the Company Articles and the
Company's
By-laws (the "Company By-laws"), and the comparable
organizational
documents of each Significant Subsidiary (as such term is
defined in Rule
12b-2 under the Exchange Act), in each case as amended to
the date
hereof.
(b) Subsidiaries. Section 3.01(b) of the Company Disclosure
Schedule lists,
as of the date hereof, (i) each Significant Subsidiary of
the Company
(including its state of incorporation or formation) and (ii)
each other
Subsidiary of the Company. All of the outstanding capital stock
of, or other
equity interests in, each Significant Subsidiary of the
Company, is
directly or indirectly owned by the Company. All the issued
and outstanding
shares of capital stock of, or other equity interests in,
each such
Subsidiary owned by the Company have been validly issued and
are
fully paid and
nonassessable and are owned directly or indirectly by the
Company free and
clear of all pledges, liens, charges, encumbrances or
security
interests of any kind or nature whatsoever (other than liens,
charges and
encumbrances for current taxes not yet due and payable)
(collectively,
"Liens"), and free of any restriction on the right to vote,
sell or
otherwise dispose of such capital stock or other equity
interests.
Except with
respect to securities of non-Affiliates that, to the Knowledge
of the Company,
do not constitute a 20% or greater interest in such
non-Affiliates
(or a 5% or greater interest in such non-Affiliates if the
Company's
investment therein is greater than $20,000,000), and except for
the capital
stock of, or voting securities or equity interests in, its
Subsidiaries,
the Company does not own, directly or indirectly, as of the
date hereof, any
capital stock of, or other voting securities or equity
interests in,
any corporation, partnership, joint venture, association or
other
entity.
(c)
Capital Structure. The authorized capital stock of the Company
consists of
1,000,000,000 shares of Company Common Stock and 50,000,000
shares of
preferred stock, without par value ("Company Preferred Stock").
1,500,000 shares
of Company Preferred Stock have been designated as Series
A Participating
Preferred Stock, without par value (the "Company Series A
Preferred
Stock"). At the close of business on December 14, 2004, (i)
321,485,774
shares of Company Common Stock were issued and outstanding
(which number
includes (A) 535,645 shares of Company Common Stock held by
the Company in
its treasury, (B) 1,934,116 shares of Company Common Stock
held by the
trust established under The Guidant Employee Savings and Stock
Ownership Plan
and (C) 919,276 shares of Company Common Stock subject to
vesting and
restrictions on transfer ("Company Restricted Stock")), (ii)
41,590,880
shares of Company Common Stock were reserved and available for
issuance
pursuant to the Company's 1994 Stock Plan, as amended, 1996
Nonemployee
Director Stock Plan, as amended, 1998 Stock Plan, as amended,
and 2001
Employee Stock Purchase Plan (the "ESPP") (such plans,
collectively,
the "Company Stock Plans"), of which 35,485,818 shares of
Company Common
Stock were subject to outstanding Company Stock Options or
agreements to
issue Company Stock Options, and (iii) no shares of Company
Preferred Stock
(including Company Series A Preferred Stock) were issued
or outstanding
or were held by the Company as treasury shares. Except as
set forth above
in this Section 3.01(c), at the close of business on
December 14,
2004, no shares of capital stock or other voting securities
or equity
interests of the Company were issued, reserved
<PAGE>
9
for issuance or
outstanding. At the close of business on December 14,
2004, there were
no outstanding stock appreciation rights, "phantom" stock
rights,
restricted stock units, performance units, rights to receive
shares of
Company Common Stock on a deferred basis or other rights (other
than Company
Stock Options) that are linked to the value of Company Common
Stock
(collectively, "Company Stock-Based Awards"). All outstanding
options to
purchase shares of Company Common Stock exclusive of rights
under the ESPP
(collectively, "Company Stock Options") and shares of
Company
Restricted Stock are evidenced by stock option agreements,
restricted stock
purchase agreements or other award agreements. All
outstanding
shares of capital stock of the Company are, and all shares
which may be
issued pursuant to the Company Stock Options or Company
Stock-Based
Awards will be, when issued in accordance with the terms
thereof, duly
authorized, validly issued, fully paid and nonassessable and
not subject to
preemptive rights. There are no bonds, debentures, notes or
other indebtedness of the Company
having the right to vote (or convertible
into, or
exchangeable for, securities having the right to vote) on any
matters on which
shareholders of the Company may vote. Except as set forth
above in this
Section 3.01(c) and for issuances of shares of Company
Common Stock
pursuant to the Company Stock Options set forth above in this
Section 3.01(c)
and subject to Section 4.01(a), (x) there are not issued,
reserved for
issuance or outstanding (A) any shares of capital stock or
other voting
securities or equity interests of the Company, (B) any
securities of
the Company convertible into or exchangeable or exercisable
for shares of
capital stock or other voting securities or equity interests
of the Company,
(C) any warrants, calls, options or other rights to
acquire from the
Company or any of its Subsidiaries, and no obligation of
the Company or
any of its Subsidiaries to issue, any capital stock, voting
securities,
equity interests or securities convertible into or
exchangeable or
exercisable for capital stock or voting securities of the
Company or (D)
any Company Stock-Based Awards and (y) there are not any
outstanding
obligations of the Company or any of its Subsidiaries to
repurchase,
redeem or otherwise acquire any such securities or to issue,
deliver or sell,
or cause to be issued, delivered or sold, any such
securities.
Neither the Company nor any of its Subsidiaries is a party to
any voting Contract
with respect to the voting of any such securities.
Except as set
forth above in this Section 3.01(c) and subject to Section
4.01(a), there
are no outstanding (1) securities of the Company or any of
its Subsidiaries
convertible into or exchangeable or exercisable for
shares of
capital stock or voting securities or equity interests of any
Subsidiary of
the Company, (2) warrants, calls, options or other rights to
acquire from the
Company or any of its Subsidiaries, and no obligation of
the Company or
any of its Subsidiaries to issue, any capital stock, voting
securities,
equity interests or securities convertible into or
exchangeable or
exercisable for capital stock or voting securities of any
Subsidiary of
the Company or (3) obligations of the Company or any of its
Subsidiaries to
repurchase, redeem or otherwise acquire any such
outstanding
securities or to issue, deliver or sell, or cause to be
issued,
delivered or sold, any such securities.
(d) Authority; Noncontravention. The Company has all requisite
corporate power
and authority to execute and deliver this Agreement and,
subject to
receipt of the Shareholder Approval, to consummate the
transactions
contemplated by this Agreement. The execution and delivery of
this Agreement
by the Company and the consummation by the Company of the
transactions
contemplated by this Agreement have been duly
<PAGE>
10
authorized by
all necessary corporate action on the part of the Company
and no other
corporate proceedings on the part of the Company are
necessary to
authorize this Agreement or to consummate the transactions
contemplated by
this Agreement, subject, in the case of the consummation
of the Merger,
to the obtaining of the Shareholder Approval. This
Agreement has
been duly executed and delivered by the Company and,
assuming the due
authorization, execution and delivery by each of the
other parties
hereto, constitutes a legal, valid and binding obligation of
the Company,
enforceable against the Company in accordance with its terms,
subject to
bankruptcy, insolvency, fraudulent transfer, moratorium,
reorganization
or similar Laws affecting the rights of creditors generally
and the
availability of equitable remedies (regardless of whether such
enforceability
is considered in a proceeding in equity or at law). The
Board of
Directors of the Company, at a meeting duly called and held,
duly
and unanimously
adopted by all directors present, resolutions (i) adopting
this Agreement,
the Merger and the other transactions contemplated by this
Agreement, (ii)
declaring that it is in the best interests of the Company
and the
shareholders of the Company that the Company enter into this
Agreement and
consummate the Merger and the other transactions
contemplated by
this Agreement on the terms and subject to the conditions
set forth in
this Agreement, (iii) directing that the Company use its
reasonable best
efforts to submit the approval of this Agreement to a vote
at a meeting of
the shareholders of the Company within 120 days of the
date hereof and
(iv) recommending that the shareholders of the Company
approve this
Agreement, which resolutions, as of the date of this
Agreement, have
not been subsequently rescinded, modified or withdrawn in
any way. The
execution and delivery of this Agreement by the Company do
not, and the
consummation by the Company of the Merger and the other
transactions
contemplated by this Agreement and compliance by the Company
with the
provisions of this Agreement will not, conflict with, or result
in any violation
or breach of, or default (with or without notice or lapse
of time, or
both) under, or give rise to a right of, or result in,
termination,
cancelation or acceleration of any obligation or to the loss
of a benefit
under, or result in the creation of any Lien in or upon any
of the
properties or other assets of the Company or any of its
Subsidiaries
under, (x) the Company Articles or the Company By-laws or the
comparable
organizational documents of any of its Subsidiaries, (y) any
loan or credit
agreement, bond, debenture, note, mortgage, indenture,
lease, supply
agreement, license agreement, development agreement or other
contract,
agreement, obligation, commitment or instrument that is
intended
by the Company,
Parent or any of their respective Subsidiaries, as
applicable, to
be legally binding, (each, including all amendments
thereto, a
"Contract"), to which the Company or any of its Subsidiaries is
a party or any
of their respective properties or other assets is subject
or (z) subject
to the obtaining of the Shareholder Approval and the
governmental
filings and other matters referred to in the following
sentence, any
(A) statute, law, ordinance, rule or regulation (each, a
"Law")
applicable to the Company or any of its Subsidiaries or their
respective
properties or other assets or (B) order, writ, injunction,
decree, judgment
or stipulation (each, an "Order") applicable to the
Company or any
of its Subsidiaries or their respective properties or other
assets, other
than, in the case of clauses (y) and (z), any such
conflicts,
violations, breaches, defaults, rights of termination,
cancelation or
acceleration, losses or Liens that individually or in the
aggregate have
not had and would not reasonably be expected to (x) have a
Material Adverse
Effect, (y) impair in any material respect the
<PAGE>
11
ability of the
Company to perform its obligations under this Agreement or
(z) prevent or
materially impede, interfere with, hinder or delay the
consummation of
the transactions contemplated by this Agreement. No
consent,
approval, order or authorization of, action by or in respect
of,
or registration,
declaration or filing with, any Federal, state, local or
foreign
government, any court, administrative, regulatory or other
governmental
agency, commission or authority or any organized securities
exchange (each,
a "Governmental Entity") is required by or with respect to
the Company or
any of its Subsidiaries in connection with the execution
and delivery of
this Agreement by the Company or the consummation of the
Merger or the
other transactions contemplated by this Agreement, except
for (1) (A) the
filing of a premerger notification and report form by the
Company under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the
rules and regulations thereunder (the "HSR Act") and the
termination of
the waiting period required thereunder, (B) all required
notifications
and filings by the Company under Article 4 of Council
Regulation
139/2004 of the European Community, as amended (the "EC Merger
Regulation"),
and the receipt of a decision under Article 6(1)(b), 8(1) or
8(2) thereunder
declaring the Merger compatible with the EC Common Market
and (C) the
receipt, termination or expiration, as applicable, of
approvals or
waiting periods required under any other applicable
competition,
merger control, antitrust or similar Law, (2) the filing with
the Securities
and Exchange Commission (the "SEC") of (X) a proxy
statement
relating to the adoption by the shareholders of the Company of
this Agreement
(as amended or supplemented from time to time, the "Proxy
Statement") and
(Y) such reports under the Securities Exchange Act of
1934, as amended
(including the rules and regulations promulgated
thereunder, the
"Exchange Act"), as may be required in connection with
this Agreement
and the transactions contemplated by this Agreement, (3)
the filing of
the Articles of Merger with the Secretary of State of the
State of Indiana
and appropriate documents with the relevant authorities
of other states
in which the Company or any of its Subsidiaries is
qualified to do
business, (4) any filings with and approvals of the NYSE
and (5) such
other consents, approvals, orders, authorizations, actions,
registrations,
declarations and filings the failure of which to be
obtained or made
individually or in the aggregate has not had and would
not reasonably
be expected to (x) have a Material Adverse Effect, (y)
impair in any
material respect the ability of the Company to perform its
obligations
under this Agreement or (z) prevent or materially impede,
interfere with,
hinder or delay the consummation of the transactions
contemplated by
this Agreement.
(e) Company SEC Documents. (i) The Company has filed all
reports,
schedules,
forms, statements and other documents (including exhibits and
other
information incorporated therein) with the SEC required to be
filed
by the Company
since January 1, 2003 (such documents, together with any
documents filed
during such period by the Company with the SEC on a
voluntary basis
on Current Reports on Form 8-K, the "Company SEC
Documents"). As
of their respective filing dates, the Company SEC
Documents
complied in all material respects with, to the extent in effect
at the time of
filing, the requirements of the Securities Act of 1933, as
amended
(including the rules and regulations promulgated thereunder,
the
"Securities
Act"), the Exchange Act and the Sarbanes-Oxley Act of 2002
(including the
rules and regulations promulgated thereunder, "SOX")
applicable to
such Company SEC Documents, and none of the Company SEC
Documents
contained any untrue statement of a material fact or
<PAGE>
12
omitted to state
a material fact required to be stated therein or
necessary in
order to make the statements therein, in light of the
circumstances
under which they were made, not misleading. Except to the
extent that
information contained in any Company SEC Document has been
revised,
amended, supplemented or superseded by a later-filed Company
SEC
Document, none
of the Company SEC Documents contains any untrue statement
of a material
fact or omits to state any material fact required to be
stated therein
or necessary in order to make the statements therein, in
light of the
circumstances under which they were made, not misleading,
which
individually or in the aggregate would require an amendment,
supplement or
corrective filing to such Company SEC Documents. Each of the
financial
statements (including the related notes) of the Company
included
in the Company
SEC Documents complied at the time it was filed as to form
in all material
respects with the applicable accounting requirements and
the published
rules and regulations of the SEC with respect thereto in
effect at the
time of filing, had been prepared in accordance with
generally
accepted accounting principles in the United States ("GAAP")
(except, in the
case of unaudited statements, as permitted by the rules
and regulations
of the SEC) applied on a consistent basis during the
periods involved
(except as may be indicated in the notes thereto) and
fairly presented
in all material respects the consolidated financial
position of the
Company and its consolidated Subsidiaries as of the dates
thereof and the
consolidated results of their operations and cash flows
for the periods
then ended (subject, in the case of unaudited statements,
to normal
year-end audit adjustments). Neither the Company nor any of its
Subsidiaries has
any liabilities or obligations of any nature (whether
accrued,
absolute, contingent or otherwise) which individually or in the
aggregate have
had or would reasonably be expected to have a Material
Adverse Effect.
None of the Subsidiaries of the Company are, or have at
any time since
January 1, 2003 been, subject to the reporting requirements
of Section 13(a)
or 15(d) of the Exchange Act.
(ii) Each of the principal executive officer of the Company and
the
principal
financial officer of the Company (or each former principal
executive
officer of the Company and each former principal financial
officer of the
Company, as applicable) has made all certifications
required by Rule
13a-14 or 15d-14 under the Exchange Act and Sections 302
and 906 of SOX
with respect to the Company SEC Documents, and the
statements
contained in such certifications are true and accurate. For
purposes of this
Agreement, "principal executive officer" and "principal
financial
officer" shall have the meanings given to such terms in SOX.
Neither the
Company nor any of its Subsidiaries has outstanding, or has
arranged any
outstanding, "extensions of credit" to directors or executive
officers within
the meaning of Section 402 of SOX. (iii) The Company
maintains a
system of internal accounting controls sufficient to provide
reasonable
assurance that (A) transactions are executed in accordance with
management's
general or specific authorizations; (B) access to assets is
permitted only
in accordance with management's general or specific
authorization;
and (C) the recorded accountability for assets is compared
with the
existing assets at reasonable intervals and appropriate action
is
taken with
respect to any differences.
(iv) The Company's "disclosure controls and procedures" (as
defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act) are
reasonably designed to
ensure
<PAGE>
13
that all
information (both financial and non-financial) required to be
disclosed by the
Company in the reports that it files or submits under the
Exchange Act is
recorded, processed, summarized and reported within the
time periods
specified in the rules and forms of the SEC, and that all
such information
is accumulated and communicated to the Company's
management as
appropriate to allow timely decisions regarding required
disclosure and
to make the certifications of the chief executive officer
and chief
financial officer of the Company required under the Exchange
Act
with respect to
such reports.
(f) Information Supplied. None of the information supplied or to
be
supplied by or
on behalf of the Company specifically for inclusion or
incorporation by
reference in (i) the registration statement on Form S-4
to be filed with
the SEC by Parent in connection with the issuance of
shares of Parent
Common Stock in the Merger (as amended or supplemented
from time to
time, the "Form S-4") will, at the time the Form S-4 is filed
with the SEC and
at the time it becomes effective under the Securities
Act, contain any
untrue statement of a material fact or omit to state any
material fact
required to be stated therein or necessary to make the
statements
therein, in light of the circumstances under which they are
made, not
misleading or (ii) the Proxy Statement will, at the date it is
first mailed to
the shareholders of the Company and at the time of the
Shareholders'
Meeting, contain any untrue statement of a material fact or
omit to state
any material fact required to be stated therein or necessary
in order to make
the statements therein, in light of the circumstances
under which they
are made, not misleading, except that no representation
or warranty is
made by the Company with respect to statements made or
incorporated by
reference therein based on information supplied by or on
behalf of Parent
or Sub specifically for inclusion or incorporation by
reference in the
Form S-4 or the Proxy Statement. The Proxy Statement will
comply as to
form in all material respects with the requirements of the
Exchange
Act.
(g) Absence of Certain Changes or Events. Except for
liabilities
incurred in
connection with this Agreement or as expressly permitted
pursuant to
Section 4.01(a)(i) through (xvi), since the date of the most
recent financial
statements included in the Filed Company SEC Documents,
the Company and
its Subsidiaries have conducted their respective
businesses only
in the ordinary course consistent with past practice, and
there has not
been any Material Adverse Change, and from such date until
the date hereof
there has not been (i) any declaration, setting aside or
payment of any
dividend or other distribution (whether in cash, stock or
property) with
respect to any capital stock of the Company or any of its
Subsidiaries,
other than (x) cash dividends payable by the Company in
respect of
shares of Company Common Stock consistent with past practice
and not
exceeding $0.10 per share of Company Common Stock per fiscal
quarter or (y)
dividends or distributions by a direct or indirect wholly
owned Subsidiary
of the Company to its shareholders, (ii) any purchase,
redemption or
other acquisition by the Company or any of its Subsidiaries
of any shares of
capital stock or any other securities of the Company or
any of its
Subsidiaries or any options, warrants, calls or rights to
acquire such
shares or other securities, other than in connection with net
share
withholding in connection with the vesting of Company
Restricted
Stock, (iii) any
split, combination or reclassification of any capital
stock of the
Company or any of its Subsidiaries or any issuance or the
authorization of
any issuance of any other securities in respect of, in
lieu of or in
substitution for shares of their respective capital stock,
<PAGE>
14
(iv) (A) any
granting by the Company or any of its Subsidiaries to any
current or
former (1) director of the Company or any of its Subsidiaries
or (2) employee
of the Company or any of its Subsidiaries who is treated
as a Tier I
Employee (a "Tier I Employee") or Tier II Employee (a "Tier II
Employee") for
purposes of the Company's Change in Control Severance Pay
Plan for Select
Employees (all individuals described in the foregoing
clauses (1) and
(2) of this clause (A), collectively, the "Key Personnel")
of any increase
in compensation, bonus or fringe or other benefits, except
for normal
increases in cash compensation (including cash bonuses) in the
ordinary course
of business consistent with past practice or as was
required under
any Company Benefit Agreement or Company Benefit Plan, (B)
any granting by
the Company or any of its Subsidiaries to any Key
Personnel of (1)
any increase in severance or termination pay or (2) any
right to receive
any severance or termination pay except for severance or
termination pay
received in the ordinary course of business consistent
with past
practice or as was required under any Company Benefit Agreement
or Company
Benefit Plan, (C) any entry by the Company or any of its
Subsidiaries
into, or any amendments of, (1) any employment, deferred
compensation,
consulting, severance, change of control, termination or
indemnification
Contract with any Key Personnel or (2) any Contract with
any Key Personnel the
benefits of which are contingent, or the terms of
which are
materially altered, upon the occurrence of a transaction
involving the
Company of a nature contemplated by this Agreement (all such
Contracts under
this clause (C), collectively, "Company Benefit
Agreements"),
(D) the removal or modification of any restrictions in any
Company Benefit
Agreement or Company Benefit Plan or awards made
thereunder,
except as required to comply with applicable Law or any
Company Benefit
Agreement or Company Benefit Plan in effect as of the date
hereof or (E)
the adoption, amendment or termination of any Company
Benefit Plan,
other than, in the cases of clauses (A), (B), (C) and (D),
such increases,
amendments, new agreements, removals, modifications or
terminations
with respect to Tier II Employees that (1) do not provide for
any increase in
compensation or benefits for any individual Tier II
Employee that is
material in relation to such Tier II Employee's
compensation or
benefits prior to such increase and (2) in the aggregate
do not result in
any material increase in compensation, benefits or other
similar expenses
of the Company and its Subsidiaries, (v) any damage,
destruction or loss,
whether or not covered by insurance, that
individually or
in the aggregate has had or would reasonably be expected
to have a
Material Adverse Effect, (vi) any change in accounting methods,
principles or
practices by the Company materially affecting its assets,
liabilities or
businesses, except insofar as may have been required by a
change in GAAP
or (vii) any material tax election or any settlement or
compromise of
any material income tax liability.
(h) Litigation. Except with respect to taxes, which are the
subject of
Section 3.01(n), there is no suit, action or proceeding
pending or, to
the Knowledge of the Company, threatened against or
affecting the
Company or any of its Subsidiaries or any of their
respective
assets that individually or in the aggregate has had or would
reasonably be
expected to have a Material Adverse Effect, nor is there
any demand,
letter or Order of any Governmental Entity or arbitrator
outstanding
against, or, to the Knowledge of the Company, investigation
by any
Governmental Entity involving, the Company or any of its
Subsidiaries or
any of their respective assets that individually or in
<PAGE>
15
the aggregate
has had or would reasonably be expected to have a
Material Adverse
Effect.
(i) Contracts. (1) As of the date hereof, neither the Company
nor
any of its
Subsidiaries is a party to, and none of their respective
properties or
other assets is subject to, any Contract that is a
"material
contract" (as such term is defined in Item 601(b)(10) of
Regulation S-K
of the SEC) (a "Material Contract"). None of the Company,
any of its
Subsidiaries or, to the Knowledge of the Company, any other
party thereto is
in violation of or in default under (nor does there
exist any
condition which upon the passage of time or the giving of
notice or both
would cause such a violation of or default by the Company
or any of its
Subsidiaries or, to the Knowledge of the Company, any other
party thereto
under) any Contract to which it is a party or by which it
or any of its
properties or other assets is bound, except for violations
or defaults that
individually or in the aggregate have not had and would
not reasonably
be expected to have a Material Adverse Effect. Neither the
Company nor any
of its Subsidiaries has entered into any Contract that is
currently in
effect that is required to be disclosed pursuant to Item 404
of Regulation
S-K of the SEC.
(2) Section 3.01(i)(2) of the Company Disclosure Schedule
contains
a complete and
accurate list, as of the date hereof, of (A) each material
Contract
restricting or purporting to restrict any of the Company's
Affiliates'
ability to compete (other than each such Contract that only
restricts the
Company's Subsidiaries' ability to compete) in any line of
business,
geographic area or customer segment, (B) each material Contract
restricting the
Company's or any of its Subsidiaries' ability to compete
in any line of
business, geographic area or customer segment and (C) each
material
Contract relating to distribution, sale, supply, licensing,
co-promotion or
manufacturing of any products or services of the Company
or any of its
Subsidiaries or any products licensed by the Company or any
of its
Subsidiaries.
(j) Compliance with
Laws; Environmental Matters. (i) Except with
respect to
Environmental Laws, the Employee Retirement Income Security
Act of 1974, as
amended ("ERISA"), taxes and regulatory compliance, which
are the subjects
of Sections 3.01(j)(ii), 3.01(l), 3.01(n) and 3.01(u),
respectively,
each of the Company and its Subsidiaries is in compliance
with all Laws
and Orders (collectively, "Legal Provisions") applicable to
it, its
properties or other assets or its business or operations,
except
for failures to
be in compliance that individually or in the aggregate
have not had and
would not reasonably be expected to have a Material
Adverse Effect.
Each of the Company and its Subsidiaries has in effect
all approvals,
authorizations, certificates, filings, franchises,
licenses,
notices and permits of or with all Governmental Entities
(collectively,
"Permits"), including all Permits under the Federal Food,
Drug and
Cosmetic Act of 1938, as amended (including the rules and
regulations
promulgated thereunder, the "FDCA"), necessary for it to own,
lease or operate
its properties and other assets and to carry on its
business and
operations as currently conducted, except where the failure
to have such
Permits individually or in the aggregate has not had and
would not
reasonably be expected to have a Material Adverse Effect. Since
January 1, 2000,
there has occurred no default under, or violation of,
any such Permit,
except for any such default or violation that
individually or
in the aggregate has not had and would not
<PAGE>
16
reasonably be
expected to have a Material Adverse Effect. The
consummation of
the Merger, in and of itself, would not cause the
revocation or
cancelation of any such Permit that individually or in the
aggregate would
reasonably be expected to have a Material Adverse Effect.
(ii) Except for those matters that individually or in the
aggregate have
not had and would not reasonably be expected to have a
Material Adverse
Effect: (A) during the period of ownership or operation
by the Company
or any of its Subsidiaries of any of its currently or
formerly owned,
leased or operated properties, there have been no
Releases of
Hazardous Materials in, on, under or affecting any properties
which would
subject the Company or any of its Subsidiaries to any
liability under
any Environmental Law or require any expenditure by the
Company or any
of its Subsidiaries for remediation to meet applicable
standards
thereunder; (B) prior to and after, as applicable, the period
of ownership or
operation by the Company or any of its Subsidiaries of
any of its
currently or formerly owned, leased or operated properties, to
the Knowledge of
the Company, there were no Releases of Hazardous
Materials in,
on, under or affecting any properties which would subject
the Company or
any of its Subsidiaries to any liability under any
Environmental
Law or require any expenditure by the Company or any of its
Subsidiaries for
remediation to meet applicable standards thereunder; (C)
neither the
Company nor any of its Subsidiaries is subject to any
indemnity
obligation or other Contract with any person relating to
obligations or
liabilities under Environmental Laws; and (D) to the
Knowledge of the
Company, there are no facts, circumstances or conditions
that would
reasonably be expected to form the basis for any
investigation,
suit, claim, action, proceeding or liability against or
affecting the
Company or any of its Subsidiaries relating to or arising
under
Environmental Laws. The term "Environmental Laws" means all
applicable
Federal, state, local and foreign Laws (including the common
law), Orders,
notices, Permits or binding Contracts issued, promulgated
or entered into
by any Governmental Entity, relating in any way to the
environment,
preservation or reclamation of natural resources or the
presence,
management, Release of, or exposure to, Hazardous Materials, or
to human health
and safety. The term "Hazardous Materials" means (1)
petroleum products and
by-products, asbestos and asbestos-containing
materials, urea
formaldehyde foam insulation, medical or infectious
wastes,
polychlorinated biphenyls, radon gas, radioactive substances,
chlorofluorocarbons and all other ozone-depleting substances and
(2) any
other chemical,
material, substance, waste, pollutant or contaminant that
is prohibited,
limited or regulated by or pursuant to any Environmental
Law. The term
"Release" means any spilling, leaking, pumping, pouring,
emitting,
emptying, discharging, injecting, escaping, leaching, dumping,
disposing or
migrating into or through the environment or any natural or
man-made
structure.
(k) Labor Relations. From the date of the most recent financial
statements
included in the Filed Company SEC Documents through the date
hereof, there
has not been any adoption, material amendment or
termination by
the Company or any of its Subsidiaries of any collective
bargaining or
other labor union Contract to which the Company or any of
its Subsidiaries
is a party or by which the Company or any of its
Subsidiaries is
bound. There are no collective bargaining or other labor
union Contracts
to which the Company or any of its Subsidiaries is a
party or by
which the Company or any of its Subsidiaries is bound. As of
the date of this
Agreement, none of the employees
<PAGE>
17
of the Company or any of its
Subsidiaries are represented by any
union with
respect to their employment by the Company or such Subsidiary.
Since January 1,
2003, neither the Company nor any of its Subsidiaries
has experienced
any material labor disputes, union organization attempts
or work
stoppages, slowdowns or lockouts due to labor disagreements.
(l) ERISA Compliance. (i) Section 3.01(l)(i) of the Company
Disclosure
Schedule contains a complete and accurate list of each
employment,
bonus, pension, profit sharing, deferred compensation,
incentive
compensation, stock ownership, stock purchase, stock
appreciation,
restricted stock, stock option, "phantom" stock,
performance,
retirement, thrift, savings, stock bonus, paid time off,
perquisite,
fringe benefit, vacation, severance, disability, death
benefit,
hospitalization, medical, welfare benefit or other plan,
program, policy
or Contract maintained, contributed to or required to be
maintained or contributed to
by the Company or any of its Subsidiaries or
any other person
or entity that, together with the Company, is treated as
a single
employer under Section 414(b), (c), (m) or (o) of the Code
(each, a
"Commonly Controlled Entity") (exclusive of any such plan,
program, policy
or Contract mandated by and maintained solely pursuant to
applicable law),
in each case providing benefits to any current or former
director,
officer or employee of the Company or any of its Subsidiaries
(collectively,
but exclusive of individual option and restricted award
agreements
issued under the Company Stock Plans, the "Company Benefit
Plans") and each
Company Benefit Agreement (exclusive of local offer
letters mandated
under applicable non-U.S. law that do not impose any
severance
obligations other than any mandatory statutory severance). Each
Company Benefit
Plan that is an "employee pension benefit plan" (as
defined in
Section 3(2) of ERISA) is sometimes referred to herein as a
"Company Pension
Plan" and each Company Benefit Plan that is an "employee
welfare benefit
plan" (as defined in Section 3(1) of ERISA) is sometimes
referred to
herein as a "Company Welfare Plan".
(ii) The Company has provided to Parent complete and accurate
copies of (A)
each Company Benefit Plan or, at the Company's option, in
the case of
Company Benefit Plans maintained primarily for the benefit
of individuals
regularly employed outside the United States, a summary
thereof (or, in
either case, with respect to any unwritten Company
Benefit Plans,
descriptions thereof) and Company Benefit Agreements
(exclusive of
local offer letters mandated under applicable non-U.S. law
that do not
impose any severance obligations other than any mandatory
statutory
severance), (B) the two most recent annual reports on Form
5500 required to
be filed with the Internal Revenue Service (the "IRS")
with respect to
each Company Benefit Plan (if any such report was
required), (C)
the most recent summary plan description for each Company
Benefit Plan for
which such summary plan description is required and (D)
each trust
Contract and insurance or group annuity Contract relating to
any Company
Benefit Plan.
(iii) Each Company Benefit Plan has been administered in all
material
respects in accordance with its terms. The Company, its
Subsidiaries and
all the Company Benefit Plans are all in compliance in
all material
respects with the applicable provisions of
<PAGE>
18
ERISA, the Code
and all other applicable Laws, including Laws of foreign
jurisdictions, and the terms of
all collective bargaining Contracts.
(iv) All Company Pension Plans intended to be tax-qualified
have
received
favorable determination letters from the IRS with respect to
"TRA" (as
defined in Section 1 of IRS Rev. Proc. 93-39), and have timely
filed with the
IRS determination letter applications (or have received
such a
determination letter) with respect to "GUST" (as defined in
Section 1 of IRS
Notice 2001-42), to the effect that such Company
Pension Plans
are qualified and exempt from Federal income taxes under
Sections 401(a)
and 501(a), respectively, of the Code, no such
determination
letter has been revoked (nor, to the Knowledge of the
Company, has
revocation been threatened) and to the Knowledge of the
Company, no
event has occurred since the date of the most recent
determination
letter or application therefor relating to any such
Company Pension
Plan that would reasonably be expected to adversely
affect the
qualification of such Company Pension Plan or materially
increase the
costs relating thereto or require security under Section
307 of ERISA.
The Company has provided to Parent a complete and accurate
copy of the most
recent determination letter received prior to the date
hereof with
respect to each Company Pension Plan, as well as a complete
and accurate
copy of each pending application for a determination
letter, if any.
The Company has also provided to Parent a complete and
accurate list of
all amendments to any Company Pension Plan as to which
a favorable
determination letter has not yet been received.
(v) Neither the Company nor any Commonly Controlled Entity has,
during the
six-year period ending on the date hereof, maintained,
contributed to
or been required to contribute to any Company Pension
Plan that is
subject to Title IV of ERISA or Section 412 of the Code, or
any
"multiemployer plan" as defined in Section 3(37) or 4001(a)(3)
of
ERISA. Except as
has not had and would not reasonably be expected to
have a Material
Adverse Effect, neither the Company nor any Commonly
Controlled
Entity has any unsatisfied liability under Title IV of ERISA.
To the Knowledge
of the Company, no condition exists that presents a
material risk to
the Company or any Commonly Controlled Entity of
incurring a
material liability under Title IV of ERISA. The Pension
Benefit Guaranty
Corporation has not instituted proceedings under
Section 4042 of
ERISA to terminate any Company Benefit Plan and, to the
Knowledge of the
Company, no condition exists that presents a material
risk that such
proceedings will be instituted.
(vi) Except as has not had and would not reasonably be expected
to
have a Material
Adverse Effect, (A) all reports, returns and similar
documents with
respect to all Company Benefit Plans required to be filed
with any
Governmental Entity or distributed to any Company Benefit Plan
participant have
been duly and timely filed or distributed, (B) none of
the Company or
any of its Subsidiaries has received notice of, and to the
Knowledge of the
Company, there are no investigations by any Governmental
Entity with
respect to, termination proceedings or other claims (except
claims for
benefits payable in the normal operation of the Company Benefit
Plans), suits or
proceedings against or involving any Company Benefit Plan
or asserting any
rights or claims to benefits under any Company Benefit
Plan that could
reasonably be expected to give rise to any material
<PAGE>
19
liability and
(C) to the Knowledge of the Company, there are not
any facts that
could give rise to any liability in the event of any such
investigation,
claim, suit or proceeding.
(vii) Except as has not had and would not reasonably be expected
to
have a Material
Adverse Effect, (A) all contributions, premiums and
benefit payments
under or in connection with the Company Benefit Plans
that are
required to have been made as of the date hereof in accordance
with the terms
of the Company Benefit Plans have been timely made or have
been reflected
on the most recent consolidated balance sheet filed or
incorporated by
reference into the Filed Company SEC Documents and (B) no
Company Pension
Plan has an "accumulated funding deficiency" (as such term
is defined in
Section 302 of ERISA or Section 412 of the Code), whether or
not waived.
(viii) With respect to each Company Benefit Plan, except as has
not
had and would
not reasonably be expected to have a Material Adverse
Effect, (A)
there has not occurred any prohibited transaction (within the
meaning of
Section 406 of ERISA or Section 4975 of the Code) in which the
Company or any
of its Subsidiaries or any of their respective employees,
or, to the
Knowledge of the Company, any trustee, administrator or other
fiduciary of
such Company Benefit Plan, or any agent of the foregoing, has
engaged that
could reasonably be expected to subject the Company or any of
its Subsidiaries
or any of their respective employees, or any such
trustee,
administrator or other fiduciary, to the tax or penalty on
prohibited
transactions imposed by Section 4975 of the Code or the
sanctions
imposed under Title I of ERISA and (B) neither the Company, any
of its
Subsidiaries or any of their respective employees nor, to the
Knowledge of the
Company, any trustee, administrator or other fiduciary of
any Company
Benefit Plan nor any agent of any of the foregoing, has
engaged in any
transaction or acted in a manner, or failed to act in a
manner, that
could reasonably be expected to subject the Company or any of
its Subsidiaries
or any of their respective employees or, to the Knowledge
of the Company,
any such trustee, administrator or other fiduciary, to any
liability for
breach of fiduciary duty under ERISA or any other applicable
Law.
(ix) Each Company Welfare Plan may be amended or terminated
(including with
respect to benefits provided to retirees and other former
employees)
without material liability to the Company or any of its
Subsidiaries at
any time after the Effective Time. Each of the Company and
its Subsidiaries
complies in all material respects with the applicable
requirements of
Section 4980B(f) of the Code, Sections 601-609 of ERISA or
any similar
state or local Law with respect to each Company Benefit Plan
that is a group
health plan, as such term is defined in Section 5000(b)(1)
of the Code or
such state Law. Neither the Company nor any of its
Subsidiaries has
any material obligations for health or life insurance
benefits
following termination of employment under any Company Benefit
Plan (other than
for continuation coverage required under Section
4980(B)(f) of
the Code).
(x) None of the execution and delivery of this Agreement, the
obtaining of the
Shareholder Approval or the consummation of the Merger or
any other
transaction contemplated by this Agreement (alone or in
conjunction with
any other event, including as a result of any termination
of employment on
or following the Effective Time) will (A) entitle any
current or
former director, officer, employee or consultant of the
<PAGE>
20
Company or any
of its Subsidiaries to severance or termination pay,
(B) accelerate
the time of payment or vesting, or trigger any payment or
funding (through
a grantor trust or otherwise) of, compensation or
benefits under,
increase the amount payable or trigger any other material
obligation
pursuant to, any Company Benefit Plan or Company Benefit
Agreement or (C)
result in any breach or violation of, or a default under,
any Company
Benefit Plan or Company Benefit Agreement.
(xi) Neither the Company nor any of its Subsidiaries has any
material
liability or obligations, including under or on account of a
Company Benefit
Plan, arising out of the hiring of persons to provide
services to the
Company or any of its Subsidiaries and treating such
persons as
consultants or independent contractors and not as employees of
the Company or
any of its Subsidiaries. No current or former independent
contractor that
provides or provided personal services to the Company or
its Subsidiaries
(other than a current or former director) is entitled to
any material
fringe or other benefits (other than cash consulting fees)
pursuant to any
plan, program, policy or Contract to which the Company or
any of its
Subsidiaries is a party or which is maintained, sponsored or
contributed to
by the Company or any of its Subsidiaries.
(xii) No material deduction by the Company or any of its
Subsidiaries in
respect of any "applicable employee remuneration" (within
the meaning of
Section 162(m) of the Code) has been disallowed or is
subject to
disallowance by reason of Section 162(m) of the Code. For each
of the Key
Personnel, the Company has previously provided to Parent (A)
accurate Form
W-2 information for the 1999, 2000, 2001, 2002 and 2003
calendar years,
(B) annual base salary as of the date hereof, actual bonus
earned for the
2003 calendar year and target annual bonus for the 2004
calendar year
and (C) a list, as of the date hereof, of all outstanding
Company Stock
Options, Company Restricted Stock and Company Stock-Based
Awards granted
under the Company Stock Plans or otherwise (other than
rights under the
ESPP), together with (as applicable) the number of shares
of Company
Common Stock subject thereto, and the grant dates, expiration
dates, exercise
or base prices and vesting schedules thereof, (D)
estimated
current annual cost of welfare benefits and (E) estimated cost
of the pension
benefit enhancement under Section 8 of the Company's Change
in Control
Severance Plan for Select Employees.
(m) No Parachute Gross Up. Except as provided in accordance
with
the Company's
Change in Control Severance Pay Plan for Select Employees,
no current or
former employee or director of the Company or any of its
Subsidiaries is
entitled to receive any additional payment from the
Company or any
of its Subsidiaries or the Surviving Corporation by reason
of the excise
tax required by Section 4999(a) of the Code being imposed on
such person by
reason of the transactions contemplated by this Agreement.
(n) Taxes. Except as has not had and would not reasonably be
expected to have
a Material Adverse Effect:
(i) All tax returns required by applicable Law to have been
filed
with any taxing
authority by, or on behalf of, the Company or any of its
Subsidiaries
have been
<PAGE>
21
filed in a
timely manner (taking into account any valid extension)
in accordance
with all applicable Laws, and all such tax returns are true
and complete in
all material respects.
(ii) The Company and each of its Subsidiaries has paid (or has
had
paid on its
behalf) all taxes due and owing, and the Company's most recent
financial
statements included in the Filed Company SEC Documents reflect
an adequate
accrual for all taxes payable by Company and its Subsidiaries
for all taxable
periods and portions thereof accrued through the date of
such financial
statements.
(iii) There are no Liens or encumbrances for taxes on any of
the
assets of the
Company or any of its Subsidiaries other than for taxes not
yet due and
payable.
(iv) The Company and its Subsidiaries have complied with all
applicable Laws
relating to the payment and withholding of taxes.
(v) No written notification has been received by the Company or
any
of its
Subsidiaries that any federal, state, local or foreign audit,
examination or
similar proceeding is pending, proposed or asserted with
regard to any
taxes or tax returns of the Company or its Subsidiaries.
(vi) There is no currently effective Contract extending, or
having
the effect of
extending, the period of assessment or collection of any
federal, state
and, to the Knowledge of the Company, foreign taxes with
respect to the
Company or any of its Subsidiaries nor has any request been
made for any
such extension.
(vii) No written notice of a claim of pending investigation has
been received
from any state, local or other jurisdiction with which the
Company or any
of its Subsidiaries currently does not file tax returns,
alleging that
the Company or any of its Subsidiaries has a duty to file
tax returns and
pay taxes or is otherwise subject to the taxing authority
of such
jurisdiction.
(viii) Neither the Company nor any of its Subsidiaries joins or
has
joined, for any
taxable period during the eight years prior to the date of
this Agreement,
in the filing of any affiliated, aggregate, consolidated,
combined or
unitary federal, state, local and, to the Knowledge of the
Company, foreign
tax return other than consolidated tax returns for the
consolidated group of which
the Company is the common parent.
(ix) Neither the Company nor any of its Subsidiaries is a party
to
or bound by any
tax sharing agreement or tax indemnity agreement,
arrangement or
practice (including any advance pricing agreement, closing
agreement or
other agreement relating to taxes with any taxing authority).
(x) Neither the Company nor any of its Subsidiaries has
constituted
either a
"distributing corporation" or a "controlled corporation" in a
distribution of
stock qualifying for tax-free treatment under Section 355
of the Code in
the two years prior to the date of this Agreement.
<PAGE>
22
(xi) Neither the Company nor any of its Subsidiaries will be
required to
include in a taxable period ending after the Effective Time
taxable income
attributable to income that accrued in a prior taxable
period (or
portion of a taxable period) but was not recognized for tax
purposes in any
prior taxable period as a result of (A) an open
transaction
disposition made on or before the Effective Time, (B) a
prepaid amount
received on or prior to the Effective Time, (C) the
installment
method of accounting, (D) the long-term contract method of
accounting, (E)
the cash method of accounting or Section 481 of the Code
or (F) any
comparable provisions of state or local tax Law, domestic or
foreign, or for
any other reason, other than any amounts that are
specifically
reflected in a reserve for taxes on the most recent financial
statements of
the Company included in the Filed Company SEC Documents.
(xii) Neither the Company nor any of its Subsidiaries has
entered
into a "listed
transaction" within the meaning of Treasury Regulation ss.
1.6011-4(b)(2)
(xiii) As used in this Agreement (A) "tax" means (i) any tax,
duty,
governmental fee
or other like assessment or charge of any kind whatsoever
(including
withholding on amounts paid to or by any person and liabilities
with respect to
unclaimed funds), together with any related interest,
penalty,
addition to tax or additional amount, and any liability for any
of the foregoing
as transferee, (ii) in the case of the Company or any of
its
Subsidiaries, liability for the payment of any amount of the
type
described in
clause (i) as a result of being or having been before the
Effective Time a
member of an affiliated, consolidated, combined or
unitary group,
or a party to any Contract as a result of which liability
of the Company
or any of its Subsidiaries is determined or taken into
account with
reference to the activities of any other person and (iii) in
the case of the
Company or any of its Subsidiaries, liability of the
Company or any
of its Subsidiaries for the payment of any amount as a
result of being
party to any tax sharing Contract or with respect to the
payment of any
amount imposed on any person of the type described in (i)
or (ii) as a
result of any existing Contract (including an indemnification
Contract); (B)
"taxing authority" means any Federal, state, local or
foreign
government, any subdivision, agency, commission or authority
thereof, or any
quasi-governmental body exercising tax regulatory
authority; and
(C) "tax return" means any report, return, document,
declaration or
other information or filing required to be filed with
respect to taxes
(whether or not a payment is required to be made with
respect to such
filing), including information returns, any documents with
respect to or
accompanying payments of estimated taxes, or with respect to
or accompanying
requests for the extension of time in which to file any
such report,
return, document, declaration or other information.
(o) Title to Properties. Each of the Company and its
Subsidiaries
has valid title
to, or valid leasehold or sublease interests or other
comparable
contract rights in or relating to all of its real properties
and
other tangible
assets necessary for the conduct of its business as
currently
conducted, except as have been disposed of in the ordinary
course
of business and
except for defects in title, easements, restrictive
covenants and
similar encumbrances that individually or in the aggregate
have not had and
would not reasonably be expected to have a Material
Adverse Effect.
Each of the Company and its Subsidiaries has complied with
the terms of all
leases or subleases to which it is a party and under which
it is in
occupancy, and all leases to which the Company is a party and
<PAGE>
23
under which it
is in occupancy are in full force and effect, except
for such failure
to comply or be in full force and effect that
individually or
in the aggregate has not had and would not reasonably be
expected to have
a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries
has received any written notice of any event or
occurrence that
has resulted or could result (with or without the giving
of notice, the lapse of time or
both) in a default with respect to any
lease or
sublease to which it is a party, which defaults individually or
in the aggregate
have had or would reasonably be expected to have a
Material Adverse
Effect.
(p) Intellectual Property. (i) Section 3.01(p)(i) of the
Company
Disclosure
Schedule sets forth, as of the date hereof, a complete and
accurate list
(in all material respects) of all patents and applications
therefor,
registered trademarks and applications therefor, domain name
registrations
and copyright registrations (if any) that, in each case, are
owned by or
licensed to the Company or any of its Subsidiaries and are
material to the
conduct of the business of the Company and its
Subsidiaries,
taken as a whole, as currently conducted. Such intellectual
property rights
required to be listed in Section 3.01(p)(i) of the Company
Disclosure
Schedule, together with any tradename rights, trade secret or
know how rights, service
mark rights, trademark rights, patent rights,
intellectual
property rights in computer programs or software or other
type of
intellectual property rights, in each case, that are owned or
licensed by the
Company or any of its Subsidiaries and are material to the
conduct of the
business of the Company and its Subsidiaries, taken as a
whole, as
currently conducted, are collectively referred to herein as
"Intellectual
Property Rights". All Intellectual Property Rights are
either (x) owned
by the Company or a Subsidiary of the Company free and
clear of all
Liens or (y) licensed to the Company or a Subsidiary of the
Company free and
clear (to the Knowledge of the Company) of all Liens,
except where the
failure to so own or license such Intellectual Property
Rights
individually or in the aggregate has not had and would not
reasonably be
expected to have a Material Adverse Effect. There are no
claims pending
or, to the Knowledge of the Company, threatened with regard
to the ownership
or, to the Knowledge of the Company, licensing by the
Company or any
of its Subsidiaries of any Intellectual Property Rights
which
individually or in the aggregate has had or would reasonably be
expected to have
a Material Adverse Effect. Each of the Company and its
Subsidiaries
owns, is validly licensed or otherwise has the right to use
all Intellectual
Property Rights, except where the failure to own, have a
valid license or
otherwise have rights to use individually or in the
aggregate has
not had and would not reasonably be expected to have a
Material Adverse
Effect. The execution and delivery of this Agreement by
the Company do
not, and the consummation by the Company of the Merger and
the other
transactions contemplated by this Agreement and compliance by
the Company with
the provisions of this Agreement will not, conflict with,
or result in any
violation or breach of, or default (with or without
notice or lapse
of time, or both) under, or give rise to a right of, or
result in,
termination, cancelation or acceleration of any obligation or
to the loss of a
benefit under, or result in the creation of any Lien in
or upon, any
Intellectual Property Right, in each case that individually
or in the
aggregate has had or would reasonably be expected to have a
Material Adverse
Effect. Section 3.01(p)(i) of the Company Disclosure
Schedule sets
forth, as of the date hereof, all Contracts under which the
Company or any
of its Subsidiaries is obligated to make payments to third
parties for use
of any Intellectual Property Rights with respect to the
<PAGE>
24
commercialization of any products that are, as of the date
hereof,
being sold,
manufactured by or under development by the Company or any of
its Subsidiaries
and for which such payments are in excess of $2,000,000
per year for any
single product. The aggregate amount of all such payments
that the Company
and its Subsidiaries are obligated to make under any
Contract of the
type described in the immediately preceding sentence that
are not required
to be disclosed pursuant to such sentence does not exceed
$10,000,000 per
year.
(ii) There are no pending or, to the Knowledge of the Company,
threatened
claims that the Company or any of its Subsidiaries has
infringed or is
infringing (including with respect to the manufacture, use
or sale by the
Company or any of its Subsidiaries of any products or to
the operations
of the Company and its Subsidiaries) any intellectual
property rights
of any person which individually or in the aggregate has
had or would
reasonably be expected to have a Material Adverse Effect. To
the Knowledge of
the Company, as of the date of this Agreement, there are
no facts,
circumstances or conditions that would reasonably be expected
to
form the basis
for any claim by a person to exclude or prevent the Company
or any of its
Subsidiaries from freely using its Intellectual Property
Rights and that
individually or in the aggregate would reasonably be
expected to have
a Material Adverse Effect.
(iii) All patents required to be listed in Section 3.01(p)(i) of
the
Company
Disclosure Schedule that are owned by the Company or any of its
Subsidiaries
have been duly registered and/or filed with or issued by each
appropriate
Governmental Entity, all necessary affidavits of continuing use
have been timely
filed, and all necessary maintenance fees have been timely
paid to continue
all such rights in effect, other than failures to be duly
registered,
filed, issued or paid which individually or in the aggregate
have not had and
would not reasonably be expected to have a Material
Adverse Effect.
None of the patents required to be listed in Section
3.01(p)(i) of
the Company Disclosure Schedule that are owned by the Company
or any of its
Subsidiaries has expired or been declared invalid, in whole
or in part, by
any Governmental Entity, other than such expirations or
declarations of
invalidity which individually or in the aggregate have not
had and would
not reasonably be expected to have a Material Adverse Effect.
There are no
ongoing interferences, oppositions, reissues, reexaminations
or other
proceedings challenging any of the patents or patent
applications
required to be
listed in Section 3.01(p)(i) of the Company Disclosure
Schedule and
owned by the Company or any of its Subsidiaries (or, to the
Company's
Knowledge, challenging any such patents or patent applications
licensed to the
Company or any of its Subsidiaries), including ex parte and
post-grant
proceedings, in the United States Patent and Trademark Office
or
in any foreign
patent office or similar administrative agency, other than
such
interferences, oppositions, reissues, reexaminations or
proceedings
that
individually or in the aggregate have not had and would not
reasonably
be expected to
have a Material Adverse Effect.
(iv) Except as has not had and would not reasonably be expected
to
have a Material
Adverse Effect, the Company and its Subsidiaries have used
commercially
reasonable efforts to maintain their material trade secrets in
confidence.
<PAGE>
25
(q) Voting Requirements. The affirmative vote of holders of a
majority of the
outstanding shares of Company Common Stock at the
Shareholders'
Meeting or any adjournment or postponement thereof to
approve this
Agreement (the "Shareholder Approval") is the only vote of
the holders of
any class or series of capital stock of the Company
necessary to
approve this Agreement and the transactions contemplated by
this
Agreement.
(r) State Takeover Laws; Company Articles Provisions. The Board
of
Directors of the
Company has unanimously adopted, by all directors
present, this
Agreement, the terms of this Agreement and the consummation
of the Merger
and the other transactions contemplated by this Agreement,
and such
adoption represents all the actions necessary to render
inapplicable to
this Agreement, the Merger and the other transactions
contemplated by
this Agreement, the restrictions (i) on "business
combinations" (as
defined in Section 23-1-43-5 of the IBCL) set forth in
Section
23-1-43-18 of the IBCL and (ii) on the actions or transactions
set
forth in
Paragraph 6 of the Company Articles ("Paragraph 6"), in each
case
to the extent,
if any, such restrictions would otherwise be applicable to
this Agreement,
the Merger and the other transactions contemplated by this
Agreement. For
purposes of Paragraph 6, the approval of the Board of
Directors of the
Company referred to in the immediately preceding sentence
constitutes the
approval of the Merger and the other transactions
contemplated by
this Agreement by the "Continuing Directors" (as defined
in Paragraph 6)
pursuant to clause (c) of Paragraph 6. No other similar
provision of the
Company Articles or the Company By-laws or, to the
Knowledge of the
Company, other state takeover Law or similar Law applies
or purports to
apply to this Agreement, the Merger or the other
transactions
contemplated by this Agreement.
(s) Brokers and Other Advisors. No broker, investment banker,
financial
advisor or other person (other than J.P. Morgan Securities Inc.
and Morgan
Stanley & Co. Incorporated), the fees and expenses of which
will be paid by the Company, is
entitled to any broker's, finder's,
financial
advisor's or other similar fee or commission in connection with
the transactions
contemplated by this Agreement based upon arrangements
made by or on
behalf of the Company. The Company has delivered to Parent
complete and
accurate copies of all Contracts under which any such fees or
expenses are
payable and all indemnification and other Contracts related
to the
engagement of the persons to whom such fees are payable.
(t) Opinion of Financial Advisors. The Company has received the
opinions of each
of J.P. Morgan Securities Inc. and Morgan Stanley & Co.
Incorporated, in
each case dated the date hereof, to the effect that, as
of such date,
the Merger Consideration is fair, from a financial point of
view, to the
holders of shares of Company Common Stock, a signed copy of
which opinion
has been, or will promptly be, delivered to Parent.
(u) Regulatory Compliance. (i) As to each product subject to
the
FDCA or similar
Legal Provisions in any foreign jurisdiction that are
developed,
manufactured, tested, di
