SC 13D
1
x0503-13d.txt
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. __)<1>
INTELLIGENT CONTROLS, INC.
--------------------------
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
--------------------------
(Title of Class of Securities)
45815R 10 0
-----------
(Cusip Number)
Franklin Electric Co., Inc.
400 E. Spring Street
Bluffton, Indiana 46714
(260) 827-5633
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 25, 2002
--------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition that is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1(e),
13d-1(f) or 13d-1(g), check the following box. [ ]
NOTE. Schedules filed in paper format shall include a
signed original and five copies of the schedule, including
all exhibits. See Rule 13d-7(b) for other parties to whom
copies are to be sent.
(Continued on following pages)
(Page 1 of 7 pages)
------------------------
<1> The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, SEE the NOTES).
CUSIP No. 45815R 10 0 Page 2 of 10 Pages
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Franklin Electric Co., Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) /x/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Indiana
7 SOLE VOTING POWER
NUMBER OF
0 Shares
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
3,519,279 Shares
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
O Shares
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON
0 Shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,519,279 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.26%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D relates to the shares of
common stock, no par value (the "Common Stock"), of Intelligent
Controls, Inc., a Maine corporation ("INCON"). The principal
executive office of INCON is located at 74 Industrial Park Road, Saco,
Maine 04072.
ITEM 2. IDENTITY AND BACKGROUND.
Franklin Electric Co., Inc. (the "Reporting Person" or "Franklin
Electric") is filing this statement. Franklin Electric is an Indiana
corporation and its principal business address is 400 E. Spring
Street, Bluffton, Indiana 46714. Franklin Electric, a technical
leader in electric motors, drives and controls, is the world's largest
manufacturer of submersible water and fueling systems motors, a
manufacturer of underground fueling systems hardware and flexible
piping systems and a leader in engineered industrial motor products.
The directors and executive officers of Franklin Electric (all of
whom are U.S. citizens) are set forth on Schedule I attached hereto.
During the last five years, the Reporting Person has not, and to
the knowledge of the Reporting Person, the directors and executive
officers of the Reporting Person have not: (i) been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors); or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State securities laws or
finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Franklin Electric acquired the right to vote certain shares of
Common Stock of INCON pursuant to a Voting Agreement among Ampersand
1995 Limited Partnership, Ampersand 1995 Companion Fund Limited
Partnership, Charles D. Yie, Alan Lukas, Roger E. Brooks, Paul E.
Lukas, Karen S. Lukas, Alan Lukas, as custodian for Andrew B. Lukas,
and James H. Young II, as Trustee of the Andrew B. Lukas Trust dated
December 4, 1994 (collectively, the "Shareholders") and Franklin
Electric dated April 25, 2002 (the "Voting Agreement") in connection
with the Merger (as defined in item 4 below) of FEI Corporation, a
wholly-owned subsidiary of Franklin Electric, and INCON.
ITEM 4. PURPOSE OF TRANSACTION.
On April 25, 2002, Franklin Electric, FEI Corporation, and INCON
entered into an Agreement and Plan of Merger (the "Merger Agreement")
whereby Franklin Electric will acquire INCON by merging FEI
Corporation with and into INCON, with INCON as the surviving entity
3
(the "Merger"). In connection with the Merger, each share of INCON
Common Stock issued and outstanding immediately prior to the
consummation of the Merger (other than dissenting shares) will be
converted into and represent the right to receive $3.95 in cash. The
obligations of the parties are subject to certain conditions,
including, among other things, approval of the Merger Agreement by
INCON shareholders. The Merger Agreement can be terminated (i) by
mutual consent of INCON and Franklin Electric; (ii) by either party
if, upon a vote at the meeting of the shareholders of INCON, the
Merger Agreement and Merger fail to receive the requisite vote for
approval and adoption by the shareholders of INCON; (iii) by either
party if the Merger has not been consummated on or before June 30,
2002; (iv) by either party if any governmental entity has issued an
order, decree or ruling enjoining, restraining or otherwise
prohibiting the Merger; (v) by INCON if: (A) Franklin Electric has
materially breached any of its representations, warranties, covenants
or agreements contained in the Merger Agreement; or (B) under certain
circumstances if the board of directors of INCON withdraws, modifies
or changes its approval or recommendation in favor of the Merger
Agreement or the Merger and INCON simultaneously pays Franklin
Electric a termination payment of $1,000,000; and (vi) by Franklin
Electric if: (A) INCON has materially breached any of its
representations, warranties, covenants or agreements contained in the
Merger Agreement; (B) if prior to the shareholders' meeting, the board
of directors of INCON withdraws, modifies, or changes in a manner
adverse to Franklin Electric, its approval or recommendation in favor
of the Merger Agreement or the Merger or approves or recommends an
acquisition proposal of a third party or enters into a definitive
agreement for a superior proposal with another party; or (C) if prior
to the shareholders' meeting, a tender offer or exchange offer for any
outstanding shares of Common Stock is commenced and INCON either fails
to recommend against acceptance of such tender offer or exchange offer
by its stockholders or takes no position with respect thereto.
As an inducement and a condition to Franklin Electric entering
into the Merger Agreement, the Shareholders (owners of approximately
74% of the outstanding shares of Common Stock of INCON) entered into
the Voting Agreement.
The Voting Agreement provides, among other things, that the
Shareholders: (i) will vote their shares of Common Stock in favor of
the Merger and the Merger Agreement, and the transactions contemplated
by or referred to in the Merger Agreement; (ii) have granted certain
executive officers of Franklin Electric a proxy to vote the shares of
Common Stock held by the Shareholders; (iii) will not sell, offer to
sell or otherwise transfer or dispose of any of their shares of Common
Stock without the prior written consent of Franklin Electric; and (iv)
will not take any other action that would in any way restrict, limit
or interfere with the performance of the Shareholders' obligations
under or the transactions contemplated by the Merger Agreement. The
Voting Agreement terminates upon termination of the Merger Agreement.
4
The Merger Agreement and the Voting Agreement are attached hereto
as Exhibits 1 and 2, respectively. The above summary of these
documents does not purport to be complete and is subject to
qualification in its entirety by reference to the text of the Merger
Agreement and the Voting Agreement attached hereto.
Except as set forth in this Item 4 or as contemplated by the
Merger Agreement, the Reporting Person, and to the knowledge of the
Reporting Person, the executive officers or directors of the Reporting
Person, have no present plans or proposals that relate to or that
would result in any of the actions specified in clauses (a) through
(j) of Item 4 of Schedule 13D of the Act.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The share ownership percentages described in this Schedule 13D
are based on 4,739,399 shares of Common Stock being outstanding, as
reported in the Company's Amendment No. 1 to Form 10-KSB/A dated April
30, 2002.
(a) The aggregate number of shares of Common Stock that Franklin
Electric owns beneficially, pursuant to Rule 13d-3 of the
Act, is 3,519,279 which constitutes approximately 74% of the
outstanding shares of Common Stock based on 4,739,399 shares
of Common Stock outstanding, as reported by INCON in its
Amendment No. 1 to Form 10-KSB/A dated April 30, 2002.
(b) Pursuant to the Voting Agreement, the Reporting Person has
shared power to vote or direct the vote of 3,519,279 shares
(or approximately 74%) of the Common Stock of INCON.
(c) There have been no transactions by the Reporting Person in
the shares of Common Stock in the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Except as set forth herein or in the Exhibits filed herewith,
there are no contracts, arrangements, understandings or relationships
of the type required to be disclosed in response to Item 6 of
Schedule 13D of the Act with respect to any securities of INCON.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Agreement and Plan of Merger by and among Franklin
Electric Co., Inc., FEI Corporation, and Intelligent
Controls, Inc., dated April 25, 2002.
5
Exhibit 2 Voting Agreement among Ampersand 1995 Limited
Partnership, Ampersand 1995 Companion Fund Limited
Partnership, Charles D. Yie, Alan Lukas, Roger E.
Brooks, Paul E. Lukas, Karen S. Lukas, Alan Lukas, as
custodian for Andrew B. Lukas, and James H. Young II,
as Trustee of the Andrew B. Lukas Trust dated December
4, 1994, and Franklin Electric Co., Inc., dated
April 25, 2002.
6
SIGNATURES
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned certifies that the information
set forth in this instrument is true, complete and correct.
Dated: May 3, 2002
FRANKLIN ELECTRIC CO., INC.
By: /s/ Gregg C. Sengstack
-------------------------------
Name: Gregg C. Sengstack
Title: Senior Vice President and
Chief Executive Officer
7
EXHIBIT INDEX
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EXHIBIT
NO. DESCRIPTION
------- -----------
1. Agreement and Plan of Merger by and among Franklin Electric
Co., Inc., FEI Corporation, and Intelligent Controls, Inc.,
dated April 25, 2002.
2. Voting Agreement among Ampersand 1995 Limited Partnership,
Ampersand 1995 Companion Fund Limited Partnership, Charles
D. Yie, Alan Lukas, Roger E. Brooks, Paul E. Lukas, Karen S.
Lukas, Alan Lukas, as custodian for Andrew B. Lukas, and
James H. Young II, as Trustee of the Andrew B. Lukas Trust
dated December 4, 1994, and Franklin Electric Co., Inc.,
dated April 25, 2002.
8
SCHEDULE I
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William H. Lawson Chairman of the Board, Chief Executive Officer and President
400 E. Spring Street
Bluffton, Indiana 46714
Jerome D. Brady Director
535 Sanctuary Drive C607
Longboat Key, Florida 34228
R. Scott Trumbull Director
Owens-Illinois, Inc.
One SeaGate 25L
Toledo, Ohio 43668
Robert H. Little Director
1451 Rembrandt Road
Boulder, Colorado 80302
Patricia Schaefer Director
5400 Deer Run Court
Muncie, Indiana 47304
Donald J. Schneider Director
Schneider National, Inc.
3101 So. Packerland Dr.
Green Bay, Wisconsin 54313
John B. Lindsay Director
1971 E. North Timber Ridge Road
Bluffton, Indiana 46714
Juris Vikmanis Director
65 Abrams Road
Cheshire, Connecticut 06410
Howard B. Witt Director
Littelfuse, Inc.
800 E. Northwest Highway
Des Plaines, Illinois 60016
Jess B. Ford Senior Vice President
400 E. Spring Street
Bluffton, Indiana 46714
Peter C. Maske Senior Vice President, Operations
400 E. Spring Street
Bluffton, Indiana 46714
9
Gregg C. Sengstack Senior Vice President and Chief Financial Officer
400 E. Spring Street
Bluffton, Indiana 46714
Donald R. Hobbs Vice President, Submersible Motor Marketing
400 E. Spring Street
Bluffton, Indiana 46714
Thomas A. Miller Vice President, Submersible Motor Engineering
400 E. Spring Street
Bluffton, Indiana 46714
Kirk M. Nevins Vice President, Sales
400 E. Spring Street
Bluffton, Indiana 46714
10
EXHIBIT 1
---------
AGREEMENT AND PLAN OF MERGER
DATED AS OF APRIL 25, 2002
BY AND AMONG
FRANKLIN ELECTRIC CO., INC.,
FEI CORPORATION
AND
INTELLIGENT CONTROLS, INC.
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 The Merger . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Closing . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.3 Effective Time . . . . . . . . . . . . . . . . . 2
SECTION 1.4 Certificate of Incorporation . . . . . . . . . . 2
SECTION 1.5 By-Laws . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.6 Directors . . . . . . . . . . . . . . . . . . . 2
SECTION 1.7 Officers . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.8 Effect of Merger on Merger Subsidiary Capital
Stock . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.9 Conversion of Common Stock . . . . . . . . . . . 2
SECTION 1.10 Exchange of Certificates and Related Matters . . 3
SECTION 1.11 Stock Options . . . . . . . . . . . . . . . . . 5
SECTION 1.13 Further Assurances . . . . . . . . . . . . . . . 6
ARTICLE II Representations and Warranties of the Company . . . 6
SECTION 2.1 Organization, Standing and Corporate Power . . . 6
SECTION 2.2 Capital Structure . . . . . . . . . . . . . . . 7
SECTION 2.3 Subsidiaries . . . . . . . . . . . . . . . . . . 7
SECTION 2.4 Authority; Noncontravention . . . . . . . . . . 8
SECTION 2.5 SEC Documents . . . . . . . . . . . . . . . . . 10
SECTION 2.6 Absence of Certain Changes or Events . . . . . . 10
SECTION 2.7 Absence of Undisclosed Liabilities . . . . . . . 11
SECTION 2.8 Benefit Plans . . . . . . . . . . . . . . . . . 12
SECTION 2.9 Taxes . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.10 Compliance with Applicable Laws . . . . . . . . 16
SECTION 2.11 Product Liability . . . . . . . . . . . . . . . 17
SECTION 2.12 Brokers . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.13 Environmental . . . . . . . . . . . . . . . . . 17
SECTION 2.14 Litigation . . . . . . . . . . . . . . . . . . . 19
SECTION 2.15 Labor Relations . . . . . . . . . . . . . . . . 20
SECTION 2.16 Contracts . . . . . . . . . . . . . . . . . . . 20
SECTION 2.17 Intellectual Property . . . . . . . . . . . . . 20
SECTION 2.18 Real Estate . . . . . . . . . . . . . . . . . . 22
SECTION 2.19 Anti-takeover Provisions . . . . . . . . . . . . 22
SECTION 2.20 Voting Requirements . . . . . . . . . . . . . . 22
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND
MERGER SUBSIDIARY . . . . . . . . . . . . . . . . . 23
SECTION 3.1 Organization and Standing . . . . . . . . . . . 23
SECTION 3.2 Merger Subsidiary . . . . . . . . . . . . . . . 23
SECTION 3.3 Authority; Noncontravention . . . . . . . . . . 23
SECTION 3.4 Financing . . . . . . . . . . . . . . . . . . . 24
SECTION 3.5 Brokers . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . 24
SECTION 4.1 Preparation of Proxy Statement . . . . . . . . . 24
SECTION 4.2 Meeting of Shareholders . . . . . . . . . . . . 25
-i-
SECTION 4.3 Access to Information; Confidentiality . . . . . 25
SECTION 4.4 Reasonable Efforts . . . . . . . . . . . . . . . 26
SECTION 4.5 Public Announcements . . . . . . . . . . . . . . 26
SECTION 4.6 Acquisition Proposals . . . . . . . . . . . . . 26
SECTION 4.7 Filings; Other Action . . . . . . . . . . . . . 27
SECTION 4.8 Indemnification . . . . . . . . . . . . . . . . 27
SECTION 4.9 Fiduciary Obligations . . . . . . . . . . . . . 28
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO
OR IN CONTEMPLATION OF THE MERGER . . . . . . . . . 28
SECTION 5.1 Conduct of Business by the Company . . . . . . . 28
SECTION 5.2 Management of the Company and Subsidiaries . . . 31
SECTION 5.3 Other Actions . . . . . . . . . . . . . . . . . 31
SECTION 5.4 Notification . . . . . . . . . . . . . . . . . . 31
SECTION 5.5 Settlement of Promissory Note FOR Restricted
Shares . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.6 Continuity of Benefits . . . . . . . . . . . . . 32
SECTION 5.7 Facilities . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . 32
SECTION 6.1 Conditions to Each Party's Obligation to
Effect the Merger . . . . . . . . . . . . . . . 32
SECTION 6.2 Conditions to Obligations of Acquiror . . . . . 33
SECTION 6.3 Conditions to Obligation of the Company . . . . 34
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . 34
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . 34
SECTION 7.2 Effect of Termination . . . . . . . . . . . . . 36
SECTION 7.3 Amendment . . . . . . . . . . . . . . . . . . . 37
SECTION 7.4 Extension; Waiver . . . . . . . . . . . . . . . 37
SECTION 7.5 Procedure for Termination, Amendment,
Extension or Waiver . . . . . . . . . . . . . . 38
ARTICLE VIII SURVIVAL OF PROVISIONS . . . . . . . . . . . . . . . 38
SECTION 8.1 Survival . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IX NOTICES . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 9.1 Notices . . . . . . . . . . . . . . . . . . . . 38
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 39
SECTION 10.1 Entire Agreement . . . . . . . . . . . . . . . . 39
SECTION 10.2 Expenses . . . . . . . . . . . . . . . . . . . . 39
SECTION 10.3 Counterparts . . . . . . . . . . . . . . . . . . 39
SECTION 10.4 No Third-Party Beneficiary . . . . . . . . . . . 40
SECTION 10.5 Governing Law . . . . . . . . . . . . . . . . . 40
SECTION 10.6 Assignment; Binding Effect . . . . . . . . . . . 40
SECTION 10.7 Enforcement of this Agreement . . . . . . . . . 40
SECTION 10.8 Headings, Gender, Etc. . . . . . . . . . . . . . 40
-ii-
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and
entered into as of April 25, 2002 by and among Franklin Electric Co.,
Inc., an Indiana corporation ("Acquiror"), FEI Corporation, a Maine
corporation and a wholly-owned subsidiary of Acquiror ("Merger
Subsidiary"), and Intelligent Controls, Inc., a Maine corporation (the
"Company").
RECITALS
WHEREAS, the Boards of Directors of Acquiror, Merger Subsidiary
and the Company each have determined that it is in the best interests
of their respective shareholders for Acquiror to acquire the Company
upon the terms and subject to the conditions of this Agreement;
WHEREAS, the Boards of Directors of Acquiror, Merger Subsidiary
and the Company have approved the merger of Merger Subsidiary with and
into the Company (the "Merger") upon the terms and subject to the
conditions of this Agreement so that the Company will become a wholly-
owned subsidiary of Acquiror; and
WHEREAS, Acquiror, Merger Subsidiary and the Company desire to
make certain representations, warranties, covenants and agreements in
connection with the Merger;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time (as defined in
Section 1.3), Merger Subsidiary shall be merged with and into the
Company, in accordance with the Maine Business Corporation Act (the
"MBCA"), and the separate corporate existence of Merger Subsidiary
shall cease and the Company shall continue as the surviving
corporation (as such, the "Surviving Corporation") with all the
rights, privileges, immunities, powers and franchises, and subject to
all the restrictions, disabilities and duties, of a corporation
organized under the MBCA. The Merger shall have the effects set forth
in the MBCA.
SECTION 1.2 CLOSING. The closing of the Merger (the "Closing")
shall take place at 9:00 a.m. on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction or waiver of the conditions (excluding conditions that,
by their terms, cannot be satisfied until the Closing Date) set forth
in Article VI, unless another time or date is agreed to by the
parties. The Closing shall be held at the offices of Schiff Hardin &
Waite, 6600 Sears Tower, Chicago, Illinois 60606, or such other
location as the parties shall agree. The date on which the Closing
occurs is referred to in this Agreement as the "Closing Date."
SECTION 1.3 EFFECTIVE TIME. The parties hereto will file with
the Secretary of State of the State of Maine (the "Maine Secretary of
State") on the Closing Date (or on such other date as Acquiror and the
Company may agree) articles of merger or other appropriate documents,
mutually satisfactory in form and substance to Acquiror and the
Company and executed in accordance with the relevant provisions of the
MBCA, and make all other filings or recordings required under the
MBCA, in connection with the Merger. The Merger shall become effective
upon the filing of the articles of merger with the Maine Secretary of
State, or at such later time as is specified in the articles of merger
(the "Effective Time").
SECTION 1.4 CERTIFICATE OF INCORPORATION. The articles of
incorporation of the Merger Subsidiary at the Effective Time shall be
the articles of incorporation of the Surviving Corporation until
thereafter amended in accordance with its terms and as provided by
applicable law.
SECTION 1.5 BY-LAWS. The by-laws of the Merger Subsidiary at
the Effective Time shall be the by-laws of the Surviving Corporation
until thereafter amended as provided by applicable law, the articles
of incorporation or the by-laws of the Surviving Corporation.
SECTION 1.6 DIRECTORS. The directors of the Merger Subsidiary
at the Effective Time shall be the directors of the Surviving
Corporation and shall hold office from the Effective Time until their
respective successors are duly elected or appointed and qualified in
the manner provided in the articles of incorporation or by-laws of the
Surviving Corporation, or as otherwise provided by applicable law.
SECTION 1.7 OFFICERS. The officers set forth on Exhibit A to
this Agreement shall be the officers of the Surviving Corporation and
shall hold office from the Effective Time until their respective
successors are duly elected or appointed and qualified in the manner
provided in the articles of incorporation or by-laws of the Surviving
Corporation, or as otherwise provided by applicable law.
SECTION 1.8 EFFECT OF MERGER ON MERGER SUBSIDIARY CAPITAL STOCK.
Each share of capital stock of Merger Subsidiary issued and
outstanding immediately prior to the Effective Time shall be converted
into one validly issued, fully paid and nonassessable share of common
stock, no par value, of the Surviving Corporation.
SECTION 1.9 CONVERSION OF COMMON STOCK.
(a) OUTSTANDING COMMON STOCK. Subject to the other
provisions of this Section 1.9, each share of common stock, no
par value, of the Company (the "Common Stock") issued and
-2-
outstanding immediately prior to the Effective Time (other than
treasury shares to be cancelled in accordance with Section
1.9(b), and Dissenting Shares (as defined in Section 1.12), and
subject to settlement of the restricted stock note in accordance
with Section 5.5) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the
right to receive $3.95 in cash, without interest (the "Merger
Consideration").
(b) TREASURY SHARES. Each share of Common Stock issued and
outstanding immediately prior to the Effective Time which is then
held as a treasury share by the Company immediately prior to the
Effective Time shall, by virtue of the Merger and without any
action on the part of the Company, be cancelled and retired and
cease to exist, without any conversion thereof.
SECTION 1.10 EXCHANGE OF CERTIFICATES AND RELATED MATTERS.
(a) PAYING AGENT. At the Effective Time, Acquiror shall
cause the Surviving Corporation to deposit with a paying agent to
be designated by Acquiror and the Company prior to the Effective
Time ("Paying Agent"), for the benefit of the holders of shares
of Common Stock, cash in an aggregate amount equal to the
aggregate Merger Consideration (such amount being sometimes
referred to in this Agreement as the "Payment Fund").
(b) LETTER OF TRANSMITTAL. Promptly after the Effective
Time (but in no event more than five business days thereafter),
the Surviving Corporation shall require the Paying Agent to mail
to each record holder of certificates (the "Certificates") that
immediately prior to the Effective Time represented shares of
Common Stock, a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title shall
pass, only upon proper delivery of Certificates to the Paying
Agent and shall be substantially in such form as has been agreed
to by the Company and Acquiror prior to Closing) and instructions
for use in surrendering such Certificates and receiving the
Merger Consideration to which such holder shall be entitled
therefor pursuant to Section 1.9. The Surviving Corporation also
shall require the Paying Agent to have such letter of transmittal
and instructions available at its offices immediately after the
Effective Date in order to accommodate record holders of
Certificates desiring to receive the Merger Consideration at the
earliest possible date.
(c) EXCHANGE PROCEDURES. Upon surrender to the Paying
Agent for cancellation of Certificates, together with a letter of
transmittal in accordance with Section 1.10(b) and such other
customary documents as may be required by the instructions to the
letter of transmittal, and acceptance thereof by the Paying
Agent, the holder of such Certificates shall be entitled to
receive in exchange therefor the amount of cash into which the
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number of shares of Common Stock previously represented by such
Certificates shall have been converted pursuant to Section
1.9(a). The Paying Agent shall accept such Certificates upon
compliance with such reasonable terms and conditions as the
Paying Agent may impose to effect an orderly exchange in
accordance with normal exchange practices. If the Merger
Consideration (or any portion thereof) is to be delivered to any
person other than the person in whose name the Certificates
surrendered in exchange therefor is registered on the record
books of the Company, it shall be a condition to such exchange
that the Certificates so surrendered shall be properly endorsed
or otherwise be in proper form for transfer and that the person
requesting such exchange shall pay to the Paying Agent any
transfer or other taxes required by reason of the payment of such
consideration to a person other than the record holder of the
Certificates surrendered, or shall establish to the satisfaction
of the Paying Agent that such tax has been paid or is not
applicable. After the Effective Time, there shall be no further
transfer on the records of the Company or its transfer agent of
any shares of Common Stock and if any Certificates are presented
to the Company for transfer, they shall be cancelled against
delivery of the Merger Consideration as provided above. Until
surrendered as contemplated by this Section 1.10(b), Certificates
(other than Certificates representing treasury shares of Common
Stock to be cancelled in accordance with Section 1.9(b)), shall
be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the Merger
Consideration, without any interest thereon.
(d) NO FURTHER OWNERSHIP RIGHTS IN SHARES. The Merger
Consideration paid upon the surrender for exchange of
Certificates representing shares of Common Stock in accordance
with the terms of this Article I shall be deemed to have been
issued and paid in full satisfaction of all rights pertaining to
the shares of Common Stock previously represented by such
Certificates.
(e) TERMINATION OF PAYMENT FUND. Any portion of the
Payment Fund which remains undistributed to the holders of the
Certificates representing shares of Common Stock for 120 days
after the Effective Time shall be delivered to Acquiror, upon
demand, and any holders of shares of Common Stock who have not
theretofore complied with this Article I shall thereafter look
only to Acquiror and only as general creditors thereof for
payment, without interest, of their claim for any Merger
Consideration with respect to their shares of Common Stock.
(f) NO LIABILITY. None of Acquiror, the Surviving
Corporation or the Paying Agent shall be liable to any person in
respect of any cash, shares, dividends or distributions payable
from the Payment Fund delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If any
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Certificates representing shares of Common Stock shall not have
been surrendered prior to seven years after the Effective Time
(or immediately prior to such earlier date on which any Merger
Consideration in respect of such Certificate would otherwise
escheat to or become the property of any Governmental Entity (as
defined in Section 2.4)), any such cash, shares, dividends or
distributions payable in respect of such Certificates 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.
SECTION 1.11 STOCK OPTIONS. The Company shall take all
necessary and appropriate action to provide that immediately prior to
the Effective Time each outstanding option to purchase Common Stock
(each, a "Stock Option") granted under or pursuant to any stock option
plan of the Company or any agreement entered into by the Company with
any employee or director of the Company or any Subsidiary (as defined
in Section 2.3) thereof, shall:
(a) to the extent vested and exercisable, be deemed
cancelled, with holders of a Stock Option entitled to receive
from the Company in consideration for the cancellation of such
Stock Option an amount in cash (less applicable withholding
taxes) equal to the product of (i) the number of shares of Common
Stock previously subject to such Stock Option, and (ii) the
excess, if any, of the Merger Consideration over the exercise
price per share of Common Stock previously subject to exercise
under such Stock Option, and/or
(b) to the extent not vested and exercisable, be deemed
cancelled without any consideration payable to holders of a Stock
Option.
The Company shall take all necessary and appropriate actions to
provide that as of the Effective Time (i) no holder of Stock Options
will have any right to receive shares of common stock of the Surviving
Corporation upon exercise of any such Stock Option, and (ii) the
Company shall pay, or have made arrangements to pay, to each holder
under Section 1.11(a) the amount contemplated by Section 1.11(a), and
each holder, whether or not entitled to payment under Section 1.11(a),
shall have delivered to the Company a release on terms mutually
acceptable to the Company and Acquiror.
SECTION 1.12 DISSENTING SHARES. Notwithstanding anything in
this Agreement to the contrary, shares of Common Stock outstanding
immediately prior to the Effective Time and held by a holder who has
met all applicable conditions for the exercise of dissenters' rights
under Section 909 of the MBCA, shall not be converted into or
represent the right to receive the Merger Consideration ("Dissenting
Shares"). Shareholders holding Dissenting Shares shall be entitled to
receive payment of the fair value of such shares of Common Stock in
accordance with the provisions of Section 909 of the MBCA, except that
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all Dissenting Shares held by shareholders who have withdrawn or
forfeited their right to dissent under Section 909 of the MBCA shall
thereupon be deemed to have been converted into, as of the Effective
Time, the right to receive, without any interest thereon, the Merger
Consideration, upon surrender, in the manner provided in Section
1.10(b), of the Certificate or Certificates that formerly evidenced
such shares of Common Stock. The Company shall give Acquiror prompt
notice of any demands under Section 909 of the MBCA, withdrawals of
such demands, and any other instruments received by the Company, and
Acquiror shall have the right to participate in all negotiations and
proceedings with respect to such demands. Prior to the Effective Time,
the Company shall not, except with the prior written consent of
Acquiror, make any payment with respect to any demands under Section
909 of the MBCA, or settle or offer to settle, any such demands.
SECTION 1.13 FURTHER ASSURANCES. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised
that any deeds, bills of sale, assignments or assurances or any other
acts or things are necessary, desirable or proper (a) to vest, perfect
or confirm, of record or otherwise, in the Surviving Corporation its
right, title and interest in, to or under any of the rights,
privileges, powers, franchises, properties or assets of either of the
Company or Merger Subsidiary, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper
officers and directors or their designees shall be authorized to
execute and deliver, in the name and on behalf of either the Company
or Acquiror, all such deeds, bills of sale, assignments and assurances
and do, in the name and on behalf of such corporations, all such other
acts and things as may be necessary, desirable or proper to vest,
perfect or confirm the Surviving Corporation's right, title and
interest in, to and under any of the rights, privileges, powers,
franchises, properties or assets of such corporations and otherwise to
carry out the purposes of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Acquiror and Merger
Subsidiary, except as set forth in the specifically referenced
sections of the disclosure schedule delivered on or prior to the date
hereof by the Company (the "Disclosure Schedule") as follows:
SECTION 2.1 ORGANIZATION, STANDING AND CORPORATE POWER. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maine and has the requisite
corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. The Company is
duly qualified or licensed to do business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of its
business or the ownership, leasing or operation of its properties
makes such qualification or licensing necessary, except where the
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failure to be so qualified or licensed or in good standing has not
had, and would not have, individually or in the aggregate, a Material
Adverse Effect. As used in this Agreement, the term "Material Adverse
Effect" means with respect to the Company a material adverse effect on
the business, assets, properties, liabilities, results of operations,
condition (financial or otherwise) or working capital of the Company
and its Subsidiaries (as defined in Section 2.3) taken as a whole. The
Company has delivered to Acquiror complete and correct copies of its
Articles of Incorporation and Bylaws, as amended to the date of this
Agreement.
SECTION 2.2 CAPITAL STRUCTURE. The authorized capital stock of
the Company consists of 8,000,000 shares of Common Stock. At the
close of business on April 15, 2002, (a) 4,739,399 shares of Common
Stock were issued and outstanding (exclusive of treasury shares), (b)
321,724 shares of Common Stock were held by the Company as treasury
stock, (c) 420,000 shares of Common Stock were reserved for issuance
upon the exercise of Stock Options, which amount is sufficient to
cover the exercise of all outstanding Stock Options irrespective of
vesting conditions, and (d) 410,000 shares of Common Stock (the
"Restricted Shares") were issued pursuant to a promissory note from
the holder of the Restricted Shares. All outstanding shares of
capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable and have not been issued in violation of
any shareholder rights under applicable law (including, without
limitation, all applicable federal and state securities laws), and are
not subject to preemptive rights. No bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any
matters on which the shareholders of the Company may vote are issued
or outstanding. Except as set forth above or in Section 2.2 of the
Disclosure Schedule, the Company does not have any outstanding option,
warrant, subscription or other right, agreement, obligation or
commitment which either obligates the Company to issue, sell or
transfer, repurchase, redeem or otherwise acquire or vote any shares
of capital stock of the Company, or which restricts the transfer of
Common Stock. Section 2.2 of the Disclosure Schedule sets forth the
following information with respect to each Stock Option outstanding on
the date hereof (i) the name of the recipient, (ii) the number of
shares of Common Stock subject to such Stock Option, (iii) the
applicable exercise price for each Stock Option, and (iv) the
projected number of shares of Common Stock purchasable thereunder as
of June 15, 2002 (assuming the due exercise thereof on that date,
consistent with the applicable vesting conditions, if any).
SECTION 2.3 SUBSIDIARIES. (a) Section 2.3(a) of the Disclosure
Schedule sets forth the name of each Subsidiary (as defined below) of
the Company and the state or jurisdiction of its incorporation. Each
Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation
and has the requisite corporate power and authority and all necessary
government approvals to own, lease and operate its properties and to
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carry on its business as now being conducted, except where the failure
to be so organized, existing or in good standing has not had, and
would not have, individually or in the aggregate, a Material Adverse
Effect. Each Subsidiary is duly qualified or licensed to do business
and is in good standing as a foreign corporation in each jurisdiction
in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed or
in good standing has not had, and would not have, individually or in
the aggregate, a Material Adverse Effect. As used herein,
"Subsidiary" means any corporation, partnership, joint venture or
other legal entity of which the Company (either alone or through or
together with any other Subsidiary), owns, directly or indirectly, 50%
or more of the capital stock or other equity interests, the holders of
which are generally entitled to vote with respect to matters to be
voted on in such corporation, partnership, joint venture or other
legal entity. Except as disclosed in the Filed SEC Documents (as
defined in Section 2.6), the Company and its Subsidiaries are not
subject to any material joint venture, joint operating or similar
arrangement or any material shareholders agreement relating thereto.
(b) Section 2.3(b) of the Disclosure Schedule sets forth, as to
each Subsidiary, its authorized capital stock and the number of its
issued and outstanding shares of capital stock. The Company is,
directly or indirectly, the record and beneficial owner of all of the
outstanding shares of capital stock of each of the Subsidiaries, and
no capital stock of any Subsidiary is or may become required to be
issued by reason of any options, warrants, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable or exercisable
for, shares of any capital stock of any Subsidiary. There are no
contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may be bound to issue, sell, transfer,
repurchase, redeem, or otherwise acquire or vote any shares of capital
stock of any Subsidiary or securities convertible into or exchangeable
or exercisable for any such shares. All of such shares so owned by the
Company are duly authorized, validly issued, fully paid and
nonassessable and have not been issued in violation of any shareholder
rights under applicable law (including, without limitation, all
applicable federal and state securities laws) and are owned by it free
and clear of all liens, claims, encumbrances, restraints on
alienation, or any other restrictions with respect to the
transferability or assignability thereof (other than restrictions on
transfer imposed by federal or state securities laws or those imposed
as a matter of law by the jurisdiction of incorporation).
(c) Except as set forth on Section 2.3(c) of the Disclosure
Schedule, neither Subsidiary has conducted any business since January
1, 1999.
SECTION 2.4 AUTHORITY; NONCONTRAVENTION. The Company has the
requisite corporate power and authority to enter into this Agreement
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and to carry out its obligations hereunder. The execution and delivery
of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company, subject, in
the case of the Merger, to the approval of the Company's shareholders
at a duly convened meeting as set forth in Section 4.2. The Board of
Directors of the Company has determined that the Merger is advisable
and fair to and in the best interests of the Company and its
shareholders and has approved the Merger and this Agreement and has
resolved to recommend the Merger to the Company's shareholders for
their approval. This Agreement has been duly executed and delivered
by the Company and, assuming this Agreement has been duly executed and
delivered by Acquiror and Merger Subsidiary, constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms except that the enforcement thereof may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditor's rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
Except as disclosed in Section 2.4 of the Disclosure Schedule,
the execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and
compliance with the provisions hereof will not, (i) conflict with or
violate any of the provisions of the Articles of Incorporation or
Bylaws of the Company, (ii) subject to the governmental filings and
other matters referred to in the following sentence, conflict with,
result in a breach of or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a benefit
under, or require the consent of any person under, any loan agreement,
note, indenture or other agreement, permit, concession, franchise,
lease, contract, license or similar instrument, obligation or
undertaking to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries or any of their
assets is bound or affected, or (iii) subject to the governmental
filings and other matters referred to in the following sentence,
contravene any law, rule or regulation of any state or of the United
States or any political subdivision thereof or therein, or any order,
writ, judgment, injunction, decree, determination or award currently
in effect, subject, in the case of clauses (ii) and (iii), to those
conflicts, breaches, defaults and similar matters, which, individually
or in the aggregate, have not had and would not reasonably be expected
to have a Material Adverse Effect, and would not materially and
adversely affect the Company's ability to consummate the transactions
contemplated by this Agreement. No consent, approval or authorization
of, or declaration or filing with, or notice to, any governmental
agency or regulatory body, court, agency, commission, division,
department, public body or other authority (a "Governmental Entity")
is required by or with respect to the Company or any Subsidiary in
connection with the execution and delivery of this Agreement by the
Company or the consummation by the Company of the transactions
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contemplated hereby, except for (A) the filing with the SEC of a
preliminary and a definitive proxy statement (the "Proxy Statement"),
relating to the approval by the Company's shareholders of the Merger
and (B) the filing with the SEC of such reports under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as may be
required in connection with this Agreement and the transactions
contemplated by this Agreement, (C) the filing of the certificate of
merger with the Maine Secretary of State and appropriate documents
with the relevant authorities of other jurisdictions in which the
Company is qualified to do business, and (D) such other consents,
approvals, authorizations, filings or notices as are set forth in
Section 2.4 of the Disclosure Schedule.
SECTION 2.5 SEC DOCUMENTS. Since January 1, 1999, the Company
has timely filed all required reports, schedules, forms, statements
and other documents required to be filed by it with the SEC (such
reports, schedules, forms, statements and other documents are
hereinafter referred to as the "SEC Documents"). As of their
respective dates, and in all material respects, the SEC Documents
complied with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of the SEC Documents as of
such dates contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
consolidated financial statements of the Company included in the SEC
Documents 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") applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim
financial statements, as permitted by Rule 10-01 of Regulation S-X)
and fairly present, in all material respects, the consolidated
financial position of the Company and its Subsidiaries as of the dates
thereof and the consolidated results of their operations, cash flows
and shareholders' equity for the periods then ended (subject, in the
case of unaudited interim financial statements, to normal recurring
adjustments).
SECTION 2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
disclosed in the SEC Documents filed prior to March 31, 2002 (the
"Filed SEC Documents"), or in Section 2.6 of the Disclosure Schedule
or as otherwise contemplated or permitted by this Agreement, since the
date of the most recent audited financial statements included in the
Filed SEC Documents, the Company and its Subsidiaries have conducted
their business only in the ordinary course (which conduct has not had,
and would not reasonably be expected to have, a Material Adverse
Effect), and except as otherwise expressly permitted by this
Agreement, there has not been:
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(a) any event, effect or change which has had or which
would reasonably be expected to have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or
property) with respect to any of the Company's outstanding
capital stock;
(c) any split, combination or reclassification of any of
its outstanding capital 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 its outstanding
capital stock,
(d) (i) any granting by the Company or any of its
Subsidiaries to any director, officer or other employee of the
Company or any of its Subsidiaries of any increase in
compensation, except in the case of employees in the ordinary
course of business consistent with prior 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 SEC Documents, (ii) any granting by the Company or any of
its Subsidiaries to any director, officer or other employee of
any increase in severance or termination pay, except 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 SEC Documents, (iii)
any entry by the Company or any of its Subsidiaries into any
employment, severance, change of control, termination or similar
agreement with any officer, director or other employee;
(e) any change in the method of accounting or policy used
by the Company or any of its Subsidiaries, except as disclosed in
the financial statements included in the Filed SEC Documents; and
(f) any loss or material interference with the Company's
business or assets from fire, accident, flood or other casualty
(whether or not covered by insurance) that has had or would
reasonably be expected to have a Material Adverse Effect; or
(g) any material increase in indebtedness.
SECTION 2.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as
reflected in the most recent financial statements contained in the
Filed SEC Documents or as described in Section 2.7 of the Disclosure
Schedule and except as has been incurred after December 31, 2001 in
the ordinary course of business (which has not had, and would not
reasonably be expected to have, a Material Adverse Effect) or in
connection with the transactions contemplated by this Agreement, the
Company and its Subsidiaries (a) do not have any liabilities or
obligations (whether direct or indirect, contingent or otherwise) and
(b) have not entered into any material oral or written agreement or
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other transaction which has had or would reasonably be expected to
have a Material Adverse Effect.
SECTION 2.8 BENEFIT PLANS.
(a) Definitions.
(i) PLAN. The term "Plan" includes (A) each employee
benefit plan, as defined in Section 3(3) of ERISA (other
than a Multiemployer Plan and including terminated Plans)
which currently or since December 31, 1996, is or has been
maintained for employees of the Company or of any Control
Group member or to which the Company or any Control Group
member makes or was required to make contributions and (B)
each nonqualified employee benefit plan, or deferred
compensation, bonus, severance, stock option, restricted
stock, performance share, phantom stock or incentive plan,
employment agreement, severance agreement or other employee
benefit or fringe benefit program, agreement arrangement or
policy.
(ii) QUALIFIED PLAN. The term "Qualified Plan" means
any Plan which is an employee pension benefit plan as
defined in Section 3(2) of ERISA and which is intended to
meet the qualification requirements of the Code.
(iii) TITLE IV PLAN. The term "Title IV Plan" means
any Qualified Plan that is a defined benefit plan (as
defined in Section 3(35) of ERISA) and is subject to Title
IV of ERISA.
(iv) MULTIEMPLOYER PLAN. The term "Multiemployer Plan"
means any employee benefit plan that is a "multiemployer
plan" within the meaning of Section 3(37) of ERISA and to
which the Company or any Control Group member has or had any
obligation to contribute.
(v) CONTROL GROUP. The term "Control Group" means a
controlled group of corporations of which the Company is a
member within the meaning of Section 414(b) of the Code, any
group of corporations or entities under common control with
the Company within the meaning of Section 414(c) of the Code
or any affiliated service group of which the Company is a
member within the meaning of Section 414(m) of the Code.
(vi) CODE. The term "Code" means the Internal Revenue
Code of 1986, as amended.
(vii) ERISA. The term "ERISA" means the Employee
Retirement Income Security Act of 1974, as amended.
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(b) PLANS LISTED; CONTROL GROUP. All Plans are listed on
Section 2.8(b) of the Disclosure Schedule. Neither the Company
nor any other member of the Control Group maintains or
contributes to, or has ever maintained or contributed to a Title
IV Plan or a Multiemployer Plan. No Subsidiary of the Company
has any employees who participate in any of the Plans, and
(except for the Control Group consisting of the Company and its
Subsidiaries) the Company is not otherwise a member of any
Control Group.
(c) OPERATIONS OF PLANS.
(i) Each Plan has been administered in compliance with
its terms and with all filing, reporting, disclosure and
other requirements of all applicable statutes (including but
not limited to ERISA and the Code), regulations and
interpretations thereunder, except for any failure to so
comply that, individually or together with all other such
failures, has not had and is not reasonably expected to have
a Material Adverse Effect.
(ii) To the Company's knowledge and in all material
respects, all oral or written communications with respect to
each Plan currently and in the past reflect and have
reflected the documents and operations of the Plan.
(iii) To the Company's knowledge, neither the Company
nor any of its Subsidiaries, nor any of their respective
employees or directors, nor any fiduciary, has engaged in
any transaction, including the execution and delivery of
this Agreement, in violation of Section 406(a) or (b) or
Section 407 of ERISA or which is a "prohibited transaction"
(as defined in Section 4975(c)(l) of the Code) for which no
exemption exists under Section 408(b) and (e), of ERISA or
Section 4975(d) of the Code or for which no administrative
exemption has been granted under Section 408(a) of ERISA.
(iv) Each Qualified Plan (together with its related
funding instrument) is qualified and tax exempt under
Sections 401 and 501 of the Code and is the subject of a
favorable Internal Revenue Service determination with
respect to such qualification and exemption. Nothing has
occurred since the date of such determination that will
adversely affect such determination or the qualified and tax
exempt status of such Qualified Plan.
(v) No matter is pending relating to any Plan before
any court or Governmental Entity.
(vi) No Plan is currently the subject of a submission
under the Internal Revenue Service Employee Plans Compliance
Resolution System or any similar system, nor under any
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United States Department of Labor amnesty program, and the
Company does not anticipate any such submission of any such
Plan.
(vii) Every fiduciary and official of each Plan is
bonded to the extent required by Section 412 of ERISA, if
applicable, and no civil or criminal action with respect to
any Plan, pursuant to any federal or state law, is pending
or (to the Company's knowledge) is threatened, against (A)
the Company or any Subsidiary thereof, or (B) against any
officer, director or employee thereof or any fiduciary of
any Plan.
(viii) To the Company's knowledge, no Plan fiduciary or
any other person has, or has had, any liability to any Plan
participant or beneficiary or any other person under any
provisions of ERISA or any other applicable law by reason of
any action or failure to act in connection with any Plan,
including, but not limited to, any liability by any reason
of any payment of, or failure to pay, benefits or any other
amounts or by reason of any credit or failure to give credit
for any benefits or rights.
(ix) Set forth on Section 2.8(c)(ix) of the Disclosure
Schedule is a list of all Plans to which the Company or any
other member of the Control Group is a party or by which any
of them is bound and under which, as a result of the
consummation of the transactions contemplated by this
Agreement or any other transaction or transactions
contemplated by the Company, any current or former director,
officer, employee or other agent of the Company or any other
member of the Control Group or any other party claiming
through such a person shall or may acquire rights to
compensation, incentive pay, severance pay, unemployment
compensation or any other rights with respect to any Plan
(including, without limitation, the creation, increase or
extension of new or existing rights), become entitled to a
distribution or payment with respect to any Plan at a date
earlier than if such transaction had not occurred, or
otherwise receive or become vested in rights or benefits
with respect to any Plan.
(x) Except as set forth on Section 2.8(c)(x) of the
Disclosure Schedule, neither the Company nor any member of
the Control Group has any obligations, or liabilities with
respect to, retiree health and life benefits under any Plan
except for benefits for continued group health coverage
required to be provided under Section 4980B of the Code and
Sections 601 through 609 of ERISA or applicable state law.
(xi) No Plan provides for payment of any amount which,
considered in the aggregate with amounts payable pursuant to
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all other Plans, would exceed the amount deductible for
federal income tax purposes by virtue of Sections 280G or
162 (m) of the Code.
(d) PLAN DOCUMENTS AND RECORDS.
(i) Complete and correct copies of all current and
prior documents, including all amendments thereto, with
respect to each Plan, have been delivered to Acquiror.
These documents include, but are not limited to, the
following: Plan documents, trust agreements, insurance
contracts, annuity contracts, summary plan descriptions,
filings with any Governmental Entity, investment manager and
investment adviser contracts, and actuarial reports, audit
reports, financial statements, and annual reports (Form
5500) for the most recent three plan years ending prior to
the Closing Date.
(ii) As of the Closing Date, the participant or
beneficiary records with respect to each Plan shall be in
custody of the persons listed on Section 2.8(d)(ii) of the
Disclosure Schedule. To the Company's knowledge and in all
material respects, all such records accurately set forth the
history of each participant and beneficiary in connection
with each Plan and accurately state the benefits earned and
owed to each such person under each such Plan as of the date
hereof.
(e) FINANCES. All contributions payable to each Plan for
all benefits earned and other liabilities accrued through
December 31, 2001 determined in accordance with the terms and
conditions of such Plan, ERISA and the Code, have been paid or
otherwise provided for, and to the extent unpaid are reflected in
the balance sheet of the Company as of December 31, 2001.
SECTION 2.9 TAXES. Except as disclosed in Section 2.9 of the
Disclosure Schedule:
(a) Each of the Company and its Subsidiaries has filed all
tax returns and reports required to be filed by it or requests
for extensions to file such returns or reports have been timely
filed, granted and have not expired. All tax returns filed by
the Company and each of its Subsidiaries are complete and
accurate in all material respects. The Company and each of its
Subsidiaries has paid (or the Company has paid on the
Subsidiaries' behalf) all taxes shown as due on such returns and
all taxes required to be paid. The most recent financial
statements contained in the SEC Documents reflect an adequate
reserve for all taxes payable by the Company and the Subsidiaries
for all taxable periods and portions thereof accrued through the
date of such financial statements.
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(b) The Company has received no notice that any
deficiencies for any taxes have been proposed, asserted or
assessed against the Company or any of its Subsidiaries by any
Governmental Entity. Except as set forth on Section 2.9 of the
Disclosure Schedule, no requests for waivers of the time to
assess any such taxes have been granted or are pending. The
Federal income tax returns of the Company and each of its
Subsidiaries consolidated in such returns have been examined by
and settled with the United States Internal Revenue Service, or
the statute of limitations on assessment or collection of any
Federal income taxes due from the Company or the any of its
Subsidiaries has expired, through such taxable years as are set
forth in Section 2.9 of the Disclosure Schedule.
(c) As used in this Agreement, "taxes" shall include all
federal, state, local and foreign income, property, premium,
franchise, sales, excise, employment, payroll, withholding and
other taxes, tariffs or governmental charges of any nature
whatsoever and any interest, penalties, additional amounts and
additions to taxes relating thereto.
(d) Neither the Company nor any of its Subsidiaries has
made any election, filed any consent or entered into any
agreement with respect to taxes that is not reflected on the
federal income tax returns of the Company and its Subsidiaries
for the three years ended December 31, 2001 (copies of which
returns have been provided to Acquiror for review prior to the
date of this Agreement) and that would reasonably be expected to
be material to the Company and the Subsidiaries taken as a whole.
SECTION 2.10 COMPLIANCE WITH APPLICABLE LAWS. Except as
disclosed in Section 2.10 of the Disclosure Schedule:
(a) The business of the Company and each of the
Subsidiaries is being, and has been since December 31, 1996,
conducted in compliance in all material respects with all
applicable federal, state, local and foreign laws, statutes,
ordinances, rules and regulations, decrees, judgments and orders
of any Governmental Entity, and all material notices, reports,
documents and other information required to be filed thereunder
within the last three years were properly filed and were in
compliance in all material respects with such laws. The assets,
properties, facilities and operations of the Company and each of
the Subsidiaries are in compliance in all material respects with
all applicable laws relating to public and worker health and
safety.
(b) The Company, and each of the Subsidiaries, has all
material licenses, permits, authorizations, franchises, and
rights issued or issuable by any Governmental Entity ("Licenses")
which are necessary for it to own, lease or operate its
properties and assets and to conduct its business as now
-16-
conducted. The business of the Company and each of the
Subsidiaries has been and is being conducted in compliance in all
material respects with all such Licenses. All such Licenses are
in full force and effect, and there is no proceeding or
investigation pending or, to the knowledge of the Company,
threatened which would reasonably be expected to lead to the
revocation, amendment, failure to renew, limitation, suspension
or restriction of any such License.
SECTION 2.11 PRODUCT LIABILITY. Except as set forth in Section
2.11 of the Disclosure Schedule, in connection with the conduct of the
Company's business: (a) to the Company's knowledge, there are no
events, conditions, circumstances, activities, practices, incident,
actions, omissions or plans which might reasonably be expected to give
rise to any material liability or obligation or otherwise form the
basis of any material claim based on or related to any product that
was or allegedly was designed, formulated, manufactured, processed,
serviced, distributed or sold by the Company or any of its affiliates
or any service provided or allegedly provided by or on behalf of the
Company or any affiliates, and (b) to the Company's knowledge, all
products, including the packaging and advertising related thereto,
which were sold or designated, formulated, manufactured, processed and
placed in the stream of commerce by the Company or any of its
affiliates or any services provided by the Company or any of its
affiliates materially complied with applicable Company Agreements (as
defined in Section 2.16 below), applicable laws, including orders from
any Governmental Entity, or applicable industry standards, and there
have not been and there are no material defects or deficiencies in
such services or products..
SECTION 2.12 BROKERS. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried
out by the Company directly with Acquiror, without the intervention of
any person on behalf of the Company in such manner as to give rise to
any valid claim by any person against the Company, Acquiror or any
Subsidiary for a finder's fee, brokerage commission, or similar
payment.
SECTION 2.13 ENVIRONMENTAL. Except as set forth in Section 2.13
of the Disclosure Schedule:
(a) The operations and properties of the Company and the
Subsidiaries (i) are in compliance in all material respects with
all applicable Environmental Laws (as defined) and (ii) have not
generated, used, stored, transported, manufactured, released or
disposed of any Hazardous Materials (as defined) on or off the
Company's premises in violation of Environmental Laws. No
material expenditure relative to the Company's premises will be
required to comply with Environmental Laws in connection with the
operation or continued operation of the business of the Company
and the Subsidiaries after the Effective Date in a manner
consistent with the current operation thereof by the Company and
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the Subsidiaries. To the knowledge of the Company and the
Subsidiaries, no material expenditure will be required to
remediate, clean up, abate or remove any Hazardous Materials on
any real property currently operated or leased, or formerly
owned, operated or leased by the Company or the Subsidiaries.
(b) There are no actions, complaints, citations,
investigations or proceedings pending or, to the knowledge of the
Company, threatened against the Company or the Subsidiaries
alleging the violation of or seeking to impose liability or
responsibility for environmental cleanup costs pursuant to any
Environmental Law or Environmental Permit (as defined below);
(c) The Company has provided Acquiror with copies of all
environmental audits, assessments, studies, reports, analyses,
investigation results or similar environmentally-related
documents of any real property currently or formerly owned,
operated or leased by the Company or any of its Subsidiaries and
copies of all Environmental Permits required for the operations
of the Company, in all cases limited to those within the
possession, custody or control of the Company or its
Subsidiaries.
(d) The Company has provided Acquiror with copies of all
requests for information (and responses thereto), notices of
violation, complaints, claims or other documents or
correspondence related to or referring to any actual or alleged
violations of Environmental Laws or responsibility for
environmental cleanup costs, including but not limited to the
Federal Comprehensive Environmental, Response, Compensation and
Liability Act ("CERCLA") and similar state laws, at (i) any real
property currently or formerly owned, operated or leased by the
Company or any Subsidiaries, or (ii) at CERCLA or similar state
sites at which the Company or any Subsidiaries are named as
potentially responsible parties, or for which the Company or any
Subsidiaries have received a CERCLA Section 122(c), Section
104(e) or similar notice or request for information, in all cases
limited to those within the possession, custody or control of the
Company or its Subsidiaries.
(e) The Company and Subsidiaries possess, and have
maintained in full force and effect, all Environmental Permits
required for the operation of their respective businesses, and in
all material respects are in compliance with the provisions of
all such Environmental Permits. Section 2.11(e) of the Disclosure
Schedule contains a list of all Environmental Permits. No
modification, revocation, reissuance, alteration, transfer or
amendment of any material Environmental Permit or any review by,
or approval of, any third party of any Environmental Permit is
required in connection with the execution or delivery of this
Agreement or the consummation of the transactions contemplated
hereby.
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(f) The Company and the Subsidiaries have not contractually
created or otherwise assumed any liabilities or obligations or
indemnifications of any third party under any Environmental Laws,
including related to any real property currently or formerly
owned, operated or leased by the Company or any Subsidiaries.
(g) As used in this Section 2.13, each of the following
terms shall have the following meanings: (i) "Environmental Law"
means any applicable federal, state, local, or foreign law,
statute, code, ordinance, rule, regulation or other requirement
(including common law) relating to the environment (including
air, soil, surface water, groundwater, drinking water, plant life
and animal life), or public or employee health and safety; (ii)
"Environmental Permit" means any governmental permit, consent,
approval, authorization, license, variance, notice, registration,
identification number or permission required under or issued
pursuant to any applicable Environmental Law or order, writ,
injunction or decree; and (iii) "Hazardous Materials" means any
hazardous, toxic or dangerous substances, materials and wastes,
including but not limited to naturally occurring or man-made
petroleum or other hydrocarbons, flammable explosives, asbestos
containing materials, radioactive materials, radioactive wastes,
polychlorinated biphenyls, pesticides, herbicides and any other
pollutants or contaminants (including materials with hazardous
constituents), sewage, sludge, industrial and/or mining slag,
tailings, solvent, including any other substances, materials or
wastes regulated under Environmental Law.
SECTION 2.14 LITIGATION. Except as set forth in the Filed SEC
Documents or in Section 2.14 of the Disclosure Schedule:
(a) there are no outstanding orders, judgments,
injunctions, awards or decrees of any Governmental Entity against
the Company or any of its Subsidiaries, any of its or their
properties, assets or business, (or, to the knowledge of the
Company, any of its or their current or former directors or
officers, as such), that have had or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect;
(b) there are no actions, suits or claims or legal,
administrative or arbitration proceedings or investigations
pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, any of its or their
properties, assets or business (or, to the knowledge of the
Company, any of its or their current or former directors or
officers, as such), that have had or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect; and
(c) there are no actions, suits or claims or legal,
administrative or arbitration proceedings or investigations
-19-
pending or, to the knowledge or the Company, threatened against
the Company or any of its Subsidiaries, any of its or their
properties, assets or business (or, to the knowledge of the
Company, any of its or their current or former directors or
officers, as such), relating to the transactions contemplated by
this Agreement.
SECTION 2.15 LABOR RELATIONS. Except as set forth in Section
2.15 of the Disclosure Schedule:
(a) Neither the Company nor any Subsidiary is a party to
any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or any Subsidiary
and there are no known organizational campaigns, petitions or
other unionization activities seeking recognition of a collective
bargaining unit.
(b) There are no strikes, slowdowns, work stoppages or
labor relations controversies pending or, to the knowledge of the
Company, threatened between the Company or any Subsidiary and any
of their respective employees, and neither the Company nor any
Subsidiary has experienced any such strike, slowdown, work
stoppage or material controversy within the past three years.
SECTION 2.16 CONTRACTS. Except as set forth in the Filed SEC
Documents or as set forth in Section 2.16 of the Disclosure Schedule,
there are no agreements, contracts or other instruments to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or any of their assets is bound or affected
that are material to the business, financial condition or results of
operations of the Company or its Subsidiaries taken as a whole
("Company Agreements"). Neither the Company or any of its
Subsidiaries nor, to the knowledge of the Company, any other party is
in breach of or default under any Company Agreements which are
currently in effect, except for such breaches and defaults which have
not had, and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. Except as set forth in
the Filed SEC Documents or as set forth in Section 2.16 of the
Disclosure Schedule, neither the Company nor any Subsidiary is a party
to or bound by any non-competition agreement or any other agreement or
obligation which purports to limit in any material respect the manner
in which, or the localities in which, the Company or any Subsidiary is
entitled to conduct all or any material portion of its business.
SECTION 2.17 INTELLECTUAL PROPERTY.
(a) Except as set forth on Section 2.17(a) of the
Disclosure Schedule, the Company owns, or has license to use, all
inventions, improvements, patents, utility models, designs, trade
names, trade dress, trade secrets, trademarks, service marks,
copyrights and other proprietary rights (including all grants,
registrations or applications therefor), used in the Company's
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business or necessary for the conduct of the Company's business
(collectively, "Intellectual Property") as presently conducted or
contemplated.
(b) All patents, patent applications, trademarks, trademark
applications and registrations and registered copyrights which
are owned by the Company, or to which the Company holds an
exclusive license to use, are listed in Section 2.17(b) of the
Disclosure Schedule. All patents, patent applications,
trademarks, trademark applications and registrations and
registered copyrights that are material to the Company's business
and are otherwise licensed from third parties are listed in
Section 2.17(b) of the Disclosure Schedule.
(c) All licenses or other agreements under which (i) the
Company is granted rights in Intellectual Property by others
(other than licenses for "Office Software"), or (ii) the Company
has granted rights to others in Intellectual Property owned or
licensed by the Company, are listed in Section 2.17(c) of the
Disclosure Schedule. All said licenses or other agreements are
in full force and effect, and to the Company's knowledge there is
no material default by any party thereto. True and complete
copies of all such licenses or other agreements, and any
amendments thereto, have been provided to Acquiror. "Office
Software" means any third party computer software that is
licensed for use on desktop or laptop "PC-class" computers or
related local area network servers other than by a written
agreement executed by the licensee, including software licensed
by shrink wrap or click wrap licenses, the Microsoft Windows
class of operating system software, and Microsoft Office or
similar office productivity software (including individual
programs contained therein). To the Company's knowledge there is
no material default with respect to any license for the Office
Software that is used in the Company's business.
(d) Except as set forth on Section 2.17(d) of the
Disclosure Schedule, the Company is the owner of record of any
application, registration or grant for each item of Intellectual
Property set forth on Section 2.17(b) of the Disclosure Schedule,
and has properly executed and recorded all documents necessary to
perfect its title to such Intellectual Property. The Company has
filed all documents and paid all taxes, fees, and other financial
obligations required to maintain in force and effect all such
Intellectual Property until Closing.
(e) Except as set forth on Section 2.17(e) of the
Disclosure Schedule, neither the conduct of the Company's
business, nor any of the products sold or services provided by
the Company in connection therewith, infringes upon or is
inconsistent with the rights of any other person or entity.
Except as set forth on Section 2.17(e) of the Disclosure
Schedule, to the Company's knowledge neither the conduct of any
-21-
other person's or entity's business, nor the nature of any of the
products it sells or services it provides, infringes upon the
Company's rights in respect of any Intellectual Property.
(f) Except as set forth on Section 2.17(f) of the
Disclosure Schedule, the Company owns all computer software that
has been developed by or for the Company and that is used in the
Company's business or is necessary for the conduct of the
Company's business as presently conducted or contemplated
("Company Software"). Section 2.17(f) of the Disclosure Schedule
sets forth a list of all material Company Software.
(g) The Company has taken reasonable and prudent steps,
consistent with good business practices, to require employees and
agents with access to the Intellectual Property to maintain the
confidentiality of non-public information relating to the
Intellectual Property, including the source code of Company
Software, and to appropriately restrict the use of thereof. The
source code of Company Software is complete and correct and
constitutes all of the source code that is necessary for the
conduct of the Company's business as presently conducted or
contemplated. The Company owns all inventions and developments
relating to the Company's present or contemplated business that
were conceived or created by its employees and other persons
having access to valuable non-public information of the Company,
including the source code of Company Software, during the course
of their work for the Company. Section 2.17(g) of the Disclosure
Schedule contains a description of the Company's practices in
this regard.
SECTION 2.18 REAL ESTATE. The Company and its Subsidiaries do
not own any real estate. The Company and its Subsidiaries do not
lease any real estate other than the premises identified in the Filed
SEC Documents or as set forth in Section 2.18 of the Disclosure
Schedule as being so leased.
SECTION 2.19 ANTI-TAKEOVER PROVISIONS. The Board of Directors
of the Company has taken all necessary action to ensure that no "fair
price," "moratorium," "control share acquisition" or other similar
anti-takeover statute or regulation, including Section 910 of the MBCA
(each, a "Takeover Statute"), or any applicable anti-takeover
provision in the Company's articles of incorporation or by-laws is or
will become applicable to the Merger. To the knowledge of the
Company, no other state takeover statute is or will become applicable
to the Merger.
SECTION 2.20 VOTING REQUIREMENTS. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock
entitled to vote at the Shareholders Meeting (as defined in Section
4.2) is the only vote of the holders of any class of the Company's
capital stock necessary to approve Merger and the transactions
contemplated by this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUBSIDIARY
Acquiror and Merger Subsidiary represent and warrant to the
Company as follows:
SECTION 3.1 ORGANIZATION AND STANDING. Acquiror is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Indiana.
SECTION 3.2 MERGER SUBSIDIARY. Merger Subsidiary is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Maine. The authorized capital stock of
Merger Subsidiary consists of 100 shares of common stock, no par
value, all of which are validly issued and outstanding. All of the
issued and outstanding capital stock of Merger Subsidiary is, and
immediately prior to the Effective Time will be, owned by Acquiror.
Merger Subsidiary has not conducted any business prior to the date
hereof and has no, and immediately prior to the Effective Time will
have no, assets, liabilities or obligations of any nature other than
incident to its formation and pursuant to this Agreement.
SECTION 3.3 AUTHORITY; NONCONTRAVENTION. Each of Acquiror and
Merger Subsidiary has all requisite corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement by Acquiror and Merger
Subsidiary and the consummation by Acquiror and Merger Subsidiary of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Acquiror and Merger
Subsidiary. This Agreement has been duly executed and delivered by
and, assuming this Agreement has been duly executed and delivered by
the Company, constitutes a valid and binding obligation of each of
Acquiror and Merger Subsidiary, enforceable against each in accordance
with its terms except that the enforcement thereof may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditor's rights generally and
(b) general principles of equity (regardless of whether enforceability
is considered in a proceeding at law or in equity).
The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not (i) conflict
with or violate any of the provisions of the articles of incorporation
or by-laws of Acquiror or Merger Subsidiary, (ii) subject to the
governmental filings and other matters referred to in the following
sentence, conflict with, result in a breach of or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation
or loss of a benefit under, or require the consent of any person
under, any indenture, or other agreement, permit, concession,
franchise, license or similar instrument or undertaking to which
-23-
Acquiror or any of its subsidiaries (including Merger Subsidiary) is a
party or by which Acquiror or any of its subsidiaries (including
Merger Subsidiary) or any of their assets is bound or affected, or
(iii) subject to the governmental filings and other matters referred
to in the following sentence, contravene any law, rule or regulation
of any state or of the United States or any political subdivision
thereof or therein, or any order, writ, judgment, injunction, decree,
determination or award currently in effect, subject, in the case of
clauses (ii) and (iii), to those conflicts, breaches, defaults and
similar matters, which, individually or in the aggregate, would not
materially and adversely affect Acquiror's or Merger Subsidiary's
ability to consummate the transactions contemplated hereby. No
consent, approval or authorization of, or declaration or filing with,
or notice to, any Governmental Entity is required by or with respect
to Acquiror or Merger Subsidiary in connection with the execution and
delivery of this Agreement by Acquiror and Merger Subsidiary or the
consummation by Acquiror and Merger Subsidiary of any of the
transactions contemplated hereby, except for (A) the filing of the
certificate of merger with the Maine Secretary of State, and
appropriate documents with the relevant authorities of the other
states in which the Company is qualified to do business, and (B) such
other consents, approvals, authorizations, filings or notices as are
set forth in Section 2.4 of the Disclosure Schedule.
SECTION 3.4 FINANCING. Acquiror has, and will have at the
Closing, sufficient funds to pay the aggregate Merger Consideration.
SECTION 3.5 BROKERS. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried
out by Acquiror directly with the Company, without the intervention of
any person on behalf of Acquiror in such manner as to give rise to any
valid claim by any person against Acquiror, the Company or any
Subsidiary for a finder's fee, brokerage commission, or similar
payment.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 PREPARATION OF PROXY STATEMENT.
(a) PROXY STATEMENT. As soon as practicable following the
date of this Agreement, the Company shall prepare and file with
the SEC a proxy statement that describes the pending Merger and
related actions (including any amendments or supplements thereto,
the "Proxy Statement"). The Company will use its reasonable
efforts to cause the Proxy Statement to be mailed to the
Company's shareholders as promptly as practicable. Acquiror
shall have a reasonable opportunity to review and comment on
drafts of the Proxy Statement, and agrees to provide such
information about Acquiror as may reasonably be necessary or
-24-
appropriate for inclusion in the Proxy Statement and any
amendment or supplement thereto.
(b) COMPANY INFORMATION. The Company agrees that none of
the information supplied or to be supplied by the Company
specifically for inclusion or incorporation by reference in the
Proxy Statement will, at the date it is first mailed to the
Company's shareholders or at the time of the Shareholders
Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The
Proxy Statement will comply as to form in all material respect
with the requirements of the Exchange Act and the rules and
regulations thereunder. If, to the knowledge of the Company, any
information contained in the Proxy Statement is or becomes
inaccurate, the Company shall promptly amend the Proxy Statement
or otherwise provide supplemental information to shareholders, in
compliance with the Exchange Act.
(c) ACQUIROR INFORMATION. Acquiror agrees that none of the
information supplied or to be supplied by Acquiror specifically
for inclusion or incorporation by reference in the Proxy
Statement will, at the date it is first mailed to the Company's
shareholders or at the time of the Shareholders Meeting, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances
under which they are made, not misleading. If, to the knowledge
of Acquiror, any information concerning Acquiror that is
contained in the Proxy Statement is or becomes inaccurate,
Acquiror shall promptly notify the Company of such inaccuracy.
SECTION 4.2 MEETING OF SHAREHOLDERS. The Company will take all
action necessary in accordance with applicable law and its Articles of
Incorporation and Bylaws to convene a meeting of its shareholders (the
"Shareholders Meeting") to consider and vote upon the approval of this
Agreement and the Merger. The Company's Board of Directors will
recommend to its shareholders approval of this Agreement and the
Merger. The Company will use its reasonable efforts to hold the
Shareholders Meeting as soon as practicable after the date hereof.
Notwithstanding anything in this Agreement to the contrary, the
Company reserves the right to obtain the approval of this Agreement
and the Merger by means of a written consent procedure in lieu of a
vote at the Shareholders Meeting.
SECTION 4.3 ACCESS TO INFORMATION; CONFIDENTIALITY. Upon
reasonable notice, the Company shall, and shall cause its Subsidiaries
to, afford to Acquiror and to the officers, employees, accountants,
counsel, financial advisors, financing sources and other
representatives of Acquiror reasonable access during normal business
hours during the period prior to the Effective Time to all its
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properties, books, contracts, commitments, personnel and records.
During such period, the Company shall furnish promptly to, upon
request, a copy of (a) each SEC Document filed by it during such
period, and (b) all correspondence or written communication with any
Governmental Entity which relates to the transactions contemplated
hereby or which is otherwise material to the financial condition or
operations of the Company and its Subsidiaries taken as a whole.
Except as required by law, Acquiror will hold, and will cause its
respective directors, officers, partners, employees, accountants,
counsel, financial advisors and other representatives and affiliates
to hold, any nonpublic information obtained from the Company in
confidence to the extent required by, and in accordance with, the
provisions of the Nondisclosure Agreement, dated January 30, 2002,
between Acquiror and the Company (the "Nondisclosure Agreement").
SECTION 4.4 REASONABLE EFFORTS. Upon the terms and subject to
the conditions and other agreements set forth in this Agreement, each
of the parties agrees to use its reasonable 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 contemplated by this Agreement.
SECTION 4.5 PUBLIC ANNOUNCEMENTS. Acquiror and the Company will
consult with each other before issuing, and shall provide each other a
reasonable opportunity to review and comment upon, any press release
or public statement with respect to this Agreement or the transactions
contemplated hereby, except to the extent disclosure prior to such
consultation, review and comment may be required by applicable law,
court process or obligations pursuant to any listing agreement with
any national securities exchange.
SECTION 4.6 ACQUISITION PROPOSALS. The Company shall not, nor
shall it authorize or permit any officer, director or employee of, or
any investment banker, attorney or other advisor or representative of,
the Company or any of its Subsidiaries to, directly or indirectly, (a)
solicit, initiate or encourage the submission of any Acquisition
Proposal (as defined below), (b) participate in any discussions or
negotiations regarding, or furnish to any person any non-public
information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, an
Acquisition Proposal or (c) enter into any understanding, commitment
or agreement with respect to an Acquisition Proposal. The Company
shall promptly advise Acquiror orally and in writing of the receipt by
it (or by any of the other entities or persons referred to above)
after the date hereof of any Acquisition Proposal or any inquiry which
could reasonably lead to an Acquisition Proposal, the material terms
and conditions of such Acquisition Proposal or inquiry, and the
identity of the person or entity making any such Acquisition Proposal.
For purposes of this Agreement, "Acquisition Proposal" means any bona
fide proposal with respect to a merger, consolidation, share exchange,
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tender offer, or similar transaction involving the Company or any
Subsidiary or any purchase of all or any significant portion of the
assets or capital stock of the Company or any Subsidiary or any other
business combination (including without limitation the acquisition of
an equity interest therein) involving the Company other than the
transactions contemplated by this Agreement.
SECTION 4.7 FILINGS; OTHER ACTION. As promptly as practicable
after the date of this Agreement, the Company and Acquiror shall
cooperate in all reasonable respects with each other in (a)
determining if other filings are required to be made prior to the
Effective Time with, or if other material consents, approvals,
permits, notices or authorizations are required to be obtained prior
to the Effective Time from, any Governmental Entity in connection with
the execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement and (b) timely making
all such filings and timely seeking all such consents, approvals,
permits, notices or authorizations. In connection with the foregoing,
the Company will provide Acquiror, and Acquiror will provide the
Company, with copies of correspondence, filings or communications (or
memoranda setting forth the substance thereof) between such party or
any of its representatives, on the one hand, and any Governmental
Entity or members of their respective staffs, on the other hand, with
respect to this Agreement and the transactions contemplated hereby.
Each of Acquiror and the Company acknowledge that certain actions may
be necessary with respect to the foregoing in making notifications and
obtaining clearances, consents, approvals, waivers or similar third
party actions which are material to the consummation of the
transactions contemplated hereby, and each of Acquiror and the Company
agree to take such action as is reasonably necessary to complete such
notifications and obtain such clearances, approvals, waivers or third
party actions.
SECTION 4.8 INDEMNIFICATION. (a) From and after the Effective
Time, the Surviving Corporation will indemnify and hold harmless each
present and former director and officer of the Company and its
Subsidiaries, determined as of the Effective Time (the "Indemnified
Parties"), against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or
liabilities (collectively, "Costs") incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or
pertaining to matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the
Effective Time, to the fullest extent that the Company or such
Subsidiary would have been permitted under applicable law and the
articles of incorporation or by-laws of the Company or such Subsidiary
in effect on the date hereof to indemnify such person (and the
Surviving Corporation shall also advance expenses as incurred to the
fullest extent permitted under applicable law, provided the person to
whom expenses are advanced provides an undertaking to repay such
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advances if it is ultimately determined that such person is not
entitled to indemnification).
(b) For a period of three (3) years after the Effective Time,
the Surviving Corporation shall cause to be maintained in effect the
current policies of directors' and officers' liability insurance
maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous in all
material respects to the Indemnified Parties) with respect to claims
arising from facts or events which occurred before the Effective Time;
provided, however, that the Surviving Corporation shall not be
obligated to make annual premium payments for such insurance to the
extent such premiums exceed 150% of the premiums paid as of the date
hereof by the Company for such insurance.
(c) The provisions of this Section 4.8 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party,
his heirs and his personal representatives, and shall be binding on
all successors and assigns of the Surviving Corporation.
SECTION 4.9 FIDUCIARY OBLIGATIONS. Notwithstanding any
provision of this Agreement, if, prior to the Shareholders Meeting,
any person (other than Acquiror or any of its affiliates) makes a
written unsolicited Acquisition Proposal and (a) the Board of
Directors of the Company determines reasonably and in good faith,
after due investigation and after consultation with and based upon the
advice of an outside financial advisor, that such Acquisition Proposal
is or could reasonably be expected to lead to a Superior Proposal (as
defined in Section 7.1(c)(ii) below), (b) the Board of Directors of
the Company determines reasonably and in good faith, after due
investigation and after consultation with and based upon the advice of
Company counsel, that the failure to take action would cause the Board
of Directors of the Company to violate its fiduciary duties to
stockholders under applicable law and (c) the Company provides at
least two business days' notice to Acquiror, then, the Board of
Directors of the Company may (i) withdraw, modify or change its
approval or recommendation in favor of this Agreement or the Merger,
(ii) furnish non-public information to the person making the
Acquisition Proposal pursuant to a customary confidentiality agreement
and (iii) participate in discussions or negotiations regarding the
Acquisition Proposal.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR
TO OR IN CONTEMPLATION OF THE MERGER
SECTION 5.1 CONDUCT OF BUSINESS BY THE COMPANY. Except as
contemplated by this Agreement or as set forth in Section 5.1 of the
Disclosure Schedule, during the period from the date of this Agreement
to the Effective Time, the Company shall, and shall cause its
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Subsidiaries to, act and carry on their respective businesses in the
ordinary course of business and, to the extent consistent therewith,
use reasonable efforts to preserve intact their current business
organizations, keep in full force and effect their Licenses, keep
available the services of their current key officers, employees and
agents, and preserve the goodwill of regulators or those engaged in
material business relationships with them. Without limiting the
generality of the foregoing, during the period from the date of this
Agreement to the Effective Time, the Company shall not, and shall not
permit any of the Subsidiaries to, without the prior consent of
Acquiror:
(a) adopt or propose any change to its articles of
incorporation or by-laws;
(b) (i) declare, set aside or pay any dividends on, or make
any other distributions with respect to, any of the Company's
outstanding capital stock, (ii) split, combine or reclassify any
of its outstanding 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 outstanding capital stock or (iii)
purchase, redeem or otherwise acquire any shares of capital stock
or other securities of, or other ownership interests of the
Company, other than the Stock Options to be purchased as
contemplated by Section 1.11 above and the Restricted Shares to
be settled as contemplated by Section 5.5 below;
(c) issue, sell, grant, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options
to acquire, any such shares, voting securities or convertible
securities, other than upon the exercise of Stock Options
outstanding on the date of this Agreement;
(d) acquire any business or any corporation, partnership,
joint venture, association or other business organization or
division or acquire any material assets or make any investment in
any person or enter into any reorganization;
(e) take any action that, if taken prior to the date of
this Agreement, would have been required to be disclosed in
Section 2.6 of the Disclosure Schedule or that would otherwise
cause any of the representations and warranties contained in
Article II not to be true and correct in all material respects at
any time;
(f) sell, mortgage or otherwise encumber or subject to any
lien or otherwise dispose of any of its properties or assets that
are material to the Company and its Subsidiaries taken as a
whole, except in the ordinary course of business;
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(g) incur any indebtedness for borrowed money or guarantee
or otherwise become responsible for any such indebtedness of
another person, other than indebtedness owing to or guarantees of
indebtedness owing to the Company or any direct or indirect
wholly-owned Subsidiary of the Company or enter into any
agreement for indebtedness or make any loans or advances to any
other person, other than to the Company, or to any direct or
indirect wholly-owned Subsidiary of the Company and other than
routine advances in the ordinary course of business to employees
or agents;
(h) make any tax election or settle or compromise any
income tax liability that would reasonably be expected to be
material to the Company and its Subsidiaries taken as a whole;
(i) pay, discharge, settle 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 SEC Documents
or incurred since the date of such financial statements in the
ordinary course of business consistent with past practice;
(j) except in the ordinary course of business, modify,
amend or terminate, or waive, release or assign any material
rights or claims under any material agreement, permit,
concession, franchise, license or similar instrument to which the
Company or any Subsidiary is a party;
(k) authorize any of, or commit or agree to take any of the
foregoing actions;
(l) make any capital expenditures other than as
contemplated by the Company's annual budget;
(m) except with regard to transaction-contingent
compensation to key officers and employees in an amount not to
exceed the amount set forth in Section 2.6(d) of the Disclosure
Schedule, (i) enter into, adopt or amend or increase the amount
or accelerate the payment or vesting of any benefit or amount
payable under, any Plan, or increase in any manner, the
compensation or fringe benefits, or otherwise extend, expand or
enhance the engagement, employment or any related rights, of any
director, officer or other employee of the Company or any of its
Subsidiaries, except for normal increases in the ordinary course
of business consistent with past practice that, in the aggregate,
do not result in a material increase in benefits or compensation
expense to the Company or any of its Subsidiaries; (ii) enter
into or amend any employment, severance or special pay
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arrangement with respect to the termination of employment with
any director or officer or other employee other than in the
ordinary course of business consistent with past practice; or
(iii) deposit into any trust (including any "rabbi trust")
amounts in respect of any employee benefit obligations or
obligations to directors;
(n) make any changes in accounting methods, except as
required by law, rule, regulation, the SEC or GAAP; or
(o) enter into any agreement or arrangement with any
affiliate (other than wholly owned Subsidiaries). As used in
this Agreement, the term "affiliate," shall mean, as to any
person, any other person which directly or indirectly controls,
or in under common control with, or is controlled by, such
person. As used in this definition, "control" (including, with
its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise).
SECTION 5.2 MANAGEMENT OF THE COMPANY AND SUBSIDIARIES. The
Company shall, from the date of this Agreement through the Effective
Time, cause its management and that of the Subsidiaries to consult on
a regular basis and in good faith with the employees and
representatives of Acquiror concerning the management of the Company
and its business.
SECTION 5.3 OTHER ACTIONS. The Company and Acquiror shall not,
and shall not permit any of their respective subsidiaries to, take or
omit to take any action that would, or that would reasonably be
expected to, result in (a) any of the representations and warranties
of such party set forth in this Agreement becoming untrue in any
material respect at any time or (b) any of the conditions of the
Merger set forth in Article VI not being satisfied.
SECTION 5.4 NOTIFICATION. The Company shall give prompt notice
to Acquiror and Acquiror shall give prompt notice to the Company of
(a) the occurrence, or non-occurrence of any event whose occurrence or
non-occurrence would reasonably be expected to cause (i) any
representation or warranty contained in this Agreement which is
qualified as to materiality or Material Adverse Effect to be untrue or
inaccurate at any time from the date hereof to the Effective Time,
(ii) any other representation or warranty made contained in this
Agreement to be untrue or inaccurate at any time from the date hereof
to the Effective Time, or (iii) any condition set forth in Article VI
to be unsatisfied at any time from the date hereof to the Effective
Time, and (b) any failure of the Company, or Acquiror, as the case may
be, to comply with or satisfy in any material respect any material
covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice
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pursuant to this Section 5.4 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice or the
right of such party to terminate this Agreement.
SECTION 5.5 SETTLEMENT OF PROMISSORY NOTE FOR RESTRICTED SHARES.
Immediately prior to the Closing, the promissory note of Roger Brooks
in the original principal amount of $1,332,500 shall be repaid by
surrender and cancellation of the 410,000 Restricted Shares at a price
equal to the Merger Consideration, and interest on the note shall be
forgiven by the Company to the extent of any remaining amount due
thereon.
SECTION 5.6 CONTINUITY OF BENEFITS. The Company and Acquiror
agree that individuals who are employed by the Company as of the
Closing Date shall become employees of the Surviving Corporation
following the Closing Date. From and after the Closing Date through
December 31, 2003, Acquiror agrees to maintain compensation levels and
employee benefits (other than stock options) which, in the aggregate,
are at least comparable to those presently in effect, subject in each
case for the Surviving Corporation's continuing right to hire and fire
individual employees and to the Surviving Corporation's right to amend
or terminate the Sales/Marketing bonus plan and Executive/Senior
Management bonus plan listed on Section 2.8 of the Disclosure Schedule
(the "Bonus Plans") for years after 2002. Acquiror agrees that the
Surviving Corporation agrees during 2002 to maintain the current base
salary of all employees, to retain the annual salary review date
schedule for each employee, and to confirm the Bonus Plans. In
addition, Acquiror shall maintain the Company's practices with respect
to the sharing of costs (on a percentage basis) with employees of the
life and medical insurance programs listed on Section 2.8 of the
Disclosure Schedule through December 31, 2003.
SECTION 5.7 FACILITIES. It is Acquiror's present intention to
maintain the Company's facilities at their present locations following
the Closing Date.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1 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) SHAREHOLDER APPROVAL. This Agreement and the Merger
shall have been approved and adopted by an affirmative vote of
the holders of the requisite number of shares present, in person
or by proxy, and entitled to vote on the Merger at the
Shareholders Meeting.
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(b) GOVERNMENTAL AND REGULATORY CONSENTS. The Company and
Acquiror shall have made all such filings, and obtained such
authorizations, consents, or approvals required by any
Governmental Entity to consummate the transactions contemplated
hereby; provided, however that such authorizations, consents or
approvals shall impose no conditions that would reasonably be
expected to have a Material Adverse Effect.
(c) NO PROCEEDINGS. No proceeding shall have been
commenced and be continuing, seeking to restrain or enjoin the
consummation of the Merger.
SECTION 6.2 CONDITIONS TO OBLIGATIONS OF ACQUIROR. The
obligations of Acquiror to effect the Merger are further subject to
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on the date hereof
and (except to the extent specifically given as of an earlier
date or except as otherwise contemplated or permitted by this
Agreement) on and as of the Closing Date as though made on the
Closing Date, and the Company shall have delivered to Acquiror a
certificate dated as of the Closing Date signed by an executive
officer to the effect set forth in this Section 6.2(a).
(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 the Company shall have delivered to
Acquiror a certificate dated as of the Closing Date signed by an
executive officer to the effect set forth in this Section 6.2(b).
(c) THIRD-PARTY APPROVALS AND CONSENTS. All
authorizations, approvals and consents of any third party
required to be obtained by the Company which, if not obtained,
would have a Material Adverse Effect, shall have been obtained
and shall be in full force and effect.
(d) RELATED AGREEMENTS. The Company shall have been repaid
all outstanding amounts owing under the promissory note executed
by Roger E. Brooks, and the Company and Mr. Brooks shall have
terminated the Restricted Stock Agreement dated as of May 1,
1998, in accordance with Section 5.5 above. The Company and the
parties to each of the Investment Agreement dated as of March 26,
1998, as amended as of May 1, 1998, and the Stockholders
Agreement dated as of May 1, 1998, in each case as amended to
date, shall have terminated such Agreements on terms acceptable
to Acquiror.
(e) NO MATERIAL ADVERSE EFFECT. Since the date of this
Agreement, no event, effect or change shall have occurred which
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has had or which would reasonably be expected to have a Material
Adverse Effect, and Acquiror shall have received a certificate
signed by the Chief Executive Officer or Chief Financial Officer
of the Company to such effect.
SECTION 6.3 CONDITIONS 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 Acquiror contained in this Agreement shall be
true and correct in all material respects on the date hereof and
(except to the extent specifically given as of an earlier date or
except as otherwise contemplated or permitted by this Agreement)
on and as of the Closing Date as though made on the Closing Date,
and Acquiror shall have delivered to the Company a certificate
dated as of the Closing Date, signed by an executive officer and
to the effect set forth in this Section 6.3(a)
(b) PERFORMANCE OF OBLIGATIONS OF ACQUIROR. Acquiror 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 Acquiror shall have delivered to the Company a
certificate dated as of the Closing Date, signed by an executive
officer and to the effect set forth in this Section 6.3(b).
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 TERMINATION. This Agreement may be terminated and
abandoned at any time prior to the Effective Time, whether before or
after approval of matters presented in connection with the Merger by
the shareholders of the Company:
(a) by mutual written consent of Acquiror and the Company;
(b) by either Acquiror or the Company:
(i) if, upon a vote at a duly held Shareholders
Meeting, this Agreement and the Merger shall fail to receive
the requisite vote for approval and adoption by the
shareholders of the Company at the Shareholders Meeting;
(ii) if the Merger shall not have been consummated on
or before June 30, 2002; provided, that either party may
terminate this Agreement on or after such earlier date on
which it can be reasonably determined that it will be
impossible to consummate the Merger by June 30, 2002; and
provided, further, that the party seeking to terminate this
Agreement pursuant to this Section 7.1(b)(ii) shall not have
breached in any material respect its obligations under this
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Agreement in any manner that shall have caused or
contributed to the failure to consummate the Merger by June
30, 2002; or
(iii) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action, or there
shall be enacted any law having the effect of, permanently
enjoining, restraining or otherwise prohibiting, or making
illegal the Merger and such order, decree, ruling or other
action shall have become final and nonappealable, provided
the party seeking to terminate this Agreement under this
Section 7.1(b)(iii) shall have used reasonable efforts to
remove or overturn such order, decree, ruling or other
action; or
(c) by the Company:
(i) upon a material breach of any representation or
warranty of Acquiror or if Acquiror fails to comply in any
material respect with any of its covenants or agreements, or
if any representation or warranty of Acquiror shall be or
become untrue in any material respect, which breach or non-
compliance is not curable or, if curable, is not cured by
Acquiror within 30 days after written notice of such breach
or non-compliance from the Company; or
(ii) if, prior to the Shareholders Meeting, the Board
of Directors of the Company shall have withdrawn, or
modified or changed in a manner adverse to Acquiror or
Merger Subsidiary, its approval or recommendation in favor
of this Agreement or the Merger in order to approve and
permit the Company to execute a definitive agreement
providing for a bona fide Acquisition Proposal made by a
third party on terms that a majority of the members of the
Board of Directors of the Company reasonably determines in
good faith (based upon the advice of an outside financial
advisor) is more favorable to the Company and its
stockholders than the transactions contemplated by this
Agreement, and for which financing, to the extent required,
is then committed or which, in the reasonable good faith
judgment of the Board of Directors of the Company, is
reasonably capable of being obtained (such an Acquisition
Proposal is referred to herein as a "Superior Proposal");
provided, that (A) at least five (5) business days prior to
terminating this Agreement pursuant to this Section
7.1(c)(ii), the Company has provided Acquiror with written
notice advising Acquiror that the Board of Directors of the
Company has received a Superior Proposal that it intends to
approve, specifying the material terms and conditions of the
Superior Proposal and identifying the person making the
Superior Proposal, (B) Acquiror may offer such adjustments
in the terms and conditions of this Agreement as Acquiror
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deems appropriate and (C) at the end of the five-business
day period the Board of Directors of the Company continues
reasonably and in good faith to believe that the Acquisition
Proposal is a Superior Proposal; provided, further, that
simultaneously with any termination of this Agreement
pursuant to this Section 7.1(c)(ii), the Company shall pay
to Acquiror the Termination Payment (as defined in Section
7.2(b) below) specified in Section 7.2(b); and provided,
further, that the Company may not terminate this Agreement
pursuant to this Section 7.1(c)(ii) if the Company is in
material breach of this Agreement; or
(d) by Acquiror:
(i) upon a material breach of any representation, or
warranty of the Company or if the Company fails to comply in
any material respect with any of this covenants or
agreements, or if any representation or warranty of the
Company shall be or become untrue in any material respect,
which breach or non-compliance is not curable or, if
curable, is not cured by the Company within 30 days after
written notice of such breach or non-compliance from
Acquiror; or
(ii) if, prior to the Shareholders Meeting, (A) the
Board of Directors of the Company shall have withdrawn, or
modified or changed in a manner adverse to Acquiror or
Merger Subsidiary, its approval or recommendation in favor
of this Agreement or the Merger, or shall have approved or
recommended an Acquisition Proposal, or shall have executed
a definitive agreement providing for an Acquisition
Proposal, or (B) a tender offer or exchange offer for any
outstanding shares of the Company's common stock, is
commenced, and the Board of Directors of the Company, within
ten days after such tender offer or exchange offer is so
commenced, either fails to recommend against acceptance of
such tender offer or exchange offer by its stockholders or
takes no position with respect to the acceptance of such
tender offer or exchange offer by its stockholders.
SECTION 7.2 EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement by either
the Company or Acquiror as provided in Section 7.1, except as
provided below in Section 7.2(b), this Agreement shall forthwith
become void and have no effect, without any liability or
obligation on the part of Acquiror or the Company, other than the
last sentence of Section 4.3 and Sections 7.2 and 10.2. Unless
there has been a valid termination of this Agreement, nothing
contained in this Section shall relieve any party from any
liability resulting from any material breach of the
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representations, warranties, covenants or agreements set forth in
this Agreement.
(b) The Company shall pay Acquiror $1,000,000 in cash as
liquidated damages and not as a penalty (the "Termination
Payment") if this Agreement is terminated pursuant to Section
7.1(b)(i), Section 7.1(c)(ii) or Section 7.1(d)(ii). The
Termination Payment shall be paid in same-day funds by wire
transfer to an account designated by Acquiror within ten days
after the event giving rise to the Termination Payment, except as
provided in Section 7.1(c)(ii). Notwithstanding anything in this
Agreement to the contrary, the Termination Payment, if payable,
shall be paid only once and shall be Acquiror's sole and
exclusive remedy hereunder for the termination of the Agreement
under the circumstances in which the Termination Payment is paid,
and upon such delivery of the Termination Payment to Acquiror, no
person shall have any further claim or rights against the Company
under this Agreement with respect thereto; provided, however,
that this sentence shall not apply to and shall in no way
restrict the right of Acquiror to assert a counterclaim in
response to any action brought by the Company against Acquiror
with respect to such events. The Company shall reimburse
Acquiror for all costs incurred in connection with the collection
of the Termination Payment under this Agreement.
SECTION 7.3 AMENDMENT. Subject to the applicable provisions of
the MBCA, at any time prior to the Effective Time, the parties hereto
may modify or amend this Agreement, by written agreement executed and
delivered by duly authorized officers of Acquiror and the Company;
provided, however, that after approval of the Merger by the
shareholders of the Company, no amendment shall be made which reduces
the amount of the Merger Consideration payable in the Merger or
adversely affects the rights of the Company's shareholders hereunder
without the approval of such shareholders.
SECTION 7.4 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 of the other parties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to
Section 7.3, waive compliance with any of the agreements or conditions
of the other parties contained in this Agreement. 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 the Company
(if an extension or waiver of the Company) or (in all other cases)
Acquiror. 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, except that an amendment, waiver or extension
by Acquiror shall be deemed to include and be binding on Merger
Subsidiary.
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SECTION 7.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
WAIVER. A termination of this Agreement pursuant to Section 7.1, an
amendment of this Agreement pursuant to Section 7.3 or an extension or
waiver pursuant to Section 7.4 shall, in order to be effective,
require in the case of Acquiror or the Company, action by its Board of
Directors or the duly authorized designee of its Board of Directors.
ARTICLE VIII
SURVIVAL OF PROVISIONS
SECTION 8.1 SURVIVAL. The representations and warranties
respectively made by the Company, Acquiror in this Agreement, or in
any certificate, respectively, delivered by the Company, Acquiror
pursuant to Section 6.2 or Section 6.3 hereof, will terminate upon the
Closing and be of no further force or effect.
ARTICLE IX
NOTICES
SECTION 9.1 NOTICES. Any notice or communication given pursuant
to this Agreement must be in writing and will be deemed to have been
duly given if mailed (by registered or certified mail, postage
prepaid, return receipt requested), or, if transmitted by telecopy, or
if delivered by courier, as follows:
If to the Company, to:
Intelligent Controls, Inc.
74 Industrial Park Road
Saco, Maine 04072
Attention: Roger E. Brooks
Telecopy: (207) 286-1439
with a copy to:
Verrill & Dana, LLP
One Portland Square
Portland, Maine 04112
Attention: Gregory S. Fryer, Esq.
Telecopy: (207) 774-7499
If to Acquiror or Merger Subsidiary, to:
Franklin Electric Co., Inc.
400 E. Spring Street
Bluffton, Indiana 46714
Attention: Gregg C. Sengstack
Telecopy: (260) 827-5633
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with copies to:
Schiff Hardin & Waite
6600 Sears Tower
Chicago, Illinois 60606
Attention: Robert J. Regan, Esq.
Telecopy: (312) 258-5600
All notices and other communications required or permitted under this
Agreement that are addressed as provided in this Section 9.1 will,
whether sent by mail, telecopy, or courier, be deemed given upon the
first business day after actual delivery to the addressed destination
to which such notice or other communication is sent (as evidenced by
the return receipt or shipping invoice signed by a representative of
such party or by telecopy confirmation). Any party from time to time
may change its address for the purpose of notices to that party by
giving a similar notice specifying a new address, but no such notice
will be deemed to have been given until it is actually received by the
party sought to be charged with the contents thereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 ENTIRE AGREEMENT. This Agreement and the
Nondisclosure Agreement constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and supersede
all prior communications, agreements, understandings, representations,
and warranties whether oral or written between the parties hereto.
There are no oral or written agreements, understandings,
representations, or warranties between the parties hereto with respect
to the subject hereof other than those set forth in this Agreement and
the Nondisclosure Agreement. In the event of any conflict between the
terms of this Agreement and the terms of the Nondisclosure Agreement,
the terms of this Agreement shall control.
SECTION 10.2 EXPENSES. Except as otherwise provided in this
Agreement, the Company and Acquiror each will pay its own costs and
expenses incident to preparing for, entering into and carrying out
this Agreement and the consummation of the transactions contemplated
hereby. Notwithstanding anything in this Agreement to the contrary,
the Company covenants and agrees that, assuming the Closing Date
occurs on or before June 30, 2002, the fees and expenses of the
Company incurred in connection with this Agreement and the Merger
(including, but not limited to, legal, accounting and printing fees
and expenses) shall not exceed $150,000 in the aggregate, and all such
fees and expenses shall have been accrued or paid as of the Effective
Time.
SECTION 10.3 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which will be deemed an original,
but all of which will constitute one and the same instrument and shall
-39-
become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 10.4 NO THIRD-PARTY BENEFICIARY. Except as otherwise
specifically provided in Section 4.8, this Agreement is not intended
and may not be construed to create any rights in any parties other
than the Company and Acquiror and their respective successors or
assigns, and it is not the intention of the parties to confer third-
party beneficiary rights upon any other person.
SECTION 10.5 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Maine
(without regard to the principles of conflicts of law) applicable to a
contract executed and to be performed in such State.
SECTION 10.6 ASSIGNMENT; BINDING EFFECT. 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, such consent not to be unreasonably withheld and
any such assignment that is not consented to shall be null and void,
except that Acquiror shall have the right to assign this Agreement to
any Subsidiary or affiliate. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be
enforceable by, the parties and their respective successors and
assigns.
SECTION 10.7 ENFORCEMENT OF THIS AGREEMENT. The parties hereto
agree that irreparable damage would occur in the event that any of the
terms or provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that each of the parties hereto shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any
court of the United States of America or any state having
jurisdiction, such remedy being in addition to any other remedy to
which any party may be entitled at law or in equity.
SECTION 10.8 HEADINGS, GENDER, ETC. The headings used in this
Agreement have been inserted for convenience and do not constitute
matter to be construed or interpreted in connection with this
Agreement. Unless the context of this Agreement otherwise requires,
(a) words of any gender are deemed to include each other gender; (b)
words using the singular or plural number also include the plural or
singular number, respectively; (c) the terms "hereof," "herein,"
"hereby," "hereto," and derivative or similar words refer to this
entire Agreement; (d) the terms "Article" or "Section" refer to the
specified Article or Section of this Agreement; (e) all references to
"dollars" or "$" refer to currency of the United States of America;
(f) the term "person" shall include any natural person, corporation,
limited liability company, general partnership, limited partnership,
-40-
or other entity, enterprise, authority or business organization; and
(g) the term "or" is disjunctive but not necessarily exclusive.
[SIGNATURE PAGE FOLLOWS]
-41-
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of Acquiror, Merger
Subsidiary and the Company effective as of the date first written
above.
FRANKLIN ELECTRIC CO., INC.
By: /s/ Jess B. Ford
--------------------------
Name: Jess B. Ford
Title: Senior Vice President
FEI CORPORATION
By: /s/ Jess B. Ford
--------------------------
Name: Jess B. Ford
Title: President
INTELLIGENT CONTROLS, INC.
By: /s/ Roger E. Brooks
--------------------------
Name: Roger E. Brooks
Title: President and Chief
Executive Officer
-42-
Exhibit A
---------
Officers of Surviving Corporation
---------------------------------
NAME TITLE
---- -----
Jess B. Ford Chairman
Roger E. Brooks President and Chief Executive
Officer
Gregg C. Sengstack Chief Financial Officer, Treasurer
and Secretary
Andrew B. Clement Controller and Assistant Treasurer
Enrique Sales Vice President Sales & Marketing
Dean Richards Vice President Manufacturing
EXHIBIT 2
---------
VOTING AGREEMENT AND
AMENDMENT TO STOCKHOLDERS AGREEMENT
AGREEMENT, dated as of April 25, 2002, by and among Franklin
Electric Co., Inc., an Indiana corporation ("Franklin"), and the
shareholders of Intelligent Controls, Inc., a Maine corporation (the
"Company"), listed on the signature page of this Agreement
(collectively, the "Shareholders" and each, a "Shareholder").
WHEREAS, on even date herewith, Franklin has entered into an
Agreement and Plan of Merger dated as of April 25, 2002 (the "Merger
Agreement") by and among Franklin, FEI Corporation, a Maine
corporation and a wholly-owned subsidiary of Franklin ("Merger
Subsidiary"), and the Company, pursuant to which Franklin will acquire
the Company by merging Merger Subsidiary with and into the Company,
with the Company as the Surviving Corporation and a wholly-owned
subsidiary of Franklin;
WHEREAS, the Company will submit the transactions contemplated by
the Merger Agreement to the holders of its Common Stock for approval
at a meeting of shareholders called for that purpose (the
"Shareholders Meeting");
WHEREAS, each Shareholder is the record holder of, and
Beneficially Owns, the number of shares of Common Share (the "Shares")
set forth opposite his or her name on Schedule I to this Agreement and
is a party to that certain Stockholders Agreement dated as of May 1,
1998, as heretofore amended (the "Shareholders Agreement"); and
WHEREAS, as an inducement to Franklin to enter into the Merger
Agreement, the Shareholders have agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with
respect to any securities shall mean having "beneficial ownership" of
such securities (as determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) and
with respect to stock options shall mean the maximum number of shares
purchasable under such options irrespective of vesting limitations or
other exercise conditions.
(b) "Common Stock" shall mean at any time the Common Stock,
no par value, of the Company.
(c) "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
2. AGREEMENTS.
(a) VOTING. Each Shareholder hereby agrees to vote his
Shares in connection with the Shareholder Meeting (a) in favor of the
Merger and the Merger Agreement, (b) in favor of any other matter
determined by the Board of Directors of the Company to be necessary
for the consummation of the transactions contemplated by or referred
to in the Merger Agreement and (c) against any matter inconsistent
with the transactions contemplated by or referred to in the Merger
Agreement;
(b) GRANT OF PROXY. Each Shareholder hereby irrevocably
grants to, and appoints, Jess B. Ford or Gregg C. Sengstack and any
nominee thereof (the "Proxy Holder"), such Shareholder's proxy and
attorney-in-fact (with full power of substitution), for and in the
name, place and stead of such Shareholder, to vote his Shares in
accordance with the provisions of Section 2(a).
(c) REVOCATION OF PRIOR PROXIES. Each Shareholder
represents that any proxies heretofore given in respect of such
Shareholder's Shares, if any, are not irrevocable, and that such
proxies are hereby revoked.
(d) IRREVOCABLE PROXY. Each Shareholder hereby affirms
that the irrevocable proxy set forth in this Section 2 are coupled
with an interest and are intended to be irrevocable in accordance with
the Maine Business Corporation Act. If for any reason the proxies
granted herein are not irrevocable, each Shareholder agrees to vote
his Shares as instructed by the Proxy Holder in writing.
(e) NO INCONSISTENT ARRANGEMENTS. Each Shareholder hereby
covenants and agrees that, except as contemplated by this Agreement,
he will not (i) transfer (which term shall include, without
limitation, any sale, gift, pledge or other disposition), or consent
to any transfer of, any or all of such Shareholder's Shares, or any
interest therein, (ii) enter into any contract, option or other
agreement or understanding with respect to any transfer of any or all
of such Shares, or any interest therein, (iii) grant any proxy, power-
of-attorney or other authorization in or with respect to such Shares,
(iv) deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares, or (v) take any
other action that would in any way restrict, limit or interfere with
the performance of his obligations under this Agreement or the
transactions contemplated by this Agreement.
(f) WAIVER OF RIGHT TO DISSENT. Each Shareholder hereby
waives any right to dissent from the Merger that such Shareholder may
have under the Maine Business Corporation Act or otherwise.
2
(g) TERMINATION OF STOCKHOLDERS AGREEMENT. Each
Shareholder hereby agrees to amend and terminate the Stockholders
Agreement in its entirety, waiving and releasing all further rights
and claims of the Shareholder thereunder. Such amendment,
termination, waiver, and release is conditional only upon consummation
of the "Merger" and shall be effective as of the "Effective Time" (as
such terms are defined in the Merger Agreement).
3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each
Shareholder hereby represents and warrants to Franklin that (i) he is
the record and Beneficial Owner of the Shares set forth on Schedule I
and (except as otherwise set forth therein) has sole voting power with
respect thereto, (ii) he does not Beneficially Own any Shares other
than those set forth on Schedule I, (iii) he has the legal capacity,
power and authority to enter into this Agreement and perform his
obligations under this Agreement without the need for the consent of
any other person or entity, and (iv) this Agreement constitutes a
valid and binding agreement of the Shareholder enforceable against him
in accordance with its terms, except as enforcement thereof may be
limited by applicable bankruptcy and other similar laws and general
principles of equity.
4. FURTHER ASSURANCES. From time to time, at the other party's
request and without further consideration, each party hereto shall
execute and deliver such additional documents and take all such
further lawful action as may be necessary or desirable to consummate
and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement.
5. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with
respect to the subject matter hereof.
(b) BINDING AGREEMENT This Agreement and the obligations
hereunder shall attach to the Shares and shall be binding upon any
person or entity to which legal or Beneficial Ownership of such Shares
shall pass, whether by operation of law or otherwise, including,
without limitation, each of the Shareholder's successors or assigns.
Notwithstanding any transfer of Shares, the transferee shall remain
liable for the performance of all obligations of the transferor under
this Agreement.
(c) ASSIGNMENT. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the
other party.
(d) AMENDMENTS, WAIVERS, ETC. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or
3
terminated, except upon the execution and delivery of a written
agreement executed by the parties hereto.
(e) NOTICES. Any notice or communication given pursuant to
this Agreement must be in writing and will be deemed to have been duly
given if mailed (by registered or certified mail, postage prepaid,
return receipt requested), or, if transmitted by telecopy, or if
delivered by courier, as follows:
If to a Shareholder: to the Shareholder's address and
telecopy number (if any) set forth on
Schedule I hereto
If to Franklin: 400 E. Spring Street
Bluffton, Indiana 46714
Attention: Gregg C. Sengstack
Telecopy: (260) 827-5633
All notices and other communications required or permitted under this
Agreement that are addressed as provided in this Section 5(e) will,
whether sent by mail, telecopy, or courier, by deemed given upon the
first business day after actual delivery to the addressed destination
to which such notice or other communication is sent (as evidenced by
the return receipt or shipping invoice signed by a representative of
such party or by telecopy confirmation). Any party from time to time
may change its address for the purpose of notices to that party by
giving a similar notice specifying a new address, but no such notice
will be deemed to have been given until it is actually received by the
party sought to be charged with the contents thereof.
(f) SPECIFIC PERFORMANCE. Each party hereto recognizes and
acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain
damages for which it would not have an adequate remedy at law for
money damages, and therefore in the event of any such breach the
aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other
equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
(g) REMEDIES CUMULATIVE. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative or
exclusive, and the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
(h) DESCRIPTIVE HEADINGS. The descriptive headings used
herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of
this Agreement.
4
(i) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all
of which, taken together, shall constitute one and the same Agreement.
(j) TERMINATION. Notwithstanding any provision of this
Agreement, in the event of any termination of the Merger Agreement,
the obligations of the Shareholders hereunder (including without
limitation the irrevocable proxy contained herein) shall terminate in
all respects without further action by any party. Upon any such
termination, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of any
Shareholder.
[SIGNATURE PAGE FOLLOWS]
5
IN WITNESS WHEREOF, the undersigned have caused this Agreement to
be duly executed as of the day and year first above written.
FRANKLIN ELECTRIC CO., INC.
By: /s/ Jess B. Ford
----------------------------------
Name: Jess B. Ford
Title: Senior Vice President
SHAREHOLDERS:
Ampersand 1995 Limited Partnership
By: AMP-95 Management Company Limited
Partnership, its General Partner
By: AMP-95 MCLP LLP, its General Partner
By: /s/ Charles D. Yie
-----------------------------------
Name: Charles D. Yie
Title: General Partner
Ampersand 1995 Companion Fund Limited
Partnership
By: AMP-95 Management Company Limited
Partnership, its General Partner
By: AMP-95 MCLP LLP, its General Partner
By: /s/ Charles D. Yie
------------------------------------
Name: Charles D. Yie
Title: General Partner
/s/ Charles D. Yie
-----------------------------------------
Charles D. Yie
/s/ Alan Lukas
-----------------------------------------
Alan Lukas
/s/ Roger E. Brooks
-----------------------------------------
Roger E. Brooks
/s/ Paul E. Lukas
-----------------------------------------
Paul E. Lukas
/s/ Karen S. Lukas
-----------------------------------------
Karen S. Lukas
/s/ Alan Lukas
-----------------------------------------
Alan Lukas, as custodian for
Andrew B. Lukas
/s/ James H. Young, II
-----------------------------------------
James H. Young II, Trustee, the Andrew
B. Lukas Trust dated December 4, 1994
SCHEDULE I
NAME, ADDRESS AND TELECOPY
NUMBER OF SHAREHOLDER BENEFICIAL OWNERSHIP
-------------------------- --------------------
SHARES OPTIONS****
------ -------
Ampersand 1995 Limited Partnership* 1,612,247 0
Ampersand 1995 Companion Fund Limited 26,215 0
Partnership*
Charles D. Yie* 0 21,000
Alan Lukas** 986,638 0
Roger E. Brooks*** 518,923 40,000
Paul E. Lukas** 375,256 5,000
_______________
* The address and telecopy number are 55 William Street, Suite 240,
Wellesley, Massachusetts 02481, telecopy number: 781-239-0824.
Share ownership shown is record ownership. Due to affiliations
between Ampersand 1995 Limited Partnership and Ampersand 1995
Companion Fund Limited Partnership, each partnership is deemed a
Beneficial Owner of the other's Shares. Due to affiliations
between Mr. Yie and the two partnerships, he may be deemed a
Beneficial Owner of the partnerships' Shares, although he has
disclaimed Beneficial Ownership of those Shares in filings made
by him with the Securities and Exchange Commission.
** The address and telecopy number are 74 Industrial Park Road,
Saco, Maine 04072, telecopy number: 207-286-1439. His
Beneficial Ownership includes 880,551 Shares owned directly,
66,949 Shares owned by his wife Karen S. Lukas, 30,106 shares
held in trust for his child (trustee is James H. Young II), and
3,000 shares held of record by him as custodian for his child.
*** The address and telecopy number are 74 Industrial Park Road,
Saco, Maine 04072, telecopy number: 207-286-1439.
**** It is not anticipated that these options will be exercised prior
to the record date for the special meeting of shareholders. If
and to the extent they are, the underlying stock will become
"Shares" within the meaning of this Agreement.