Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and among
CENDANT CORPORATION
ROBERTSON
ACQUISITION CORPORATION
and
ORBITZ, INC.
dated
September 29, 2004
<PAGE>
Index of Defined Terms
Defined Term
Section
------------
-------
Acquisition
Proposal........................................Section
5.2(e)(i)
Agreement............................................................Recitals
Appointment
Date..................................................Section
5.1
Assignee.........................................................Section
9.11
Average
Premium................................................Section
6.8(c)
Balance Sheet
Date................................................Section 3.9
Bankruptcy
Case.......................................................Annex
I
Bankruptcy
Court...................................................Annex
I(j)
Bankruptcy
Event...................................................Annex
I(h)
Benefit
Plans.................................................Section
3.12(a)
Certificate of
Merger.............................................Section 1.5
Certificates...................................................Section
2.2(b)
Change in Tax
Law..................................................Annex I(k)
Class A Common
Stock...........................................Section 3.3(a)
Class A
Offer........................................................Recitals
Class A
Shares.......................................................Recitals
Class B Common
Stock...........................................Section 3.3(a)
Class B
Offer........................................................Recitals
Class B
Shares.......................................................Recitals
Closing...........................................................Section
1.6
Closing
Date......................................................Section
1.6
Code...........................................................Section
2.2(e)
Common
Stock...................................................Section
3.3(a)
Common Stock Merger
Consideration..............................Section 2.1(c)
Company..............................................................Recitals
Company
Agreements.............................................Section
3.7(a)
Company Board of
Directors...........................................Recitals
Company
Bylaws.................................................Section
3.2(c)
Company
Certificate...........................................Section
3.2(c)
Company Change in
Recommendation...............................Section 5.3(a)
Company Disclosure
Schedule.......................................Article III
Company
Employees.............................................Section
6.13(a)
Company
IP....................................................Section
3.17(a)
Company Licensed
IP...........................................Section 3.17(a)
Company Material Adverse
Change................................Section 3.1(a)
Company Material Adverse
Effect................................Section 3.1(a)
Company Option
Plans..............................................Section 2.4
Company Owned
IP..............................................Section 3.17(a)
Company
Recommendation.........................................Section
5.3(a)
Company Restricted
Stock..........................................Section 2.5
Company SEC
Documents..........................................Section
3.8(a)
Company Stock
Option..............................................Section 2.4
Company Stockholders
Agreement.................................Section 3.3(c)
Company Stockholders Agreement
Waiver................................Recitals
Company
Subsidiary.............................................Section
3.2(a)
Copyrights....................................................Section
3.17(a)
Covered
Persons................................................Section
6.8(c)
CSFB.............................................................Section
3.22
D&O
Insurance..................................................Section
6.8(c)
DGCL.................................................................Recitals
Dissenting
Shares..............................................Section
2.3(a)
Drop Dead
Date.............................................Section
8.1(b)(iv)
Effective
Time....................................................Section
1.5
Encumbrances...................................................Section
3.2(a)
ERISA.........................................................Section
3.12(a)
ERISA
Affiliate...............................................Section
3.12(a)
Exchange
Act...................................................Section
1.1(a)
Exchange
Ratio....................................................Section
2.4
Final
Order........................................................Annex
I(j)
Financial
Statements...........................................Section
3.8(a)
GAAP...........................................................Section
3.8(a)
Governmental Approval
Condition.......................................Annex I
Governmental
Entity............................................Section
3.7(a)
HSR
Act........................................................Section
3.7(a)
HSR
Condition.........................................................Annex
I
Indemnification
Agreements.....................................Section 6.8(c)
Independent
Directors..........................................Section
1.3(b)
Industries.....................................................Section
3.1(a)
Initial Expiration
Date........................................Section 1.1(a)
Intellectual
Property.........................................Section
3.17(a)
IP
Agreement..................................................Section
3.14(i)
IPO
Exchange..................................................Section
3.13(e)
Litigation
Condition...............................................Annex
I(a)
Material Company
Agreement.......................................Section 3.14
Merger.........................................................Section
1.4(a)
Merger
Agreement......................................................Annex
I
Merger
Consideration...........................................Section
2.1(d)
Merrill
Lynch....................................................Section
3.22
Minimum
Condition..............................................Section
1.1(a)
Offer
Documents................................................Section
1.1(b)
Offer to
Purchase..............................................Section
1.1(a)
Offers...............................................................Recitals
Offers
Price.........................................................Recitals
Parent...............................................................Recitals
Parent Common
Stock...............................................Section 2.4
Patents.......................................................Section
3.17(a)
Paying
Agent...................................................Section
2.2(a)
Permitted
Encumbrances.........................................Section
3.2(a)
Person.........................................................Section
3.2(a)
Post Signing
Returns.............................................Section
6.11
Preferred
Shares...............................................Section
2.1(d)
Preferred
Stock................................................Section
3.3(a)
Preferred Stock Merger
Consideration...........................Section 2.1(d)
Proxy
Statement............................................Section
1.9(a)(ii)
Purchaser............................................................Recitals
Purchaser Common
Stock............................................Section 2.1
Regulation
M-A.................................................Section
1.1(b)
Reporting
System...............................................Section
6.5(c)
Representatives................................................Section
5.2(a)
Required Company
Holders..........................................Section 3.6
Restricted
Clauses................................................Section
5.1
SAM............................................................Section
3.2(d)
Sarbanes-Oxley
Act.............................................Section 3.8(a)
Schedule
14D-9.................................................Section
1.2(a)
Schedule
TO....................................................Section
1.1(b)
SEC............................................................Section
1.1(b)
Securities
Act.................................................Section
3.8(a)
Series A Preferred
Stock.......................................Section 2.1(d)
Shares...............................................................Recitals
Software
Programs.............................................Section
3.17(a)
Special
Committee....................................................Recitals
Special
Meeting.............................................Section
1.9(a)(i)
Stockholder..........................................................Recitals
Stockholder
Agreement................................................Recitals
Stockholder Approval
Condition........................................Annex I
Stockholder
Consent...................................................Annex
I
Stockholders Transaction
Consent.....................................Recitals
Subsidiary.....................................................Section
3.2(a)
Superior
Proposal..........................................Section
5.2(e)(ii)
Surviving
Corporation..........................................Section
1.4(a)
Tax...........................................................Section
3.13(d)
Tax
Authority.................................................Section
3.13(d)
Tax
Claim................................................Section
3.13(a)(iii)
Tax
Claims...............................................Section
3.13(a)(iii)
Tax
Returns...................................................Section
3.13(d)
Taxes.........................................................Section
3.13(d)
Termination
Fee................................................Section
8.2(b)
Third
Party....................................................Section
5.2(a)
Trade
Secrets.................................................Section
3.17(a)
Trademarks....................................................Section
3.17(a)
Transactions......................................................Section
3.4
United.........................................................Section
8.1(g)
United
Approval................................................Section
8.1(g)
Voting
Debt....................................................Section
3.3(a)
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter referred to as this
"Agreement"), dated September 29, 2004, by
and among Cendant Corporation, a
Delaware corporation ("Parent"), Robertson
Acquisition Corporation, a Delaware
corporation and an indirect wholly-owned
subsidiary of Parent ("Purchaser"),
and Orbitz, Inc., a Delaware corporation
(the "Company").
WHEREAS, the Board of Directors of each of Parent, Purchaser and
the
Company has approved, and deems it
advisable and in the best interests of its
respective stockholders to consummate, the
acquisition of the Company by Parent
upon the terms and subject to the
conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser
(i)
make a cash tender offer to acquire all of
the issued and outstanding shares of
class A common stock, par value $0.001
(such shares the "Class A Shares" and
such offer the "Class A Offer") and (ii)
make a cash tender offer to acquire
all of the issued and outstanding shares of
each series of class B common
stock, par value $0.001, which are not
registered pursuant to the Exchange Act
(such shares the "Class B Shares," and,
together with the Class A Shares, the
"Shares," and such offer the "Class B
Offer," and, together with the Class A
Offer, the "Offers"), each for $27.50 per
Share in cash (such price, or any
such higher price per Share as may be paid
in the Offers, referred to herein as
the "Offers Price");
WHEREAS, also in furtherance of such acquisition, the Board of
Directors of each of Parent, Purchaser and
the Company has approved this
Agreement and the Merger following the
Offers in accordance with the General
Corporation Law of the State of Delaware
(the "DGCL") and upon the terms and
subject to the conditions set forth
herein;
WHEREAS, the Board of Directors of the Company (the "Company Board
of
Directors") has determined that the
consideration to be paid for each Share in
the Offers and the Merger is fair to the
holders of such Shares and has
resolved to recommend that the holders of
such Shares accept the Offers and
adopt and approve this Agreement and each
of the Transactions upon the terms
and subject to the conditions set forth
herein;
WHEREAS, the Special Committee of the Company Board of Directors
(the
"Special Committee") has determined that
the consideration to be paid for each
Class A Share in the Class A Offer and the
Merger is fair to the holders of
such Shares (other than the Stockholders
(excluding Jeffrey G. Katz)) and has
resolved to recommend that the holders of
such Shares (other than the
Stockholders (excluding Jeffrey G. Katz))
accept the Class A Offer and adopt
and approve this Agreement and each of the
Transactions upon the terms and
subject to the conditions set forth
herein;
WHEREAS, as a condition and further inducement to Parent and
Purchaser
to enter into this Agreement and incur the
obligations set forth herein,
certain stockholders of the Company (each,
a "Stockholder") concurrently
herewith are entering into a Stockholder
Agreement (the "Stockholder
Agreement"), dated as of the date hereof,
with Parent and Purchaser, in the
form attached hereto as Exhibit C, pursuant
to which each such Stockholder
(other than Jeffrey G. Katz) has, among
other things, upon the terms and
subject to the conditions set forth
therein, agreed to irrevocably tender such
Stockholder's Class B Shares in the Class B
Offer and granted Parent an
irrevocable proxy with respect to the
voting of certain Shares in favor of the
adoption of the Merger, and Jeffrey G. Katz
has, among other things, upon the
terms and subject to the conditions set
forth therein, agreed to irrevocably
tender his Class A Shares in the Class A
Offer and granted Parent an
irrevocable proxy with respect to the
voting of such Shares in favor of the
adoption of the Merger;
WHEREAS, immediately following the execution of this Agreement,
each
of the Stockholders (other than Jeffrey G.
Katz) is delivering to the Company
written consents in lieu of a meeting of
stockholders of the Company pursuant
to which such Stockholder has adopted this
Agreement, the Merger and the
Transactions pursuant to Sections 8.2(a),
8.2(b) and, subject to the approval
of the Bankruptcy Court in the case of
United, 8.2(c) of the Company
Certificate (each, a "Stockholders
Transaction Consent");
WHEREAS, concurrently with the execution of this Agreement, the
Company and the Stockholders (other than
Jeffrey G. Katz) are each executing
and delivering a written waiver (each, a
"Company Stockholders Agreement
Waiver") which waiver, upon its
effectiveness, among other things, eliminates
any requirement under Section 4.3 of the
Company Stockholders Agreement that
Purchaser (or any transferee or assignee
thereof) as transferee in the Class B
Offer (i) be subject to the terms and
conditions of the Company Stockholders
Agreement and/or (ii) assume (in writing or
otherwise) any obligations under
the Company Stockholders Agreement, in
either case upon, or as a condition to,
a "Qualified Transfer" (as defined in the
Company Certificate);
WHEREAS,
concurrently with the execution hereof, each of the directors
designated by each holder of Class B Shares
is tendering his resignation from
the Company Board of Directors effective as
of the acquisition of the Class B
Shares owned by such holder pursuant to the
Class B Offer; and
WHEREAS, the Company, Parent and Purchaser desire to make
certain
representations, warranties, covenants and
agreements in connection with the
Offers and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
mutual
representations, warranties, covenants and
agreements set forth herein, the
parties hereto agree as follows:
Article I
THE OFFERS AND MERGER
Section 1.1. The Offers. (a) Provided that this Agreement shall
not
have been terminated in accordance with
Section 8.1 and none of the events set
forth in paragraphs (a) (except to the
extent any such suit, action or
proceeding described in such paragraph (a)
has been brought or commenced by a
United States Trustee in a Bankruptcy
Case), (b), (c), (d), (e), (h), (i) and
(k) of Annex I shall have occurred, as
promptly as practicable, and in any
event, within ten business days of the date
hereof, Purchaser shall
simultaneously commence (within the meaning
of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended, and the
rules and regulations promulgated
thereunder (the "Exchange Act")) each of
the Offers to purchase for cash all
Shares at the Offers Price, subject to (i)
there being validly tendered in the
Offers (in the aggregate) and not withdrawn
prior to the expiration of the
Offers that number of Shares which,
together with the Shares then beneficially
owned by Parent or Purchaser, represents at
least a majority of the Shares
outstanding on a fully-diluted basis and no
less than a majority of the voting
power of the outstanding shares of capital
stock of the Company entitled to
vote in the election of directors
(collectively, the "Minimum Condition") and
(ii) the other conditions set forth in
Annex I. Subject to the prior
satisfaction or waiver by Parent or
Purchaser of the Minimum Condition and the
other conditions of the Offers set forth in
Annex I, Purchaser shall
consummate the Offers in accordance with
their terms and accept for payment
and pay for all Shares tendered pursuant to
the Offers as soon as practicable
after Purchaser is legally permitted to do
so under applicable law; provided,
however, that the initial expiration date
of the Offers (and the first date
upon which Purchaser may accept Shares
tendered pursuant to the Offers) shall
be the later of the date that is (i) 30
business days following the first
public announcement of this Agreement by
Parent or (ii) 20 business days
following the commencement of the Offers
(the "Initial Expiration Date"). The
obligations of Purchaser to commence the
Offers and accept for payment and pay
for any Shares validly tendered on or prior
to the expiration of the Offers
and not withdrawn shall be subject to the
Minimum Condition and the other
conditions set forth in Annex I. The Offers
shall be made by means of an offer
to purchase (the "Offer to Purchase") that
contains the terms set forth in
this Agreement and the Stockholder
Agreement in effect as of the date hereof,
the Minimum Condition and the other
conditions set forth in Annex I. Purchaser
shall not decrease the Offers Price, pay a
different price in one Offer than
the other, change the form of consideration
payable in the Offers, decrease
the number of Shares sought in the Offers,
impose additional conditions to the
Offers or amend any other condition to the
Offers in any manner adverse to the
holders of the Shares without the prior
written consent of the Company (such
consent, subject to Section 9.1, to be
authorized by the Company Board of
Directors); provided, however, that (x) if
on the Initial Expiration Date (as
it may be extended), all conditions to the
Offers shall not have been
satisfied or waived, Purchaser may, from
time to time, in its sole discretion,
extend the Initial Expiration Date for such
period as Purchaser may determine
to a date that is no later than the Drop
Dead Date and (y) Purchaser may, in
its sole discretion, provide a "subsequent
offering period" in accordance with
Rule 14d-11 under the Exchange Act. In
addition, Parent and Purchaser agree
that if at any one or more scheduled
expiration dates of the Offers, the HSR
Condition, the Litigation Condition, the
Governmental Approval Condition
(which for purposes of this Section 1.1(a)
shall also be deemed to include the
conditions set forth in paragraphs (h) and
(j) (to the extent arising out of
litigation) of Annex I) or the Stockholder
Approval Condition, in each case,
set forth in Annex I have not been
satisfied or waived, but at such scheduled
expiration date all of the other conditions
to the Offers set forth in Annex I
shall then be satisfied, or if not then
satisfied, are reasonably capable of
being satisfied, then, at the request of
the Company (received at least 24
hours prior to the then-scheduled
expiration date of the Offers and confirmed
in writing), Purchaser shall extend the
Offers from time to time, in the case
of the Litigation Condition, Governmental
Approval Condition or the
Stockholder Approval Condition not being
satisfied, to a date that is no later
than January 31, 2005, and, in the case of
the HSR Condition or the Litigation
Condition (to the extent relating solely to
antitrust and competition law
matters) not being satisfied, to a date
that is no later than April 30, 2005.
Without limiting the right of Purchaser to
extend the Offers, in the event
that Parent shall receive a Notice of
Superior Proposal at any time, Purchaser
shall, if the Matching Bid Date shall be
later than the scheduled expiration
date of the Offers, extend the Offers until
5:00 p.m. Eastern Time on the
later of (i) the earlier of (x) the second
full business day after Parent's
delivery of a Matching Bid, if any, or (y)
the first full business day after
Purchaser notifies the Company in writing
that Purchaser waives any and all
rights to make a Matching Bid under Section
5.3(b) (and releases the Company
from its obligations with respect thereto)
or fails to provide such notice to
the Company and (ii) in the event the
Company establishes a Final Deadline
pursuant to Section 5.3(b), the second full
business day following such Final
Deadline (the later of the dates specified
in clauses (i) and (ii) above, the
"Matching Bid Date"). Purchaser may
increase the Offers Price and extend the
Offers to the extent required by law in
connection with such increase, in each
case in its sole discretion and without the
Company's consent. Notwithstanding
anything herein to the contrary, any
increase or decrease in the Offers Price,
modification, amendment or waiver of any
terms of or conditions to any Offer,
consents with respect to any Offer or
extension if relevant or applicable of
any Offer shall, in each case, be made to
both Offers simultaneously or not at
all. Purchaser shall not terminate the
Offers prior to any scheduled
expiration date (as the same may be
extended or required to be extended)
without the written consent of the Company
except in the event that Purchaser
terminates this Agreement pursuant to
Section 8.1.
(b) As soon as practicable on the date the Offers are
commenced,
Parent and Purchaser shall file with the
Securities and Exchange Commission
(the "SEC"), pursuant to Regulation M-A
under the Exchange Act ("Regulation
M-A"), a Tender Offer Statement on Schedule
TO with respect to the Class A
Offer (together with all amendments,
supplements and exhibits thereto, the
"Schedule TO"). The Schedule TO shall
include the summary term sheet required
under Regulation M-A and, as exhibits, the
Offer to Purchase and a form of
letter of transmittal and summary
advertisement (collectively, together with
any amendments and supplements thereto, the
"Offer Documents"). Parent and
Purchaser agree to take all steps necessary
to cause the Offer Documents to be
filed with the SEC and disseminated to
holders of Shares, in each case as and
to the extent required by applicable
federal securities laws. Parent and
Purchaser, on the one hand, and the
Company, on the other hand, agree to
promptly correct any information provided
by it for use in the Offer Documents
if and to the extent that it shall have
become false or misleading in any
material respect or as otherwise required
by law. Parent and Purchaser further
agree to take all steps necessary to cause
the Offer Documents, as so corrected
(if applicable), to be filed with the SEC
and disseminated to holders of
Shares, in each case as and to the extent
required by applicable federal
securities laws. The Company and its
counsel shall be given a reasonable
opportunity to review the Schedule TO and
the Offer Documents before they are
filed with the SEC, and Parent and
Purchaser shall give due consideration to
all the reasonable additions, deletions or
changes suggested thereto by the
Company and its counsel. In addition,
Parent and Purchaser agree to provide the
Company and its counsel in writing with any
comments, whether written or oral,
that Parent, Purchaser or their counsel may
receive from time to time from the
SEC or its staff with respect to the
Schedule TO and the Offer Documents
promptly after Parent's or Purchaser's, as
the case may be, receipt of such
comments, and any written or oral responses
thereto. The Company and its
counsel shall be given a reasonable
opportunity to review any such written
responses and Parent and Purchaser shall
give due consideration to all
reasonable additions, deletions or changes
suggested thereto by the Company and
its counsel. If the Offers are terminated
or withdrawn by Purchaser, or this
Agreement is terminated prior to the
purchase of Shares in the Offers, Parent
and Purchaser shall promptly return, and
shall cause any depository or paying
agent, including the Paying Agent, acting
on behalf of Parent and Purchaser, to
return all tendered Shares to the
registered holders thereof.
Section 1.2 Company Actions. (a) Promptly following the filing of
the
Schedule TO, the Company shall, in a manner
that complies with Rule 14d-9 under
the Exchange Act, file with the SEC a
Tender Offer Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to
the Offers (together with all
amendments, supplements and exhibits
thereto, the "Schedule 14D-9") that shall,
subject to the provisions of Section
5.3(b), contain the recommendation
referred to in clause (iii) of Section 3.5.
The Company further agrees to take
all steps necessary to cause the Schedule
14D-9 to be filed with the SEC and
disseminated to holders of Shares, in each
case as and to the extent required
by applicable federal securities laws. The
Company, on the one hand, and Parent
and Purchaser, on the other hand, agree to
promptly correct any information
provided by it for use in the Schedule
14D-9 if and to the extent that it shall
have become false or misleading in any
material respect or as otherwise
required by law. The Company agrees to take
all steps necessary to cause the
Schedule 14D-9, as so corrected (if
applicable), to be filed with the SEC and
disseminated to holders of the Shares, in
each case as and to the extent
required by applicable federal securities
laws. Parent, Purchaser and their
counsel shall be given a reasonable
opportunity to review the Schedule 14D-9
before it is filed with the SEC and the
Company shall give due consideration to
all reasonable additions, deletions or
changes suggested thereto by Parent,
Purchaser and their counsel. In addition,
the Company agrees to provide Parent,
Purchaser and their counsel in writing with
any comments, whether written or
oral, that the Company or its counsel may
receive from time to time from the
SEC or its staff with respect to the
Schedule 14D-9 promptly after the
Company's receipt of such comments, and any
written or oral responses thereto.
Parent, Purchaser and their counsel shall
be given a reasonable opportunity to
review any such written responses and the
Company shall give due consideration
to all reasonable additions, deletions or
changes suggested thereto by Parent,
Purchaser and their counsel.
(b) In connection with the Class A Offer, the Company shall
promptly
furnish or cause to be furnished to
Purchaser mailing labels, security position
listings and any available listing or
computer file containing the names and
addresses of the record holders of the
Class A Shares as of a recent date, and
shall promptly furnish Purchaser with such
information and assistance
(including, but not limited to, lists of
holders of the Class A Shares, updated
promptly from time to time upon Purchaser's
request, and their addresses,
mailing labels and lists of security
positions) as Purchaser or its agent may
reasonably request for the purpose of
communicating the Class A Offer to the
record and beneficial holders of the Class
A Shares. Subject to the
requirements of applicable law, and except
for such steps as are necessary to
disseminate the Offer Documents and any
other documents necessary to consummate
the Offers, the Merger and the other
transactions contemplated by this
Agreement, the Parent and Purchaser shall
hold in confidence the information
contained in any such labels, listings and
files, shall use such information
only in connection with the Offers and the
Merger and, if this Agreement shall
be terminated, shall promptly deliver to
the Company all copies of such
information.
Section 1.3 Directors. (a) Promptly upon the purchase of and
payment
for any Shares by Parent or Purchaser
pursuant to the Offers which represents
at least a majority of the Shares
outstanding and no less than a majority of
the voting power of the outstanding shares
of capital stock of the Company
entitled to vote in the election of
directors and at all times thereafter,
Parent shall be entitled to elect or
designate such number of directors,
rounded up to the next whole number, on the
Company Board of Directors as is
equal to the product of the total number of
directors on the Company Board of
Directors (giving effect to the directors
elected or designated by Parent
pursuant to this sentence) multiplied by
the percentage that the aggregate
number of Shares beneficially owned by
Purchaser, Parent and any of their
affiliates bears to the total number of
Shares then outstanding. The Company
shall, upon Parent's request at any time
following the purchase of and payment
for Shares pursuant to the Offers, take
such actions, including but not limited
to promptly filling vacancies or newly
created directorships on the Company
Board of Directors, promptly increasing the
size of the Company Board of
Directors (including by amending the Bylaws
of the Company if necessary so as
to increase the size of the Company Board
of Directors) and/or promptly
securing the resignations of such number of
its incumbent directors (subject to
the right of any holder of Class B Shares
to designate directors of the Company
as provided in the Company Certificate) as
are necessary to enable Parent's
designees to be so elected or designated to
the Company Board of Directors, and
shall use its commercial best efforts to
cause Parent's designees to be so
elected or designated at such time. The
Company shall, upon Parent's request
following the purchase of and payment for
Shares pursuant to the Offers, also
cause persons elected or designated by
Parent to constitute the same percentage
(rounded up to the next whole number) as is
on the Company Board of Directors
of (i) each committee of the Company Board
of Directors (other than the Special
Committee), (ii) each board of directors
(or similar body) of each Company
Subsidiary and (iii) each committee (or
similar body) of each such board, in
each case only to the extent permitted by
applicable law or the rules of any
stock exchange on which the Class A Shares
are listed. The Company's
obligations under this Section 1.3(a) shall
be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated
thereunder. The Company shall promptly
upon execution of this Agreement take all
actions required pursuant to Section
14(f) and Rule 14f-1 in order to fulfill
its obligations under this Section
1.3(a), including mailing to stockholders
(together with the Schedule 14D-9)
the information required by Section 14(f)
and Rule 14f-1 as is necessary to
enable Parent's designees to be elected or
designated to the Company Board of
Directors. Parent or Purchaser shall supply
the Company with information with
respect to either of them and their
nominees, officers, directors and
affiliates to the extent required by
Section 14(f) and Rule 14f-1. The
provisions of this Section 1.3(a) are in
addition to and shall not limit any
rights that any of Purchaser, Parent or any
of their respective affiliates may
have as a holder or beneficial owner of
Shares as a matter of law with respect
to the election of directors or
otherwise.
(b) In the event that Parent's designees are elected or designated
to
the Company Board of Directors pursuant to
Section 1.3(a), then, until the
Effective Time, the Company shall cause the
Company Board of Directors to
maintain three directors who are designated
as Class A Directors on the date
hereof (the "Independent Directors");
provided, however, that if any
Independent Director is unable to serve due
to death or disability, the
remaining Independent Director(s) shall be
entitled to elect or designate
another person (or persons) to fill such
vacancy, and such person (or persons)
shall be deemed to be an Independent
Director for purposes of this Agreement.
If no Independent Director then remains,
the other directors shall designate
three persons to fill such vacancies and
such persons shall be deemed
Independent Directors for purposes of this
Agreement. Notwithstanding anything
in this Agreement to the contrary, if
Parent's designees constitute a majority
of the Company Board of Directors after the
acceptance for payment of Shares
pursuant to the Offers and prior to the
Effective Time, then the affirmative
vote of a majority of the Independent
Directors shall (in addition to the
approval rights of the Company Board of
Directors or the stockholders of the
Company as may be required by the Company
Certificate, the Company Bylaws or
applicable law) be required to (i) amend or
terminate this Agreement by the
Company, (ii) exercise or waive any of the
Company's rights, benefits or
remedies hereunder, if such action would
materially and adversely affect the
holders of Shares (other than Parent or
Purchaser) or adversely affects any
Director, (iii) amend the Company
Certificate or Company Bylaws if such action
would materially and adversely affect the
holders of Shares (other than Parent
or Purchaser) or (iv) take any other action
of the Company Board of Directors
under or in connection with this Agreement
if such action would materially and
adversely affect the holders of Shares
(other than Parent or Purchaser);
provided, however, that if there shall be
no Independent Directors as a result
of such persons' deaths, disabilities or
refusal to serve, then such actions
may be effected by majority vote of the
entire Company Board of Directors.
Section 1.4 The Merger. (a) Subject to the terms and conditions
of
this Agreement, at the Effective Time, the
Company and Purchaser shall
consummate a merger (the "Merger") pursuant
to which (i) Purchaser shall be
merged with and into the Company and the
separate corporate existence of
Purchaser shall thereupon cease, (ii) the
Company shall be the successor or
surviving corporation in the Merger and
shall continue to be governed by the
laws of the State of Delaware and (iii) the
separate corporate existence of the
Company with all its rights, privileges,
immunities, powers and franchises
shall continue unaffected by the Merger.
The corporation surviving the Merger
is sometimes hereinafter referred to as the
"Surviving Corporation." The Merger
shall have the effects set forth in the
DGCL.
(b) From and after the Effective Time, the certificate of
incorporation of the Company shall be
amended to read in the form attached
hereto as Exhibit A and, as so amended,
shall be the certificate of
incorporation of the Surviving Corporation,
until thereafter amended as
provided by law and such certificate of
incorporation.
(c) From and after the Effective Time, the bylaws of the Company
shall
be amended to read in the form attached
hereto as Exhibit B and, as so amended,
shall be the bylaws of the Surviving
Corporation, except as to the name of the
Surviving Corporation, until thereafter
amended as provided by law, the
Certificate of Incorporation of the
Surviving Corporation and such bylaws.
Section 1.5 Effective Time. Parent, Purchaser and the Company
shall
cause an appropriate Certificate of Merger
(the "Certificate of Merger") to be
executed and filed on the Closing Date (or
on such other date as Parent and the
Company may agree) with the Secretary of
State of the State of Delaware as
provided in the DGCL. The Merger shall
become effective on the date on which
the Certificate of Merger has been duly
filed with the Secretary of State of
the State of Delaware or such time as is
agreed upon by the parties and
specified in the Certificate of Merger,
such time hereinafter referred to as
the "Effective Time."
Section 1.6 Closing. The closing of the Merger (the "Closing")
will
take place at 10:00 a.m., New York time, on
a date to be specified by the
parties, such date to be no later than the
second business day after
satisfaction or waiver of all of the
conditions set forth in Article VII (the
"Closing Date"), at the offices of Skadden,
Arps, Slate, Meagher & Flom LLP,
Four Times Square, New York, NY 10036,
unless another date or place is agreed
to in writing by the parties hereto.
Section 1.7 Directors and Officers of the Surviving Corporation.
The
Company, Parent and Purchaser shall use
their reasonable best efforts to cause
the directors of Purchaser immediately
prior to the Effective Time, from and
after the Effective Time, be the directors
of the Surviving Corporation, and
the officers of the Company immediately
prior to the Effective Time shall, from
and after the Effective Time, to be the
officers of the Surviving Corporation,
in each case until their respective
successors shall have been duly elected,
designated or qualified, or until their
earlier death, resignation or removal
in accordance with the Surviving
Corporation's Certificate of Incorporation and
Bylaws.
Section 1.8 Subsequent Actions. If at any time after the
Effective
Time the Surviving Corporation shall
determine, in its sole discretion, or
shall be advised, that any deeds, bills of
sale, assignments, assurances or any
other actions or things are necessary or
desirable to vest, perfect or confirm
of record or otherwise in the Surviving
Corporation its right, title or
interest in, to or under any of the rights,
properties or assets of either of
the Company or Purchaser acquired or to be
acquired by the Surviving
Corporation as a result of, or in
connection with, the Merger or otherwise to
carry out this Agreement, then the officers
and directors of the Surviving
Corporation shall be authorized to execute
and deliver, in the name and on
behalf of either the Company or Purchaser,
all such deeds, bills of sale,
instruments of conveyance, assignments and
assurances and to take and do, in
the name and on behalf of each of such
corporations or otherwise, all such
other actions and things as may be
necessary or desirable to vest, perfect or
confirm any and all right, title or
interest in, to and under such rights,
properties or assets in the Surviving
Corporation or otherwise to carry out
this Agreement.
Section 1.9 Stockholders' Meeting. (a) If required by applicable
law
in order to consummate the Merger, the
Company, acting through the Company
Board of Directors, shall, in accordance
with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as soon as
reasonably practicable following the acceptance for payment and
purchase of Shares by Purchaser pursuant to the Offers for the
purpose
of considering and taking action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement
and
use its commercial best efforts to obtain and furnish the
information
required to be included by the SEC in the Proxy Statement and,
after
consultation with Parent, respond promptly to any comments made by
the
SEC with respect to the preliminary proxy or information statement
and
cause a definitive proxy or information statement (the "Proxy
Statement") to be mailed to its stockholders;
(iii) subject to Section 5.3(b) and 6.2, include in the Proxy
Statement the
recommendations of (x) the Company Board of Directors
that stockholders of the Company vote in favor of the approval of
the
Merger and the adoption of this Agreement and (y) the Special
Committee that the holders of the Class A Shares (other than
the
Stockholders (excluding Jeffrey G. Katz)) vote in favor of the
approval of the Merger and the adoption of this Agreement; and
(iv) subject to Sections 5.3(b) and 6.2, use its commercial
best efforts to solicit from its stockholders proxies in favor of
the
Merger and take all other action reasonably necessary or advisable
to
secure the approval of stockholders required by the DGCL and any
other
applicable law to effect the Merger.
(b) Parent agrees to vote, or cause to be voted, all of the
Shares
then owned by it, Purchaser or any of its
other subsidiaries and affiliates in
favor of the approval of the Merger and the
adoption of this Agreement.
Section 1.10 Merger Without Meeting of Stockholders.
Notwithstanding
Section 1.9, in the event that Parent,
Purchaser or any other subsidiary of
Parent shall acquire at least 90% of the
outstanding shares of each class of
capital stock of the Company entitled to
vote on the Merger, pursuant to the
Offers or otherwise in accordance with the
provisions hereof, the parties
hereto agree, at the request of Parent and
subject to Article VII, to take all
necessary and appropriate action to cause
the Merger to become effective as
soon as practicable after such acquisition,
without a meeting of stockholders
of the Company, in accordance with Section
253 of the DGCL.
Article II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time,
by
virtue of the Merger and without any action
on the part of the holders of any
securities of the Company or common stock,
par value $0.01 per share, of
Purchaser (the "Purchaser Common
Stock"):
(a) Purchaser Common Stock. Each issued and outstanding share
of
Purchaser Common Stock shall be converted
into and become one fully paid and
nonassessable share of common stock of the
Surviving Corporation.
(b) Cancellation
of Treasury Stock and Parent-Owned Stock. All Shares
that are owned by the Company as treasury
stock and any Shares owned by Parent,
Purchaser or any other wholly-owned
Subsidiary of Parent shall be cancelled and
shall cease to exist, and no consideration
shall be delivered in exchange
therefor.
(c) Conversion of Common Stock. Each issued and outstanding
Share
(other than Shares to be cancelled in
accordance with Section 2.1(b) and other
than Dissenting Shares) shall be converted
into the right to receive the Offers
Price, payable to the holder thereof in
cash, without interest (the "Common
Stock Merger Consideration"). From and
after the Effective Time, all such
Shares shall no longer be outstanding and
shall automatically be cancelled and
shall cease to exist, and each holder of a
certificate representing any such
Shares shall cease to have any rights with
respect thereto, except the right to
receive the Common Stock Merger
Consideration therefor upon the surrender of
such certificate in accordance with Section
2.2, without interest thereon.
(d) Conversion of Series A Preferred Stock. Each issued and
outstanding share (the "Preferred Shares")
of Series A Redeemable Non-Voting
Convertible Preferred Stock, par value
$0.001 (the "Series A Preferred Stock"),
other than Dissenting Shares, shall be
converted into the right to receive the
Liquidation Preference (as defined in the
Company Certificate) payable to the
holder thereof in cash, without interest
(the "Preferred Stock Merger
Consideration" and, together with the
Common Stock Merger Consideration, the
"Merger Consideration"). From and after the
Effective Time, all such Preferred
Shares shall no longer be outstanding and
shall automatically be cancelled and
shall cease to exist, and each holder of a
certificate representing any such
shares shall cease to have any rights with
respect thereto, except the right to
receive the Preferred Stock Merger
Consideration therefor upon the surrender of
such certificate to the Company, without
interest thereon. Upon surrender of
such certificate for cancellation to the
Company, the holder of such
certificate shall be entitled to receive in
exchange therefor the Preferred
Stock Merger Consideration for each
Preferred Share formerly represented by
such certificate and the certificate so
surrendered shall forthwith be
cancelled. The Company shall provide all
holders of Series A Preferred Stock
with the notice required by the Certificate
of Designations, Preferences and
Rights of the Series A Preferred Stock
attached as Exhibit A to the Company
Certificate.
Section 2.2 Exchange of Certificates. (a) Paying Agent. Parent shall
designate a bank or trust company to act as
agent for the holders of Shares in
connection with the Merger (the "Paying
Agent") and to receive the funds to
which holders of Shares shall become
entitled pursuant to Section 2.1. Prior to
the Effective Time, Parent or Purchaser
shall deposit, or cause to be
deposited, with the Paying Agent the
aggregate Common Stock Merger
Consideration. For purposes of determining
the amount of Common Stock Merger
Consideration to be so deposited, Parent
and Purchaser shall assume that no
stockholder of the Company will perfect any
right to appraisal of his, her or
its Shares. Such funds shall be invested by
the Paying Agent as directed by
Parent or the Surviving Corporation, in its
sole discretion, pending payment
thereof by the Paying Agent to the holders
of the Shares. Earnings from such
investments shall be the sole and exclusive
property of Parent and the
Surviving Corporation, and no part of such
earnings shall accrue to the benefit
of holders of Shares.
(b) Exchange Procedures. Promptly after the Effective Time, the
Paying
Agent shall mail to each holder of record
of a certificate or certificates,
which immediately prior to the Effective
Time represented outstanding Shares
(the "Certificates"), whose shares were
converted pursuant to Section 2.1 into
the right to receive the Common Stock
Merger Consideration (i) a letter of
transmittal (which shall specify that
delivery shall be effected, and risk of
loss and title to the Certificates shall
pass, only upon delivery of the
Certificates to the Paying Agent and shall
be in such form and have such other
provisions as Parent may reasonably
specify) and (ii) instructions for
effecting the surrender of the Certificates
in exchange for payment of the
Common Stock Merger Consideration. Upon
surrender of a Certificate for
cancellation to the Paying Agent or to such
other agent or agents as may be
appointed by Parent, together with such
letter of transmittal, duly executed,
the holder of such Certificate shall be
entitled to receive in exchange
therefor the Common Stock Merger
Consideration for each Share formerly
represented by such Certificate and the
Certificate so surrendered shall
forthwith be cancelled. If payment of the
Common Stock Merger Consideration is
to be made to a Person other than the
Person in whose name the surrendered
Certificate is registered, it shall be a
condition precedent of payment that
(x) the Certificate so surrendered shall be
properly endorsed or shall be
otherwise in proper form for transfer and
(y) the Person requesting such
payment shall have paid any transfer and
other taxes required by reason of the
payment of the Common Stock Merger
Consideration to a Person other than the
registered holder of the Certificate
surrendered or shall have established to
the satisfaction of the Surviving
Corporation that such tax either has been
paid or is not required to be paid. Until
surrendered as contemplated by this
Section 2.2, each Certificate shall be
deemed at any time after the Effective
Time to represent only the right to receive
the Common Stock Merger
Consideration in cash as contemplated by
this Section 2.2, without interest
thereon.
(c) Transfer Books; No Further Ownership Rights in Shares. At
the
Effective Time, the stock transfer books of
the Company shall be closed and
thereafter there shall be no further
registration of transfers of Shares or
Preferred Shares on the records of the
Company. From and after the Effective
Time, the holders of certificates
evidencing ownership of Shares or Preferred
Shares, as the case may be, outstanding
immediately prior to the Effective Time
shall cease to have any rights with respect
to such Shares or Preferred Shares,
as the case may be, except as otherwise
provided for herein or by applicable
law. If, after the Effective Time,
certificates are presented to the Surviving
Corporation for any reason, they shall be
cancelled and exchanged as provided
in this Article II.
(d) Termination of Fund; No Liability. At any time following one
year
after the Effective Time, the Surviving
Corporation shall be entitled to
require the Paying Agent to deliver to it
any funds (including any interest
received with respect thereto) made
available to the Paying Agent and not
disbursed (or for which disbursement is
pending subject only to the Paying
Agent's routine administrative procedures)
to holders of Certificates, and
thereafter such holders shall be entitled
to look only to the Surviving
Corporation (subject to abandoned property,
escheat or other similar laws) only
as general creditors thereof with respect
to the Merger Consideration payable
upon due surrender of their Certificates,
without any interest thereon.
Notwithstanding the foregoing, neither the
Surviving Corporation nor the Paying
Agent shall be liable to any holder of a
Certificate for Merger Consideration
delivered to a public official pursuant to
any applicable abandoned property,
escheat or similar law.
(e) Withholding Rights. Parent, Purchaser, the Surviving
Corporation
and the Paying Agent, as the case may be,
shall be entitled to deduct and
withhold from the relevant Merger
Consideration otherwise payable pursuant to
this Agreement to any holder of Shares
(including any holder of Shares who held
Company Restricted Stock that vested in
accordance with its terms) or Preferred
Shares such amounts that Parent, Purchaser,
the Surviving Corporation or the
Paying Agent is required to deduct and
withhold with respect to the making of
such payment (or, in the case of Company
Restricted Stock, the vesting of such
Company Restricted Stock in accordance with
its terms) under the Internal
Revenue Code of 1986, as amended (the
"Code"), the rules and regulations
promulgated thereunder or any provision of
state, local or foreign law. To the
extent that amounts are so withheld by
Parent, Purchaser, the Surviving
Corporation or the Paying Agent, such
amounts shall be treated for all purposes
of this Agreement as having been paid to
the holder of Shares or Preferred
Shares in respect of which such deduction
and withholding was made by Parent,
Purchaser, the Surviving Corporation or the
Paying Agent.
Section 2.3 Dissenting Shares. (a) Notwithstanding anything in
this
Agreement to the contrary, Shares or
Preferred Shares outstanding immediately
prior to the Effective Time and held by a
holder who has not voted in favor of
the adoption of this Agreement or consented
thereto in writing and who has
complied with Section 262 of the DGCL
("Dissenting Shares") shall not be
converted into a right to receive the
Common Stock Merger Consideration or the
Preferred Stock Merger Consideration, as
the case may be, unless such holder
fails to perfect or withdraws or otherwise
loses his or her right to appraisal.
A holder of Dissenting Shares shall be
entitled to receive payment of the
appraised value of such shares held by him
or her in accordance with Section
262 of the DGCL, unless, after the
Effective Time, such holder fails to perfect
or withdraws or loses his or her right to
appraisal, in which case such Shares
or Preferred Shares, as the case may be,
shall be converted into and represent
only the right to receive the Common Stock
Merger Consideration or the
Preferred Stock Merger Consideration, as
the case may be, without interest
thereon, upon surrender of the Certificate
or Certificates representing such
Shares or Preferred Shares, as the case may
be.
(b) The Company shall give Parent (i) prompt notice of any
written
demands for appraisal of any Shares or
Preferred Shares, attempted withdrawals
of such demands and any other instruments
served pursuant to the DGCL and
received by the Company relating to rights
of appraisal and (ii) the
opportunity to participate in the conduct
of all negotiations and proceedings
with respect to demands for appraisal under
the DGCL. Except with the prior
written consent of Parent, the Company
shall not voluntarily make any payment
with respect to any demands for appraisal
or settle or offer to settle any such
demands for appraisal.
Section 2.4 Option Plans. Effective as of the Effective Time,
each
outstanding employee stock option or right
to acquire shares of Class A Common
Stock (each, a "Company Stock Option")
granted under the Company's 2000 Stock
Plan or the Company's Amended and Restated
2002 Stock Plan (together, the
"Company Option Plans"), whether or not
then exercisable, shall (a) with
respect to the portion thereof that is
vested immediately prior to the
Effective Time in accordance with the terms
of the Company Option Plans as in
effect on the date of this Agreement and
upon receipt of any necessary
optionholder consent, be cancelled in
exchange for a single lump sum cash
payment equal to (reduced by any applicable
withholding tax) the product of (i)
the excess, if any, of the Common Stock
Merger Consideration over the per share
exercise price of such Company Stock Option
immediately before the Effective
Time and (ii) the number of shares of Class
A Common Stock issuable upon
exercise of the vested portion of such
Company Stock Option immediately before
the Effective Time and (b) with respect to
the unvested portion thereof (or the
vested portion thereof (as described above)
to the extent necessary
optionholder consent is not obtained) be
assumed by Parent and converted into
an option to purchase common stock of
Parent, par value $0.01 per share
("Parent Common Stock") in accordance with
this Section 2.4. Each unvested
portion of any Company Stock Option (or the
vested portion thereof (as
described above) to the extent necessary
optionholder consent is not obtained)
so converted shall continue to have, and be
subject to, the same terms and
conditions (including vesting schedule) as
set forth in the applicable Company
Option Plan and any agreements thereunder
immediately prior to the Effective
Time, except that, as of the Effective
Time, (i) each Company Stock Option
shall be exercisable for that number of
whole shares of Parent Common Stock
equal to the product of the number of
Shares that were issuable upon exercise
of such Company Stock Option immediately
prior to the Effective Time multiplied
by 1.2489 (the "Exchange Ratio"), rounded
down to the nearest whole number of
shares of Parent Common Stock and (ii) the
per share exercise price for the
shares of Parent Common Stock issuable upon
exercise of such Company Stock
Option so converted shall be equal to the
quotient determined by dividing the
exercise price per Share at which such
Company Stock Option was exercisable
immediately prior to the Effective Time by
the Exchange Ratio, rounded up to
the nearest whole cent. No later than five
business days after the Closing,
Parent shall register the shares of Parent
Common Stock issuable upon exercise
of Company Stock Option converted pursuant
to this Section 2.4 by filing an
effective registration statement on Form
S-8 (or any successor form) or another
appropriate form with the SEC, and Parent
shall use commercial best efforts to
maintain the effectiveness of such
registration statement and maintain the
current status of the prospectus with
respect thereto for so long as such
options remain outstanding.
Section 2.5 Restricted Stock. Notwithstanding Section 2.1, as of
the
Effective Time each outstanding award of
restricted Class A Common Stock
("Company Restricted Stock") shall be
converted into the right to receive the
Common Stock Merger Consideration subject
to the applicable terms and
conditions of the corresponding Company
Restricted Stock award agreement and
Company Option Plan pursuant to which such
Company Restricted Stock has been
granted. Common Stock Merger Consideration
in respect of Company Restricted
Stock shall be payable at such times as
Company Restricted Stock would have
become vested pursuant to the applicable
vesting schedules contained in the
Company Restricted Stock award agreements
in effect as of the date hereof,
subject to acceleration as provided in
employment or other agreements between
the Company and each holder of Company
Restricted Stock. Prior to the payment
of Common Stock Merger Consideration in
respect of any Company Restricted Stock
no Company Employee shall have any interest
in such Common Stock Merger
Consideration beyond that of a general
unsecured creditor of the Parent.
Article III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as set forth in the Company's disclosure schedule delivered
to
Parent prior to the execution of this
Agreement (the "Company Disclosure
Schedule"), the Company represents and
warrants to Parent and Purchaser as set
forth below. Each disclosure set forth in
the Company Disclosure Schedule is
identified by reference to, or has been
grouped under a heading referring to, a
specific individual section of this
Agreement and disclosure made pursuant to
any section thereof shall be deemed to be
disclosed on each of the other
sections of the Company Disclosure Schedule
to the extent the applicability of
the disclosure to such other section is
reasonably apparent from the disclosure
made.
Section 3.1 Organization. (a) The Company is a corporation duly
organized, validly existing and in good
standing under the laws of the
jurisdiction of its incorporation and has
requisite corporate power and
authority to own, lease and operate its
properties and to carry on its business
as it is now being conducted, except where
the failure to be so organized,
existing and in good standing or to have
such power and authority would not,
individually or in the aggregate, have a
Company Material Adverse Effect. As
used in this Agreement, "Company Material
Adverse Change" or "Company Material
Adverse Effect" means any fact(s),
change(s), event(s), development(s) or
circumstance(s) which, individually or in
the aggregate, would be reasonably
expected (i) to have a material adverse
effect on the business, financial
condition or results of operations of the
Company and the Company Subsidiaries,
taken as a whole or (ii) to prevent the
consummation by the Company of any of
the Offers and the Merger; provided,
however, that for purposes of clause (i)
above, any adverse effect resulting from
(s) any seasonal reduction in revenues
or earnings that is of a magnitude
consistent with prior periods, (t) changes
in the United States economy, financial
markets, political or regulatory
conditions generally, (u) changes in any of
the industries in which the
business of the Company and/or the Company
Subsidiaries is conducted
(including, without limitation, online
travel, offline travel, leisure travel
or corporate travel (the "Industries")), in
each case, which do not
disproportionately affect the Company as
compared to others in the Industries
in any material respect, (v) the
announcement of the Offers or the Merger or
other communication of Parent regarding the
plans or intentions of Parent with
respect to the conduct of the business or
assets of the Company or its
Subsidiaries, (w) changes in any laws
applicable to the Company or its
Subsidiaries after the date hereof which do
not disproportionately affect the
Company as compared to others in the
Industries in any material respect, (x)
changes in GAAP after the date hereof, (y)
any actions taken, or failures to
take action, or such other effects, changes
or occurrences to which Parent has
consented in writing or (z) terrorist
activities or material worsening of war
or armed hostilities if the effect thereof
would reasonably be expected to be
transitory, shall be disregarded in
determining whether there has been a
Company Material Adverse Effect or Company
Material Adverse Change; and
provided, further, that the effects of
terrorist activities (other than those
reasonably expected to be transitory),
material worsening of war or armed
hostility or other national or
international calamity shall not be regarded as
changes for purposes of clauses (t) and (u)
above.
(b) The Company is duly qualified or licensed to do business and
in
good standing in each jurisdiction in which
the property owned, leased or
operated by it or the nature of the
business conducted by it makes such
qualification or licensing necessary,
except where the failure to be so
qualified, licensed or in good standing
would not, individually or in the
aggregate, have a Company Material Adverse
Effect.
Section 3.2 Subsidiaries and Affiliates. (a) Section 3.2(a) of
the
Company Disclosure Schedule sets forth the
name, jurisdiction of incorporation
or organization and authorized and
outstanding capital of each Company
Subsidiary and the jurisdictions in which
each Company Subsidiary is qualified
to do business. Other than with respect to
the Company Subsidiaries or as set
forth in Section 3.2(a) of the Company
Disclosure Schedule, the Company does
not own, directly or indirectly, any
capital stock or other equity securities
of any corporation or have any direct or
indirect equity or ownership interest
in any business. All of the outstanding
capital stock of each Company
Subsidiary is owned directly or indirectly
by the Company free and clear of all
liens, charges, security interests,
options, claims, mortgages, title defects
or objections, leases, conditional sales
contracts, collateral security
arrangements and other title or interest
retention arrangements, pledges, or
other encumbrances and restrictions of any
nature whatsoever ("Encumbrances")
other than Encumbrances created as a result
of federal and state securities
laws, and is validly issued, fully paid and
nonassessable, and there are no
outstanding options, rights or agreements
of any kind relating to the issuance,
sale or transfer of any capital stock or
other equity securities of any such
Company Subsidiary to any person except the
Company. As used in this Agreement,
the term "Company Subsidiary" means each
Person which is a Subsidiary of the
Company. As used in this Agreement, the
term "Subsidiary" means with respect to
any party, any corporation, limited
liability company, partnership or other
organization, whether incorporated or
unincorporated, of which (i) at least a
majority of the securities or other
interests having by their terms ordinary
voting power to elect a majority of the
board of directors or others performing
similar functions with respect to such
corporation or other organization is
directly or indirectly owned or controlled
by such party or by any one or more
of its Subsidiaries, or by such party and
one or more of its Subsidiaries or
(ii) such party or any other Subsidiary of
such party is a general partner
(excluding any such partnership where such
party or any Subsidiary of such
party does not have a majority of the
voting interest in such partnership). As
used in this Agreement, the term "Person"
means a natural person, partnership,
corporation, limited liability company,
business trust, joint stock company,
trust, unincorporated association, joint
venture, Governmental Entity or other
entity or organization.
(b) Except as set forth on Section 3.2(b) of the Company
Disclosure
Schedule, each Company Subsidiary (i) is a
corporation or limited liability
company duly organized, validly existing
and in good standing under the laws of
its state of incorporation or organization,
(ii) has requisite corporate or
similar power and authority to carry on its
business as it is now being
conducted and to own the properties and
assets it now owns and (iii) is duly
qualified or licensed to do business as a
foreign corporation or other
organization in good standing in each
jurisdiction in which the property owned,
leased or operated by it or the nature of
the business conducted by it makes
such qualification or license necessary,
except where the failure to be so
organized, existing and in good standing,
to have such power and authority or
to be so qualified or licensed and in good
standing would not, individually or
in the aggregate, have a Company Material
Adverse Effect. Each such
jurisdiction is listed in Section 3.2(a) of
the Company Disclosure Schedule.
(c) The Company has heretofore delivered or made available to
Parent
complete and correct copies of the
Company's Amended and Restated Certificate
of Incorporation (the "Company
Certificate") and Amended and Restated Bylaws
(the "Company Bylaws") and similar
organizational documents of each Company
Subsidiary, as is presently in effect,
except for Company Subsidiaries
disclosed in Section 3.2(c) of the Company
Disclosure Schedule, which hold no
material assets except as disclosed in
Section 3.2(c) of the Company Disclosure
Schedule.
(d) None of the
Company or any Company Subsidiaries (i) owns (or has
owned) any capital stock, security or other
interest (or any right to acquire
capital stock, security or other interest)
of SAM Investments LDC, a Cayman
Islands Company ("SAM") and (ii) owns (or
has owned) any bonds, debentures,
notes or other indebtedness of SAM. Except
to the extent set forth in that
certain Stock Purchase Agreement, dated as
of November 26, 2003, by and among
American Airlines, Inc., Continental
Airlines, Inc., Omicron Reservations
Management, Inc., Northwest Airlines, Inc.,
UAL Loyalty Services, Inc. and SAM,
no agreements have been entered into
between the Company or any Company
Subsidiary, on the one hand, and SAM (or
any of its affiliates), on the other
hand.
Section 3.3 Capitalization. (a) The authorized capital stock of
the
Company consists of (i) 175,000,000 shares
of Class A common stock, $0.001 par
value per share (the "Class A Common
Stock"), (ii) 100,000,000 shares of Class
B common stock, $0.001 par value per share
(the "Class B Common Stock" and,
together with the Class A Common Stock, the
"Common Stock") and (iii)
35,000,000 shares of preferred stock,
$0.001 par value per share (the
"Preferred Stock") of which 434,782 are
designated as the Series A Preferred
Stock. As of September 24, 2004, (i)
14,356,179 shares of Class A Common Stock
are issued and outstanding, (ii) 27,173,461
shares of Class B Common Stock are
issued and outstanding, (iii) 434,782
shares of Series A Preferred Stock are
issued and outstanding, (iv) no shares of
Common Stock are issued and held in
the treasury of the Company or otherwise
owned by the Company and (v) a total
of 7,105,846 shares of Class A Common Stock
are reserved for issuance pursuant
to the Company Option Plans of which
6,120,298 shares are subject to
outstanding options. All of the outstanding
shares of the Company's capital
stock are, and all Shares which may be
issued pursuant to the exercise of
outstanding Company Stock Options will be,
when issued in accordance with the
terms thereof, duly authorized, validly
issued, fully paid and non-assessable.
There are no bonds, debentures, notes or
other indebtedness having general
voting rights (or convertible into
securities having such rights) ("Voting
Debt") of the Company or any Company
Subsidiary issued and outstanding. As of
September 24, 2004, except for (i) Company
Stock Options to purchase not more
than 7,105,846 shares of Class A Common
Stock, (ii) Class B Common Stock, which
is convertible into Class A Common Stock
pursuant to the terms of the Company
Certificate, (iii) Series A Preferred
Stock, which is convertible into Class A
Common Stock pursuant to the terms of the
Series A Preferred Certificate of
Designations and (iv) other arrangements
and agreements set forth in Section
3.3(a) of the Company Disclosure Schedule,
(x) there are no shares of capital
stock of the Company authorized, issued or
outstanding, (y) there are no
existing options, warrants, calls,
pre-emptive rights, subscriptions or other
rights, agreements, arrangements or
commitments of any kind relating to the
issued or unissued capital stock of the
Company or any Company Subsidiary
obligating the Company or any Company
Subsidiary to issue, transfer or sell or
cause to be issued, transferred or sold any
shares of capital stock or Voting
Debt of, or other equity interest in, the
Company or any Company Subsidiary or
securities convertible into or exchangeable
for such shares or equity
interests, or obligating the Company or any
Company Subsidiary to grant, extend
or enter into any such option, warrant,
call, subscription or other right,
agreement, arrangement or commitment and
(z) there are no outstanding
contractual obligations of the Company or
any Company Subsidiary to repurchase,
redeem or otherwise acquire any shares of
capital stock of the Company or any
Company Subsidiary or any affiliate of the
Company or to provide funds to make
any investment (in the form of a loan,
capital contribution or otherwise) in
any Company Subsidiary. No Company
Subsidiary owns any shares of Common Stock.
(b) As of September 24, 2004, the Company had outstanding
Company
Stock Options to purchase 6,120,298 shares
of Class A Common Stock and 292,328
shares of Company Restricted Stock granted
under Company Option Plans. Since
September 24, 2004, the Company has granted
no more than 9,900 Company Stock
Options and no shares of Company Restricted
Stock. Except as set forth in the
preceding two sentences, the Company has no
other outstanding stock options to
purchase any shares, and no restricted
shares, of any class or series of
capital stock. All of such Company Stock
Options and Company Restricted Stock
have been granted to employees or directors
of the Company and members of the
Company's consumer advisory board in the
ordinary course of business consistent
with past practice. Since September 24,
2004, the Company has not granted any
Company Stock Options or shares of Company
Restricted Stock to officers or
directors of the Company. Section 3.3(b) of
the Company Disclosure Schedule
sets forth a listing of all outstanding
Company Stock Options and shares of
Company Restricted Stock as of September
20, 2004 and (i) the date of their
grant and the portion of which that is
vested, (ii) the date upon which each
Company Stock Option expires, (iii) whether
or not such Company Stock Option is
intended to qualify as an "incentive stock
option" within the meaning of
Section 422 of the Code and (iv) whether or
not such Company Stock Option or
Company Restricted Stock will accelerate,
in whole or in part, pursuant to its
terms as a result of the transactions
contemplated hereby.
(c) Except as provided in the Amended and Restated Stockholders
Agreement, dated December 19, 2003, by and
among the Company and certain of its
stockholders (the "Company Stockholders
Agreement"), there are no voting trusts
or other agreements or understandings to
which the Company or any Company
Subsidiary is a party with respect to the
voting of the capital stock of the
Company or any of the Company
Subsidiaries.
Section 3.4 Authorization; Validity of Agreement; Company Action.
The
Company has all necessary corporate power
and authority to execute and deliver
this Agreement, to perform its obligations
hereunder and, with respect to the
Merger, assuming the due authorization,
execution and delivery of the
Stockholders Transaction Consents, to
consummate the transactions provided for
or contemplated by this Agreement,
including, but not limited to, the Offers
and the Merger (collectively, together with
the Stockholder Agreement, the
"Transactions"). The execution, delivery
and performance by the Company of this
Agreement, and the consummation by it of
the Transactions, have been duly and
validly authorized by the Company Board of
Directors and, no other corporate
action on the part of the Company is
necessary (other than, with respect to the
Merger, the approval and adoption of the
Merger and this Agreement by the
Required Company Holders) to authorize the
execution and delivery by the
Company of this Agreement and the
consummation by it of the Transactions. This
Agreement has been duly executed and
delivered by the Company and, assuming due
and valid authorization, execution and
delivery hereof by Parent and Purchaser,
is a valid and binding obligation of the
Company enforceable against the
Company in accordance with its terms,
except that (i) such enforcement may be
subject to applicable bankruptcy,
insolvency or other similar laws, now or
hereafter in effect, affecting creditors'
rights generally and (ii) the remedy
of specific performance and injunctive and
other forms of equitable relief may
be subject to equitable defenses and to the
discretion of the court before
which any proceeding therefor may be
brought.
Section 3.5 Board Approvals. The Company Board of Directors, at
a
meeting duly called and held, has
unanimously (i) determined that this
Agreement, the Offers and the Merger are
advisable, fair to, and in the best
interests of the stockholders of the
Company, (ii) duly and validly approved
and taken all corporate action required to
be taken by the Company Board of
Directors to authorize the consummation of
the Transactions and (iii)
recommended that the stockholders of the
Company accept the Offers, tender
their Shares to Purchaser pursuant to the
Offers, and approve and adopt this
Agreement and the Merger, and, except as
permitted by Sections 5.2(d), 5.3(a)
and 5.3(b), none of the aforesaid actions
by the Company Board of Directors has
been amended, rescinded or modified. The
Special Committee, at a meeting duly
called and held, has unanimously (i)
determined that this Agreement, the Class
A Offer and the Merger are fair to, and in
the best interests of, the holders
of the Class A Shares (other than the
Stockholders (excluding Jeffrey G. Katz))
and (ii) recommended that the holders of
Class A Shares (other than the
Stockholders (excluding Jeffrey G. Katz))
accept the Class A Offer, tender
their Class A Shares to Purchaser pursuant
to the Class A Offer, and approve
and adopt this Agreement and the Merger,
and except as permitted by Sections
5.2(d), 5.3(a) and 5.3(b) none of the
aforesaid actions by the Special
Committee have been amended, rescinded or
modified. Assuming the accuracy of
the representation and warranty set forth
in the first sentence of Section 4.8,
the action taken by the Company Board of
Directors in approving this Agreement
and the Merger is sufficient to render
inapplicable to this Agreement and the
Transactions the restrictions on business
combinations contained in Section 203
of the DGCL. The Company Board of Directors
has given all necessary board
approvals to cause the sale by the
Stockholders of the Class B Shares to
Purchaser pursuant to the Class B Offer to
be a "Qualified Transfer" for
purposes of Section 6.1(d) of the Company
Certificate and, assuming that each
of the Company Stockholders Agreement
Waivers has been duly authorized,
executed and delivered by each Stockholder,
such Class B Shares shall not
automatically convert into Class A Shares
upon their acquisition by Purchaser.
Assuming all Stockholders (other than
Jeffrey G. Katz) transfer their Shares to
Purchaser in the Class B Offer, unless
earlier terminated by the parties
thereto, the Company Stockholders Agreement
shall terminate upon transfer of
such Shares to Purchaser in accordance with
the terms thereof.
Section 3.6 Required Vote. The affirmative vote of the holders of
(i)
a majority of the voting power of the
outstanding shares of Common Stock,
voting together as a single class and (ii)
any approval required by Sections
8.2(a), 8.2(b) and 8.2(c) of the Company
Certificate (the approvals in clauses
(i) and (ii) collectively, the "Required
Company Holders") are the only votes
of the holders of any class or series of
the Company's capital stock necessary
to adopt and approve the Merger and this
Agreement. No vote of any other class
or series of the Company's capital stock,
including, without limitation, the
Preferred Stock, is necessary to approve
any of the Transactions, including the
Merger.
Section 3.7 Consents and Approvals; No Violations. (a) Except as
set
forth in Section 3.7 of the Company
Disclosure Schedule, none of the execution,
delivery or performance of this Agreement
by the Company, the consummation by
the Company of the Transactions or
compliance by the Company with any of the
provisions of this Agreement will (i)
assuming the adoption and approval of
this Agreement by the Required Company
Holders, conflict with or result in any
breach of any provision of the Company
Certificate, the Company Bylaws or
similar organizational documents of the
Company or any Company Subsidiary, (ii)
require any filing by the Company with, or
the permit, authorization, consent
or approval of, any court, arbitral
tribunal, administrative agency or
commission or other governmental or other
regulatory authority or agency,
foreign or domestic (a "Governmental
Entity") (except for (A) compliance with
any applicable requirements of the Exchange
Act, (B) any filings as may be
required under the DGCL in connection with
the Merger, (C) filings, permits,
authorizations, consents and approvals as
may be required under the
Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR
Act"), (D) the filing with the SEC and the
Nasdaq Stock Market, Inc. of (1) the
Schedule 14D-9, (2) a Proxy Statement if
stockholder approval is required by
law, (3) the information required by Rule
14f-1 under the Exchange Act and (4)
such reports under Section 13(a) of the
Exchange Act as may be required in
connection with this Agreement and the
Transactions or (E) such filings and
approvals as may be required by any
applicable state securities or blue sky
laws), (iii) result in a modification,
violation or breach of, or constitute
(with or without due notice or lapse of
time or both) a default (or give rise
to any right, including, but not limited
to, any right of termination,
amendment, cancellation or acceleration)
under, any of the terms, conditions or
provisions of any note, bond, mortgage,
lien, indenture, lease, license,
contract, understanding or agreement,
whether oral or written, or other
instrument or obligation to which the
Company or any Company Subsidiary is a
party or by which any of them or any of
their respective properties or assets
is bound (the "Company Agreements") or (iv)
violate any order, writ,
injunction, decree, statute, rule or
regulation applicable to the Company, any
Company Subsidiary or any of their
respective properties or assets, except in
the case of clauses (ii), (iii) or (iv)
where (x) any failure to obtain such
permits, authorizations, consents or
approvals, (y) any failure to make such
filings or (z) any such modifications,
violations, breaches or defaults would
not, individually or in the aggregate, have
a Company Material Adverse Effect.
(b) The Company does not make any sales to customers that do not
have
a credit card issued by a U.S. Bank and a
U.S. billing address, does not
classify any revenue as non-U.S. revenue,
does not have assets of a value
exceeding $1 million in any non-U.S.
jurisdiction, does not have an interest in
any legal entity incorporated in any
non-U.S. jurisdiction (except Canada and
Nevis) and does not have any assets in any
of the following jurisdictions:
Albania, Azerbaijan and Kazachtstan.
Section 3.8 Company SEC Documents and Financial Statements. (a)
The
Company has filed with the SEC all forms,
reports, schedules, statements and
other documents required by it to be filed
since and including December 16,
2003 under the Exchange Act or the
Securities Act of 1933, as amended (the
"Securities Act") (together with all
certifications required pursuant to the
Sarbanes-Oxley Act of 2002 (the
"Sarbanes-Oxley Act")) (such documents and any
other documents filed by the Company with
the SEC, as have been amended since
the time of their filing, collectively, the
"Company SEC Documents"). As of
their respective dates, or if amended, as
of the date of the last such
amendment, the Company SEC Documents (a)
did not contain any untrue statement
of a material fact or omit to state a
material fact required to be stated
therein or necessary in order to make the
statements made therein, in light of
the circumstances under which they were
made, not misleading and (b) complied
in all material respects with the
applicable requirements of the Exchange Act
or the Securities Act, as the case may be,
the Sarbanes-Oxley Act and the
applicable rules and regulations of the SEC
thereunder. None of the Company
Subsidiaries is required to file any forms,
reports or other documents with the
SEC. All of the audited consolidated
financial statements and unaudited
consolidated interim financial statements
of the Company included in the
Company SEC Documents, as amended or
supplemented prior to the date hereof
(collectively, the "Financial Statements"
), (i) have been prepared from, are
in accordance with, and accurately reflect
the books and records of the Company
and its consolidated subsidiaries in all
material respects, (ii) have been
prepared in accordance with generally
accepted accounting principles ("GAAP")
applied on a consistent basis during the
periods involved (except as may be
indicated in the notes thereto and except,
in the case of the unaudited interim
statements, as may be permitted under Form
10-Q of the Exchange Act) and (iii)
fairly present in accordance with GAAP the
consolidated financial position and
the consolidated results of operations and
cash flows (except, in the case of
unaudited interim financial statements, for
normal or recurring year-end
adjustments none of which, individually or
in the aggregate, would be material)
of the Company and its consolidated
Subsidiaries as of the times and for the
periods referred to therein. No
representation is made with respect to any
information provided by Purchaser or any
affiliate or associate thereof in
writing for inclusion or incorporation by
reference in any Company SEC
Documents.
(b) Without limiting the generality of Section 3.8(a), KPMG LLP
has
not resigned or been dismissed as
independent public accountant of the Company
as a result of or in connection with any
disagreement with the Company on a
matter of accounting practices which
materially impacts or would require the
restatement of any previously issued
financial statements, covering one or more
years or interim periods for which the
Company is required to provide financial
statements, such that they should no longer
be relied upon.
Section 3.9 Absence of Certain Changes. Except as contemplated by
this
Agreement and except as set forth in
Section 3.9 of the Company Disclosure
Schedule or in the Company SEC Documents
filed prior to the date hereof, since
June 30, 2004 (the "Balance Sheet Date"),
each of the Company and each Company
Subsidiary has conducted its respective
business in the ordinary course of
business consistent with past practice.
From the Balance Sheet Date through the
date of this Agreement, neither the Company
nor any Company Subsidiary has:
(a) suffered any Company Material Adverse Change;
(b) paid,
discharged or satisfied any claim, liability or obligation
(whether absolute, accrued, contingent or
otherwise), in excess of $250,000
individually or $1,000,000 in the
aggregate, other than the payment, discharge
or satisfaction in the ordinary course of
business consistent with past
practice;
(c) permitted or allowed any of its property or assets (real,
personal
or mixed, tangible or intangible) to be
subjected to any Encumbrance, except
for: (i) liens imposed by law, such as
carriers', warehouseman's, mechanics',
materialmen's, landlords', laborers',
suppliers', construction and vendors'
liens, incurred in good faith in the
ordinary course of business and securing
obligations which are not yet due or which
are being contested in good faith by
appropriate proceedings as to which the
Company has, to the extent required by
GAAP, set aside on its books adequate
reserves; (ii) liens for Taxes either not
yet due and payable or which are being
contested in good faith by appropriate
legal or administrative proceedings and as
to which the Company has, to the
extent required by GAAP, set aside on its
books adequate reserves; (iii) with
respect to leasehold interests, liens
incurred, created, assumed or permitted
to exist and arising by, through or under a
landlord or owner of the leased
property, with or without consent of the
lessee, none of which materially
impairs the use of any parcel of property
material to the operation of the
business of the Company or the value of
such property for the purpose of such
business; and (iv) any minor imperfection
of title which does not have a
material impact on the continued use and
operation of the property to which
such Encumbrance applies (collectively,
"Permitted Encumbrances");
(d) written off as uncollectible any notes or accounts
receivable,
except for write offs in the ordinary
course of business consistent with past
practice;
(e) cancelled any debts or waived any claims or rights of
material
value;
(f) sold, transferred, or otherwise disposed of any of its
properties
or assets (real, personal or mixed,
tangible or intangible) with a fair market
value in excess of $250,000, individually
or $1,000,000, in the aggregate,
except in the ordinary course of business
consistent with past practice;
(g) disposed of, granted or obtained, or permitted to lapse any
rights
to any Company IP (except for disposing of,
granting, obtaining or permitted to
lapse non-material rights, or collecting
data by the Company or any Company
Subsidiaries, in the ordinary course of
business consistent with past
practice), or disclosed (except in the
ordinary course of business and subject
to reasonable confidentiality obligations)
to any Person other than
representatives of Parent, any material
Trade Secret;
(h) granted any increase in the compensation or benefits of
officers
or employees whose base compensation
exceeds $100,000 per year (including any
such increase pursuant to any bonus,
pension, profit-sharing or other plan,
agreement or commitment) or any increase in
the compensation or benefits
payable or to become payable to any such
officer or employee, except in the
ordinary course of business consistent with
past practice, and no such increase
is customary on a periodic basis or
required by any agreement or understanding;
(i) made any single capital expenditure or commitment in excess
of
$100,000 for additions to property, plant,
equipment or intangible capital
assets or made aggregate capital
expenditures and commitments in excess of
$500,000 for additions to property, plant,
equipment or intangible capital
assets;
(j) except for quarterly dividends paid to the holders of the
Preferred Stock, declared, paid or set
aside for payment any dividend or other
distribution in respect of its capital
stock or redeemed, purchased or
otherwise acquired, directly or indirectly,
any shares of capital stock or
other securities of the Company or any
Company Subsidiary;
(k) (i) made any change in any of the accounting methods used by
it
materially affecting its assets,
liabilities or business, except for such
changes required by GAAP or (ii) made or
changed any Tax election, changed an
annual accounting period, adopted or
changed any accounting method, filed any
amended Tax Returns, entered into any
closing or similar agreement, or settled
or consented to any Tax Claim; or
(l) agreed, whether in writing or otherwise, to take any action
described in this Section 3.9.
Section 3.10 No Undisclosed Liabilities. Except (a) as disclosed
in
the Financial Statements or the Company SEC
Documents, (b) for liabilities and
obligations incurred since the Balance
Sheet Date that would not, individually
or in the aggregate, have a Company
Material Adverse Effect, (c) for
liabilities and obligations incurred under
this Agreement or in connection with
the Transactions and (d) for liabilities
and obligations incurred under any
Company Agreement other than liabilities or
obligations due to breaches
thereunder, neither the Company nor any
Company Subsidiary has incurred any
liabilities or obligations of any nature,
whether or not accrued, contingent or
otherwise required by GAAP to be recognized
or disclosed on a consolidated
balance sheet of the Company or any Company
Subsidiary or in the notes thereto.
Section 3.11 Litigation. Except as set forth on Section 3.11 of
the
Company Disclosure Schedule, there is no
claim, action, suit, arbitration,
alternative dispute resolution action or
any other judicial or administrative
proceeding pending against (or, to the
Company's knowledge, threatened against
or naming as a party thereto), the Company
or any Company Subsidiary or any
executive officer or director of the
Company or any Company Subsidiary (in
their capacity as such) or, to the
Company's knowledge, any investigation
pending or threatened against the Company
or any Company Subsidiary. There is
no order, writ, injunction or decree
outstanding against the Company or any
Company Subsidiary or affecting any of
their respective properties or assets.
Section 3.12 Employee Benefit Plans; ERISA. (a) Section 3.12(a) of
the
Company Disclosure Schedule contains a true
and complete list of each
employment or consulting agreement,
collective bargaining agreement or any
bonus, pension, profit sharing, deferred
compensation, incentive compensation,
stock ownership, stock purchase, stock
option, phantom stock, stock
appreciation right or other stock-based
incentive, retirement, vacation,
severance, change in control or termination
pay, disability, death benefit,
hospitalization, surgical, medical, life
insurance or other insurance or any
other plan, program, agreement, arrangement
or understanding (whether or not
legally binding), "welfare" plan, fund or
program that is within Section 3(1)
of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")
and "pension" plan, fund or program that is
within the meaning of Section 3(2)
of ERISA providing benefits to, or entered
into between, any current or former
employee, officer, consultant or director
of the Company or any Company
Subsidiary that is sponsored, maintained,
contributed to or required to be
contributed to, by the Company or any
Company Subsidiary or any person or
entity that, together with the Company and
the Company Subsidiaries, is treated
as a single employer under Section 414(b),
(c), (m) or (o) of the Code (the
Company and each such other person or
entity, an "ERISA Affiliate") for the
benefit of any current or former employees,
officers, consultants or directors
of the Company or any Company Subsidiary
(collectively, the "Benefit Plans").
(b) The Company has made available to Parent true, complete and
correct copies of (i) each Benefit Plan and
any amendments thereto (or, in the
case of any unwritten Benefit Plans,
descriptions thereof), (ii) the three most
recent annual reports on Form 5500 filed
with the Internal Revenue Service with
respect to each Benefit Plan (if any such
report was required), plus schedules
related thereto and three most recent
actuarial reports, (iii) the most recent
summary plan description for each Benefit
Plan for which such summary plan
description is required (together with all
Summaries of Material Modification
issued with respect thereto), (iv) each
trust agreement and group annuity
contract relating to any Benefit Plan (if
any such report was required) and (v)
all material contracts and employee
communications relating to each Benefit
Plan.
(c) Except as set forth on Section 3.12(c) of the Company
Disclosure
Schedule, each Benefit Plan has been
established and administered materially in
accordance with its terms and applicable
laws, including, but not limited to,
ERISA, the Code and other applicable
laws.
(d) All Benefit Plans intended to qualify under Sections 401(a)
and
501(a) of the Code have been the subject of
determination or opinion letters
from the Internal Revenue Service to the
effect that such Benefit Plans (or the
form thereof, as applicable) are so
qualified and are exempt from federal
income taxes under Sections 401(a) and
501(a), respectively, of the Code, a
true, complete and correct copy of each
such determination or opinion letter
has been made available to Parent, and no
such determination or opinion letter
has been revoked nor, to the knowledge of
the Company, has any event occurred
since the date of the most recent
determination or opinion letter or
application therefor for each such Benefit
Plan that would adversely affect its
qualification or materially increase its
costs.
(e) Neither the Company, nor any Company Subsidiary, nor any
ERISA
Affiliate has at any time maintained,
contributed to or been obligated to
contribute to any Benefit Plan that is
subject to Title IV of ERISA, including
without limitation any "multiemployer plan"
(as defined in Section 4001(a)(3)
of ERISA).
(f) Except as set forth on Section 3.12(f) of the Company
Disclosure
Schedule, no current or former employee,
officer, consultant or director of the
Company or any Company Subsidiary will be
entitled to any additional
compensation or benefits or any
acceleration of the time of payment or vesting
or any other enhancement of any
compensation or benefits under any Benefit Plan
as a result of the Transactions e
