<PAGE>
EXECUTION COPY
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THE COOPER COMPANIES, INC.
TCC ACQUISITION CORP.
AND
OCULAR SCIENCES, INC.
DATED AS OF JULY 28, 2004
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TABLE OF CONTENTS
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ARTICLE 1. DEFINED
TERMS.........................................................................
1
Section 1.1 Certain
Definitions............................................................
1
Section 1.2 Terms Defined
Elsewhere........................................................
7
ARTICLE 2. THE
MERGER............................................................................
10
Section 2.1 The
Merger.....................................................................
10
Section 2.2 Effective
Time.................................................................
10
Section 2.3 Effect of the
Merger...........................................................
10
Section 2.4 Certificate of
Incorporation; By-laws..........................................
11
Section 2.5 Directors and
Officers.........................................................
11
ARTICLE 3. CONVERSION OF SECURITIES;
EXCHANGE OF CERTIFICATES....................................
11
Section 3.1 Conversion of
Securities.......................................................
11
Section 3.2 Exchange of
Certificates.......................................................
12
Section 3.3 Share Transfer
Books...........................................................
15
Section 3.4 Company Stock
Options..........................................................
15
Section 3.5 Dissenting
Stockholders........................................................
16
Section 3.6 Tax
Adjustment.................................................................
16
ARTICLE 4. COMPANY REPRESENTATIONS AND
WARRANTIES................................................
17
Section 4.1 Organization and
Qualification; Subsidiaries...................................
17
Section 4.2 Certificate of
Incorporation and By-laws; Corporate Books and Records..........
18
Section 4.3
Capitalization.................................................................
18
Section 4.4
Authority......................................................................
19
Section 4.5 No Conflict; Required
Filings and Consents.....................................
20
Section 4.6 Permits; Compliance
With Law...................................................
20
Section 4.7 SEC Filings; Financial
Statements..............................................
21
Section 4.8 Disclosure
Documents...........................................................
23
Section 4.9 Absence of Certain
Changes or Events...........................................
23
Section 4.10 Employee Benefit
Plans.........................................................
24
Section 4.11 Labor and Other Employment
Matters.............................................
27
Section 4.12 Tax
Treatment..................................................................
28
Section 4.13
Contracts......................................................................
28
Section 4.14
Litigation.....................................................................
29
Section 4.15 Environmental
Matters..........................................................
30
Section 4.16 Intellectual
Property..........................................................
30
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Section 4.17
Taxes..........................................................................
33
Section 4.18
Insurance......................................................................
35
Section 4.19 Opinion of Financial
Advisor...................................................
35
Section 4.20 Vote
Required..................................................................
35
Section 4.21
Brokers........................................................................
35
Section 4.22
Properties.....................................................................
35
Section 4.23 Transactions with
Affiliates...................................................
36
Section 4.24
Customers......................................................................
36
Section 4.25 FDA
Compliance.................................................................
37
Section 4.26 Product Warranty and
Recall....................................................
37
Section 4.27 Unlawful Practice of
Medicine..................................................
38
Section 4.28 Compliance with Health Care
Laws...............................................
38
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB...............................
38
Section 5.1 Organization and
Qualification; Subsidiaries...................................
38
Section 5.2 Certificate of
Incorporation and By-laws; Corporate Books and Records..........
39
Section 5.3
Capitalization.................................................................
39
Section 5.4
Authority......................................................................
39
Section 5.5 No Conflict; Required
Filings and Consents.....................................
40
Section 5.6
Litigation.....................................................................
41
Section 5.7 SEC Filings; Financial
Statements..............................................
41
Section 5.8 Disclosure
Documents...........................................................
42
Section 5.9 Absence of Certain
Changes or Events...........................................
42
Section 5.10 Compliance with
Laws...........................................................
43
Section 5.11 FDA
Compliance.................................................................
43
Section 5.12 Tax
Treatment..................................................................
43
Section 5.13 Ownership of Merger Sub; No
Prior Activities...................................
44
Section 5.14
Brokers........................................................................
44
Section 5.15 Vote
Required..................................................................
44
Section 5.16 Fairness
Opinion...............................................................
44
Section 5.17 DGCL Section
203...............................................................
44
Section 5.18 No
Negotiations................................................................
44
Section 5.19 Restrictions on Conduct of
Business............................................
45
ARTICLE 6.
COVENANTS.............................................................................
45
Section 6.1 Conduct of Business by
the Company Pending the Closing.........................
45
Section 6.2 Conduct of Business by
Parent Pending the Closing..............................
50
Section 6.3
Cooperation....................................................................
51
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Section 6.4 Registration
Statement; Proxy Statement........................................
51
Section 6.5 Stockholders'
Meetings.........................................................
52
Section 6.6 Access to Information;
Confidentiality.........................................
53
Section 6.7 No Solicitation of
Transactions by Company.....................................
53
Section 6.8 Appropriate Action;
Consents; Filings..........................................
55
Section 6.9 [Intentionally
Omitted.].......................................................
57
Section 6.10 Certain
Notices................................................................
57
Section 6.11 Public
Announcements...........................................................
57
Section 6.12 Stock Exchange
Listing.........................................................
58
Section 6.13 Company Stock Options,
Employee Benefit and Related Matters....................
58
Section 6.14 Indemnification of Directors
and Officers......................................
59
Section 6.15 Plan of
Reorganization.........................................................
60
Section 6.16 Affiliate
Letters..............................................................
60
Section 6.17 FIRPTA
Affidavit...............................................................
60
Section 6.18 401(k)
Plan....................................................................
60
Section 6.19 No Solicitation of
Transactions by Parent......................................
61
Section 6.20 Board of
Directors.............................................................
63
ARTICLE 7. CLOSING
CONDITIONS....................................................................
63
Section 7.1 Conditions to
Obligations of Each Party Under This Agreement...................
63
Section 7.2 Additional Conditions
to Obligations of Parent and Merger Sub..................
64
Section 7.3 Additional Conditions
to Obligations of the Company............................
65
ARTICLE 8. TERMINATION, AMENDMENT AND
WAIVER.....................................................
66
Section 8.1
Termination....................................................................
66
Section 8.2 Effect of
Termination..........................................................
68
Section 8.3
Amendment......................................................................
70
Section 8.4
Waiver.........................................................................
70
Section 8.5 Fees and
Expenses..............................................................
70
ARTICLE 9. GENERAL
PROVISIONS....................................................................
70
Section 9.1 Non-Survival of
Representations and Warranties.................................
70
Section 9.2
Notices........................................................................
70
Section 9.3
Headings.......................................................................
71
Section 9.4
Severability...................................................................
71
Section 9.5 Entire
Agreement...............................................................
71
Section 9.6
Assignment.....................................................................
72
Section 9.7 Parties in
Interest............................................................
72
Section 9.8 Mutual
Drafting................................................................
72
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Section 9.9 Governing Law; Consent
to Jurisdiction; Waiver of Trial by Jury................
72
Section 9.10
Disclosure.....................................................................
73
Section 9.11
Counterparts...................................................................
73
Section 9.12 Specific
Performance...........................................................
73
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 28, 2004 (this
"Agreement"), by and among THE COOPER
COMPANIES, INC., a Delaware corporation
("Parent"), TCC ACQUISITION CORP., a
Delaware corporation and a direct wholly
owned subsidiary of Parent ("Merger Sub"),
and OCULAR SCIENCES, INC., a Delaware
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Merger
Sub
and the Company have approved and declared
advisable the merger of the Company
with and into Merger Sub (the "Merger")
upon the terms and subject to the
conditions of this Agreement and in
accordance with the General Corporation Law
of the State of Delaware (the "DGCL");
and
WHEREAS, the respective Boards of Directors of Parent and the
Company have determined that the Merger is
in the best interest of their
respective stockholders, and Parent has
approved this Agreement and the Merger
as the sole stockholder of Merger Sub;
and
WHEREAS, as a condition to and inducement to Parent's and
Merger
Sub's willingness to enter into this
Agreement, simultaneously with the
execution of this Agreement, one of the
stockholders of the Company is entering
into a voting agreement with Parent and
Merger Sub (the "Voting Agreement"), in
the form set forth in Exhibit A hereto;
and
WHEREAS, for federal income tax purposes, it is intended that
the
Merger shall qualify as a "reorganization,"
and this Agreement shall constitute
a plan of reorganization, within the
meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the
"Code") and the Treasury Regulations
promulgated thereunder;
NOW, THEREFORE, in consideration of the foregoing and the
respective
representations, warranties, covenants and
agreements set forth in this
Agreement and intending to be legally bound
hereby, the parties hereto agree as
follows:
ARTICLE 1.
DEFINED TERMS
Section
1.1 Certain Definitions. For purposes of this Agreement, the
term:
"AFFILIATE" means a person that directly or indirectly, through
one
or more intermediaries, controls, is
controlled by, or is under common control
with, the first-mentioned person.
"ACQUISITION PROPOSAL" means any offer or proposal (other than
the
Merger) concerning any (A) merger,
consolidation, business combination, or
similar transaction involving the Company
or any Company Subsidiary, (B) sale,
lease or other disposition directly or
indirectly by merger, consolidation,
business combination, share exchange, joint
venture, or otherwise of assets of
the Company or any Company Subsidiary
representing a material portion of the
consolidated assets of the Company and the
Company Subsidiaries (other than
acquisitions of inventory and equipment in
the ordinary course of business), (C)
issuance, sale, or other disposition of
(including by way of merger,
consolidation, business combination, share
exchange, joint venture or any
similar transaction) securities (or
options, rights or warrants to purchase, or
securities convertible into or exchangeable
for such securities) representing
35% or
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more of the voting power of the Company or
(D) transaction in which any person
shall acquire beneficial ownership, or the
right to acquire beneficial ownership
or any group shall have been formed which
beneficially owns or has the right to
acquire beneficial ownership of 35% or more
of the outstanding voting capital
shares of the Company or (E) any
combination of the foregoing (other than the
Merger).
"BENEFICIAL OWNERSHIP" (and related terms such as "beneficially
owned" or "beneficial owner") has the
meaning set forth in Rule 13d-3 under the
Exchange Act.
"BLUE SKY LAWS" means state securities or "blue sky" laws.
"BUSINESS DAY" means any day other than a day on which the SEC
shall
be closed.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as
amended as of the date hereof.
"CLOSING DATE" means the date of the Effective Time.
"CLOSING PRICE" means the closing price of the Parent Common
Stock
on the NYSE on the day immediately prior to
the Closing Date.
"COMPANY MATERIAL ADVERSE EFFECT" means any effect, event,
occurrence, development, circumstance,
change or condition (an "Effect") that,
individually or in the aggregate with other
Effects is, or would reasonably be
expected to be materially adverse to the
assets, liabilities, business,
property, condition (financial or
otherwise) or results of operations of the
Company and the Company Subsidiaries, taken
as a whole; provided, however, that
in no event shall any of the following be
deemed to constitute a Company
Material Adverse Effect: (A) any Effect
affecting any of the industries in which
the Company or any Company Subsidiary
operates generally or affecting the
economy generally (to the extent that such
Effects do not disproportionately
affect the Company, taken as a whole with
the Company Subsidiaries, as compared
to other companies in such industries); (B)
any change in the Company's stock
price or trading volume; provided, however,
that clause (B) shall not exclude
any underlying Effect which may have caused
such change in stock price or
trading volume; or (C) any Effect resulting
from the announcement or pendency of
the Merger.
"COMPANY STOCK OPTION PLAN" means any stock option plan or
other
equity-based compensation plan of the
Company or any Company Subsidiary,
including, without limitation, the O.S.I.
Corporation 1989 Stock Option Plan,
the Ocular Sciences, Inc. 1997 Equity
Incentive Plan, the Ocular Sciences, Inc.
Amended and Restated 1997 Directors Stock
Option Plan, the Ocular Sciences, Inc.
1997 Employee Stock Purchase Plan (the
"ESPP") and the Ocular Sciences, Inc.
Deferred Fee Plan for Directors, each as
amended.
"CONTRACTS" means any of the agreements, contracts, leases,
powers of attorney, notes, loans, evidence
of indebtedness, purchase orders,
letters of credit, settlement agreements,
franchise agreements, undertakings,
covenants not to compete, employment
agreements, licenses, instruments,
obligations, understandings, policies,
sales orders, quotations and other
executory commitments to which any company
is a party or to which any of the
assets of any company are subject, whether
oral or written, express or implied.
<PAGE>
"CONTROL" (including the terms "controlled by" and "under
common
control with") means the possession,
directly or indirectly or as trustee or
executor, of the power to direct or cause
the direction of the management or
policies of a person, whether through the
ownership of stock or as trustee or
executor, by contract or credit arrangement
or otherwise.
"ENVIRONMENTAL CLAIMS" means all notices of violation, liens,
claims, demands, suits, or causes of action
for any damage, including, without
limitation, personal injury or property
damage, arising out of or related to
Environmental Conditions or pursuant to
applicable Environmental Laws.
"ENVIRONMENTAL CONDITIONS" means any onsite or offsite Releases
relating to or arising out of the use,
handling, storage, treatment, disposal,
recycling, generation or transportation, of
Hazardous Substances by the Company
or any Company Subsidiary. With respect to
Environmental Claims by third
parties, Environmental Conditions also
include the exposure of persons to
Hazardous Substances at the work place or
the exposure of persons or property to
Hazardous Substances migrating from or
otherwise emanating from the Facilities.
"ENVIRONMENTAL LAWS" means all applicable foreign, federal,
state,
district and local laws, all rules or
regulations promulgated thereunder, and
all orders, consent orders, judgments,
notices, or permits issued, promulgated
or entered pursuant thereto (collectively,
"Environmental Regulations"),
relating to pollution or protection of the
environment, including, without
limitation, (i) Environmental Regulations
relating to emissions, discharges,
releases or threatened releases of
Hazardous Substances into the environment,
(ii) Environmental Regulations relating to
the identification, generation,
manufacture, processing, distribution, use,
treatment, storage, disposal,
recovery, transport or other handling of
Hazardous Substances, (iii)
Environmental Regulations relating to the
health and safety of persons
(including employees) or property, (iv)
CERCLA, (v) the Toxic Substances Control
Act, (vi) the Hazardous Materials
Transportation Act, (vii) the Resource
Conservation and Recovery Act, (viii) the
Clean Water Act, (ix) the Safe
Drinking Water Act, (x) the Clean Air Act,
(x) the Occupational Safety and
Health Act, (xi) the Federal Insecticide,
Fungicide, Rodenticide Act, (xii) the
Atomic Energy Act, (xiii) the Emergency
Planning and Community Right-to-Know Act
and (xiv) The Oil Pollution Act.
"EQUITY INTEREST" means any share, capital stock, partnership,
member or similar interest in any entity,
and any option, warrant, right or
security (including debt securities)
convertible, exchangeable or exercisable
therefor.
"ERISA" means the Employee Retirement Income Security Act of
1974,
as amended, and the regulations promulgated
thereunder.
"ERISA AFFILIATE" means any entity or trade or business (whether
or
not incorporated) other than the Company
that together with the Company is
considered under common control and treated
as a single employer under Section
4.14(b), (c), (m) or (o) of the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations
promulgated thereunder.
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"EXPENSES" includes all reasonable out-of-pocket expenses
(including, without limitation, all fees
and expenses of counsel, accountants,
investment bankers, experts and consultants
to a party hereto and its
affiliates) incurred by a party or on its
behalf in connection with or related
to the authorization, preparation,
negotiation, execution and performance of
this Agreement and the transactions
contemplated hereby, including the
preparation, printing, filing and mailing
of the Proxy Statement and the
Registration Statement and the solicitation
of stockholder approvals and all
other matters related to the transactions
contemplated hereby.
"FACILITIES" means all plants, offices, manufacturing
facilities,
stores, warehouses, administration
buildings and all real property and related
facilities owned or leased at any time by
the Company or any of its
Subsidiaries.
"GAAP"
means generally accepted accounting principles as applied in
the United States.
"GOVERNMENTAL ENTITY" means any domestic or foreign
governmental
body or court including all international,
federal, state, provincial, regional,
local, municipal or other governmental
administrative, judicial, legislative or
regulatory authority.
"GROUP" has the meaning as used in Section 13 of the Exchange
Act,
except where the context otherwise
requires.
"HAZARDOUS SUBSTANCES" means all pollutants, contaminants,
chemicals, wastes, by-products, and any
other infectious, carcinogenic,
ignitable, corrosive, reactive, toxic or
otherwise hazardous substances, waste
or materials (whether solids, liquids or
gases) subject to regulation, control,
investigation or remediation under
applicable Environmental Laws. By way of
example only, the term Hazardous Substances
includes petroleum and/or petroleum
by-products, urea formaldehyde, flammable,
explosive and radioactive materials,
radon gas, PCBs, pesticides, herbicides,
asbestos, acids, metals and solvents.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of
1976, as amended, and the rules and
regulations thereunder.
"INTELLECTUAL PROPERTY" means all intellectual property or
other
proprietary rights of every kind, foreign
or domestic, in and to all: (a)
inventions (whether or not patentable),
patents, patent applications, invention
disclosures, together with all
provisionals, reissuances, continuations,
continuations-in-part, divisions,
revisions, renewals, extensions, and
reexaminations thereof, and other rights of
invention; (b) trademarks, service
marks, trade names, trade dress, logos,
domain names, product names and slogans,
including any common law rights,
registrations, and applications for
registration for any of the foregoing, and
the goodwill associated with all of
the foregoing; (c) copyrights and other
rights of authorship, and any
applications, registrations and renewals in
connection therewith, including, but
not limited to, any moral rights and rights
of attribution and integrity, the
content contained on any World Wide Web
site; (d) trade secrets, know-how and
confidential and proprietary business or
technical information, including,
without limitation, customer and supplier
lists and related information, pricing
and cost information, business and
marketing plans, any other financial,
marketing and business data, technical
data, processes, formulations,
specifications and schematics; (e) computer
applications, operating systems, and
any other software (including source code
and object code) documentation for any
of the foregoing, electronic data and
<PAGE>
databases, web sites (including all related
computer code and content); (f)
rights to exclude others from appropriating
any of such intellectual property
including the rights to sue for and
remedies against past, present and future
infringements of any or all of the
foregoing and rights of priority and
protection of interests therein under the
laws of the United States and abroad
and (g) copies and tangible embodiments
thereof.
"IRS" means the United States Internal Revenue Service.
"KNOWLEDGE" means the actual knowledge of the officers of the
Company as set forth on Section 1.2 of the
Company Disclosure Schedule, and the
knowledge such officers would have
following reasonable inquiry of any other
employees of the Company being primarily
responsible for the matter being
represented.
"LAW" means any foreign or domestic federal, state, provincial,
local, municipal or other law, statute,
code, treaty, ordinance, rule,
regulation, order, judgment, writ,
stipulation, award, injunction, decree or
arbitration award or finding.
"LIEN" means any encumbrance, lien, mortgage, deed of trust,
charge,
lease, easement, servitude, pledge,
restriction, or security interest of any
kind.
"NASDAQ" means the Nasdaq National Market System.
"NYSE" means the New York Stock Exchange.
"OTHER FILINGS" means all filings made by or required to be made
by,
the Company or the Parent, as the case may
be, with the SEC other than the
Registration Statement and the Proxy
Statement.
"PARENT ACQUISITION PROPOSAL" means any offer or proposal
(other
than the Merger), concerning any (A)
merger, consolidation, business
combination, or similar transaction
involving Parent, (B) sale, lease or other
disposition directly or indirectly by
merger, consolidation, business
combination, share exchange, joint venture,
or otherwise of assets of Parent
representing a majority of the consolidated
assets of Parent (other than
acquisitions of inventory and equipment in
the ordinary course of business), (C)
issuance, sale, or other disposition of
(including by way of merger,
consolidation, business combination, share
exchange, joint venture or any
similar transaction) securities (or
options, rights or warrants to purchase, or
securities convertible into or exchangeable
for such securities) representing a
majority or more of the voting power of
Parent or (D) transaction in which any
person shall acquire beneficial ownership,
or the right to acquire beneficial
ownership or any group shall have been
formed which beneficially owns or has the
right to acquire beneficial ownership of a
majority or more of the outstanding
voting capital shares of Parent or (E) any
combination of the foregoing.
"PARENT CONFLICTING PROPOSAL" means any Parent Acquisition
Proposal
which is expressly conditioned on the
termination of this Agreement prior to the
consummation of the Merger.
"PARENT MATERIAL ADVERSE EFFECT" means any Effect that,
individually
or in the aggregate with other Effects is,
or would reasonably be expected to
be, materially adverse to the assets,
liabilities, business, property, condition
(financial or otherwise) or results of
operations of
<PAGE>
Parent and the Parent Subsidiaries, taken
as a whole; provided, however, that in
no event shall any of the following be
deemed to constitute a Parent Material
Adverse Effect: (A) any Effect affecting
any of the industries in which Parent
or any Parent Subsidiary operates generally
or affecting the economy generally
(to the extent that such Effects do not
disproportionately affect Parent, taken
as a whole with the Parent Subsidiaries, in
any material respect); (B) any
change in Parent's stock price or trading
volume; provided, however, that clause
(B) shall not exclude any underlying Effect
which may have caused such change in
stock price or trading volume; or (C) any
Effect resulting from the announcement
or pendency of the Merger.
"PARENT RIGHTS" means the preferred stock purchase rights
issuable
pursuant to the Parent Rights
Agreement.
"PARENT RIGHTS AGREEMENT" means the Rights Agreement, dated as
of
October 29, 1997 between the Parent and
American Stock Transfer & Trust, as
Rights Agent, as amended.
"PERSON" means an individual, corporation, limited liability
company, partnership, association, trust,
unincorporated organization, other
entity or group (as defined in Section
13(d) of the Exchange Act).
"REGULATIONS" means regulations promulgated under the Code.
"RELEASE" means any past or present releasing, spilling,
leaking,
pumping, pouring, emitting, emptying,
discharging, injecting, escaping,
leaching, disposing, or dumping into the
environment or the workplace of any
Hazardous Substance.
"SHARE ISSUANCE" means the issuance of shares of Parent Common
Stock
pursuant to Section 3.1.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and
the rules and regulations promulgated
thereunder.
"SUBSIDIARY" or "SUBSIDIARIES" means any corporation, limited
liability company, partnership, association
or other business entity of which
(i) if a corporation, a majority of the
total voting power of shares of stock
entitled (without regard to the occurrence
of any contingency) to vote in the
election of directors, managers or trustees
thereof is at the time owned or
controlled, directly or indirectly, by
Parent, the Company or any other person,
or (ii) if a limited liability company,
partnership, association or other
business entity, a majority of the
partnership or other similar ownership
interest thereof is at the time owned or
controlled, directly or indirectly, by
Parent, the Company or any other
person.
"SUPERIOR PROPOSAL" means a bona fide offer or proposal made by
a
third party to acquire, directly or
indirectly, pursuant to a tender offer,
exchange offer, merger, consolidation or
other business combination, all or
substantially all of the assets of the
Company or a majority of the outstanding
voting securities of the Company, which (A)
was not solicited by the Company,
any Company Subsidiary, any Company
Representatives or any Company Affiliate
Representatives, (B) does not contain a
financing contingency, and (C) in the
good faith judgment of the Company Board
after consultation with outside legal
advisors and the Company's financial
advisor, and after taking into account the
various legal, financial and
<PAGE>
regulatory aspects of the proposal and the
person making such proposal, (i) if
accepted, is reasonably likely to be
consummated, and (ii) if consummated would
result in a transaction that is more
favorable to the Company's stockholders,
from a financial point of view, than the
transactions contemplated by this
Agreement.
"TAXES" means any and all taxes, fees, levies, duties, tariffs,
imposts and other charges of any kind
(together with any and all interest,
penalties, additions to tax and additional
amounts imposed with respect thereto)
imposed by any Governmental Entity or
domestic or foreign taxing authority,
whether disputed or not, including, without
limitation, income, franchise,
windfall or other profits, gross receipts,
property, sales, use, net worth,
capital stock, payroll, employment, social
security, workers' compensation,
unemployment compensation, excise,
withholding, ad valorem, stamp, transfer,
value-added, gains tax and license,
registration and documentation fees, and
shall, in each case, include any liability
for the Taxes of any other person
under Treasury Regulation Section 1.1502-6
(or any similar provision of state,
local or foreign law), as a transferee or
successor, or by contract or
otherwise.
"TAX RETURN" means any report, return (including information
return), claim for refund, election,
estimated tax filing or declaration
required to be supplied to any Governmental
Entity or domestic or foreign taxing
authority with respect to Taxes, including
any schedule or attachment thereto,
and including any amendments thereof.
Section
1.2 Terms Defined Elsewhere. The following terms are defined
elsewhere in this Agreement, as indicated
below:
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"AGGREGATE SPREAD VALUE"
Section 3.4(b0
"AGREEMENT"
Preamble
"ALTERNATIVE HOLDCO"
Section 3.6
"ALTERNATIVE MERGER 1"
Section 3.6
"ALTERNATIVE MERGER 2"
Section 3.6
"ALTERNATIVE MERGERS"
Section 3.6
"ALTERNATIVE MERGER SUB 1"
Section 3.6
"ALTERNATIVE MERGER SUB 2"
Section 3.6
"ALTERNATIVE STRUCTURE EVENT"
Section 3.6
"CASH CONSIDERATION PERCENTAGE"
Section 3.4(b)
"CERTIFICATE OF MERGER"
Section 2.2
"COBRA"
Section 4.10(f)
"CODE"
Recitals
"COMPANY"
Preamble
"COMPANY AFFILIATE REPRESENTATIVES"
Section 6.7(a)
</TABLE>
<PAGE>
<TABLE>
<S>
<C>
"COMPANY BOARD"
Section 4.4(a)
"COMPANY CERTIFICATE OF INCORPORATION"
Section 4.2
"COMPANY BENEFIT PLAN"
Section 4.10(a)
"COMPANY BY-LAWS"
Section 4.2
"COMPANY COMMON SHARES"
Section 3.1(a)
"COMPANY DISCLOSURE SCHEDULE"
Article 4
"COMPANY FINANCIAL ADVISOR"
Section 4.19
"COMPANY FINANCIAL STATEMENTS"
Section 4.7(b)
"COMPANY INTELLECTUAL PROPERTY"
Section 4.16(a)
"COMPANY MATERIAL CONTRACTS"
Section 4.13
"COMPANY OPTIONS"
Section 3.4
"COMPANY PERMITS"
Section 4.6
"COMPANY PREFERRED SHARES"
Section 4.3(a)
"COMPANY RECOMMENDATION"
Section 6.7(c)
"COMPANY SEC FILINGS"
Section 4.7(a)
"COMPANY STOCKHOLDERS MEETING"
Section 6.5(a)
"COMPANY SUBSIDIARY"
Section 4.1(b)
"COMPANY TERMINATION FEE"
Section 8.2(e)
"CONFIDENTIALITY AGREEMENT"
Section 6.6(b)
"CONTINUING EMPLOYEES"
Section 6.13(a)
"D&O INSURANCE"
Section 6.14(b)
"DGCL"
Recitals
"DISSENTING SHARES"
Section 3.5
"EFFECT"
Section 1.1
"EFFECTIVE TIME"
Section 2.2
"ESPP"
Section 1.1
"EXCESS SHARES"
Section 3.2(e)(i)
"EXCHANGE AGENT"
Section 3.2(b)
"EXCHANGE FUND"
Section 3.2(b)
</TABLE>
<PAGE>
<TABLE>
<S>
<C>
"EXCHANGE RATIO"
Section 3.1(a)
"FDA"
Section 4.6
"FDCA"
Section 4.6
"FOREIGN PLAN"
Section 4.10(g)
"HEALTH CARE LAW"
Section 4.28
"LICENSE AGREEMENT"
Section 4.16(b)
"MERGER"
Recitals
"MERGER CONSIDERATION"
Section 3.1(a)
"MERGER CONSIDERATION VALUE"
Section 3.4(a)
"MERGER SUB"
Preamble
"MULTIEMPLOYER PLAN"
Section 4.10(d)
"NEW CERTIFICATE"
Section 3.2(a)(ii)
"OLD CERTIFICATES"
Section 3.2(a)(i)
"OUTSIDE DATE"
Section 8.1(b)
"PARENT"
Preamble
"PARENT AFFILIATE REPRESENTATIVES"
Section 6.19
"PARENT BOARD"
Section 6.4(a)
"PARENT BY-LAWS"
Section 5.2
"PARENT CERTIFICATE"
Section 5.2
"PARENT COMMON STOCK"
Section 3.1(a)
"PARENT DISCLOSURE SCHEDULE"
Article 5
"PARENT FINANCIAL STATEMENTS"
Section 5.7(b)
"PARENT OPTIONS"
Section 5.3(a)
"PARENT PREFERRED STOCK"
Section 5.3(a)
"PARENT RECOMMENDATION"
Section 6.19
"PARENT SEC FILINGS"
Section 5.7(a)
"PARENT STOCKHOLDERS MEETING"
Section 6.5(b)
"PARENT SUBSIDIARY"
Section 5.5(a)
"PARENT TERMINATION FEE"
Section 8.2(f)
</TABLE>
<PAGE>
<TABLE>
<S>
<C>
"PER SHARE CASH CONSIDERATION"
Section 3.1(a)
"PER SHARE STOCK CONSIDERATION"
Section 3.1(a)
"PLAN"
Section 6.18
"PROGRAM"
Section 4.28
"PROXY STATEMENT"
Section 6.4(a)
"REGISTRATION STATEMENT"
Section 6.4(a)
"REGULATIONS"
Section 1.1
"REGULATORY CONDITIONS"
Section 8.1(b)
"REPRESENTATIVES"
Section 6.6
"SECTION 16"
Section 6.13
"SOXA"
Section 4.7(c)
"SURVIVING CORPORATION"
Section 2.1
"STOCK CONSIDERATION PERCENTAGE"
Section 3.4(b)
"VOTING AGREEMENT"
Recitals
</TABLE>
ARTICLE 2.
THE MERGER
Section
2.1 The Merger. Upon the terms and subject to satisfaction or
waiver of the conditions set forth in this
Agreement, and in accordance with the
DGCL, the Company, at the Effective Time,
shall be merged with and into Merger
Sub. As a result of the Merger, the
separate corporate existence of the Company
shall cease and Merger Sub shall continue
as the surviving corporation of the
Merger (the "Surviving Corporation").
Section
2.2 Effective Time. On the date that is no later than two (2)
business days after the satisfaction or, if
permissible, waiver of the
conditions set forth in Article 7, or on
such other date as may be mutually
agreed by the parties, the parties hereto
shall cause the Merger to be
consummated by filing a certificate of
merger (the "Certificate of Merger") with
the Secretary of State of the State of
Delaware, in such form as required by,
and executed in accordance with the
relevant provisions of, the DGCL (the date
and time of such filing, or if another date
and time is specified in such
filing, such specified date and time, being
the "Effective Time").
Section
2.3 Effect of the Merger. At the Effective Time, the effect of
the
Merger shall be as provided in the
applicable provisions of the DGCL. Without
limiting the generality of the foregoing,
at the Effective Time, except as
otherwise provided herein, all the
property, rights, privileges, powers and
franchises of the Company and Merger Sub
shall vest in the Surviving
Corporation, and all debts, liabilities and
duties of the Company and Merger Sub
shall become the debts, liabilities and
duties of the Surviving Corporation.
<PAGE>
Section
2.4 Certificate of Incorporation; By-laws. At the Effective
Time,
the Certificate of Incorporation and the
By-laws of Merger Sub shall become the
Certificate of Incorporation and the
By-laws of the Surviving Corporation, each
as in effect immediately prior to the
Effective Time, as the same may be amended
in accordance with Section 6.14(a)
hereof.
Section
2.5 Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time
shall be the initial directors of the
Surviving Corporation, each to hold office
in accordance with the Certificate of
Incorporation and By-laws of the Surviving
Corporation. The officers of Merger
Sub immediately prior to the Effective Time
shall be the initial officers of the
Surviving Corporation, each to hold office
in accordance with the Certificate of
Incorporation and By-laws of the Surviving
Corporation.
ARTICLE 3.
CONVERSION
OF SECURITIES; EXCHANGE OF CERTIFICATES
Section
3.1 Conversion of Securities. At the Effective Time, by virtue
of
the Merger and without any action on the
part of Merger Sub, the Company or the
holders of any of the following securities
(except as specifically provided
herein with respect to elections made by
such holders):
(a) Conversion Generally. Each common share, par value $0.001
per
share, of the Company ("Company Common
Shares") issued and outstanding
immediately prior to the Effective Time
(other than any Company Common Shares to
be canceled pursuant to Section 3.1(b) and
Dissenting Shares referred to in
Section 3.5) shall be converted, subject to
other provisions of this Section 3.1
and Section 3.2(e), into the right to
receive (i) 0.3879 (the "Exchange Ratio")
of a share of common stock, par value $0.10
per share (together with the
associated one-half of a Parent Right,
"Parent Common Stock"), of Parent (the
"Per Share Stock Consideration"), and (ii)
$22.00 in cash without interest (the
"Per Share Cash Consideration" and,
together with the Per Share Stock
Consideration, the "Merger Consideration").
At the Effective Time, all such
Company Common Shares shall no longer be
outstanding and shall automatically be
canceled and retired and shall cease to
exist, and each certificate previously
representing any such shares shall
thereafter represent the right to receive the
Merger Consideration, subject to other
provisions of this Section 3.1, Section
3.2(e) and Section 3.5 below. No fractional
shares of Parent Common Stock shall
be issued, and in lieu thereof, a cash
payment shall be made pursuant to Section
3.2(e) hereof.
(b) Cancellation of Certain Shares. Each Company Common Share
held
by Parent, Merger Sub, any wholly owned
subsidiary of Parent or Merger Sub, or
by the Company immediately prior to the
Effective Time shall be canceled and
extinguished without any conversion thereof
and no payment shall be made with
respect thereto.
(c) Merger Sub. Each share of common stock, par value $0.01 per
share, of Merger Sub issued and outstanding
immediately prior to the Effective
Time shall remain issued, outstanding and
unchanged as a validly issued, fully
paid and nonassessable share of common
stock, par value $0.01 per share, of the
Surviving Corporation.
(d) Change in Shares. If between the date of this Agreement and
the
Effective Time the outstanding shares of
Parent Common Stock or Company Common
Shares shall have been changed into a
different number of shares or a different
class, by reason of any stock
<PAGE>
dividend, subdivision, reclassification,
recapitalization, split, combination or
exchange of shares, the Exchange Ratio, the
Per Share Cash Consideration and any
number or amount contained herein which is
based on the price of Parent Common
Stock or Company Common Shares or the
number of shares of Parent Common Stock or
Company Common Shares, as the case may be,
shall be correspondingly adjusted to
reflect such stock dividend, subdivision,
reclassification, recapitalization,
split, combination or exchange of
shares.
Section
3.2 Exchange of Certificates.
(a) Exchange Procedures.
(i) Promptly
after the Effective Time, Parent will cause the
Exchange Agent to mail to each holder of
record of Company Common Shares (as of
immediately prior to the Effective Time) a
letter of transmittal and
instructions for use in effecting surrender
by such holder of certificates
representing such holder's Company Common
Shares ("Old Certificates") to the
Exchange Agent in exchange for the
consideration provided in this Article 3.
(ii) The holder of
each Old Certificate, upon the surrender
by such holder to the Exchange Agent of
such Old Certificate, together with the
letter of transmittal duly executed by such
holder, shall be entitled to receive
in exchange for such Old Certificate the
Merger Consideration into which the
Company Common Shares theretofore
represented by such Old Certificate have been
converted pursuant to Section 3.1 (together
with any applicable cash in lieu of
fractional shares and dividends or
distributions in respect of such Merger
Consideration), and such Old Certificate
shall forthwith thereafter be canceled.
Until such time as a certificate
representing Parent Common Stock (the "New
Certificate") is issued to or at the
direction of a holder of an Old Certificate
entitled to receive Per Share Stock
Consideration pursuant to Section 3.1, such
Parent Common Stock shall be deemed not
outstanding, and such Parent Common
Stock shall not be entitled to vote on any
matter. In the event of a transfer of
ownership of Company Common Shares that is
not registered on the transfer
records of the Company, a New Certificate
representing the appropriate number of
shares of Parent Common Stock and the cash
consideration payable hereunder with
respect to such Company Common Shares may
be issued and paid to a person other
than the person in whose name the Old
Certificate so surrendered is registered,
if such Old Certificate shall be properly
endorsed or otherwise be in proper
form for transfer and the person requesting
such payment shall pay any transfer
or other taxes required by reason of the
issuance of shares of Parent Common
Stock to a person other than the registered
holder of such Old Certificate or
shall establish to the satisfaction of
Parent that such tax has been paid or is
not applicable. Each Old Certificate shall
be deemed at any time after the
Effective Time to represent only the right
to receive, upon exchange as
contemplated in this Section 3.2, the
Merger Consideration into which the
Company Common Shares formerly represented
by such Old Certificate are converted
in the Merger. No interest shall be paid or
accrue on any Merger Consideration
payable upon surrender of any Old
Certificate.
(b) Exchange Agent. As of the Effective Time, Parent shall
deposit,
or shall cause to be deposited, with a bank
or trust company designated by
Parent and reasonably acceptable to the
Company (the "Exchange Agent"), for the
benefit of the holders of Company Common
Shares, for exchange in accordance with
this Article 3, through the Exchange Agent,
certificates representing the shares
of Parent Common Stock and an amount of
cash sufficient to deliver to the
holders of Company Common Shares (other
than Dissenting Shares) the aggregate
Merger
<PAGE>
Consideration (such certificates for shares
of Parent Common Stock and cash,
together with cash in lieu of fractional
shares and any dividends or
distributions with respect to the shares of
Parent Common Stock with a record
date occurring after the Effective Time,
being hereinafter referred to as the
"Exchange Fund") deliverable pursuant to
Section 3.1 in exchange for outstanding
Company Common Shares. The Exchange Agent
shall, pursuant to irrevocable
instructions, deliver the Merger
Consideration contemplated to be issued
pursuant to Section 3.1 out of the Exchange
Fund. Except as contemplated by
Section 3.2(e) hereof, the Exchange Fund
shall not be used for any other
purpose. Prior to the Effective Time,
Parent shall enter into an agreement with
the Exchange Agent, in a form reasonably
satisfactory to the Company, setting
forth the procedures to be used for such
exchange and the other actions
contemplated by this Section 3.2.
(c) Distributions with Respect to Unexchanged Shares of Parent
Common Stock. No dividends or other
distributions declared or made after the
Effective Time with respect to Parent
Common Stock with a record date after the
Effective Time shall be paid to the holder
of any unsurrendered Old Certificate
with respect to the shares of Parent Common
Stock represented thereby, and no
cash payment in lieu of fractional shares
shall be paid to any such holder
pursuant to Section 3.2(e), unless and
until the holder of such Old Certificate
shall surrender such Old Certificate.
Subject to the effect of escheat, tax or
other applicable Laws, following surrender
of any such Old Certificate, there
shall be paid to the holder of the
certificates representing whole shares of
Parent Common Stock issued in exchange
therefor, in addition to the Merger
Consideration deliverable therefore
pursuant to Section 3.1, without interest,
(A) promptly, the amount of any cash
payable with respect to a fractional share
of Parent Common Stock to which such holder
is entitled pursuant to Section
3.2(e) and the amount of dividends or other
distributions with a record date
after the Effective Time theretofore paid
with respect to such whole shares of
Parent Common Stock and (B) at the
appropriate payment date, the amount of
dividends or other distributions, with a
record date after the Effective Time
but prior to surrender and a payment date
occurring after surrender, payable
with respect to such whole shares of Parent
Common Stock.
(d) Further Rights in Company Common Shares. All Merger
Consideration issued and paid upon
conversion of the Company Common Shares in
accordance with the terms hereof (including
any cash paid pursuant to Section
3.2(e)) shall be deemed to have been issued
and paid in full satisfaction of all
rights pertaining to such Company Common
Shares.
(e) Fractional Shares. No certificates or scrip representing
fractional shares of Parent Common Stock
shall be issued upon the surrender for
exchange of Old Certificates, no dividend
or distribution with respect to Parent
Common Stock shall be payable on or with
respect to any fractional share and
such fractional share interests will not
entitle the owner thereof to any rights
of a stockholder of Parent.
(i) As promptly
as practicable following the Effective Time,
the Exchange Agent shall determine the
difference between (A) the number of full
shares of Parent Common Stock delivered to
the Exchange Agent by Parent pursuant
to Section 3.2(b) and (B) the aggregate
number of full shares of Parent Common
Stock to be distributed to holders of
Company Common Shares pursuant to Section
3.1(a) (such difference being the "Excess
Shares"). As soon after the Effective
Time as practicable, the Exchange Agent, as
agent for such holders of Parent
Common Stock, shall sell the Excess Shares
at then prevailing prices on the
NYSE, all in the manner provided in this
Section 3.2(e).
<PAGE>
(ii) The sale of the
Excess Shares by the Exchange Agent
shall be executed on the NYSE and shall be
executed in round lots to the extent
practicable. Until the net proceeds of any
such sale or sales have been
distributed to such holders of Company
Common Shares, the Exchange Agent will
hold such proceeds in trust for such
holders of Company Common Shares as part of
the Exchange Fund. All commissions,
transfer taxes and other out-of-pocket
transaction costs of the Exchange Agent
incurred in connection with such sale or
sales of Excess Shares shall be deducted
from the Exchange Fund. In addition,
the Exchange Agent's compensation and
expenses in connection with such sale or
sales shall be deducted from the Exchange
Fund. The Exchange Agent shall
determine the portion of such net proceeds
to which each holder of Company
Common Shares shall be entitled, if any, by
multiplying the amount of the
aggregate net proceeds by a fraction, the
numerator of which is the amount of
the fractional share interest to which such
holder of Company Common Shares is
entitled (after taking into account all
shares of Parent Common Stock to be
issued to such holder) and the denominator
of which is the aggregate amount of
fractional share interests to which all
holders of Company Common Shares are
entitled.
(iii) As soon as practicable after the determination of the
amount of cash, if any, to be paid to
holders of Company Common Shares with
respect to any fractional share interests,
the Exchange Agent shall promptly pay
such amounts to such holders of Company
Common Shares subject to and in
accordance with the terms of Section
3.2(b).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund
which remains undistributed to the holders
of Company Common Shares for six (6)
months after the Effective Time shall be
delivered to Parent upon demand, and
any holders of Company Common Shares who
have not theretofore complied with this
Article 3 shall thereafter look only to
Parent for the Merger Consideration, any
cash in lieu of fractional shares of Parent
Common Stock to which they are
entitled pursuant to Section 3.2(e) and any
dividends or other distributions
with respect to Parent Common Stock to
which they are entitled pursuant to
Section 3.2(b), in each case, without any
interest thereon.
(g) No Liability. None of Parent, the Company, Merger Sub or
the
Surviving Corporation shall be liable to
any holder of Company Common Shares for
any such shares of Parent Common Stock (or
dividends or distributions with
respect thereto) or cash from the Exchange
Fund delivered to a public official
pursuant to any abandoned property, escheat
or similar Law.
(h) Lost Certificates. If any Old Certificate shall have been
lost,
stolen or destroyed, upon the making of an
affidavit of that fact by the person
claiming such Old Certificate to be lost,
stolen or destroyed and, if required
by Parent, the posting by such person of a
bond, in such reasonable amount as
Parent may direct, as indemnity against any
claim that may be made against it
with respect to such Old Certificate, the
Exchange Agent will issue in exchange
for such lost, stolen or destroyed Old
Certificate the Merger Consideration, any
cash in lieu of fractional shares of Parent
Common Stock to which the holders
thereof are entitled pursuant to Section
3.2(e) and any dividends or other
distributions to which the holders thereof
are entitled pursuant to Section
3.2(b), in each case, without any interest
thereon.
<PAGE>
(i) Withholding.
Parent, Merger Sub or the Exchange Agent
shall be entitled to deduct and withhold
from the consideration otherwise
payable pursuant to this Agreement to any
holder of Company Common Shares such
amounts as Parent, Merger Sub or the
Exchange Agent are required to deduct and
withhold under the Code, or any provision
of state, local or foreign tax Law,
with respect to the making of such payment.
To the extent that amounts are so
withheld by Parent, Merger Sub or the
Exchange Agent, such withheld amounts
shall be treated for all purposes of this
Agreement as having been paid to the
holder of Company Common Shares in respect
of whom such deduction and
withholding was made by Parent, Merger Sub
or the Exchange Agent.
Section
3.3 Share Transfer Books. At the Effective Time, the share
transfer books of the Company shall be
closed and thereafter, there shall be no
further registration of transfers of
Company Common Shares theretofore
outstanding on the records of the Company.
From and after the Effective Time,
the holders of certificates representing
Company Common Shares outstanding
immediately prior to the Effective Time
shall cease to have any rights with
respect to such Company Common Shares
except as otherwise provided herein or by
Law. On or after the Effective Time, any
Old Certificates presented to the
Exchange Agent or Parent for any reason
shall be converted into the Merger
Consideration, any cash in lieu of
fractional shares of Parent Common Stock to
which the holders thereof are entitled
pursuant to Section 3.2(e) and any
dividends or other distributions to which
the holders thereof are entitled
pursuant to Section 3.2(b).
Section
3.4 Company Stock Options. At the Effective Time, by virtue of
the
Merger and without any action on the part
of the holders of any outstanding
unexercised and unexpired option to
purchase Company Common Shares, whether or
not then vested or exercisable, issued
under a Company Stock Option Plan or
otherwise (each, a "Company Option" and
collectively, the "Company Options"), or
any other Person, except as expressly
provided herein:
(a) each Company Option outstanding immediately prior to the
Effective Time with an exercise price per
share equal to or greater than the sum
of (i) the Per Share Cash Consideration and
(ii) the Closing Price of the Parent
Common Stock multiplied by the Exchange
Ratio (such sum, the "Merger
Consideration Value")) shall be canceled
and the holder thereof shall have no
right to receive any consideration
therefor; and
(b) each Company Option outstanding immediately prior to the
Effective Time with an exercise price per
share less than the Merger
Consideration Value shall be canceled in
exchange for the right to receive a
payment in cash, without interest, and
Parent Common Stock equal in the
aggregate to the product (such product, the
"Aggregate Spread Value") of (i) the
excess of (A) the Merger Consideration
Value over (B) the exercise price per
share under such Company Option, and (ii)
the number of Company Common Shares
into which such Company Option is
exercisable. The Aggregate Spread Value of
each Common Option shall be paid as
follows: (i) in an amount in cash, without
interest, equal to the Aggregate Spread
Value multiplied by the Cash
Consideration Percentage, reduced by the
applicable withholding taxes on the
Aggregate Spread Value, and (ii) in a
number of shares of Parent Common Stock
equal to (A) the Aggregate Spread Value
multiplied by Stock Consideration
Percentage, divided by (B) the Closing
Price of the Parent Common Stock. As soon
as reasonably practicable following the
Effective Time, but in no event more
than twenty (20) business days thereafter,
the Surviving Corporation shall mail
to each holder of a Company Option the
applicable cash payment and
<PAGE>
certificates for shares of Parent Common
Stock. The term "Cash Consideration
Percentage" shall mean the percentage
obtained by dividing the Per Share Cash
Consideration by the Merger Consideration
Value. The term "Stock Consideration
Percentage" shall mean the percentage
obtained by dividing (i) the Closing Price
of the Parent Common Stock multiplied by
the Exchange Ratio, by (ii) the Merger
Consideration Value.
(c) The Company represents and warrants to Parent that no consent
or
approval of any of the holders of Company
Options is required in order to
implement the provisions of this Section
3.4. Prior to the Effective Time, the
Company Board shall take all necessary
action to cause all outstanding unvested
Company Options to become fully vested and
exercisable immediately prior to the
consummation of the Merger.
Section
3.5 Dissenting Stockholders. Notwithstanding anything in this
Agreement to the contrary, Company Common
Shares that are outstanding
immediately prior to the Effective Time and
held by a holder thereof who
properly exercises and perfects appraisal
rights for such shares in accordance
with Section 262 of the DGCL ("Dissenting
Shares") will be paid for by the
Surviving Corporation in accordance with
Section 262 of the DGCL; provided,
however, that if any such holder shall fail
to perfect or otherwise shall waive,
withdraw or lose the right to appraisal and
payment under the DGCL, the right of
such holder to such appraisal of its
Company Common Shares shall cease and such
Company Common Shares shall be deemed
converted as of the Effective Time into
the right to receive the Merger
Consideration as provided in this Article 3. The
Company shall give Parent (a) prompt notice
of any written demands for appraisal
received by the Company, withdrawals of
such demands, and any other related
instruments served pursuant to Section 262
of the DGCL and received by the
Company and (b) the opportunity to direct
all negotiations and proceedings with
respect to demands for appraisals under the
DGCL. The Company shall not, except
with the prior written consent of Parent,
(i) voluntarily make any payment with
respect to any demands for appraisal for
Dissenting Shares, (ii) offer to
settle, or settle, any such demands, (iii)
waive any failure to timely deliver a
written demand for appraisal in accordance
with the DGCL, or (iv) agree to do
any of the foregoing.
Section
3.6 Tax Adjustment. In the event that either party, after
consulting with outside counsel, reasonably
determines at any time that there is
a reasonable likelihood that the Merger
would not qualify as a "reorganization"
within the meaning of Section 368(a) of the
Code, then such party shall have the
right to elect that the structure of the
Merger shall be revised as follows: (i)
Parent shall form a new Delaware
corporation which is a direct wholly owned
subsidiary of Parent ("Alternative
Holdco"), (ii) Parent shall cause Alternative
Holdco to form a new Delaware corporation
which is a direct wholly owned
subsidiary of Alternative Holdco
("Alternative Merger Sub 1") and another new
Delaware corporation which is a direct
wholly owned subsidiary of Alternative
Holdco ("Alternative Merger Sub 2"), (iii)
at the Effective Time, Alternative
Merger Sub 1 shall be merged with and into
the Company, with the Company
continuing as the surviving corporation
("Alternative Merger 1") and Alternative
Merger Sub 2 shall be merged with and into
Parent, with Parent continuing as the
surviving corporation and each share of
Alternative Holdco stock held by Parent
shall be cancelled ("Alternative Merger 2,"
and with Alternative Merger 1, the
"Alternative Mergers"), provided that (i)
in no event will such revision to the
structure of the Merger result in any
change in the amount of cash consideration
to which the holders of Company Common
Stock and Company Options would otherwise
be entitled to receive under this
Agreement, and (ii) the percentage ownership
of the
<PAGE>
Company's stockholders and option holders
in Alternative Holdco shall be the
same as it would have been in Parent
immediately after the Effective Time under
this Agreement (and Alternative Holdco
shall have the same capital structure
(subject to immaterial exceptions) as
Parent would have had immediately after
the Effective Time under this Agreement).
In the event that either party
exercises this option to revise the
structure of the Merger (an "Alternative
Structure Event"), (i) all references to
the term "Parent Common Stock" when
used in the context of Parent Common Stock
to be issued in the Merger shall be
deemed to be references to common stock to
be issued by Alternative Holdco in
Alternative Merger 1, (ii) all references
to the Share Issuance shall be deemed
to be references to Alternative Merger 2;
(iii) this Agreement shall be deemed
automatically amended by the parties as
appropriate to give effect to the
structure of the Alternative Mergers,
including, but not limited to, the
amendment of Sections 7.2(c) and 7.3(c) to
provide that Parent or the Company,
as applicable, shall have received the
opinion of its outside counsel, dated the
Closing Date, to the effect that on the
basis of the facts, representations and
assumptions set forth in representation
letters of Parent, Alternative Holdco,
Alternative Merger Sub 1, Alternative
Merger Sub 2 and the Company (or in such
opinion), the Alternative Mergers, taken
together, will constitute a transaction
described in Section 351 of the Code and
(iii) each party shall execute a
written amendment to this Agreement as
necessary to reflect the foregoing and to
otherwise effect the substance of the
transaction as set forth in the Merger
Agreement. Each of the Company and Parent
shall cooperate in good faith with one
another and use its best efforts, to take
or cause to be taken all actions, and
to do or cause to be done, all things
necessary, including amending this
Agreement, to provide a mechanism to
exchange Parent Company Stock and to ensure
that, if an Alternative Structure Event
were to occur, the Alternative Mergers
could be consummated as closely as
reasonably practicable to the time the Merger
would have been consummated but for the
Alternative Structure Event.
Notwithstanding anything to the contrary
set forth in this Section 3.6 the
changes described in this Section 3.6 shall
not be implemented in a manner that
would be materially adverse to the
interests of the holders of Parent Common
Stock or the holders of Company Common
Stock.
ARTICLE 4.
COMPANY REPRESENTATIONS AND WARRANTIES
Except as set forth in the Disclosure Schedule delivered by the
Company to Parent prior to the execution of
this Agreement (the "Company
Disclosure Schedule"), which, subject to
Section 9.10, identifies exceptions by
specific Section references, the Company
hereby represents and warrants to
Parent as follows:
Section
4.1 Organization and Qualification; Subsidiaries.
(a) The Company is a corporation duly organized, validly
existing
and in good standing under the laws of the
State of Delaware and has the
requisite power and authority to own, lease
and operate its properties and to
carry on its business as it is now being
conducted.
(b) Each subsidiary of the Company (each a "Company Subsidiary"
and,
collectively, the "Company Subsidiaries")
has been duly organized, and is
validly existing and in good standing under
the laws of the jurisdiction of its
incorporation or organization, as the case
may be. Each Company Subsidiary has
the requisite corporate power and authority
to own, lease and operate its
properties and to carry on its business as
it is now being conducted.
<PAGE>
(c) Each of the Company and each Company Subsidiary is duly
qualified or licensed to do business, and
is in good standing, in each
jurisdiction where the character of the
properties owned, leased or operated by
it or the nature of its business makes such
qualification, licensing or good
standing necessary, except for such
failures to be so qualified, licensed or in
good standing that would not, individually
or in the aggregate, have a Company
Material Adverse Effect.
(d) Section 4.1 of the Company Disclosure Schedule sets forth a
true
and complete list of all of the Company
Subsidiaries. None of the Company or any
Company Subsidiary holds an Equity Interest
in any other person except for
passive investments in the Equity Interests
(not to exceed 2% of any such
company's outstanding Equity Interests) of
public companies as part of the cash
management program of the Company.
Section 4.2 Certificate of
Incorporation and By-laws; Corporate Books and
Records. The copy of the Company's Restated
Certificate of Incorporation (the
"Company Certificate of Incorporation")
attached to Section 4.2(i) of the
Company Disclosure Schedule and the copy of
the Company's By-laws (the "Company
By-laws") attached to Section 4.2(ii) of
the Company Disclosure Schedule are
true and complete copies thereof as in
effect on the date hereof. The Company is
not in violation of any of the provisions
of the Company Certificate of
Incorporation or the Company By-laws. True
and complete copies of (i) all
approved minutes of meetings of the Company
Board, or any committees thereof, or
of meetings of the stockholders of the
Company, and (ii) actions by written
consent of the Company Board, or any
committees thereof, have been made
available by the Company to Parent.
Section
4.3 Capitalization.
(a) The authorized capital shares of the Company consist of
80,000,000 Company Common Shares, par value
$0.001 per share, and 4,000,000
preferred shares, par value $0.001 per
share (the "Company Preferred Shares").
As of July 26, 2004, (A) 25,157,814 Company
Common Shares were issued and
outstanding, all of which were validly
issued and fully paid, nonassessable and
free of preemptive rights (which are
binding upon the Company or any Company
Subsidiary), and (B) 3,397,536 Company
Common Shares were issuable (and such
number was reserved for issuance) upon
exercise of Company Options outstanding
as of such date. As of the date hereof, no
Company Preferred Shares are issued
or outstanding. Except for Company Options
and the stock option agreements
related thereto and except for arrangements
and agreements set forth in Section
4.3 of the Company Disclosure Schedule,
there are no options, warrants or other
rights, agreements, arrangements or
commitments of any character to which the
Company or any Company Subsidiary is a
party or by which the Company or any
Company Subsidiary is bound relating to the
issued or unissued Equity Interests
of the Company or any Company Subsidiary,
or securities convertible into or
exchangeable for such Equity Interests, or
obligating the Company or any Company
Subsidiary to issue or sell any of its
capital shares or other Equity Interests,
or securities convertible into or
exchangeable for such capital shares of, or
other Equity Interests in, the Company or
any Company Subsidiary. As of July 26,
2004, the weighted average exercise price
of all outstanding Company Options
equals $20.863.
(b) The Company has previously made available to Parent a true
and
complete list, as of the date hereof, of
the prices at which outstanding Company
Options as of the date
<PAGE>
hereof may be exercised under any
applicable Company Stock Option Plan, the
number of Company Options outstanding at
each such price and the vesting
schedule of the Company Options for each
officer of the Company. All of the
Company Common Shares subject to issuance
under the Company Stock Option Plans,
upon issuance on the terms and conditions
specified in the instruments pursuant
to which they are issuable, will be duly
authorized, validly issued, fully paid,
nonassessable and free of preemptive rights
(which are binding upon the Company
or any Company Subsidiary). There are no
outstanding contractual obligations of
the Company or any Company Subsidiary (A)
restricting the transfer of, (B)
affecting the voting rights of, (C)
requiring the repurchase, redemption or
disposition of, or containing any right of
first refusal with respect to, (D)
requiring the registration for sale of, or
(E) granting any preemptive or
antidilutive right with respect to, any
Company Common Shares or any other
Equity Interests in, the Company or any
Company Subsidiary. Each outstanding
capital share of each Company Subsidiary is
duly authorized, validly issued,
fully paid, nonassessable and free of
preemptive rights (other than any
pre-emptive rights under applicable Law)
and is owned, beneficially and of
record, by the Company or another Company
Subsidiary or a nominee of the Company
or of another Company Subsidiary free and
clear of all Liens, options, rights of
first refusal, agreements, limitations on
the Company's or such other Company
Subsidiary's voting rights, charges and
other encumbrances of any nature
whatsoever. There are no outstanding
contractual obligations of the Company or
any Company Subsidiary to provide funds to,
or make any investment (in the form
of a loan, capital contribution or
otherwise) in, any Company Subsidiary or any
other person, other than guarantees by the
Company of any indebtedness or other
obligations of any wholly owned Company
Subsidiary as set forth in Section 4.3
of the Company Disclosure Schedule.
Section
4.4 Authority.
(a) The Company has all necessary corporate power and authority
to
execute and deliver this Agreement, to
perform its obligations hereunder and to
consummate the transactions contemplated by
this Agreement. The execution and
delivery of this Agreement by the Company
and, other than, with respect to the
Merger, as provided in Section 4.20, the
consummation by the Company of the
transactions contemplated hereby have been
duly and validly authorized by all
necessary corporate action, as required by
the DGCL and no other corporate
proceedings on the part of the Company and
no stockholder votes are necessary to
authorize this Agreement or to consummate
the transactions contemplated hereby.
The Board of Directors of the Company (the
"Company Board") has approved this
Agreement, declared advisable the
transactions contemplated hereby and has
directed that this Agreement and the Merger
be submitted to the Company's
stockholders for approval at a meeting of
such stockholders. This Agreement has
been duly authorized (other than with
respect to the Merger) and validly
executed and delivered by the Company and
constitutes a legal, valid and binding
obligation of the Company, enforceable
against the Company in accordance with
its terms subject only to the effect, if
any, of (i) applicable bankruptcy and
other similar laws affecting the rights of
creditors generally, and (ii) rules
of law governing specific performance,
injunctive relief and other equitable
remedies.
(b) The Company has taken all appropriate actions so that the
restrictions on business combinations
contained in Section 203 of the DGCL will
not apply with respect to or as a result of
this Agreement and the transactions
contemplated hereby, including the Merger,
or the
<PAGE>
Voting Agreements without any further
action on the part of the stockholders or
the Company Board. No other state takeover
statute or similar statute or
regulation is applicable to or purports to
be applicable to the Merger or any
other transactions contemplated by this
Agreement.
Section
4.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company
does
not, and the performance of this Agreement
by the Company will not, (A) conflict
with or violate any provision of the
Company Certificate of Incorporation or
Company By-laws or any equivalent
organizational documents of any Company
Subsidiary, provided that the Merger is not
consummated prior to obtaining the
stockholder approval set forth in Section
4.20, (B) assuming that all consents,
approvals, authorizations and permits
described in Section 4.5(b) have been
obtained and all filings and notifications
described in Section 4.5(b) have been
made and any waiting periods thereunder
have terminated or expired, conflict
with or violate in any material respects
any Law applicable to the Company or
any Company Subsidiary or by which any
material property or asset of the Company
or any Company Subsidiary is bound or
affected or (C) require any consent or
approval under, result in any breach of or
any loss of any benefit under,
constitute a change of control or default
(or an event which with notice or
lapse of time or both would become a
default) under or give to others any right
of termination, vesting, amendment,
acceleration or cancellation of, or result
in the creation of a material Lien on any
property or asset of the Company or
any Company Subsidiary pursuant to, any
material promissory note, bond,
mortgage, indenture, contract, agreement,
lease, license, Company Permit or
other instrument or obligation, except,
with respect to clause (C) for any such
conflicts, violations, breaches, defaults
or other occurrences which would not,
individually or in the aggregate, (x)
reasonably be expected to prevent or
materially delay consummation of the Merger
or any other transactions
contemplated by this Agreement or (y) have
a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company
does
not, and the performance of this Agreement
by the Company will not, require the
Company to obtain any material consent,
approval, authorization or permit of, or
make any material filing with or
notification to, any Governmental Entity or any
other person, except under the Exchange
Act, Securities Act, any applicable Blue
Sky Laws, the rules and regulations of
Nasdaq, the HSR Act, foreign or
supranational antitrust and competition
Laws and the filing and recordation of
the Certificate of Merger as required by
the DGCL.
Section
4.6 Permits; Compliance With Law. Each of the Company and each
Company Subsidiary is in possession of all
authorizations, licenses, permits,
certificates, registrations, approvals and
clearances of any Governmental
Entity, and has made all filings,
applications and registrations with any
Governmental Entity (including any
authorizations required under the Federal
Food, Drug and Cosmetic Act of 1938, as
amended (the "FDCA") and any regulations
of the U.S. Food and Drug Administration
(the "FDA") promulgated thereunder)
necessary for the Company and each Company
Subsidiary to own, lease and/or
operate its properties or other assets, or
to carry on its respective businesses
substantially in the manner described in
the Company SEC Filings filed prior to
the date hereof and substantially as it is
being conducted as of the date
hereof, including, but not limited to, the
testing, manufacturing, storing,
packaging, labeling and distributing of any
product of the Company or any
Company Subsidiary (the "Company Permits"),
and all such Company Permits are
valid, and in full force and effect,
<PAGE>
except where the failure to have, or the
suspension or cancellation of, or
failure to be valid or in full force and
effect of, any of the Company Permits,
or the failure to have made such filings,
applications and/or registrations,
would not, individually or in the
aggregate, (x) reasonably be expected to
prevent or materially delay consummation of
the Merger or any other transactions
contemplated by this Agreement or (y) have
a Company Material Adverse Effect.
Neither the Company nor any Company
Subsidiary is in conflict with, or in
default or violation of, (A) in any
material respect, any Law applicable to the
Company or any Company Subsidiary or by
which any material property or asset of
the Company or any Company Subsidiary is
bound or affected or (B) any Company
Permits, except, with respect to clause (B)
for any such conflicts, defaults or
violations that would not, individually or
in the aggregate, reasonably be
expected to (x) prevent or materially delay
consummation of the Merger or any
other transactions contemplated by this
Agreement or (y) have a Company Material
Adverse Effect. Neither the Company nor any
Company Subsidiary has, within the
last three years, received any written or,
to the knowledge of the Company, oral
warning, notice, notice of violation or
probable violation, notice of
revocation, or other communication from or
on behalf of any Governmental Entity,
alleging (A) any violation of any Company
Permit, or (B) that the Company or any
Company Subsidiary requires any Company
Permit for its business as currently
conducted that is not currently held by it,
except for any such communications
received after the date hereof and promptly
disclosed to Parent, none of which
could, individually or in the aggregate,
have a Company Material Adverse Effect.
No investigation or inquiry by any
Governmental Entity with respect to the
Company or any Company Subsidiary is
pending, or, to the knowledge of the
Company, threatened, with respect to any
alleged or claimed violation of Law
applicable to the Company or any Company
Subsidiary or by which any material
property or asset of the Company or any
Company Subsidiary is bound or affected,
except for any such investigation or
inquiry commenced after the date hereof and
promptly disclosed to Parent, none of which
could, individually or in the
aggregate, have a Company Material Adverse
Effect.
Section
4.7 SEC Filings; Financial Statements.
(a) The Company has timely filed or furnished all registration
statements, prospectuses, forms, reports,
definitive proxy statements, schedules
and documents required to be filed or
furnished by it under the Securities Act
or the Exchange Act, as the case may be,
since June 30, 2001 (collectively, the
"Company SEC Filings"). Each Company SEC
Filing (A) as of its date, complied in
all material respects with the requirements
of the Securities Act or the
Exchange Act, as the case may be, and (B)
did not at the time it was filed (or
if amended or superseded by a filing prior
to the date of this Agreement then on
the date of such filing) 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 the
light of the circumstances under which
they were made, not misleading. As of the
date of this Agreement, no Company
Subsidiary is subject to the periodic
reporting requirements of the Exchange
Act.
(b) Each of the consolidated financial statements (including,
in
each case, any notes thereto) contained in
the Company SEC Filings (the "Company
Financial Statements") was prepared in
accordance with GAAP applied (except as
may be indicated in the notes thereto and,
in the case of unaudited quarterly
financial statements, as permitted on Form
10-Q, 8-K or any successor form under
the Exchange Act) on a consistent basis
throughout the periods indicated (except
as may be indicated in the notes thereto),
and each presented fairly in all
material respects the consolidated
financial position, results of operations and
cash flows of the Company
<PAGE>
and the consolidated Company Subsidiaries
as of the respective dates thereof and
for the respective periods indicated
therein (subject, in the case of unaudited
statements, to normal year-end adjustments
which were not and would not,
individually or in the aggregate,
reasonably be expected to be material). The
books and records of the Company and each
Company Subsidiary have been, and are
being, maintained in all material respects
in accordance with applicable legal
and accounting requirements, and the
Company Financial Statements are consistent
with such books and records.
(c) The Company has in place the "disclosure controls and
procedures" (as defined in Rules 13a-15(e)
and 15d-15(e) of the Exchange Act)
required in order for the Chief Executive
Officer and Chief Financial Officer of
the Company to engage in the review and
evaluation process mandated by Section
302 of the Sarbanes-Oxley Act of 2002
("SOXA"). The Company's "disclosure
controls and procedures" are reasonably
designed to ensure that material
information (both financial and
non-financial) relating to the Company and its
consolidated Subsidiaries required to be
disclosed by the Company in the reports
that it files or submits under the Exchange
Act is recorded, processed,
summarized and reported within the time
periods specified in the rules and forms
of the SEC, and that such information is
accumulated and communicated to the
Company's principal executive and principal
financial officers, or persons
performing similar functions, as
appropriate to allow timely decisions regarding
required disclosure and to make the
certifications of the Chief Executive
Officer and Chief Financial Officer of the
Company required by Section 302 of
SOXA with respect to such reports. Except
as reflected in the Company Financial
Statements, neither the Company nor any
Company Subsidiary is a party to any
material off-balance sheet arrangements (as
defined in Item 303 of Regulation
S-K promulgated under the Exchange Act). To
the Company's knowledge, KPMG LLP,
which has expressed its opinion with
respect to the financial statements of the
Company and its Subsidiaries included in
Company SEC Filings (including the
related notes), is "independent" with
respect to the Company and the Company
Subsidiaries within the meaning of
Regulation S-X since July 1, 2001. The
Company has made such disclosure of
non-audit services performed by KPMG LLP in
its proxy statements with respect to its
annual meetings of stockholders as is
required under the rules and regulations of
the SEC.
(d) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the
consolidated Company Subsidiaries as of
December 31, 2003 included in the Company
Form 10-K for the fiscal year ended
December 31, 2003, including the notes
thereto, none of the Company or any
consolidated Company Subsidiary has any
liabilities or obligations of any nature
(whether accrued, absolute, contingent,
determined, determinable or otherwise),
other than (i) liabilities or obligations
incurred in the ordinary course of
business consistent with past practice
since December 31, 2003 that would not,
individually or in the aggregate, (x)
reasonably be expected to prevent or
materially delay consummation of the Merger
or any other transactions
contemplated by this Agreement or (y) have
a Company Material Adverse Effect or
(ii) fees and expenses incurred in
connection with this Agreement and the
transactions contemplated hereby.
(e) The Company has previously provided to Parent a true and
complete copy of any amendment or
modification which has not yet been filed with
the SEC to any agreement, document or other
instrument which previously had been
filed by the Company with the SEC pursuant
to the Securities Act or the Exchange
Act.
<PAGE>
Section
4.8 Disclosure Documents.
(a) The Proxy Statement and any Other Filings to be made by the
Company, and any amendments or supplements
thereto, at (A) the time the
Registration Statement is declared
effective, (B) the time the Proxy Statement
(or any amendment thereof or supplement
thereto) is first mailed to the
stockholders of the Company, (C) the time
of the Company Stockholders Meeting,
and (D) the Effective Time, will comply as
to form in all material respects with
the applicable requirements of the
Securities Act, the Exchange Act and other
applicable Laws.
(b) The Proxy Statement and any Other Filings to be made by the
Company, and any amendments or supplements
thereto, do not, and will not, at (A)
the time the Registration Statement is
declared effective, (B) the time the
Proxy Statement (or any amendment thereof
or supplement thereto) is first mailed
to the stockholders of the Company, (C) the
time of the Company Stockholders
Meeting, and (E) the Effective Time,
contain any untrue statement of a material
fact or omit to state any material fact
required to be stated therein or
necessary in order to make the statements
made therein, in light of the
circumstances under which they were made,
not misleading. The representations
and warranties contained in this (b) will
not apply to statements or omissions
included in the Proxy Statement or any
Other Filings based upon information
furnished in writing to the Company by
Parent or Merger Sub specifically for use
therein.
Section
4.9 Absence of Certain Changes or Events. Since December 31,
2003,
except as specifically contemplated by, or
as disclosed in, this Agreement or
the Company SEC Filings or Section 4.9 of
the Company Disclosure Schedule, there
has not been (a) any Company Material
Adverse Effect or (b) any of the
following:
(i) any amendment of the Certificate of Incorporation or Bylaws
of
the Company;
(ii) any declaration, setting aside or payment of any dividend
on,
or other distribution (whether in cash,
stock, property or a combination
thereof) with respect to any of its capital
shares (other than dividends paid by
a wholly owned Company Subsidiary to the
Company or to any other wholly owned
Company Subsidiary);
(iii) any reclassification, combination, split, subdivision, or
issuance or authorization of the issuance
of any other securities in respect of,
or any redemption, purchase or other
acquisition, directly or indirectly, of any
of the Company's capital shares or other
Equity Interests except for repurchases
from employees or other service providers
of the Company following termination
of their employment or services pursuant to
the terms of their pre-existing
stock option or purchase agreements;
(iv) any granting by the Company or any of Company Subsidiary of
any
increase in compensation or increase in
benefits payable or to become payable to
its directors, officers or employees,
except for normal increases of cash
compensation in the ordinary course of
business consistent with past practice,
or any payment by the Company or any
Company Subsidiary of any bonus, except for
bonuses made in the ordinary course of
business consistent with past practice,
or any granting by the Company or any of
Company Subsidiary of any increase in
severance or termination pay or any entry
by the Company or any of Company
Subsidiary into, or modification or
amendment of any currently effective
employment, severance, termination or
indemnification agreement or any agreement
the benefits of which are contingent or the
terms of
<PAGE>
which are materially altered upon the
occurrence of a transaction involving the
Company of the nature contemplated by this
Agreement;
(v) entry by the Company or any of Company Subsidiary into any
licensing or other agreement with regard to
the acquisition or disposition of
any material Company Intellectual Property
other than licenses and agreements
entered into in the ordinary course of
business consistent with past practice;
(vi) any termination or material amendment with respect to any
Company Material Contract in effect since
the date of the Company Balance Sheet;
(vii) any material change by the Company in its accounting
policies
or procedures, except as required by GAAP
or by a Governmental Entity or in
connection with compliance with Section 404
of SOXA;
(viii) any material revaluation by the Company of any of its
assets
other than in the ordinary course of
business consistent with past practice;
(ix) any cancellation by the Company or any of its Subsidiaries
of
any material debts or waiver of any claims
or rights of material value;
(x) any issuance or sale of any debt securities of the Company
or
any Company Subsidiary, any incurrence of
any liability or obligation for
borrowed money (other than any borrowings
under the Company's revolving credit
agreements with Comerica Bank and Wells
Fargo as in effect on the date hereof,
and any refinancing thereof or amendment
thereto that does not increase the
principal amount of loans available
thereunder) or any liability or obligation
as guarantor with respect to the
obligations of others, any grant of any
security interest, pledge or lien on any
material assets or properties of the
Company or any Company Subsidiary or the
making of any loan to any person (other
than a Company Subsidiary) outside the
ordinary course of business;
(xi) any sale, transfer or other disposition outside of the
ordinary
course of business of any material
properties or assets (real, personal or
mixed, tangible or intangible) by the
Company or any of Company Subsidiary;
(xii) any material damage, destruction or loss, whether or not
covered by insurance, affecting the assets,
properties or business of the
Company or any Company Subsidiary; or
(xiii) any agreement, whether in writing or otherwise, to take
any
action described in this section by the
Company or any of Company Subsidiary.
Section
4.10 Employee Benefit Plans.
(a) Section 4.10(a) of the Company Disclosure Schedule sets forth
a
true and complete list of each "employee
benefit plan" as defined in Section
3(3) of ERISA and any other plan, policy,
program, practice, agreement,
understanding or arrangement (whether
written or oral) providing compensation or
other benefits to any current or former
director, officer, employee or
consultant (or to any dependent or
beneficiary thereof of the Company or any
ERISA Affiliate), which are now,
maintained, sponsored or contributed to by the
Company or
<PAGE>
any ERISA Affiliate, or under which the
Company or any ERISA Affiliate has any
obligation or liability, whether actual or
contingent, including, without
limitation, all material incentive, bonus,
deferred compensation, vacation,
holiday, cafeteria, medical, dental, life,
accident, disability, stock purchase,
stock option, stock appreciation, phantom
stock, restricted stock or other
stock-based compensation plans, policies,
programs, practices or arrangements
(each a "Company Benefit Plan"). Neither
the Company nor, to the knowledge of
the Company, any other person or entity has
any express or implied commitment,
whether legally enforceable or not, to
modify, change or terminate any Company
Benefit Plan, other than with respect to a
modification, change or termination
required by ERISA or the Code.
With respect to each Company Benefit Plan, the Company has made
available to Parent true and complete
copies of (A) each Company Benefit Plan
(or, if not written a written summary of
its material terms), including without
limitation all plan documents, adoption
agreements, trust agreements, insurance
contracts or other funding vehicles and all
amendments thereto, (B) all summary
plan descriptions, including any summary of
material modifications, and all
brochures and material written
communications describing such plans delivered to
participants generally, (C) the most recent
annual reports (Form 5500 series)
filed with the IRS with respect to such
Company Benefit Plan (and, if the most
recent annual report is a Form 5500R, the
most recent Form 5500C filed with
respect to such Company Benefit Plan) and
all schedules and attachments thereto,
(D) the most recent actuarial report or
other financial statement relating to
such Company Benefit Plan, (E) the most
recent determination or opinion letter,
if any, issued by the IRS with respect to
any Company Benefit Plan and any
pending request for such a determination
letter, (F) the most recent
nondiscrimination tests performed under the
Code (including 401(k) and 401(m)
tests) for each Company Benefit Plan, and
(G) all filings made with any
Governmental Entity.
(b) Each Company Benefit Plan has been administered in all
material
respects in accordance with its terms and
all applicable Laws, including ERISA
and the Code, and contributions required to
be made under the terms of any of
the Company Benefit Plans as of the date of
this Agreement have been timely made
or, if not yet due, have been properly
reflected on the most recent consolidated
balance sheet filed or incorporated by
reference in the Company SEC Filings
filed prior to the date of this Agreement.
With respect to the Company Benefit
Plans, no event has occurred and, to the
knowledge of the Company, there exists
no condition or set of circumstances in
connection with which the Company could
be subject to any material liability (other
than for routine benefit
liabilities) under the terms of, or with
respect to, such Company Benefit Plans,
ERISA, the Code or any other applicable
Law.
(c) (A) Each Company Benefit Plan which is intended to qualify
under
Section 401(a), Section 401(k), Section
401(m) or Section 4975(e)(6) of the Code
has either received a favorable
determination or opinion letter from the IRS as
to its qualified status or the remedial
amendment period for such Company
Benefit Plan has not yet expired, and each
trust established in connection with
any Company Benefit Plan which is intended
to be exempt from federal income
taxation under Section 501(a) of the Code
is, to the knowledge of the Company,
so exempt, and to the Company's knowledge
no fact or event has occurred that
could adversely affect the qualified status
of any such Company Benefit Plan or
the exempt status of any such trust, (B) to
the Company's knowledge there has
been no prohibited transaction (within the
meaning of Section 406 of ERISA or
Section 4975 of the Code and other than a
transaction that is exempt under a
statutory or administrative exemption) with
respect to any Company Benefit
<PAGE>
Plan that could result in liability to the
Company, (C) each Company Benefit
Plan can be amended, terminated or
otherwise discontinued after the Effective
Time in accordance with its terms, without
liability (other than liability for
ordinary administrative expenses typically
incurred in a termination event), (D)
no suit, administrative proceeding, action
or other litigation has been brought,
or to the knowledge of the Company is
threatened, against or with respect to any
such Company Benefit Plan, including any
audit or inquiry by the IRS or United
States Department of Labor (other than
routine benefits claims), (E) to the
knowledge of the Company, neither the
Company nor any ERISA Affiliate has any
liability under ERISA Section 502, (F) all
tax, annual reporting and other
governmental filings required by ERISA and
the Code have been timely filed with
the appropriate Governmental Entity and all
notices and disclosures have been
timely provided to participants, and (G)
all contributions and payments to
Company Benefit Plans are, to the extent
otherwise deductible pursuant to
applicable Law, so deductible under Code
sections 162 or 404.
(d) No Company Benefit Plan is a multiemployer pension plan (as
defined in Section 3(37) of ERISA)
("Multiemployer Plan") or other pension plan
subject to Title IV of ERISA and none of
the Company or any ERISA Affiliate has
sponsored or contributed to or been
required to contribute to a Multiemployer
Plan or other pension plan subject to Title
IV of ERISA.
(e) No amount that could be received (whether in cash or property
or
the vesting of property), as a result of
the consummation of the transactions
contemplated by this Agreement, by any
employee, officer or director of the
Company or any Company Subsidiary who is a
"disqualified individual" (as such
term is defined in Treasury Regulation
Section 1.280G-1) under any Company
Benefit Plan could be characterized as an
"excess parachute payment" (as defined
in Section 280G(b)(1) of the Code).
(f) Except as required by Law, no Company Benefit Plan provides
any
of the following retiree or post-employment
benefits to any person: medical,
disability or life insurance benefits. The
Company and each ERISA Affiliate are
in material compliance with (i) the
requirements of the applicable health care
continuation and notice provisions of the
Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and
the regulations (including proposed
regulations) thereunder ("COBRA") and any
similar state law and (ii) the
applicable requirements of the Health
Insurance Portability and Accountability
Act of 1996, as amended, and the
regulations (including the proposed
regulations) thereunder.
(g) With respect to each Company Benefit Plan maintained outside
the
jurisdiction of the United States,
including any such plan required to be
maintained or contributed to by applicable
Law, custom or rule of the relevant
jurisdiction (each, a "Foreign Plan"): (i)
all employer and employee
contributions to each Foreign Plan required
by Law or by the terms of such
Foreign Plan have been made, or, if
applicable, accrued in accordance with
normal accounting practices and all
material obligations under such Foreign
Plans have been fully performed; (ii) each
Foreign Plan required to be
registered has been registered and has been
maintained in good standing with
applicable regulatory authorities and (iii)
except for Foreign Plans
administrated by any governmental or
regulatory authority, no Foreign Plan would
constitute a "multiemployer pension plan"
(as defined in Section 3(37) of
ERISA), "pension plan" (as defined in
Section 3(3) of ERISA) or other plan
subject to Title IV of ERISA if maintained
or administered in, or otherwise
subject to the laws of, the United
States.
<PAGE>
Section
4.11 Labor and Other Employment Matters.
(a) Each of the Company and each Company Subsidiary is in
material
compliance with all applicable Laws
respecting labor, employment, fair
employment practices, terms and conditions
of employment, workers' compensation,
occupational safety, plant closings, and
wages and hours. None of the Company or
any Company Subsidiary is liable for any
payment to any trust or other fund or
to any Governmental Entity, with respect to
unemployment compensation benefits,
social security or other benefits or
obligations for employees (other than
routine payments to be made in the ordinary
course of business and consistent
with past practice). Neither the Company
nor any Company Subsidiary is a party
to any collective bargaining or other labor
union contract applicable to persons
employed by the Company or any Company
Subsidiary, and no collective bargaining
agreement or other labor union contract is
being negotiated by the Company or
any Company Subsidiary. There is no labor
dispute, strike, slowdown or work
stoppage against the Company or any Company
Subsidiary pending or, to the
knowledge of the Company, threatened which
may interfere in any respect with the
respective business activities of the
Company or any Company Subsidiary. No
labor union or similar organization has
otherwise been certified to represent
any persons employed by the Company or any
Company Subsidiary or has applied to
represent such employees or, to the
knowledge of the Company, is attempting to
organize so as to represent such employees.
None of the Company, any Company
Subsidiary or their respective
representatives or employees has committed any
unfair labor practices in connection with
the operation of the respective
businesses of the Company or any Company
Subsidiary, and there is no charge or
complaint against the Company or any
Company Subsidiary by the National Labor
Relations Board or any comparable state or
foreign agency pending or, to the
knowledge of the Company, threatened,
except where such unfair labor practice,
charge or complaint would not, individually
or in the aggregate, have a Company
Material Adverse Effect. None of the
Company or any Company Subsidiary is
delinquent in payments to any of its
employees for any wages, salaries,
commissions, bonuses or other direct
compensation for any services performed for
it or amounts required to be reimbursed to
such employees. Each of the Company
and each Company Subsidiary has withheld
all amounts required by Law or by
agreement to be withheld from the wages,
salaries, and other payments to
employees, and is not liable for any
arrears of wages or any Taxes or any
penalty for failure to comply with any of
the foregoing. There are no material
pending claims against the Company or any
Company Subsidiary under any workers'
compensation plan or policy or for long
term disability. There are no material
controversies pending or, to the knowledge
of the Company, threatened, between
the Company or any Company Subsidiary and
any of their current or former
employees, which controversies have or
could reasonably be expected to result in
an action, suit, proceeding, claim,
arbitration or investigation before any
Governmental Entity. To the Company's
knowledge, no employee of the Company or
any Company Subsidiary is in any material
respect in violation of any term of
any employment contract, non-disclosure
agreement, non-competition agreement, or
any restrictive covenant to a former
employer relating to the right of any such
employee to be employed by the Company or
such Company Subsidiary because of the
nature of the business conducted or
presently proposed to be conducted by it or
to the use of trade secrets or proprietary
information of others. No employee of
the Company or any Company Subsidiary who
holds a material position of
responsibility within the Company's
organization (taken as whole with the
Company Subsidiaries) has given notice to
the Company or any Company Subsidiary
of termination of employment, nor does the
Company have any knowledge, that any
such employee intends to terminate his or
her employment with the
<PAGE>
Company or any Company Subsidiary. The
Company has made available to Parent true
and complete copies of the most recent
EEO-1 Report filed on behalf of the
Company and each Company Subsidiary. The
Company and the Company Subsidiaries
are not required to file Vets 100 Reports
and do not maintain Affirmative Action
Plans.
(b) The Company has identified in Section 4.11(b) of the
Company
Disclosure Schedule and has made available
to Parent true and complete copies of
(A) all severance and employment agreements
(except for offer letters of
employment generated in the ordinary course
of business and pursuant to which no
severance or "change of control" provisions
are applicable) with directors,
officers or employees of or consultants to
the Company or any Company
Subsidiary, (B) all severance programs and
policies of the Company and each
Company Subsidiary with or relating to its
employees, and (C) all plans,
programs, agreements and other arrangements
of the Company and each Company
Subsidiary with or relating to its
directors, officers, employees or consultants
which contain change in control provisions.
Neither the execution and delivery
of this Agreement nor the consummation of
the transactions contemplated hereby
will (either alone or in conjunction with
any other event, such as termination
of employment) (A) result in any payment
(including, without limitation,
severance, unemployment compensation,
parachute or otherwise) becoming due to
any director or any employee of the Company
or any Company Subsidiary or
affiliate from the Company or any Company
Subsidiary or affiliate under any
Company Benefit Plan or otherwise, (B)
significantly increase any benefits
otherwise payable under any Company Benefit
Plan or (C) result in any
acceleration of the time of payment or
vesting of any material benefits. No
individual who is a party to an employment
agreement listed in Section 4.11(b)
of the Company Disclosure Schedule or any
agreement incorporating change in
control provisions with the Company has
terminated employment or been
terminated, nor, to the knowledge of the
Company, has any event occurred that
could give rise to a termination event, in
either case under circumstances that
has given, or could give, rise to a
severance obligation on the part of the
Company under such agreement.
(c) There are no pending or threatened claims (other than claims
for
benefits in the ordinary course), lawsuits
or arbitrations which have been
asserted or instituted against any Company
Benefit Plan, any fiduciaries thereof
with respect to their duties to the Company
Benefit Plans or the assets of any
of the trusts under any of the Company
Benefit Plans which could reasonably be
expected to result in any material
liability of the Company or any Company
Subsidiary to the Pension Benefit Guaranty
Corporation, the Department of
Treasury, the Department of Labor or any
Multiemployer Plan.
Section
4.12 Tax Treatment. None of the Company, any Company Subsidiary
or, to the knowledge of the Company, any of
the Company's affiliates has taken
or agreed to take, or will take or will
agree to take, any action that would
prevent the Merger from qualifying as a
"reorganization" within the meaning of
Section 368(a) of the Code. The Company is
not aware of any agreement, plan or
other circumstance that would prevent the
Merger from qualifying as a
"reorganization" within the meaning of
Section 368(a).
Section
4.13 Contracts. None of the Company or any Company Subsidiary is
a
party to or bound by any contract (A) any
of the benefits to any party of which
will be increased, or the vesting of the
benefits to any party of which will be
accelerated, by the occurrence of any of
the transactions contemplated by this
Agreement, or the value of any of the
benefits to any party of which will be
calculated on the basis of any of the
transactions contemplated by this
Agreement,
<PAGE>
or (B) which, as of the date hereof, (1) is
a "material contract" (as such term
is defined in Item 601(b)(10) of Regulation
S-K of the SEC), (2) involves
aggregate expenditures in the future in
excess of $500,000 (excluding purchase
orders and expenditures to renew insurance
policies and Company Benefit Plans in
the ordinary course of business), (3)
involves annual expenditures in the future
in excess of $250,000 and is not cancelable
within six months (excluding
purchase orders and expenditures to renew
insurance policies and Company Benefit
Plans in the ordinary course of business),
(4) contains any non-compete or
exclusivity provisions with respect to any
line of business or geographic area
with respect to the Company or any Company
Subsidiary, or which restricts the
conduct of any line of business by the
Company or any Company Subsidiary or any
geographic area in which the Company or any
Company Subsidiary may conduct
business, or which grants any person an
exclusive right to use any material
Company Intellectual Property with respect
to any line of business or any
geographic area, (5) is a material original
equipment manufacturer or contract
manufacturing agreement, (6) is a material
supply agreement, including but not
limited to telecommunications or
information technology services agreements,
involving annual expenditures in excess of
$250,000, (7) is a joint venture
agreement or joint development, or similar
agreement which requires expenditures
in the aggregate in excess of $500,000, (8)
is a distributor agreement pursuant
which has resulted, or is reasonably
expected to result, in annual revenues to
the Company or any Company Subsidiary in
excess of $250,000 or which is an
exclusive agreement not cancelable within
six months, (9) the termination of
which would be reasonably expected to have
a Company Material Adverse Effect, or
(10) which would prohibit or materially
delay the consummation of the Merger or
any of the transactions contemplated by
this Agreement. Each Contract of the
type described in this Section 4.13,
whether or not set forth in Section 4.13 of
the Company Disclosure Schedule, is
referred to herein as a "Company Material
Contract." Each Company Material Contract
is valid and binding on the Company
and each Company Subsidiary party thereto
and, to the Company's knowledge, each
other party thereto, and is in full force
and effect, and the Company and each
Company Subsidiary has in all material
respects performed all obligations
required to be performed by it to the date
hereof under each Company Material
Contract and, to the Company's knowledge,
each other party to each Company
Material Contract has in all material
respects performed all obligations
required to be performed by it under such
Company Material Contract, except as
would not, individually or in the
aggregate, reasonably be expected to (x)
prevent or materially delay consummation of
the Merger or any other transactions
contemplated by this Agreement or (y) have
a Company Material Adverse Effect.
None of the Company or any Company
Subsidiary knows of, or has received written
notice of, any violation or default under
(or any condition which with the
passage of time or the giving of notice
would cause such a violation of or
default under) an
