Additional Definitive Non-Management Proxy Solicitation Material — Sch. 14A Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: DFAN14A Additional Definitive Non-Management Proxy HTML 30K
Solicitation Material
2: EX-2.01 Plan of Acquisition, Reorganization, Arrangement, HTML 372K Liquidation or Succession
3: EX-99.1 Miscellaneous Exhibit HTML 33K
4: EX-99.2 Miscellaneous Exhibit HTML 8K
EX-2.01 — Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
Effect
of the Merger on the Capital Stock of the Constituent Corporations;
Exchange Fund; Company Equity Awards
SECTION
2.01.
Effect
on Capital Stock
2
SECTION
2.02.
Exchange
Fund
3
SECTION
2.03.
Company
Stock Options and Company Equity Awards
5
ARTICLE
III
Representations
and Warranties
SECTION
3.01.
Representations
and Warranties of the Company
7
SECTION
3.02.
Representations
and Warranties of Parent and Sub
23
ARTICLE
IV
Covenants
Relating to Conduct of Business
SECTION
4.01.
Conduct
of Business
25
SECTION
4.02.
Advice
of Changes
29
SECTION
4.03.
No
Solicitation
29
SECTION
4.04.
Conduct
of Business of Parent and Sub
32
SECTION
4.05.
Control
of Other Party’s Business
32
ARTICLE
V
Additional
Agreements
SECTION
5.01.
Preparation
of the Proxy Statement; Stockholders’ Meeting
32
-i-
SECTION
5.02.
Access
to Information; Confidentiality
33
SECTION
5.03.
Efforts
34
SECTION
5.04.
Benefit
Plans
36
SECTION
5.05.
Indemnification,
Exculpation and Insurance
37
SECTION
5.06.
Fees
and Expenses
39
SECTION
5.07.
Public
Announcements
39
SECTION
5.08
Financing
39
ARTICLE
VI
Conditions
Precedent
SECTION
6.01.
Conditions
to Each Party’s Obligation to Effect the Merger
40
SECTION
6.02.
Conditions
to Obligations of Parent and Sub
40
SECTION
6.03.
Conditions
to Obligation of the Company
41
SECTION
6.04.
Frustration
of Closing Conditions
41
ARTICLE
VII
Termination,
Amendment and Waiver
SECTION
7.01.
Termination
41
SECTION
7.02.
Termination
Fees
43
SECTION
7.03.
Effect
of Termination
45
SECTION
7.04.
Amendment
45
SECTION
7.05.
Extension;
Waiver
45
SECTION
7.06.
Procedure
for Termination or Amendment
45
ARTICLE
VIII
General
Provisions
SECTION
8.01.
Nonsurvival
of Representations and Warranties
45
SECTION
8.02.
Notices
46
SECTION
8.03.
Definitions
46
SECTION
8.04.
Interpretation
47
SECTION
8.05.
Consents
and Approvals
48
SECTION
8.06.
Counterparts
48
SECTION.8.07.
Entire
Agreement; No Third-Party Beneficiaries
48
SECTION
8.08.
Governing
Law
48
SECTION
8.09.
Assignment
48
SECTION
8.10.
Specific
Enforcement; Consent to Jurisdiction
48
SECTION
8.11.
Waiver
of Jury Trial
49
SECTION
8.12.
Severability
49
Annex
I
Index
of Defined Terms
Annex
II
Form
of Voting and Support
Agreement
-ii-
AGREEMENT
AND PLAN OF MERGER (this “Agreement”)
dated
as of March 22, 2007, among AVERY DENNISON CORPORATION, a Delaware corporation
(“Parent”),
ALPHA
ACQUISITION CORP., a New York corporation and a wholly owned Subsidiary of
Parent (“Sub”),
and
PAXAR CORPORATION,
a New
York corporation (the “Company”).
Capitalized terms used in this Agreement are defined in the sections listed
opposite such terms in Annex I.
WHEREAS,
the Board of Directors of each of the Company, Parent and Sub has adopted this
Agreement, and deemed it advisable and in the best interests of their respective
shareholders to consummate the merger of Sub with and into the Company (the
“Merger”),
upon
the terms and subject to the conditions set forth in this Agreement, whereby
each issued and outstanding share of common stock, par value $0.10 per share,
of
the Company (“Company
Common Stock”),
other
than (i) shares of Company Common Stock directly owned by the Company, as
treasury stock, or by Parent or Sub, and (ii) Company Restricted Stock will
be
converted into the right to receive $30.50 in cash.
WHEREAS,
Parent, Sub and the Company desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
NOW,
THEREFORE, in consideration of the representations, warranties, covenants and
agreements contained in this Agreement, and subject to the conditions set forth
herein, the parties hereto agree as follows:
SECTION
1.04. Effects
of the Merger.
The
Merger shall have the effects set forth in Section 906 of the
NYBCL.
SECTION
1.05. Certificate
of Incorporation and Bylaws.
(a) The
Certificate of Incorporation of Sub as in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable Law.
(b) The
Bylaws of Sub as in effect immediately prior to the Effective Time shall be
the
Bylaws of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable Law.
SECTION
1.06. Directors.
From
and after the Effective Time, the directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation until the
earlier of their death, resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
SECTION
1.07. Officers.
From
and after the Effective Time, the officers of the Company immediately prior
to
the Effective Time shall be the officers of the Surviving Corporation, until
the
earlier of their death, resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE
II
Effect
of the Merger on the Capital Stock of the
Constituent
Corporations; Exchange Fund;
Company
Equity Awards
SECTION
2.01. Effect
on Capital Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
the holder of any shares of Company Common Stock (other than the requisite
adoption of the Merger by the stockholders of the Company) or any shares of
capital stock of Parent or Sub (other than the requisite adoption of the Merger
by Parent as the sole stockholder of Sub, which adoption has been obtained):
-2-
(a)Capital
Stock of Sub.
Each
share of capital stock of Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and become one validly issued, fully
paid
and nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
(b)Cancellation
of Treasury Stock and Parent-Owned Stock.
Each
share of Company Common Stock that is directly owned by the Company, as treasury
stock, or by Parent or Sub immediately prior to the Effective Time shall
automatically be canceled and shall cease to exist, and no consideration shall
be delivered in exchange therefor.
(d)
Adjustments.
If at
any time during the period between the date of this Agreement and the Effective
Time, any change in the outstanding shares of capital stock of the Company
shall
occur as a result of any reclassification, recapitalization, stock split
(including a reverse stock split) or combination, exchange or readjustment
of
shares, or any stock dividend or stock distribution with a record date during
such period, the Merger Consideration shall be equitably adjusted to reflect
such change.
(b)Certificate
Exchange Procedures.
As
promptly as practicable after the Effective Time, but in any event within two
Business Days thereafter, Parent shall cause the Paying Agent to mail to each
holder of record of a Certificate (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Paying Agent and which shall otherwise be in form and substance reasonably
acceptable to the Company) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Consideration. Each
holder of record of a Certificate shall, upon surrender to the Paying Agent
of
such Certificate, together with such letter of transmittal, duly executed,
and
such other documents as may reasonably be required by the Paying Agent, be
entitled to receive in exchange therefor the amount of cash which the number
of
shares of Company Common Stock previously represented by such Certificate shall
have been converted into the right to receive pursuant to Section
2.01(c),
and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock which is not registered in the
transfer records of the Company, payment of the Merger Consideration may be
made
to a person other than the person in whose name the Certificate so surrendered
is registered if such 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 similar Taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of such Certificate
or establish to the reasonable satisfaction of Parent that such Tax has been
paid or is not applicable. No interest shall be paid or will accrue on any
cash
payable to holders of Certificates pursuant to the provisions of this Article
II.
-3-
(c)No
Further Ownership Rights in Company Common Stock.
All
cash paid upon the surrender of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock formerly represented
by
such Certificates, subject, however, to the Surviving Corporation’s obligation
to pay all dividends that may have been declared by the Company and that remain
unpaid at the Effective Time. At the close of business on the day on which
the
Effective Time occurs, the stock transfer books of the Company shall be closed,
and there shall be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the shares of Company Common Stock that
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, any Certificate is presented to the Surviving Corporation for
transfer, it shall be canceled against delivery of cash to the holder thereof
as
provided in this Article II.
(d)Termination
of the Exchange Fund.
Any
portion of the Exchange Fund that remains undistributed to the holders of the
Certificates for 12 months after the Effective Time shall be delivered to
Parent, upon demand, and any holders of the Certificates who have not
theretofore surrendered their shares for payment in compliance with this Article
II shall thereafter look only to Parent for, and Parent shall remain liable
for,
payment of their claims for the Merger Consideration pursuant to the provisions
of this Article II.
(e)No
Liability.
None of
Parent, Sub, the Company, the Surviving Corporation, the Paying Agent or any
other person shall be liable to any person in respect of any cash from the
Exchange Fund delivered to a public official in compliance with any applicable
state, federal or other abandoned property, escheat or similar Law. If any
Certificate shall not have been surrendered prior to the date on which the
related Merger Consideration would escheat to or become the property of any
Governmental Entity, any such Merger Consideration shall, to the extent
permitted by applicable Law, immediately prior to such time become the property
of Parent, free and clear of all claims or interest of any person previously
entitled thereto.
(f)Investment
of Exchange Fund.
The
Paying Agent shall invest the cash in the Exchange Fund as directed by Parent;
provided,
however,
that
such investments shall be in obligations of or guaranteed by the United States
of America or any agency or instrumentality thereof and backed by the full
faith
and credit of the United States of America, in commercial paper obligations
rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard &
Poor’s, respectively, or in certificates of deposit, bank repurchase agreements
or banker’s acceptances of commercial banks with capital exceeding $500 million
(based on the most recent financial statements of such bank that are then
publicly available). Any interest and other income resulting from such
investments shall be paid solely to Parent, and all fees and expenses of the
Paying Agent in connection with the satisfaction of its responsibilities
contemplated by this Article II shall be paid by Parent. Nothing contained
herein and no investment losses resulting from investment of the Exchange Fund
shall diminish the rights of any holder of Certificates to receive the Merger
Consideration due to such holder as provided herein.
-4-
(g)Lost
Certificates.
If any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by such person
of a
bond or surety in such reasonable amount as Parent may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent shall deliver in respect of such lost, stolen or destroyed
Certificate the applicable Merger Consideration with respect
thereto.
SECTION
2.03. Company
Stock Options and Company Equity Awards.
Prior
to the Effective Time, the Company shall take all action necessary (including
any necessary determinations and/or resolutions of the Company’s Board of
Directors or a committee thereof) such that:
(b) Any
Company Restricted Stock outstanding as of the Effective Time shall be converted
into a number of Parent Common Shares equal to (i) the product of (x) the number
of such restricted Company Common Shares and (y) the Merger Consideration,
divided by (ii) the Average Parent Stock Price (provided
that any
fractional shares resulting from such calculation shall be rounded up to the
nearest whole number), and shall otherwise remain subject to the terms
(including vesting terms) of the applicable equity-based compensation plans
and
the agreements evidencing grants thereunder, provided
that the
vesting of Company Restricted Stock shall be accelerated upon a termination
without Cause of the applicable award holder’s employment prior to the 24-month
anniversary of the Effective Time.
SECTION
3.01. Representations
and Warranties of the Company.
Except
as set forth in the Company Disclosure Letter (it being understood that any
information set forth in one section or subsection of the Company Disclosure
Letter shall be deemed to apply to and qualify the Section or subsection of
this
Agreement to which it corresponds in number and each other Section or subsection
of this Agreement to the extent that it is reasonably apparent that such
information is relevant to such other Section or subsection) or the SEC
Documents filed with the SEC by the Company and publicly available prior to
the
date of this Agreement (the “Filed
SEC Documents”),
other
than the sections of the Filed SEC Documents pertaining to “risk factors” or
“forward looking statements,” the Company represents and warrants to Parent and
Sub as follows:
(a)Organization,
Standing and Corporate Power.
Each of
the Company and its Subsidiaries (i) is duly organized and validly existing
under the Laws of its jurisdiction of organization and has all requisite
corporate, company or partnership power and authority to carry on its business
as presently conducted, and (ii) is duly qualified or licensed to do business
and is in good standing (where such concept is recognized under applicable
Law)
in each jurisdiction where the nature of its business or the ownership, leasing
or operation of its properties makes such qualification or licensing necessary,
except, in the case of the Company’s Subsidiaries, where the failure to be so
organized, existing, qualified, licensed or in good standing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has made available to Parent prior to the execution
of this Agreement a true and complete copy of the Restated Certificate of
Incorporation of the Company (the “Company
Certificate of Incorporation”)
and
the Bylaws of the Company (the “Company
Bylaws”),
in
each case as in effect on the date of this Agreement.
(d)Authority.
The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated by this
Agreement, subject, in the case of the Merger, to receipt of the Stockholder
Approval. The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action on the part of
the
Company, subject, in the case of the Merger, to receipt of the Stockholder
Approval. This Agreement has been duly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by each of the
other
parties hereto, constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject,
as to enforceability, to bankruptcy, insolvency and other Laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law). The Board of Directors of the Company, at
a
meeting duly called and held at which all directors of the Company were present,
duly adopted resolutions (i) adopting this Agreement, the Merger and the
other transactions contemplated by this Agreement, (ii) declaring that it is
in
the best interests of the stockholders of the Company that the Company enter
into this Agreement and consummate the Merger and the other transactions
contemplated by this Agreement on the terms and subject to the conditions set
forth herein, (iii) directing that the adoption of this Agreement be submitted
to a vote at a meeting of the stockholders of the Company and (iv) recommending
that the stockholders of the Company adopt this Agreement (collectively, the
“Recommendation”).
(g)Information
Supplied.
The
information supplied by the Company relating to the Company and its Subsidiaries
to be contained in the Proxy Statement will not, on the date it is first mailed
to the stockholders of the Company and at the time of the Stockholders’ Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation or warranty is made by the Company
with respect to statements made or incorporated by reference therein based
on
information supplied by Parent or Sub for inclusion or incorporation by
reference in the Proxy Statement.
(h)Absence
of Certain Changes or Events.
Since
December 31, 2006, except as otherwise required or contemplated by this
Agreement, (i) the business of the Company and its Subsidiaries has been
conducted, in all material respects, in the ordinary course of business
consistent with past practice, (ii) no event has occurred and no action has
been
taken that would be prohibited by the terms of Section
4.01
of this
Agreement if such section had been in effect as of and at all times since
December 31, 2006, except for such events or actions that would not reasonably
have, individually or in the aggregate, a Material Adverse Effect and (iii)
there has not been any change, effect, event, occurrence or state of facts
which, individually or in the aggregate, has had, or would reasonably be
expected to have, a Material Adverse Effect.
(i)Litigation.
There
is no suit, action or proceeding pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries that, individually
or
in the aggregate, would reasonably be expected to have a Material Adverse Effect
or to prevent, materially impede or materially delay the Company from
consummating the Merger. As of the date hereof, there is no Judgment outstanding
against the Company or any of its Subsidiaries that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect or
to
prevent, materially impede or materially delay the Company from consummating
the
Merger. This Section
3.01(i)
does not
relate to environmental matters, which are the subject of Section
3.01(o).
(A)
all
Contracts that constitute a “material contract” (as such term is defined in Item
601(b)(10) of Regulation S-K under the Securities Act) to the Company;
(B)
all
Contracts that constitute a contract committing to or otherwise relating to
Indebtedness for borrowed money or the deferred purchase price of property
(in
either case, whether incurred, assumed, guaranteed or secured by an asset),
in
each case in excess of $5,000,000;
(C)
all
Contracts containing provisions that limit or purport to limit, in any material
respect, the ability of the Company or any of its Subsidiaries or Affiliates,
including, upon consummation of the Merger, the Surviving Corporation, or any
of
their respective employees to: (x) sell any products, commodities or services
of
or to any other Person, (y) engage in any line of business or (z) compete with
or obtain products, commodities or services from any other Person or limit
the
ability of any Person to provide products, commodities or services to the
Company or any of its Subsidiaries, in each case, in any geographic area or
during any period of time;
(D)
all
Contracts that by their terms call for aggregate payments or consideration
or
other performance by the Company or any of its Subsidiaries of more than
$5,000,000 over the remaining term of such Contract, except for any such
Contract that may be canceled, pursuant to its terms or applicable Law, without
any material penalty, acceleration or other liability to the Company or any
of
its Subsidiaries, upon notice of 180 days or fewer;
(E)
all
Contracts that concern the distribution by third parties of materials, supplies,
goods, services or other commodities or equipment involving commitment for
sales
of more than $5,000,000 in the aggregate in any calendar year;
-13-
(F)
all
Contracts that contain any provision providing for an “earn-out,” contingent
purchase price or similar contingent payment obligation on the part of any
Company or Subsidiary, in each case in an amount in excess of
$5,000,000;
(G)
all
Contracts involving future payment obligations by any party in excess of
$5,000,000 that would be terminable other than by the Company or its
Subsidiaries or under which a payment obligation would arise or be accelerated
(whether of severance pay or otherwise), in each case as a result of the
consummation of the transactions contemplated by this Agreement (either alone
or
upon the passage of time or occurrence of any additional acts or events);
(H)
all
Contracts (including without limitation with respect to employment) between
the
Company or any of its Subsidiaries, on the one hand, and any Affiliate, director
or officer (or, to the Knowledge of the Company, any of their respective
Affiliates), on the other hand, other than: (x) contracts between the Company
and any of its Subsidiaries and (y) contracts among Subsidiaries of the
Company;
(I)
all
Real Property Leases, and all leases of personal property providing for annual
rentals of $2,500,000 or more or aggregate future payments of $5,000,000 or
more
that cannot be terminated on not more than 180 days’ notice without payment by
any Company or Subsidiary of any penalty of more than $1,000,000;
(J)
all
licenses (inbound and outbound), sublicenses, development agreements, material
transfer agreements and other agreements under which the Company or any of
its
Subsidiaries has granted or received the right to use any Intellectual Property
(other than licenses for readily available commercial software), in each case
that are material to the business of the Company and its
Subsidiaries;
(K)
all
partnership, joint venture, profit sharing, agreement of alliance or cooperation
or other similar agreements or arrangements or agreements providing for the
formation of any such relationship or involving an equity investment by or
in
any other entity, in each case involving an investment by the Company of
$5,000,000 or more;
(L)
all
Contracts that were entered into for the acquisition of the securities of any
other Person or entity or that relate to the past or future disposition or
acquisition of any assets, properties or the operating business of the Company,
its Subsidiaries or any other Person or entity, in each case valued in excess
of
$5,000,000; and
(M)
all
other Contracts, whether or not made in the ordinary course of business, that
are material to the Company and its Subsidiaries, taken as a whole, or the
conduct of the business of the Company and its Subsidiaries, taken as a whole,
or the absence of which would, in the aggregate, have a Material Adverse
Effect.
-14-
(ii) Except
as
would not, individually or in the aggregate, reasonably
be
expected to have a Material Adverse Effect, (A)
neither the Company nor any Subsidiary of the Company is in breach, default
or
violation of the terms of any Company Material Contract and no event has
occurred that with the lapse of time or the giving of notice or both would
constitute a default thereunder by the Company or any of its Subsidiaries;
(B)
the Company and each of its Subsidiaries has in all respects performed all
obligations required to be performed by it to date under each Company Material
Contract; and (C) each Company Material Contract is a valid and binding
obligation of the Company or the Subsidiaries of the Company party thereto,
is
in full force and effect and is enforceable against the Company and its
Subsidiaries and, to the Knowledge of the Company, the other parties thereto
in
accordance with its terms, except that (x) such enforcement may be subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar Laws, now or hereafter in effect, relating to creditors’ rights
generally and (y) equitable remedies of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and
to
the discretion of the court before which any proceeding therefor may be brought,
and except to the extent that any such Company Material Contract has previously
expired in accordance with its terms.
(ii) All
Company Benefit Plans that are intended to be qualified under Section 401(a)
of
the Code for federal income Tax purposes have been the subject of determination
letters from the Internal Revenue Service to the effect that such Company
Benefit Plans are so qualified and exempt from federal income Taxes under
Sections 401(a) and 501(a) of the Code, and no such determination letter has
been revoked, and to the Knowledge of the Company, there are no existing
circumstances and no events have occurred that would reasonably be expected
to
adversely affect the qualified status of any such plan or the related
trust.
(iii) No
Company Benefit Plan is subject to Title IV or Section 302 of ERISA or Section
412 or 4971 of the Code, and to the Knowledge of the Company, no circumstances
exist that would reasonably be expected to result in liabilities to the Company
or any of its Subsidiaries under any of such sections of the Code or
ERISA.
(iv) None
of
the Company, any of its Subsidiaries or any other person or entity under common
control with the Company within the meaning of Section 414(b), (c), (m) or
(o)
of the Code participates in, or is required to contribute to, or has in the
past
five years contributed to any “multiemployer plan” (within the meaning of
Section 3(37) of ERISA) or a plan that has two or more contributing sponsors
at
least two of whom are not under common control (within the meaning of Section
4063 of ERISA).
(v) The
Company and its Subsidiaries have no undisclosed or unrecorded liability in
an
amount that would reasonably be expected to have a Material Adverse Effect
for
life, health, medical, dental or other welfare benefits to former employees
or
beneficiaries or dependents thereof, except for health continuation coverage
as
required by Section 4980B of the Code or Part 6 of Title I of ERISA and at
no
expense to the Company and its Subsidiaries.
(vi) Except
as
expressly provided in Section
2.03,
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) result in, cause the accelerated vesting, funding or delivery
of,
or increase the amount or value of, any payment or benefit to any employee,
officer, director of the Company or any of its Subsidiaries, or result in any
limitation on the right of the Company or any of its Subsidiaries to amend,
merge, terminate or receive a reversion of assets from any Company Benefit
Plan
or related trust. No amount paid or payable (whether in cash, in property or
in
the form of benefits) by the Company or any of its Subsidiaries in connection
with the transactions contemplated hereby (either solely as a result thereof
or
as a result of such transactions in conjunction with any other event) will
be an
“excess parachute payment” within the meaning of Section 280G of the
Code.
(viii) Except
as
would not reasonably be expected to result in a Material Adverse Effect, all
Company Benefit Plans subject to the Laws of any jurisdiction outside of the
United States (A) have been maintained in accordance with all applicable
requirements, (B) if they are intended to qualify for special Tax treatment,
meet all requirements for such treatment, and (C) if they are intended to be
funded and/or book-reserved, are fully funded and/or book-reserved, as
appropriate.
(ix) No
labor
organization or group of employees of the Company or any of its Subsidiaries
has
made a pending demand for recognition or certification, and there are no
representation or certification proceedings or petitions seeking a
representation proceeding presently pending or, to the Knowledge of the Company
as of the date hereof, threatened to be brought or filed, with the National
Labor Relations Board or any other labor relations tribunal or authority. There
are no organizing activities, strikes, work stoppages, slowdowns, lockouts,
material arbitrations or material grievances, or other material labor disputes
pending or, to the Knowledge of the Company as of the date hereof, threatened
against or involving the Company or any of its Subsidiaries. Each of the Company
and its Subsidiaries is in compliance with all applicable Laws and collective
bargaining agreements respecting employment and employment practices, terms
and
conditions of employment, wages and hours and occupational safety and health,
excluding any instances of non-compliance that would not, individually or in
the
aggregate, be reasonably expected to result in a Material Adverse
Effect.
(m)Taxes.
(i) Except
as
would not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect:
(A)
the
Company and each of its Subsidiaries have prepared and timely filed (taking
into
account any extension of time within which to file) all Tax Returns required
to
be filed by any of them and all such filed Tax Returns are complete and
accurate;
-17-
(B)
the
Company and each of its Subsidiaries have paid all Taxes that are required
to be
paid by any of them;
(C)
no
material issues have been raised and are currently pending by any federal,
state, local or foreign taxing authority in connection with any of such Tax
Returns, and all deficiencies asserted or assessments made as a result of any
examinations of any Tax Returns previously filed by the Company or any of its
Subsidiaries have been fully paid, or are fully reflected as a liability in
the
financial statements included in the SEC Documents, or are being contested
in
good faith and an adequate reserve therefor has been established and is fully
reflected as a liability in the financial statements included in the SEC
Documents;
(D)
no
jurisdiction where the Company and its Subsidiaries do not file a Tax Return
has
made a claim in writing that any of the Company and its Subsidiaries is required
to file a Tax Return in such jurisdiction;
(E)
as of
the date of this Agreement, there are not pending or, to the knowledge of the
Company, threatened in writing, any audits, examinations, investigations or
other proceedings in respect of Taxes (except with respect to matters contested
in good faith or for which adequate reserves have been established in accordance
with GAAP);
(F)
neither the Company nor any of its Subsidiaries has been, within the past two
years or otherwise as part of a “plan (or series of related transactions)”
within the meaning of Section 355(e) of the Code of which the transactions
contemplated in this Agreement are also a part, a “distributing corporation” or
a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the
Code) in a distribution of stock intending to qualify for Tax-free treatment
under Section 355 of the Code;
(G)
neither
the Company nor any of its Subsidiaries is a party to, is bound by, or has
any
obligation under, any Tax sharing, allocation, indemnity or similar agreements
or arrangements that obligates it to make any payment computed by reference
to
the Taxes, taxable income or taxable losses of any other Person; and
(H)
neither the Company nor any of its Subsidiaries (A) has been a member of an
affiliated group filing a consolidated federal income Tax Return (other than
a
group the common parent of which was the Company) or (B) has any liability
for
the Taxes of any person (other than the Company or any of its Subsidiaries)
under Treasury Regulation Section 1.1502-6 (or similar provision of state,
local
or foreign law), as a transferee or successor, by contract or
otherwise.
-18-
(ii) As
used
in this Agreement, (i) “Taxes”
means
any and all domestic or foreign, federal, state, local or other taxes 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, including, without limitation, taxes on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, unemployment, social security, workers’
compensation or net worth, and taxes in the nature of excise, withholding,
ad
valorem or value added, and (ii) “Tax
Return”
means
any return, report or similar filing (including the attached schedules) filed
or
required to be filed with respect to Taxes, including any information return
or
declaration of estimated Taxes.
(iii) It
is
agreed and understood that no representation or warranty is made in respect
of
Tax matters in any Section of this Agreement other than this Section
3.01(m)
and
Section
3.01(l).
(iii) Except
as
would not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect, the Company and its Subsidiaries use the Intellectual
Property of third parties only pursuant to valid and effective license
agreements.
(iv) Except
for the Intermec licenses and except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, there
are
no restrictions on the direct or indirect transfer of any Intellectual Property
owned by the Company or any Subsidiary or any license, or any interest therein,
held by the Company or any Subsidiary in respect of any Intellectual Property
and the consummation of the transactions contemplated by this Agreement will
not
result in the loss or impairment of the Company’s or any Subsidiaries’ right to
own or continue to use, as the case may be, any of the Intellectual
Property.
(v) The
Company and its Subsidiaries have taken commercially reasonable steps to protect
the secrecy and confidentiality of trade secrets owned by the Company or any
Subsidiary that are material to the business of the Company and its
Subsidiaries, taken as a whole, as conducted on the date hereof.
To the
Knowledge of the Company, no current or former employee, officer, director,
shareholder, consultant or independent contractor has notified the Company
or
any of its Subsidiaries of any right, claim or interest in or with respect
to
the Intellectual Property
(vi) As
used
in this Agreement, “Intellectual
Property”
means
the following and all rights pertaining thereto: (A) patents, patent
applications, provisional patent applications and statutory invention
registrations (including all utility models and other patent rights under the
laws of all countries), (B) trademarks, service marks, trade dress, logos,
trade
names, service names, corporate names, domain names and other source
identifiers, registrations and applications for registration thereof, (C)
copyrights, proprietary designs, Computer Software (as defined below), mask
works, databases, and registrations and applications for registration thereof
and (D) confidential and proprietary information, trade secrets, know-how,
whether or not registered. For purposes of this Agreement, “Computer
Software”
means
computer software and includes all source code, object code, executable or
binary code.
(p)Corrupt
Practices.
To the
Knowledge of the Company, except for “facilitating payments” (as such term is
defined in the Foreign Corrupt Practices Act and other comparable Laws), none
of
the Company, any of its Subsidiaries, or any of their respective directors,
officers, agents, employees, consultants, or other representatives (in each
case
acting in their capacities as such) has, in the past 5 years, in connection
with
the operation of their respective businesses directly or indirectly (i) used
any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (ii) offered, promised, paid
or delivered any fee, commission or other sum of money or item of value, however
characterized, to any finder, agent or other party acting on behalf of or under
the auspices of a governmental or political employee or official or governmental
or political entity, political agency, department, enterprise or
instrumentality, in the United States or any other country, that was illegal
under any applicable Law, (iii) made any payment to any customer or supplier,
or
to any officer, director, partner, employee or agent of any such customer or
supplier, for the unlawful sharing of fees to any such customer or supplier
or
any such officer, director, partner, employee or agent for the unlawful rebating
of charges, (iv) engaged in any other unlawful reciprocal practice, or made
any
other unlawful payment or given any other unlawful consideration to any such
customer or supplier or any such officer, director, partner, employee or agent,
(v) taken any action or made any omission in violation of any applicable law
governing imports into or exports from the United States or any foreign country,
or relating to economic sanctions or embargoes, corrupt practices, money
laundering, or compliance with unsanctioned foreign boycotts, including without
limitation the Arms Export Control Act, the Trading with the Enemy Act, the
International Emergency Economic Powers Act, the Export Administration Act,
the
1930 Tariff Act and other U.S. customs laws, the Foreign Corrupt Practices
Act,
the Export Administration Regulations, the International Traffic in Arms
Regulations, the Office of Foreign Assets Control Regulations, the U.S. Customs
Regulations, or any regulation, ruling, rule, order, decision, writ, judgment,
injunction, or decree of any governmental authority issued pursuant
thereto.
(r)State
Takeover Statutes.
The
adoption by and approval of the Board of Directors of the Company of this
Agreement, the Merger and the other transactions contemplated by this Agreement
represents all the action necessary to render inapplicable to this Agreement,
the Merger and the other transactions contemplated by this Agreement, the
provisions of Section 912 of the NYBCL to the extent, if any, such Section
would
otherwise be applicable to this Agreement, the Merger and the other transactions
contemplated by this Agreement, and no other state takeover statute applies
to
this Agreement, the Merger or the other transactions contemplated by this
Agreement.
-22-
(s)Brokers
and Other Advisors.
No
broker, investment banker, financial advisor or other person, other than Goldman
Sachs & Co., the fees and expenses of which will be paid by the Company, is
entitled to any broker’s, finder’s or financial advisor’s fee or commission in
connection with the Merger and the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
(t)Opinions
of Financial Advisors.
The
Company has received the opinion of Goldman Sachs & Co., dated as of the
date of this Agreement, to the effect that, as of such date, the Merger
Consideration is fair, from a financial point of view, to the holders of shares
of Company Common Stock.
SECTION
3.02. Representations
and Warranties of Parent and Sub.
Except
as set forth in the Parent Disclosure Letter (it being understood that any
information set forth in one section or subsection of the Parent Disclosure
Letter shall be deemed to apply to and qualify the Section or subsection of
this
Agreement to which it corresponds in number and each other Section or subsection
of this Agreement to the extent that it is reasonably apparent that such
information is relevant to such other Section or subsection), Parent and Sub
jointly and severally represent and warrant to the Company as follows:
(a)Organization,
Standing and Corporate Power.
Each of
Parent and Sub is duly organized, validly existing and in good standing under
the Laws of its jurisdiction of organization and has all requisite corporate
or
limited liability company power, as applicable, and authority to carry on its
business as presently conducted. Each of the Parent and Sub is duly qualified
or
licensed to do business and is in good standing (where such concept is
recognized under applicable Law) in each jurisdiction where the nature of its
business or the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, other than where the failure to be so
qualified, licensed or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Parent
has
made available to the Company prior to the execution of this Agreement a true
and complete copy of the Restated Certificate of Incorporation of Parent and
the
Certificate of Incorporation of Sub and the Bylaws of Parent and Sub, in each
case as in effect on the date of this Agreement.
(b)Authority.
Each of
Parent and Sub has all requisite corporate or limited liability company power,
as applicable, and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement, including the
Merger. The execution and delivery of this Agreement and the consummation of
the
transactions contemplated by this Agreement, including the Merger, have been
duly authorized by all necessary corporate action on the part of each of Parent
and Sub, and no other corporate proceedings (including no shareholder action)
on
the part of Parent or Sub are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby, including the Merger. This
Agreement has been duly executed and delivered by each of Parent and Sub and,
assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each of Parent and Sub,
enforceable against each of Parent and Sub in accordance with its terms,
subject, as to enforceability, to bankruptcy, insolvency and other Laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles (regardless of whether such enforceability is considered
in a
proceeding in equity or at law).
-23-
(c)No
Conflict.
The
execution and delivery of this Agreement do not, and the consummation of the
Merger and the other transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, conflict with, or result in
any
violation or breach of, or default (with or without notice or lapse of time,
or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a benefit under, or result
in
the creation of any Lien upon any of the properties or assets of Parent or
Sub
under, any provision of (i) the certificate of incorporation, bylaws or
comparable organizational documents of Parent or Sub or (ii) subject to the
filings and other matters referred to in the immediately following sentence,
any
Law or Judgment, in each case applicable to Parent or Sub or their respective
properties or assets, other than, in the case of clause (ii), any such
conflicts, violations, breaches, defaults, rights, losses or Liens that would
not, individually or in the aggregate, reasonably be expected to prevent or
materially delay the Closing. No consent, approval, order or authorization
of,
registration, declaration or filing with, or notice to, any Governmental Entity
is required to be obtained or made by or with respect to Parent or Sub in
connection with the execution and delivery of this Agreement by Parent and
Sub
or the consummation by Parent and Sub of the Merger or the other transactions
contemplated by this Agreement except for (I) the filing of a premerger
notification and report form by Parent and Sub under the HSR Act and the filings
and receipt, termination or expiration, as applicable, of such other approvals
or waiting periods as may be required under any other applicable foreign or
domestic competition, merger control, antitrust or similar Law, (II) the
delivery of the Certificate of Merger to the department of state of the State
of
New York and (III) such other consents, approvals, orders, authorizations,
registrations, declarations, filings and notices the failure of which to be
obtained or made would not, individually or in the aggregate, reasonably be
expected to prevent or materially delay the Closing.
(d)Litigation.
As of
the date hereof, there is no suit, action or proceeding pending or, to the
Knowledge of Parent, threatened against Parent or any of its Subsidiaries that,
individually or in the aggregate, would reasonably be expected to prevent,
materially impede or materially delay Parent and Sub from consummating the
Merger. As of the date hereof, there is no Judgment outstanding against Parent
or any of its Subsidiaries that, individually or in the aggregate, would
reasonably be expected to prevent, materially impede or materially delay Parent
and Sub from consummating the Merger.
(e)
Information
Supplied.
None of
the information supplied or to be supplied by Parent or Sub for inclusion or
incorporation by reference in the Proxy Statement will, on the date it is first
mailed to the stockholders of the Company and at the time of the Stockholders’
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not
misleading.
(g)Capitalization
of Sub.
The
authorized capital stock of Sub consists of 100 shares of common stock, par
value $0.01 per share, all of which are validly issued and outstanding. All
of
the capital stock of Sub is, and at the Effective Time will be, owned by Parent,
free and clear of all Liens other than Permitted Liens. Sub has outstanding
no
option, warrant, right, or any other agreement pursuant to which any person
other than Parent may acquire any equity security of Sub. Sub has been formed
solely for the purpose of engaging in the transactions contemplated hereby
and,
prior to the Effective Time, will not have incurred liabilities or obligations
of any nature, other than pursuant to or in connection with this Agreement
and
the Merger and the other transactions contemplated by this Agreement and any
related agreement.
(h)Brokers
and Other Advisors.
No
broker, investment banker, financial advisor or other person, other than
JPMorgan Chase, the fees and expenses of which will be paid by Parent, is
entitled to any broker’s, finder’s or financial advisor’s fee or commission in
connection with the Merger and the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Parent or Sub.
(i)
Ownership
of Company Common Stock.
Neither
Parent nor any of its Subsidiaries beneficially owns, directly or indirectly,
any shares of Company Common Stock or other securities convertible into,
exchangeable into or exercisable for shares of Company Common Stock. Except
as
set forth in Section 3.02(i) of the Parent Company Disclosure Letter, there
are
no voting trusts or other agreements, arrangements or understandings to which
Parent or any of its Subsidiaries is a party with respect to the voting of
the
capital stock or other equity interest of the Company or any of its Subsidiaries
nor are there any agreements, arrangements or understandings to which Parent
or
any of its Subsidiaries is a party with respect to the acquisition, divestiture,
retention, purchase, sale or tendering of the capital stock or other equity
interest of the Company or any of its Subsidiaries.
ARTICLE
IV
Covenants
Relating to Conduct of Business
SECTION
4.01. Conduct
of Business.
Except
as set forth in Section 4.01 of the Company Disclosure Letter, as contemplated,
required or permitted by this Agreement, as required by Law or any Governmental
Entity of competent jurisdiction, or as consented to in writing by Parent (which
consent shall not be unreasonably withheld, conditioned or delayed after
reasonable consultation between the Company and Parent), during the period
from
the date of this Agreement to the Effective Time, the Company shall, and shall
cause each of its Subsidiaries to, carry on its business in the ordinary course
and, to the extent consistent therewith, use reasonable best efforts to preserve
substantially intact its current business organizations, to keep available
the
services of its current officers and key employees and to preserve its
relationships with significant customers, suppliers, licensors, licensees,
distributors, wholesalers, lessors and others having significant business
dealings with it and to take no action which is intended to or which would
reasonably be expected to materially adversely affect or materially delay the
ability of any of the parties hereto from obtaining any necessary approvals
of
any Governmental Entity required for the transactions contemplated by this
Agreement, from performing its covenants and agreements under this Agreement
or
from consummating the transactions contemplated hereby or otherwise materially
delay or prohibit consummation of the Merger or other transactions contemplated
hereby. Without limiting the generality of the foregoing, except as set forth
in
Section 4.01 of the Company Disclosure Letter, contemplated, required or
permitted by this Agreement, required by Law (including, as applicable, Section
409A of the Code) or any Governmental Entity of competent jurisdiction or
consented to in writing by Parent (which consent shall not be unreasonably
withheld, conditioned or delayed after reasonable consultation between the
Company and Parent), during the period from the date of this Agreement to the
Effective Time, the Company shall not, and shall not permit any of its
Subsidiaries to:
-25-
(a) declare,
set aside or pay any dividends on, or make any other distributions (whether
in
cash, stock or property) in respect of, any capital stock of the Company, other
than dividends or distributions by a direct or indirect wholly owned Subsidiary
of the Company to its parent, and mandatory dividends or other distributions
by
Subsidiaries that are joint ventures that have income above statutory
reserves;
(b) split,
combine or reclassify any capital stock of the Company or issue or authorize
the
issuance of any other securities in lieu of or in substitution for shares of
any
capital stock of the Company;
(c) purchase,
redeem or otherwise acquire any shares of any capital stock of the Company
or
any rights, warrants or options to acquire any such shares, other than
(i) the acquisition by the Company of shares of Company Common Stock in
connection with the surrender of shares of Company Common Stock by holders
of
Company Stock Options in order to pay the exercise price of the Company Stock
Options, (ii) the withholding of shares of Company Common Stock to satisfy
Tax obligations with respect to awards granted pursuant to the Company Stock
Plans, (iii) the acquisition by the Company of Company Stock Options and
Company Restricted Stock in connection with the forfeiture of such awards and
(iv) the acquisition of shares of Company Common Stock in order to satisfy
obligations under the ESPP;
(d) issue,
deliver, grant or sell any shares of any capital stock of the Company, any
other
voting securities or any securities convertible into, or any rights, warrants
or
options to acquire, any such shares, voting securities or convertible
securities, or any “phantom” stock, “phantom” stock rights, stock appreciation
rights or stock-based performance units, other than (i) upon the exercise of
Company Stock Options or the vesting of Company Restricted Stock or Company
Equity Awards outstanding on the date of this Agreement in accordance with
their
present terms or (ii) as required to comply with any Company Benefit Plan (as
operated in the ordinary course) as in effect on the date of this Agreement
or
(iii) as required by any Contract (other than a Company Benefit Plan), plan
or
arrangement as in effect on the date hereof, a true, correct and complete copy
of which has been provided to Parent prior to the date hereof;
-26-
(e) amend
or
waive or propose to amend or waive any provision of the Company Certificate
of
Incorporation or the Company Bylaws or the comparable organizational documents
of any Subsidiary of the Company;
(f) merge
or
consolidate with, or purchase an equity interest in or a substantial portion
of
the assets of, any person or any division or business thereof, if the aggregate
amount of the consideration paid or transferred by the Company and its
Subsidiaries in connection with all such transactions would exceed $5,000,000
in
the aggregate (provided
that the
Company shall consult with Parent with respect to any such merger, consolidation
or purchase regardless of the consideration paid), other than any such action
solely between or among the Company and its Subsidiaries;
(g) transfer,
sell, lease or otherwise dispose of any of its properties or assets (including
capital stock of any Subsidiary of the Company) that are material, individually
or in the aggregate, to the Company and its Subsidiaries, taken as a whole,
other than (i) sales or other dispositions of inventory and other assets in
the
ordinary course of business consistent with past practice, (ii) leases and
subleases of real property and voluntary terminations or surrenders of real
property leases, in each case, in the ordinary course of business consistent
with past practice and (iii) dispositions of obsolete equipment or assets or
dispositions of assets being replaced;
(h) pledge,
mortgage, encumber or otherwise subject to a Lien (other than a Permitted Lien)
any of its properties or assets (including capital stock of any Subsidiary
of
the Company) that are material, individually or in the aggregate, to the Company
and its Subsidiaries, taken as a whole, other than in the ordinary course of
business consistent with past practice;
(j) authorize
or make any capital expenditures, other than (i) in connection with the
repair or replacement of facilities destroyed or damaged due to casualty or
accident (whether or not covered by insurance) and (ii) otherwise in an
aggregate amount for all such capital expenditures made pursuant to this clause
(ii) not to exceed $53,000,000 in the aggregate for all such capital
expenditures;
-27-
(k) waive,
release, assign, settle or compromise any material claim, action, proceeding
or
litigation, in each case made or pending against the Company or any of its
Subsidiaries, other than (i) the settlement of claims or litigation in the
ordinary course of business consistent with past practice in an amount not
to
exceed, for any such settlement or series of related settlements, $500,000
and,
for all such settlements, $5,000,000 in the aggregate and (ii) the settlement
of
claims or litigation where such settlement is expressly disclosed, reflected
or
reserved against in the most recent financial statements (or the notes thereto)
of the Company included in the SEC Documents for an amount not materially in
excess of the amount so disclosed, reflected or reserved;
(l) cancel
any material Indebtedness or waive any material claims or rights, in each case
other than in the ordinary course of business consistent with past
practice;
(m)
(i) other than in the ordinary course of business in a manner that does not
increase the Company’s costs or liabilities, enter into, adopt, amend (except
for such amendments as may be required by Law or which are reasonably necessary
to avoid adverse tax consequences to the Company, its Subsidiaries or their
respective employees) or terminate any Company Benefit Plan, or any other
employee benefit plan, program or policy for the benefit or welfare of any
current or former employee, officer, consultant or director of the Company
or
any of its Subsidiaries, (ii) other than base salary increases in the ordinary
course of business consistent with past practice or as required by any Contract,
plan or arrangement as in effect as of the date hereof (provided
that a
true, correct and complete copy of such Contract, plan or arrangement has been
provided to Parent prior to the date hereof), increase the compensation or
benefits payable to any current or former employee, officer, director or
consultant of the Company or any of its Subsidiaries or pay any amounts to
any
such individuals not otherwise due, (iii) other than as required by any
Contract, plan or arrangement as in effect as of the date hereof (provided
that a
true, correct and complete copy of such Contract, plan or arrangement has been
provided to Parent prior to the date hereof), grant or accelerate the vesting
of
any equity-based awards for the benefit of any current or former employee,
officer, director or consultant of the Company or any of its Subsidiaries,
(iv)
enter into any new collective bargaining agreement or similar agreement with
respect to the Company or any of its Subsidiaries, or materially amend or renew
any existing collective bargaining agreement or similar agreement with respect
to the Company or any of its Subsidiaries, or (v) other than as required by
any
Contract, plan or arrangement as in effect as of the date hereof (provided
that a
true, correct and complete copy of such Contract, plan or arrangement has been
provided to Parent prior to the date hereof), provide any funding for any rabbi
trust or similar arrangement;
(n) make
any
change in accounting principles or practices materially affecting the
consolidated assets, liabilities or results of operations of the Company, other
than as required (i) by any change in GAAP (or any interpretation thereof),
including as may be required by the Financial Accounting Standards Board or
any
similar organization, or (ii) by any change in Law, including Regulation S-X
under the Securities Act;
-28-
(o) make,
change or revoke any material Tax election, change any annual Tax accounting
period, adopt or change any Tax accounting method, file any material amended
Tax
Return, enter into any closing agreement with respect to a material amount
of
Taxes, settle any material Tax claim or assessment or surrender any right to
claim a refund of a material amount of Taxes;
(p) enter
into, renew, extend, materially amend or terminate any Company Material Contract
or Contract which if entered into prior to the date hereof would be a Company
Material Contract, in each case, other than any Contract relating to
Indebtedness that would not be prohibited under clause (i) of this Section
4.01;
(q) enter
into any “non-compete” or similar agreement that would by its terms materially
restrict the businesses of the Surviving Corporation or its Subsidiaries
following the Effective Time or that the Company has reason to believe would
materially restrict the businesses of Parent or its Affiliates other than the
Surviving Corporation and its Subsidiaries;
(r) take
any
action that is intended or would reasonably be expected to result in any of
the
conditions set forth in Article VI of this Agreement not being satisfied;
or
(s) authorize
any of, or commit or agree to take any of, the foregoing actions.
SECTION
4.02. Advice
of Changes.
Each of
the Company and Parent shall, as promptly as practicable, give written notice
to
the other party upon becoming aware of any material event, development or
occurrence that would reasonably be expected to give rise to a failure of
condition precedent set forth in Section
6.01
(in the
case of all parties hereto), Section
6.02
(in the
case of the Company) or Section
6.03
(in the
case of Parent).
(b) The
Company shall, shall cause each of its Subsidiaries and Representatives to,
immediately cease any solicitations, discussions or negotiations with any Person
(other than the parties hereto) with respect to an Alternative Proposal, in
each
case that exist as of the date hereof.
The
Company shall promptly inform its Representatives of the Company’s obligations
under this Section
4.03.
(c) Notwithstanding
anything to the contrary in Section
4.03
at any
time prior to receipt of the Stockholder Approval, in response to an unsolicited
written Alternative Proposal which did not result from or arise in connection
with a breach of Section
4.03(a)
or
(b)
and
which the Board of Directors of the Company determines, in good faith, after
consultation with its outside counsel and financial advisors, (1) constitutes
or
would reasonably be expected to result in a Superior Proposal, and (2) that
the
failure to take action on such unsolicited Alternative Proposal would be
inconsistent with its fiduciary obligations to the stockholders of the Company
under applicable Law, the Company and its Subsidiaries and their Representatives
may (i) furnish non-public information with respect to the Company and its
Subsidiaries to the person who has made such Alternative Proposal and its
Representatives pursuant to a confidentiality agreement no less restrictive
of
the other party than the Confidentiality Agreement is of Parent, and
(ii) participate in discussions or negotiations with such person and its
Representatives regarding such Alternative Proposal; provided,
however,
that the Company shall simultaneously provide or make available to Parent
any material non-public information concerning the Company or any of its
Subsidiaries that is provided to the person making such Alternative Proposal
or
its Representatives which was not previously provided or made available to
Parent.
(d) Except
as
set forth in Section
7.01(c)(ii),
and
excluding any confidentiality agreement permitted pursuant to Section
4.03(c),
neither
the Board of Directors of the Company nor any committee thereof shall
(i) withdraw or modify in a manner adverse to Parent or Sub, or publicly
propose to withdraw or modify in a manner adverse to Parent or Sub, the
Recommendation, (ii) adopt or approve any letter of intent, agreement in
principle, acquisition agreement or other agreement relating to any Alternative
Proposal or (iii) adopt, approve, endorse or recommend, or publicly propose
to adopt, approve, endorse or recommend, any Alternative Proposal.
Notwithstanding the foregoing, if, prior to receipt of the Stockholder Approval,
the Board of Directors of the Company or a committee thereof determines that
an
Alternative Proposal is a Superior Proposal and further determines in good
faith, after consultation with outside counsel, that failure to withdraw or
modify its Recommendation would be inconsistent with the Company’s Board of
Directors’ exercise of its fiduciary duties, the Board of Directors of the
Company or any committee thereof may withdraw or modify its
Recommendation.
(e) The
Company promptly (and in any event within 24 hours) shall advise Parent of
(i) any Alternative Proposal or inquiry that would reasonably be expected
to lead to any Alternative Proposal, (ii) any request for non-public
information relating to the Company or its Subsidiaries, other than such
indications, inquiries or requests for information not reasonably expected
to be
related to an Alternative Proposal, or (iii) any inquiry or request for
discussion or negotiation regarding an Alternative Proposal, in each case that
is received by the Company or any of its Subsidiaries or Representatives,
including in each case the identity of the person making any such Alternative
Proposal or indication, inquiry or request and the material terms of any such
Alternative Proposal or request or inquiry (including copies of any document
or
correspondence evidencing such Alternative Proposal or indication, inquiry
or
request). The Company shall keep Parent reasonably informed on a current basis
(and in any event within 24 hours of the occurrence of any material changes,
developments, discussions or negotiations) of the status (including the material
terms and conditions thereof and any material change to the terms thereto)
of
any such Alternative Proposal or indication or inquiry, including furnishing
copies of any written revised proposals. Without limiting the foregoing, the
Company shall promptly (and in any event within 24 hours) notify Parent if
it
determines to begin providing information or to engage in discussions or
negotiations concerning an Alternative Proposal. The Company shall as promptly
as practicable notify Parent in writing if its Board of Directors determines
that any Alternative Proposal is a Superior Proposal. The Company shall not,
and
shall cause its Subsidiaries not to, enter into any confidentiality agreement
with any Person subsequent to the date of this Agreement which prohibits the
Company from providing such information to Parent.
-30-
(f) Nothing
contained in this Agreement shall prohibit the Company or its Board of Directors
from (i) disclosing to its stockholders a position contemplated by Rules 14d-9
and 14e-2(a) promulgated under the Exchange Act
or (ii)
making any required disclosure to the Company’s stockholders if, in the good
faith judgment of such Board of Directors, after consultation and the receipt
of
advice from its outside counsel, failure to disclose such information would
reasonably be expected to violate its obligations under applicable Law;
provided,
however,
that
any such disclosure that addresses or relates to the Recommendation or an
Alternative Proposal shall be deemed to be a modification, amendment or
withdrawal of the Recommendation for the purposes of Section
4.03(d)
unless
the Board of Directors of the Company in connection with such communication
publicly reaffirms the Recommendation.
SECTION
4.04. Conduct
of Business of Parent and Sub.
Except
as set forth in Section 4.04 of the Parent Disclosure Letter, as contemplated,
required or permitted by this Agreement, as required by Law or any Governmental
Entity of competent jurisdiction, or as consented to in writing by the Company
(which consent shall not be unreasonably withheld, conditioned or delayed),
during the period from the date of this Agreement to the Effective
Time:
(a)
Parent
shall cause Sub to (i) perform its obligations under this Agreement and (ii)
not
engage directly or indirectly in any business or activities of any type or
kind
and not to enter into any Contracts or arrangements with any person, or be
subject to or bound by any obligation or undertaking, which is inconsistent
with
this Agreement; and
(b) Parent
shall not, and shall cause each of its Subsidiaries not to, take any action
which is intended to or which would reasonably be expected to materially
adversely affect the ability of any of the parties hereto from obtaining any
necessary approvals of any Governmental Entity required for the transactions
contemplated by this Agreement, from performing its covenants and agreements
under this Agreement or from consummating the transactions contemplated hereby
or otherwise prohibit consummation of the Merger or other transactions
contemplated hereby.
SECTION
4.05. Control
of Other Party’s Business.
Nothing
contained in this Agreement shall be deemed to give Parent or Sub, directly
or
indirectly, the right to control or direct the Company’s operations prior to the
Effective Time. Prior to the Effective Time, the Company shall exercise,
consistent with the terms and conditions of this Agreement, complete control
and
supervision over its operations.
ARTICLE
V
Additional
Agreements
SECTION
5.01. Preparation
of the Proxy Statement; Stockholders’ Meeting.
(a) As promptly as reasonably practicable following the date of this
Agreement, the Company shall prepare and file with the SEC the Proxy Statement.
Parent shall provide to the Company all information concerning Parent and Sub
as
may be reasonably requested by the Company in connection with the Proxy
Statement and shall otherwise assist and cooperate with the Company in the
preparation of the Proxy Statement and resolution of comments referred to below.
The Company shall as promptly as practicable notify Parent upon the receipt
of
any comments from the SEC or the staff of the SEC or any request from the SEC
or
the staff of the SEC for amendments or supplements to the Proxy Statement,
and
shall provide Parent with copies of all material correspondence between the
Company and its Representatives, on the one hand, and the SEC or the staff
of
the SEC, on the other hand. The Company shall use its reasonable best efforts
to
respond as promptly as practicable to any comments of the SEC or the staff
of
the SEC with respect to the Proxy Statement and to cause the Proxy Statement
to
be mailed to the stockholders of the Company as promptly as reasonably
practicable following the date of this Agreement. If at any time prior to the
Stockholders’ Meeting there shall occur or be discovered any event or any
information relating to the Company, Parent, Sub or any of their respective
Affiliates, officers or directors that should be set forth in an amendment
or
supplement to the Proxy Statement so that the Proxy Statement shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, the Company shall promptly prepare and file with the SEC and, to
the
extent required by Law, mail to the Company’s stockholders an appropriate
amendment or supplement describing such event or information. Prior to filing
or
mailing the Proxy Statement (or any amendment or supplement thereto) or
responding to any comments of the SEC or the staff of the SEC with respect
thereto, the Company shall provide Parent a reasonable opportunity to review
and
to propose comments on such document or response.
SECTION
5.02. Access
to Information; Confidentiality.
The
Company shall afford to Parent, and to Parent’s Representatives, reasonable
access during normal business hours during the period prior to the Effective
Time or the termination of this Agreement to all of its and its Subsidiaries’
properties, books and records and to those employees of the Company to whom
Parent reasonably requests access, and, during such period, the Company shall
furnish to Parent all information concerning its and its Subsidiaries’ business
as Parent may reasonably request. Notwithstanding the foregoing, neither the
Company nor any of its Subsidiaries shall be required to (i) provide access
to
or disclose information where the Company reasonably determines that such access
or disclosure would jeopardize the attorney-client privilege of the Company
or
any of its Subsidiaries, contravene any Law or any Contract to which the Company
or any of its Subsidiaries is a party or unduly interfere with the conduct
of
the business of the Company and its Subsidiaries in the ordinary course or
(ii)
provide access to any properties of the Company or its Subsidiaries for the
purpose of environmental sampling or testing. Except for disclosures expressly
permitted by the terms of the confidentiality letter agreement dated as of
January 18, 2007, between Parent and the Company (as it may be amended from
time
to time, the “Confidentiality
Agreement”),
Parent shall hold, and shall cause its Representatives to hold, all information
received from the Company or its Representatives, directly or indirectly, in
confidence in accordance with the Confidentiality Agreement.
-33-
SECTION
5.03. Efforts.
(a)
Subject to the terms and conditions set forth in this Agreement, each of the
parties hereto shall use reasonable best efforts to take promptly, or cause
to
be taken, all actions, and to do promptly, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper
or
advisable under applicable Laws to consummate and make effective the Merger
and
the other transactions contemplated by this Agreement, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents, clearances,
approvals, and expirations or terminations of waiting periods from Governmental
Entities and the making of all necessary registrations and filings and the
taking of all steps as may be necessary to obtain an approval, clearance or
waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties, (iii) the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the consummation
of
the Merger and the other transactions contemplated by this Agreement and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by this Agreement. In furtherance and not in
limitation of the foregoing, the Company and Parent agree not to extend any
waiting period under the HSR Act or any other applicable foreign or domestic
competition, merger control, antitrust or similar Law or enter into any
agreement with any Governmental Entity not to consummate the Merger or the
other
transactions contemplated by this Agreement, except with the prior written
consent of the other party.
(b) Subject
to the terms and conditions herein provided and without limiting the foregoing,
the Company and Parent shall (i) promptly, but in no event later than 10
Business Days after the date hereof, file any and all required Notification
and
Report Forms under the HSR Act with respect to the Merger and the other
transactions contemplated by this Agreement, and use reasonable best efforts
to
cause the expiration or termination of any applicable waiting periods under
the
HSR Act as promptly as practicable, (ii) promptly file any and all required
notifications or applications under any other applicable foreign or domestic
competition, merger control, antitrust or similar Law with respect to the Merger
and the other transactions contemplated by this Agreement, and use reasonable
best efforts to receive required approvals or clearances and cause the
expiration or termination of any applicable waiting period under such applicable
foreign or domestic competition, merger control, antitrust or similar Law as
promptly as practicable, (iii) use reasonable best efforts to cooperate with
each other in (x) determining whether any filings are required to be made
with, or consents, permits, authorizations, waivers, clearances, approvals,
and
expirations or terminations of waiting periods are required to be obtained
from,
any third parties or other Governmental Entities in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and (y) timely making all such filings and
timely obtain all such consents, permits, authorizations or approvals, (iv)
supply to any Governmental Entity as promptly as practicable any additional
information or documents that may be requested pursuant to any Regulatory Law
(as hereinafter defined) or by such Governmental Entity, and (v) take, or
cause to be taken, all other actions and do, or cause to be done, all other
things necessary, proper or advisable to consummate and make effective the
transactions contemplated hereby, including taking all such further action
as
may be necessary to resolve such objections, if any, as
the
United States Federal Trade Commission, the Antitrust Division of the United
States Department of Justice,
state
antitrust enforcement authorities or competition authorities of any other nation
or other jurisdiction or any other person may assert under Regulatory Law with
respect to the transactions contemplated hereby, and to avoid or eliminate
any
impediment under any Law that may be asserted by any Governmental Entity with
respect to the Merger so as to enable the Closing to occur as soon as reasonably
possible (and in any event no later than the Outside Date), including (x)
proposing, negotiating, committing to and effecting, by consent decree, hold
separate order or otherwise, the sale, divestiture or disposition of any assets
or businesses of Parent or its Subsidiaries or Affiliates or of the Company
or
its Subsidiaries and (y) otherwise taking or committing to take any actions
that
after the Closing Date would limit the freedom of action of Parent, its
Subsidiaries (including the Surviving Corporation’s) or Affiliates with respect
to, or Parent’s or its Affiliates’ ability to retain, one or more of its or its
Subsidiaries’ (including the Surviving Corporation’s) businesses, product lines
or assets; in each case as may be required in order to avoid the entry of,
or to
effect the dissolution of, any injunction, temporary restraining order or other
order in any suit or proceeding which would otherwise have the effect of
preventing the Closing or delaying the Closing beyond the Outside Date;
provided,
however,
and
notwithstanding anything else contained herein, the provisions of this
Section
5.03
shall
not be construed to require Parent or any of its Subsidiaries (or permit the
Company or any of the Company’s Subsidiaries) to undertake or commit to
undertake any efforts or to take any action or commit to take any action if
such
efforts or action would, or would reasonably be expected to, result in a
Substantial Detriment. “Substantial
Detriment”
shall
mean changes or effects which, individually or in the aggregate, would result
in, or would be reasonably likely to result in, a Material Adverse Effect,
at or
after the Effective Time, provided
that any
requirement to divest or hold separate, or limit the operation of, any division,
Subsidiary, interest, business, product line, asset or property relating to
the
operations conducted by Parent and its Subsidiaries prior to the Effective
Time
shall be deemed to result in a Substantial Detriment if such action with respect
to a comparable amount of assets or businesses of the Company and its
Subsidiaries would be reasonably likely, in the aggregate, to have a Material
Adverse Effect, at or after the Effective Time.
-34-
(c) Subject
to applicable legal limitations and the instructions of any Governmental Entity,
the Company and Parent shall keep each other apprised of the status of matters
relating to the completion of the transactions contemplated thereby, including
promptly furnishing the other with copies of notices or other communications
received by the Company or Parent, as the case may be, or any of their
respective Subsidiaries, from any third party and/or any Governmental Entity
with respect to such transactions. The Company
and Parent shall permit counsel for the other party reasonable opportunity
to
review in advance, and consider in good faith the views of the other party
in
connection with, any proposed written communication to any Governmental Entity.
Each of the Company and Parent agrees not to participate in any substantive
meeting or discussion, either in person or by telephone, with any Governmental
Entity in connection with the proposed transactions unless it consults with
the
other party in advance and, to the extent not prohibited by such Governmental
Entity, gives the other party the opportunity to attend and
participate.
(d) In
furtherance and not in limitation of the covenants of the parties contained
in
this Section
5.03,
if any
administrative or judicial action or proceeding, including any proceeding by
a
private party, is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement as violative of any Regulatory Law,
each of the Company and Parent shall cooperate in all respects with each other
and shall use reasonable best efforts to contest and resist any such action
or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Merger and the other transactions contemplated by this
Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Section
5.03
shall
limit a party’s right to terminate this Agreement pursuant to Section
7.01(b)(ii)
so long
as such party has, prior to such termination, complied with its obligations
under this Section
5.03.
(b) With
respect to any “employee benefit plan,” as such term defined in Section 3(3) of
ERISA (whether or not subject to ERISA), maintained by Parent or any of its
Subsidiaries (including any vacation, paid time-off and severance plans) with
respect to which any Company Employee may become a participant, for all
purposes, including determining eligibility to participate, level of benefits,
vesting, benefit accruals and early retirement subsidies, each Company
Employee’s service with the Company or any of its Subsidiaries (as well as
service with any predecessor employer of the Company or any such Subsidiary,
to
the extent service with the predecessor employer is recognized by the Company
or
such Subsidiary) shall be treated as service with Parent or its applicable
Subsidiary; provided,
however,
that
such service need not be recognized for purposes of benefit accrual under final
average pay defined benefit plans or as would otherwise result in a duplication
of benefits.
(c) Parent
shall waive, or cause to be waived, any pre-existing condition limitations,
exclusions, actively-at-work requirements and waiting periods under any
“employee welfare benefit plan,” as defined in Section 3(1) of ERISA (whether or
not subject to ERISA), maintained by Parent or any of its Affiliates in which
Company Employees (and their eligible dependents and eligible domestic partners)
participate from and after the Effective Time, except to the extent that such
pre-existing condition limitations, exclusions, actively-at-work requirements
and waiting periods would not have been satisfied or waived under the comparable
Company Benefit Plan immediately prior to the Effective Time. Parent shall
recognize, or cause to be recognized, the dollar amount of all co-payments,
deductibles and similar expenses incurred by each Company Employee (and his
or
her eligible dependents and eligible domestic partners) during the calendar
year
in which the Effective Time occurs for purposes of satisfying such year’s
deductible and co-payment limitations under the relevant welfare benefit plans
in which they participate from and after the Effective Time.
-36-
(d) The
parties agree that consummation of the transactions contemplated by this
Agreement shall constitute a “Change in Control” (or other similar concept)
under any Company Benefit Plan or other compensatory plan, program or
arrangement to which the Company or any of its Subsidiaries is a party with
respect to which such concept (or similar concept) is relevant, including the
Change in Control Employment Agreements to which the Company is a party;
provided
that if
a true, correct and complete copy of any such agreement, plan, program or
arrangement has not been provided to Parent prior to the date hereof, this
Section
5.04(d)
shall
not apply to such agreement, plan, program or arrangement.
(e) Without
limiting the generality of Section
8.07,
no
provision of this Section
5.04
shall
create any third-party beneficiary rights in any employee or former employee
(including any beneficiary or dependent thereof) of the Company or any of its
Subsidiaries in any respect, and no provision of this Section
5.04
shall
create such rights in any such persons in respect of any benefits that may
be
provided, directly or indirectly, under any Company Benefit Plan or any employee
program or any plan or arrangement of the Parent or any of its Subsidiaries.
No
provision of this Agreement shall constitute a limitation on the rights to
amend, modify or terminate after the Effective Time any such plans or
arrangements of the Parent or any of its Subsidiaries or to terminate the
employment of any Company Employee.
(d) In
the
event that either Parent or the Surviving Corporation or any of their respective
successors or assigns (i) consolidates with or merges into any other person
and
is not the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers or conveys all or a substantial portion of its
properties and other assets to any person, or if Parent dissolves the Surviving
Corporation, then, and in each such case, Parent shall cause proper provision
to
be made so that the applicable successors and assigns or transferees shall
succeed to, and expressly assume the obligations set forth in this Section
5.05.
(e) Parent
shall cause the Surviving Corporation to perform all of the obligations of
the
Surviving Corporation under this Section
5.05
and the
parties acknowledge and agree that Parent guarantees the payment and performance
of the Surviving Corporation’s obligations pursuant to this Section
5.05.
(f) The
provisions of this Section
5.05
are
intended to be for the benefit of, and will be enforceable by, each Indemnified
Party, his or her heirs and his or her representatives, and are in addition
to,
and not in substitution for, any other rights to indemnification or contribution
that any such person may have by contract or otherwise. Notwithstanding anything
herein to the contrary, if any Claim (whether arising before or after the
Effective Time) is made against any Indemnified Party on or prior to the sixth
anniversary of the Effective Time, the provisions of this Section
5.05
shall
continue in effect until the final disposition of such Claim.
SECTION
5.06. Fees
and Expenses.
Except
as provided in Section
7.02,
all
fees and expenses incurred in connection with this Agreement, the Merger and
the
other transactions contemplated by this Agreement shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated.
SECTION
5.07. Public
Announcements.
Each of
Parent and the Company shall consult with the other before issuing, and give
the
other a reasonable opportunity to review and comment upon, any press release
or
other public statements with respect to the transactions contemplated by this
Agreement, including the Merger, and shall not issue any such press release
or
make any such public statement prior to such consultation, except as may be
required by applicable Law, court process or the rules and regulations of any
national securities exchange or national securities quotation system and except
for any matters referred to in Section
4.03(f).
The
parties agree that the initial press release to be issued with respect to the
transactions contemplated by this Agreement shall be in the form heretofore
agreed to by the parties.
SECTION
5.08. Financing.
Parent
and Merger Sub shall use their respective best efforts to obtain the Debt
Financing on the terms and conditions described in the Debt Commitment Letter,
including using their reasonable best efforts (a) to negotiate definitive
agreements with respect thereto on the terms and conditions contained in the
Debt Commitment Letter, (b) to satisfy all conditions applicable to Parent
in such definitive agreements, (c) to comply with its obligations under the
Debt
Commitment Letter, and (d) to enforce its rights under the Debt Commitment
Letter. Parent shall give the Company prompt notice upon becoming aware of
any
material breach by any party of the Debt Commitment Letter or any termination
of
the Debt Commitment Letter. Parent shall keep the Company informed on a
reasonable basis and in reasonable detail of the status of its efforts to
arrange the Debt Financing. In the event that Parent becomes aware of any event
or circumstance that makes procurement of any portion of the Debt Financing
unlikely to occur in the manner or from the sources contemplated in the Debt
Commitment Letter, Parent shall immediately notify the Company and Parent and
Merger Sub shall use their respective best efforts to arrange any such portion
from alternative sources. The Company agrees to provide, and will use reasonable
best efforts to cause its Subsidiaries and Representatives (including legal
and
accounting) to provide such cooperation reasonably requested by Parent and
Merger Sub in connection with the Debt Financing or any alternative financing,
provided
that
Parent shall, at the request of the Company, reimburse the Company for any
reasonable out-of-pocket expenses incurred in providing such cooperation.
-39-
ARTICLE
VI
Conditions
Precedent
SECTION
6.01. Conditions
to Each Party’s Obligation to Effect the Merger.
The
respective obligation of each party to effect the Merger is subject to the
satisfaction or (to the extent permitted by Law) waiver at or prior to the
Effective Time of the following conditions:
(a)Stockholder
Approval.
The
Stockholder Approval shall have been obtained.
(b)Antitrust
and Competition Approval.
(i) The
waiting period (and any extension thereof) applicable to the Merger under the
HSR Act shall have been terminated or shall have expired and (ii) any other
approvals required to be obtained prior to the Closing under any other
antitrust, competition, or similar laws of any foreign jurisdiction shall have
been obtained.
SECTION
6.02. Conditions
to Obligations of Parent and Sub.
The
obligations of Parent and Sub to effect the Merger are further subject to the
satisfaction or (to the extent permitted by Law) waiver at or prior to the
Effective Time of the following conditions:
(a)Representations
and Warranties.
The
representations and warranties of the Company set forth in this Agreement shall
be true and correct (disregarding all qualifications or limitations as to
“materiality,”“Material Adverse Effect” and words of similar import set forth
therein) as of the date of this Agreement and as of the Closing Date as though
made on the Closing Date (except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of such earlier
date), except where the failure of such representations and warranties to be
so
true and correct would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
-40-
(b)Performance
of Obligations of the Company.
The
Company shall have, in all material respects, performed or complied with all
material obligations required to be performed or complied with by it under
this
Agreement, including all provisions under Section
4.03,
at or
prior to the time of the Closing.
(c)Certificate
of Compliance.
The
Company shall have delivered to Parent a certificate, dated the Effective Time
and signed by its Chief Executive Officer or another senior executive officer,
certifying to the effect that the conditions set forth in Sections
6.02(a)
and
(b)
have
been satisfied.
SECTION
6.03. Conditions
to Obligation of the Company.
The
obligation of the Company to effect the Merger is further subject to the
satisfaction or (to the extent permitted by Law) waiver at or prior to the
Effective Time of the following conditions:
(a)Representations
and Warranties.
The
representations and warranties of Parent and Sub set forth in this Agreement
shall be true and correct (disregarding all qualifications or limitations as
to
“materiality” and words of similar import set forth therein) as of the date of
this Agreement and as of the Closing Date as though made on the Closing Date
(except to the extent such representations and warranties expressly relate
to an
earlier date, in which case as of such earlier date), except where the failure
of such representations and warranties to be so true and correct would not,
individually or in the aggregate, reasonably be expected to prevent or
materially delay the Closing.
(b)Performance
of Obligations of Parent and Sub.
Each of
Parent and Sub shall have, in all material respects, performed or complied
with
all material obligations required to be performed or complied with by it under
this Agreement at or prior to the time of the Closing.
(c)Certificate
of Compliance.
Parent
shall have delivered to the Company a certificate, dated the Effective Time
and
signed by its Chief Executive Officer or another senior executive officer,
certifying to the effect that the conditions set forth in Sections
6.03(a)
and
(b)
have
been satisfied.
SECTION
6.04. Frustration
of Closing Conditions.
None of
the Company, Parent or Sub may rely on the failure of any condition set forth
in
Section
6.01,
6.02
or
6.03,
as the
case may be, to be satisfied if such failure was caused by such party’s failure
to perform any of its obligations under this Agreement, to act in good faith
or
to use its reasonable best efforts to consummate the Merger and the other
transactions contemplated by this Agreement, as required by and subject to
Section
5.03.
ARTICLE
VII
Termination,
Amendment and Waiver
SECTION
7.01. Termination.
This
Agreement may be terminated at any time prior to the Effective Time, whether
before or after receipt of the Stockholder Approval:
(a) by
mutual
written consent of Parent and the Company;
(ii) if
any
Restraint having any of the effects set forth in Section
6.01(c)
shall
have become final and nonappealable; provided
that the
party seeking to terminate this Agreement pursuant to this Section
7.01(b)(ii)
shall
have used the efforts required by Section
5.03
to
prevent the entry of and to remove such Restraint; or
(iii) if
the
Stockholder Approval shall not have been obtained at the Stockholders’ Meeting
duly convened therefor or at any adjournment or postponement
thereof;
(c) by
the
Company, if:
(i) Parent
or
Sub shall have breached any of their representations or warranties or failed
to
perform any of their covenants or agreements set forth in this Agreement, which
breach or failure to perform (A) would give rise to the failure of a condition
set forth in Section
6.01,
6.03(a)
or
6.03(b)
and (B)
is incapable of being cured prior to the Outside Date or, if capable of being
cured, is not cured within 30 days after written notice thereof is given by
the
Company to Parent; provided
that the
Company shall not have the right to terminate this Agreement pursuant to this
Section
7.01(c)
if the
Company is then in material breach of any of its representations, warranties,
covenants or agreements hereunder; or
(ii) prior
to
the receipt of the Stockholder Approval, (A) the Board of Directors of the
Company has received an Alternative Proposal which it has determined to be
a
Superior Proposal in accordance with Section
4.03(h),
(B) the
Company is in compliance, in all material respects, with Section
4.03,
(C) the Company has previously paid, or contemporaneously with such
termination pays, the amount due under Section
7.02
and
(D) the Board of Directors of the Company has adopted and authorized the
Company to enter into a definitive agreement providing for the implementation
of
such Superior Proposal; or
-42-
(d) by
Parent, if:
(i) the
Company shall have breached any of its representations or warranties or failed
to perform any of its covenants or agreements set forth in this Agreement,
which
breach or failure to perform (A) would give rise to the failure of a condition
set forth in Section
6.01,
6.02(a)
or
6.02(b)
and (B)
is incapable of being cured prior to the Outside Date or if capable of being
cured, is not cured within 30 days after written notice thereof is given by
Parent to the Company; provided
that
Parent shall not have the right to terminate this Agreement pursuant to this
Section
7.01(d)
if
Parent or Sub is then in material breach of any of its representations,
warranties, covenants or agreements hereunder; or
(ii) the
Board
of Directors of the Company (A) withdraws, modifies or qualifies in a manner
adverse to Parent or Sub, or publicly proposes to withdraw, modify or qualify,
in a manner adverse to Parent or Sub, its Recommendation, (B) fails to recommend
to the Company’s stockholders that they give the Stockholder Approval or (C)
adopts, approves, endorses or recommends, or publicly proposes to adopt,
approve, endorse or recommend, any Alternative Proposal.
SECTION
7.02. Termination
Fees.
(a) In
the
event that:
(i) (A)
an
Alternative Proposal, whether or not conditional, shall have been made directly
to the Company’s stockholders generally or any person shall have publicly
announced an intention to make an Alternative Proposal, (B) following the
occurrence of an event described in the preceding clause (A), this Agreement
is
terminated by (x) Parent pursuant to Section
7.01(b)(i)
or
Section
7.01(d)(i)
or (y)
by either the Company or Parent pursuant to Section
7.01(b)(iii),
and
(C) the Company enters into a definitive agreement with respect to, or
consummates, a transaction contemplated by any Alternative Proposal, or such
a
transaction is consummated (whether or not such Alternative Proposal was the
same Alternative Proposal referred to in the foregoing clause (A)), in any
such
case within 12 months of the date this Agreement is terminated;
or
(ii) this
Agreement is terminated by the Company pursuant to Section
7.01(c)(ii);
or
(iii) this
Agreement is terminated by Parent pursuant to Section
7.01(d)(ii);
(b) With
respect to any payment required to be made pursuant to Section
7.02(a)(i),
the
Company shall pay $5,000,000 of the Termination Fee concurrently with the
termination of this Agreement, and shall pay the remainder of the Termination
Fee upon the occurrence of the events in Section
7.02(a)(i)(C).
With
respect to any payment to be made pursuant to Section
7.02(a)(ii)
or
Section
7.02(a)(iii),
the
Company shall pay the Termination Fee concurrently with the termination of
this
Agreement.
(c) In
any
event under Section
7.02(a),
the
Company shall pay, in addition to the Termination Fee or any part thereof,
to an
account or accounts designated by Parent, as promptly as possible (but in any
event within two Business Days) following receipt of an invoice therefor (which
may be delivered at any time on or after the date two Business Days before
the
termination of this Agreement) all of Parent’s and Sub’s actual and reasonably
documented out-of-pocket fees and expenses (including legal fees and expenses)
actually incurred by Parent, Sub and their Affiliates on or prior to the
termination of this Agreement in connection with the transactions contemplated
by this Agreement (“Parent
Expenses”),
which
amount shall not be greater than $5,000,000.
(d) In
the
event that (A) either party shall terminate this Agreement pursuant to
Section
7.01(b)(i)
or
7.01(b)(ii)
(with
respect to Restraints related to any Regulatory Law), (B) as of the date of
such
termination any approval under any Regulatory Law required to be obtained prior
to the Closing shall not have been obtained or any waiting period under any
Regulatory Law required to be expired or terminated prior to the Closing shall
not have expired or been terminated, (C) immediately prior to such termination,
the conditions set forth in Sections
6.01(a),
6.01(c)
(other
than a failure of such condition with respect to Restraints related to any
Regulatory Law), 6.02(a)
and
6.02(b)
shall
have been satisfied, then Parent shall pay to the Company, no later than two
Business Days following such termination, a termination fee of $50,000,000
in
cash (the “Regulatory
Termination Fee”),
it
being understood that in no event shall the Company be required to pay the
Regulatory Termination Fee on more than one occasion.
(e) In
the
event that the Company shall fail to pay the Termination Fee or Parent Expenses
or Parent shall fail to pay the Regulatory Termination Fee, in each case as
required pursuant to this Section
7.02
when
due, such amounts shall accrue interest for the period commencing on the date
such amounts became past due, at a rate equal to the rate of interest publicly
announced by JPMorgan Chase from time to time during such period, as such bank’s
prime lending rate plus 1.50%. In addition, if the Company or Parent shall
fail
to pay such amounts when due, then such party shall also pay to the other party
all of the other party’s costs and expenses (including attorneys’ fees) in
connection with efforts to collect such fee.
(f) Each
of
the parties hereto acknowledges that the agreements contained in this
Section
7.02
are an
integral part of the transactions contemplated by this Agreement and that the
Termination Fee is not a penalty, but rather is liquidated damages in a
reasonable amount that will compensate Parent and Sub for the efforts and
resources expended and opportunities foregone while negotiating this Agreement
and in reliance on this Agreement and on the expectation of the consummation
of
the transactions contemplated hereby, which amount would otherwise be impossible
to calculate with precision.
-44-
(g) Any
payments made pursuant to this Section
7.02
shall be
net of any amounts as may be required to be deducted or withheld therefrom
under
the Code or under any provision of applicable Tax Law.
SECTION
7.03. Effect
of Termination.
In the
event of termination of this Agreement by either the Company or Parent as
provided in Section
7.01,
this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company or any of their
respective officers or directors, other than the provisions of the last sentence
of Section
5.02,
Section
5.06,
Section
7.02,
this
Section
7.03
and
Article
VIII,
which
provisions shall survive such termination; provided,
however
that
nothing herein shall relieve the Company, Parent or Sub from liability for
any
fraud, intentional misrepresentation or willful and material breach of any
of
its representations, warranties, covenants or agreements set forth in this
Agreement prior to such termination.
SECTION
7.04. Amendment.
This
Agreement may be amended by the parties hereto at any time before or after
receipt of the Stockholder Approval; provided,
however,
that
after such Stockholder Approval has been obtained, there shall be made no
amendment or waiver that by Law requires further adoption or approval by the
stockholders of the Company without such adoption or approval having been
obtained. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
SECTION
7.05. Extension;
Waiver.
At any
time prior to the Effective Time, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
to
the extent permitted by Law, waive any inaccuracies in the representations
and
warranties contained herein or in any document delivered pursuant hereto or
(c)
subject to the proviso to the first sentence of Section
7.04
and to
the extent permitted by Law, waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement
to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
SECTION
7.06. Procedure
for Termination or Amendment.
A party
terminating this Agreement pursuant to Section
7.01
shall
give written notice of such termination to the other parties hereto. A
termination of this Agreement pursuant to Section
7.01
or an
amendment of this Agreement pursuant to Section
7.04
shall,
in order to be effective, require, in the case of Parent or the Company, action
by its Board of Directors.
ARTICLE
VIII
General
Provisions
SECTION
8.01. Nonsurvival
of Representations and Warranties.
None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section
8.01
shall
not limit any covenant or agreement of the parties that by its terms
contemplates performance after the Effective Time.
-45-
SECTION
8.02. Notices.
Except
for notices that are specifically required by the terms of this Agreement to
be
delivered orally, all notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally, faxed (with confirmation) or sent by overnight courier
(providing proof of delivery) to the parties at the following addresses (or
at
such other address for a party as shall be specified by like notice):
SECTION
8.04. Interpretation.
When a
reference is made in this Agreement to an Article, a Section or Exhibit, such
reference shall be to an Article or a Section of, or an Exhibit to, this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
“include,”“includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.” The words “hereof,”“herein” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision
of
this Agreement. The word “or” when used in this Agreement is not exclusive. All
terms defined in this Agreement shall have the defined meanings when used in
any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable
to
the singular as well as the plural forms of such terms and to the masculine
as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case
of
statutes) by succession of comparable successor statutes and references to
all
attachments thereto and instruments incorporated therein. References to a person
are also to its permitted successors and assigns.
-47-
SECTION
8.05. Consents
and Approvals.
For any
matter under this Agreement requiring the consent or approval of any party
to be
valid and binding on the parties hereto, such consent or approval must be in
writing.
SECTION
8.06. Counterparts.
This
Agreement may be executed in one or more counterparts (including by facsimile),
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered (by facsimile, email or otherwise) to the other
parties.
SECTION
8.07. Entire
Agreement; No Third-Party Beneficiaries.
This
Agreement and the Confidentiality Agreement (a) constitute the entire agreement,
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this Agreement and
the
Confidentiality Agreement, provided
that the
Confidentiality Agreement shall survive the execution and delivery of this
Agreement, and (b) except as set forth in Section
5.05,
are not
intended to and shall not confer upon any person other than the parties any
legal or equitable rights or remedies.
SECTION
8.08. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION
8.09. Assignment.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, in whole or in part, by operation of law or otherwise by any of
the
parties without the prior written consent of the other parties, and any
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and
be
enforceable by, the parties hereto and their respective successors and
assigns.
SECTION
8.10. Specific
Enforcement; Consent to Jurisdiction.
The
parties agree that irreparable damage would occur and that the parties would
not
have any adequate remedy at law in the event that any of the provisions of
this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any court
of
the State of New York or any federal court sitting in the Southern District
of
New York, this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (a) irrevocably
and
unconditionally consents to submit itself and its property to the exclusive
jurisdiction and venue of the Supreme Court of the State of New York (or, in
the
case of any claim as to which the federal courts have exclusive subject matter
jurisdiction, the Federal Court of the United States of America sitting in
the
Southern District of New York) in the event any dispute arises out of this
Agreement or the transactions contemplated by this Agreement, (b) agrees that
all claims in respect of such action or proceeding must be commenced, and may
be
heard and determined, exclusively in the aforementioned courts (c) waives,
to
the fullest extent it may legally and effectively do so, any objection which
it
may now or hereafter have to the laying of venue of any such action or
proceeding in the aforementioned courts; and (d) to the fullest extent permitted
by law, (i) waives the defense of an inconvenient forum to the maintenance
of
such action or proceeding in the aforementioned courts, (ii) agrees not to
assert any claim that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid
of
execution of judgment, execution of judgment or otherwise), and (iii) agrees
not
to assert any claim that this Agreement, or the subject matter hereof, may
not
be enforced in or by such courts. Each of the parties hereto agrees that a
final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each party to this Agreement irrevocably consents to service
of
process in the manner provided for notices in Section
8.02.
-48-
SECTION
8.11. Waiver
of Jury Trial.
EACH
PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE
FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY
AND
(IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
8.11.
SECTION
8.12. Severability.
If any
term or other provision of this Agreement becomes or is declared by a court
of
competent jurisdiction to be void, invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect.
The parties further agree that any such illegal, void, invalid or unenforceable
provisions shall be limited or eliminated only to the minimum extent necessary
so that this Agreement shall otherwise remain in full force and effect and
that
the parties shall replace such provisions of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such provision.
-49-
[Remainder
of Page Left Blank Intentionally]
-50-
IN
WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement to
be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
AVERY
DENNISON CORPORATION
by/s/
Dean
A. Scarborough
Name:
Dean
A.
Scarborough
Title:
President and Chief Executive Officer
ALPHA
ACQUISITION CORP.
by/s/
Dean
A. Scarborough
Name:
Dean
A.
Scarborough
Title:
Authorized Signatory
PAXAR
CORPORATION
by/s/
Rob
van der Merwe
Name:
Rob
van
der Merwe
Title:
President
and Chief Executive Officer
[Signature
Page to Agreement and Plan of Merger]
ANNEX
I
Index
of Defined Terms
2007
Bonus Year
Section
5.04(a)
Affiliate
Section
8.03(a)
Agreement
Preamble
Alternative
Proposal
Section
4.03(g)
Average
Parent Stock Price
Section
2.03(a)
Business
Day
Section
8.03(b)
Cause
Section
2.03(e)
Certificate
Section
2.01(c)
Certificate
of Merger
Section
1.03
Claim
Section
5.05(b)
Closing
Section
1.02
Closing
Date
Section
1.02
Code
Section
2.02(h)
Company
Preamble
Company
Benefit Plan
Section
3.01(l)(vii)
Company
Bylaws
Section
3.01(a)
Company
Certificate of Incorporation
Section3.01(a)
Company
Common Stock
Recitals
Company
Disclosure Letter
Section
8.03(c)
Company
Employees
Section
5.04
Company
Equity Award
Section
2.03(c)
Company
Material Contracts
Section
3.01(j)(i)
Company
Preferred Stock
Section
3.01(c)
Company
Restricted Stock
Section
3.01(c)
Company
Stock Options
Section
3.01(c)
Company
Stock Plans
Section
3.01(c)
Computer
Software
Section
3.01(n)
Confidentiality
Agreement
Section
5.02
Contract
Section
3.01(e)
Current
Policies
Section
5.05(c)
Debt
Commitment Letter
Section
3.02(f)
Debt
Financing
Section
3.02(f)
Effective
Time
Section
1.03
Environmental
Claims
Section
3.01(o)
Environmental
Law
Section
3.01(o)
ERISA
Section
3.01(l)(i)
ESPP
Section
2.03(d)
Exchange
Act
Section
3.01(e)
Exchange
Fund
Section
2.02
Filed
SEC Documents
Section
3.01
GAAP
Section
3.01(f)(i)
I-1
Governmental
Entity
Section
3.01(e)
Hazardous
Materials
Section
3.01(o)
HSR
Act
Section
3.01(e)
Indebtedness
Section
4.01(i)
Indemnified
Party
Section
5.05
Infringe
Section
3.01(n)(i)
Intellectual
Property
Section
3.01(n)
Judgment
Section
3.01(e)
Knowledge
Section
8.03(d)
Law
Section
3.01(e)
Liens
Section
3.01(b)
Material
Adverse Effect
Section
8.03(e)
Maximum
Annual Amount
Section
5.05(c)
Merger
Recitals
Merger
Consideration
Section
2.01(c)
NYBCL
Section
1.01
Outside
Date
Section
7.01(b)(i)
Parent
Preamble
Parent
Common Shares
Section
2.03(a)
Parent
Disclosure Letter
Section
8.03(f)
Parent
Expenses
Section
7.02(c)
Parent
Stock Option
Section
2.03(a)
Paying
Agent
Section
2.02
Permits
Section
3.01(k)
Permitted
Liens
Section
3.01(b)
Person
or person
Section
8.03(g)
Proxy
Statement
Section
3.01(e)
Recommendation
Section
3.01(d)
Regulatory
Law
Section
5.03(e)
Regulatory
Termination Fee
Section
7.02(d)
Release
Section
3.01(o)
Representatives
Section
4.03
Restraints
Section
6.01(c)
Sarbanes-Oxley
Act
Section
3.01(f)(ii)
Scheduled
Intellectual Property
Section
3.01(n)(ii)
SEC
Section
3.01(e)
SEC
Documents
Section
3.01(f)(i)
Securities
Act
Section
3.01(f)(i)
Significant
Subsidiaries
Section
3.01(b)
Stockholder
Approval
Section
3.01(q)
Stockholders’
Meeting
Section
5.01(b)
Sub
Preamble
Subsidiary
Section
8.03(h)
Substantial
Detriment
Section
5.03(b)
Superior
Proposal
Section
4.03(h)
Surviving
Corporation
Section
1.01
I-2
Tax
or Taxes
Section
3.01(m)
Tax
Return
Section
3.01(m)
Termination
Fee
Section
7.02(a)
Voting
Agreement
Recitals
Voting
Company Debt
Section
3.01(c)
I-3
ANNEX
II
Form
of Voting and Support Agreement
VOTING
AND SUPPORT AGREEMENT, dated as of March 22, 2007, (this “Agreement”),
by
and between Avery Dennison Corporation, a Delaware corporation (“Parent”),
on
the one hand, and Arthur Hershaft (the “Shareholder”),
on
the other hand. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Merger Agreement (as defined
below).
WITNESSETH:
WHEREAS,
Parent, Alpha Acquisition Corp., a Delaware corporation, a direct wholly-owned
Subsidiary of Parent (“Sub”)
and
Paxar Corporation, a New York corporation (the “Company”)
are,
concurrently with the execution and delivery of this Agreement, entering into
an
Agreement and Plan of Merger, dated the date hereof (the “Merger
Agreement”),
pursuant to which Sub will merge with and into the Company (the “Merger”);
and
WHEREAS,
as of the date hereof, the Shareholder is the beneficial owner of 1,850,000
shares of Company Common Stock (the “Existing
Shares”),
of
which 450,000 shares will cease to be within the Shareholder’s voting control as
of May 1, 2007 (the “Sold
Shares”),
and
options to purchase 551,593 shares of Company Common Stock (the “Existing
Options”),
and
together with the Existing Shares, the “Existing
Securities”),
of
which none are unvested; and
WHEREAS,
as a condition to its willingness to enter into the Merger Agreement, Parent
has
requested that the Stockholder enter into this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual representations,
warranties, covenants and agreements contained herein, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE
I
VOTING
1.1Agreement
to Vote.
The
Shareholder agrees that, from and after the date hereof and until this Agreement
is terminated pursuant to Section 4.1, at the Stockholders’ Meeting or any other
meeting of the stockholders of the Company, however called, or in connection
with any written consent of the stockholders of the Company, relating to any
proposed action by the stockholders of the Company with respect to the matters
set forth in Section 1.1(b) below, the Shareholder shall:
(a) appear
at
each such meeting or otherwise cause the Existing Securities and any shares
of
Company Common Stock, options to purchase shares of Company Common Stock or
other security or voting capital stock of Company acquired by the Shareholder
after the date hereof (the “Shares”)
owned
beneficially or of record by the Shareholder to be counted as present thereat
for purposes of calculating a quorum; and
II-1
(b) vote
(or
cause to be voted), in person or by proxy, all the Shares owned by the
Shareholder, and any other voting securities of the Company (whenever acquired),
that are owned beneficially or of record by the Shareholder or as to which
he
has, directly or indirectly, the right to vote or direct the voting, (i) in
favor of adoption of the Merger Agreement and any other action of the Company’s
stockholders requested in furtherance thereof and (ii) against any action or
agreement submitted for adoption of the stockholders of the Company that would
reasonably be expected to result in a breach of any covenant, representation
or
warranty or any other obligation or agreement of the Company contained in the
Merger Agreement or of the Shareholder contained in this Agreement; and (iii)
against any action, agreement or transaction submitted for adoption to the
stockholders of the Company that the Shareholder would reasonably expect is
intended, or would reasonably be expected, to materially impede, interfere
or be
inconsistent with, delay or materially and adversely affect the Merger or this
Agreement.
1.2Proxy.
As
security for the Shareholder’s obligations under Section 1.1, the Shareholder
hereby irrevocably constitutes and appoints the Parent as his attorney in fact
and proxy in accordance with the Business Corporations Law of New York
(“NYBCL”),
with
full power of substitution and resubstitution, to cause the Shares owned
beneficially and of record by the Shareholder as indicated in Section 1.1 above
to be counted as present at any meeting of Shareholders and to vote such Shares
thereat (which proxy shall be limited to the matters set forth in Section 1.1).
THIS
PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN
INTEREST.
The
Shareholder agrees to take such further action or execute such other instruments
as may be necessary to effectuate the intent of this proxy. Such proxy will
expire automatically and without further action by the parties upon termination
of this Agreement.
1.3No
Obligation as Director.
Nothing
in this Agreement shall be construed to impose any obligation or limitation
on
votes or actions taken by the Shareholder in his capacity as a director of
the
Company.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
2.1Representations
and Warranties of the Shareholder.
The
Shareholder hereby represents and warrants to Parent as follows:
(a)Authorization;
Validity of Agreement; Necessary Action.
This
Agreement has been duly executed and delivered by the Shareholder and
constitutes a valid and binding obligation of the Shareholder, enforceable
in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and to general equity principles).
(b)Ownership.
As of
the date hereof, the number of shares of the Company Common Stock and the number
of options to purchase shares of the Company Common Stock beneficially owned
by
the Shareholder is noted in the Recitals to this Agreement. The Existing
Securities are, and any additional Shares acquired by the Shareholder after
the
date hereof and prior to the Effective Time will be, owned beneficially by
the
Shareholder. As of the date hereof, the Existing Shares are the only shares
of
Company Common Stock held of record, beneficially owned by or for which voting
power or disposition power is held or shared by the Shareholder. Subject to
Section 3.1, the Shareholder has and will have at all times through the
Effective Time sole voting power, sole power of disposition, sole power to
issue
instructions with respect to the matters set forth in Article I or Section
3.1
hereof, and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Existing Securities other
than the Sold Shares and with respect to all of the Shares at the Effective
Time, with no limitations, qualifications or restrictions on such rights,
subject to applicable federal securities laws and the terms of this Agreement.
The Shareholder has good title to the Existing Securities (other than the Sold
Shares), free and clear of any Liens and the Shareholder will have good title
to
such Existing Securities (other than the Sold Shares) and any additional Shares
acquired by the Shareholder after the date hereof and prior to the Effective
Time, free and clear of any Liens. The Shareholder further represents that
any
proxies heretofore given in respect of the Shares owned beneficially and of
record by such Shareholder, if any, are revocable, and hereby revokes such
proxies.
II-2
(c)No
Violation.
The
execution and delivery of this Agreement by the Shareholder does not, and the
performance by the Shareholder of his obligations under this Agreement will
not,
(i) to his knowledge, conflict with or violate any law, ordinance or regulation
of any Governmental Entity or any Regulatory Law applicable to the Shareholder
or by which any of his assets or properties is bound or (ii) conflict with,
result in any breach of or constitute a default (or an event that with notice
or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or require
payment under, or result in the creation of any Lien on the properties or assets
of the Shareholder pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Shareholder is a party or by which the Shareholder or any of his
assets or properties is bound, except for any of the foregoing as would not
reasonably be expected, either individually or in the aggregate, to materially
impair the ability of the Shareholder to perform his obligations hereunder
or to
consummate the transactions contemplated hereby on a timely basis.
ARTICLE
III
OTHER
COVENANTS
3.1Further
Agreements of the Shareholder.
(a) The
Shareholder hereby agrees, while this Agreement is in effect, and except as
expressly contemplated hereby, not to sell, transfer, pledge, encumber, assign,
distribute, gift or otherwise dispose of (collectively, a “Transfer”)
or
enter into any contract, option or other arrangement or understanding with
respect to any Transfer (whether by actual disposition or effective economic
disposition due to hedging, cash settlement or otherwise) of, any of the
Existing Securities (other than the Sold Shares), any additional Shares acquired
beneficially or of record by the Shareholder after the date hereof, or any
interest therein, provided
that
notwithstanding the foregoing, the Shareholder may pledge up to 250,000 shares
of Company Common Stock as collateral for any indebtedness of the Shareholder
after making reasonable efforts to preserve the Shareholder’s voting control
over such shares through the Effective Time, provided,
further, that the Shareholder may Transfer any Shares to (i) one or more
corporations or other entities that is directly or indirectly wholly owned
by
the Shareholder or (ii) one or more trusts for the benefit of family members
of
the Shareholder or similar vehicles, in each case, so long as the Shareholder
retains direct or indirect sole voting control over such Transferred
Shares.
II-3
(b) In
case
of a stock dividend or distribution, or any change in Company Common Stock
by
reason of any stock dividend or distribution, split-up, recapitalization,
combination, exchange of shares or the like, the term “Shares” shall be deemed
to refer to and include the Shares as well as all such stock dividends and
distributions and any securities into which or for which any or all of the
Shares may be changed or exchanged or which are received in such
transaction.
(c) The
Shareholder agrees, while this Agreement is in effect, to notify Parent promptly
in writing of (i) the number of any additional Shares acquired by the
Shareholder, if any, after the date hereof and (ii) with respect to the subject
matter contemplated by Section 3.1(d), any such inquiries or proposals which
are
received by, any such information which is requested from, or any such
negotiations or discussions which are sought to be initiated or continued with,
the Shareholder.
(d) The
Shareholder agrees, while this Agreement is in effect, not to, nor to permit
any
investment banker, financial adviser, attorney, accountant or other
representative or agent of the Shareholder to, directly or indirectly, engage
in
any activity which would be prohibited pursuant to Section 4.03(a) or (b) of
the
Merger Agreement if engaged in by the Company. Without limiting the foregoing,
it is understood that any violation of the restrictions set forth in the
preceding sentence by an investment banker, financial advisor, attorney,
accountant or other representative or agent of the Shareholder shall be deemed
to be a violation of this Section 3.1(d) by the Shareholder.
(e) The
Shareholder agrees, while this Agreement is in effect, not to (i) take, agree
or
commit to take any action that would make any representation and warranty of
the
Shareholder, as applicable, contained in this Agreement inaccurate in any
respect as of any time during the term of this Agreement or (ii) agree or commit
to take any action necessary to prevent any such representation or warranty
from
being inaccurate in any respect at any such time. The Shareholder further agrees
that he shall fully cooperate with Parent, as and to the extent reasonably
requested by Parent, to effect the transactions contemplated hereby including
the Merger.
ARTICLE
IV
MISCELLANEOUS
4.1Termination.
This
Agreement shall terminate upon the earlier to occur of (a) the receipt of
Stockholder Approval for the Merger and (b) the termination of the Merger
Agreement pursuant to its terms. In the event of such termination, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of any party; provided,
however
that
nothing herein shall relieve any party from liability for any fraud, intentional
misrepresentation or willful and material breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement prior to such
termination.
II-4
4.2Further
Assurances.
From
time to time, at the other party’s request and without further consideration,
each party shall execute and deliver such additional documents and take all
such
further action as may be reasonably necessary or desirable to consummate the
transactions contemplated by this Agreement.
4.3No
Ownership Interest.
Nothing
contained in this Agreement shall be deemed to vest in Parent any direct or
indirect ownership or incidence of ownership of or with respect to any Shares.
All rights, ownership and economic benefits of and relating to the Shares shall
remain vested in and belong to the Shareholder, and Parent shall have no
authority to manage, direct, superintend, restrict, regulate, govern or
administer any of the policies or operations of the Company or exercise any
power or authority to direct the Shareholder in the voting of any of the Shares,
except as otherwise provided herein.
4.4Notices.
Except
for notices that are specifically required by the terms of this Agreement to
be
delivered orally, all notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally, faxed (with confirmation) or sent by overnight courier
(providing proof of delivery) to the parties at the following addresses (or
at
such other address for a party as shall be specified by like
notice):
4.5Interpretation.
When a
reference is made in this Agreement to an Article or a Section, such reference
shall be to an Article or a Section of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include,”“includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.” The words “hereof,”“herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and
not to any particular provision of this Agreement. The word “or” when used in
this Agreement is not exclusive. The definitions contained in this Agreement
are
applicable to the singular as well as the plural forms of such terms and to
the
masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
Whenever “knowledge” is used in this Agreement, it shall be deemed to mean the
actual knowledge, after reasonable inquiry, of the Shareholder.
II-5
4.6Counterparts.
This
Agreement may be executed in one or more counterparts (including by facsimile)
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood
that
both parties need not sign the same counterpart.
4.7Entire
Agreement; No Third-Party Beneficiaries.
This
Agreement (together with the Merger Agreement, to the extent referred to herein)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement is not intended to and shall not confer
upon any person other than the parties any legal or equitable rights or
remedies.
4.8Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
4.9Specific
Enforcement; Consent to Jurisdiction.
The
parties agree that irreparable damage would occur and that the parties would
not
have any adequate remedy at law in the event that any of the provisions of
this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any court
of
the State of New York or any federal court sitting in the Southern District
of
New York, this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (a) irrevocably
and
unconditionally consents to submit itself to the exclusive jurisdiction and
venue of the Supreme Court of the State of New York (or, in the case of any
claim as to which the federal courts have exclusive subject matter jurisdiction,
the Federal Court of the United States of America sitting in the Southern
District of New York) in the event any dispute arises out of this Agreement
or
the transactions contemplated by this Agreement, (b) agrees that all claims
in
respect of such action or proceeding must be commenced, and may be heard and
determined, exclusively in the aforementioned courts (c) waives, to the fullest
extent it may legally and effectively do so, any objection which it may now
or
hereafter have to the laying of venue of any such action or proceeding in the
aforementioned courts; and (d) waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in the aforementioned courts. Each of the parties hereto agrees
that
a final judgment in any such action or proceeding shall be conclusive and may
be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each party to this Agreement irrevocably consents to service
of
process in the manner provided for notices in Section 5.4.
II-6
4.10Amendment.
This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
4.11Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is invalid, illegal
or
incapable of being enforced, the parties hereto shall negotiate in good faith
to
modify this Agreement so as to effect the original intent of the parties as
closely as possible to the fullest extent permitted by applicable Law in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
4.12Assignment.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, in whole or in part, by operation of law or otherwise, by any
of
the parties without the prior written consent of the other parties, and any
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and
be
enforceable by the parties and their respective successors and assigns.
[Remainder
of Page Left Blank Intentionally]
II-7
IN
WITNESS WHEREOF, Parent and Shareholder have caused this Agreement to be
executed
as of
the date first written above by their respective officers thereunto duly
authorized.
AVERY
DENNISON CORPORATION
By:
Name:
Title:
ARTHUR
HERSHAFT
[Signature
Page to Voting and Support Agreement]
Dates Referenced Herein and Documents Incorporated by Reference
