Agreement and Plan of Merger - Triton Acquisition Holding Co. and Maytag Corp.
AGREEMENT AND PLAN OF MERGER
Dated as of May 19, 2005,
Among
TRITON ACQUISITION HOLDING CO.,
TRITON ACQUISITION CO.
and
MAYTAG CORPORATION
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TABLE OF CONTENTS
Page
ARTICLE I
The Merger
SECTION 1.01. The Merger....................................................1
SECTION 1.02. Closing.......................................................1
SECTION 1.03. Effective Time................................................2
SECTION 1.04. Effects.......................................................2
SECTION 1.05. Certificate of Incorporation and By-laws......................2
SECTION 1.06. Directors.....................................................2
SECTION 1.07. Officers......................................................2
ARTICLE II
Effect on the Capital Stock of the Constituent Corporations; Exchange of
Certificates
SECTION 2.01. Effect on Capital Stock.......................................3
SECTION 2.02. Exchange of Certificates......................................4
ARTICLE III
Representations and Warranties of the Company
SECTION 3.01. Organization, Standing and Power..............................6
SECTION 3.02. Company Subsidiaries; Equity Interests........................6
SECTION 3.03. Capital Structure.............................................7
SECTION 3.04. Authority Execution and Delivery Enforceability...............8
SECTION 3.05. No Conflicts; Consents........................................9
SECTION 3.06. SEC Documents; Undisclosed Liabilities.......................10
SECTION 3.07. Information Supplied.........................................12
SECTION 3.08. Absence of Certain Changes or Events.........................12
SECTION 3.09. Taxes........................................................14
SECTION 3.10. Absence of Changes in Benefit Plans..........................16
SECTION 3.11. ERISA Compliance; Excess Parachute Payments..................17
SECTION 3.12. Litigation...................................................21
SECTION 3.13. Compliance with Applicable Laws..............................21
SECTION 3.14. Labor Matters................................................21
SECTION 3.15. Environmental Matters........................................22
SECTION 3.16. Intellectual Property........................................24
SECTION 3.17. Brokers; Schedule of Fees and Expenses.......................24
SECTION 3.18. Opinion of Financial Advisor.................................24
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ARTICLE IV
Representations and Warranties of Parent and Sub
SECTION 4.01. Organization, Standing and Power.............................25
SECTION 4.02. Sub; Equity Interests........................................25
SECTION 4.03. Authority; Execution and Delivery; Enforceability............25
SECTION 4.04. No Conflicts; Consents.......................................26
SECTION 4.05. Information Supplied.........................................26
SECTION 4.06. Brokers......................................................27
SECTION 4.07. Financing....................................................27
SECTION 4.08. Solvency.....................................................28
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business..........................................28
SECTION 5.02. No Solicitation..............................................33
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of Proxy Statement; Stockholders Meeting.........36
SECTION 6.02. Access to Information; Confidentiality.......................36
SECTION 6.03. Reasonable Best Efforts; Notification........................37
SECTION 6.04. Stock Options; ESPP..........................................39
SECTION 6.05. Benefit Plans................................................40
SECTION 6.06. Indemnification..............................................42
SECTION 6.07. Fees and Expenses............................................43
SECTION 6.08. Public Announcements.........................................44
SECTION 6.09. Transfer Taxes...............................................43
SECTION 6.10. Rights Agreements; Consequences if Rights Triggered..........44
SECTION 6.11. Stockholder Litigation.......................................44
SECTION 6.12. Resignation of Directors of the Company......................44
SECTION 6.13. Other Actions by Parent......................................44
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger...44
SECTION 7.02. Conditions to Obligations of Parent and Sub..................45
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SECTION 7.03. Condition to Obligation of the Company.......................46
SECTION 7.04. Frustration of Closing Conditions............................47
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination..................................................47
SECTION 8.02. Effect of Termination........................................48
SECTION 8.03. Amendment....................................................48
SECTION 8.04. Extension; Waiver............................................48
SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver....49
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties................49
SECTION 9.02. Notices......................................................50
SECTION 9.03. Definitions..................................................50
SECTION 9.04. Interpretation; Disclosure Letter............................51
SECTION 9.05. Severability.................................................51
SECTION 9.06. Counterparts.................................................52
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries...............52
SECTION 9.08. Governing Law................................................52
SECTION 9.09. Assignment...................................................53
SECTION 9.10. Enforcement..................................................52
EXHIBIT A - Charter Amendment
EXHIBIT B - By-laws Amendment
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INDEX OF DEFINED TERMS
Defined Term Location
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"affiliate".................................................. 9.03
"Antitrust Laws" 3.05(b)
"Appraisal Shares" .......................................... 2.01(d)
"Bonus Plans"................................................ 6.05(e)
"Cash Equity" ............................................... 4.07(b)
"Certificate of Merger" ..................................... 1.03
"Certificates" .............................................. 2.02(b)
"Closing" ................................................... 1.02
"Closing Date" .............................................. 1.02
"Code" ...................................................... 3.09(g)
"Commitment Letters" ........................................ 4.07(b)
"Commonly Controlled Entity" ................................ 3.10(a)
"Company" ................................................... Preamble
"Company Benefit Agreements" ................................ 3.10(b)
"Company Benefit Plans" ..................................... 3.10(a)
"Company Board" 3.04(b)
"Company By-laws" ........................................... 3.01
"Company Capital Stock" ..................................... 3.03(a)
"Company Charter" ........................................... 3.01
"Company Common Stock" ...................................... Recitals
"Company Disclosure Letter" ................................. Article III
"Company Employee Stock Option" ............................. 6.04(d)
"Company Employees".......................................... 6.05(d)
"Company Material Adverse Effect" ........................... 9.03
"Company Pension Plans" ..................................... 3.11(a)
"Company Preferred Stock" ................................... 3.03(a)
"Company Rights" ............................................ 3.03(a)
"Company Rights Agreement" .................................. 3.03(a)
"Company SAR" ............................................... 6.04(d)
"Company SEC Documents" ..................................... 3.06(a)
"Company Stock Plans" ....................................... 6.04(d)
"Company Stockholder Approval" .............................. 3.04(c)
"Company Stockholders Meeting" .............................. 6.01(b)
"Company Subsidiary" ........................................ 3.01
"Company Takeover Proposal" ................................. 5.02(g)
"Confidentiality Agreement" ................................. 6.02
"Consent" ................................................... 3.05(b)
"Contract" .................................................. 3.05(a)
"Debt Commitment Letter" .................................... 4.07(a)
"Debt Financing" ............................................ 4.07(a)
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"DGCL" ...................................................... 1.01
"Disqualified Individual".................................... 3.11(e)
"Effective Time"............................................. 1.03
"Environmental Claim"........................................ 3.15(i)(1)
"Environmental Laws"......................................... 3.15(i)(2)
"Environmental Permits"...................................... 3.15(b)(i)
"Equity Commitment Letters".................................. 4.07(b)
"Equity Investors"........................................... 4.07(b)
"ERISA"...................................................... 3.11(a)
"ESPP"....................................................... 6.04(d)
"Exchange Act"............................................... 3.05(b)
"Exchange Fund".............................................. 2.02(a)
"Excluded Participants"...................................... 5.01(a)
"Filed Company SEC Document"................................. Article III
"Financing".................................................. 4.07(b)
"GAAP"....................................................... 3.06(b)
"Governmental Entity"........................................ 3.05(b)
"Hazardous Materials"........................................ 3.15(i)(3)
"HSR Act".................................................... 3.05(b)
"Intellectual Property Rights"............................... 3.16
"Judgment"................................................... 3.05(a)
"knowledge" ................................................. 9.03
"Law"........................................................ 3.05(a)
"Lazard"..................................................... 3.17
"Lenders".................................................... 4.07(a)
"Liens"...................................................... 3.02(a)
"Loan Agreement"............................................. 6.03(d)
"Maximum Premium"............................................ 6.06(b)
"Merger"..................................................... Recitals
"Merger Consideration"....................................... 2.01(c)(1)
"New Plans".................................................. 6.05(b)
"Non-U.S. Benefit Agreements"................................ 3.10(b)
"Non-U.S. Benefit Plans"..................................... 3.11(a)
"Old Plans".................................................. 6.05(b)
"Outside Date"............................................... 8.01(b)(i)
"Parent"..................................................... Preamble
"Parent Material Adverse Effect"............................. 9.03
"Participant"................................................ 3.08(iv)(A)
"Paying Agent"............................................... 2.02(a)
"Permits".................................................... 3.13
"person"..................................................... 9.03
"Primary Company Executive".................................. 3.11(e)
"Proxy Statement"............................................ 3.05(b)
"Release".................................................... 3.15(i)(4)
"Representatives"............................................ 5.02(a)
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"Retention Bonus"............................................ 6.05(d)
"Retention Pool"............................................. 6.05(d)
"Sarbanes-Oxley Act"......................................... 3.06(d)
"SEC"........................................................ 3.05(b)
"Section 262"................................................ 2.01(d)
"Securities Act" 3.06(b)
"Severamnce Plan"............................................ 6.05(f)
"Significant Company Subsidiary"............................. 3.02(a)
"Solicitation Period End Date"............................... 5.02(a)
"Sub"........................................................ Preamble
"subsidiary"................................................. 9.03
"Superior Company Proposal".................................. 5.02(g)
"Surviving Corporation"...................................... 1.01
"Tax Return"................................................. 3.09(a)
"Taxes"...................................................... 3.09(a)
"Taxing Authority"........................................... 3.09(a)
"Transactions"............................................... 1.01
"Transfer Taxes"............................................. 6.09
"Trust Agreement"............................................ 3.11(i)
"US Pension Plan"............................................ 3.11(c)
"Voting Company Debt"........................................ 3.03(a)
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AGREEMENT AND PLAN OF MERGER dated as of May 19, 2005,
among TRITON ACQUISITION HOLDING CO., a Delaware corporation
("PARENT"), TRITON ACQUISITION CO., a Delaware corporation and a
wholly owned subsidiary of Parent ("SUB"), and MAYTAG
CORPORATION, a Delaware corporation (the "COMPANY").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS the respective Boards of Directors of Sub and the Company
have approved and declared advisable this Agreement and the merger (the
"MERGER") of Sub into the Company, on the terms and subject to the conditions
set forth in this Agreement, whereby each issued share of common stock, par
value $1.25 per share, of the Company ("COMPANY COMMON STOCK") not owned by
Parent, Sub or the Company shall be converted into the right to receive $14.00
in cash, and Parent, as the sole stockholder of Sub, shall adopt this Agreement
as soon as reasonably practicable following its execution; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER. On the terms and subject to the conditions
set forth in this Agreement, and in accordance with the General Corporation Law
of the State of Delaware (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time. At the Effective Time, the separate corporate
existence of Sub shall cease and the Company shall continue as the surviving
corporation (the "SURVIVING CORPORATION"). The Merger, the payment of cash in
connection with the Merger and the other transactions contemplated by this
Agreement (including the Financing) are referred to herein as the
"TRANSACTIONS".
SECTION 1.02. CLOSING. The closing (the "CLOSING") of the Merger shall
take place at the offices of Cravath, Swaine & Moore LLP, 825 Eighth Avenue, New
York, New York 10019 at 10:00 a.m. on the second business day following the
satisfaction (or, to the extent permitted by Law, waiver by all parties) of the
conditions set forth in Section 7.01, or, if on such day any condition set forth
in Section 7.02 or 7.03 has not been satisfied (or, to the extent permitted by
Law, waived by the party or parties entitled to the benefits thereof), as soon
as practicable after all the conditions set forth in Article VII have been
satisfied (or, to the extent permitted by Law, waived by the parties
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entitled to the benefits thereof), or at such other place, time and date as
shall be agreed in writing between Parent and the Company. The date on which the
Closing occurs is referred to in this Agreement as the "CLOSING DATE".
SECTION 1.03. EFFECTIVE TIME. Prior to the Closing, Parent shall
prepare, and on the Closing Date or as soon as practicable thereafter the
Surviving Corporation shall file with the Secretary of State of the State of
Delaware, a certificate of merger (the "CERTIFICATE OF MERGER") executed in
accordance with the relevant provisions of the DGCL and shall make all other
filings or recordings required under the DGCL. The Merger shall become effective
at such time as the Certificate of Merger is duly filed with such Secretary of
State, or at such subsequent time as Parent and the Company shall agree and
specify in the Certificate of Merger (the time the Merger becomes effective
being the "EFFECTIVE TIME").
SECTION 1.04. EFFECTS. The Merger shall have the effects set forth in
Section 259 of the DGCL.
SECTION 1.05. CERTIFICATE OF INCORPORATION AND BY-LAWS. (a) The
certificate of incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be amended at the Effective Time to read in the form
of Exhibit A hereto and, as so amended, such certificate of incorporation shall
be the certificate of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable Law.
(b) The By-laws of the Company as in effect immediately prior to the
Effective Time shall be amended at the Effective Time to read in the form of
Exhibit B hereto and, as so amended, such By-laws shall be the By-laws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable Law.
SECTION 1.06. DIRECTORS. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
SECTION 1.07. OFFICERS. The officers of the Company immediately prior to
the Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected or appointed and qualified, as the case may be.
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ARTICLE II
EFFECT ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01. EFFECT ON CAPITAL STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or any shares of capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one fully paid and nonassessable
share of common stock, par value $1.00 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. Each share
of Company Common Stock that is owned by the Company, Parent or Sub shall no
longer be outstanding and shall automatically be canceled and shall cease to
exist, and no consideration shall be delivered or deliverable in exchange
therefor.
(c) CONVERSION OF COMPANY COMMON STOCK. (1) Subject to Sections
2.01(b) and 2.01(d), each issued and outstanding share of Company Common Stock
shall be converted into the right to receive $14.00 in cash (the "MERGER
CONSIDERATION").
(2) As of the Effective Time, all such shares of Company Common Stock
shall no longer be outstanding and shall automatically be canceled and shall
cease to exist, and each holder of a certificate theretofore representing any
such shares of Company Common Stock shall cease to have any rights with respect
thereto, except the right to receive Merger Consideration upon surrender of such
certificate in accordance with Section 2.02, without interest, and except as
otherwise provided with respect to unpaid dividends and other distributions in
Section 2.02(c).
(d) APPRAISAL RIGHTS. Notwithstanding anything in this Agreement to
the contrary, shares ("APPRAISAL SHARES") of Company Common Stock that are
issued and outstanding immediately prior to the Effective Time and that are held
by any person who is entitled to demand and properly demands appraisal of such
Appraisal Shares pursuant to, and who complies with, Section 262 of the DGCL
("SECTION 262") shall not be converted into Merger Consideration as provided in
Section 2.01(c), but rather the holders of Appraisal Shares shall be entitled to
the rights provided for under Section 262; PROVIDED, HOWEVER, that if any such
holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to appraisal under Section 262, then such holder's Appraisal Shares shall
be deemed to have been converted as of the Effective Time into, and to have
become exchangeable solely for the right to receive, Merger Consideration as
provided in Section 2.01(c) and unpaid dividends and other distributions as
provided in Section 2.02(c). The Company shall serve prompt notice to Parent of
any demands received by the Company for appraisal of any shares of Company
Common Stock, and Parent shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands. Prior to the
Effective Time, the Company shall not, without the prior
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written consent of Parent, make any payment with respect to, or settle or offer
to settle, any such demands, or agree to do any of the foregoing.
SECTION 2.02. EXCHANGE OF CERTIFICATES. (a) PAYING AGENT. Prior to the
Effective Time, Parent shall select a bank or trust company reasonably
satisfactory to the Company to act as paying agent (the "PAYING AGENT") for the
payment of the Merger Consideration upon surrender of certificates representing
Company Common Stock. Parent shall take all steps necessary to enable, and shall
cause, the Surviving Corporation to provide to the Paying Agent, concurrently
with the Closing, cash necessary to pay for the shares of Company Common Stock
converted into the right to receive cash pursuant to Section 2.01(c) (such cash
being hereinafter referred to as the "EXCHANGE FUND").
(b) EXCHANGE PROCEDURE. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates (the "CERTIFICATES") that immediately prior to the
Effective Time represented outstanding shares of Company Common Stock whose
shares were converted into the right to receive Merger Consideration pursuant to
Section 2.01, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for Merger Consideration. Upon surrender of a Certificate for cancellation to
the Paying Agent or to such other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate shall be paid promptly in exchange therefor the amount of cash into
which the shares of Company Common Stock theretofore represented by such
Certificate shall have been converted pursuant to Section 2.01, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock that is not registered in the
transfer records of the Company, payment 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
taxes required by reason of the payment 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. Subject to Section 2.01(d) and
except as otherwise provided with respect to unpaid dividends and other
distributions in Section 2.02(c), until surrendered as contemplated by this
Section 2.02, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the amount of
cash, without interest, into which the shares of Company Common Stock
theretofore represented by such Certificate have been converted pursuant to
Section 2.01. No interest shall be paid or accrue on the cash payable upon
surrender of any Certificate.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. The Merger
Consideration paid in accordance with the terms of this Article II upon
conversion of any shares of Company Common Stock shall be deemed to have been
paid
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in full satisfaction of all rights pertaining to such shares of Company Common
Stock, SUBJECT, HOWEVER, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time that may have been declared or made by the Company on such shares
of Company Common Stock in accordance with the terms of this Agreement or prior
to the date of this Agreement and which remain unpaid at the Effective Time, and
after the Effective Time there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of shares of Company
Common Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, any certificates formerly representing shares of
Company Common Stock are presented to the Surviving Corporation or the Paying
Agent for any reason, they shall be canceled and exchanged as provided in this
Article II.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
that remains undistributed to the holders of Company Common Stock for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holder of Company Common Stock who has not theretofore complied with this
Article II shall thereafter look only to Parent and/or the Surviving Corporation
for payment of its claim for Merger Consideration.
(e) NO LIABILITY. None of Parent, Sub, the Company or the Paying Agent
shall be liable to any person in respect of any cash from the Exchange Fund
delivered to a public official to the extent required by any applicable
abandoned property, escheat or similar Law. If any Certificate has not been
surrendered immediately prior to such date on which the Merger Consideration in
respect of such Certificate would otherwise irrevocably escheat to or become the
property of any Governmental Entity, any such shares, cash, dividends or
distributions in respect of such Certificate shall, to the extent permitted by
applicable Law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
(f) INVESTMENT OF EXCHANGE FUND. The Paying Agent shall invest any
cash included in the Exchange Fund, as directed by Parent, in (i) direct
obligations of the United States of America, (ii) obligations for which the full
faith and credit of the United States of America is pledged to provide for the
payment of all principal and interest or (iii) commercial paper obligations
receiving the highest rating from either Moody's Investor Services, Inc. or
Standard & Poor's, a division of The McGraw Hill Companies, or a combination
thereof; PROVIDED that, in any such case, no such instrument shall have a
maturity exceeding three months from the date of the investment therein. Any
interest and other income resulting from such investments shall be paid to
Parent.
(g) WITHHOLDING RIGHTS. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable to any holder of Company
Common Stock pursuant to this Agreement such amounts as are required to be
deducted and withheld with respect to the making of such payment under the Code,
or under any other provision of applicable Federal, state, local or foreign tax
Law. To the extent that amounts are so withheld and paid over to the appropriate
taxing authority by Parent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the
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holders of the shares of Company Common Stock in respect of which such
deduction and withholding was made by Parent.
(h) LOST CERTIFICATES. If any Certificate shall have been lost,
stolen, defaced or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen, defaced or destroyed
and, if reasonably required by the Surviving Corporation, the posting by such
person of a bond in such reasonable amount as the Surviving Corporation may
direct as indemnity against any claim that may be made against it with respect
to such Certificate, the Paying Agent shall pay in respect of such lost, stolen,
defaced or destroyed Certificate the Merger Consideration with respect to each
share of Company Common Stock formerly represented by such Certificate.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that, except as
set forth in the disclosure letter, dated as of the date of this Agreement, from
the Company to Parent and Sub (the "COMPANY DISCLOSURE LETTER") or in any
Company SEC Document filed and publicly available prior to the date of this
Agreement (each, a "FILED COMPANY SEC DOCUMENT"):
SECTION 3.01. ORGANIZATION, STANDING AND POWER. Each of the Company
and each of its subsidiaries (each, a "COMPANY SUBSIDIARY") (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized, other than defects in such organization,
existence or good standing that, individually and in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect, and (b) has
full corporate power and authority and possesses all governmental franchises,
licenses, permits, authorizations and approvals necessary to enable it to own,
lease or otherwise hold its properties and assets and to conduct its businesses
as presently conducted, other than such corporate power and authority,
franchises, licenses, permits, authorizations and approvals the lack of which,
individually and in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. The Company and each Company Subsidiary is duly
qualified to do business in each jurisdiction where the nature of its business
or the ownership or leasing of its properties make such qualification necessary
or the failure to so qualify would reasonably be expected to have a Company
Material Adverse Effect. The Company has delivered to Parent true and complete
copies of the certificate of incorporation of the Company, as amended to the
date of this Agreement (as so amended, the "COMPANY CHARTER"), and the by-laws
of the Company, as amended to the date of this Agreement (as so amended, the
"COMPANY BY-LAWS").
SECTION 3.02. COMPANY SUBSIDIARIES; EQUITY INTERESTS.
(a) Section 3.02(a) of the Company Disclosure Letter lists each "significant
subsidiary", as such term is defined in Rule 1-02 of Regulation S-X under the
Exchange Act (each, a "SIGNIFICANT COMPANY SUBSIDIARY"), and its jurisdiction of
organization. All the outstanding shares of capital stock of each Company
Subsidiary have been validly issued
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7
and are fully paid and nonassessable and are owned by the Company, by another
Company Subsidiary or by the Company and another Company Subsidiary, free and
clear of all pledges, liens, charges, mortgages, encumbrances and security
interests of any kind or nature whatsoever (collectively, "LIENS").
(b) Except for its interests in the Company Subsidiaries, the Company
does not own, directly or indirectly, any capital stock, equity membership
interest, partnership interest, joint venture interest or other equity interest
in any person.
SECTION 3.03. CAPITAL STRUCTURE. (a) The authorized capital stock of
the Company consists of 200,000,000 shares of Company Common Stock and
24,000,000 shares of preferred stock, par value $1.00 per share ("COMPANY
PREFERRED STOCK" and, together with the Company Common Stock, the "COMPANY
CAPITAL STOCK"). At the close of business on April 30, 2005, (i) 79,694,548
shares of Company Common Stock (each together with a Company Right) and no
shares of Company Preferred Stock were issued and outstanding, (ii) 37,456,045
shares of Company Common Stock were held by the Company in its treasury, (iii)
7,758,643 shares of Company Common Stock were subject to outstanding Company
Employee Stock Options and 818,396 additional shares of Company Common Stock
were reserved for issuance pursuant to the Company Stock Plans and (iv)
4,000,000 shares of Company Preferred Stock were reserved for issuance in
connection with the rights (the "COMPANY RIGHTS") issued pursuant to the Rights
Agreement dated as of February 12, 1998 (as amended from time to time, the
"COMPANY RIGHTS AGREEMENT"), between the Company and Computershare Investor
Services, LLC, as Rights Agent. At the close of business on April 30, 2005,
there were outstanding rights to purchase 13,389 shares of Company Common Stock
under the ESPP (assuming the fair market value per share of Company Common Stock
on the last day of the then current offering period in effect under the ESPP
will be equal to the Merger Consideration). As of April 30, 2005, the aggregate
amount credited to the accounts of participants in the ESPP was $187,440. Except
as set forth above, at the close of business on April 30, 2005, no shares of
capital stock or other voting securities of the Company were issued, reserved
for issuance or outstanding. During the period from April 30, 2005 to the date
of this Agreement, (x) there have been no issuances by the Company of shares of
capital stock or other voting securities of the Company other than issuances of
shares of Company Common Stock pursuant to the exercise of Company Employee
Stock Options outstanding on such date as required by their terms as in effect
on the date of such issuance and (y) there have been no issuances by the Company
of options, warrants or other rights to acquire shares of capital stock or other
voting securities of the Company. There are no outstanding Company SARs that
were not granted in tandem with a related Company Employee Stock Option. All
outstanding shares of Company Capital Stock are, and all such shares that may be
issued prior to the Effective Time will be when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to or issued in violation
of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DGCL, the
Company Charter, the Company By-laws or any Contract to which the Company is a
party or otherwise bound. There are not any bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into,
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8
or exchangeable for, securities having the right to vote) on any matters on
which holders of Company Capital Stock may vote ("VOTING COMPANY DEBT"). Except
as set forth above, as of the date of this Agreement, there are not any options,
warrants, rights, convertible or exchangeable securities, "phantom" stock
rights, stock appreciation rights, stock-based performance units, commitments,
Contracts, arrangements or undertakings of any kind to which the Company or any
Company Subsidiary is a party or by which any of them is bound (i) obligating
the Company or any Company Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, the Company or any
Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or
any Company Subsidiary to issue, grant, extend or enter into any such option,
warrant, call, right, security, unit, commitment, Contract, arrangement or
undertaking or (iii) that give any person the right to receive any economic
benefit or right similar to or derived from the economic benefits and rights
occurring to holders of Company Capital Stock. As of the date of this Agreement,
there are not any outstanding contractual obligations of the Company or any
Company Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any Company Subsidiary. The Company has made
available to Parent a complete and correct copy of the Company Rights Agreement,
as amended to the date of this Agreement.
(b) The Company has delivered or made available to Parent a true,
complete and correct list of all outstanding Company Employee Stock Options, the
number of shares of Company Common Stock subject to each such Company Employee
Stock Option, the grant dates, exercise prices, expiration dates and vesting
schedule of each such Company Employee Stock Option and the names of the holders
of each Company Employee Stock Option. All outstanding Company Employee Stock
Options are evidenced by the forms of Company Employee Stock Option agreements
delivered or made available to Parent, and no Company Employee Stock Option
agreement contains terms that are materially inconsistent with, or in addition
in any material respect to, the terms contained therein.
SECTION 3.04. AUTHORITY EXECUTION AND DELIVERY ENFORCEABILITY.
(a) The Company has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the Merger and the other Transactions
to be performed or consummated by the Company. The execution and delivery by the
Company of this Agreement and the consummation by the Company of the Merger and
the other Transactions to be performed or consummated by the Company 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 Company Stockholder
Approval. The Company has duly executed and delivered this Agreement, and this
Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights, and to general equity
principles.
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9
(b) The Board of Directors of the Company (the "COMPANY BOARD"), at a
meeting duly called and held, duly adopted resolutions (i) approving this
Agreement, the Merger and the other Transactions to be performed or consummated
by the Company, (ii) determining that the terms of the Merger and the other
Transactions to be performed or consummated by the Company are fair to and in
the best interests of the Company and its stockholders, (iii) directing that
this Agreement be submitted to a vote at the Company Stockholders Meeting, (iv)
recommending that the Company's stockholders adopt this Agreement and (v)
declaring the advisability of this Agreement. Assuming that the representation
set forth in the second sentence of Section 4.02(c) is true and correct, such
resolutions of the Company Board are sufficient to render inapplicable to Parent
and Sub and this Agreement, the Merger and the other Transactions (i) the
restrictions on "business combinations" contained in Section 203 of the DGCL and
(ii) the provisions of Article Eleventh of the Company Charter. To the Company's
knowledge, no other state takeover statute or similar statute or regulation
applies or purports to apply to the Company with respect to this Agreement, the
Merger or any other Transaction.
(c) Assuming that the representation set forth in the second sentence
of Section 4.02(c) is true and correct, the only vote of holders of any class or
series of Company Capital Stock necessary to approve and adopt this Agreement
and the Merger is the adoption of this Agreement by the holders of a majority of
the outstanding shares of Company Common Stock entitled to vote thereon (the
"COMPANY STOCKHOLDER APPROVAL"). The affirmative vote of the holders of Company
Capital Stock, or any of them, is not necessary to consummate any Transaction
other than the Merger.
SECTION 3.05. NO CONFLICTS; CONSENTS. (a) The execution and delivery
by the Company of this Agreement do not, and the consummation of the Merger and
the other Transactions and compliance with the terms hereof will not, conflict
with, or result in any violation of or default (with or without the lapse of
time or the giving of notice, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any person under, or result in the creation of any
Lien upon any of the properties or assets of the Company or any Company
Subsidiary under, any provision of (i) the Company Charter, the Company By-laws
or the comparable charter or organizational documents of any Company Subsidiary,
(ii) any contract, lease, license, indenture, note, bond, agreement, permit,
concession, franchise or other instrument (a "CONTRACT") to which the Company or
any Company Subsidiary is a party or by which any of their respective properties
or assets is bound or (iii) subject to the filings and other matters referred to
in Section 3.05(b), any judgment, order or decree ("JUDGMENT") or statute, law
(including common law), ordinance, rule or regulation ("LAW") applicable to the
Company or any Company Subsidiary or their respective properties or assets,
other than, in the case of clauses (ii) and (iii) above, any such items that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
(b) No consent, approval, license, permit, order or authorization
("CONSENT") of, or registration, declaration or filing with, or permit from, any
Federal,
<PAGE>
10
state, local or foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "GOVERNMENTAL ENTITY"), is required to
be obtained or made by or with respect to the Company or any Company Subsidiary
in connection with the execution, delivery and performance of this Agreement or
the consummation of the Transactions, other than (i) compliance with and filings
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"), (ii) any additional Consents and filings under any foreign
antitrust, competition, premerger notification or trade regulation law,
regulation or order ("ANTITRUST LAWS") (including, if applicable, the
Competition Act (Canada)) or under the Investment Canada Act (Canada), (iii) the
filing with the Securities and Exchange Commission (the "SEC") of (A) a proxy or
information statement relating to the adoption of this Agreement by the
Company's stockholders (the "PROXY STATEMENT") and (B) such reports under, or
other applicable requirements of, the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), as may be required in connection with this
Agreement, the Merger and the other Transactions, (iv) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of the other jurisdictions
in which the Company is qualified to do business, (v) compliance with and such
filings as may be required under applicable Environmental Laws, (vi) such
filings as may be required in connection with the Taxes described in Section
6.09, (vii) filings under any applicable state takeover Law and (viii) such
other items that, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
(c) The Company and the Company Board have taken all action necessary
to (i) render the Company Rights Agreement inapplicable to this Agreement, the
Merger and the other Transactions and (ii) ensure that (A) neither Parent nor
any of its affiliates or associates is or will become an "Acquiring Person" (as
defined in the Company Rights Agreement) by reason of this Agreement, the Merger
or any other Transaction, (B) a "Distribution Date" or a "Share Acquisition
Date" (as each such term is defined in the Company Rights Agreement) shall not
occur by reason of this Agreement, the Merger or any other Transaction and (C)
the Company Rights shall expire immediately prior to the Effective Time.
SECTION 3.06. SEC DOCUMENTS; UNDISCLOSED LIABILITIES. (a) The Company
has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company with the SEC since January 1, 2003 pursuant to
Sections 13(a) and 15(d) of the Exchange Act (the "COMPANY SEC DOCUMENTS").
(b) As of its respective date, each Company SEC Document complied as
to form in all material respects with the requirements of the Exchange Act or
the Securities Act of 1933, as amended (the "SECURITIES ACT"), as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such Company SEC Document, and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Except to the extent that
information contained in any Filed Company SEC
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11
Document has been revised or superseded by a later filed Filed Company SEC
Document, none of the Company SEC Documents contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in the Company SEC Documents
(including the related notes and schedules thereto) comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles ("GAAP") (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present, in all material respects, the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods shown (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
(c) Other than liabilities or obligations (i) disclosed or provided
for in the financial statements included in the Filed Company SEC Documents or
(ii) incurred since March 31, 2005 in the ordinary course of business, neither
the Company nor any Company Subsidiary has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) required by GAAP to
be set forth on a consolidated balance sheet of the Company and its consolidated
subsidiaries or in the notes thereto and that, individually or in the aggregate,
would reasonably be expected to have a Company Material Adverse Effect.
(d) Each of the principal executive officer and the principal
financial officer of the Company (or each former principal executive officer and
former principal financial officer of the Company, as applicable) has made all
certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act of
2002 and the related rules and regulations promulgated thereunder and under the
Exchange Act (collectively, the "SARBANES-OXLEY ACT") with respect to the
Company SEC Documents, and the Company has delivered to Parent a summary of any
disclosure made by the Company's management to the Company's auditors and audit
committee referred to in such certifications. For purposes of the preceding
sentence, "principal executive officer" and "principal financial officer" shall
have the meanings ascribed to such terms in the Sarbanes-Oxley Act.
(e) The Company has (i) designed disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) to ensure that material
information relating to the Company, including its consolidated subsidiaries, is
made known to its principal executive officer and principal financial officer;
(ii) designed internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) of the Exchange Act) to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP; (iii)
evaluated the effectiveness of the Company's disclosure controls and procedures
and, to the extent required by applicable Law, presented in any applicable
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12
Company SEC Document that is a report on Form 10-K or Form 10-Q or any amendment
thereto its conclusions about the effectiveness of the disclosure controls and
procedures as of the end of the period covered by such report or amendment based
on such evaluation; and (iv) to the extent required by applicable Law, disclosed
in such report or amendment any change in the Company's internal control over
financial reporting that occurred during the period covered by such report or
amendment that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
(f) The Company has disclosed, based on the most recent evaluation of
internal control over financial reporting, to the Company's auditors and the
audit committee of the Company Board (i) all significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
Company's ability to record, process, summarize and report financial
information, and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal control over financial reporting.
(g) None of the Company Subsidiaries is, or has at any time since
January 1, 2003 been, subject to the reporting requirements of Sections 13(a)
and 15(d) of the Exchange Act.
(h) As of the date of this Agreement, to the knowledge of the Company,
there is no applicable accounting rule, consensus or pronouncement that has been
adopted by the SEC, the Financial Accounting Standards Board, the Emerging
Issues Task Force or any similar body but that is not in effect as of the date
of this Agreement that, if implemented, would reasonably be expected to have a
Company Material Adverse Effect.
(i) Since July 30, 2002, the Company has been in compliance in all
material respects with the applicable requirements of the Sarbanes-Oxley Act in
effect from time to time.
SECTION 3.07. INFORMATION SUPPLIED. None of the information supplied
or to be supplied by the Company for inclusion or incorporation by reference in
the Proxy Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Company 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. The Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, except that no
representation is made by the Company with respect to statements made or
incorporated by reference therein based on information supplied by Parent or Sub
in writing for inclusion or incorporation by reference therein.
SECTION 3.08. ABSENCE OF CERTAIN CHANGES OR EVENTS. From the date of
the most recent audited financial statements included in the Filed Company SEC
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13
Documents to the date of this Agreement, the Company has conducted its business
only in the ordinary course, and during such period there has not been:
(i) any event, change, effect, development, condition or occurrence
that, individually or in the aggregate, would reasonably be expected to
have a Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any
Company Common Stock or any repurchase for value by the Company of any
Company Common Stock, other than quarterly cash dividends with respect to
the Company Common Stock of (A) $0.18 per share with respect to the first
quarter of 2005 and (B) $0.09 per share with respect to the second quarter
of 2005, in each case with usual declaration, record and payment dates;
(iii) any split, combination or reclassification of any Company Common
Stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of
Company Common Stock;
(iv) (A) any granting by the Company or any Company Subsidiary to any
current or former director, officer, employee or independent contractor of
the Company or any Company Subsidiary (each, a "PARTICIPANT") of any loan
or any increase in any type of compensation, benefits, perquisites or any
bonus or award, except for grants of normal cash bonus opportunities and
normal increases of cash compensation (including compensation in connection
with new hires), in each case in the ordinary course of business consistent
with past practice or as was required under employment agreements in effect
as of the date of the most recent audited financial statements included in
the Filed Company SEC Documents, (B) any payment of any bonus to any
Participant, except for bonuses paid in the ordinary course of business
consistent with past practice, (C) any granting by the Company or any
Company Subsidiary to any Participant of any severance, change in control,
termination or similar compensation, pay or benefits or increases therein,
or of the right to receive any severance, change in control, termination or
similar compensation, pay or benefits or increases therein, except (x) as
was required under any employment, severance or termination agreements in
effect as of the date of the most recent audited financial statements
included in the Filed Company SEC Documents, (y) in the ordinary course of
business consistent with past practice in connection with new hires to
replace departed employees and (z) in the ordinary course of business
consistent with past practice in connection with promotions made in the
ordinary course of business consistent with past practice, or (D) any entry
by the Company or any Company Subsidiary into, or any amendment of, any
Company Benefit Agreement;
(v) any damage, destruction or loss, whether or not covered by
insurance, that, individually or in the aggregate, would reasonably be
expected to have a Company Material Adverse Effect;
<PAGE>
14
(vi) any change in accounting methods, principles or practices by the
Company or any Company Subsidiary, except insofar as may have been required
by a change in GAAP or applicable Law;
(vii) any material elections with respect to Taxes by the Company or
any Company Subsidiary or settlement or compromise by the Company or any
Company Subsidiary of any material Tax liability or refund; or
(viii)any revaluation by the Company or any Company Subsidiary of any
of the material assets of the Company or any Company Subsidiary, except
insofar as may have been required by applicable Law.
SECTION 3.09. TAXES. (a) As used in this Agreement:
"TAXES" shall mean all (i) Federal, state and local, domestic and
foreign, taxes, assessments, duties or similar charges of any kind whatsoever,
including all corporate franchise, income, sales, use, ad valorem, receipts,
value added, profits, license, withholding, employment, excise, property, net
worth, capital gains, transfer, stamp, documentary, social security, payroll,
environmental, alternative minimum, occupation, recapture and other taxes, and
including any interest, penalties and additions imposed with respect to such
amounts; (ii) liability for the payment of any amounts of the type described in
clause (i) as a result of being a member of an affiliated, consolidated,
combined, unitary or aggregate group; and (iii) liability for the payment of any
amounts as a result of an obligation to indemnify any other person with respect
to the payment of any amounts of the type described in clause (i) or (ii).
"TAXING AUTHORITY" shall mean any Federal, state or local, domestic or
foreign, governmental body (including any subdivision, agency or commission
thereof), or any quasi-governmental body, in each case, exercising regulatory
authority in respect of Taxes.
"TAX RETURN" shall mean all returns, declarations of estimated tax
payments, reports, estimates, information returns and statements, including any
related or supporting information with respect to any of the foregoing, filed or
to be filed with any Taxing Authority in connection with the determination,
assessment, collection or administration of any Taxes.
(b) The Company and each Company Subsidiary has timely filed, or has
caused to be timely filed on its behalf, all material Tax Returns required to be
filed by or on behalf of the Company and each Company Subsidiary in the manner
prescribed by applicable Law. All such Tax Returns are complete and correct,
except as, individually or in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect. The Company and each Company Subsidiary
has timely paid (or the Company has paid on each such Company Subsidiary's
behalf) all Taxes due and owing, and, in accordance with GAAP, the most recent
financial statements contained in the Filed Company SEC Documents reflect a
reserve (excluding any reserve for deferred Taxes) for all Taxes payable by the
Company and each Company Subsidiary for all
<PAGE>
15
taxable periods and portions thereof through the date of such financial
statement, in each case except as, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect.
(c) No Tax Return of the Company or any Company Subsidiary is under
audit or examination by any Taxing Authority, and no written notice or, to the
knowledge of the Company, unwritten notice of such an audit or examination has
been received by the Company or any Company Subsidiary. Each material assessed
deficiency resulting from any audit or examination relating to Taxes by any
Taxing Authority has been timely paid and there is no assessed deficiency,
refund litigation, proposed adjustment or matter in controversy with respect to
any Taxes due and owing by the Company or any Company Subsidiary. The Federal
income Tax Returns of the Company and each Company Subsidiary have been examined
by the Internal Revenue Service or the relevant statute of limitations has
closed for all years through 1997.
(d) There is no agreement or other document extending, or having the
effect of extending, the period of assessment or collection of any material
Taxes and no power of attorney with respect to any such Taxes has been executed
or filed with any Taxing Authority by or on behalf of the Company or any Company
Subsidiary.
(e) No material Liens for Taxes exist with respect to any assets or
properties of the Company or any Company Subsidiary, except for statutory liens
for Taxes not yet due.
(f) Neither the Company nor any Company Subsidiary is a party to or
bound by any material Tax sharing agreement, material Tax indemnity obligation
or similar material agreement or arrangement with respect to Taxes (including
any advance pricing agreement, closing agreement or other agreement relating to
Taxes with any Taxing Authority), other than any such agreements (i) with
customers, vendors, lessors or similar persons entered into in the ordinary
course of business and (ii) among the Company and the Company Subsidiaries.
(g) Except as, individually or in the aggregate, would not reasonably
be expected to have a Company Material Adverse Effect, the Company and each
Company Subsidiary has complied with all applicable Laws relating to the payment
and withholding of Taxes (including withholding of Taxes pursuant to Sections
1441, 1442, 3121 and 3402 of the Internal Revenue Code of 1986, as amended (the
"CODE") or similar provisions under any Federal, state or local, domestic or
foreign, Laws) and has, within the time and the manner prescribed by applicable
Law, withheld from and paid over to the proper Governmental Entities all amounts
required to be so withheld and paid over under applicable Law.
(h) Neither the Company nor any Company Subsidiary is or has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code.
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16
(i) Neither the Company nor any Company Subsidiary shall be required
to include in a taxable period ending after the Closing Date taxable income
attributable to income that accrued in a prior taxable period but was not
recognized in any prior taxable period as a result of the installment method of
accounting, the long-term contract method of accounting, the cash method of
accounting or Section 481 of the Code or comparable provisions of state, local
or foreign Tax law.
(j) Neither the Company nor any Company Subsidiary has participated in
any "listed transaction" as defined in Treasury Regulation Section 1.6011-4.
SECTION 3.10. ABSENCE OF CHANGES IN BENEFIT PLANS. (a) From the date
of the most recent audited financial statements included in the Filed Company
SEC Documents to the date of this Agreement, neither the Company nor any Company
Subsidiary has terminated, adopted, amended, modified or agreed to terminate,
adopt, amend or modify (or announced an intention to terminate, adopt, amend or
modify), in any material respect, any collective bargaining agreement or any
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock appreciation, restricted stock, stock
repurchase rights, stock option, phantom stock, performance, retirement, thrift,
savings, stock bonus, cafeteria, paid time off, perquisite, fringe benefit,
vacation, severance, disability, death benefit, hospitalization, medical or
other welfare benefit or other plan, program, arrangement or understanding,
whether oral or written, formal or informal, funded or unfunded (whether or not
legally binding), maintained, contributed to or required to be maintained or
contributed to by the Company or any Company Subsidiary or any other person or
entity that, together with the Company or any Company Subsidiary, is treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code or any other
applicable Law (each, a "COMMONLY CONTROLLED ENTITY"), in each case providing
benefits to any Participant and whether or not subject to United States law (all
such plans, programs, arrangements and understandings, including any such plan,
program, arrangement or understanding entered into or adopted on or after the
date of this Agreement, "COMPANY BENEFIT PLANS") or has made any change, in any
material respect, in any actuarial or other assumption used to calculate funding
obligations with respect to any Company Benefit Plan that is a Company Pension
Plan, or any change, in any material respect, in the manner in which
contributions to any such Company Pension Plan are made or the basis on which
such contributions are determined.
(b) Section 3.10 of the Company Disclosure Letter contains a complete
and correct list of (i) any material employment, deferred compensation,
severance, change in control, termination, employee benefit, loan (other than
Participant loans under any Company Pension Plan that includes a qualified cash
or deferred arrangement within the meaning of Section 401(k) of the Code),
indemnification, retention, stock repurchase, stock option, consulting or
similar agreement, commitment or obligation between the Company or any Company
Subsidiary, on the one hand, and any Participant, on the other hand, and (ii)
any agreement between the Company or any Company Subsidiary, on one hand, and
any Participant, on the other hand, the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of transactions
involving the Company or any Company Subsidiary of the nature contemplated by
this Agreement
<PAGE>
17
(all such agreements, collectively, the "COMPANY BENEFIT AGREEMENTS"); PROVIDED,
HOWEVER, that Company Benefit Agreements maintained primarily for the benefit of
Participants (other than officers or directors of the Company or any Company
Subsidiary) who are principally employed in jurisdictions other than the United
States of America (all such agreements, collectively, the "NON-U.S. BENEFIT
AGREEMENTS") are not listed in Section 3.11(a) of the Company Disclosure Letter
(but a list of such Non-U.S. Benefit Agreements shall be provided to Parent
within 20 days following the date of this Agreement).
SECTION 3.11. ERISA COMPLIANCE; EXCESS PARACHUTE PAYMENTS.
(a) Section 3.11(a) of the Company Disclosure Letter contains a complete and
correct list of all Company Benefit Plans that are "employee pension benefit
plans" (as defined in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) (all such plans, collectively, the "COMPANY
PENSION PLANS") or "employee welfare benefit plans" (as defined in Section 3(1)
of ERISA) and all other material Company Benefit Plans; PROVIDED, HOWEVER, that
no Company Benefit Agreement shall be deemed a Company Benefit Plan or listed in
Section 3.11(a) of the Company Disclosure Letter; PROVIDED FURTHER, HOWEVER,
that Company Benefit Plans maintained primarily for the benefit of Participants
principally employed in jurisdictions other than the United States of America
(all such plans, collectively, the "NON-U.S. BENEFIT PLANS") are not listed in
Section 3.11(a) of the Company Disclosure Letter (but a list of such Non-U.S.
Benefit Plans shall be provided to Parent within 20 days following the date of
this Agreement). Each Company Benefit Plan has been administered in compliance
with its terms and applicable Law, and the terms of any applicable collective
bargaining agreements, except to the extent that the failure to comply with any
such terms or Law, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect. The Company has delivered or
made available (or, with respect to Non-U.S. Benefit Plans and Non-U.S. Benefit
Agreements, shall deliver or make available within 20 days following the date of
this Agreement) to Parent complete and correct copies of (i) each Company
Benefit Plan and each Company Benefit Agreement (or, in the case of any
unwritten Company Benefit Plan or Company Benefit Agreement, a description
thereof), (ii) the most recent annual report on Form 5500 (including
accompanying schedules and attachments) with respect to each Company Benefit
Plan for which such a report is required, (iii) the most recent summary plan
description for each Company Benefit Plan for which such summary plan
description is required under ERISA, (iv) each material trust agreement and
material group annuity contract relating to the funding or payment of benefits
under any Company Benefit Plan, (v) the most recent determination or
qualification letter issued by the Internal Revenue Service for each Company
Benefit Plan intended to qualify for favorable tax treatment in the United
States of America, as well as a true, correct and complete copy of each pending
application for such letter, if applicable, and (vi) the most recent actuarial
valuation, if applicable, for each Company Pension Plan.
(b) All Company Pension Plans intended to be tax qualified have been
the subject of determination letters from the Internal Revenue Service with
respect to all tax Law changes through the Economic Growth and Tax Relief
Reconciliation Act of
<PAGE>
18
2001 with respect to which a determination letter from the Internal Revenue
Service can be obtained to the effect that such Company Pension Plans are
qualified and exempt from Federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, and no such determination letter has been revoked
nor, to the knowledge of the Company, has revocation been threatened, nor has
any such Company Pension Plan been amended since the date of its most recent
determination letter or application therefor in any respect that would adversely
affect its qualification or materially increase its costs or require security
under Section 307 of ERISA. All Company Pension Plans that are required to have
been approved by any non-U.S. Governmental Entity have been so approved.
(c) Neither the Company nor any Commonly Controlled Entity has
maintained, contributed to or been obligated to maintain or contribute to, or
has any liability under, any Company Benefit Plan that is subject to Title IV of
ERISA. With respect to the Maytag Corporation Employees Retirement Plan (the "US
PENSION PLAN"), to the knowledge of the Company there has been no material
adverse change in the financial conditions of such plan from the date of the
most recent audited financial statements included in the Filed Company SEC
Documents to the date of this Agreement, assuming for such purpose that there
has been no change in the discount rate used for purposes of valuing the
liabilities of such plan from the discount rate applied in such financial
statements. No liability under Title IV of ERISA (other than for premiums to the
Pension Benefit Guaranty Corporation) has been or is expected to be incurred by
the Company or any Company Subsidiary with respect to any ongoing, frozen or
terminated "single-employer" plan (as defined in Section 4001(a)(15) of ERISA),
currently or formerly maintained by any of them or by any Commonly Controlled
Entity, except for any such liabilities that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect. None
of the Company Pension Plans has an "accumulated funding deficiency" (as defined
in Section 302 of ERISA or Section 412 of the Code), whether or not waived, nor
has any waiver of the minimum funding standards of Section 302 of ERISA or
Section 412 of the Code been requested. None of the Company, any Company
Subsidiary, any employee of the Company or any Company Subsidiary or any of the
Company Benefit Plans, including the Company Pension Plans, or any trusts
created thereunder or any trustee, administrator or other fiduciary of any
Company Benefit Plan or trust created thereunder, or any agents of the
foregoing, has engaged in a "prohibited transaction" (as defined in Section 406
of ERISA or Section 4975 of the Code) that would be reasonably expected to
subject the Company, any Company Subsidiary or any officer of the Company or any
Company Subsidiary or any of the Company Benefit Plans, or, to the knowledge of
the Company, any trusts created thereunder or any trustee or administrator of
any Company Benefit Plan or trust created thereunder to the tax or penalty on
prohibited transactions imposed by such Section 4975 of the Code or to the
sanctions imposed under Title I of ERISA or to any other liability for breach of
fiduciary duty under ERISA, except for any such prohibited transactions that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. No Company Pension Plan or related trust has
been terminated during the last five years, nor has there been any "reportable
event" (as defined in Section 4043 of ERISA), other than an event for which the
30-day notice period has been waived, with respect to any Company Pension Plan
since January 1, 2004,
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19
and no notice of a reportable event will be required to be filed in connection
with the transactions contemplated hereby. Neither the Company nor any Company
Subsidiary has incurred any material liability that has not been satisfied in
full as a result of a "complete withdrawal" or a "partial withdrawal" (as each
such term is defined in Sections 4203 and 4205, respectively, of ERISA) during
the past six years from any "multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA.
(d) With respect to any Company Benefit Plan that is an employee
welfare benefit plan, whether or not subject to ERISA, such Company Benefit Plan
is either funded through an insurance company contract and is not a "welfare
benefits fund" (as defined in Section 419(e) of the Code) or it is unfunded.
(e) Other than payments or benefits that may be made to the persons
listed in Section 3.11(e) of the Company Disclosure Letter (each, a "PRIMARY
COMPANY EXECUTIVE"), no amount or other entitlement that could be received
(whether in cash or property or the vesting of property) as a result of any of
the Transactions (alone or in combination with any other event) by any
Participant who is a "disqualified individual" (as defined in final Treasury
Regulation Section 1.280G-1) (each, a "DISQUALIFIED INDIVIDUAL") under any
Company Benefit Plan, Company Benefit Agreement or other compensation
arrangement currently in effect would be an "excess parachute payment" (as
defined in Section 280G(b)(1) of the Code) and no such Disqualified Individual
is entitled to receive any additional payment (E.G., any tax gross-up or any
other payment) from the Company, the Surviving Corporation or any other person
in the event that the excise tax required by Section 4999(a) of the Code is
imposed on such Disqualified Individual. The Company has provided Parent with
calculations performed in 2004 by Hewitt Associates of the estimated amounts of
compensation and benefits that could be received (whether in cash or property or
the vesting of property) by certain Primary Company Executives as a result of a
transaction of the nature contemplated by this Agreement (alone or in
combination with any other event), and the "base amount" (as defined in Section
280G(b)(3) of the Code) for certain Primary Company Executives, in each case as
of the date specified in such calculations and in accordance with the
assumptions made by Hewitt Associates as set forth in such calculations. To the
knowledge of the Company, the Company provided true and complete compensation
and benefit information and data to Hewitt Associates necessary to perform such
calculations, which information and data was correct in all material respects as
of the date provided by the Company to Hewitt Associates.
(f) The execution and delivery by the Company of this Agreement do
not, and the consummation of the Transactions and compliance with the terms
hereof will not (either alone or in combination with any other event) (i)
entitle any Participant to any additional compensation, severance, termination,
change in control or other benefits or any benefits the value of which will be
calculated on the basis of any of the Transactions (alone or in combination with
any other event), (ii) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of any compensation,
severance or other benefits under, or increase the amount payable or trigger any
other material obligation pursuant to, any Company Benefit Plan or Company
<PAGE>
20
Benefit Agreement, or (iii) trigger the forgiveness of indebtedness owed by any
Participant to the Company or any of its affiliates.
(g) Since January 1, 2004, and through the date of this Agreement,
neither the Company nor any Company Subsidiary has received notice of, and, to
the knowledge of the Company, there are no (i) material pending termination
proceedings or other suits, claims (except claims for benefits payable in the
normal operation of the Company Benefit Plans), actions or proceedings against
or involving or asserting any rights or claims to benefits under any Company
Benefit Plan or Company Benefit Agreement or (ii) pending investigations (other
than routine inquiries) by any Governmental Entity with respect to any Company
Benefit Plan or Company Benefit Agreement, except for any such suits, claims,
proceedings or investigations that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. All
contributions, premiums and benefit payments under or in connection with the
Company Benefit Plans or Company Benefit Agreements that are required to have
been made by the Company or any Company Subsidiary have been timely made,
accrued or reserved for, except for failures to make, accrue or reserve for any
such contributions, premiums and benefit payments that, individually or
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
(h) Neither the Company nor any Company Subsidiary has any liability
or obligations, including under or on account of a Company Benefit Plan or
Company Benefit Agreement, arising out of the hiring of persons to provide
services to the Company or any Company Subsidiary and treating such persons as
consultants or independent contractors and not as employees of the Company or
any Company Subsidiary, except for any such liabilities or obligations that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
(i) The Agreement for the Trust for Maytag Corporation Non-Qualified
Deferred Compensation Plans dated as of October 1, 2003 (the "TRUST Agreement"),
by and between the Company and KeyBank National Association, and each Plan (as
such term is defined in the Trust Agreement) has been amended to provide that no
funding shall be required in connection with the execution of this Agreement or
the consummation of the transactions contemplated hereby.
(j) Except for any items that, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect, (i) all
Non-U.S. Benefit Plans have been maintained in accordance with their terms and
all applicable legal requirements, (ii) if any Non-U.S. Benefit Plan is intended
to qualify for special tax treatment, such Non-U.S. Benefit Plan meets all
requirements for such treatment, and (iii) the fair market value of the assets
of each Non-U.S. Benefit Plan required to be funded, the liability of each
insurer for any Non-U.S. Benefit Plan required to be funded, and the book
reserve established for any Non-U.S. Benefit Plan, together with any accrued
contributions, is sufficient to provide for the accrued benefit obligations
under each Non-U.S. Benefit Plan.
<PAGE>
21
SECTION 3.12. LITIGATION. There are no suits, actions or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any Company Subsidiary (and the Company is not aware of any basis for
any such suit, action or proceeding) that, individually or in the aggregate,
would reasonably be expected to have a Company Material Adverse Effect, nor are
there any Judgments outstanding against the Company or any Company Subsidiary
that, individually or in the aggregate, would reasonably be expected to have a
Company Material Adverse Effect.
SECTION 3.13. COMPLIANCE WITH APPLICABLE LAWS. The Company and the
Company Subsidiaries and their relevant personnel and operations are in
compliance with all applicable Laws, including those relating to occupational
health and safety, except for such failure to be in compliance as, individually
or in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect. Neither the Company nor any Company Subsidiary has received any
written communication during the past two years from a Governmental Entity that
alleges that the Company or a Company Subsidiary is not in compliance in any
material respect with any applicable Law, except for such failure to be in
compliance as, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect. The Company and the Company
Subsidiaries have in effect all permits, licenses, variances, exemptions,
authorizations, operating certificates, franchises, orders and approvals of all
Governmental Entities (collectively, "PERMITS"), necessary or advisable for them
to own, lease or operate their properties and assets and to carry on their
businesses as now conducted, except for such Permits the absence of which,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect, and there has occurred no violation of, default
(with or without the lapse of time or the giving of notice, or both) under, or
event giving to others any right of termination, amendment or cancellation of,
with or without notice or lapse of time or both, any such Permit, except for any
such violations, defaults or events that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect.
There is no event which, to the knowledge of the Company, would reasonably be
expected to result in the revocation, cancellation, non-renewal or adverse
modification of any such Permit, except for any such events that, individually
or in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect. This Section 3.13 does not relate to matters with respect to
Taxes, which are the subject of Section 3.09.
SECTION 3.14. LABOR MATTERS. Since January 1, 2004, neither the
Company nor any Company Subsidiary has experienced any material labor strikes,
union organization attempts, requests for representation, work slowdowns or
stoppages or disputes due to labor disagreements, and to the knowledge of the
Company there is currently no such action threatened against or affecting the
Company or any Company Subsidiary. The Company and the Company Subsidiaries are
each, and since January 1, 2002 have each been, in compliance with all
applicable Laws with respect to labor relations, employment and employment
practices, terms and conditions of employment and wages and hours, human rights,
pay equity and workers compensation, except to the extent that the failure to
comply with any such Law, individually or in the aggregate,
<PAGE>
22
would not reasonably be expected to have a Company Material Adverse Effect, and
is not, and since January 1, 2002 has not, engaged in any unfair labor practice
that, individually or in the aggregate, would reasonably be expected to have a
Company Material Adverse Effect. There is no unfair labor practice charge or
complaint against the Company or any Company Subsidiary pending or, to the
knowledge of the Company, threatened, in each case, before the National Labor
Relations Board or any comparable Federal, state, provincial or foreign agency
or authority, except for any such charges or complaints that, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect. No grievance or arbitration proceeding arising out of a
collective bargaining agreement is pending or, to the knowledge of the Company,
threatened against the Company or any Company Subsidiary, except for any such
grievances or proceedings that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect.
SECTION 3.15. ENVIRONMENTAL MATTERS.
(a) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect, the
Company and each of the Company Subsidiaries are, and have been, in compliance
with all Environmental Laws, and neither the Company nor any of the Company
Subsidiaries has received any written communication from a Governmental Entity
that alleges that the Company or any of the Company Subsidiaries is in violation
of, or has liability under, any Environmental Law.
(b) (i) The Company and each of the Company Subsidiaries have obtained
and are in compliance with all material permits, licenses and governmental
authorizations pursuant to Environmental Law (collectively "ENVIRONMENTAL
PERMITS") necessary for their operations as presently conducted, (ii) all such
Environmental Permits are valid and in good standing and (iii) since January 1,
2003, neither the Company nor any of the Company Subsidiaries has been advised
in writing by any Governmental Entity of any actual or potential change in the
status or terms and conditions of any Environmental Permit.
(c) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect,
there are no Environmental Claims pending or, to the knowledge of the Company,
threatened, against the Company or any of the Company Subsidiaries.
(d) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect,
neither the Company nor any of the Company Subsidiaries has entered into or
agreed to, or is otherwise subject to, any Judgment relating to any
Environmental Law or to the investigation or remediation of Hazardous Materials.
(e) Except for such matters that, individually or in the aggregate,
would not reasonably be
<PAGE>
23
expected to have a Company Material Adverse Effect, there has been no treatment,
storage or Release of any Hazardous Material that would reasonably be expected
to form the basis of any Environmental Claim against the Company or any of the
Company Subsidiaries or against any person whose liabilities for such
Environmental Claims the Company or any of the Company Subsidiaries has, or may
have, retained or assumed, either contractually or by operation of law.
(f) There are no underground storage tanks at, on, under or about (i)
any manufacturing facility owned, operated or leased by the Company or any
Company Subsidiary, (ii) any other property owned by the Company or any
Company Subsidiary or (iii) to the knowledge of the Company, any other
property leased or operated by the Company or any Company Subsidiary.
(g) To the knowledge of the Company, any asbestos-containing material
that is at, under or about property owned, operated or leased by the
Company or any Company Subsidiary is non-friable or encapsulated and in
good condition according to the generally accepted standards and practices
governing such material, and its presence or condition does not violate or
otherwise require abatement or removal pursuant to any applicable
Environmental Law.
(h) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect,
(i) neither the Company nor any of the Company Subsidiaries has retained or
assumed, either contractually or by operation of law, any liabilities or
obligations that would reasonably be expected to form the basis of any
Environmental Claim against the Company or any of the Company Subsidiaries,
and (ii) to the knowledge of the Company, no Environmental Claims are
pending against any person whose liabilities for such Environmental Claims
the Company or any of the Company Subsidiaries has, or may have, retained
or assumed, either contractually or by operation of law.
(i) DEFINITIONS. As used in this Agreement:
(1) "ENVIRONMENTAL CLAIM" means any and all administrative, regulatory
or judicial actions, suits, orders, demands, directives, claims, liens,
judgments, investigations, proceedings or written notices of noncompliance
or violation by or from any person alleging liability of whatever kind or
nature (including liability or responsibility for the costs of enforcement
proceedings, investigations, cleanup, governmental response, removal or
remediation, natural resources damages, property damages, personal
injuries, medical monitoring, penalties, contribution, indemnification and
injunctive relief) arising out of, based on or resulting from (x) the
presence or Release of, or exposure to, any Hazardous Materials at any
location; or (y) the failure to comply with any Environmental Law;
(2) "ENVIRONMENTAL LAWS" means all applicable Federal, state, local
and foreign laws, rules, regulations, orders, decrees, judgments, legally
binding agreements or Environmental Permits issued, promulgated or entered
into by or with any Governmental Entity, relating to pollution, natural
resources or protection of endangered or threatened species, human health
or the environment
<PAGE>
24
(including ambient air, surface water, groundwater, land surface or
subsurface strata);
(3) "HAZARDOUS MATERIALS" means (x) any petroleum or petroleum
products, radioactive materials or wastes, asbestos in any form, urea
formaldehyde foam insulation and polychlorinated biphenyls; and (y) any
other chemical, material, substance or waste that in relevant form or
concentration is prohibited, limited or regulated under any Environmental
Law; and
(4) "RELEASE" means any actual or threatened release, spill, emission,
leaking, dumping, injection, pouring, deposit, disposal, discharge,
dispersal, leaching or migration into or through the environment (including
ambient air, surface water, groundwater, land surface or subsurface strata)
or within any building, structure, facility or fixture.
SECTION 3.16. INTELLECTUAL PROPERTY. The Company and the Company
Subsidiaries own, or are validly licensed or otherwise have the right to use,
all patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, service marks, service mark rights, copyrights, domain names and
other proprietary intellectual property rights and computer programs
(collectively, "INTELLECTUAL PROPERTY RIGHTS") which are material to the conduct
of the business of the Company and the Company Subsidiaries taken as a whole. No
claims are pending or, to the knowledge of the Company, threatened that the
Company or any Company Subsidiary is infringing or otherwise adversely affecting
the rights of any person with regard to any Intellectual Property Right, except
for any such claims that, individually or in the aggregate, would not reasonably
be expected to have a Company Material Adverse Effect. To the knowledge of the
Company, no person is infringing the rights of the Company or any Company
Subsidiary with respect to any Intellectual Property Right, except for any such
infringements that, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
SECTION 3.17. BROKERS; SCHEDULE OF FEES AND EXPENSES. No broker,
investment banker, financial advisor or other person, other than Lazard Freres &
Co. LLC ("LAZARD"), the fees and expenses of which will be paid by the Company,
is entitled to any broker's, finder's, financial advisor's or other similar fee
or commission in connection with the Merger and the other Transactions based
upon arrangements made by or on behalf of the Company. The Company has furnished
to Parent a true and complete copy of all agreements between the Company and
Lazard relating to the Merger and the other Transactions.
SECTION 3.18. OPINION OF FINANCIAL ADVISOR. The Company has received
the opinion of Lazard, dated the date of this Agreement, to the effect that, as
of such date, the consideration to be received in the Merger by the holders of
the Company Common Stock is fair from a financial point of view to such holders,
a signed copy of which opinion shall be delivered to Parent as soon as
reasonably practicable following the date of this Agreement.
<PAGE>
25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub, jointly and severally, represent and warrant to the
Company that:
SECTION 4.01. ORGANIZATION, STANDING AND POWER. Each of Parent and Sub
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is organized, other than defects in such
organization, existence or good standing that, individually and in the
aggregate, would not reasonably be expected to have a Parent Material Adverse
Effect, and (b) has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to conduct its businesses as presently conducted, other than such corporate
power and authority, franchises, permits, authorizations and approvals the lack
of which, individually or in the aggregate, would not reasonably be expected to
have a Parent Material Adverse Effect.
SECTION 4.02. SUB; EQUITY INTERESTS. (a) Since the date of its
incorporation, neither Parent nor Sub has carried on any business, conducted any
operations or incurred any obligations or liabilities other than (i) the
execution of this Agreement and (A) in the case of Parent, the Equity Commitment
Letters and (B) in the case of Sub, the Debt Commitment Letter and the other
agreements referred to therein, (ii) the performance of its obligations
hereunder and thereunder, and (iii) matters ancillary hereto and thereto.
(b) The authorized capital stock of Sub consists of 1,000 shares of
common stock, par value $1.00 per share, all of which have been validly issued,
are fully paid and nonassessable and are owned by Parent free and clear of any
Lien.
(c) As of the date of this Agreement, neither Parent nor Sub owns any
shares of Company Common Stock. None of Parent or any of its affiliates is (i)
an "interested stockholder" (as defined in Section 203 of the DGCL) of the
Company or (ii) an "Interested Shareholder" or an "Affiliate" of an Interested
Shareholder (as each such term is defined in Article Eleventh of the Company
Charter).
(d) For purposes of the Notification and Report Form to be filed under
the HSR Act in connection with the Merger, Parent is its own ultimate parent
entity. To the knowledge of Parent, Ripplewood Partners II, L.P. does not have
any controlled affiliate that receives a material amount of its revenues from
the production of home and commercial appliances of the type produced by the
Company.
SECTION 4.03. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY. Each
of Parent and Sub has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the Merger and the other Transactions
to be performed or consummated by Parent or Sub, as the case may be. The
execution and
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26
delivery by each of Parent and Sub of this Agreement and the consummation by it
of the Merger and the other Transactions to be performed or consummated by
Parent or Sub, as the case may be, have been duly authorized by all necessary
corporate action on the part of Parent and Sub. Parent, as sole stockholder of
Sub, shall adopt this Agreement as soon as reasonably practicable following its
execution. Each of Parent and Sub has duly executed and delivered this
Agreement, and this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights, and to general equity principles.
SECTION 4.04. NO CONFLICTS; CONSENTS. (a) The execution and delivery
by each of Parent and Sub of this Agreement, do not, and the consummation of the
Merger and the other Transactions and compliance with the terms hereof will not,
conflict with, or result in any violation of or default (with or without the
lapse of time or the giving of notice, or both) under, or give rise to a right
of termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any person under, or result in the creation of any
Lien upon any of the properties or assets of Parent or any of its subsidiaries
under, any provision of (i) the charter or organizational documents of Parent or
any of its subsidiaries, (ii) any Contract to which Parent or any of its
subsidiaries is a party or by which any of their respective properties or assets
is bound or (iii) subject to the filings and other matters referred to in
Section 4.04(b), any Judgment or Law applicable to Parent or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii) above, any such items that, individually or in the
aggregate, would not reasonably be expected to have a Parent Material Adverse
Effect.
(b) No Consent of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect to
Parent or any of its subsidiaries in connection with the execution, delivery and
performance of this Agreement or the consummation of the Transactions, other
than (i) compliance with and filings under the HSR Act, (ii) any additional
consents and filings under any foreign Antitrust Law (including, if applicable,
the Competition Act (Canada)) or under the Investment Canada Act (Canada), (iii)
the filing with the SEC of such reports under, or other applicable requirements
of, the Exchange Act, as may be required in connection with this Agreement, the
Merger and the other Transactions, (iv) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware, (v) compliance with and
such filings as may be required under applicable Environmental Laws, (vi) such
filings as may be required in connection with the Taxes described in Section
6.09, (vii) filings under any applicable state takeover Law, (viii) such of the
foregoing as may be required in connection with the Debt Financing and (ix) such
other items that, individually or in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect.
SECTION 4.05. INFORMATION SUPPLIED. None of the information supplied
or to be supplied by Parent or Sub for inclusion or incorporation by reference
in the
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27
Proxy Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Company 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.
SECTION 4.06. BROKERS. No broker, investment banker, financial advisor
or other person, other than Citigroup Global Markets Inc., J.P. Morgan
Securities Inc., Goldman, Sachs & Co. and Deutsche Bank Securities Inc., any
fees and expenses of which will be paid by Parent, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the Merger and the other Transactions based upon arrangements made by or on
behalf of Parent.
SECTION 4.07. FINANCING. (a) Sub has received and accepted and agreed
to a commitment letter dated May 19, 2005 (the "DEBT COMMITMENT LETTER") from
the lenders party thereto (collectively, the "LENDERS") relating to the
commitment of the Lender to provide the debt financing required to consummate
the Merger on the terms contemplated by this Agreement, to refinance certain
existing indebtedness of the Company and to pay related fees and expenses. The
debt financing required to consummate the Merger, to refinance certain existing
indebtedness of the Company and to pay related fees and expenses is collectively
referred to in this Agreement as the "DEBT FINANCING".
(b) Sub has received and accepted and agreed to commitment letters
dated May 19, 2005 (the "EQUITY COMMITMENT LETTERS" and, together with the Debt
Commitment Letter, the "COMMITMENT LETTERS") from certain persons (collectively,
the "EQUITY INVESTORS") relating to the commitment of the Equity Investors to
provide the cash equity required to consummate the Merger on the terms
contemplated by this Agreement, to refinance certain existing indebtedness of
the Company and to pay related fees and expenses. The cash equity required to
consummate the Merger, to refinance certain existing indebtedness of the Company
and to pay related fees and expenses is collectively referred to in this
Agreement as the "CASH EQUITY" (the Cash Equity, together with the Debt
Financing, is collectively referred to as the "FINANCING"). Complete and correct
copies of the executed Commitment Letters have been provided to the Company.
(c) Subject to its terms and conditions, the Financing, when funded in
accordance with the Commitment Letters, shall provide Sub with acquisition
financing at the Effective Time sufficient to consummate the Merger on the terms
contemplated by this Agreement, to refinance certain existing indebtedness of
the Company and to pay related fees and expenses.
(d) As of the date of this Agreement, the Commitment Letters are
valid, binding and in full force and effect and no event within the direct
control of Parent or Sub has occurred which, with or without notice, lapse of
time or both, would reasonably be expected to constitute a default or breach or
an incurable failure to satisfy a condition precedent on the part of Parent or
Sub under the terms and conditions of the Commitment Letters, other than any
such default or breach that has been waived by the Lenders or the
<PAGE>
28
applicable Equity Investor, as the case may be, or otherwise cured in a timely
manner by Parent or Sub to the satisfaction of the Lenders or such Equity
Investor, as the case may be. As of the date of this Agreement, Parent or Sub
has paid in full any and all commitment fees or other fees required to be paid
pursuant to the terms of the Commitment Letters on or before the date of this
Agreement.
SECTION 4.08. SOLVENCY. Assuming that the statements in the following
clauses (a) through (d) are true and correct with respect to the Company and the
Company Subsidiaries, on a consolidated basis, immediately prior to the
Effective Time without reference to the transactions contemplated hereby and the
indebtedness to be incurred in connection therewith or the manner in which
Parent and Sub propose to conduct the business of the Surviving Corporation and
its subsidiaries after the Effective Time, immediately after the Effective Time
(a) the fair value of the assets of the Surviving Corporation and its
subsidiaries, on a consolidated basis, shall exceed the amount of all
liabilities of the Surviving Corporation and its subsidiaries, on a consolidated
basis, contingent or otherwise, (b) the present fair saleable value of the
assets of the Surviving Corporation and its subsidiaries, on a consolidated
basis, shall be greater than the amount that shall be required to pay the
probable liability of the Surviving Corporation and its subsidiaries, on a
consolidated basis, on their debts and other liabilities as such debts and other
liabilities become absolute and matured, (c) the Surviving Corporation and its
subsidiaries, on a consolidated basis, shall not have an unreasonably small
amount of capital with which to conduct the businesses in which they are engaged
as such businesses are now conducted and are proposed to be conducted following
the Effective Time and (d) the Surviving Corporation and its subsidiaries, on a
consolidated basis, shall be able to pay their debts and other liabilities as
such debts and other liabilities become absolute and matured.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 5.01. CONDUCT OF BUSINESS. (a) CONDUCT OF BUSINESS BY THE
COMPANY. Except for matters set forth in Section 5.01(a) of the Company
Disclosure Letter or otherwise expressly permitted by this Agreement, from the
date of this Agreement to the Effective Time the Company shall, and shall cause
each Company Subsidiary to, conduct its business in the ordinary course in
substantially the same manner as previously conducted and, to the extent
consistent therewith, use commercially reasonable best efforts to preserve
intact its current business organization, keep available the services of its
current officers and employees and keep its relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them. In addition, and without limiting the generality of the
foregoing, except for matters set forth in Section 5.01(a) of the Company
Disclosure Letter or otherwise expressly permitted by this Agreement or required
in connection with the Debt Financing, from the date of this Agreement to the
Effective Time, the Company shall not, and shall not permit any Company
Subsidiary to, do any of the following without the prior written consent of
Parent:
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(i) (A) declare, set aside or pay any dividends on, or make any other
distributions in respect of (in each case, whether in cash, stock or
property), any of its capital stock, other than (1) dividends and
distributions by a direct or indirect wholly owned Company Subsidiary to
its parent and (2) quarterly cash dividends with respect to the Company
Common Stock not in excess of $0.09 per share, with usual declaration,
record and payment dates, (B) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock,
other than any such issuance by a direct or indirect wholly owned Company
Subsidiary to its parent, or (C) purchase, redeem or otherwise acquire any
(1) shares of capital stock of the Company or any Company Subsidiary, (2)
any other securities thereof or any rights, warrants or options to acquire
any such shares or other securities or (3) any options, warrants, rights,
securities, units, commitments, contracts, arrangements or undertakings of
any kind that give any person the right to receive any economic benefit and
rights accruing to holders of capital stock of the Company or any Company
Subsidiary;
(ii) issue, deliver, sell or grant (A) any shares of its capital
stock, (B) any Voting Company Debt or other voting securities, (C) any
securities convertible into or exchangeable for, or any options, warrants
or rights to acquire, any such shares, Voting Company Debt, voting
securities or convertible or exchangeable securities, (D) any "phantom"
stock, "phantom" stock rights, stock appreciation rights or stock-based
performance units or (E) any options, warrants, rights, securities, units,
commitments, Contracts, arrangements or undertakings of any kind that give
any person the right to receive any economic benefits and rights accruing
to holders of capital stock of the Company or any Company Subsidiary, other
than the issuance of shares of its capital stock by a wholly owned Company
Subsidiary to the Company or another wholly owned Company Subsidiary and
other than the issuance of Company Common Stock (and associated Company
Rights) (1) upon the exercise of Company Employee Stock Options or rights
under the ESPP outstanding as of the date of this Agreement and only if and
to the extent required by their terms as in effect on the date of this
Agreement and (2) with respect to rights outstanding as of the date of this
Agreement under restricted stock units, performance stock rights and
deferred compensation plans as set forth in Section 3.03 of the Company
Disclosure Letter and only if and to the extent required by their terms in
effect on the date of this Agreement;
(iii) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating with,
or by purchasing a substantial equity interest in or portion of the assets
of, or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof or (B) any assets that are material, individually or in the
aggregate, to the Company and the Company Subsidiaries, taken as a whole,
except (x) purchases of inventory in the
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30
ordinary course of business consistent with past practice and (y)
acquisitions of assets pursuant to capital expenditures budgeted in the
Company's 2005 Capital Budget set forth in Section 5.01(a) of the Company
Disclosure Letter under the column entitled "March (3+9) Forecast";
(v) except as required under applicable Law or the terms of any plan
or agreement in effect on the date of this Agreement, (A) grant to any
Participant any loan or increase in compensation, except for any such
increase in compensation made in the ordinary course of business consistent
with past practice and made to any Participant that is not a Primary
Company Executive, (B) grant to any Participant any increase in severance,
change in control or termination pay or benefits, or pay any bonus to any
Participant, except for bonuses paid to Participants (other than Excluded
Participants) in the ordinary course of business consistent with past
practice, (C) enter into any employment, change in control, loan,
retention, consulting, indemnification, severance, termination or similar
agreement with any Participant, except (x) in the ordinary course of
business consistent with past practice in connection with new hires to
replace departed key employees, (y) in the ordinary course of business
consistent with past practice in connection with promotions made in the
ordinary course of business consistent with past practice (except, in the
case of clauses (x) and (y), any change in control agreements) and (z) for
severance arrangements entered into with Participants (other than Excluded
Participants) in the ordinary course of business consistent with past
practice after consultation in good faith with Parent), (D) take any action
to fund or in any other way secure the payment of compensation or benefits
under any Company Benefit Plan or Company Benefit Agreement, (E) establish,
adopt, enter into, terminate or amend any collective bargaining agreement
or other labor union Contract, Company Benefit Plan or Company Benefit
Agreement, (F) pay or provide to any Participant any benefit not provided
for under a Company Benefit Plan or Company Benefit Agreement as in effect
on the date hereof other than the payment of base compensation, severance
(but only to the extent that such severance is paid (x) after consultation
in good faith with Parent and (y) to Participants other than Excluded
Participants) and bonuses not otherwise prohibited by clause (B) of this
Section 5.01(a)(v), in each case, in the ordinary course of business
consistent with past practice, (G) grant any incentive awards under any
Company Benefit Plan (including the grant of Company Employee Stock
Options, stock appreciation rights, performance units, performance shares,
restricted stock, stock purchase rights or other stock-based or
stock-related awards or the removal or modification of existing
restrictions in any Contract, Company Benefit Plan or Company Benefit
Agreement on incentive awards made thereunder), or (H) take any action to
accelerate any material rights or benefits, including vesting and payment,
under any collective bargaining agreement, Company Benefit Plan or Company
Benefit Agreement (for the avoidance of doubt, under no circumstances shall
any voluntary contributions to the US Pension Plan not prohibited by
Section 5.01(a)(xiii) be deemed prohibited under this Section 5.01(a)(v) or
under any other sub-clause of this Section 5.01(a));
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31
(vi) make any change in accounting methods, principles or practices
materially affecting the reported consolidated assets, liabilities or
results of operations of the Company, except insofar as may have been
required by a change in GAAP;
(vii) sell, lease (as lessor), license or otherwise dispose of or
subject to any Lien any material properties or assets, except pursuant to
contracts or agreements in effect as of the date of this Agreement and
sales of inventory and excess or obsolete assets in the ordinary course of
business consistent with past practice;
(viii)(A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person (other than any such indebtedness or
guarantees among the Company and the direct or indirect wholly owned
Company Subsidiaries or among the direct and indirect wholly owned Company
Subsidiaries), issue or sell any debt securities or warrants or other
rights to acquire any debt securities of the Company or any Company
Subsidiary, guarantee any debt securities of another person, enter into any
"keep well" or other agreement to maintain any financial statement
condition of another person or enter into any arrangement having the
economic effect of any of the foregoing, except for short-term borrowings
(1) incurred in the ordinary course of business consistent with past
practice or (2) for working capital purposes; or (B) make any loans,
advances or capital contributions to, or investments in, any other person,
other than to or in the Company or any direct or indirect wholly owned
Company Subsidiary;
(ix) make or agree to make any capital expenditures other than those
capital expenditures budgeted in the Company's 2005 Capital Budget set
forth in Section 5.01(a) of the Company Disclosure Letter under the column
entitled "March (3+9) Forecast";
(x) make or change any material Tax election or settle or compromise
any material Tax liability or refund, other than in the ordinary course of
business consistent with past practice or as required by applicable Law;
(xi) (A) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or the
notes thereto) of the Company included in the Filed Company SEC Documents
or incurred in the ordinary course of business consistent with past
practice, (B) cancel any material indebtedness (individually or in the
aggregate) or waive any claims or rights of substantial value, (C) waive
the benefits of, or agree to modify in any manner, any confidentiality or
similar agreement (excluding any standstill provision in any such agreement
in effect as of the date of this Agreement) to which the Company or any
Company Subsidiary
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32
is a party or (D) waive the benefits of, or agree to modify in any manner,
any standstill agreement in effect as of the date of this Agreement to
which the Company or any Company Subsidiary is a party;
(xii) permit any insurance policy or arrangement naming or providing
for it as a beneficiary or a loss payable payee to be canceled or
terminated (unless such policy or arrangement is canceled or terminated in
the ordinary course of business and concurrently replaced with a policy or
arrangement with substantially similar coverage) or materially impaired;
(xiii) other than (x) minimum contributions to the US Pension Plan
required to be made under Section 412 of the Code and (y) additional
contributions to the US Pension Plan in the minimum amount necessary to
satisfy the PBGC Variable Rate Premium exemption described in PBGC
Regulations Section 4006.5(a)(5) (which additional contributions under this
clause (y) shall not be made (1) prior to September 1, 2005 or (2) without
first consulting in good faith with Parent, on or after September 1, 2005),
make any contributions to the US Pension Plan (A) prior to September 1,
2005 or (B) without first discussing in good faith with Parent and giving
Parent the opportunity to offer an alternative course of action (it being
understood, for the avoidance of doubt, that the final determination as to
whether to make such contributions on or after September 1, 2005 shall be
made by the Company in its sole discretion), on or after September 1, 2005,
PROVIDED that, in respect of any contribution made to the US Pension Plan
pursuant to this clause (B), the aggregate amount of such contribution
shall not exceed the excess of $100,000,000 over the aggregate amount of
all contributions made to the US Pension Plan since January 1, 2005
(including, for the avoidance of doubt, all contributions made in 2005
previously or contemporaneously pursuant to clauses (x) and (y) of this
Section 5.01(a)(xiii)); or
(xiv) authorize any of, or commit or agree to take any of, the
foregoing actions.
For the purposes of this Section 5.01(a), "EXCLUDED PARTICIPANTS" shall mean
those Participants (1) listed in Items 1 and 2 of Section 3.10(b) of the Company
Disclosure Letter or (2) that are otherwise employed with the Company at the
level of director or at any more-senior level of employment.
(b) OTHER ACTIONS. The Company shall not, and shall not permit any of
the Company Subsidiaries to, take any action that would reasonably be expected
to result in any condition to the Merger set forth in Article VII not being
satisfied.
(c) ADVICE OF CHANGES. The Company shall promptly advise Parent orally
and in writing of any event, change, effect, development, condition or
occurrence that, individually or in the aggregate, would reasonably be expected
to have a Company Material Adverse Effect.
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33
(d) CONSULTATION. In connection with the continuing operation of the
business of the Company and the Company Subsidiaries between the date of this
Agreement and the Effective Time, the Company shall use reasonable efforts to
consult in good faith on a regular basis with the representatives of Parent to
report material operational developments and the general status of ongoing
operations pursuant to procedures reasonably requested in writing by Parent or
its representatives; PROVIDED that the consultation required by this Section
5.01(d) shall be conducted in a manner so as not to disrupt in any material
respect the business of the Company and the Company Subsidiaries. Parent and Sub
acknowledge that neither Parent nor Sub shall have any approval rights under
this Section 5.01(d). The Company acknowledges that any such consultation shall
not constitute a waiver by either Parent or Sub of any rights it may have under
this Agreement and that neither Parent nor Sub shall have any liability or
responsibility for any actions of the Company, any Company Subsidiary or any of
their respective directors or officers with respect to matters that are the
subject of such consultations.
SECTION 5.02. NO SOLICITATION. (a) During the period beginning on the
date of this Agreement and continuing until 12:01 a.m. (EST) on June 18, 2005
(the "SOLICITATION PERIOD END DATE"), the Company and any officer, director or
employee of, or any investment banker, attorney or other advisor or
representative (collectively, "REPRESENTATIVES") of, the Company or any Company
Subsidiary shall be permitted to (i) directly or indirectly solicit, initiate or
encourage the submission of a Company Takeover Proposal and (ii) directly or
indirectly participate in discussions or negotiations regarding, and furnish to
any person information with respect to, and take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, a Company Takeover Proposal; PROVIDED, HOWEVER, that (A)
the Company shall not, nor shall it authorize or permit any Company Subsidiary
to, nor shall it authorize or permit any Representative of the Company or any
Company Subsidiary to, provide to any person any non-public information (other
than any immaterial non-public information) with respect to the Company or any
Company Subsidiary without first entering into a customary confidentiality
agreement with such person that is not less restrictive of the other party than
the Confidentiality Agreement (excluding the provisions of the eleventh
paragraph thereof) and (B) the Company shall promptly provide to Parent any
non-public information concerning the Company or any Company Subsidiary that is
provided to such person or its Representatives which was not previously provided
to Parent.
(b) Subject to Section 5.02(c), from the Solicitation Period End Date
until the earlier of the Effective Time and the termination of this Agreement
pursuant to Article VIII, the Company shall not, nor shall it authorize or
permit any Company Subsidiary to, and the Company shall direct and use its
reasonable best efforts to cause the Representatives of the Company or any
Company Subsidiary not to, (i) directly or indirectly solicit, initiate or
encourage the submission of any Company Takeover Proposal, (ii) enter into any
agreement with respect to any Company Takeover Proposal or (iii) directly or
indirectly participate in any discussions or negotiations regarding, or furnish
to any person any non-public information with respect to, or knowingly take any
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34
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Company Takeover
Proposal. Without limiting the foregoing, it is agreed that any violation of the
restrictions set forth in the preceding sentence by any Representative of the
Company or any Company Subsidiary, whether or not such person is purporting to
act on behalf of the Company or any Company Subsidiary or otherwise, shall be
deemed to be a breach of this Section 5.02(b) by the Company. Subject to Section
5.02(c), on the Solicitation Period End Date, the Company shall immediately
cease and cause to be terminated any existing solicitation, encouragement,
discussion, negotiation or other action permitted by Section 5.02(a) conducted
by the Company, any Company Subsidiary or any of their respective
Representatives with respect to a Company Takeover Proposal.
(c) Notwithstanding anything to the contrary in Section 5.02(b), from
the Solicitation Period End Date and prior to the receipt of the Company
Stockholder Approval, the Company may, in response to an unsolicited Company
Takeover Proposal which did not result from a breach of Section 5.02(b), or a
solicited Company Takeover Proposal which did not result from a breach of
Section 5.02(a), and which, in either case, the Company Board determines, in
good faith, after consultation with outside counsel and financial advisors, may
reasonably be expected to lead to a transaction (i) more favorable from a
financial point of view to the holders of Company Common Stock than the Merger,
taking into account all the terms and conditions of such proposal, and this
Agreement (including any amendment to the terms of this Agreement and the Merger
in effect as of the date of such determination) and (ii) that is reasonably
capable of being completed, taking into account all financial, regulatory, legal
and other aspects of such proposal, and subject to compliance with Section
5.02(e), (x) furnish information with respect to the Company and the Company
Subsidiaries to the person making such Company Takeover Proposal and its
Representatives pursuant to a customary confidentiality agreement not less
restrictive of the other party than the Confidentiality Agreement (excluding the
provisions of the eleventh paragraph thereof) and (y) participate in discussions
or negotiations with such person and its Representatives regarding any Company
Takeover Proposal; PROVIDED, HOWEVER, that the Company shall promptly provide to
Parent any non-public information concerning the Company or any Company
Subsidiary that is provided to the person making such Company Takeover Proposal
or its Representatives which was not previously provided to Parent.
(d) Subject to Section 8.01(e), neither the Company Board 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 approval or recommendation by the Company Board or any such committee
of this Agreement or the Merger, (ii) approve any letter of intent, agreement in
principle, acquisition agreement or similar agreement relating to any Company
Takeover Proposal or (iii) approve or recommend, or publicly propose to approve
or recommend, any Company Takeover Proposal. Notwithstanding the foregoing, if,
prior to receipt of the Company Stockholder Approval, the Company Board
determines in good faith, after consultation with outside counsel, that failure
to so withdraw or modify its recommendation of the Merger and this Agreement
would be inconsistent with the
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35
Company Board's exercise of its fiduciary duties, the Company Board or any
committee thereof may withdraw or modify its recommendation of the Merger and
this Agreement.
(e) The Company promptly shall advise Parent orally and in writing of
any Company Takeover Proposal or, following the Solicitation Period End Date,
any inquiry with respect to or that would reasonably be expected to lead to any
Company Takeover Proposal, the identity of the person making any such Company
Takeover Proposal or inquiry and the material terms of any such Company Takeover
Proposal or inquiry. The Company shall keep Parent reasonably informed of the
status (including any change to the terms thereof) of any such Company Takeover
Proposal or inquiry.
(f) Nothing contained in this Section 5.02 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any required
disclosure to the Company's stockholders if, in the good faith judgment of the
Company Board, after consultation with outside counsel, failure so to disclose
would be inconsistent with its obligations under applicable Law.
(g) For purposes of this Agreement:
"COMPANY TAKEOVER PROPOSAL" means (i) any proposal or offer for a
merger, consolidation, dissolution, recapitalization or other business
combination involving the Company, (ii) any proposal for the issuance by
the Company of over 20% of its equity securities as consideration for the
assets or securities of another person or (iii) any proposal or offer to
acquire in any manner, directly or indirectly, over 20% of the equity
securities or consolidated total assets of the Company, in each case other
than the Merger.
"SUPERIOR COMPANY PROPOSAL" means any proposal made by a third party
to acquire all or substantially all the equity securities or assets of the
Company, pursuant to a tender or exchange offer, a merger, a consolidation,
a liquidation or dissolution, a recapitalization, a sale of all or
substantially all its assets or otherwise, (i) on terms which the Company
Board determines in good faith, after consultation with the Company's
outside legal counsel and financial advisors, to be more favorable from a
financial point of view to the holders of Company Common Stock than the
Merger, taking into account all the terms and conditions of such proposal,
and this Agreement (including any proposal by Parent to amend the terms of
this Agreement and the Merger) and (ii) that is reasonably capable of being
completed, taking into account all financial, regulatory, legal and other
aspects of such proposal; PROVIDED that the Company Board shall not so
determine that any such proposal is a Superior Company Proposal prior to
the time that is 48 hours after the time at which the Company has complied
in all material respects with Section 5.02(e) with respect to such
proposal.
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ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. PREPARATION OF PROXY STATEMENT; STOCKHOLDERS MEETING.
(a) The Company shall, as soon as reasonably practicable following the date of
this Agreement, prepare and file with the SEC the Proxy Statement in preliminary
form, and each of the Company and Parent shall use its reasonable best efforts
to respond as promptly as practicable to any comments of the SEC with respect
thereto. The Company shall notify Parent promptly of the receipt of any comments
from the SEC or its staff and of any request by the SEC or its staff for
amendments or supplements to the Proxy Statement or for additional information
and shall supply Parent with copies of all correspondence between the Company or
any of its representatives, on the one hand, and the SEC or its staff, on the
other hand, with respect to the Proxy Statement. If at any time prior to receipt
of the Company Stockholder Approval there shall occur any event that should be
set forth in an amendment or supplement to the Proxy Statement, the Company
shall promptly prepare and, if required by the SEC, mail to its stockholders
such amendment or supplement. The Company shall use its reasonable best efforts
to cause the Proxy Statement to be mailed to the Company's stockholders as
promptly as practicable after filing with or, if necessary, clearance from the
SEC. Notwithstanding the foregoing, prior to filing or mailing the Proxy
Statement (or any amendment or supplement thereto) or responding to any comments
of the SEC with respect thereto, the Company (i) shall provide Parent an
opportunity to review and comment on such document or response and (ii) shall
include in such document or response all reasonable comments proposed by Parent.
(b) The Company shall, as soon as practicable following the date of
this Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "COMPANY STOCKHOLDERS MEETING") for the purpose of seeking the
Company Stockholder Approval. The Company shall, through the Company Board,
recommend to its stockholders that they give the Company Stockholder Approval,
except to the extent that the Company Board shall have withdrawn or modified its
recommendation of this Agreement or the Merger as permitted by Section 5.02(d).
Without limiting the generality of the foregoing, the Company agrees that its
obligations pursuant to the first sentence of this Section 6.01(b) shall not be
affected by the commencement, public proposal, public disclosure or
communication to the Company of any Company Takeover Proposal or (ii) the
withdrawal or modification by the Company Board of its recommendation of this
Agreement or the Merger.
SECTION 6.02. ACCESS TO INFORMATION; CONFIDENTIALITY. The Company
shall, and shall cause each of the Company Subsidiaries to, afford to Parent,
and to Parent's officers, employees, accountants, counsel, financial advisors
and other representatives, reasonable access during normal business hours during
the period prior to the Effective Time to all their respective properties,
books, contracts, commitments, personnel and records and, during such period,
the Company shall, and shall cause each of the Company Subsidiaries to, furnish
promptly to Parent (a) a copy of each report,
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37
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Federal or state securities laws and (b)
all other information concerning its business, properties and personnel as
Parent may reasonably request. All information exchanged pursuant to this
Section 6.02 shall be subject to the confidentiality agreement dated September
27, 2004 between the Company and Ripplewood Holdings L.L.C. (the
"CONFIDENTIALITY AGREEMENT").
SECTION 6.03. REASONABLE BEST EFFORTS; NOTIFICATION. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each of the
parties shall use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Merger and
the other Transactions (other than the Financing), including (i) the obtaining
of all necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
(including filings with Governmental Entities, if any) and the taking of all
reasonable steps as may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of
all necessary Consents 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 Transactions, including
seeking to have vacated or reversed any decree, order or judgment entered by any
court or other Governmental Entity that would restrain, prevent or delay the
Closing and (iv) the execution and delivery of any additional instruments
necessary to consummate the Transactions (other than the Financing) and to fully
carry out the purposes of this Agreement. In connection with and without
limiting the foregoing, the Company and the Company Board shall (i) use their
reasonable best efforts to ensure that no state takeover statute or similar
statute or regulation is or becomes applicable to any Transaction or this
Agreement and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to this Agreement, use their reasonable best
efforts to ensure that the Merger and the other Transactions may be consummated
as promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the Merger and
the other Transactions. Parent and Sub shall use their reasonable best efforts
to obtain the proceeds of the Financing on the terms and conditions described in
the Commitment Letters, including using reasonable best efforts to (A) negotiate
definitive agreements with respect to the Debt Financing consistent with the
terms and conditions contained therein and (B) satisfy on a timely basis all
conditions in such definitive agreements the satisfaction of which are within
the control of Parent or Sub. Parent and Sub shall use their reasonable best
efforts to comply with their respective obligations, and enforce their
respective rights, under the Commitment Letters. Parent shall give the Company
prompt notice of any material breach by any party to the Commitment Letters of
which Parent has become aware or any termination of the Commitment Letters.
Parent shall keep the Company informed on a reasonably current basis in
reasonable detail of the status of its efforts to obtain the proceeds of the
Financing and shall not permit any amendment or modification to, or any waiver
of any material provision or remedy under, the Commitment Letters if such
amendment, modification, waiver or remedy (x) reduces the aggregate amount of
the
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Financing, (y) amends the conditions to the drawdown of the Financing or (z) is
adverse to the interests of the Company, in each case, in any material respect.
The Company shall also use reasonable best efforts to assist and cooperate with
Parent and Sub in connection with their efforts to obtain the proceeds of the
Debt Financing, including providing reasonably required information relating to
the Company and the Company Subsidiaries to the financial institution or
institutions providing the Debt Financing and executing and delivering, and
causing the Company Subsidiaries to execute and deliver, customary certificates,
legal opinions (which may be reasoned, if counsel reasonably believes it cannot
give the opinion otherwise) or other documents and instruments relating to
guarantees, the pledge of collateral and other matters ancillary to the Debt
Financing as may be reasonably requested by Parent in connection with the Debt
Financing; PROVIDED, HOWEVER, that no obligation of the Company or any Company
Subsidiary under any such certificate, document or instrument shall be effective
until the Effective Time and none of the Company or any Company Subsidiary shall
be required to pay any commitment or other similar fee or incur any other
liability in connection with the Debt Financing prior to the Effective Time.
Subject to applicable Law relating to the exchange of information, the Company
and Parent and their respective counsel shall have the right to review in
advance, and to the extent practicable each shall consult the other on, any
filing made with, or written materials submitted to, any Governmental Entity in
connection with the Merger and the other Transactions. The Company and Parent
shall provide the other party and its counsel with the opportunity to
participate in any meeting with any Governmental Entity in respect of any
filing, investigation or other inquiry in connection with the Merger or the
other Transactions.
(b) The Company shall give prompt notice to Parent, and Parent or Sub
shall give prompt notice to the Company, of (i) any representation or warranty
made by it contained in this Agreement that is qualified as to materiality
becoming untrue or inaccurate in any respect or any such representation or
warranty that is not so qualified becoming untrue or inaccurate in any material
respect or (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement; PROVIDED, HOWEVER, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties
or the conditions to the obligations of the parties under this Agreement.
(c) As soon as reasonably practicable following the execution of this
Agreement, Parent, in its capacity as the sole stockholder of Sub, shall adopt
this Agreement.
(d) In the event that the Closing shall occur, simultaneously with the
Closing, Parent shall cause the Company or the Surviving Corporation to repay in
full (i) any Obligations (as such term is defined in the Loan and Security
Agreement dated as of October 31, 2002 (as amended, the "LOAN AGREEMENT"), among
the Company, the Company Subsidiaries, Bank of America, National Association, as
administrative agent, and the other lenders named therein) outstanding under the
Loan Agreement and (ii) any obligations outstanding under the ABL Facility (as
such term is defined in Section 5.01(a) of the Company Disclosure Letter), in
each case, to the extent required to avoid a
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39
default thereunder (it being understood and agreed that, if the aggregate of
such Obligations and obligations exceed a certain amount, the Closing may not
occur as a result of the terms and conditions of the Debt Commitment Letter not
being satisfied, in which case Parent shall have no obligations under this
Section 6.03(d)).
SECTION 6.04. STOCK OPTIONS; ESPP. (a) Prior to the Effective Time,
the Company Board (or, if appropriate, any committee thereof administering the
Company Stock Plans) shall adopt such resolutions as shall provide for the
following:
(i) adjust the terms of all outstanding Company Employee Stock
Options, whether vested or unvested, to provide that the Company Employee
Stock Options outstanding immediately prior to the Effective Time shall, as
of the Effective Time, become fully vested and exercisable solely for the
right to receive cash in an amount equal to the Merger Consideration; and
(ii) make such other changes to the Company Stock Plans as the Company
and Parent may agree are appropriate to give effect to the Transactions.
(b) As soon as practicable following the date of this Agreement, the
Company Board (or, if appropriate, any committee of the Company Board
administering the ESPP), shall adopt such resolutions or take such other actions
as may be required to provide that with respect to the ESPP, (i) participants
may not increase their payroll deductions or purchase elections from those in
effect on the date of this Agreement and (ii) no purchase period shall be
commenced after the date of this Agreement.
(c) All amounts payable to holders of the Company Employee Stock
Options pursuant to Section 6.04(a) shall be subject to any required
withholding of Taxes and shall be paid without interest as soon as practicable
following the Effective Time.
(d) In this Agreement:
"COMPANY EMPLOYEE STOCK OPTION" means any option to purchase Company
Common Stock (exclusive of rights under the ESPP) granted under the
Company Stock Plans or otherwise.
"COMPANY SAR" means any stock appreciation right linked to the price
of Company Common Stock and granted under the Company Stock Plans or
otherwise.
"COMPANY STOCK PLANS" mean the 2002 Employee and Director Stock
Incentive Plan, the 1998 Non-Employee Directors' Stock Option Plan, the
2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive
Plan, the 1992 Stock Option Plan for Executives and Key Employees, the
1989 Stock Option Plan for Non-Employee Directors and the ESPP.
"ESPP" means the Company's Employee Discount Stock Purchase Plan.
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40
SECTION 6.05. BENEFIT PLANS. (a) Subject to all applicable
collective bargaining agreements, from the Effective Time through December 31,
2005, except as set forth below, Parent shall either (A) maintain or cause the
Surviving Corporation to maintain the Company Benefit Plans (other than plans
providing for the issuance of Company Common Stock or based on the value of
Company Common Stock) at the benefit levels in effect on the date of this
Agreement or (B) provide or cause the Surviving Corporation to provide to
employees of the Company and the Company Subsidiaries who remain employed by the
Surviving Corporation and its subsidiaries benefits (other than benefits under
plans providing for the issuance of Company Common Stock or based on the value
of Company Common Stock) that, taken as a whole, are comparable in the aggregate
to those provided to such employees immediately prior to the Effective Time (it
being understood and agreed that modifications to Company Benefit Plans that
have been announced to participants or planned and otherwise disclosed to Parent
but not yet implemented as of the Effective Time shall be taken into account for
purposes of the foregoing). Without limiting the foregoing, Parent agrees that,
with respect to service through December 31, 2005, it shall, or shall cause the
Surviving Corporation to, maintain the employer matching contribution component
of the Maytag Corporation Salary Savings Plan without reduction; PROVIDED,
HOWEVER, that such employer matching contributions shall be made in cash
following the Effective Time). Parent and the Company agree and acknowledge that
consummation of the Transactions shall constitute a "change of control" for
purposes of each applicable Company Benefit Plan and Company Benefit Agreement.
Nothing herein shall be construed to prohibit Parent or the Surviving
Corporation from amending or terminating any Company Benefit Plan in accordance
with the terms thereof and with applicable Law, so long as they comply with the
requirements of this Section 6.05.
(b) From and after the Effective Time, Parent shall, and shall cause
the Surviving Corporation to, honor in accordance with their respective terms
(as in effect on the date of this Agreement), all the Company Benefit Plans and
Company Benefit Agreements disclosed in Sections 3.10(b) and 3.11(a) of the
Company Disclosure Letter (subject, in each case, to the right of Parent or the
Surviving Corporation to amend or terminate a Company Benefit Plan or Company
Benefit Agreement in accordance with the terms thereof and with applicable Law).
For purposes of eligibility, vesting and benefit accrual (other than benefit
accrual under defined benefit pension plans) under the employee benefit plans of
Parent and its subsidiaries providing benefits after the Effective Time to any
employee of the Company or any Company Subsidiary immediately prior to the
Effective Time (all such plans, collectively, the "NEW PLANS"), each such
employee shall be credited with all years of service for which such employee
was credited before the Effective Time under any comparable Company Benefit
Plans, except where such crediting would lead to a duplication of benefits. In
addition and without limiting the generality of the foregoing, (i) Parent shall
use its commercially reasonable efforts to cause each employee of the Company or
any Company Subsidiary immediately prior to the Effective Time to be immediately
eligible to participate, without any waiting period, in any and all New Plans to
the extent coverage under any such New Plan replaces coverage under a comparable
Company Benefit Plan in which such employee participated immediately prior to
the Effective Time (all such plans,
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41
collectively, the "OLD PLANS"), (ii) for purposes of each New Plan providing
medical, dental, pharmaceutical and/or vision benefits to any such employee,
Parent shall use its commercially reasonable efforts to cause all pre-existing
condition exclusions, limitations and actively-at-work requirements of such New
Plan to be waived for such employee and his or her covered dependent (to the
extent such exclusions, limitations and actively-at-work requirements were
waived or satisfied as of the Effective Time under the corresponding Old Plan)
and (iii) all deductibles, coinsurance and maximum out-of-pocket expenses
incurred by such employee and his or her covered dependents under any Old Plan
during the portion of the plan year of such Old Plan ending on the date such
employee's participation in the corresponding New Plan begins shall be taken
into account under such New Plan for purposes of satisfying all deductible,
coinsurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year as if such
amounts had been paid in accordance with such New Plan.
(c) Nothing contained herein shall be construed as requiring Parent or
the Surviving Corporation to continue the employment of any specific person.
(d) The Company may provide up to $3,000,000 as a retention pool (the
"RETENTION POOL") for the purposes of retaining the services of employees of the
Company and the Company Subsidiaries ("COMPANY EMPLOYEES") who are key
employees. The Chief Executive Officer of the Company shall determine, subject
to approval by (i) the Company Board and (ii) Parent (in the case of (ii), such
approval not to be unreasonably withheld), the Company Employees eligible to
receive retention awards from the Retention Pool (each, a "RETENTION BONUS") and
any criteria for payment of the Retention Bonus, and shall determine the final
allocation of payments from the Retention Pool. Any Retention Bonus shall be
intended to retain the services of the recipient through, and shall be payable
(if such recipient still remains employed by the Company and the Company
Subsidiaries at such time) on, the Closing Date. Notwithstanding anything to the
contrary in this Section 6.05(d), no Primary Company Executive shall receive any
award or payment from the Retention Pool.
(e) Parent shall cause the Company to continue to maintain the
Company's 2005 annual bonus plans set forth in Section 6.05(e) of the Company
Disclosure Letter (the "BONUS PLANS") for the 2005 calendar year and to pay
Company Employees the aggregate of all bonus amounts due under such Bonus Plans
pursuant to the objective formulae set forth therein (including formulae
approved thereunder by the Company or the Company Board, or a committee thereof,
prior to the date of this Agreement and previously provided to Parent), based on
the performance of the Company and its operating units, without adjusting such
total for individual performance; PROVIDED, HOWEVER, that Parent shall
determine, in its sole discretion, the portion of such aggregate bonus amounts
that may be payable to any particular Company Employee so long as such bonus
amounts are fully paid in the aggregate to the Company Employees. Company
performance in respect of calculations to be made under the Bonus Plans for the
2005 calendar year shall be calculated without taking into account any expenses
or
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42
costs related to or arising out of the Transactions or any non-recurring charges
that would not reasonably be expected to have been incurred had the Transactions
not occurred.
(f) From the Effective Time through the first anniversary of the
Effective Time, (i) Company Employees below the level of Director shall continue
to participate in the Maytag Corporation Separation Pay and Benefits Plan (the
"SEVERANCE PLAN"), (ii) Company Employees at the levels of Director and above
shall be eligible for severance benefits pursuant to the plan set forth in
Section 6.05(f) of the Company Disclosure Letter, and (iii) none of the
Severance Plan, the Maytag Corporation Separation of Employment Plan, or the
plan set forth in Section 6.05(f) of the Company Disclosure Letter shall be
amended in any manner adverse to the Company Employees.
SECTION 6.06. INDEMNIFICATION. (a) Parent shall, to the fullest extent
permitted by Law, cause the Surviving Corporation to honor all the Company's
obligations to indemnify the current or former directors or officers of the
Company for acts or omissions by such directors and officers occurring prior to
the Effective Time to the extent that such obligations of the Company exist on
the date of this Agreement, whether pursuant to the Company Charter, the Company
By-laws or individual indemnity agreements, and such obligations shall survive
the Merger and shall continue in full force and effect in accordance with the
terms of the Company Charter, the Company By-laws and such individual indemnity
agreements from the Effective Time until the expiration of the applicable
statute of limitations with respect to any claims against such directors or
officers arising out of such acts or omissions. Parent shall, to the fullest
extent permitted by Law, cause the Surviving Corporation to advance funds for
expenses incurred by a director or officer in defending a civil or criminal
action, suit or proceeding relating to the indemnification obligations
referenced in the immediately preceding sentence in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall be
ultimately determined that he or she is not entitled to the indemnification
referenced in the immediately preceding sentence.
(b) For a period of six years after the Effective Time, Parent shall
cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may substitute therefor policies with reputable and financially sound carriers
of at least the same coverage and amounts containing terms and conditions which
are no less advantageous) with respect to claims arising from or related to
facts or events which occurred at or before the Effective Time; PROVIDED,
HOWEVER, that Parent shall not be obligated to make annual premium payments for
such insurance to the extent such premiums exceed 300% of the annual premiums
paid as of the date hereof by the Company for such insurance (such 300% amount,
the "MAXIMUM PREMIUM"). If such insurance coverage cannot be obtained at all, or
can only be obtained at an annual premium in excess of the Maximum Premium,
Parent shall maintain the most advantageous policies of directors' and officers'
insurance obtainable for an annual premium equal to the Maximum Premium. The
Company represents to Parent that the Maximum Premium is $3,696,000.
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43
SECTION 6.07. FEES AND EXPENSES. (a) Except as provided in this
Section 6.07, all fees and expenses incurred in connection with the Merger and
the other Transactions shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated.
(b) The Company shall pay to Parent a fee of $40,000,000 if: (i)
Parent terminates this Agreement pursuant to Section 8.01(d); (ii) (A) after the
date of this Agreement and prior to the termination of this Agreement pursuant
to Article VIII, any person makes a Company Takeover Proposal or amends a
Company Takeover Proposal made prior to the date of this Agreement, (B) this
Agreement is terminated by either the Company or Parent pursuant to Section
8.01(b)(i) (and prior to such termination the Company shall have breached or
failed to perform any of its covenants or agreements set forth in this
Agreement) or 8.01(b)(iii) (but only if a Company Takeover Proposal is publicly
announced at or prior to the time of the Company Stockholder Meeting) or by
Parent pursuant to Section 8.01(c) and (C) within 12 months after the date of
such termination the Company enters into a definitive agreement to consummate,
or consummates, the transactions contemplated by a Company Takeover Proposal; or
(iii) the Company terminates this Agreement pursuant to Section 8.01(e). Any fee
due under this Section 6.07(b) shall be paid by wire transfer of same-day funds
on the date of termination of this Agreement (except that in the case of
termination pursuant to clause (ii) above, such payment shall be made on the
date of execution of such definitive agreement or, if earlier, consummation of
such transactions). Solely for the purposes of Section 6.07(b)(ii), the term
"Company Takeover Proposal" shall have the meaning assigned to such term in
Section 5.02(g), except that all references to "20%" shall be changed to "40%".
The Company acknowledges that the agreements contained in this Section 6.07(b)
are an integral part of the transaction contemplated by this Agreement, and
that, without these agreements, Parent would not enter into this Agreement;
accordingly, if the Company fails promptly to pay the amounts due pursuant to
this Section 6.07(b), and, in order to obtain such payment, Parent commences a
suit that results in a judgment against the Company for the amounts set forth in
this Section 6.07(b), the Company shall pay to Parent interest on the amounts
set forth in this Section 6.07(b) from and including the date payment of such
amount was due to but excluding the date of actual payment at the prime rate of
JPMorgan Chase Bank in effect on the date such payment was required to be made,
together with reasonable legal fees and expenses incurred in connection with
such suit. It is expressly understood that in no event shall the Company be
required to pay the fee referred to in this Section 6.07(b) on more than one
occasion.
(c) The Company shall reimburse Parent and Sub, in an aggregate amount
not to exceed $12,500,000, for all their out-of-pocket expenses actually
incurred in connection with this Agreement, the Merger and the other
Transactions if this Agreement is terminated pursuant to Section 8.01(b)(iii) or
8.01(c); PROVIDED, HOWEVER, that no such reimbursement shall be required if the
Company is otherwise obligated to make a payment to Parent pursuant to Section
6.07(b). Such reimbursement, if any, shall be paid upon demand following such
termination.
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44
SECTION 6.08. PUBLIC ANNOUNCEMENTS. Each of Parent and Sub, on the one
hand, and the Company, on the other hand, shall use its reasonable best efforts
to consult with each other before issuing, and, to the extent reasonably
feasible, provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the Merger and the
other Transactions 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 by obligations pursuant to any listing
agreement with any national securities exchange.
SECTION 6.09. TRANSFER TAXES. All stock transfer, real estate
transfer, documentary, stamp, recording and other similar Taxes (including
interest, penalties and additions to any such Taxes) ("TRANSFER TAXES") incurred
in connection with the Transactions shall be paid by either Sub or the Surviving
Corporation, and the Company shall cooperate with Sub and Parent in preparing,
executing and filing any Tax Returns with respect to such Transfer Taxes,
including supplying in a timely manner a complete list of all real property
interests held by the Company that are located in New York State and any
information with respect to such property that is reasonably necessary to
complete such Tax Returns.
SECTION 6.10. RIGHTS AGREEMENTS; CONSEQUENCES IF RIGHTS TRIGGERED. The
Company Board shall take all further actions (in addition to those referred to
in Section 3.05(c)) requested in writing by Parent in order to render the
Company Rights inapplicable to the Merger and the other Transactions. Except as
approved in writing by Parent, the Company Board shall not (i) amend the Company
Rights Agreement, (ii) redeem the Company Rights or (iii) take any action with
respect to, or make any determination under, the Company Rights Agreement. If
any Distribution Date or Share Acquisition Date occurs under the Company Rights
Agreement at any time during the period from the date of this Agreement to the
Effective Time, the Company and Parent shall make such adjustment to the Merger
Consideration as the Company and Parent shall mutually agree so as to preserve
the economic benefits that the Company and Parent each reasonably expected on
the date of this Agreement to receive as a result of the consummation of the
Merger and the other Transactions.
SECTION 6.11. STOCKHOLDER LITIGATION. The Company shall give Parent
the opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors relating to any Transaction;
PROVIDED, HOWEVER, that no such settlement shall be agreed to without Parent's
consent, which consent shall not be unreasonably withheld.
SECTION 6.12. RESIGNATION OF DIRECTORS OF THE COMPANY. Prior to the
Effective Time, the Company shall cause each member of the Company Board to
execute and deliver a letter, which shall not be revoked or amended prior to the
Effective Time, effectuating his or her resignation as a director of the Company
Board effective immediately prior to the Effective Time.
SECTION 6.13. OTHER ACTIONS BY PARENT. Parent shall not, and shall use
its reasonable best efforts to cause its affiliates not to, take any action that
would
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45
reasonably be expected to result in any condition to the Merger set forth in
Article VII not being satisfied.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01. 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 waiver on or prior to the Closing Date of the following
conditions:
(a) STOCKHOLDER APPROVAL. The Company shall have obtained the Company
Stockholder Approval.
(b) ANTITRUST. Any waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired. Any Consents and filings required prior to the Closing under any
foreign Antitrust Law, the absence of which would reasonably be expected to (i)
have a Company Material Adverse Effect or (ii) result in a criminal violation,
shall have been obtained or made.
(c) NO INJUNCTIONS OR RESTRAINTS. No restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the Merger shall be in effect; PROVIDED, HOWEVER, that prior to asserting
this condition, subject to Section 6.03, each of the parties shall have used its
reasonable best efforts to prevent the entry of any such injunction or other
order and to appeal as promptly as possible any such judgment that may be
entered.
(d) SOLVENCY OPINION. Each of Parent and the Company shall have
received a solvency opinion, in form and substance reasonably satisfactory to
Parent and the Company, from a nationally recognized financial advisor that is
regularly involved in the business of valuing companies and rendering solvency
opinions and that is selected by the Company and reasonably satisfactory to
Parent opining that both immediately prior to the Effective Time and on a pro
forma basis immediately after giving effect to the consummation of the Merger
and the other Transactions (including the Debt Financing and the application of
the proceeds therefrom), the Company and the Surviving Corporation, as
applicable, shall be solvent (as such term is customarily defined in such
solvency opinions).
SECTION 7.02. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The
obligations of Parent and Sub to effect the Merger are further subject to the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company set forth in this Agreement that are qualified as to Company
Material Adverse Effect shall be true and correct and those not so qualified
shall be true and correct in all material respects, as of the date of this
Agreement and as of the Closing
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46
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 such representations and warranties qualified as to Company Material
Adverse Effect shall be true and correct, and those not so qualified shall be
true and correct in all material respects, on and as of such earlier date).
Parent shall have received a certificate signed on behalf of the Company by the
chief executive officer and the chief financial officer of the Company to such
effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such effect.
(c) NO LITIGATION. There shall not be pending any suit, action or
proceeding by any Governmental Entity or any other person, in each case that has
arisen after the date of this Agreement and has a reasonable likelihood of
success, relating to the Merger or any other Transaction and which (i) is
reasonably likely to result in the Company or any Company Subsidiary being
required to pay material damages or other amounts or (ii) otherwise is
reasonably likely to have a Company Material Adverse Effect. As a result of any
judgment or settlement in respect of any such suit, action or proceeding by any
Governmental Entity or any other person, neither the Company nor any Company
Subsidiary shall have paid, or shall be required to pay, (i) any material
damages or other amounts or (ii) any amount that otherwise would reasonably be
expected to have a Company Material Adverse Effect.
(d) ABSENCE OF COMPANY MATERIAL ADVERSE EFFECT. Except as disclosed in
the Company Disclosure Letter or in any Filed Company SEC Document, since the
date of this Agreement there shall not have been any event, change, effect,
development, condition or occurrence that, individually or in the aggregate, has
had or would reasonably be expected to have a Company Material Adverse Effect.
(e) FINANCING. Sub shall have received the proceeds of the Debt
Financing from the Lenders.
SECTION 7.03. CONDITION TO OBLIGATION OF THE COMPANY. The obligation
of the Company to effect the Merger is further subject to the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Parent and Sub set forth in this Agreement that are qualified as to Parent
Material Adverse Effect shall be true and correct and those not so qualified
shall be true and correct in all material respects, 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 such representations and warranties qualified as to Parent
Material Adverse Effect shall be true and correct, and those not so qualified
shall be true and correct in all material respects, on and as of such
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47
earlier date). The Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND SUB. Parent and Sub shall
have performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Closing Date, and the Company
shall have received a certificate signed on behalf of Parent by an executive
officer of Parent to such effect.
(c) FINANCING. Sub shall have available at the Closing cash in an
amount sufficient for the Surviving Corporation to provide the Paying Agent,
concurrently with the Closing, cash necessary to pay for the shares of Company
Common Stock to be converted into the right to receive cash proceeds pursuant to
Section 2.01(c).
SECTION 7.04. FRUSTRATION OF CLOSING CONDITIONS. None of the Company,
Parent or Sub may rely on the failure of any condition set forth in Section
7.01, 7.02 or 7.03, as the case may be, to be satisfied if such failure was
caused by such party's failure to use reasonable best efforts to consummate the
Merger and the other Transactions as required by and subject to Section 6.03.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after receipt of the
Company Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Merger is not consummated on or before December 15,
2005 (the "OUTSIDE DATE"), unless the failure to consummate the Merger
is the result of a willful and material breach of this Agreement by
the party seeking to terminate this Agreement; PROVIDED, HOWEVER, that
the passage of such period shall be tolled for any part thereof during
which any party shall be subject to a nonfinal order, decree, ruling
or action restraining, enjoining or otherwise prohibiting the
consummation of the Merger;
(ii) if any Governmental Entity issues an order, decree or ruling
or takes any other action permanently enjoining, restraining or
otherwise prohibiting the Merger and such order, decree, ruling or
other action shall have become final and nonappealable; or
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48
(iii) if, upon a vote thereon at a duly held meeting to obtain
the Company Stockholder Approval, the Company Stockholder Approval is
not obtained;
(c) by Parent, if the Company breaches or fails to perform in any
material respect any of its representations, warranties or covenants
contained in this Agreement, which breach or failure to perform (i) would
give rise to the failure of a condition set forth in Section 7.02(a) or
7.02(b), and (ii) cannot be or has not been cured by the Outside Date
(provided that neither Parent nor Sub is then in wilful and material breach
of any representation, warranty or covenant contained in this Agreement);
(d) by Parent:
(i) if the Company Board or any committee thereof withdraws or
modifies, in a manner adverse to Parent or Sub, or publicly proposes
to withdraw or modify, in a manner adverse to Parent or Sub, its
approval or recommendation of this Agreement or the Merger, fails to
recommend to the Company's stockholders that they give the Company
Stockholder Approval or approves or recommends, or publicly proposes
to approve or recommend, any Company Takeover Proposal; or
(ii) if (A) the Company or any of its officers, directors,
employees, representatives or agents knowingly takes any of the
actions that would be proscribed by Section 5.02 but for the
exceptions therein allowing certain actions to be taken pursuant to
Section 5.02(c) or the second sentence of Section 5.02(d), unless such
action has only an immaterial effect on Parent, or (B) the Company
gives Parent the notification contemplated by Section 8.05(b)(iii);
(e) by the Company prior to receipt of the Company Stockholder
Approval in accordance with Section 8.05(b); PROVIDED, HOWEVER, that the
Company shall have complied with all provisions thereof, including the
notice provisions therein; or
(f) by the Company, if Parent or Sub breaches or fails to perform in
any material respect any of its representations, warranties or covenants
contained in this Agreement, which breach or failure to perform (i) would
give rise to the failure of a condition set forth in Section 7.03(a) or
7.03(b), and (ii) cannot be or has not been cured by the Outside Date
(provided that the Company is not then in wilful and material breach of any
representation, warranty or covenant contained in this Agreement).
SECTION 8.02. EFFECT OF TERMINATION. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than Section
3.17,
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49
Section 4.06, the last sentence of Section 6.02, Section 6.07, this Section 8.02
and Article IX, which provisions shall survive such termination, and except to
the extent that such termination results from the willful and material breach by
a party of any representation, warranty or covenant set forth in this Agreement.
SECTION 8.03. AMENDMENT. This Agreement may be amended by the parties
at any time before or after receipt of the Company Stockholder Approval;
PROVIDED, HOWEVER, that after receipt of the Company Stockholder Approval, there
shall be made no amendment that by Law requires further approval by the
stockholders of the Company without the further approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties.
SECTION 8.04. 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) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) waive compliance with any
of the agreements or conditions contained in this Agreement. No extension or
waiver by the Company shall require the approval of the stockholders of the
Company. 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 8.05. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
WAIVER. (a) A termination of this Agreement pursuant to Section 8.01, an
amendment of this Agreement pursuant to Section 8.03 or an extension or waiver
under this Agreement pursuant to Section 8.04 shall, in order to be effective,
require in the case of Sub or the Company, action by its Board of Directors or,
to the extent permitted by law, the duly authorized designee of its Board of
Directors. Termination of this Agreement prior to the Effective Time shall not
require the approval of the stockholders of the Company.
(b) The Company may terminate this Agreement pursuant to Section
8.01(e) only if (i) the Company Board has received a Superior Company Proposal,
(ii) in light of such Superior Company Proposal a majority of the disinterested
directors of the Company shall have determined in good faith, after consultation
with outside counsel, that the failure to withdraw or modify its recommendation
of the Merger and this Agreement would be inconsistent with the Company Board's
exercise of its fiduciary duty under applicable Law, (iii) the Company has
notified Parent in writing of the determinations described in clause (ii) above,
(iv) at least five business days following receipt by Parent of the notice
referred to in clause (iii) above, and taking into account any revised proposal
made by Parent since receipt of the notice referred to in clause (iii) above,
such Superior Company Proposal remains a Superior Company Proposal and a
majority of the disinterested directors of the Company has again made the
determinations referred to in clause (ii) above, (v) the Company is in
compliance, in all material respects, with Section 5.02, (vi) the Company has
previously paid the fee due under Section 6.07, (vii) the Company Board
concurrently approves, and the Company concurrently enters into, a definitive
agreement providing for the implementation of such Superior Company
<PAGE>
50
Proposal and (viii) Parent is not at such time entitled to terminate this
Agreement pursuant to Section 8.01(c) (assuming for purposes of this clause
(viii) that the Outside Date is the date of termination of this Agreement by the
Company, except where the applicable breach or failure to perform is not wilful
and material and is capable of being cured prior to the Outside Date).
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. 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 9.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 9.02. NOTICES. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given upon receipt by the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Triton Acquisition Holding Co.
c/o Ripplewood Holdings L.L.C.
One Rockefeller Plaza, 32nd Floor
New York, NY 10020
Attention: Christopher Minnetian
with a copy to:
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Peter S. Wilson, Esq.
Mark I. Greene, Esq.
(b) if to the Company, to
Maytag Corporation
403 West Fourth Street, North
Newton, IA 50208
Attention: Roger Scholten
<PAGE>
51
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Richard D. Katcher, Esq.
James Cole, Jr., Esq.
SECTION 9.03. DEFINITIONS. For purposes of this Agreement:
An "AFFILIATE" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
A "COMPANY MATERIAL ADVERSE EFFECT" means a material adverse effect
on (a) the business, assets, financial condition, prospects or results of
operations of the Company and the Company Subsidiaries, taken as a whole, other
than any event, change, effect, development, condition or occurrence arising out
of or relating to (i) general economic or political conditions in the United
States of America or (ii) conditions generally affecting industries in which any
of the Company or the Company Subsidiaries operates (except, in the case of
clauses (i) and (ii) above, if the event, change, effect, development, condition
or occurrence disproportionately impacts the business, assets, financial
condition, prospects or results of operations of the Company and the Company
Subsidiaries, taken as a whole), (b) the ability of the Company to perform its
obligations under this Agreement or (c) the ability of the Company to consummate
the Merger and the other Transactions to be performed or consummated by the
Company.
"KNOWLEDGE" means, with respect to the Company, the knowledge of any
of Ralph Hake, George Moore, Roger Scholten or Steven Klyn.
A "PARENT MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the ability of Parent or Sub, as the case may be, to perform its obligations
under this Agreement (including the ability of Parent and Sub to obtain the
Financing) or (ii) the ability of Parent or Sub, as the case may be, to
consummate the Merger and the other Transactions to be performed or consummated
by Parent or Sub, as the case may be.
A "PERSON" means any individual, firm, corporation, partnership,
company, limited liability company, trust, joint venture, association,
Governmental Entity or other entity.
A "SUBSIDIARY" of any person means another person (a) an amount of
the voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person, or (b) of which such first person is, in
<PAGE>
52
the case of a partnership, the general partner or, in the case of a limited
liability company, the managing member.
SECTION 9.04. INTERPRETATION; DISCLOSURE LETTER. When a reference is
made in this Agreement to a Section or subsection, such reference shall be to a
Section or subsection, as applicable, of 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". Any matter disclosed in any section of the
Company Disclosure Letter shall be deemed disclosed only for the purposes of the
specific Sections of this Agreement to which such section relates.
SECTION 9.05. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. 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 in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 9.06. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, 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 to the other parties.
SECTION 9.07. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, taken together with the Company Disclosure Letter 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 Transactions and (b) except for Section 6.06 and
except as otherwise provided in the Confidentiality Agreement, are not intended
to confer upon any person other than the parties hereto any rights or remedies.
Notwithstanding clause (b) of the immediately preceding sentence, following the
Effective Time the provisions of Article II shall be enforceable by holders of
Certificates. For all purposes of this Agreement and the Confidentiality
Agreement, the Confidentiality Agreement shall be deemed to be amended to add at
the end of the last sentence of the first paragraph thereof the text ", other
than RHJ International, Goldman Sachs Capital Partners and the J. Rothschild
Group of Companies (each of which shall be deemed to be a "Representative"
hereunder)".
SECTION 9.08. 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, except to the extent the laws of Delaware are mandatorily
applicable to the Merger.
<PAGE>
53
SECTION 9.09. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement 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, except that Sub may assign, in
its sole discretion, any of or all its rights, interests and obligations under
this Agreement to Parent or to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Sub of any of its obligations under
this Agreement. Any purported assignment without such consent shall be void.
Subject to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 9.10. ENFORCEMENT. The parties agree that irreparable damage
would occur 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 New York state court, any
Federal court located in the State of New York or the State of Delaware, or the
Court of Chancery of the State of Delaware, 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) consents to submit itself to the personal jurisdiction of any
New York state court, any Federal court located in the State of New York or the
State of Delaware, or the Court of Chancery of the State of Delaware in the
event any dispute arises out of this Agreement or any Transaction, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (c) agrees that it will not
bring any action relating to this Agreement or any Transaction in any court
other than any New York state court, any Federal court sitting in the State of
New York or the State of Delaware or the Court of Chancery of the State of
Delaware and (d) waives any right to trial by jury with respect to any action
related to or arising out of this Agreement or any Transaction.
[Signature page follows.]
<PAGE>
54
IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed
this Agreement, all as of the date first written above.
TRITON ACQUISITION HOLDING CO.,
by /s/ Christopher Minnetian
----------------------------
Name: Christopher Minnetian
Title:
TRITON ACQUISITION CO.,
by /s/ Christopher Minnetian
----------------------------
Name: Christopher Minnetian
Title:
MAYTAG CORPORATION,
by /s/ Roger K. Scholten
------------------------
Name: Roger K. Scholten
Title: Sr. V.P.
<PAGE>
EXHIBIT A
RESTATED CERTIFICATE OF INCORPORATION
OF
SURVIVING CORPORATION
ARTICLE I
The name of the corporation (hereinafter called the "Corporation") is
"Maytag Corporation".
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
The name of the registered agent at such address is The Corporation Trust
Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
ARTICLE IV
The total number of shares of all classes of stock that the
Corporation shall have authority to issue is 1,000 shares of Common Stock having
the par value of $1.00 per share. The holders of shares of Common Stock of the
Corporation shall have no preemptive right to purchase or have offered to them
for purchase any shares of Common Stock or other equity securities issued or to
be issued by the Corporation.
ARTICLE V
The number of directors of the Corporation shall be fixed from time
to time by resolution of the Board of Directors of the Corporation. Any director
or the
<PAGE>
2
entire Board of Directors of the Corporation may be removed, with or without
cause, at any time by the holders of a majority of the shares of Common Stock
then entitled to vote at an election of directors or by written consent of the
stockholders.
ARTICLE VI
In furtherance and not in limitation of the powers conferred upon it
by law, the Board of Directors of the Corporation is expressly authorized to
adopt, amend or repeal the By-laws of the Corporation.
ARTICLE VII
Unless and except to the extent that the By-laws of the Corporation so require,
the election of directors of the Corporation need not be by written ballot.
ARTICLE VIII
To the fullest extent from time to time permitted by law, no person
who is or was a director of the Corporation shall be personally liable to any
extent to the Corporation or its stockholders for monetary damages for breach of
his fiduciary duty as a director. Any amendment, modification or repeal of the
foregoing sentence shall not adversely affect any right or protection of a
director of the Corporation hereunder in respect of any act or omission
occurring prior to the time of such amendment, modification or repeal.
ARTICLE IX
SECTION 1. Any person who is or was a director or officer of the
Corporation, or of any other corporation, partnership, joint venture, trust or
other enterprise for which he served as such at the request of the Corporation,
shall in accordance with the provisions of this Article IX hereinafter set forth
be indemnified by
<PAGE>
3
the Corporation against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation), to which he was or is a party, or is
threatened to be made a party, by reason of his being or having been a director
or officer of the Corporation or of such other corporation, partnership, joint
venture, trust or other enterprise. The director or officer shall be entitled to
such indemnification if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Corporation,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendre or its equivalent shall not, in itself, create a presumption that the
person did not meet the standards of conduct set forth herein. In the case of
any action or suit by or in the right of the Corporation to procure a judgment
in its favor, such director or officer shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action if he acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Corporation, and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Delaware Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
<PAGE>
4
person is fairly and reasonably entitled to such expenses which the Delaware
Court of Chancery or such other court shall deem proper.
SECTION 2. To the extent that a present or former director or officer
of the Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Section 1 of this Article IX, or
defense of any claim, issue or matter therein, he shall be entitled, as of
right, to indemnification as provided in this Article IX. Any indemnification
under this Article IX (unless ordered by a court) shall be made by the
Corporation as authorized in the specific case upon a determination that
indemnification of the present or former director or officer is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section 1 of this Article IX. Such determination shall be made with respect to a
person who is a director or officer at the time of such determination (1) by a
majority vote of the directors who were not parties to such action, suit or
proceeding, even though less than a quorum; (2) by a committee of such directors
designated by a majority vote of such directors, even though less than a quorum;
(3) if there are no such directors, or if such directors so direct, by
independent legal counsel (who shall not be regular counsel of the Corporation
and shall have generally recognized competence to advise upon the matter) in a
written opinion; or (4) by the stockholders.
SECTION 3. Expenses (including attorneys' fees) incurred in defending
a civil or criminal action, suit or proceeding of the character described in
this Article IX may be paid by the Company in advance of the final disposition
thereof upon receipt of
<PAGE>
5
an undertaking by or on behalf of the director or officer to repay such amount
if it shall be ultimately determined that he is not entitled to indemnification
under this Article IX.
SECTION 4. The rights of indemnification and advancement of expenses
provided in or granted pursuant to this Article IX shall be in addition to any
other rights to which any such director or officer may be entitled as a matter
of law, under any contract, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and in the event
of such person's death, such rights shall extend to his heirs and legal
representatives. The foregoing rights shall be available whether or not such
person continues to be a director or officer at the time of incurring or
becoming subject to such liability or expenses and whether or not the claim
asserted against him is based on matters which antedate the adoption of this
Article IX.
SECTION 5. The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article IX.
SECTION 6. For purposes of this Article IX, references to "the
Corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or
<PAGE>
6
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors or officers, so that any person who is or
was a director or officer of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article IX with
respect to such constituent corporation if its separate existence had continued.
SECTION 7. For purposes of this Article IX, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director or officer of the Corporation which
imposes duties on, or involves services by, such director or officer with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Article IX.
<PAGE>
EXHIBIT B
MAYTAG CORPORATION
BYLAWS
OFFICES
1. The registered office shall be in the City of Wilmington, County of New
Castle, State of Delaware, and the name of the registered agent in charge
thereof is the Corporation Trust Company. The corporation may also have an
office in the City of Newton, Jasper County, State of Iowa, and also offices at
such other places as the board of directors may from time to time appoint or the
business of the corporation may require.
SEAL
2. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware."
STOCKHOLDERS MEETINGS
3. Meetings of the stockholders may be held at such place as shall be
determined by resolution of the board of directors.
4. An annual meeting of the stockholders shall be held on such date and at
such time and place as shall be fixed by resolution of the board of directors.
Any previously scheduled annual or special meeting of the stockholders may be
postponed by resolution of the board of directors upon public notice given prior
to the date previously scheduled for such meeting of stockholders. At the annual
meeting the stockholders shall elect directors of the class for which the term
expires on such date and shall transact such other business as may properly be
brought before the meeting.
Except as otherwise provided by statute or the Certificate of
Incorporation, the only business which properly shall be conducted at any annual
meeting of the stockholders shall (i) have been specified in the written notice
of the meeting (or any supplement thereto) given as provided in Bylaw 7, (ii) be
brought before the meeting by or at the direction of the Board of Directors or
the officer of the corporation presiding at the meeting or (iii) have been
specified in a written notice (a "Stockholder Meeting Notice") given to the
corporation, in accordance with all of the following requirements, by or on
behalf of any stockholder who is entitled to vote at such meeting. Each
Stockholder Meeting Notice must be delivered personally to, or be mailed to and
received by, the secretary of the corporation at the principal executive offices
of the corporation, in Newton, Iowa, not less than 90 days nor more than 120
days prior to the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, the Stockholder Meeting Notice to be timely must be so
delivered not earlier than the 120th day prior to such annual meeting and not
later than the close of business on the later of the 90th day prior to such
annual meeting or the 10th day following the day on which public announcement of
the date of such meeting is first made. For purposes of these Bylaws, "public
announcement" shall mean disclosure in a
<PAGE>
2
press release reported by the Dow Jones News Service, Associated Press or
comparable national news service or in a document publicly filed by the
corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Securities Exchange Act of 1934, as amended. Each Stockholder
Meeting Notice shall set forth: (i) a description of each item of business
proposed to be brought before the meeting and the reasons for conducting such
business at the annual meeting; (ii) the name and record address of the
stockholder proposing to bring such item of business before the meeting; (iii)
the class and number of shares of stock held of record, owned beneficially and
represented by proxy by such stockholder as of the record date for the meeting
(if such date shall then have been made publicly available) and as of the date
of such Stockholder Meeting Notice and; (iv) all other information which would
be required to be included in a proxy statement filed with the Securities and
Exchange Commission if, with respect to any such item of business, such
stockholder were a participant in a solicitation subject to Section 14 of the
Securities Exchange Act of 1934 as amended. No business shall be brought before
any annual meeting of stockholders of the corporation otherwise than as provided
in this Bylaw 4; provided, however, that nothing contained in this Bylaw 4 shall
be deemed to preclude discussion by any stockholder of any business properly
brought before the annual meeting. The officer of the corporation presiding at
the annual meeting of stockholders shall, if the facts so warrant, determine
that business was not properly brought before the meeting in accordance with the
provisions of this Bylaw 4 and, if he should so determine, he should so declare
to the meeting and any such business so determined to be not properly brought
before the meeting shall not be transacted.
5. The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person, or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the stockholders for
the transaction of business except as otherwise provided by law, by the
Certificate of Incorporation or by these Bylaws. The officer of the corporation
presiding at the meeting or a majority of the shares so represented may adjourn
the meeting from time to time, whether or not there is such a quorum present.
Notice of the time or place of an adjourned meeting shall be given only as
required by law. The stockholders present at a duly called meeting may continue
to transact business until adjournment, notwithstanding the withdrawal of
sufficient stockholders to constitute the remaining stockholders less than a
quorum. At such adjourned meeting at which the requisite amount of voting stock
shall be represented any business may be transacted which might have been
transacted at the meeting as originally notified. If the adjournment is for more
than thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
6. At each meeting of the stockholders every stockholder having the right
to vote shall be entitled to vote in person or may authorize another person or
persons to act for such stockholder as proxy by the methods provided in Section
212 of the General Corporation Law of the State of Delaware, as in effect from
time to time. No such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period. Each stockholder shall
have one vote for each share of stock having voting power, registered in his
name on the books of the corporation. The vote for
<PAGE>
3
directors, and upon the demand of any stockholder, the vote upon any question
before the meeting, shall be by ballot. Directors shall be elected by a
plurality of the votes of the shares present in person or represented by proxy
at the meeting and entitled to vote on the election of directors. Except as
otherwise provided by law, the Certificate of Incorporation or these Bylaws, in
all matters other than the election of directors, the affirmative vote of the
majority of shares present in person or represented by proxy at the meeting and
entitled to vote on the subject matter shall be the act of the stockholders.
7. Written notice of the annual meeting shall be prepared and mailed by the
corporation to each stockholder entitled to vote thereat at such address as
appears on the stock book of the corporation at least ten and not more than
sixty days prior to the meeting.
8. A complete list of the stockholders entitled to vote at the ensuing
meeting, arranged in alphabetical order, with the address of each, and the
number of voting shares held by each, shall be prepared by the secretary and
filed in the office where the meeting is to be held, at least ten days before
every meeting of stockholders, and shall, during the usual hours of business
during such ten day period, and during the whole time of said meeting of
stockholders, be open to the examination of any stockholder for any purpose
germane to the meeting.
9. Special meetings of stockholders of the corporation may be called only
by the board of directors pursuant to a resolution approved by a majority of the
whole board of directors. Any previously scheduled annual or special meeting of
the stockholders may be postponed by resolution of the board of directors upon
public notice given prior to the date previously scheduled for such meeting of
stockholders. This Bylaw 9 may not be amended or rescinded except by the
affirmative vote of the holders of at least two-thirds of the stock of the
corporation issued and outstanding and entitled to vote, at any regular or
special meeting of the stockholders if notice of the proposed alteration or
amendment be contained in the notice of meeting.
10. Business transacted at all special meetings shall be confined to the
objects stated in the notice of the special meeting. Written notice of a special
meeting of stockholders stating the time and place and object thereof shall be
prepared and mailed by the corporation, postage prepaid, at least ten and not
more than sixty days before such meeting, to each stockholder entitled to vote
thereat at such address as appears on the books of the corporation.
11. The board of directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may include individuals who serve the
corporation in other capacities, including, without limitation, as officers,
employees, agents or representatives of the corporation, to act at a meeting of
stockholders and make a written report thereof. One or more persons may be
designated by the board of directors as alternate inspectors to replace any
inspector who fails to act. If no inspector or alternate has been appointed to
act or is able to act at a meeting of stockholders, the officer appointed to act
or is able to act at a meeting of stockholders, the officer of the corporation
presiding at the meeting shall appoint one or more inspectors to act at the
meeting. Each inspector, before
<PAGE>
4
discharging his or her duties, shall take and sign an oath faithfully to execute
the duties of inspector with strict impartiality and according to the best of
his or her ability. The inspectors shall have the duties prescribed by law.
The officer of the corporation presiding at the meeting shall fix and
announce at the meeting the date and time of the opening and the closing of the
polls for each matter upon which the stockholders will vote at the meeting.
DIRECTORS
12. The property and business of this corporation shall be managed by its
board of directors. Except as otherwise provided in these Bylaws or by law, the
directors of the corporation shall be elected at the annual meeting of
stockholders in each year. The number of directors which shall constitute the
whole board of directors shall be at least three and such number may be fixed
from time to time by a majority of the whole board.
This Section 12 may not be amended or rescinded except by the affirmative
vote of the holders of at least two-thirds of the stock of the corporation
issued and outstanding and entitled to vote, at any regular or special meeting
of the stockholders if notice of the proposed alteration or amendment be
contained in the notice of the meeting.
13. The directors may hold their meetings and have one or more offices, and
keep the books of the corporation outside of Delaware, at the office of the
corporation in the city of Newton, Iowa, or at such other places as they may
from time to time determine.
14. In addition to the powers and authorities by these Bylaws expressly
conferred upon them, the board may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these Bylaws directed or required to be
exercised or done by stockholders.
14A. Except as otherwise fixed pursuant to the Certificate of
Incorporation relating to the rights of the holders of any one or more classes
or series of Preferred Stock issued by the corporation, acting separately by
class or series, to elect, under specified circumstances, directors at a meeting
of stockholders, nominations for the election of directors may be made by the
board of directors or a committee appointed by the board of directors or by any
stockholder entitled to vote in the election of directors generally. However,
any stockholder entitled to vote in the election of directors generally may
nominate one or more persons for election as directors at any annual meeting
only if written notice of such stockholder's intent to make such nomination or
nominations has been delivered personally to, or been mailed to and received by,
the secretary of the corporation at the principal executive offices of the
corporation in Newton, Iowa, not less than 90 days nor more than 120 days prior
to the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is advanced by
more than 30 days or delayed by more than 60 days from such anniversary date,
notice by the stockholder to be timely must be so delivered not earlier than the
120th day prior to such annual meeting and not later than the close of business
on the later of the 90th day prior to such annual meeting or the 10th day
following the
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day on which public announcement of the date of such meeting is first made. Each
such notice shall set forth: (i) the name and record address of the stockholder
who intends to make the nomination; (ii) the name, age, principal occupation or
employment, business address and residence address of the person or persons to
be nominated; (iii) the class and number of shares of stock held of record,
owned beneficially and represented by Proxy by such stockholder and by the
person or persons to be nominated as of the date of such notice; (iv) a
representation that the stockholder intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the notice; (v) a
description of all arrangements or understandings between such stockholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by such
stockholder; (vi) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the Securities Exchange Act of 1934, as amended, and the proxy rules
of the Securities and Exchange Commission; and (vii) the consent of each nominee
to serve as a director of the corporation if so elected. The corporation may
require any proposed nominee to furnish such other information as may reasonably
be required by the corporation to determine the eligibility of such proposed
nominee to serve as a director of the corporation. Notwithstanding anything in
the second sentence of this Bylaw 14A to the contrary, in the event that the
number of directors to be elected to the board of directors of the corporation
is increased and there is no public announcement naming all of the nominees for
director or specifying the size of the increased board of directors made by the
corporation at least 70 days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this Bylaw 14A shall
also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the secretary at
the principal executive offices of the corporation, in Newton, Iowa, not later
than the close of business on the 10th day following the day on which such
public announcement is first made by the corporation. The officer of the
corporation presiding at the annual meeting of stockholders shall, if the facts
so warrant, determine that a nomination was not made in accordance with the
provisions of this Bylaw 14A, and if he should so determine, he should so
declare to the meeting and the defective nomination shall be disregarded.
Nominations of persons for election to the board of directors may be made
at a special meeting of stockholders at which directors are to be elected
pursuant to the corporation's notice of meeting (a) by or at the direction of
the board of directors or (b) provided that the board of directors has
determined that directors shall be elected at such meeting, by any stockholder
of the corporation who is a stockholder of record at the time of giving of
notice provided for in this Bylaw 14A, who shall be entitled to vote at the
meeting and who complies with the notice procedures set forth in this Bylaw 14A.
In the event the corporation calls a special meeting of stockholders for the
purpose of electing one or more directors to the board, any such stockholder may
nominate a person or persons (as the case may be), for election to such
position(s) as specified in the corporation's notice of meeting, if the
stockholder's notice required by the first paragraph of this Bylaw 14A shall be
delivered to the secretary at the principal executive offices of the corporation
not earlier than the 90th day prior to such special meeting and not later
than the close of business on the later of the 60th day prior to such special
meeting or the
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10th day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the board of
directors to be elected at such meeting.
No person shall be eligible for election as a director of the corporation
unless nominated in accordance with the procedures set forth in these Bylaws.
Notwithstanding the provisions of Bylaw 4 and this Bylaw 14A, a
stockholder shall also comply with all applicable requirements of the Securities
and Exchange Act of 1934, as amended, and the rules and regulations thereunder
with respect to the matters set forth in Bylaw 4 and this Bylaw 14A. Nothing in
Bylaw 4 and this Bylaw 14A shall be deemed to affect any rights of stockholders
to request inclusion of proposals in the corporation's proxy statement pursuant
to Rule 14a-8 under the Securities and Exchange Act of 1934, as amended.
EXECUTIVE COMMITTEE
15. There may be an executive committee of two or more directors designated
by resolution passed by a majority of the whole board. Said committee may meet
at stated times, or on notice to all by any of their own number. During the
intervals between meetings of the board such committee shall advise with and aid
the officers of the corporation in all matters concerning its interests and the
management of its business, and generally perform such duties and exercise such
powers as may be directed or delegated by the board of directors from time to
time. The board may delegate to such committee authority to exercise all the
powers of the board excepting power to amend the Bylaws, while the board is not
in session. Vacancies in the membership of the committee shall be filled by the
board of directors at a regular meeting or at a special meeting called for that
purpose.
16. The executive committee shall keep regular minutes of its proceedings
and report the same to the board when required.
COMPENSATION OF DIRECTORS
17. Directors who as officers or employees of the corporation receive
compensation from it shall not receive any stated compensation for their
services as directors; but by resolution of the board reasonable compensation
for attendance at board meetings may be allowed and paid.
Directors who do not receive compensation from the corporation for
employment with it in the capacity of an officer or employee shall be allowed
and paid such stated compensation as may be fixed by the board of directors; and
such directors shall be reimbursed for expenses incurred in connection with the
performance of their duties or services as director, the amount thereof to be
allowed and paid by resolution of the board.
Nothing herein contained shall be construed as precluding a director from
serving the company in any other capacity and receiving compensation therefor.
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18. Members of special or standing committees may be allowed and paid
compensation for their services as such, and expenses incident thereto, in such
amounts as from time to time are fixed and allowed by the board of directors.
MEETINGS OF THE BOARD
19. The newly elected board may meet without notice for the purpose of
organization or otherwise immediately following the annual meeting of the
stockholders or at such place and time as shall be fixed by resolution of the
board.
20. Regular meetings of the board may be held without notice at such time
and place as shall from time to time be determined by resolution of the board.
21. Special meetings of the board may be called by the chairman of the
board or the president on two days' written notice mailed to each director, or
on not less than 24 hours' notice delivered to each director personally,
telephonically or by telegram or telecopy at such number as has been provided by
the director; special meetings shall be called by the chairman of the board, the
president or secretary in like manner and on like notice on the written request
of a majority of the directors then in office. A special meeting may be held
without notice if all the directors are present or, if those not present waive
notice of the meeting in writing, either before or after such meeting.
22. At all meetings of the board, four directors, but not less than
one-third of the total number of directors, shall be necessary and sufficient to
constitute a quorum for the transaction of business, and the act of a majority
of the directors present at any meeting at which there is a quorum, shall be the
act of the board of directors, except as may be otherwise provided by statute or
by the Certificate of Incorporation or by these Bylaws.
OFFICERS
23. The officers of this corporation shall be chosen by the directors and
shall be a president, one or more vice presidents, a secretary, controller, and
such assistant secretaries as the board of directors may designate. The board
may also elect a chairman of the board and in that event, shall designate
whether he or the president shall be the chief executive officer of the
corporation.
24. The board of directors, at its first meeting after each annual meeting
of stockholders, shall elect the corporate officers.
25. The board may appoint such other officers and agents as it shall deem
necessary, who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
board.
26. The salaries of the officers of the corporation shall be fixed from
time to time by the board of directors; provided that in the case of officer
members of the board of directors their salaries may be fixed from time to time
by either of the following
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8
additional methods: (i) by a salary committee of not less than three members
appointed, by a resolution passed by a majority of the whole board of directors,
from among the members of the board of directors who are not officers of the
corporation, or (ii) by a salary committee composed of all members of the board
of directors who are not officers of the corporation, such committee to act by a
majority of its members. None of the officers of the corporation shall be
prevented from receiving a salary by reason of the fact that he is also a member
of the board of directors; but an officer who shall also be a member of the
board of directors shall not have any vote in a determination by the board of
directors of the amount of salary that shall be paid to him.
27. The officers of the corporation shall hold office until their
successors are chosen and qualify in their stead. Any officer elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the whole board of directors.
CHAIRMAN OF THE BOARD OF DIRECTORS
28. Whenever a chairman of the board of directors has been elected by the
board, he shall preside at all meetings of the board of directors and of the
stockholders. If no chairman of the board is elected, the president shall act as
the chairman of the board and shall assume the powers and duties of the
chairman.
PRESIDENT
29. (a) The president shall be the chief executive officer of the
corporation unless a chairman of the board has been elected and designated as
such officer. Subject to the authority of the chairman of the board in such
event, the president shall have general and active management of the business of
the corporation and shall see that all orders and resolutions of the board are
carried into effect. In the absence or disability of the chairman of the board,
where that office has been filled by election of the board, the powers and
duties of the chairman shall be assumed by the president.
(b) He shall execute bonds, mortgages and other contracts requiring a seal,
under the seal of the corporation.
(c) He shall have the general powers and duties of supervision and
management usually vested in the office of president of the corporation.
VICE PRESIDENT
30. The board of directors may elect one or more vice presidents and may
designate one or more of the vice presidents to be executive vice presidents.
Subject to the succession provided for in Bylaw 29(a), in the absence or
disability of the CEO, the executive vice presidents, or the vice presidents in
the event none have been designated "Executive", in the order designated, (or in
the absence of any designation, then in the order of their election) shall
perform the duties and exercise the powers of the CEO. The vice president(s)
shall perform such other duties as the board of directors may prescribe.
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SECRETARY
31. The secretary shall attend all sessions of the board and all meetings
of the stockholders and record all votes and the minutes of all proceedings in a
book to be kept for that purpose and shall perform like duties for the standing
committees when required. He shall be custodian of the corporate records and of
the seal of the corporation and see that the seal of the corporation is affixed
to all documents, the execution of which on behalf of the corporation under its
seal is duly authorized. He shall give, or cause to be given, notice of all
meetings of the stockholders and of the board of directors, and shall perform
such other duties as may be prescribed by the board of directors or president,
under whose supervision he shall be.
TREASURER
32. (a) The treasurer shall, under the general direction of the Chief
Financial Officer, be responsible for the planning and directing of corporate
finance activities. He shall have the custody of corporate funds and securities
and shall deposit all moneys, and other valuable effects in the name and to the
credit of the Corporation, in such depositories as may be designated by the
Board of Directors.
(b) He shall disburse the funds of the Corporation as may be ordered by the
Board, taking proper vouchers for such disbursements, and shall render to the
Chairman of the Board, the President and the directors, at the regular meetings
of the Board, or whenever they may require it, an account of all his
transactions as Treasurer.
(c) He shall give the Corporation a bond if required by the Board of
Directors in a sum, and with one or more sureties satisfactory to the Board, for
the faithful performance of the duties of his office, and for the restoration to
the Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
CHIEF FINANCIAL OFFICER
33. The Chief Financial Officer of the corporation shall have the general
responsibility for the financial operations of the corporation and for all
receipts and disbursements of the funds of the corporation.
CONTROLLER
34. The controller shall be the chief accounting officer of the
corporation.
ASSISTANT SECRETARY
35. The assistant secretaries in the order of their seniority shall, in the
absence or disability of the secretary, perform the duties and exercise the
powers of the secretary, and shall perform such other duties as the board of
directors shall prescribe.
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ASSISTANT TREASURER
36. Repealed.
VACANCIES AND NEWLY CREATED DIRECTORSHIPS
37. If the office of any officer or agent becomes vacant by reason of
death, resignation, retirement, disqualification, removal from office or
otherwise, such vacancy may be filled by the board of directors.
Vacancies in the board of directors and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, and
the directors so chosen shall hold office until the expiration of the term of
the class to which they have been chosen and until their successors are duly
elected and qualified. This second paragraph of Section 37 may not be amended or
rescinded except by the affirmative vote of the holders of at least two-thirds
of the stock of the corporation issued and outstanding and entitled to vote, at
any regular or special meeting of the stockholders if notice of the proposed
alteration or amendment be contained in the notice of the meeting.
DUTIES OF OFFICERS MAY BE DELEGATED
38. In case of the absence of any officer of the corporation, or for any
other reason that the board may deem sufficient, the board may delegate, for the
time being, the powers or duties, or any of them, of such officer to any other
officer, or to any director, provided a majority of the entire board concur
therein.
CERTIFICATES OF STOCK
39. The certificates of stock of the corporation shall be numbered and
shall be entered in the books of the corporation as they are issued. They shall
exhibit the holder's name and number of shares and shall be signed by the
president or a vice president and the treasurer or an assistant treasurer, or
the secretary or an assistant secretary.
TRANSFERS OF STOCK
40. Transfers of stock shall be made on the books of the corporation only
by the person named in the certificate or by attorney, lawfully constituted in
writing, and upon surrender of the certificate therefor.
41. The board of directors shall have power to appoint one or more transfer
agents and/or one or more registrars of transfers and may provide that the
issuance of certificates of stock of this corporation shall not be valid unless
signed by such transfer agent or transfer agents and/or registrar of transfers
or registrars of transfers, and if such certificate is countersigned (1) by a
transfer agent other than the corporation or its employee, or (2) by a registrar
other than the corporation or its employee, any other signature on the
certificate may be a facsimile.
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RECORD DATES
42. In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the board of directors, and shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any such
other action. If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business of the day next preceding the day on which notice is
given, and the record date for any other purpose shall be at the close of
business on the day on which the board of directors adopts the resolution
relating thereto. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
REGISTERED STOCKHOLDERS
43. The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and accordingly shall not
be bound to recognize any equitable or other claim to or interest in such share
on the part of any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by the laws of Delaware.
LOST CERTIFICATE
44. Any person claiming a certificate of stock to be lost, stolen or
destroyed, shall make an affidavit or affirmative of the fact and advertise the
same in such manner as the board of directors may require, and shall if the
directors so require give the corporation a bond of indemnity, sufficient to
indemnify the corporation against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of a new replacement certificate, whereupon a new certificate may be
issued of the same tenor and for the same number of shares as the one alleged to
be lost, stolen or destroyed.
INSPECTION OF BOOKS
45. The directors shall determine from time to time whether and, if
allowed, when and under what conditions and regulations the accounts and books
of the corporation (except such as may by statute be specifically open to
inspection) or any of them shall be open to the inspection of the stockholders,
and the stockholders' rights in this respect are and shall be restricted and
limited accordingly.
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CHECKS
46. All checks or demands for money and notes of the corporation, shall be
signed by such officer or officers, employee or employees as the board of
directors may from time to time designate.
FISCAL YEAR
47. Repealed.
DIRECTORS' ANNUAL STATEMENT
48. The board of directors shall present at each annual meeting, and when
called for by vote of the stockholders at any special meeting of the
stockholders, a full and clear statement of the business and condition of the
corporation.
NOTICES
49. Except as otherwise provided in these Bylaws, whenever under the
provisions of these Bylaws notice is required to be given to any director,
officer or stockholder, it shall not be construed to mean personal notice, but
such notice may be given in writing, by telecopy as provided in Bylaw 21, by
mail, by depositing the same in the post office or letter box, in a postpaid
sealed wrapper, addressed to such stockholder, officer or director at such
address as appears on the books of the corporation, or, in default of other
address, to such director, officer or stockholder at the General Post Office in
the City of Wilmington, Delaware, and such notice shall be deemed to be given at
the time when the same shall be thus mailed.
Any stockholder, director, or officer may waive any notice required to be
given under these Bylaws, either before or after the event for which such notice
was required.
INCENTIVE PAYMENTS
50. Repealed.
51. Unless otherwise provided by resolution adopted by the board of
directors, the president or any vice president or the secretary may from time to
time appoint an attorney or attorneys, or an agent or agents, to exercise in the
name and on behalf of the company the powers and rights which it may have as the
holder of stock or other securities in any other corporation or membership in
any organization, to vote or consent in respect of such stock or other
securities or membership, and the president, or any vice president or the
secretary may execute or cause to be executed in the name and on behalf of the
company and under its corporate seal, or otherwise all such written proxies or
other instruments as he may deem necessary or proper in order that the company
may exercise its powers and rights.
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AMENDMENTS
52. Except as otherwise provided in these Bylaws, these Bylaws may be
altered or amended by the affirmative vote of a majority of the stock issued and
outstanding and entitled to vote thereat, at any regular or special meeting of
the stockholders, if notice of the proposed alteration or amendment be contained
in the notice of the meeting, or (except as otherwise provided in these Bylaws)
by the affirmative vote of a majority of the board of directors at a regular or
special meeting of the board.