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Filed by Union Pacific Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Motor Cargo Industries, Inc.
Commission File No. 000-23341
On October 15, 2001, Motor Cargo Industries, Inc., a Utah
corporation ("Motor Cargo"), Union Pacific Corporation, a Utah corporation
("Union Pacific"), and Motor Merger Co., a Utah corporation and
wholly-owned subsidiary of Union Pacific, entered into an Agreement and
Plan of Merger (the "Agreement"). In addition, Messrs. Harold R. Tate and
Marvin L. Friedland, who jointly hold approximately 62.5% of the stock of
Motor Cargo, have entered into Shareholder Agreements with Union Pacific.
Attached and incorporated herein by reference in their entirety as
Exhibits 1 through 3 are copies of the Agreement and the Shareholder
Agreements.
* * *
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This material is being filed pursuant to Rule 425 under the Securities Act
of 1933. This document does not constitute an offer of sale of securities.
Shareholders of Motor Cargo and other investors are urged to read the
following documents, when available, in connection with the transaction
described above: the prospectus, exchange offer materials, registration
statement on Form S-4 and Schedule TO, containing or incorporating by
reference such documents and other information, to be filed by Union
Pacific and the solicitation/recommendation statement on Schedule 14D-9, to
be filed by Motor Cargo. Such documents will contain important information
about Motor Cargo, Union Pacific, the transaction, and significant
shareholders and their interests in the transaction, and related matters.
In addition to the prospectus, exchange offer materials, registration
statement, Schedule TO, and Schedule 14D-9, Union Pacific and Motor Cargo
file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or
other information filed by Motor Cargo or Union Pacific at the SEC Public
Reference Rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at any
of the SEC's other public reference rooms in New York and Chicago. Please
call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Union Pacific's and Motor Cargo's filings with the SEC are
also available to the public from commercial document-retrieval services
and at the web site maintained by the SEC at http://www.sec.gov. Free
copies of the tender offer materials, when available, and these other
documents may also be obtained from Union Pacific by directing a request by
mail to Union Pacific Corporation, 1416 Dodge Street, Omaha, Nebraska
68179, Attention: Investor Relations, Telephone: 1-877-547-7261. Free
copies of the Schedule 14D-9, when available, may also be obtained from
Motor Cargo by directing a request by mail to Motor Cargo Industries, Inc.,
845 West Center Street, North Salt Lake City, Utah 84054, Attention:
Investor Relations, Telephone: 801-299-5294.
EXHIBIT INDEX
Exhibit No. Description
1 Agreement and Plan of Merger, dated as of October 15,
2001, by and among Union Pacific Corporation, Motor Cargo
Industries, Inc. and Motor Merger Co.
2 Shareholder Agreement, dated as of October 15, 2001,
between Union Pacific Corporation and Harold R. Tate.
3 Shareholder Agreement, dated as of October 15, 2001,
between Union Pacific Corporation and Marvin L.
Friedland.
EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
By and Among
MOTOR CARGO INDUSTRIES, INC.
UNION PACIFIC CORPORATION
and
MOTOR MERGER CO.
Dated as of October 15, 2001
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions..............................................2
ARTICLE II
THE OFFER
Section 2.1. The Offer................................................6
Section 2.2. Company Actions..........................................9
Section 2.3. Directors of the Company................................10
ARTICLE III
THE MERGER
Section 3.1. The Merger..............................................11
Section 3.2. The Closing; Effective Time.............................12
Section 3.3. Conversion of Securities................................12
Section 3.4. Exchange of Certificates................................13
Section 3.5. Options and Stock Appreciation Rights...................15
Section 3.6. Dissenting Shares.......................................15
Section 3.7. Articles of Incorporation and Bylaws....................16
Section 3.8. Directors and Officers..................................16
Section 3.9. Other Effects of Merger.................................16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1. Organization and Qualification..........................16
Section 4.2. Capitalization..........................................17
Section 4.3. Corporate Authorization; Validity of Agreement;
Company Action..........................................18
Section 4.4. Consents and Approvals; No Violations...................19
Section 4.5. SEC Reports and Financial Statements....................20
Section 4.6. Absence of Certain Changes..............................21
Section 4.7. No Undisclosed Liabilities..............................21
Section 4.8. Schedule 14D-9; Proxy Statement.........................22
Section 4.9. Employee Benefit Plans; ERISA...........................22
Section 4.10. Labor Matters...........................................25
Section 4.11. Litigation; Compliance with Law.........................27
Section 4.12. Taxes...................................................28
Section 4.13. Contracts...............................................30
Section 4.14. Environmental Matters...................................31
Section 4.15. Intellectual Property...................................32
Section 4.16. Title, Sufficiency and Condition of Assets..............35
Section 4.17. Transactions with Affiliates............................35
Section 4.18. Opinion of Financial Advisor............................35
Section 4.19. Broker's or Finder's Fee................................35
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 5.1. Organization and Qualification..........................36
Section 5.2. Corporate Authorization; Validity of Agreement;
Necessary Action........................................36
Section 5.3. Consents and Approvals; No Violations...................37
Section 5.4. Information To Be Supplied..............................38
Section 5.5. SEC Reports and Financial Statements....................38
Section 5.6. Financing...............................................39
Section 5.7. Taxes...................................................39
ARTICLE VI
COVENANTS
Section 6.1. Interim Operations of the Company.......................39
Section 6.2. Preparation of Proxy Statement; Company Shareholder
Meeting.................................................42
Section 6.3. Access to Information...................................44
Section 6.4. No Solicitation; Acquisition Proposals..................44
Section 6.5. Modifications to Recommendations........................47
Section 6.6. HSR Act Filings; Reasonable Best Efforts................48
Section 6.7. Litigation..............................................49
Section 6.8. Certain Benefit Matters.................................49
Section 6.9. Additional Agreements...................................49
Section 6.10. Publicity...............................................50
Section 6.11. Notification of Certain Matters.........................50
Section 6.12. Directors' and Officers' Indemnification and Insurance..50
Section 6.13. Rule 145 Affiliates.....................................51
Section 6.14. Cooperation.............................................51
Section 6.15. Tax-Free Reorganization Treatment.......................52
Section 6.16. Conveyance Taxes........................................53
ARTICLE VII
CONDITIONS
Section 7.1. Conditions to Each Party's Obligations..................53
Section 7.2. Conditions to Obligations of Parent.....................54
Section 7.3. Frustration of Conditions...............................54
ARTICLE VIII
TERMINATION AND ABANDONMENT; EXPENSES
Section 8.1. Termination.............................................54
Section 8.2. Effect of Termination and Abandonment...................55
Section 8.3. Fees and Expenses.......................................55
ARTICLE IX
MISCELLANEOUS
Section 9.1. Amendment and Modification..............................58
Section 9.2. Waiver of Compliance; Consents..........................58
Section 9.3. Survival................................................58
Section 9.4. Notices.................................................59
Section 9.5. Binding Effect; Permitted Assignment....................60
Section 9.6. Governing Law...........................................60
Section 9.7. Submission to Jurisdiction; Waivers.....................60
Section 9.8. Waiver of Jury Trial....................................61
Section 9.9. Counterparts............................................61
Section 9.10. Interpretation..........................................61
Section 9.11. Entire Agreement........................................61
Section 9.12. Severability............................................62
Section 9.13. Third Party Beneficiaries...............................62
Section 9.14. Disclosure Schedule.....................................62
Annex A Conditions of the Offer.........................................A-1
INDEX OF DEFINED TERMS
Page
Acquisition Proposal....................................................47
affiliate...............................................................62
Agreement................................................................1
Antitrust Laws...........................................................2
Articles of Merger......................................................12
Beneficial Owner.........................................................2
Beneficially Owning......................................................2
Benefit Plans...........................................................23
Certificates............................................................14
Closing.................................................................12
Closing Date............................................................13
Code.....................................................................2
Company..................................................................1
Company Agreement.......................................................31
Company Group...........................................................28
Company Intellectual Property...........................................34
Company Material Adverse Effect..........................................2
Company Options.........................................................17
Company Plans...........................................................17
Company SEC Documents...................................................21
Company Shareholder Approval............................................19
Company Shareholder Meeting.............................................44
Company Shares...........................................................1
Confidentiality Agreement...............................................46
Consent.................................................................21
Continuing Director.....................................................11
Conveyance Taxes........................................................54
Copyrights..............................................................33
Disclosure Schedule......................................................3
Dissenting Shares.......................................................16
Drop Dead Date..........................................................56
Effective Time..........................................................13
Environmental Laws.......................................................3
Environmental Permits...................................................31
ERISA....................................................................3
ERISA Affiliate..........................................................3
Exchange Act.............................................................3
Exchange Agent..........................................................13
Exchange Offer Consideration.............................................3
Exchange Ratio...........................................................7
GAAP....................................................................22
Governmental Authority...................................................3
Hazardous Substances.....................................................4
HSR Act..................................................................4
including...............................................................62
Indebtedness.............................................................4
Intellectual Property...................................................33
IP Licenses.............................................................33
knowledge...............................................................62
Law......................................................................4
Lien.....................................................................5
Liquidated Amount.......................................................56
material................................................................62
Merger...................................................................1
Merger Consideration....................................................13
Merger Sub...............................................................1
Minimum Condition........................................................1
NASD.....................................................................5
NYSE.....................................................................5
Offer....................................................................1
Offer Documents..........................................................8
Offer Registration Statement.............................................8
Outside Date............................................................55
Parent...................................................................1
Parent Common Stock......................................................1
Parent Material Adverse Effect...........................................5
Parent SEC Documents....................................................39
Patents.................................................................33
Per Share Cash Consideration.............................................7
Permits..................................................................5
Permitted Liens..........................................................5
person..................................................................62
Preliminary Prospectus...................................................8
Proprietary Software....................................................34
RCRA....................................................................33
Recommendations..........................................................9
Release..................................................................5
Representation Letters..................................................53
Representative...........................................................6
Reverse Merger..........................................................53
Rule 145 Affiliate.......................................................6
Salary Continuation Agreements..........................................50
Schedule 14D-9..........................................................10
Schedule TO..............................................................8
SEC......................................................................6
Securities Act...........................................................6
Shareholder Agreements...................................................1
Shareholders.............................................................1
Skadden Arps............................................................53
Software................................................................34
Subsequent Determination................................................48
Subsequent Determination Notice.........................................48
subsidiary..............................................................62
Superior Proposal.......................................................47
Surviving Corporation...................................................12
Tax Opinion.............................................................53
Tax Return...............................................................6
Taxes....................................................................6
Termination Damages.....................................................58
Third Party..............................................................6
Title IV Plan...........................................................24
Trade Secrets...........................................................33
Trademarks..............................................................33
Transaction..............................................................6
Treasury Regulations....................................................30
Trigger Event...........................................................56
URBCA....................................................................1
Voting Debt.............................................................18
WARN Act................................................................27
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is
made and entered into as of October 15, 2001, by and among Motor Cargo
Industries, Inc., a Utah corporation (the "Company"), Union Pacific
Corporation, a Utah corporation ("Parent"), and Motor Merger Co., a Utah
corporation and wholly-owned subsidiary of Parent ("Merger Sub").
WITNESSETH:
WHEREAS, the respective Boards of Directors of the
Company, Parent and Merger Sub deem it advisable and in the best interests
of their respective shareholders that Parent engage in a strategic business
combination with the Company upon the terms and subject to the conditions
provided for in this Agreement;
WHEREAS, in furtherance thereof it is proposed that the
acquisition be accomplished by Parent commencing an offer (as it may be
amended from time to time as permitted by this Agreement, the "Offer") to
exchange in which each of the issued and outstanding shares of common
stock, no par value, of the Company (the "Company Shares"), upon the terms
and subject to the conditions set forth in this Agreement, may be exchanged
for the right to receive from Parent, at the election of the holder
thereof: (A) 0.26 of a share of common stock, par value $2.50 per share of
Parent ("Parent Common Stock"), or (B) $12.10 in cash;
WHEREAS, the Board of Directors of each of Parent (on its
own behalf and as the sole shareholder of Merger Sub), Merger Sub and the
Company have each approved this Agreement and the merger of the Company
with and into the Merger Sub (the "Merger"), with the Merger Sub continuing
as the surviving corporation in the Merger in accordance with the Utah
Revised Business Corporation Act (" URBCA") and upon the terms and
conditions set forth in this Agreement;
WHEREAS, contemporaneously with the execution and
delivery of this Agreement, as a condition and inducement to Parent's
willingness to enter into this Agreement, Parent is entering into
shareholder agreements with each of Harold R. Tate and Marvin L. Friedland
(together, the "Shareholders"), pursuant to which, among other things, each
Shareholder is agreeing to validly tender for exchange all Company Shares
owned by such Shareholder and elect to receive Parent Common Stock as
consideration for all of such shares (the "Shareholder Agreements"); and
WHEREAS, the Board of Directors of the Company has
unanimously approved the Offer and the Merger, this Agreement and the
transactions contemplated hereby in a manner which constitutes a directors'
action (as defined in Section 16-10a-852 of the URBCA), and has amended the
Bylaws of the Company to provide that Chapter 6 of Title 61 of the Utah
Code does not apply to control share acquisitions (as defined in Section
61-6-3 of the Utah Code) of capital stock of the Company, and such
approvals and amendment are sufficient to render Section 61-6-10 of the
Utah Code inapplicable to the Offer and the Merger, this Agreement, the
Shareholder Agreements and the transactions contemplated hereby and
thereby.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement and in the
Shareholder Agreements, the adequacy of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. When used in this Agreement,
the following terms shall have the respective meanings specified therefor
below (such meanings to be equally applicable to both the singular and
plural forms of the terms defined).
"Antitrust Laws" means, collectively, the HSR Act, the
Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade
Commission Act, as amended, and any other federal, state or foreign
statutes, rules, regulations, orders or decrees that are designed to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade.
"Beneficial Owner" or "Beneficially Owning" shall have
the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.
"Code" shall mean the Internal Revenue Code of 1986, as
amended and the rules and regulations promulgated thereunder.
"Company Material Adverse Effect" shall mean any fact,
change, event or effect that, individually or together with other facts,
changes, events or effects, is, or would reasonably be expected to be,
materially adverse, in either the short-term or long-term, to the business,
operations, results of operations, financial condition, assets or
liabilities of the Company and its subsidiaries, taken as a whole, whether
related specifically to the Company or to more generally applicable facts,
changes, events or effects.
"Disclosure Schedule" means the disclosure schedule
delivered by the Company to Parent on or prior to the date hereof.
"Environmental Laws" shall mean all foreign, federal,
state and local laws, regulations, rules and ordinances relating to
pollution or protection of the environment or human health and safety,
including laws relating to releases or threatened releases of Hazardous
Substances into the indoor or outdoor environment (including ambient air,
surface water, groundwater, land, surface and subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, Release, transport or handling of Hazardous Substances;
all laws and regulations with regard to recordkeeping, notification,
disclosure and reporting requirements respecting Hazardous Substances; all
laws relating to endangered or threatened species of fish, wildlife and
plants and the management or use of natural resources; and common law to
the extent it relates to or applies to exposure to or impact of Hazardous
Substances on persons or property.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations promulgated
thereunder.
"ERISA Affiliate" shall mean, with respect to any person,
any trade or business, whether or not incorporated, that together with such
person would be deemed a "single employer" within the meaning of section
4001(b)(1) of ERISA.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Exchange Offer Consideration" means the shares of Parent
Common Stock or the cash (including cash in lieu of fractional shares) to
be received upon consummation of the Offer pursuant to the terms set forth
in Section 2.1(a).
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof, any entity,
authority or body exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, including any
governmental or regulatory authority, agency, department, board,
commission, administration or instrumentality, any court, tribunal or
arbitrator or any self regulatory organization.
"Hazardous Substances" shall mean (a) any petrochemical
or petroleum products, radioactive materials, asbestos in any form that is
or could become friable, urea formaldehyde foam insulation, transformers or
other equipment that contain dielectric fluid containing polychlorinated
biphenyls, and radon gas; (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "restricted hazardous
materials," "extremely hazardous substances," "toxic substances,"
"contaminants" or "pollutants" or words of similar meaning and regulatory
effect; or (c) any other chemical, material or substance, exposure to which
is prohibited, limited, or regulated by any applicable Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as the same has been or may be amended from time
to time.
"Indebtedness" shall mean, with respect to any person,
without duplication, (a) all obligations of such person for borrowed money,
or with respect to deposits or advances of any kind to such person, (b) all
obligations of such person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such person upon which interest charges
are customarily paid, (d) all obligations of such person under conditional
sale or other title retention agreements relating to property purchased by
such person, (e) all obligations of such person issued or assumed as the
deferred purchase price of property or services (excluding obligations of
such person to creditors for raw materials, inventory, services and
supplies incurred in the ordinary course of such person's business), (f)
all capitalized lease obligations of such person, (g) all obligations of
others secured by any Lien on property or assets owned or acquired by such
person, whether or not the obligations secured thereby have been assumed,
(h) all obligations of such person under interest rate or currency swap
transactions (valued at the termination value thereof), (i) all letters of
credit issued for the account of such person (excluding letters of credit
issued for the benefit of suppliers to support accounts payable to
suppliers incurred in the ordinary course of business), (j) all obligations
of such person to purchase securities (or other property) which arises out
of or in connection with the sale of the same or substantially similar
securities or property, and (k) all guarantees and arrangements having the
economic effect of a guarantee of such person of any indebtedness of any
other person.
"Law" means any federal, state, local, foreign or other
statute, law, ordinance, rule or regulation or any order, writ, decision,
injunction, judgment, award or decree.
"Lien" means any security interests, liens, claims,
pledges, options, rights of first refusal, agreements, charges or other
encumbrances of any nature or any other limitation or restriction
(including any restriction on the right to vote or sell the same, except as
may be provided under applicable federal or state securities laws).
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NYSE" shall mean the New York Stock Exchange.
"Parent Material Adverse Effect" shall mean any fact,
change, event or effect that, individually or together with other facts,
changes, events or effects, is, or would reasonably be expected to be,
materially adverse, in either the short-term or long-term, to the business,
operations, results of operations, financial condition, assets or
liabilities of Parent and its subsidiaries, taken as a whole, whether
related specifically to Parent or to more generally applicable facts,
changes, events or effects.
"Permits" means approvals, authorizations, certificates,
filings, franchises, licenses, notices, permits, consents and rights.
"Permitted Liens" shall mean such of the following as to
which neither the Company nor any of its subsidiaries is otherwise subject
to criminal liability due to its existence: (i) Liens disclosed as such in
the financial statements of the Company SEC Documents, (ii) Liens for Taxes
not yet due and payable or, if due, (A) not delinquent or (B) being
contested in good faith by appropriate proceedings during which collection
or enforcement against the property is stayed, (iii) mechanics', workmen's,
repairmen's, warehousemen's, carriers' or other Liens, including statutory
Liens, arising or incurred in the ordinary course of business that do not
materially interfere with or materially affect the value or use of the
respective underlying asset to which such Liens relate, (iv) original
purchase price conditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business and (v) Liens that
do not materially interfere with or materially affect the value or use in
any material respect of the respective underlying asset to which such Liens
relate.
"Release" means any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment (including
ambient air, surface water, groundwater, and surface or subsurface strata)
or into or out of any property, including the movement of Hazardous
Substances through or in the air, soil, surface water, groundwater or
property.
"Representative" means with respect to any person, its
officers, directors, employees, investment bankers, attorneys, accountants,
consultants or other agents, advisors or representatives.
"Rule 145 Affiliate" means an affiliate within the
meaning of Rule 145 promulgated under the Securities Act.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Taxes" shall mean (a) any and all taxes, charges, fees,
levies or other assessments, including income, gross receipts, excise, real
or personal property, sales, withholding, social security, occupation, use,
service, service use, license, net worth, payroll, franchise, transfer and
recording taxes, fees and charges, imposed by the Internal Revenue Service
or any taxing authority (whether domestic or foreign including any state,
county, local or foreign government or any subdivision or taxing agency
thereof (including a United States possession)), including any interest
whether paid or received, fines, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes,
charges, fees, levies or other assessments, (b) liability for the payment
of any amounts described in clause (a) above as a result of being a member
of an affiliated, consolidated, combined, unitary or similar group or as a
result of transferor or successor liability and (c) liability for the
payment of any amounts as a result of being a party to any tax sharing
agreement or as a result of any agreement to indemnify any other person
with respect to the payment of any amounts of the type described in clause
(a) or (b) above.
"Tax Return" shall mean any report, return, document,
declaration or other information or filing required to be supplied to any
taxing authority or jurisdiction (foreign or domestic) with respect to
Taxes, including information returns, any documents with respect to or
accompanying payments of estimated Taxes, or with respect to or
accompanying requests for the extension of time in which to file any such
report, return, document, declaration or other information.
"Third Party" means any person (or group of persons)
other than Parent and its respective subsidiaries.
"Transaction" means the combined series of transactions
contemplated by this Agreement, including the Offer and the Merger.
ARTICLE II
THE OFFER
Section 2.1. The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Section 8.1 hereof and that none of the
events set forth in paragraphs (a) through (l) of Annex A hereto shall have
occurred or be existing (and shall not have been waived by Parent), Parent
shall commence (within the meaning of Rule 14d-2 promulgated under the
Exchange Act) as promptly as reasonably practicable after the date hereof
the Offer to exchange for each Company Share, at the election of the holder
thereof, either: (i) 0.26 (the "Exchange Ratio") of a share of Parent
Common Stock; or (ii) cash in the amount of $12.10 (the "Per Share Cash
Consideration"). Shareholders who validly tender Company Shares but fail to
make an election shall be deemed to have elected to receive the Per Share
Cash Consideration for each share of Company Common Stock validly tendered.
(b) The obligation of Parent to accept for payment and
pay for Company Shares tendered pursuant to the Offer in the form and
amount specified in Section 2.1 shall be subject only to the conditions set
forth in Annex A hereto; provided, however, no certificates or scrip
representing fractional shares of Parent Common Stock shall be issued in
connection with the exchange of Parent Common Stock for Company Shares upon
consummation of the Offer, and in lieu thereof each tendering shareholder
who would otherwise be entitled to a fractional share of Parent Common
Stock in the Offer will be paid an amount in cash equal to the product
obtained by multiplying (A) the fractional share interest of such holder
(after taking into account all shares of Company Common Stock validly
tendered for exchange and not withdrawn by such holder) would otherwise be
entitled by (B) the closing price for a share of Parent Common Stock as
reported on the NYSE Composite Transaction Tape (as reported in the Wall
Street Journal, or, if not reported thereby, any other authoritative
source) on the date Parent accepts Company Shares for exchange in the
Offer. The Per Share Cash Consideration payable by Parent for each validly
tendered Company Share accepted for payment by Parent shall, subject to any
required withholding of Taxes, be net to the holder thereof in cash. The
Company agrees that no Company Shares held by the Company or any of its
subsidiaries will be tendered to Parent pursuant to the Offer. Parent
expressly reserves the right to waive any of such conditions, to increase
the Exchange Offer Consideration payable in the Offer and to make any other
changes in the terms of the Offer; provided, however, that no change may be
made without the prior written consent of the Company which (i) decreases
the amount payable per Company Share tendered pursuant to the Offer, (ii)
reduces the maximum number of Company Shares that may be exchanged in the
Offer, or (iii) imposes conditions to the Offer in addition to the
conditions set forth in Annex A hereto.
(c) Subject to the terms of the Offer and this Agreement
and the satisfaction or earlier waiver of all the conditions of the Offer
set forth in Annex A hereto as of any expiration date of the Offer, Parent
will accept for exchange and pay for all Company Shares validly tendered
and not withdrawn pursuant to the Offer as soon as practicable after the
expiration of the Offer. The initial expiration date of the Offer shall be
the twentieth business day following the commencement of the Offer. Parent
may, without the consent of the Company, extend the Offer (i) for one or
more periods beyond the initial expiration date but in no event ending
later than January 31, 2002 if, at the initial or extended expiration date
of the Offer, any of the conditions to the Offer set forth in Annex A
hereto shall not have been satisfied or to the extent permitted by this
Agreement, waived, and (ii) for any period required by any rule,
regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer or any period required by applicable Law. In
addition, Parent may elect to provide a subsequent offering period for
three business days to twenty business days after the acceptance of Company
Shares pursuant to the Offer pursuant to Rule 14d-11 promulgated under the
Exchange Act to meet the objective (which is not a condition to the Offer)
that there be validly tendered, in accordance with the terms of the Offer
and such subsequent offer, prior to the expiration date of such subsequent
offer and not withdrawn a number of Company Shares, which together with
Company Shares then owned by Parent, constitutes at least 90% of the then
outstanding Company Shares.
(d) As promptly as practicable after the date of this
Agreement, Parent shall prepare and file with the SEC a registration
statement on Form S-4 (together with any supplements or amendments thereto,
the "Offer Registration Statement") to register the offer and sale of
Parent Common Stock pursuant to the Offer. The Offer Registration Statement
will include a preliminary prospectus containing the information required
under Rule 14d-4(b) promulgated under the Exchange Act (the "Preliminary
Prospectus"). As soon as practicable on the date of commencement of the
Offer, Parent and Merger Sub shall (i) file with the SEC a Tender Offer
Statement on Schedule TO which will contain or incorporate by reference all
or part of the Preliminary Prospectus and forms of the related letter of
transmittal/election form and all other ancillary documents with respect to
the Offer (together with all supplements and amendments thereto, the
"Schedule TO") (the Schedule TO, the Offer Registration Statement and such
documents included therein pursuant to which the Offer will be made,
together with any supplements or amendments thereto, the "Offer Documents")
and (ii) cause the Offer Documents to be disseminated to the holders of
Company Shares. Each of the Company, Parent and Merger Sub agrees promptly
to correct any information provided by it for use in the Offer Documents if
and to the extent that such information shall have become false or
misleading in any material respect. Parent and Merger Sub agree to take all
steps necessary to cause the Schedule TO and the Offer Registration
Statement as so corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to holders of Company Shares,
in each case as and to the extent required by applicable federal securities
laws. The Company and its counsel shall be given an opportunity to review
and comment on the Offer Documents prior to their being filed with the SEC
or disseminated to the holders of Company Shares. Each of Parent and Merger
Sub agrees to provide the Company and its counsel with any comments Parent
and Merger Sub or their counsel may receive from time to time from the SEC
or its staff with respect to the Offer Documents promptly after the receipt
of such comments and to consult with the Company and its counsel prior to
responding to any such comments.
Section 2.2. Company Actions.
(a) The Company hereby approves of and consents to the
Offer and represents and warrants that the Company's Board of Directors, at
a meeting duly called and held, has (i) amended the Bylaws of the Company
to provide that Chapter 6 of Title 61 of the Utah Code does not apply to
control share acquisitions (as defined in Section 61-6-3 of the Utah Code)
of capital stock of the Company, (ii) unanimously determined that this
Agreement and the transactions contemplated hereby, including the Offer and
the Merger, are advisable and are fair to and in the best interests of the
shareholders of the Company, (iii) unanimously approved and adopted this
Agreement and the transactions contemplated hereby, including the Offer and
the Merger, in a manner which constitutes a directors' action (as defined
in Section 16-10a-852 of the URBCA), and (iv) unanimously resolved to
recommend that the shareholders of the Company accept the Offer, tender
their Company Shares to Parent thereunder and approve and adopt this
Agreement and the Merger (the recommendations referred to in this clause
(iv) are collectively referred to in this Agreement as the
"Recommendations"). The Company hereby consents to the inclusion in the
Offer Documents of the Recommendations and approval of the Board of
Directors described in the immediately preceding sentence, and the Company
shall not permit the Recommendations and approval of the Company's Board of
Directors or any component thereof to be modified in any manner adverse to
Parent or Merger Sub or to be withdrawn by the Company's Board or any
committee thereof, except as provided, and only to the extent set forth, in
Section 6.5 hereof.
(b) As promptly as practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") which shall
contain the Recommendations which pertain to this Agreement and the Offer.
The Company further agrees to take all steps necessary to cause the
Schedule 14D-9 to be disseminated to holders of Company Shares as and to
the extent required by applicable federal securities laws. Each of the
Company, Parent and Merger Sub will promptly correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that it
shall have become false or misleading in any material respect, and the
Company will cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of Company Shares, in each case as
and to the extent required by applicable federal securities laws. Parent
and its counsel shall be given a reasonable opportunity to review and
comment upon the Schedule 14D-9 before it is filed with the SEC. In
addition, the Company agrees to provide Parent, Merger Sub and their
counsel with any comments that the Company or its counsel may receive from
time to time from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments and to consult with Parent,
Merger Sub and their counsel prior to responding to any such comments.
(c) The Company shall promptly furnish Parent with
mailing labels containing the names and addresses of all record holders of
Company Shares and with security position listings of Company Shares held
in stock depositories, each as of a recent date, together with all other
available listings and computer files containing names, addresses and
security position listings of record holders and non-objecting beneficial
owners of Company Shares. The Company shall furnish Parent with such
additional information, including updated listings and computer files of
holders of Company Shares, mailing labels and security position listings,
and such other assistance as Parent or its agents may reasonably request.
Section 2.3. Directors of the Company.
(a) Effective upon the acceptance of Company Shares for
payment by Parent or any of its affiliates pursuant to the Offer, Parent
shall be entitled to designate such number of directors on the Board of
Directors of the Company as is equal to the product (rounded up to the next
whole number) obtained by multiplying the total number of directors on such
Board at that time by the percentage that the number of Company Shares then
Beneficially Owned by Parent (including such Company Shares so accepted)
bears to the total number of Company Shares then outstanding. In
furtherance thereof, the Company and its Board of Directors shall, after
the acceptance of such Company Shares by Parent or any of its affiliates
pursuant to the Offer, upon written request of Parent, immediately increase
the size of its Board of Directors or secure the resignations of such
number of incumbent directors or remove such number of incumbent directors
(to the extent permitted by applicable Law), or any combination of the
foregoing, as is necessary to enable Parent's designees to be so appointed
to the Board of Directors of the Company and shall cause Parent's designees
to be so appointed. Effective upon the acceptance of Company Shares by
Parent or any of its affiliates pursuant to the Offer, the Company shall,
if requested by Parent, also cause directors designated by Parent to
constitute at least the same percentage (rounded up to the next whole
number) of each committee of the Company's Board of Directors as is on the
Company's Board of Directors after giving effect to the foregoing changes
to the composition of the Company's Board of Directors. Notwithstanding the
foregoing, there shall be until the Effective Time at least two members of
the Company's Board of Directors who are directors of the Company prior to
consummation of the Offer (each, a "Continuing Director"). The Company and
its Board of Directors shall promptly take all legally available actions as
may be necessary to comply with their obligations under this Section
2.3(a), including all actions as may be permitted under the URBCA and the
Company's Articles of Incorporation and Bylaws.
(b) The Company shall comply with and immediately take
all actions required pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder in order to fulfill its obligations under
Section 2.3(a), including mailing to shareholders, together with the
Schedule 14D-9, the information required by such Section 14(f) and Rule
14f-1 as is necessary to enable Parent's designees to be appointed to the
Company's Board of Directors. Parent will supply the Company and be solely
responsible for any information with respect to Parent, its designees and
its nominees, officers, directors and affiliates required by such Section
14(f) and Rule 14f-1.
(c) Following the appointment of Parent's designees to
the Company's Board of Directors pursuant to this Section 2.3 and prior to
the Effective Time, (i) any amendment or termination of this Agreement by
the Company, (ii) any extension or waiver by the Company of the time for
the performance of any of the obligations or other acts of Parent or Merger
Sub under this Agreement, or (iii) any waiver of any of the Company's
rights hereunder shall, in any such case, require the concurrence of a
majority of the Continuing Directors then in office.
ARTICLE III
THE MERGER
Section 3.1. The Merger. Upon the terms and subject to
the conditions of this Agreement, the Merger shall be consummated in
accordance with the URBCA. At the Effective Time, upon the terms and
subject to the conditions of this Agreement, the Company shall be merged
with and into Merger Sub in accordance with the URBCA and the separate
existence of the Company shall thereupon cease, and Merger Sub, as the
surviving corporation in the Merger, shall continue its corporate existence
under the laws of the State of Utah as a wholly-owned subsidiary of Parent;
provided, however, that if Parent does not obtain a Tax Opinion, then, in
Parent's reasonable discretion, the Reverse Merger may be effected, and the
surviving corporation shall thereby become a wholly-owned subsidiary of
Parent. If the Reverse Merger is effected, then the separate existence of
Merger Sub shall cease and the Company shall become the surviving
corporation. The surviving corporation of the Merger or the Reverse Merger,
as the case may be, shall be herein referred to as the "Surviving
Corporation." In the event Parent elects to effect a Reverse Merger, all
references to "Merger" in this Agreement and all other ancillary or related
agreements, documents and instruments shall be deemed to be references to
the "Reverse Merger" and this Agreement and such other ancillary and
related agreements, documents and instruments shall be construed and
interpreted accordingly.
Section 3.2. The Closing; Effective Time.
(a) The closing of the Merger (the "Closing") shall take
place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four
Times Square, New York, New York 10036 at 10:00 a.m. local time as promptly
as practicable, on a date to be specified by the parties which shall be no
later than the third business day after the date that all of the closing
conditions set forth in Article VII have been satisfied or waived (if
waivable) unless another time, date and place is agreed upon in writing by
the parties hereto.
(b) Effective Time. Subject to the provisions of this
Agreement, on the Closing Date the Surviving Corporation shall deliver to
the Utah Department of Commerce, Division of Corporations and Commercial
Code, for filing articles of merger in accordance with Section 16-10a-1105
of the URBCA (the "Articles of Merger") executed in accordance with the
relevant provisions of the URBCA and shall make all other filings or
recordings required under the URBCA in order to effect the Merger. The
Merger shall become effective upon the filing of the Articles of Merger or
at such other later time as is agreed by the parties hereto and specified
in the Articles of Merger in the manner required by the URBCA. The time
when the Merger shall become effective is herein referred to as the
"Effective Time" and the date on which the Effective Time occurs is herein
referred to as the "Closing Date."
Section 3.3. Conversion of Securities. At the Effective
Time, by virtue of the Merger and without any action on the part of the
holders of any securities of Merger Sub or the Company:
(a) Each Company Share that is owned by Parent, the
Company or any of their respective subsidiaries shall automatically be
cancelled and retired and shall cease to exist, and no consideration shall
be delivered in exchange therefor.
(b) Each issued and outstanding Company Share (other than
Company Shares to be cancelled in accordance with Section 3.3(a) hereof and
Dissenting Shares) shall automatically be converted into the right to
receive the Per Share Cash Consideration in cash (the "Merger
Consideration"), payable, without interest, to the holder of such Company
Share upon surrender, in the manner provided in Section 3.4 hereof, of the
certificate that formerly evidenced such Company Share. All such Company
Shares, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such Company Shares shall cease to
have any rights with respect thereto, except the right to receive the
Merger Consideration therefor upon the surrender of such certificate in
accordance with Section 3.4 hereof.
(c) Each issued and outstanding share of common stock of
Merger Sub shall remain outstanding and be one validly issued, fully paid
and nonassessable share of common stock of the Surviving Corporation.
Section 3.4. Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Parent
shall designate a bank or trust company reasonably acceptable to the
Company to act as agent for the holders of Company Shares (other than
Company Shares held by Parent, the Company and any of their respective
subsidiaries and Dissenting Shares) in connection with the Merger (the
"Exchange Agent") to receive in trust, the aggregate Merger Consideration
to which holders of Company Shares shall become entitled pursuant to
Section 3.3(b) hereof. Parent shall deposit such aggregate Merger
Consideration with the Exchange Agent promptly following the Effective
Time. Such aggregate Merger Consideration shall be invested by the Exchange
Agent as directed by Parent. Any interest and other income resulting from
such investment shall be paid to Parent.
(b) Exchange Procedures. Promptly after the Effective
Time, Parent and the Surviving Corporation shall cause to be mailed to each
holder of record, as of the Effective Time, of a certificate or
certificates, which immediately prior to the Effective Time represented
outstanding Company Shares (the "Certificates"), whose Company Shares were
converted pursuant to Section 3.3(b) hereof into the right to receive the
Merger Consideration, a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as Parent
may reasonably specify) and instructions for use in effecting the surrender
of the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Exchange Agent or to
such other agent or agents as may be appointed by Parent, together with
such letter of transmittal, properly completed and duly executed in
accordance with the instructions thereto, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration
for each Company Share formerly represented by such Certificate, and the
Certificate so surrendered shall forthwith be cancelled. No interest will
be paid or accrued on the cash payable upon the surrender of the
Certificates. Until surrendered as contemplated by this Section 3.4, each
Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration for each
Company Share in cash as contemplated by Section 3.3(b) hereof.
(c) Transfer Books; No Further Ownership Rights in the
Shares. At the Effective Time, the stock transfer books of the Company
shall be closed, and thereafter there shall be no further registration of
transfers of the Company Shares on the records of the Company. From and
after the Effective Time, the holders of Certificates evidencing ownership
of the Company Shares outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Company Shares, except
as otherwise provided for herein or by applicable law. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be cancelled and exchanged as provided in this
Article III.
(d) Termination of Fund; No Liability. At any time
following the one-year anniversary of the Effective Time, the Surviving
Corporation shall be entitled to require the Exchange Agent to deliver to
it any funds (including any interest received with respect thereto) which
had been made available to the Exchange Agent, and holders of Company
Shares not theretofore exchanged for the Merger Consideration shall be
entitled to look to the Surviving Corporation (subject to abandoned
property, escheat or other similar laws) only as general creditors thereof
with respect to the Merger Consideration payable upon due surrender of
their Certificates without any interest thereon. Notwithstanding the
foregoing, neither the Surviving Corporation nor the Exchange Agent nor any
party hereto shall be liable to any holder of a Certificate for Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(e) Lost, Stolen or Destroyed Certificates. In the event
any Certificates shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming such Certificate(s) to
be lost, stolen or destroyed and, if required by Parent, the posting by
such person of a bond in such sum as Parent may reasonably direct as
indemnity against any claim that may be made against any party hereto or
the Surviving Corporation with respect to such Certificate(s), the Exchange
Agent will issue the Merger Consideration pursuant to Section 3.3(b)
deliverable in respect of the Shares represented by such lost, stolen or
destroyed Certificates.
(f) Withholding Taxes. Parent and Merger Sub shall be
entitled to deduct and withhold, or cause the Exchange Agent to deduct and
withhold, from the Exchange Offer Consideration or the Merger Consideration
payable to a holder of Company Shares pursuant to the Offer or the Merger,
or from the cash payments provided for in Section 3.5 of this Agreement,
any such amounts as are required under the Code, or any applicable
provision of state, local or foreign Tax law. To the extent that amounts
are so withheld by Parent or Merger Sub, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
holder of the Company Shares or Company Options in respect of which such
deduction and withholding was made by Parent or Merger Sub.
(g) Transfer Taxes. If payment of the Exchange Offer
Consideration or the Merger Consideration payable to a holder of Company
Shares pursuant to the Offer or the Merger is to be made to a person other
than the person in whose name the surrendered Certificate is registered, it
shall be a condition of payment that the Certificate so surrendered shall
be properly endorsed or shall be otherwise in proper form for transfer and
that the person requesting such payment shall have paid all transfer and
other Taxes required by reason of the issuance to a person other than the
registered holder of the Certificate surrendered or shall have established
to the satisfaction of Parent that such Tax either has been paid or is not
applicable.
Section 3.5. Options. Parent acknowledges that in
connection with the transactions contemplated hereby, each Company Option
granted to an employee, officer or director of the Company under the
Company Plans shall become fully vested and exercisable in accordance with
the terms of the Company Plans. At the Effective Time, each such
then-outstanding Company Option shall be cancelled and the holder thereof
shall be entitled to receive as consideration for such cancellation, an
amount in cash (net of applicable withholdings) equal to the excess of (i)
the Per Share Cash Consideration over (ii) the per share exercise or strike
price of such Company Option multiplied by (iii) the number of shares
subject to such Company Option.
Section 3.6. Dissenting Shares. Notwithstanding any
provision of this Agreement to the contrary, each outstanding Company
Share, the holder of which has demanded and perfected such holder's right
to dissent from the Merger and to be paid the fair value of such Company
Shares in accordance with Part 13 of the URBCA and, as of the Effective
Time, has not effectively withdrawn or lost such dissenters' rights
("Dissenting Shares"), shall not be converted into or represent a right to
receive the Merger Consideration into which Company Shares are converted
pursuant to Section 3.3(b) hereof, but the holder thereof shall be entitled
only to such rights as are granted by the URBCA. Notwithstanding the
immediately preceding sentence, if any holder of Company Shares who demands
dissenters' rights with respect to its Shares under the URBCA effectively
withdraws or loses (through failure to perfect or otherwise) its
dissenters' rights, then as of the Effective Time or the occurrence of such
event, whichever later occurs, such holder's Company Shares will
automatically be converted into and represent only the right to receive the
Merger Consideration as provided in Section 3.3(b) hereof, without interest
thereon, upon surrender of the certificate or certificates formerly
representing such Company Shares. After the Effective Time, Parent shall
cause the Surviving Corporation to make all payments to holders of Company
Shares with respect to such demands in accordance with the URBCA. The
Company shall give Parent (i) prompt written notice of any notice of intent
to demand fair value for any Company Shares, withdrawals of such notices,
and any other instruments served pursuant to the URBCA and received by the
Company, and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for fair value for Company Shares under
the URBCA. The Company shall not, except with the prior written consent of
Parent, voluntarily make any payment with respect to any such demands for
fair value for Company Shares or offer to settle or settle any such
demands.
Section 3.7. Articles of Incorporation and Bylaws.
Subject to Section 6.12 hereof, at and after the Effective Time until the
same have been duly amended, (i) the Articles of Incorporation of the
Surviving Corporation shall be in the form set forth in Exhibit A hereto
and (ii) the Bylaws of the Surviving Corporation shall be identical to the
Bylaws of Merger Sub.
Section 3.8. Directors and Officers. At and after the
Effective Time, the directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time shall be
the officers of the Surviving Corporation, in each case until their
successors are elected or appointed and qualified. If, at the Effective
Time, a vacancy shall exist on the Board of Directors or in any office of
the Surviving Corporation, such vacancy may thereafter be filled in the
manner provided by law.
Section 3.9. Other Effects of Merger. The Merger shall
have all further effects as specified in the applicable provisions of the
URBCA.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Company hereby represents and warrants to Parent and
Merger Sub as follows:
Section 4.1. Organization and Qualification. Each of the
Company and its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of the Company and its subsidiaries has
the requisite corporate power and corporate authority and any necessary
material governmental authority, franchise, license, certificate or permit
to own, operate or lease the properties that it purports to own, operate or
lease and to carry on its business as it is now being conducted, and is
duly qualified as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties owned,
operated or leased or the nature of its activities makes such qualification
necessary, except for such failures to be so qualified and in good standing
which are not, or would not be reasonably expected to be, material to the
Company. Exhibit 21 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000 sets forth (by incorporation by
reference) a complete list of the Company's active subsidiaries. The
Company's inactive subsidiaries have no operations or liabilities.
Section 4.2. Capitalization. (a) The authorized capital
stock of the Company consists of (A) 100,000,000 shares of common stock, no
par value, of which, as of the date hereof, 6,473,140 shares are issued and
outstanding and (B) 25,000,000 shares of preferred stock, no par value, of
which, as of the date hereof, none are issued and outstanding. As of the
date hereof, there are no treasury shares of the Company and only options
(the "Company Options") to purchase in the aggregate 350,400 Company Shares
are outstanding all of which were granted under either the Company's 1997
Stock Option Plan or the Company's 1999 Stock Option Plan for Non-Employee
Directors (the "Company Plans"). All the outstanding shares of the
Company's capital stock are, and all shares which may be issued pursuant to
the exercise of outstanding Company Options or pursuant to the Company
Plans will be, when issued in accordance with the respective terms thereof,
duly authorized, validly issued, fully paid and non-assessable. There are
no bonds, debentures, notes or other indebtedness having voting rights (or
convertible into securities having such rights) ("Voting Debt") of the
Company or any of its subsidiaries issued and outstanding. Except as set
forth above and except for the transactions provided for in this Agreement,
as of the date hereof, (i) there are no shares of capital stock of the
Company authorized, issued or outstanding and (ii) there are no existing
options, warrants, calls, pre-emptive rights, subscriptions or other
rights, convertible securities, agreements, arrangements or commitments of
any character, relating to the issued or unissued capital stock of the
Company or any of its subsidiaries, obligating the Company or any of its
subsidiaries to issue, transfer or sell or cause to be issued, transferred
or sold any shares of capital stock or Voting Debt of, or other equity
interest in, the Company or any of its subsidiaries or securities
convertible into or exchangeable for such shares or equity interests or
obligations of the Company or any of its subsidiaries to grant, extend or
enter into any such option, warrant, call, subscription or other right,
convertible security, agreement, arrangement or commitment. There are no
outstanding contractual obligations of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any Company Shares
or other capital stock of the Company or any of its subsidiaries or
affiliates of the Company or to provide funds to make any investment (in
the form of a loan, capital contribution or otherwise) in any of its
subsidiaries or any other entity nor has the Company or any of its
subsidiaries granted or agreed to grant to any person any stock
appreciation rights or similar equity-based rights. Except as permitted by
this Agreement, following the Merger, neither the Company nor any of its
subsidiaries will have any obligation to issue, transfer or sell any shares
of its capital stock pursuant to any employee benefit plan or otherwise.
(b) All of the outstanding shares of capital stock of
each of the subsidiaries are owned beneficially by the Company, directly or
indirectly, and all such shares have been validly issued and are fully paid
and nonassessable and are owned by either the Company or one of its
subsidiaries free and clear of all Liens.
(c) There are no voting trusts or other agreements or
understandings to which the Company or any of its subsidiaries is a party
with respect to the voting of the capital stock of the Company or any of
its subsidiaries. None of the Company or its subsidiaries is required to
redeem, repurchase or otherwise acquire shares of capital stock of the
Company, or any of its subsidiaries, respectively, as a result of the
transactions contemplated by this Agreement.
Section 4.3. Corporate Authorization; Validity of
Agreement; Company Action. The Company has the requisite corporate power
and corporate authority to enter into this Agreement, to perform its
obligations hereunder and, subject to obtaining the Company Shareholder
Approval (unless, pursuant to the URBCA, such approval is not required to
effectuate the Merger) with respect to the Merger, to consummate the
transactions contemplated by this Agreement. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated by this Agreement have been duly authorized by
all necessary corporate action on the part of the Company, subject, in the
case of the Merger, if required by the URBCA, to obtaining the Company
Shareholder Approval. This Agreement has been duly executed and delivered
by the Company and, assuming this Agreement constitutes a valid and binding
obligation of Parent and the Merger Sub, constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except to the extent that such enforcement may be subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and by general equitable principles.
(a) The affirmative vote of the holders (including Parent
following its acceptance of Company Shares for payment under the Offer) of
a majority of the outstanding Company Shares (the "Company Shareholder
Approval") is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve the Merger and the
transactions contemplated hereby (other than the Offer and the Shareholder
Agreements and the transactions contemplated thereby, in respect of which
no approval is required from the holders of capital stock of the Company)
unless, pursuant to the URBCA, such approval is not required to effectuate
the Merger.
(b) Neither the Company nor any of its subsidiaries
Beneficially Owns, either directly or indirectly, any shares of capital
stock of the Company.
(c) The Company has duly and validly approved and taken
all actions required to be taken by the Company's Board of Directors under
the URBCA to approve the Offer, the Merger and the other transactions
contemplated by this Agreement. The Bylaws of the Company have been duly
amended and adopted to provide that Chapter 6 of Title 61 of the Utah Code
does not apply to control share acquisitions (as defined in Section 61-6-3
of the Utah Code) of capital stock of the Company. The Company has
furnished to Parent a certified copy of resolutions of the Board of
Directors of the Company (i) approving this Agreement, the Offer, the
Merger and the other transactions contemplated hereby, (ii) effecting the
amendment to the Bylaws of the Company described in the second sentence of
this Section 4.3(c) and (iii) providing that all Company Options
outstanding as of the Effective Time will be cancelled at the Effective
Time and that holders of such cancelled Company Options shall be entitled
to receive an amount of cash as consideration for such cancellation in
accordance with Section 3.5 hereof. The approvals and determinations and
Bylaw amendment described in this Section and Section 2.2 hereof are (i)
sufficient to render Section 61-6-10 of the Utah Code inapplicable to the
Offer, the Merger, this Agreement, the Shareholder Agreements and the other
transactions contemplated hereby and thereby and (ii) in accordance with
Section 16-10a-1103 of the URBCA. No "fair price," "merger moratorium,"
"control share acquisition" or other similar anti-takeover statute or
regulation applies or purports to apply to this Agreement, the Offer or the
Merger, the Shareholder Agreements or the other transactions contemplated
hereby and thereby.
(d) Prior to any action being taken by the Board of
Directors of the Company with respect to the approval and adoption of this
Agreement and the transactions contemplated hereby, the qualified directors
of the Company (as defined in Section 16-10a-850 of the URBCA) received the
required disclosure (as defined in Section 16-10a-850 of the URBCA),
including disclosure of the existence and nature of this Agreement, the
Shareholder Agreements and the transactions contemplated hereby and
thereby, by each director who has a conflicting interest (as defined in
Section 16-10a-850 of the URBCA) with respect to the approval and adoption
of this Agreement and the transactions contemplated hereby. All facts known
to such directors with conflicting interests in respect of the subject
matter of such transactions that an ordinarily prudent person would
reasonably believe to be material to a judgment about whether or not to
proceed with the transactions were disclosed. The action of the Company's
Board of Directors described in Section 2.2 hereof constitute a directors'
action (as defined in Section 16-10a-852 of the URBCA) with respect to this
Agreement, the Shareholder Agreements and the transactions contemplated
hereby and thereby.
Section 4.4. Consents and Approvals; No Violations.
Except as disclosed in Section 4.4 of the Disclosure Schedule and for
filings and other Permits, as may be required under, and other applicable
requirements of, the Exchange Act, the approval of this Agreement and the
Merger by the Company's shareholders and the filing and recordation of the
Articles of Merger as required by the URBCA, neither the execution,
delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the articles of
incorporation or bylaws or similar organizational documents of the Company
or of any of its subsidiaries, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, amendment, cancellation or
acceleration) under, any Company Agreement or (iii) violate any Law
applicable to the Company, any of its subsidiaries or any of their
properties or assets, except in the case of (ii) or (iii) for such
violations, breaches or defaults which do not have, and would not
reasonably be expected to have, a Company Material Adverse Effect and which
will not materially impair the ability of the Company to consummate, or
prevent or materially delay the consummation of, the transactions
contemplated hereby.
(a) No consent, approval, waiver or authorization of,
notice to, declaration by, or filing with ("Consent") a Governmental
Authority is required by or with respect to the Company or any of its
subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the
transactions contemplated by this Agreement, except for (i) the filing of a
premerger notification and report form by the Company under the HSR Act,
and any applicable filings under other Antitrust Laws, (ii) the filing with
the SEC of (A) the Schedule 14D-9 and the information required by Rule
14f-1, (B) the Proxy Statement, and (C) such reports under the Exchange Act
and the Securities Act, as may be required in connection with this
Agreement and the transactions contemplated hereby, (iii) such filings as
may be required under state securities or "blue sky" laws, (iv) the filing
of the Articles of Merger with the Utah Department of Commerce, Division of
Corporations and Commercial Code, and appropriate documents with the
relevant authorities of other states in which the Company is qualified to
do business, and (v) such other consents, approvals, orders,
authorizations, registrations, declarations and filings, the failure of
which to be made or obtained, do not have, and would not reasonably be
expected to have, a Company Material Adverse Effect, and which will not
materially impair the ability of the Company to consummate, or to prevent
or materially delay the consummation of, the transactions contemplated
hereby.
Section 4.5. SEC Reports and Financial Statements. The
Company has filed with the SEC, and has heretofore made available to Parent
true and complete copies of, all forms, reports, schedules, statements and
other documents required to be filed or furnished by it and its
subsidiaries since December 31, 1998 under the Exchange Act or the
Securities Act (as such documents have been amended since the time of their
filing, collectively, the "Company SEC Documents"). As of their respective
dates or, if amended, as of the date of the last such amendment, the
Company SEC Documents, including any financial statements or schedules
included therein (a) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading and (b) complied
in all material respects with the applicable requirements of the Exchange
Act and the Securities Act, as the case may be, and the applicable rules
and regulations of the SEC thereunder. Each of the consolidated financial
statements included in the Company SEC Documents have been prepared from,
and are in accordance with, the books and records of the Company and its
consolidated subsidiaries, comply in all material respects with applicable
accounting requirements and with the published rules and regulations of the
SEC with respect thereto, have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated financial position
and the consolidated results of operations and cash flows (and changes in
financial position, if any) of the Company and its consolidated
subsidiaries as at the dates thereof or for the periods presented therein.
The financial results set forth in the financial statements and schedules
set forth in the Company's Form 10-Q for the quarterly period ended
September 30, 2001 shall be no less favorable than the results furnished in
writing by the Company to Parent as of the date hereof.
Section 4.6. Absence of Certain Changes. Except as
disclosed in Section 4.6 of the Disclosure Schedule, since December 31,
2000, the Company and its subsidiaries have conducted their respective
businesses and operations consistent with past practice only in the
ordinary and usual course thereof and there has not occurred (i) any
events, changes, or effects (including the incurrence of any liabilities of
any nature, whether or not accrued, contingent or otherwise) which have, or
would reasonably be expected to have, a Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to the
equity interests of the Company or of any of its subsidiaries other than
dividends paid by wholly-owned subsidiaries; or (iii) any change by the
Company or any of its subsidiaries in accounting principles or methods,
except insofar as may be required by a change in GAAP. Since December 31,
2000, neither the Company nor any of its subsidiaries has taken any of the
actions prohibited by Section 6.1 hereof.
Section 4.7. No Undisclosed Liabilities. Except (a) to
the extent disclosed in Section 4.7 of the Disclosure Schedule and (b) for
liabilities and obligations incurred in the ordinary and customary course
of business and consistent with past practice, since December 31, 2000,
neither the Company nor any of its subsidiaries has incurred any
liabilities or obligations of any nature, whether or not accrued,
contingent or otherwise, which have, or would reasonably be expected to
have, a Company Material Adverse Effect, or would be required to be
reflected or reserved against on a consolidated balance sheet of the
Company and its subsidiaries (including the notes thereto) prepared in
accordance with GAAP as applied in preparing the consolidated balance sheet
of the Company and its subsidiaries as of December 31, 2000. Section 4.7 of
the Disclosure Schedule sets forth the amount of principal and unpaid
interest outstanding under each instrument evidencing Indebtedness of the
Company and its subsidiaries which will accelerate or become due or result
in a right of redemption or repurchase on the part of the holder of such
Indebtedness (with or without due notice or lapse of time) as a result of
this Agreement, the Merger or the other transactions contemplated hereby.
Section 4.8. Schedule 14D-9; Proxy Statement. Neither the
Schedule 14D-9, nor any of the information supplied or to be supplied by
the Company or its subsidiaries or representatives for inclusion or
incorporation by reference in the Offer Registration Statement or the Offer
Documents will, at the respective times any such documents or any
amendments or supplements thereto are filed with the SEC, are first
published, sent or given to shareholders of the Company or become effective
under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The Proxy
Statement will not, at the time the Proxy Statement is mailed to the
Company's shareholders or, at the time of the Company Shareholder 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 Schedule 14D-9 and the Proxy Statement will
comply as to form in all material respects with the requirements of all
applicable Laws, including the Exchange Act and the rules and regulations
thereunder. No representation or warranty is made by the Company with
respect to statements made or incorporated by reference therein based on
information supplied by Parent or Merger Sub specifically for inclusion or
incorporation by reference therein. The Company represents that it has
obtained all necessary consents to permit the inclusion in its entirety of
the fairness opinion of Morgan Keegan & Company, Inc. in the Schedule 14D-9
and, if necessary, the Proxy Statement.
Section 4.9. Employee Benefit Plans; ERISA.
(a) There have been, since January 1, 1995, no employee
benefit plans, programs, arrangements, contracts or agreements (including
pension, health, life insurance, cash-or equity-based incentive, deferred
compensation, stock purchase or restricted stock plans or agreements and
employment, change of control and severance plans or agreements) of any
type (including plans described in section 3(3) of ERISA), maintained,
contributed to or required to be contributed to, or entered into by the
Company, any of its subsidiaries or any of their respective ERISA
Affiliates, or with respect to which the Company or any of its subsidiaries
has, may have, or may have had, a liability, other than those disclosed in
Section 4.9 of the Disclosure Schedule (the "Benefit Plans"). Except as set
forth in documents delivered to Parent in accordance with Section 4.9(h),
there have been no amendments to any Benefit Plan resulting in an increase
of costs to the Company or any ERISA Affiliate of the Company and/or an
increase of benefits provided under such Benefit Plan to any current or
former employee of the Company or any of its subsidiaries. Neither the
Company nor any ERISA Affiliate of the Company has any formal plan or
commitment, whether legally binding or not, to create any additional
Benefit Plan or modify or change any existing Benefit Plan that would
affect any current or former employee of the Company or any of its
subsidiaries.
(b) With respect to each Benefit Plan: (i) if intended to
qualify under section 401(a) of the Code, such plan so qualifies, and its
trust is exempt from taxation under section 501(a) of the Code and no
condition exists that could adversely affect such qualification or tax
exemption, except for amendments that must be made to such plan for which
the remedial amendment period is still open; (ii) such plan has been
administered in all material respects in accordance with its terms and
applicable Law; (iii) no breaches of fiduciary duty have occurred which
might be expected to give rise to a material liability on the part of the
Company or any ERISA Affiliate of the Company; (iv) no disputes are
pending, threatened or, to the knowledge of the Company, anticipated that
might be expected to give rise to a material liability on the part of the
Company or any ERISA Affiliate of the Company; (v) no prohibited
transaction (within the meaning of section 406 or 407 of ERISA) has
occurred that might be expected to give rise to a material liability on the
part of the Company or any ERISA Affiliate of the Company; (vi) all
contributions and premiums due as of the date hereof (including any
extensions for such contributions and premiums) have been made in full;
(vii) no Tax has been imposed under section 4976, 4977, 4978, 4979, 4980 or
5000 of the Code; and (viii) all relevant reports and other filings
(including form 5500 Annual Reports, Summary Annual Reports and Summary
Plan Descriptions) have been timely made. Section 4.9(b) of the Disclosure
Schedule sets forth, to the knowledge of the Company, a description of each
failure to administer any Benefit Plan intended to be qualified under
Section 401(a) of the Code in accordance with its terms and applicable Law
which occurred after January 1, 1995.
(c) Full payment has been made, or will be made in
accordance with section 404(a)(6) of the Code, of all amounts which the
Company or any ERISA Affiliate of the Company is required to pay under the
terms of each of the Benefit Plans as of the last day of the most recent
plan year thereof ended prior to the date of this Agreement, and all such
amounts which become due through the Effective Time will be satisfied by
the Company or its ERISA Affiliates at or prior to the Effective Time.
(d) With respect to each Benefit Plan that is, or has
been since January 1, 1995, subject to section 302 or Title IV of ERISA
(each such plan, a "Title IV Plan") (i) neither the Company nor any ERISA
Affiliate of the Company has incurred any liability under Title IV of ERISA
that has not been satisfied in full; (ii) the Pension Benefits Guaranty
Corporation has not instituted proceedings to terminate any such plan and
no condition exists that presents a material risk that such proceedings
will be instituted, (iii) the present value of accrued benefits under such
plan, based upon the actuarial assumptions used for funding purposes in the
most recent actuarial report prepared by such plan's actuary with respect
to such plan did not exceed, as of its latest valuation date, the then
current value of the assets of such plan allocable to such accrued
benefits; and (iv) no such plan or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, as of the last
day of the most recent fiscal year of each Title IV Plan ended prior to the
Closing Date. With respect to clauses (i) - (iv) of this Section 4.9(d),
insofar as such representations apply to section 4064, 4069 or 4204 of
ERISA, they are made with respect to any Title IV Plan to which the Company
or any ERISA Affiliate of the Company made, or was required to make,
contributions during the period commencing January 1, 1995 and ending on
the last day of the most recent plan year ended prior to the Closing Date.
(e) With respect to each Benefit Plan that is a "welfare
plan" (as defined in section 3(1) of ERISA), no such plan provides medical
or death benefits with respect to current or former employees of the
Company or any of its subsidiaries beyond their termination of employment,
other than (i) coverage mandated by applicable Law; (ii) death benefits
under any "pension plan"; or (iii) benefits the full cost of which is now,
and shall be in the future, borne by the current or former employee (or his
beneficiary). No condition exists that would prevent the Company or any of
its subsidiaries from amending or terminating any Benefit Plan providing
health or medical benefits in respect of any active or former employee of
the Company or any subsidiaries other than limitations imposed under the
terms of collective bargaining agreements. There has been no material
failure of a Benefit Plan that is a group health plan (as defined in
section 5000(b)(1) of the Code) to meet the requirements of section
4980B(f) of the Code with respect to a qualified beneficiary (as defined in
section 4980B(g) of the Code).
(f) The consummation of the transactions contemplated by
this Agreement will not, alone or in combination with a related event, (i)
entitle any individual to severance pay or accelerate the time of payment
or vesting, or increase the amount, of compensation or benefits due to any
individual; (ii) constitute or result in a prohibited transaction under
section 4975 of the Code or section 406 or 407 of ERISA; or (iii) subject
the Company, any of its subsidiaries, any ERISA Affiliate of the Company,
any of the Benefit Plans, any related trust, any trustee or administrator
thereof, or any party dealing with the Benefit Plans or any such trust to
either a civil penalty assessed pursuant to section 409 or 502(i) of ERISA
or a tax imposed pursuant to section 4976 or 4980B of the Code.
(g) Except as set forth in Section 4.9(g) of the
Disclosure Schedule, there is no Benefit Plan that is a "multiemployer
plan," as such term is defined in section 3(37) of ERISA or a "multiple
employer welfare arrangement" as such term is defined in Section 3(40) of
ERISA. Except for contributions required to be made in the ordinary course
to such multiemployer plans pursuant to the relevant collective bargaining
agreements, no additional costs would be incurred by Parent, the Company,
the Surviving Corporation or any of their respective ERISA Affiliates in
connection with the withdrawal from such plans by Parent, the Company, the
Surviving Corporation or any of their respective ERISA Affiliates. None of
the Benefit Plans set forth in Section 4.9(g) of the Disclosure Schedule is
a "pension plan" as such term is defined in Section 3(2) of ERISA.
(h) With respect to each Benefit Plan, the Company has
delivered to Parent accurate and complete copies of all plan texts, summary
plan descriptions, summaries of material modifications, trust agreements
and other related agreements including all amendments to the foregoing; the
two most recent annual reports; the most recent annual and periodic
accounting of plan assets; the most recent determination letter received
from the United States Internal Revenue Service; and the two most recent
actuarial reports (including all attachments), to the extent any of the
foregoing may be applicable to a particular Benefit Plan.
Section 4.10. Labor Matters.
(a) Except as specifically set forth in Section 4.10 of
the Disclosure Schedule, (i) neither the Company nor any of the
subsidiaries is party to any collective bargaining or other agreement with
any labor organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of the Company
or any of its subsidiaries; (ii) to the knowledge of the Company, no union
claims to represent the employees of the Company or any of its
subsidiaries; (iii) none of the employees of the Company or any of its
subsidiaries is represented by any labor organization and the Company has
no knowledge of any current union organizing activities among the employees
of the Company or any of its subsidiaries, nor, to the knowledge of the
Company, does any question concerning representation exist concerning such
employees; and (iv) there are no written personnel policies, rules or
procedures applicable to employees of the Company or any of its
subsidiaries. There is no labor strike, dispute, slowdown, stoppage or
lockout actually pending or, to the knowledge of the Company, threatened
against or affecting the respective business activities of the Company or
any of its subsidiaries and during the past five years there has not been
any such action. There is no unfair labor practice charge or complaint
against the Company or any of its subsidiaries pending or, to the knowledge
of the Company, threatened before the National Labor Relations Board or any
similar state or foreign agency. To the knowledge of the Company, no
charges with respect to or relating to the Company or any of its
subsidiaries are pending before the Equal Employment Opportunity Commission
or any other Governmental Authorities responsible for the prevention of
unlawful employment practices or any Governmental Authorities responsible
for the enforcement of employee health and safety (including under the
Occupational Safety and Health Act and the regulations thereunder). The
Company has not received written notice, or to the knowledge of the Company
any verbal notice, of the intent of any federal, state, local or foreign
agency responsible for the enforcement of labor or employment laws or
employee health and safety laws to conduct an investigation with respect to
or relating to the Company or any of its subsidiaries and, to the knowledge
of the Company, no such investigation is in progress. There are no
complaints, lawsuits or other proceedings pending or, to the knowledge of
the Company, threatened in any forum by or on behalf of any present or
former employee of the Company or any of its subsidiaries, any applicant
for employment or classes of the foregoing alleging any breach by the
Company or any of its subsidiaries of any express or implied contract of
employment, any laws governing employment or the termination thereof or
other discriminatory, wrongful or tortious conduct in connection with the
employment relationship or any employee health and safety laws.
(b) The Company and each of its subsidiaries has paid in
full, or fully accrued for in the financial statements of the Company, all
wages, salaries, commissions, bonuses, severance payments, vacation
payments, holiday pay, sick pay, pay in lieu of compensatory time and other
compensation due or to become due to all current and former employees of
the Company and each of its subsidiaries for all services performed by any
of them on or prior to the date hereof. The Company and each of its
subsidiaries has withheld and paid in a timely manner all Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee or independent contractor. The Company and each of its
subsidiaries are, and at all times have been, in all material respects, in
compliance with all applicable federal, state and local and foreign laws,
rules and regulations relating to the employment of labor including laws,
rules and regulations relating to payment of wages, employment and
employment practices, terms and conditions of employment, hours,
immigration, equal employment opportunity, discrimination, child labor,
occupational health and safety, collective bargaining and the payment and
withholding of taxes and other sums required by Governmental Authorities.
To the knowledge of the Company, the Company and its subsidiaries are not
engaged in any unfair labor practices as defined in the National Labor
Relations Act or other applicable law or regulation, and there is no
grievance pending or, to the knowledge of the Company, threatened which
arises out of any collective bargaining agreement or other grievance
procedure.
(c) Except as set forth in Section 4.10(c) of the
Disclosure Schedule, since the enactment of the Worker Adjustment and
Retraining Notification Act (the "WARN Act"), neither the Company nor any
of its subsidiaries has effectuated (i) a "plant closing" (as defined in
the WARN Act) affecting any site of employment or one or more facilities
(as defined in the WARN Act) affecting any site of employment or one or
more facilities or operating units within any site of employment or
facility of the Company or any of its subsidiaries; or (ii) a "mass-layoff"
(as defined in the WARN Act) affecting any site of employment or facility
of the Company or any of its subsidiaries; nor has the Company or any of
its subsidiaries effected any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar state, local or foreign law or regulation. Except as disclosed in
Section 4.10(c) of the Disclosure Schedule, none of the employees of the
Company or any of its subsidiaries has suffered an "employment loss" (as
defined in the WARN Act) during the six month period prior to the date of
this Agreement. The listing in Section 4.10(c) of the Disclosure Schedule
shall be updated at the Closing Date for employment losses occurring during
the 90 day period prior to the Closing Date.
Section 4.11. Litigation; Compliance with Law.
(a) Except as disclosed in Section 4.11 of the Disclosure
Schedule, there is no suit, claim, action, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting, the Company or any of its subsidiaries which has, or would
reasonably be expected to have, a Company Material Adverse Effect, or
materially impair the ability of the Company to consummate or prevent or
materially delay the consummation of, the transactions contemplated hereby.
(b) The Company and its subsidiaries have complied in a
timely manner and in all material respects, with all Laws of any
Governmental Authority relating to any of the property owned, leased or
used by them, or applicable to their business, including but not limited
to, equal employment opportunity, discrimination, occupational safety and
health, environmental, interstate commerce and antitrust laws. The
Company's and its subsidiaries' assets and properties (in each case,
tangible and intangible) have been operated and maintained, in all material
respects, in accordance with the Rules and Regulations of the U.S.
Department of Federal Highway Act and the Rules and Regulations of the U.S.
Department of Transportation, as applicable.
Section 4.12. Taxes. (a) Except as set forth in Section
4.12 of the Disclosure Schedule:
(i) the Company and its subsidiaries and each
affiliated, combined, consolidated or unitary group of
which the Company or any of its subsidiaries is or has
been a member (a "Company Group") have (x) duly and
timely filed (or there have been filed on their behalf)
with the appropriate Governmental Authorities all Tax
Returns required to be filed by them on or prior to the
date hereof, and such Tax Returns are true, correct and
complete, and (y) duly paid in full, or made provision in
accordance with GAAP (or there has been paid or provision
has been made on their behalf) for the payment of, all
Taxes for all periods ending through the date hereof;
(ii) there are no Liens for Taxes upon any property
or assets of the Company or any of its subsidiaries,
except for Liens for Taxes not yet due and payable;
(iii) the Company and its subsidiaries have
complied in all respects with all applicable laws, rules
and regulations relating to the payment and withholding
of Taxes (including withholding of Taxes pursuant to
Sections 1441 and 1442 of the Code or similar provisions
under any foreign laws) and have, within the time and the
manner prescribed by law, withheld from employee wages
and paid over to the proper Governmental Authorities all
amounts required to be so withheld and paid over under
applicable laws;
(iv) no federal, state, local or foreign audits or
other administrative proceedings or court proceedings are
presently pending with regard to any Taxes or Tax Returns
of the Company or its subsidiaries or any Company Group
and neither the Company nor any of its subsidiaries has
received notice of any pending audits or proceedings with
regard to any Taxes or Tax Returns of the Company or its
Subsidiaries or any Company Group;
(v) the federal income Tax Returns of the Company
and its subsidiaries and any Company Group have been
examined by the Internal Revenue Service (or the
applicable statutes of limitation for the assessment of
federal income Taxes for such periods have expired) for
all periods through and including December 31, 1997, and
no material deficiencies were asserted as a result of
such examinations which have not been resolved and fully
paid;
(vi) neither the Company nor any of its
subsidiaries is a party to any agreement, contract or
arrangement that could result, separately or in the
aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code;
(vii) neither the Company nor any of its
subsidiaries has made any change in Tax accounting
methods since January 1, 1990;
(viii) there are no outstanding requests,
agreements, consents or waivers to extend the statutory
period of limitations applicable to the assessment of any
Taxes or deficiencies against the Company or any of its
subsidiaries, and no power of attorney granted by either
the Company or any of its subsidiaries with respect to
any Taxes is currently in force;
(ix) neither the Company nor any of its
subsidiaries is a party to any agreement providing for
the allocation or sharing of Taxes;
(x) neither the Company nor any of its subsidiaries
has, with regard to any assets or property held, acquired
or to be acquired by any of them, filed a consent to the
application of Section 341(f) of the Code, or agreed to
have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as such term is
defined in Section 341(f)(4) of the Code) owned by the
Company or any of its subsidiaries; and
(xi) all transactions that could give rise to an
understatement of the federal income tax liability of the
Company or any of its subsidiaries within the meaning of
Section 6662(d) of the Code are adequately disclosed on
Tax Returns in accordance with Section 6662(d)(2)(B) of
the Code if there is or was no substantial authority for
the treatment giving rise to such understatement.
(b) No excess loss accounts exist as described in Section
1.1502-19 of the regulations promulgated under the Code (the "Treasury
Regulations") with respect to the Company or its subsidiaries.
(c) There are no net operating loss carryovers available
to the Company or its subsidiaries.
(d) Neither the Company nor any of its subsidiaries has
taken or agreed to take any action or knows of any fact, circumstance, plan
or intention that will, or would be reasonably likely to, prevent the
Transaction from qualifying as a reorganization within the meaning of
Section 368(a) of the Code.
Section 4.13. Contracts. Except as disclosed in Section
4.13 of the Disclosure Schedule, neither the Company nor any of its
subsidiaries is a party to or bound by any contract, arrangement,
commitment or understanding (whether written or oral), (a) any of the
benefits of which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement, or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Agreement, (b) (1) which is a "material contract" (as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or
(2) which involves expenditures in excess of $100,000, (c) which contains
any non-compete or exclusivity provisions with respect to any material line
of business or material geographic area with respect to the Company or any
of its subsidiaries, or which restricts the conduct of any material line of
business by the Company or any of its subsidiaries or any material
geographic area in which the Company or any of its subsidiaries may conduct
business, in each case in any material respect or (d) which would prohibit
or materially delay the consummation of the Offer, the Merger or any of the
transactions contemplated in this Agreement. The Company has previously
made available to Parent true and complete copies of all (A) material
agreements with customers and suppliers listed in Section 4.13 of the
Disclosure Schedule to which the Company or any of its subsidiaries is a
party and (B) employment and deferred compensation agreements with
directors, executive officers and key employees, and material agreements
with consultants, which are in writing and to which the Company or any of
its subsidiaries is a party. Each contract, arrangement, commitment or
understanding of the type described in this Section 4.13, whether or not
set forth in Section 4.13 of the Disclosure Schedule, is referred to herein
as a "Company Agreement." Each Company Agreement is valid and binding on
the Company or its subsidiaries, as applicable, and in full force and
effect, and the Company and each of its subsidiaries have performed all
obligations required to be performed by them until the date hereof under
each Company Agreement, except those that are not, and would not reasonably
be expected to be, material to the Company. Neither the Company nor any of
its subsidiaries knows of, or has received written notice, or to the
knowledge of the Company, verbal notice, of, any violation or default under
(or any condition which with the passage of time or the giving of notice
would case such a violation of or default under) any Company Agreement or
any other loan or credit agreement, note, bond, mortgage, indenture or
lease, or any other contract, agreement, arrangement or understanding to
which it is a party or by which it or any of its properties or assets is
bound, except for violations or defaults that are not, or would not
reasonably be expected to be, material to the Company.
Section 4.14. Environmental Matters.
(a) The Company and each of its subsidiaries has been and
is in material compliance with all applicable Environmental Laws, including
possessing all material permits, authorizations, licenses, exemptions and
other governmental authorizations required for its operations under
applicable Environmental Laws, (all of the foregoing, whether material or
not, the "Environmental Permits"). All such Environmental Permits are in
effect, no appeal nor any other action is pending to revoke any such
Environmental Permit, and the Company and each of its subsidiaries are in
compliance in all material respects with all terms and conditions of such
Environmental Permits. To the extent required by applicable Environmental
Laws, the Company and each of its subsidiaries have filed (or will have
filed by the Closing Date) all applications necessary to renew or obtain
any Environmental Permits in a timely fashion so as to allow the Company
and each of its subsidiaries to continue to operate their businesses in
compliance with applicable Environmental Laws, and the Company does not
expect such new or renewed Environmental Permits to include any terms or
conditions that will have a material impact on the Company or any of its
subsidiaries.
(b) There is no pending or threatened written claim,
lawsuit, or administrative proceeding against the Company or any of its
subsidiaries, under or pursuant to any Environmental Law, that has, or
would reasonably be expected to have, a Company Material Adverse Effect.
Neither the Company nor any of its subsidiaries has received written notice
from any person, including any Governmental Authority, alleging that the
Company or any of its subsidiaries has been or is in violation or
potentially in violation of any applicable Environmental Law or otherwise
may be liable under any applicable Environmental Law, which violation or
liability is unresolved. Neither the Company nor any of its subsidiaries
has received any written request for information from any person, including
but not limited to any Governmental Authority, related to liability under
or compliance with any applicable Environmental Law, except for such
matters, if they matured into a claim against the Company or any of its
subsidiaries, that do not have, or would not reasonably be expected to have
a Company Material Adverse Effect.
(c) With respect to the real property that is currently
owned, leased or operated by the Company or any of its subsidiaries, there
have been no Releases of Hazardous Substances on or underneath any of such
real property that have, or would reasonably be expected to have, a Company
Material Adverse Effect.
(d) With respect to real property that was formerly
owned, leased or operated by the Company or any of its subsidiaries or any
of their predecessors in interest, there were no Releases of Hazardous
Substances on or underneath any of such real property during or prior to
the Company's or any of its subsidiaries' ownership or operation of such
real property that have, or would reasonably be expected to have, a Company
Material Adverse Effect.
(e) Neither the Company nor any of its subsidiaries has
entered into any agreement that may require them to pay to, reimburse,
guarantee, pledge, defend, indemnify or hold harmless any person from or
against any liabilities or costs arising out of or related to the
generation, manufacture, use, transportation or disposal of Hazardous
Substances, or otherwise arising in connection with or under Environmental
Laws.
(f) Except as set forth in Section 4.14(f) of the
Disclosure Schedule, the Company and each of its subsidiaries have never
engaged in any activities that have required or should have required the
Company or any of its subsidiaries to obtain a permit as a transporter of
hazardous waste (as such term is defined pursuant to the Resource
Conservation and Recovery Act, 42 U.S.C. ss. 6901, et seq. ("RCRA") or any
similar state statute), or as the owner or operator of a facility that
treated, stored or disposed of hazardous waste, in accordance with the
requirements of RCRA or any similar state statute.
(g) Except as set forth in Section 4.14 of the Disclosure
Schedule, or except with respect to former underground storage tanks that
have been removed or closed in place in accordance with applicable Law and
as to which no further action (including no further environmental
investigation or cleanup) is required and no further costs or liability is
involved, neither the Company nor any of its subsidiaries currently owns or
operates or formerly owned or operated any underground storage tanks
subject to regulation pursuant to Subchapter IX of RCRA (42 U.S.C. ss.ss.
6991-6991i) or similar statute statutes.
(h) To the knowledge of the Company, neither the Company
nor any of its subsidiaries, within the next five years, will be required
to expend monies for capital improvements in order to (1) comply or
maintain compliance with applicable Environmental Laws or (2) comply with
regulatory requirements that are not now effective, but to the knowledge of
the Company, will be or are reasonably expected to become effective after
the Closing Date, except for such expenditures that are reasonably expected
to be less than $60,000 per annum and $200,000 in the aggregate.
Section 4.15. Intellectual Property.
(a) As used herein: (i) "Intellectual Property" means all
U.S. and foreign (a) trademarks, service marks, trade names, Internet
domain names, designs, logos, slogans and general intangibles of like
nature, together with goodwill, registrations and applications relating to
the foregoing ("Trademarks"); (b) patents and pending patent applications,
patent disclosures, and any and all divisions, continuations,
continuations-in-part, reissues, reexaminations, and any extensions
thereof, any counterparts claiming priority therefrom, utility models,
patents of importation/confirmation, certificates of invention and like
statutory rights ("Patents"), (c) registered and unregistered copyrights
(including those in Software), rights of publicity and all registrations
and applications to register the same ("Copyrights"); and (d) confidential
information, technology, know-how, inventions, processes, formulae,
algorithms, models and methodologies ("Trade Secrets"); (ii) "IP Licenses"
means all licenses and agreements (excluding "click-wrap" or "shrink-wrap"
agreements or agreements contained in "off-the-shelf" Software or the terms
of use or service for any Web site) pursuant to which the Company and its
subsidiaries have acquired rights in (including usage rights) to any
Intellectual Property, or licenses and agreements pursuant to which the
Company and its subsidiaries have licensed or transferred the right to use
any Intellectual Property, including license agreements, settlement
agreements and covenants not to sue; (iii) "Software" means all computer
programs, including any and all software implementations of algorithms,
models and methodologies whether in source code or object code form,
databases and compilations, including any and all data and collections of
data, all documentation, including user manuals and training materials,
related to any of the foregoing and the content and information contained
on any Web site; and (iv) "Company Intellectual Property" means the
Intellectual Property and Software held for use or used in the business of
Company or its subsidiaries as presently conducted or as currently proposed
to be conducted.
(b) Section 4.15(b) of the Disclosure Schedule sets
forth, for the following Intellectual Property owned by the Company and its
subsidiaries, a complete and accurate list of all U.S., state and foreign:
(i) Patents; (ii) Trademarks (including Internet domain name registrations)
and material unregistered trademarks and service marks; and (iii)
Copyrights and material unregistered copyrights.
(c) Section 4.15(c) of the Disclosure Schedule lists all
material Software which is owned by the Company or its subsidiaries
("Proprietary Software"), and all material IP Licenses.
(d) The Company, or one of its subsidiaries, owns or
possesses licenses or other legal rights to use, sell or license all
Company Intellectual Property, free and clear of all Liens, except
Permitted Liens.
(e) All Trademarks, Patents and Copyrights owned by the
Company and its subsidiaries and to the knowledge of the Company, all
Trademarks, Patents and Copyrights used by but not owned by the Company and
its subsidiaries are valid and subsisting, in full force and effect and
have not lapsed, expired or been abandoned, and are not the subject of any
opposition filed with the United States Patent and Trademark Office or any
other intellectual property registry.
(f) The Company Intellectual Property and the IP Licenses
constitute all the Intellectual Property, Software and IP Licenses that are
necessary for the continuing conduct and operation of the Company's
business (as described in the Company's Annual Report filed with the SEC on
Form 10-K for the period ending December 31, 2000) in all material respects
as conducted and operated by the Company immediately prior to the date
hereof.
(g) Except as set forth in Section 4.15(g) of the
Disclosure Schedule:
(i) no claims, or to the knowledge of Company,
threat of claims, have been asserted by any Third Party
against the Company or any of its subsidiaries related to
the use in the conduct of the businesses of the Company
and its subsidiaries of any Intellectual Property or
Software, or challenging or questioning the validity or
effectiveness of any IP License;
(ii) no settlement agreements, consents, judgments,
orders, forebearances to sue or similar obligations limit
or restrict the Company's or any subsidiary's rights in
and to any Company Intellectual Property ;
(iii) to the knowledge of the Company, the conduct
of the businesses of the Company and its subsidiaries
does not infringe, misappropriate, dilute or otherwise
violate any Intellectual Property rights of any Third
Party.
(iv) the Company and its subsidiaries have not
licensed or sublicensed their rights in any Company
Intellectual Property, or received or been granted any
such rights, other than pursuant to the IP Licenses;
(v) to the knowledge of the Company, no Third Party
is misappropriating, infringing, diluting or violating
any Intellectual Property owned by the Company or its
subsidiaries;
(vi) the IP Licenses are valid and binding
obligations of the Company and/or the relevant
subsidiary, enforceable in accordance with their terms,
and there is no material default thereof by the Company
or any of its subsidiaries or, to the knowledge of the
Company, of the other party thereto;
(vii) the Company and its subsidiaries have taken
all reasonable measures to protect the confidentiality of
their Trade Secrets; and
(viii) the consummation of the transactions
contemplated hereby will not result in the loss or
impairment of the Company's and its subsidiaries' rights
to own or use any of the Company Intellectual Property,
nor will such consummation require the consent of any
Third Party in respect of any Intellectual Property.
Section 4.16. Title, Sufficiency and Condition of Assets.
(a) The Company and its subsidiaries, in each case, have
good and valid title to their owned assets and properties (in each case,
tangible and intangible) or, in the case of assets and properties which
they lease, license or have other rights in, valid leasehold, license or
other interests in such, assets and properties, in each case, free and
clear of all Liens, except for Permitted Liens.
(b) The Company and its subsidiaries have good and valid
title to, or rights by lease, license or other agreement to use, all assets
and properties (in each case, tangible and intangible) necessary to permit
the Company and its subsidiaries to conduct their business as currently
conducted. The assets and properties (in each case, tangible and
intangible) owned or used by the Company are in satisfactory condition and
repair for their continued use as they have been used and adequate in all
material respects for their current use.
Section 4.17. Transactions with Affiliates. Except as
disclosed in Section 4.17 of the Disclosure Schedule, since December 31,
2000, there has been no transaction, or series of similar transactions,
agreements, arrangements or understandings, nor are there any currently
proposed transactions, or series of similar transactions, agreements,
arrangements or understandings to which the Company or any of its
subsidiaries was or is to be a party, that would be required to be
disclosed under Item 404 of Regulation S-K promulgated under the Securities
Act.
Section 4.18. Opinion of Financial Advisor. The Company
has received an opinion from Morgan Keegan & Company, Inc. to the effect
that the consideration to be received by the shareholders of the Company
pursuant to the Offer and the Merger is fair to such shareholders from a
financial point of view, a copy of which opinion has been delivered to
Parent.
Section 4.19. Broker's or Finder's Fee. Except for the
fees of Morgan Keegan & Company, Inc. (whose fees and expenses will be paid
by the Company in accordance with the Company's agreement with such firm, a
true and correct copy of which has been previously delivered to Parent by
the Company), no agent, broker, person or firm acting on behalf of the
Company or its subsidiaries is, or will be, entitled to any fee, commission
or broker's or finder's fees from any of the parties hereto, or from any
person controlling, controlled by, or under common control with, any of the
parties hereto, in connection with this Agreement, the Shareholder
Agreements or any of the transactions contemplated hereby or thereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and the Merger Sub represent and warrant to the
Company as follows:
Section 5.1. Organization and Qualification. Each of
Parent and Merger Sub is a corporation duly organized, validly existing and
in good standing under the laws of the State of Utah. Each of Parent and
Merger Sub has the requisite corporate power and corporate authority and
any necessary material governmental authority, franchise, license,
certificate or permit to own, operate or lease the properties that it
purports to own, operate or lease and to carry on its business as it is now
being conducted, and is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character
of its properties owned, operated or leased or the nature of its activities
makes such qualification necessary, except for such failures to be so
qualified and in good standing which are not, and would not be reasonably
likely to be, material to Parent.
Section 5.2. Corporate Authorization; Validity of
Agreement; Necessary Action. Each of Parent and Merger Sub has the
requisite corporate power and corporate authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated by this Agreement. The execution and delivery of
this Agreement by each of Parent and Merger Sub and the consummation by
each of Parent and Merger Sub of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on
the part of each of Parent and Merger Sub. This Agreement has been duly
executed and delivered by each of Parent and Merger Sub and, assuming this
Agreement constitutes a valid and binding obligation of the Company,
constitutes a valid and binding obligation of each of Parent and Merger Sub
enforceable against each of Parent and Merger Sub in accordance with its
terms, except to the extent that such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and by general equitable principles. The authorized capital
stock of Parent consists of (A) 500,000,000 shares of common stock, par
value $2.50 per share and (B) 20,000,000 shares of preferred stock, no par
value, of which no shares are outstanding. As of September 30, 2001,
248,385,281 shares of Parent Common Stock were issued and outstanding and
27,102,444 shares of Parent Common Stock were held in the treasury of
Parent. In addition, Parent may issue shares of its capital stock upon the
exercise or conversion of presently outstanding securities, the number and
terms of which are summarized in the Parent SEC Documents as of the
respective dates thereof. The shares of Parent Common Stock to be issued
pursuant to the Merger will be duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights.
Section 5.3. Consents and Approvals; No Violations.
(a) Except for filings and Permits as may be required
under, and other applicable requirements of, the Exchange Act, the
Securities Act, the URBCA, state blue sky laws and any applicable state
takeover laws, neither the execution, delivery or performance of this
Agreement by Parent and the Merger Sub nor the consummation by Parent and
the Merger Sub of the transactions contemplated hereby nor compliance by
Parent and the Merger Sub with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the respective
articles of incorporation or by-laws of Parent or Merger Sub, (ii) result
in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any Indebtedness, lease, license, Permit,
contract, agreement or other instrument or obligation to which Parent or
any of its subsidiaries is a party or by which any of them or any of their
properties or assets may be bound or (iii) violate any Law applicable to
Parent or Merger Sub or any of their respective properties or assets,
except in the case of (ii) and (iii) for such violations, breaches or
defaults which do not have, and would not reasonably be expected to have, a
Parent Material Adverse Effect and which will not materially impair the
ability of Parent or Merger Sub to consummate or prevent or materially
delay the consummation of the Offer and the Merger or the other
transactions contemplated hereby.
(b) No Consent by a Governmental Authority is required by
or with respect to Parent or Merger Sub in connection with the execution
and delivery of this Agreement by Parent or Merger Sub or the consummation
by Parent or Merger Sub of the transactions contemplated by this Agreement,
except for (i) the filing of a premerger notification and report form by
Parent under the HSR Act, and any applicable filings under other Antitrust
Laws, (ii) the filing with the SEC of (A) the Offer Documents and (B) such
reports under the Exchange Act and the Securities Act, as may be required
in connection with this Agreement and the transactions contemplated hereby,
(iii) such filings as may be required under state securities or "blue sky"
laws, (iv) the filing of the Articles of Merger with the Utah Department of
Commerce, Division of Corporations and Commercial Code, and appropriate
documents with the relevant authorities of other states in which the
Company is qualified to do business, and (v) such other consents,
approvals, orders, authorizations, registrations, declarations and filings,
the failure of which to be made or obtained, do not have, and would not
reasonably be expected to have, a Parent Material Adverse Effect, and which
will not materially impair the ability of Parent or Merger Sub to
consummate, or to prevent or materially delay the consummation of, the
transactions contemplated hereby.
Section 5.4. Information To Be Supplied.
(a) The information with respect to Parent and Merger Sub
that Parent and/or Merger Sub, as the case may be, furnishes to the Company
in writing specifically for use in the 14D-9 and the Proxy Statement, at
the time the 14D-9 is first sent or given to shareholders of the Company,
and in the case of the Proxy Statement, at the time the Proxy Statement is
mailed to the Company's shareholders or, at the time of the Company
Shareholder Meeting, will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The Offer
Documents will comply as to form in all material respects with the
requirements of the Exchange Act.
(b) Notwithstanding the foregoing provisions of this
Section 5.4, no representation or warranty is made by Parent with respect
to statements made or incorporated by reference in the Proxy Statement or
the Offer Documents based on information supplied by the Company expressly
for inclusion or incorporation by reference therein or based on information
which is not made in or incorporated by reference in such documents but
which should have been disclosed pursuant to Section 4.8.
Section 5.5. SEC Reports and Financial Statements. Parent
has filed with the SEC, and has heretofore made available to the Company
true and complete copies of, all forms, reports, schedules, statements and
other documents required to be filed by it and its subsidiaries since
December 31, 1998 under the Exchange Act or the Securities Act (as such
documents have been amended since the time of their filing, collectively,
the "Parent SEC Documents"). As of their respective dates or, if amended,
as of the date of the last such amendment, the Parent SEC Documents,
including any financial statements or schedules included therein (a) did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the
case may be, and the applicable rules and regulations of the SEC
thereunder. Each of the consolidated financial statements included in the
Parent SEC Documents have been prepared from, and are in accordance with,
the books and records of Parent and its consolidated subsidiaries, comply
in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position and the consolidated
results of operations and cash flows (and changes in financial position, if
any) of Parent and its consolidated subsidiaries as at the dates thereof or
for the periods presented therein.
Section 5.6. Financing. Either Parent or the Merger Sub
has, or will have prior to the satisfaction of the conditions to the Offer,
sufficient funds available (through existing credit arrangements or
otherwise) to deliver the Exchange Offer Consideration and Merger
Consideration to all of the Company Shares outstanding which become
entitled to receive such consideration.
Section 5.7. Taxes. Neither Parent nor any of its
subsidiaries, including Merger Sub, has taken any action or knows of any
fact, circumstance, plan or intention that will, or would be reasonably
likely to, prevent the Transaction from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
ARTICLE VI
COVENANTS
Section 6.1. Interim Operations of the Company. The
Company covenants and agrees that, except as expressly provided in this
Agreement, or with the prior written consent of Parent, which consent shall
not be unreasonably withheld, conditioned, or delayed, after the date
hereof and prior to the Effective Time:
(a) the business of the Company and its subsidiaries
shall be conducted only in the ordinary and customary course consistent
with past practice, including, taking all reasonable measures to protect
the confidentiality of the Company's and its subsidiaries' Trade Secrets,
and, to the extent consistent therewith, each of the Company and its
subsidiaries shall use reasonable best efforts to preserve its business
organization intact and maintain its existing relations with customers,
suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, split,
combine or reclassify the outstanding Company Shares, or any outstanding
capital stock of any of the subsidiaries of the Company;
(c) neither the Company nor any of its subsidiaries
shall: (i) amend its articles of incorporation or bylaws or similar
organizational documents; (ii) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property with respect to its
capital stock; (iii) issue, sell, transfer, pledge, dispose of or encumber
any additional shares of, or securities convertible into or exchangeable
for, or options, warrants, calls, commitments or rights of any kind to
acquire, any shares of capital stock of any class of the Company or its
subsidiaries, other than issuances pursuant to the exercise of Company
Options outstanding on the date hereof; (iv) transfer, lease, license,
sell, mortgage, pledge, dispose of, or encumber any material assets other
than in the ordinary and usual course of business and consistent with past
practice, or incur or modify any material Indebtedness; or (v) redeem,
purchase or otherwise acquire directly or indirectly any of its capital
stock;
(d) neither the Company or any of its subsidiaries shall:
(i) increase the compensation or benefits payable to any director, officer,
other employee or consultant of the Company or any of its subsidiaries,
other than in the ordinary course of business consistent with past
practice; (ii) grant any severance or termination pay to (or amend any such
existing arrangement with) any director, officer, other employee or
consultant of the Company or any of its subsidiaries; (iii) enter into any
employment, deferred compensation or other similar agreement (or amend any
such existing agreement) with any director, officer, other employee or
contractor of the Company or any of its subsidiaries; (iv) increase any
benefits payable under any existing severance or termination pay policies
or agreements or employment agreements; or (v) permit any director,
officer, other employee or contractor of the Company or any of its
subsidiaries who is not already a party to an agreement or a participant in
a plan providing benefits upon or following a "change in control" to become
a party to any such agreement or a participant in any such plan, other than
pursuant to a pre-existing contractual commitment or as required by
applicable Law;
(e) neither the Company nor any of its subsidiaries
shall: (i) adopt any new Benefit Plan, terminate any Benefit Plan or modify
any Benefit Plan in a way that could result in additional cost to Parent,
the Company or any of their respective subsidiaries, except for any
amendments to a Benefit Plan required to maintain its qualified plan status
under Section 401(a) of the Code; (ii) modify any actuarial cost method,
assumption or practice used in determining benefit obligations, annual
expense and funding for any Benefit Plan, except to the extent required by
GAAP; (iii) subject to any ERISA fiduciary obligation, modify the
investment philosophy of the Benefit Plan trusts or maintain an asset
allocation which is not consistent with such philosophy; (iv) subject to
any ERISA fiduciary obligation, enter into any outsourcing agreement, or
any other material contract relating to the Benefit Plans or management of
the Benefit Plan trusts; (v) grant any ad hoc pension increase; or (vi)
establish any new or fund any existing "rabbi" or similar trust (except in
accordance with the current terms of any Benefit Plan), or enter into any
other arrangement for the purpose of securing non-qualified retirement
benefits, termination benefits or deferred compensation;
(f) neither the Company nor any of its subsidiaries shall
modify, amend or terminate any of the Company Agreements or waive, release
or assign any material rights or claims, except in the ordinary course of
business and consistent with past practice;
(g) neither the Company nor any of its subsidiaries shall
permit any material insurance policy naming it as a beneficiary or a loss
payable payee to be cancelled or terminated without notice to Parent,
except in the ordinary course of business and consistent with past
practice;
(h) neither the Company nor any of its subsidiaries
shall: (i) incur Indebtedness; provided, however, the Company may incur
Indebtedness, if such Indebtedness is incurred on an arm's length basis
with nationally recognized financial institutions and such Indebtedness
does not exceed $500,000 in net debt and is incurred in the ordinary course
of business consistent with past practice; (ii) make any loans, advances or
capital contributions to, or investments in, any other person (other than
to wholly-owned subsidiaries of the Company); or (iii) enter into any
material commitment or transaction (including any borrowing, capital
expenditure or purchase, sale or lease of assets) requiring a capital
expenditure by the Company or its subsidiaries other than capital
expenditures pursuant to the Company's capital expenditures budget
previously furnished to Parent and other capital expenditures that do not
exceed $50,000 in the aggregate since June 30, 2001;
(i) neither the Company nor any of its subsidiaries shall
change any method of reporting income, deductions or other items for income
Tax purposes, make or change any election with respect to Taxes, agree to
or settle any claim or assessment in respect of Taxes, or agree to an
extension or waiver of the limitation period to any claim or assessment in
respect of Taxes, other than in the ordinary course of business consistent
with past practice or as required by Law;
(j) neither the Company nor any of its subsidiaries shall
change any of the accounting principles used by it unless required by GAAP;
(k) neither the Company nor any of its subsidiaries shall
pay, discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction of any such claims, liabilities or
obligations, (i) in the ordinary course of business and consistent with
past practice, of claims, liabilities or obligations reflected or reserved
against in, or contemplated by, the consolidated financial statements (or
the notes thereto) of the Company and its consolidated subsidiaries, (ii)
incurred in the ordinary course of business and consistent with past
practice or (iii) which are legally required to be paid, discharged or
satisfied (provided that if such claims, liabilities or obligations
referred to in this clause (iii) are legally required to be paid and are
also not otherwise payable in accordance with clauses (i) or (ii) above,
the Company will notify Parent in writing reasonably in advance of their
payment if such claims, liabilities or obligations exceed, individually or
in the aggregate, $25,000 in value);
(l) (i) acquire (by merger, consolidation, or acquisition
of stock or assets) any corporation, partnership or other business
organization or division thereof or make any investment in another entity
(other than an entity which is a wholly-owned subsidiary of the Company as
of the date hereof and other than incorporation of a wholly-owned
subsidiary of the Company) or (ii) sell, pledge, dispose of, or encumber or
authorize or propose the sale, pledge, disposition or encumbrance of any
assets of the Company or any of its subsidiaries, except in the ordinary
and customary course of business consistent with past practice;
(m) take any action which it believes when taken could
reasonably be expected to adversely affect or delay in any material respect
the ability of any of the parties hereto to obtain any approval of any
Governmental Authority required to consummate the transactions contemplated
hereby;
(n) take any action to cause the Company Shares to cease
to be quoted on the Nasdaq National Market prior to the Closing Date;
(o) neither the Company nor any of its subsidiaries will
take, or agree to commit to take, any action that would make any
representation or warranty of the Company contained herein inaccurate in
any respect at, or as of any time prior to, the Effective Time; and
(p) neither the Company nor any of its subsidiaries will
enter into an agreement, contract, commitment or arrangement to do any of
the foregoing, or to authorize, recommend, propose or announce an intention
to do any of the foregoing.
Section 6.2. Preparation of Proxy Statement; Company
Shareholder Meeting.
(a) If required by applicable Law, promptly after the
acceptance for exchange of Company Shares pursuant to the Offer, the
Company shall prepare and file with the SEC under the Exchange Act the
Proxy Statement and use all reasonable best efforts to have the Proxy
Statement cleared by the SEC as promptly as practicable after the
acceptance by Parent for exchange of Company Shares pursuant to the Offer.
The Company shall mail the Proxy Statement to its shareholders as promptly
as practicable after the Proxy Statement has cleared the SEC. Each of the
Company, Parent and Merger Sub will promptly correct any information
provided by it for use in the Proxy Statement if and to the extent that it
shall have become false or misleading in any material respect prior to the
Company Shareholder Meeting, and the Company will cause the Proxy Statement
as so corrected to be filed with the SEC and to be disseminated to holders
of Company Shares, in each case as and to the extent required by applicable
federal securities laws. Parent and its counsel shall be given a reasonable
opportunity to review and comment upon the Proxy Statement before it is
filed with the SEC. In addition, the Company agrees to provide Parent,
Merger Sub and their counsel with any comments that the Company or its
counsel may receive from time to time from the SEC or its staff with
respect to the Proxy Statement promptly after the receipt of such comments
and to consult with Parent, Merger Sub and their counsel prior to
responding to any such comments. The Company will advise Parent of the time
when the SEC has cleared the Proxy Statement, promptly after it receives
notice thereof.
(b) If approval of the Company's shareholders is required
by applicable law in order to consummate the Merger, the Company shall
establish, prior to or as soon as practicable following the date upon which
the Proxy Statement has been cleared by the SEC, a record date (which shall
be prior to or as soon as practicable following the date upon which the
Proxy Statement has been cleared by the SEC) for, duly call, give notice
of, convene and hold a meeting of its shareholders (the "Company
Shareholder Meeting") for the purpose of considering and taking action upon
this Agreement and the Merger and (with the consent of Parent) such other
matters as may in the reasonable judgment of the Company be appropriate for
consideration at the Company Shareholder Meeting. Once the Company
Shareholder Meeting has been called and noticed, the Company shall not
postpone or adjourn the Company Shareholder Meeting (other than for the
absence of a quorum) without the consent of Parent. The Board of Directors
of the Company shall include the Recommendations in the Proxy Statement as
such Recommendations pertain to the Merger and this Agreement. The Company
shall use its reasonable best efforts to solicit from shareholders of the
Company proxies in favor of this Agreement and the Merger and shall take
all other actions necessary or advisable to secure the vote or consent of
shareholders required by the URBCA to effect the Merger.
(c) Notwithstanding the foregoing clauses (a) and (b)
above, in the event that Parent shall acquire at least 90% of the
outstanding Company Shares in the Offer, subject to the satisfaction or (to
the extent permitted hereunder) waiver of all conditions to the Merger, the
parties hereto shall take all necessary actions to cause the Merger to
become effective, as soon as practicable after the acceptance for exchange
and purchase of such Company Shares pursuant to the Offer, without a
meeting of shareholders of the Company, in accordance with Section
16-10a-1104 of the URBCA, including, the contribution by Parent to Merger
Sub of all Company Shares then held by Parent or such other actions as may
be necessary such that the Transaction will qualify as a reorganization
under Section 368(a) of the Code.
Section 6.3. Access to Information. The Company shall
(and shall cause each of its subsidiaries to) afford to the Representatives
of Parent reasonable access, during normal business hours, during the
period from the date hereof and prior to the Effective Time, to all of its
and its subsidiaries' properties, books, contracts, commitments, records
and officers, and during such period, the Company shall (and shall cause
each of its subsidiaries to) furnish promptly to Parent (a) a copy of each
report, schedule, registration statement and other document filed or
received by it during such period pursuant to the requirements of the
federal securities laws and (b) all other information concerning its
business, properties and personnel as Parent may reasonably request.
Section 6.4. No Solicitation; Acquisition Proposals. (a)
From the date of this Agreement until the Effective Time or, if earlier,
the termination of this Agreement in accordance with its terms, (1) the
Company shall, and the Company shall cause its and its subsidiaries'
respective Representatives to, immediately cease and terminate any existing
solicitation, initiation, encouragement, activity, discussion or
negotiation with any Third Party conducted heretofore by the Company, its
subsidiaries or their respective Representatives with respect to any
Acquisition Proposal and (2) the Company shall not, and the Company shall
cause its and its subsidiaries' respective Representatives not to, directly
or indirectly, (i) solicit, initiate or knowingly encourage (including by
way of furnishing information), or knowingly take any other action to
facilitate, any inquiries or the making or submission of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal; (ii) enter into any agreement, arrangement or understanding with
respect to any Acquisition Proposal or enter into any agreement,
arrangement or understanding requiring the Company to abandon, terminate or
fail to consummate the exchange of Company Shares pursuant to the Offer or
the Merger or any other transaction contemplated by this Agreement; (iii)
participate or engage in any discussions or negotiations with, or disclose
or provide any non-public information or data relating to the Company or
its subsidiaries or afford access to the properties, books or records or
employees of the Company or its subsidiaries to, any Third Party relating
to an Acquisition Proposal, or knowingly facilitate any effort or attempt
to make or implement an Acquisition Proposal or accept an Acquisition
Proposal; or (iv) enter into any letter of intent or similar document or
any contract, agreement or commitment contemplating or otherwise relating
to any Acquisition Proposal.
(b) Notwithstanding the restrictions set forth in Section
6.4(a), if, at any time prior to the exchange of Company Shares pursuant to
the Offer, (1) the Company has received an unsolicited bona fide written
proposal from a Third Party relating to an Acquisition Proposal (under
circumstances in which the Company has complied with its obligations under
Section 6.4(a)) and (2) the Board of Directors of the Company concludes in
good faith (after consultation with a financial advisor of nationally
recognized reputation and after receiving the written advice of its outside
counsel) (i) that such Acquisition Proposal constitutes a Superior Proposal
and (ii) that the failure to provide such information or participate in
such negotiations or discussions would result in a breach by the Board of
Directors of the Company of its fiduciary duties to the Company's
Shareholders under applicable Law, the Company may, subject to its giving
Parent at least two business days' prior written notice of the identity of
such Third Party and all of the terms and conditions of such Acquisition
Proposal and of the Company's intention to furnish nonpublic information
to, or enter into discussions or negotiations with, such Third Party, (x)
furnish information with respect to the Company and its subsidiaries to any
Third Party pursuant to a customary confidentiality agreement containing
terms no less restrictive than the terms of the Confidentiality Agreement
dated March 7, 2001, entered into between Morgan Keegan & Company, on
behalf of the Company, and Overnite Transportation Company, as the same may
be amended, supplemented or modified (the "Confidentiality Agreement"),
provided that a copy of all such information is delivered simultaneously to
Parent if it has not previously been so furnished to Parent, and (y)
participate in discussions or negotiations regarding such proposal.
(c) The Company shall as soon as practicable (and in any
event within 24 hours) notify and advise Parent orally and in writing of
any Acquisition Proposal or of any request for information or inquiry that
may lead to an Acquisition Proposal, the terms and conditions of such
Acquisition Proposal, request or inquiry, and the identity of the person
making such Acquisition Proposal, request or inquiry. The Company shall
inform Parent on a prompt and current basis of the status, content and
details of any discussions regarding, or relating to, any Acquisition
Proposal with a Third Party (including amendments and proposed amendments)
and, as promptly as practicable, of any change in the price, structure or
form of the consideration or material terms of and conditions regarding the
Acquisition Proposal. In fulfilling its obligations under this paragraph
(c) of this Section 6.4, the Company shall provide promptly to Parent
copies of all written correspondence or other written material, including
material in electronic form, between the Company and such Third Party,
except in the event where the delivery of such copies would result in a
breach by the Board of Directors of the Company of its fiduciary duties to
the Company's Shareholders under applicable Law.
(d) The Company agrees that it will promptly inform its
and its subsidiaries' respective Representatives of the obligations
undertaken in this Section 6.4.
(e) Nothing contained in this Section 6.4 or Section 6.5
hereof shall prohibit the Company from taking and disclosing to its
shareholders a position as required by Rule 14d-9 or Rule 14e-2(a)
promulgated under the Exchange Act.
(f) For purposes of this Agreement,
"Acquisition Proposal" means any inquiry, offer, proposal
or intended proposal, indication of interest, signed
agreement or completed action, as the case may be, by any
Third Party which relates to a transaction or series of
transactions (including any merger, consolidation,
recapitalization, liquidation or other direct or indirect
business combination) involving the Company or any of its
subsidiaries or the issuance or acquisition of shares of
capital stock or other equity securities of the Company
or any of its subsidiaries representing 15% or more (by
voting power) of the outstanding capital stock of the
Company or such subsidiary or any tender or exchange
offer that if consummated would result in any person,
together with all affiliates thereof, Beneficially Owning
shares of capital stock or other equity securities of the
Company or any of its subsidiaries representing 15% or
more (by voting power) of the outstanding capital stock
of the Company or such subsidiary, or the acquisition,
license, purchase or other disposition of a substantial
portion of the technology, business or assets of the
Company or any of its subsidiaries outside the ordinary
course of business or inconsistent with past practice;
and
"Superior Proposal" means any bona fide written
Acquisition Proposal (provided that for the purposes of
this definition, the applicable percentages in the
definition of Acquisition Proposal shall be seventy-five
percent (75%) as opposed to fifteen percent (15%)), on
its most recently amended or modified terms, if amended
or modified, which the Board of Directors of the Company
determines in its good faith judgment (after receipt of
the advice of a financial advisor of nationally
recognized reputation and receiving advice of its outside
counsel), taking into account, among other things, all
legal, financial, regulatory, timing and other aspects of
the proposal and the Third Party making the proposal (i)
would, if consummated, result in a transaction that is
more favorable to the Company's shareholders (in their
capacities as shareholders), from a financial point of
view, than the transactions contemplated by this
Agreement and (ii) is reasonably capable of being
completed.
(g) The Company agrees not to release or permit the
release of any person from, or to waive or permit the waiver of any
provision of, any confidentiality, "standstill" or similar agreement to
which any of the Company or its subsidiaries is a party and will promptly
provide Parent with a copy of such agreements. The Company will use its
best efforts to enforce or cause to be enforced each such agreement at the
request of Parent.
Section 6.5. Modifications to Recommendations. Except as
expressly permitted by this Section 6.5, neither the Board of Directors of
the Company nor any committee thereof shall (i) withdraw, qualify, modify
or amend, or propose to withdraw, qualify, modify or amend, in a manner
adverse to Parent, the Recommendations or take any action or make any
statement, filing or release inconsistent with such Recommendations (it
being understood that taking a neutral position or no position with respect
to an Acquisition Proposal shall be considered an adverse modification of
the Recommendations), (ii) approve or recommend, or propose publicly to
approve or recommend, any Acquisition Proposal or (iii) cause the Company
to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement related to any Acquisition Proposal
(each of the foregoing being referred to as a "Subsequent Determination"),
provided that, if prior to the consummation of the Offer, the Board of
Directors of the Company determines in good faith, after it has received a
Superior Proposal and after receipt of written advice from outside counsel,
that the failure to make a Subsequent Determination would result in a
breach by the Board of Directors of the Company of its fiduciary duties to
the Company's shareholders under applicable Law, the Board of Directors of
the Company may (subject to this and the following sentences) inform the
Company's shareholders that it no longer believes that exchange of Company
Shares pursuant to the Offer and the other transactions contemplated hereby
are advisable, but only at a time that is after 5:00 p.m., New York City
time, on the third business day following delivery by the Company to Parent
of a written notice (a "Subsequent Determination Notice") (i) advising
Parent that the Board of Directors of the Company has received a Superior
Proposal, (ii) specifying the terms and conditions of such Superior
Proposal, including the amount per share that the Company's shareholders
will receive per Company Share (valuing any non-cash consideration at what
the Board of Directors of the Company determines in good faith, after
consultation with its independent financial advisor, to be the fair value
of the non-cash consideration) and including a copy thereof with all
accompanying documentation, except in the event where the inclusion of such
copy would result in a breach by the Board of Directors of the Company of
its fiduciary duties to the Company's Shareholders under applicable Law,
(iii) identifying the person making such Superior Proposal and (iv) stating
that the Company intends to make a Subsequent Determination. After
providing such notice, the Company shall provide a reasonable opportunity
to Parent, and shall cooperate in good faith with Parent, to make such
adjustments in the terms and conditions of this Agreement as would enable
the Company to proceed with its Recommendations to its shareholders without
a Subsequent Determination; provided, however, that any such adjustment to
this Agreement shall be at the discretion of Parent at the time.
Section 6.6. HSR Act Filings; Reasonable Best Efforts.
(a) Each of Parent and the Company shall (i) promptly
make or cause to be made the filings required of such party or any of its
subsidiaries under the HSR Act and any other Antitrust Laws with respect to
the Offer, the Merger and the other transactions contemplated by this
Agreement, (ii) comply at the earliest reasonable practicable date with any
request under the HSR Act or such other Antitrust Laws for additional
information, documents, or other material received by such party or any of
its subsidiaries from the Federal Trade Commission or the Department of
Justice or any other Governmental Authority in respect of such filings, the
Offer, the Merger or such other transactions, (iii) cooperate with the
other party in connection with any such filing and in connection with
resolving any investigation or other inquiry of any such agency or other
Governmental Authority under any Antitrust Laws with respect to any such
filing, the Offer, the Merger or such other transactions, and (iv) use
reasonable best efforts to resolve such objections, if any, as may be
asserted by any Governmental Authority with respect to the Offer, the
Merger or any other transactions contemplated under this Agreement under
the Antitrust Laws. The Company shall not propose to enter into, or enter
into, any agreement, arrangement or understanding with any Governmental
Authority with respect to any Governmental Authority's review of the Offer,
the Merger or any other transactions contemplated under this Agreement
without the prior written consent of Parent.
(b) Subject to Section 6.4 and Section 6.5 of this
Agreement, each of the parties agrees to use reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done,
and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Offer, the Merger, and the other
transactions contemplated by this Agreement, including (i) the obtaining of
all other necessary actions or nonactions, waivers, consents and approvals
from Governmental Authorities and the making of all other necessary
registrations and filings (including other filings with Governmental
Authorities, if any), (ii) the obtaining of all necessary consents,
approvals or waivers from third parties, (iii) the preparation of the Offer
Registration Statement, the Offer Documents, the Schedule 14D-9 and, if
necessary, the Proxy Statement, and (iv) the execution and delivery of any
additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement.
(c) Notwithstanding anything to the contrary in this
Section 6.6, (i) neither Parent nor any of its subsidiaries shall be
required to divest any of their or the Company's or any of its
subsidiaries' respective businesses, product lines or assets, (ii) neither
Parent nor any of its subsidiaries shall be required to take or agree to
take any other action or agree to any limitation that could reasonably be
expected to have an adverse effect on the business, assets, condition
(financial or otherwise), results of operations or prospects of Parent and
its subsidiaries, taken as a whole, or of Parent combined with the
Surviving Corporation after the Effective Time, (iii) no party shall be
required to agree to the imposition of or to comply with, any condition,
obligation or restriction on Parent or any of its subsidiaries or on the
Surviving Corporation or any of its subsidiaries of the type referred to in
subclause (a) or (b) of clause (5) of Annex A or Section 7.1(b), (iv)
neither Parent nor Merger Sub shall be required to waive any of the
conditions to the Offer set forth in Annex A or any of the conditions of to
the Merger set forth in Article VIII, and (v) no party shall be required to
pursue or defend any administrative or judicial action or proceeding that
may be instituted or threatened.
(d) Payment of HSR Filing Fee. Any filing fee payable
under or pursuant to the HSR Act shall be paid in full by Parent regardless
of whether the Offer, the Merger, this Agreement or the other transactions
contemplated hereby are consummated.
Section 6.7. Litigation. The Company shall give Parent
the opportunity to participate in the defense of any litigation against the
Company and/or its directors relating to the transactions contemplated by
this Agreement or any other Acquisition Proposal and will not settle or
compromise any such action without the prior written consent of Parent.
Section 6.8. Certain Benefit Matters. Parent agrees to
cause the Surviving Corporation and its subsidiaries to honor and assume
the Salary Continuation Agreements listed on Section 6.8 of the Disclosure
Schedule (the "Salary Continuation Agreements"), true and accurate copies
of which have previously been provided to Parent. If Parent shall notify
Company prior to the Effective Time that Parent wishes to substitute
alternate contractual arrangements (to become effective as of the Effective
Time) with one or more of the persons subject to such agreements, the
Company agrees to use its best efforts to facilitate Parent's negotiations
with any such person and to cooperate in making any such contractual
changes which are agreed upon by Parent and such person.
Section 6.9. Additional Agreements. If, at any time after
the Effective Time, the Surviving Corporation shall consider or be advised
that any deeds, bills of sale, assignments, assurances or any other actions
or things are necessary or desirable to vest, perfect or confirm of record
or otherwise in the Surviving Corporation its right, title or interest in,
to or under any of the rights, properties or assets of Merger Sub or the
Company or otherwise carry out this Agreement, the officers and directors
of the Surviving Corporation shall be authorized to execute and deliver, in
the name and on behalf of Merger Sub or the Company, all such deeds, bills
of sale, assignments and assurances and to take and do, in the name and on
behalf of Merger Sub or the Company, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or
assets in the Surviving Corporation or otherwise to carry out this
Agreement. If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and directors of Parent shall use reasonable best efforts
to take, or cause to be taken, all such necessary actions.
Section 6.10. Publicity. So long as this Agreement is in
effect, neither the Company, Parent nor any of their respective affiliates
shall issue or cause the publication of any press release or other
announcement with respect to the Offer, the Merger, this Agreement or the
other transactions contemplated hereby without the prior consultation of
the other party, except as may be required by Law or by any rules and
regulations of the NASD or any applicable securities exchange or listing
agreement with any applicable securities exchange or the Nasdaq National
Market.
Section 6.11. Notification of Certain Matters. (a) The
Company shall give prompt notice to Parent, and Parent or Merger Sub shall
give prompt notice to the Company, of (i) any representation or warranty
made by it contained in this Agreement becoming untrue or inaccurate in any
material respect and (ii) the failure by it to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied
with or satisfied by it under this Agreement; provided, however, that no
such notification shall affect the representations, warranties, covenants
or agreements of the parties or the conditions to the obligations of the
parties under this Agreement.
(b) The Company shall give prompt notice to Parent, and
Parent or Merger Sub shall give prompt notice to the Company, of: (i) any
notice or other communication from any person alleging that the consent of
such person is or may be required in connection with the transactions
contemplated by this Agreement; (ii) any notice or other communication from
any Governmental Authority in connection with the transactions contemplated
by this Agreement; and (iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge threatened against,
relating to or involving or otherwise affecting it or any of its
subsidiaries which, if pending on the date of this Agreement would have
been required to have been disclosed pursuant to Article IV and Article V
or which relate to the consummation of the transactions contemplated by
this Agreement.
Section 6.12. Directors' and Officers' Indemnification
and Insurance. The Surviving Corporation shall, and Parent shall cause the
Surviving Corporation to, (i) indemnify and hold harmless, and provide
advancement of expenses to, all current or former directors, officers and
employees of the Company and its subsidiaries (in all of their capacities)
(a) to the same extent such persons are indemnified or have the right to
advancement of expenses as of the date of this Agreement by the Company
pursuant to the Company's Articles of Incorporation, Bylaws,
indemnification agreements, if any, in existence on the date hereof with
any directors, officers and employees of the Company and its subsidiaries
and the URBCA and (b) without limitation to clause (a), to the fullest
extent permitted by law, in each case for acts or omissions occurring at or
prior to the Effective Time (including for acts or omissions occurring in
connection with the approval of this Agreement and the consummation of the
transactions contemplated hereby), (ii) include and cause to be maintained
in effect in the Surviving Corporation's (or any successor's) Articles of
Incorporation and Bylaws for a period of six years after the Effective
Time, the current provisions regarding elimination of liability of
directors, indemnification of officers, directors and employees and
advancement of expenses contained in the Articles of Incorporation and
Bylaws of the Company and (iii) cause to be maintained for a period of six
years after the Effective Time a policy (or a "tail" policy) of directors'
and officers' liability insurance and fiduciary liability insurance of at
least the same coverage and amounts containing terms and conditions which
are, in the aggregate, no less advantageous to the insured than the terms
currently provided to directors and officers of Parent with respect to
claims arising from facts or events that occurred on or before the
Effective Time. The obligations of the Surviving Corporation under this
Section 6.12 shall not be terminated or modified in such a manner as to
adversely affect any indemnitee to whom this Section 6.12 applies without
the consent of such affected indemnitee (it being expressly agreed that the
indemnitees to whom this Section 6.12 applies shall be third party
beneficiaries of this Section 6.12).
Section 6.13. Rule 145 Affiliates. Within 10 days after
the date of this Agreement, the Company shall deliver to Parent a letter
identifying all persons who may be deemed to be Rule 145 Affiliates. The
Company shall use its reasonable best efforts to cause each person who is
so identified as a Rule 145 Affiliate to deliver to Parent at least 5 days
prior to the initial expiration of the Offer, an agreement substantially in
the form of Exhibit B to this Agreement.
Section 6.14. Cooperation. Parent and the Company shall
together, or pursuant to an allocation of responsibility to be agreed
between them, coordinate and cooperate (i) with respect to the timing of
the Company Shareholder Meeting, (ii) in determining whether any action by
or in respect of, or filing with, any Governmental Authority is required,
or any actions, consents approvals or waivers are required to be obtained
from parties to any material contracts, in connection with the consummation
of the transactions contemplated by this Agreement, and (iii) in seeking
any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith and timely
seeking to obtain any such actions, consents approvals or waivers. Subject
to the terms and conditions of this Agreement, Parent and the Company will
each use its reasonable best efforts to have the Offer Registration
Statement declared effective under the Securities Act as promptly as
practicable after the Offer Registration Statement is filed, and Parent and
the Company shall, subject to applicable Law, confer on a regular and
frequent basis with one or more representatives of one another to report
operational matters of significance to the Offer and the Merger and the
general status of ongoing operations insofar as relevant to the Offer and
the Merger, provided that the parties will not confer on any matter to the
extent inconsistent with law.
Section 6.15. Tax-Free Reorganization Treatment.
(a) This Agreement is intended to constitute a plan of
reorganization with respect to the Transaction for United States Federal
income tax purposes and the parties hereto intend the Transaction to
qualify as a reorganization within the meaning of Section 368(a) of the
Code. From and after the date of this Agreement, each party hereto shall
use its reasonable best efforts (and shall cause its respective
subsidiaries to use their reasonable best efforts) to cause the Transaction
to qualify, and shall not, without the prior written consent of the other
parties hereto, take any actions or cause any actions to be taken which
could reasonably be expected to prevent the Transaction from qualifying as
a reorganization under the provisions of Section 368(a) of the Code.
Following the Effective Time, neither the Surviving Corporation nor Parent,
nor any of their respective subsidiaries, shall take any action or cause
any action to be taken which could reasonably be expected to cause the
Transaction to fail to qualify as a reorganization under Section 368(a) of
the Code.
(b) The parties hereto shall cooperate and use their
reasonable best efforts in order for Parent to obtain an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden Arps"), counsel to
Parent, that the Transaction will be treated as a reorganization within the
meaning of Section 368(a) of the Code (the "Tax Opinion"). In connection
therewith, both Parent (together with Merger Sub) and the Company shall
deliver to Skadden Arps representation letters, dated and executed as of
the Effective Time (and as of such other date or dates as reasonably
requested by Skadden Arps), in form and substance substantially identical
to those attached hereto as Exhibit C and Exhibit D, respectively (allowing
for such amendments to the representation letters as Skadden Arps deems
necessary) (together, the "Representation Letters"). Notwithstanding
anything express or implied to the contrary in this Agreement, but subject
to the provisions of this Section 6.15, if such opinion cannot be obtained,
then, in Parent's reasonable discretion, the Merger shall not be effected
as described herein and shall instead be effected as a merger of Merger Sub
with and into the Company (the "Reverse Merger") in accordance with the
URBCA and the separate existence of Merger Sub shall thereupon cease, and
the Company, as the surviving corporation in the Reverse Merger, shall
continue its corporate existence under the laws of the State of Utah as a
wholly-owned subsidiary of Parent.
(c) The parties hereto agree that they will not take any
position on any Federal, state, or local Tax Return, or take any other Tax
reporting position, that is inconsistent with the treatment of the Merger
as a tax-free reorganization, unless otherwise required by a decision by
the Tax Court or a judgment, decree, or other order by any court of
competent jurisdiction, which has become final and non-appealable, or by
applicable state or local income or franchise tax law, provided, however,
that this clause (c) will not apply in the event that the Merger is
effected as a Reverse Merger pursuant to clause (b) above.
(d) None of the parties hereto shall take or cause to be
taken any action which would cause to be untrue (or fail to take or cause
not to be taken any action which would cause to be untrue) any of the
certifications and representations included in the Representation Letters
attached hereto as Exhibit C and Exhibit D.
Section 6.16. Conveyance Taxes. The Company and Parent
shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer and
stamp taxes, any transfer, recording, registration and other fees and any
similar Taxes (together with any related interest, penalties or additions
to tax, "Conveyance Taxes") which become payable in connection with the
transactions contemplated by this Agreement. Notwithstanding any provision
to the contrary contained in this Agreement, other than Sections 3.4(g) and
3.5 hereof, each of Parent and the Company shall pay, without deduction
from any amount payable to holders of Company Shares and without
reimbursement from the other party, any such Conveyance Taxes imposed on it
by any Governmental Authority (and/or for which its shareholders are
primarily liable), which become payable in connection with the transactions
contemplated by this Agreement.
ARTICLE VII
CONDITIONS
Section 7.1. Conditions to Each Party's Obligations. The
respective obligations of each party to effect the Merger shall be subject
to the fulfillment or waiver at or prior to the Effective Time of the
following conditions:
(a) Shareholder Approval. If required under the URBCA,
the Company Shareholder Approval shall have been obtained.
(b) No Injunction or Action. No order, statute, rule,
regulation, executive order, stay, decree, judgment or injunction shall
have been enacted, entered, promulgated or enforced by any Governmental
Authority since the date of this Agreement which prohibits or prevents the
consummation of the Merger which has not been vacated, dismissed or
withdrawn prior to the Effective Time. The Company and Parent shall use
their reasonable best efforts to have any of the foregoing vacated,
dismissed or withdrawn by the Effective Time.
(c) Exchange of Company Shares. Parent or any of its
affiliates shall have purchased Company Shares pursuant to the Offer.
Section 7.2. Conditions to Obligations of Parent. The
obligations of Parent and Merger Sub to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
additional condition: the Company shall have performed and complied with in
all material respect all its covenants and agreements hereunder required by
this Agreement to be performed or complied with or satisfied by the Company
at or prior to the Effective Time.
Section 7.3. Frustration of Conditions. Neither Parent
nor the Company may rely on the failure of any condition set forth in this
Article VII to be satisfied if such failure was caused by such party's
failure to comply with or perform any of its covenants or obligations set
forth in this Agreement.
ARTICLE VIII
TERMINATION AND ABANDONMENT; EXPENSES
Section 8.1. Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether before or after
approval of the shareholders of the Company or Merger Sub:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Offer shall have expired or been
terminated in accordance with the terms of this Agreement
without Parent or Merger Sub having accepted for exchange
any Company Shares pursuant to the Offer, unless the
failure to consummate the Offer is the result of a
material breach of this Agreement by the party seeking to
terminate this Agreement;
(ii) if the Offer shall not have been consummated
on or before January 31, 2002 (the "Outside Date"),
unless the failure to consummate the Offer is the result
of a material breach of this Agreement by the party
seeking to terminate this Agreement;
(iii) if the Merger shall not have been consummated
on or prior to April 30, 2002 (the "Drop Dead Date"),
provided, however, that the right to terminate this
Agreement pursuant to this Section 8.1(b)(iii) shall not
be available to any party whose willful and material
breach of this Agreement results in the failure of the
Merger to be consummated by such time;
(iv) if the Merger shall not have been consummated
as a result of any condition thereto in Article VII
being incapable of being satisfied; or
(v) if any statute, rule, regulation, judgment,
order, legislation or interpretation of any nature
enacted, enforced, promulgated, amended or issued by any
Governmental Authority having the effects set forth in
subclause (a) or (b) of clause (5) of Annex A hereto;
(c) by Parent, upon the occurrence of any Trigger Event
described in Section 8.3(a) hereof; or
(d) by the Company, if the Company makes a Subsequent
Determination in compliance with Section 6.4 hereof and pursuant to the
provisions of Section 6.5 hereof, provided the Company has paid Parent the
sums required by Section 8.3(a) hereof.
The party desiring to terminate this Agreement pursuant to this Section 8.1
shall give written notice of such termination to the other party in
accordance with Section 9.4 hereof.
Section 8.2. Effect of Termination and Abandonment. In
the event of termination of this Agreement and the abandonment of the
Merger pursuant to this Article VIII, this Agreement (other than Sections
8.2 and 8.3 and Article IX) shall become void and of no further force or
effect with no liability on the part of any party hereto (or of any of its
Representatives); provided, however, that no such termination shall relieve
any party hereto from any liability for any breach of this Agreement prior
to termination.
Section 8.3. Fees and Expenses.
(a) The Company agrees to pay Parent a fee in immediately
available funds equal to $5,000,000 (the "Liquidated Amount") promptly, but
in no event later than three business days, after the termination of this
Agreement (or such later date as may apply in the case of clause (i) below
or such earlier time prior to the termination of this Agreement in the case
of clause (iv) below) as a result of the occurrence of any of the events
set forth below (each, a "Trigger Event"):
(i) the Company shall have received an Acquisition
Proposal, and at any time prior to, or within nine months
after, the termination of this Agreement (unless this
Agreement is terminated pursuant to Section 8.1(a) or
Section 8.1(b)(v)), the Company shall have entered into,
or shall have publicly announced its intention to enter
into, an agreement or an agreement in principle with
respect to any Acquisition Proposal;
(ii) any Third Party shall have become the
Beneficial Owner of at least 15% of the outstanding
Company Shares or shall have acquired, directly or
indirectly, at least 15% of the assets of the Company and
its subsidiaries;
(iii) there shall have been a willful and material
breach or failure to perform in any material respect by
the Company of any of its representations, warranties,
covenants or other agreements contained in this
Agreement, which breach or failure to perform (A) would
give rise to the failure of a condition set forth in
subclause (e) or (f) of clause (5) of Annex A, -------
and (B) is incapable of being or has not been cured by
the Company prior to or on the earlier of (x) the date
which is 10 business days immediately following written
notice by Parent to the Company of such breach or failure
to perform and (y) the expiration or termination of the
Offer in accordance with the terms of this Agreement;
(iv) the Company has provided Parent with a
Subsequent Determination Notice or the Board of Directors
of the Company (or any committee thereof) (A) shall have
made a Subsequent Determination, (B) shall fail to
include in the Schedule 14D-9 its Recommendations without
modification or qualification in a manner adverse to
Parent, (C) shall fail to reaffirm such Recommendations
within two business days upon Parent's reasonable request
to do so, or (D) shall have resolved to, or publicly
announced an intention to, take any of the actions or
omit to take any action as specified in this Section
8.3(a)(iv);
(v) as of the final expiration date of the Offer,
all conditions to the consummation of the Offer shall
have been met or waived except for satisfaction of the
Minimum Condition and there shall have been made
subsequent to the date of this Agreement an Acquisition
Proposal; or
(vi) there shall have been a change in the
constitution of the Board of Directors of the Company not
provided for in this Agreement such that at least a
majority of the members of the Board of Directors is
comprised of individuals not serving on the Board of
Directors as of the date hereof.
(b) Except as set forth in this Section 8.3 or Section
6.6(d) hereof, all fees and expenses incurred in connection with the Offer
and the Merger, this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees or expenses,
whether or not the Offer or the Merger is consummated. Except for fees
payable to the Exchange Agent which will be paid with funds furnished by
and originating with the Company, the Company covenants and agrees that it
will not pay or reimburse either of the Shareholders for any fees or
expenses incurred by such Shareholder in connection with his Shareholder
Agreement or the transactions contemplated by such Shareholder Agreement,
or in his capacity as Shareholder in connection with this Agreement or the
Offer, the Merger, or the other transactions contemplated by this
Agreement.
(c) Parent and Merger Sub expressly acknowledge and agree
that, except in the event of a willful and material breach of this
Agreement by the Company, with respect to any termination of this Agreement
pursuant to which Parent is paid the Liquidated Amount, (i) the payment of
the Liquidated Amount shall constitute liquidated damages with respect to
any and all claims for damages and any and all other claims which Parent or
Merger Sub may be entitled to assert against the Company, its subsidiaries
or any of their respective Representatives with respect to a breach of this
Agreement (collectively, "Termination Damages "), and (ii) the right to
receive payment of the Liquidated Amount shall constitute the sole and
exclusive remedy available to Parent and Merger Sub for any and all
Termination Damages. The parties hereto expressly acknowledge and agree
that, because of the difficulty of accurately determining the actual amount
of the Termination Damages, if any, provided there has not been a willful
and material breach of this Agreement by the Company, the right to payment
of the Liquidated Amount (x) shall constitute a reasonable estimate of the
Termination Damages that will be suffered by reason of any such proposed or
actual termination of this Agreement, and (y) shall be in full and complete
satisfaction of any and all damages arising as a result of or with respect
to the Termination Damages. Except for non-payment of the Liquidated Amount
or a willful and material breach of this Agreement by the Company, in no
event shall Parent or the Merger Sub be entitled to seek or to obtain any
recovery or judgment, or other damages of any kind, including,
consequential, indirect or punitive damages, against the Company, its
subsidiaries or any of their respective Representatives in respect of any
proposed or actual termination of this Agreement with respect to which
Parent is paid Liquidated Amount, including, without limitation,
consequential, indirect or punitive damages.
(d) Parent and the Company agree that the agreements
contained in Sections 8.3(a) and 8.3(b) hereof are an integral part of the
transactions contemplated by this Agreement and constitute liquidated
damages and not a penalty. In the event of any dispute as to whether any
fee due under either Section 8.3(a) or 8.3(b) is due and payable, the
prevailing party shall be entitled to receive from the other party the
costs and expenses (including legal fees and expenses) in connection with
any action, including the filing of any lawsuit or other legal action,
relating to such dispute. Interest shall be paid on the amount of any
unpaid fee at the publicly announced prime rate of Citibank, N.A. from the
date such fee was required to be paid.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Amendment and Modification. This Agreement
may be amended, modified or supplemented only by a written agreement among
the Company, Parent and Merger Sub.
Section 9.2. Waiver of Compliance; Consents. Any failure
of the Company on the one hand, or Parent and Merger Sub on the other hand,
to comply with any obligation, covenant, agreement or condition herein may
be waived by Parent on the one hand, or the Company on the other hand, only
by a written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto,
such consent shall be given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth in this Section 9.2.
Section 9.3. Survival. The respective representations,
warranties, covenants and agreements of the Company and Parent contained
herein or in any certificates or other documents delivered prior to or at
the Closing shall survive the execution and delivery of this Agreement,
notwithstanding any investigation made or information obtained by the other
party, but shall terminate at the Effective Time, except for those
covenants contained in Sections 3.3, 3.4, 3.5, 3.6, 3.9, 6.11, 6.15, 6.16,
9.1 and 9.15 hereof, which shall survive beyond the Effective Time in
accordance with their terms.
Section 9.4. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by facsimile, receipt confirmed,
when received if sent by overnight courier or registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to the Company, to:
Motor Cargo Industries, Inc.
845 West Center Street
North Salt Lake City, Utah 84054
Attention: Marvin L. Friedland
Telecopy: (801) 299-5225
with a copy to (but which shall not constitute
notice to the Company):
Stoel Rives LLP
201 South Main Street
Salt Lake City, Utah 84111-4904
Attention: Reed W. Topham
Brent J. Giauque
Telecopy: (801) 578-6999
(ii) if to Parent or Merger Sub, to:
Union Pacific Corporation
1416 Dodge Street, Room 1230
Omaha, Nebraska 68179
Attention: Carl W. von Bernuth
Telecopy: (401) 271-6633
with a copy to (but which shall not constitute
notice to Parent):
Overnite Transportation Company
1000 Semmes Avenue
P.O. Box 1216
Richmond, Virginia 23224
Attention: Pat Hanley
Telecopy: (804) 231-8312
with a copy to (but which shall not constitute
notice to Parent or Merger Sub):
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Paul T. Schnell, Esq.
Richard J. Grossman, Esq.
Telecopy: (212) 735-2000
Section 9.5. Binding Effect; Permitted Assignment. This
Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto
prior to the Effective Time without the prior written consent of the other
parties hereto, which consent may be withheld in the sole and absolute
discretion of the party requested to consent.
Section 9.6. Governing Law. This Agreement shall be
deemed to be made in, and in all respects shall be interpreted, construed
and governed by and in accordance with the internal laws of, the State of
Utah, without regard to the conflict of laws rules thereof.
Section 9.7. Submission to Jurisdiction; Waivers. Each of
the Company, Parent and Merger Sub irrevocably and unconditionally agrees
that any legal action or proceeding with respect to this Agreement or for
recognition and enforcement of any judgment in respect hereof brought by
the other party hereto or its successors or assigns may be brought and
determined in the federal and state courts located in Salt Lake City, Utah
and each of the Company, Parent and Merger Sub hereby irrevocably submits
with regard to any such action or proceeding for itself and in respect to
its property, generally and unconditionally, to the nonexclusive
jurisdiction of the aforesaid courts. Each of the Company, Parent and
Merger Sub hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any
reason other than the failure to lawfully serve process, (b) that it or its
property is exempt or immune from jurisdiction of any such court or from
any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to the fullest
extent permitted by applicable law, that (i) the suit, action or proceeding
in any such court is brought in an inconvenient forum, (ii) the venue of
such suit, action or proceeding is improper and (iii) this Agreement, or
the subject matter hereof, may not be enforced in or by such courts.
Section 9.8. Waiver of Jury Trial. Each of parties hereto
hereby irrevocably waives all right to a trial by jury in any action,
proceeding, or counterclaim arising out of or related to this Agreement or
the transactions contemplated hereby.
Section 9.9. Counterparts. This Agreement may be executed
in one or more counterparts, each of which together be deemed an original,
but all of which together shall constitute one and the same instrument.
Section 9.10. Interpretation. The article and section
headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not in
any way affect the meaning or interpretation of this Agreement. As used in
this Agreement, (i) the term "person" shall mean and include an individual,
a partnership, a joint venture, a corporation, a limited liability company,
a trust, an association, an unincorporated organization, a Governmental
Authority and any other entity or group (as defined in the Exchange Act),
(ii) unless otherwise specified herein, the term "affiliate," with respect
to any person, shall mean and include any person controlling, controlled by
or under common control with such person, (iii) the term "subsidiary" of
any specified person shall mean any corporation any of the outstanding
voting power of which, or any partnership, joint venture, limited liability
company or other entity any of the total equity interest of which, is
directly or indirectly owned by such specified person, other than in any
such case any entity which may be deemed to be a "subsidiary" of such
specified person solely by reason of the ownership of equity securities of
such entity which are registered under the Exchange Act and held by such
specified person for investment purposes only, (iv) a matter will be deemed
to be "material" hereunder with respect to any person or entity if such
matter, individually or in the aggregate, would be considered significant
by a reasonable investor in such entity in the context of the particular
provision in which the word "material" appears (i.e., a matter need not
have a Company Material Adverse Effect or a Parent Material Adverse Effect
in order to be deemed to be "material"), (v) the term "knowledge," when
used with respect to the Company, shall mean the knowledge of the directors
and officers of the Company and, when used with respect to Parent, shall
mean the knowledge of the directors and officers of Parent, and (vi) the
term "including" shall mean "including, without limitation".
Section 9.11. Entire Agreement. This Agreement, the
Shareholder Agreements and the documents or instruments referred to herein
and therein, including Annex A, the Exhibit(s) attached hereto and the
Disclosure Schedule referred to herein, which Exhibit(s) and Disclosure
Schedule are incorporated herein by reference, and any other written
agreement entered into contemporaneously herewith embody the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained therein. There are no restrictions, promises,
representations, warranties, covenants, or undertakings, other than those
expressly set forth or referred to therein. This Agreement and such other
agreements supersede all prior agreements and the understandings between
the parties with respect to such subject matter.
Section 9.12. Severability. In case any provision in this
Agreement shall be held invalid, illegal or unenforceable in a
jurisdiction, such provision shall be modified or deleted, as to the
jurisdiction involved, only to the extent necessary to render the same
valid, legal and enforceable, and the validity, legality and enforceability
of the remaining provisions hereof shall not in any way be affected or
impaired thereby nor shall the validity, legality or enforceability of such
provision be affected thereby in any other jurisdiction.
Section 9.13. Third Party Beneficiaries. Nothing
contained in this Agreement or in any instrument or document executed by
any party in connection with the transactions contemplated hereby shall
create any rights in, or be deemed to have been executed for the benefit
of, any person or entity that is not a party hereto or thereto or a
successor or permitted assign of such a party; provided, however, that the
parties hereto specifically acknowledge that the provisions of Section 6.12
hereof are intended to be for the benefit of, and shall be enforceable by,
all current or former directors, officers and employees of the Company and
its subsidiaries (in all of their capacities) affected thereby.
Section 9.14. Disclosure Schedule. The Company and Parent
acknowledge that the Disclosure Schedule (i) relates to certain matters
concerning the disclosures required and transactions contemplated by this
Agreement, (ii) is qualified in its entirety by reference to specific
provisions of this Agreement and (iii) is not intended to constitute and
shall not be construed as indicating that such matter is required to be
disclosed, nor shall such disclosure be construed as an admission that such
information is material with respect to the Company, except to the extent
required by this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement and Plan of Merger to be signed and delivered by its
respective duly authorized officers as of the date first above written.
MOTOR CARGO INDUSTRIES, INC.
By: /s/ Harold R. Tate
----------------------------------
Name: Harold R. Tate
Title: Chairman and Chief Executive Officer
UNION PACIFIC CORPORATION
By: /s/ Carl W. von Bernuth
---------------------------------
Name: Carl W. von Bernuth
Title: Senior Vice President, General
Counsel and Secretary
MOTOR MERGER CO.
By: /s/ Carl W. von Bernuth
----------------------------------
Name: Carl W. von Bernuth
Title: Vice President and Secretary
Exhibits
Exhibit A - Form of Articles of Incorporation of the Surviving Corporation
Exhibit B - Form of Rule 145 Affiliate Letter
Exhibit C - Parent Representation Letter
Exhibit D - Company Representation Letter
ANNEX A
Conditions of the Offer
Notwithstanding any other provision of the Offer, subject
to the terms of the Agreement, Parent shall not be required to accept for
exchange or exchange or deliver any Exchange Offer Consideration for,
(subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act (relating to Parent's obligation to pay for
or return tendered Company Shares after the termination or withdrawal of
the Offer)) any Company Shares tendered, if by the expiration of the Offer
(as it may be extended in accordance with the requirements of Section 2.1),
(1) there shall not have been validly tendered in accordance with the Offer
and not withdrawn prior to the expiration of the Offer such number of
Company Shares that, together with the Company Shares owned by Parent and
Merger Sub on the date hereof, would constitute at least 66 2/3% of the
Company Shares on a fully-diluted basis (including, for purposes of such
calculation, all Company Shares issuable upon exercise of all Company
Options, and the conversion or exchange of all securities convertible or
exchangeable into Company Shares) outstanding at the expiration date of the
Offer (including any extension thereof) (the "Minimum Condition"), (2) the
applicable waiting period under the HSR Act and any other applicable
Antitrust Laws shall not have expired or been terminated, (3) the Offer
Registration Statement shall not have become effective under the Securities
Act or shall be the subject of any stop order or proceedings seeking a stop
order, (4) the Parent Common Stock to be issued in the Offer shall not have
been approved for listing on the NYSE, subject to official notice of
issuance, or (5) at any time on or after the date of the Agreement and
prior to the acceptance for exchange of Company Shares pursuant to the
Offer, any of the following conditions exist:
(a) there shall have been entered, enforced, instituted,
pending, threatened, or issued by any Governmental Authority, any judgment,
order, injunction, ruling, proceeding, action, suit, charge or decree:
(i) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to
restrain or prohibit or make materially more costly the
making of the Offer, the acceptance for exchange of, or
the exchange or delivery of Exchange Offer Consideration
for, some of or all the Company Shares by Parent or the
consummation by Parent or Merger Sub of the Merger,
(ii) seeking to obtain material damages or
otherwise directly or indirectly relating to the
transactions contemplated by the Agreement, the Offer or
the Merger,
(iii) seeking to limit, restrain or prohibit
Parent's or Merger Sub's ownership or operation (or that
of their respective subsidiaries or affiliates) of all or
any portion of the business or assets of the Company and
its subsidiaries, taken as a whole, or of Parent and its
subsidiaries, taken as a whole, or to compel Parent or
any of its subsidiaries or affiliates to dispose of or
hold separate all or any portion of the business or
assets of the Company and its subsidiaries, taken as a
whole, or of Parent and its subsidiaries, taken as a
whole,
(iv) seeking to impose or confirm limitations on
the ability of Parent or any of its subsidiaries or
affiliates effectively to exercise full rights of
ownership of any Company Shares, including the right to
vote any Company Shares to be acquired pursuant to the
Offer or owned by Parent or any of its subsidiaries or
affiliates on all matters presented to the Company's
shareholders (including the approval and adoption of the
Agreement and the Merger), or seeking to require
divestiture by Parent or any of its subsidiaries or
affiliates of any Company Shares, or
(v) which otherwise has, or would reasonably be
expected to have, a Company Material Adverse Effect or a
Parent Material Adverse Effect; or
(b) there shall have been any action taken, or any
statute, rule, regulation, judgment, order, legislation or interpretation
of any nature pending, proposed, enacted, enforced, promulgated, amended or
issued by any Governmental Authority or deemed by any Governmental
Authority applicable to (i) Parent, the Company or any subsidiary or
affiliate of Parent or the Company or (ii) any transaction contemplated by
the Agreement, which in the judgment of Parent is reasonably likely to
result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (v) of paragraph (a) above; or
(c) there shall have occurred or exist any facts,
changes, events or effects that have, or would reasonably expected to have,
a Company Material Adverse Effect; or
(d) there shall have occurred (i) any general suspension
of, or limitation on prices for, trading in securities on the New York
Stock Exchange or the Nasdaq National Market other than (x) a shortening of
trading hours or any coordinated trading halt triggered solely as a result
of a specified increase or decrease in a market index or (y) a suspension
of not more than twenty-four hours solely relating to a bomb threat or
other substantially similar threat directed to the New York Stock Exchange
or the Nasdaq National Market, (ii) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States,
(iii) any limitation (whether or not mandatory) on the extension of credit
by banks or other lending institutions in the United States, (iv) the
commencement of a war, armed hostilities or any other international or
national calamity involving the United States or (v) in the case of any of
the foregoing existing at the time of the commencement of the Offer, an
acceleration or a worsening thereof; or
(e) the Company shall have failed to perform in any
material respect any obligation under the Agreement or to comply in any
material respect with any agreement or covenant of the Company to be
performed or complied with by it under the Agreement; or
(f) the representations and warranties of the Company set
forth in the Agreement that are qualified as to materiality shall not be
true and correct as so qualified in all respects as of the date of the
Agreement and as of the expiration of the Offer (including any extension
thereof) (except to the extent expressly made as of an earlier date, in
which case as of such date), or any of the representations and warranties
set forth in the Agreement that are not so qualified shall not be true and
correct in any material respect as of the date of the Agreement and as of
the expiration of the Offer (including any extension thereof)(except to the
extent expressly made as of an earlier date, in which case as of such
date)(it being understood that, for purposes of determining the accuracy of
such representations and warranties, any update of or modification to the
Disclosure Schedule made or purported to have been made after the date of
the Agreement shall be disregarded); or
(g) this Agreement shall have been terminated in
accordance with its terms; or
(h) the Board of Directors of the Company (or any
committee thereof) shall have made a Subsequent Determination; or
(i) any Third Party shall have become the Beneficial
Owner of at least 15% of the outstanding Company Shares or shall have
acquired, directly or indirectly, at least 15% of the assets of the Company
and its subsidiaries; or
(j) Parent and the Company shall have agreed that Parent
shall terminate the Offer or postpone the acceptance for payment of or
payment for Company Shares thereunder; or
(k) any party shall have breached a Shareholder
Agreement; or
(l) any one or more of the representations and warranties
contained in Section 4.3 of the Agreement shall have been breached in any
respect or are inaccurate in any respect;
which, in the good faith judgment of Parent in any such case, and
regardless of the circumstances (including any action or omission by Parent
or any of its affiliates) giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for exchange or exchange.
The foregoing conditions are for the sole benefit of
Parent and may be asserted by Parent regardless of the circumstances
(including any action or omission by Parent or any of its affiliates)
giving rise to any such condition or may, subject to the terms of this
Agreement, be waived by Parent in whole at any time or in part from time to
time. The failure by Parent at any time to exercise its rights under any of
the foregoing conditions shall not be deemed a waiver of any such right;
the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts
and circumstances, and each such right shall be deemed an ongoing right
which may be asserted at any time or from time to time. Terms used but not
defined herein shall have the meaning assigned to such terms in the
Agreement to which this Annex A is a part.
EXHIBIT 2
SHAREHOLDER AGREEMENT
This Shareholder Agreement (this "Agreement") is made and
entered into as of October 15, 2001, by and between Union Pacific
Corporation, a Utah corporation ("Parent"), and Harold R. Tate (the
"Shareholder").
WHEREAS, concurrently herewith, Motor Cargo Industries,
Inc., a Utah corporation (the "Company"), Parent and Motor Merger Co., a
Utah corporation and wholly owned subsidiary of Parent ("Merger Sub"), are
entering into an Agreement and Plan of Merger of even date herewith (the
"Merger Agreement"), and pursuant to the Merger Agreement, Parent is
offering to exchange (the "Offer") each outstanding share of common stock,
no par value, of the Company ("Company Shares"), for, at the election of
the holder thereof, either (A) 0.26 of a share of common stock, par value
$2.50 per share, of Parent ("Parent Common Stock"), or (B) $12.10 in cash.
WHEREAS, upon consummation of the Offer and pursuant to
the terms of the Merger Agreement, the Company will be merged with and into
Merger Sub (the "Merger"), with Merger Sub continuing as the surviving
corporation, and outstanding shares of Company Stock will be converted into
the right to receive $12.10 per share;
WHEREAS, as of the date hereof, Shareholder (1) owns of
record that number of Company Shares appearing under Column A on Schedule A
attached hereto (such Company Shares, together with all other shares of
capital stock or other securities of the Company acquired by such
Shareholder hereafter, whether acquired upon the exercise of options or by
purchase, dividend, distribution, stock split, recapitalization, exchange
or otherwise, and all securities into which or for any or all of such
Company Shares may be changed or exchanged, now or in the future, are
collectively referred to as the "Shareholder's Shares"), and (2)
Beneficially Owns, and possesses the sole power to vote and sole power of
disposition with respect to, the number of Shareholder's Shares appearing
under Column B on Schedule A attached hereto (such shares, together with
all other shares of capital stock or other securities of the Company as to
which such Shareholder hereafter acquires Beneficial Ownership are
collectively referred to as the "Beneficially Owned Shares" and, together
with the Shareholder's Shares, the "Committed Shares"); and
WHEREAS, as a condition and inducement to the willingness
of Parent and Merger Sub to enter into the Merger Agreement and make the
Offer and effect the Merger, Parent and Merger Sub have required that
Shareholder agree, and Shareholder hereby agrees, to enter into the
agreements set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the
mutual promises and the mutual covenants and agreements contained herein,
the receipt and sufficiency of which are hereby acknowledged, and intending
to be legally bound hereby, the parties agree as follows:
ARTICLE I
COVENANTS OF SHAREHOLDER
Section 1.1 Agreement to Tender and Elect Stock.
Shareholder hereby agrees to validly tender (or cause the record owner of
such shares, as applicable, to validly tender), pursuant to and in
accordance with the terms of the Offer, but in no event later than ten
business days after the date on which Parent commences the Offer, all of
the Committed Shares, by physical delivery of the certificates therefor,
and to not withdraw any of the Committed Shares, except following
termination of the Offer pursuant to its terms or expiration of this
Agreement pursuant to Section 4.1 hereof. Shareholder shall irrevocably
elect to receive only Parent Common Stock in exchange for each Committed
Share so tendered and shall not modify or otherwise change, or seek to
modify or change, such election.
Section 1.2 Agreement to Vote. Unless Parent consents or
requests otherwise, Shareholder hereby agrees that he shall, and shall
cause the holder(s) of record of the Beneficially Owned Shares on any
applicable record date to, from time to time, at any meeting (whether
annual or special and whether or not an adjourned or postponed meeting) of
shareholders of the Company, however called, or in connection with any
written consent of the holders of Company Shares, or in any other
circumstances upon which a vote, consent or approval with respect to the
Merger, the Merger Agreement or any of the transactions contemplated
thereby are sought, (a) if a meeting is held, appear at such meeting or
otherwise cause the Committed Shares to be counted as present thereat for
purposes of establishing a quorum, and (b) vote (or cause to be voted), in
person or by proxy, or consent (or cause to be consented) the Committed
Shares, and any other voting securities of the Company (whether acquired
heretofore or hereafter) as to which such Shareholder has, directly or
indirectly, the right to vote or direct the voting, in favor of the Merger,
the Merger Agreement and the other transactions contemplated hereby and by
the Merger Agreement.
Section 1.3 Other Votes. Unless Parent consents or
requests otherwise, at any meeting (whether annual or special and whether
or not an adjourned or postponed meeting) of shareholders of the Company,
however called, or in connection with any written consent of the holders of
Company Shares, or in any other circumstances in which a vote, consent or
approval of any of the shareholders of the Company is sought, Shareholder
hereby agrees that he shall vote (or cause to be voted) or consent (or
cause to be consented) the Committed Shares against (a) any merger
agreement, merger, consolidation, combination, sale or issuance of
securities, sale or other disposition of substantial assets, spin-off,
reorganization, recapitalization, dissolution, liquidation or winding up
of, by or involving the Company or any of its subsidiaries (other than the
Merger Agreement and the Merger), (b) any Acquisition Proposal and (c) any
amendment or modification of the Articles of Incorporation or Bylaws of the
Company or of any of its subsidiaries or other proposal or transaction
involving the Company or any of its subsidiaries which is reasonably likely
to, in any manner, directly or indirectly, materially impair the ability of
Parent, Merger Sub or the Company to consummate, or to prevent or
materially delay the consummation of, the Offer, the Merger or the other
transactions contemplated by the Merger Agreement (collectively, the
"Negative Voting Matters"). Shareholder further agrees not to commit or
agree to take any action inconsistent with any of the foregoing.
Section 1.4 Grant of Proxy. (a) Shareholder, by this
Agreement, with respect to the Committed Shares, does hereby make,
constitute and appoint Parent, or any nominee of Parent, with full power of
substitution and resubstitution, to the fullest extent of Shareholder's
rights with respect to the Committed Shares (including any and all other
shares or securities issued or issuable in respect thereof on or after the
date hereof) as his true and lawful attorney and proxy, for and in his
name, place and stead, to exercise all voting and other rights (including,
the power to execute and deliver written consents with respect to the
Committed Shares) of each of the Committed Shares as his proxy, at any
meeting (whether annual or special and whether or not an adjourned or
postponed meeting) of shareholders of the Company, however called, or in
connection with any written consent of the holders of Company Shares, or in
any other circumstances in which a vote, consent or approval of any of the
shareholders of the Company is sought (including the right to sign his name
(as shareholder) to any consent, certificate or other document relating to
the Company that the law of the State of Utah may permit or require) (i) in
favor of the Merger, the Merger Agreement, this Agreement and the other
transactions contemplated hereby and by the Merger Agreement, (ii) against
any Negative Voting Matter or any other action or agreement that would
result in a breach or inaccuracy of, or failure to fulfill, any covenant,
representation, warranty, obligation or agreement of the Company under the
Merger Agreement, and (iii) in favor of any other matter necessary for the
consummation of the Offer and the other transactions contemplated by the
Merger Agreement and this Agreement. Shareholder further agrees to cause
the Committed Shares to be voted or consented in accordance with the
foregoing.
(b) The proxy hereby granted by Shareholder to Parent, or
any nominee of Parent, is granted as of the date hereof in order to secure
the obligations of Shareholder provided for herein and is irrevocable and
coupled with an interest in such obligations and is granted in
consideration of Parent's entering into this Agreement and the Merger
Agreement. This proxy will terminate upon the termination of this Agreement
in accordance with its terms.
(c) Any obligation of the undersigned hereunder shall be
binding upon the successors and assigns of the undersigned. Shareholder
authorizes Parent, or any nominee of Parent, to file this proxy and any
substitution or revocation of substitution with the Secretary of the
Company and with any Inspector of Elections at any meeting of the
shareholders of the Company.
(d) Upon the execution hereof, all prior proxies in
conflict with this proxy given by the undersigned with respect to the
Committed Shares (including any and all other shares or securities issued
or issuable in respect thereof on or after the date hereof) are hereby
revoked.
Section 1.5 No Inconsistent Agreements. Shareholder
hereby covenants and agrees: (a) (i) that except as contemplated by this
Agreement and the Merger Agreement, Shareholder has not entered any voting
agreement, voting trust or similar understanding or obligation, whether
written or oral, with respect to any of the Committed Shares, or (ii) that
any voting agreement, voting trust, proxy or power of attorney he has
previously entered into or granted with respect to the Committed Shares has
expired or been revoked or terminated, and (b) that Shareholder shall not,
at any time while this Agreement remains in effect, (i) enter into any
voting agreement or voting trust with respect to any of the Committed
Shares, or (ii) grant a proxy or power of attorney with respect to any of
the Committed Shares. This Agreement supersedes any and all durable powers
of attorney or similar arrangements that Shareholder may have entered into
with respect to the Committed Shares.
Section 1.6 No Transfers. Shareholder agrees not to,
directly or indirectly, (a) donate, pledge, encumber, issue, sell,
transfer, assign, or otherwise dispose of, in any manner (including by
gift, operation of law, merger, consolidation or reorganization, whether
voluntary or involuntary) (collectively, "Transfer") to any person, or
(except for this Agreement) enter into any contract, agreement, commitment,
option or other arrangement (including any profit-sharing arrangement) (a
"Contract") with respect to the Transfer of, any of the Committed Shares,
(b) except for this Agreement, grant any proxy or enter into any Contract
(including any voting arrangement relating to any of the Committed Shares),
(c) change, modify or alter in any manner, or agree to change, modify or
alter in any manner, the Beneficial Ownership of any of the Committed
Shares, or (d) seek, solicit, commit or agree to take any of the actions
described in this Section 1.6. Shareholder will not request that the
Company or its transfer agent register the Transfer (book entry or
otherwise) of any certificated or uncertificated interest representing any
of the Committed Shares, and Shareholder hereby consents to the entry or
issuance of stop transfer instructions by the Company of any Transfer of
any of the Committed Shares. Shareholder agrees to immediately notify
Parent and to provide all details reasonably requested by Parent if such
Shareholder is approached or solicited, directly or indirectly, by any
person with respect to any of the foregoing.
Section 1.7 No Solicitation. Shareholder hereby agrees
that he shall, and shall cause his Representatives to, immediately cease
and terminate any existing solicitation, initiation, encouragement,
activity, discussion or negotiation with any Third Party conducted
heretofore by Shareholder or his Representatives with respect to any
Acquisition Proposal and Shareholder shall not, and Shareholder shall cause
his Representatives not to, directly or indirectly, (a) solicit, initiate
or knowingly encourage (including by way of furnishing information), or
knowingly take any other action to facilitate, any inquiries or the making
or submission of any proposal that constitutes, or may reasonably be
expected to lead to, any Acquisition Proposal; (b) enter into any
agreement, arrangement or understanding with respect to any Acquisition
Proposal or enter into any agreement, arrangement or understanding
requiring Shareholder to abandon, terminate or fail to consummate the
exchange of the Committed Shares pursuant to the Offer or the Merger or any
other transaction contemplated by this Agreement; (c) participate or engage
in any discussions or negotiations with any Third Party relating to an
Acquisition Proposal, or knowingly facilitate any effort or attempt to make
or implement an Acquisition Proposal or accept an Acquisition Proposal; or
(d) enter into any letter of intent or similar document or any contract,
agreement or commitment contemplating or otherwise relating to any
Acquisition Proposal. Any and all action taken by Shareholder, in his
capacity as an officer or director of the Company, in accordance with
Section 6.4 or Section 6.5 of the Merger Agreement, to the extent
inconsistent with this Section 1.7, shall be deemed not to violate this
Section 1.7.
Section 1.8 Best Efforts. Shareholder shall use his best
efforts to take, or cause to be taken, all actions, execute and deliver all
instruments, and do, cause to be done, and assist and cooperate with the
Company, Parent and Merger Sub in doing, all things necessary, proper or
advisable to consummate and effect completely, in the most expeditious
manner practicable, the Offer, the Merger, the Merger Agreement, this
Agreement and the other transactions contemplated hereby and thereby
(except in his capacity as a director or officer to the extent as otherwise
permitted by Section 6.4 and Section 6.5 of the Merger Agreement).
Section 1.9 Acquisition of Additional Shares. Shareholder
agrees to promptly notify Parent in writing of the nature and amount of any
acquisition by Shareholder of any capital share or securities of the
Company acquired directly or indirectly by Shareholder on or after the date
hereof.
Section 1.10 Documents Delivered. Shareholder
acknowledges receipt of a copy of the Merger Agreement and all exhibits,
annexes and schedules thereto.
Section 1.11 Disclosure. Shareholder hereby permits the
Company, Merger Sub and Parent to publish and disclose in the Offer
Documents and, if approval of the Company's shareholders is required under
applicable law, the Proxy Statement (including all documents and schedules
filed with the Securities and Exchange Commission) his identity and
ownership of the Committed Shares and the nature of his commitments,
arrangements and understandings under this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder represents and warrants to Parent as follows:
Section 2.1 Authorization; Validity of Agreement.
Shareholder has full power and authority to execute and deliver this
Agreement, to perform Shareholder's obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and
performance by Shareholder of this Agreement and the consummation by
Shareholder of the transactions contemplated hereby have been duly and
validly authorized by Shareholder and no other actions or proceedings on
the part of Shareholder are necessary to authorize the execution and
delivery by him of this Agreement and the consummation by him of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Shareholder and assuming this Agreement constitutes a valid
and binding obligation of Parent, constitutes a valid and binding
obligation of Shareholder, enforceable against Shareholder in accordance
with its terms, except to the extent that such enforcement may be subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and by general equitable principals. If this Agreement is being
executed in a representative or fiduciary capacity, the person signing this
Agreement has full power and authority to enter into and perform such
Agreement.
Section 2.2 Ownership. Shareholder has, and at all times
prior to the termination of this Agreement or the acceptance by Parent of
the validly tendered Committed Shares will have, and will convey to Parent
in the Offer, good and valid title, free and clear of any Liens, mortgages,
hypothecations, adverse interests, encroachments, title defects, or other
restrictions or limitations of any nature whatsoever to (a) the number of
Company Shares, of which Shareholder is the sole and lawful record owner,
set forth under Column A on Schedule A attached hereto, and (b) the number
of Company Shares, of which Shareholder is the sole and lawful Beneficial
Owner, set forth under Column B on Schedule A attached hereto. The Company
Shares set forth under Column A and Column B on Schedule A attached hereto
constitute all of the capital stock and other securities of the Company
owned of record or Beneficially Owned by such Shareholder as of the date
hereof. Except as set forth on Schedule A attached hereto, Shareholder does
not own any options to purchase, warrants or rights to subscribe for or
otherwise acquire any securities of the Company. Shareholder has, and at
all times prior to termination of this Agreement will have, sole voting
power and sole power to issue instructions with respect to the matters set
forth in Article I hereof, sole power of disposition, sole power of
conversion and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Committed Shares with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement. The terms
"Beneficially Own," "Beneficially Owned," "Beneficial Ownership" and
similar terms 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"). None
of the Committed Shares is currently subject to any voting trust, proxy or
other contract, arrangement or restriction with respect to the voting or
disposition of the Committed Shares, except as expressly contemplated by
this Agreement.
Section 2.3 No Conflict; Consents. Neither the execution,
delivery or performance by Shareholder of this Agreement nor the
consummation of the transactions contemplated hereby nor compliance by
Shareholder with any of the provisions hereof will (a) require the Consent
of any Governmental Authority or any other person, (b) violate any Law
applicable to the Shareholder or any of his properties or assets, or (c)
conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of
the properties or assets of Shareholder under, (i) any contract,
instrument, agreement or decree or other judicial determination to which
Shareholder is a party or by which he or any of his assets or properties
are bound, or (ii) any applicable Law.
Section 2.4 Finder's Fees. No investment banker, broker
or finder is entitled to a commission or fee from Parent, Merger Sub or the
Company in respect of this Agreement based upon any contract, agreement or
understanding made by or on behalf of Shareholder.
Section 2.5 No Group. Shareholder is acting individually
and not as part of a "group," as defined in the Exchange Act.
ARTICLE III
TAX-FREE REORGANIZATION TREATMENT
Section 3.1 Representation of Shareholder. Shareholder
has not taken or agreed to take any action, and does not know of any fact,
circumstance, plan or intention that will, or would be reasonably likely
to, prevent the Transaction from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
Section 3.2 Representation of Parent. Neither Parent nor
any of its subsidiaries, including Merger Sub, has taken or agreed to take
any action, or knows of any fact, circumstance, plan or intention that
will, or would be reasonably likely to, prevent the Transaction from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code.
Section 3.3 Reasonable Best Efforts. Each party hereto
shall use its reasonable best efforts to cause the Transaction to qualify
as a reorganization within the meaning of Section 368(a) of the Code.
Section 3.4 Continuing Interest. Prior to the Effective
Time, Shareholder will not sell, exchange or otherwise transfer ownership
(including by derivative transactions such as an equity swap which would
have the economic effect of a transfer of ownership) to Parent, the Company
or any person related to either of them within the meaning of Section
1.368-1(e)(3) of the Treasury Regulations, directly or indirectly
(including through partnerships or through third parties in connection with
a plan to so transfer ownership), any of the Parent Common Stock received
by him in the Offer. Following the Effective Time, there is no plan or
intention on the part of Shareholder to sell, exchange or otherwise
transfer ownership (including by derivative transactions such as an equity
swap which would have the economic effect of a transfer of ownership) to
Parent, Merger Sub or any person related to either of them within the
meaning of Section 1.368-1(e)(3) of the Treasury Regulations, directly or
indirectly (including through partnerships or through third parties in
connection with a plan to so transfer ownership), any of the Parent Common
Stock received by him in the Offer. Shareholder understands that, for
purposes of this representation, (i) a corporation that is a partner in a
partnership will be treated as owning or acquiring any stock owned or
acquired, as the case may be, by the partnership and as having furnished
its share of any consideration furnished by the partnership to acquire the
stock, in each case, in accordance with its interest in the partnership and
(ii) any reference to Parent or the Company includes a reference to any
successor or predecessor of such corporation, except that the Company is
not treated as a predecessor of Parent and Parent is not treated as a
successor of the Company.
Section 3.5 Expenses. Except as otherwise provided in the
Merger Agreement, Shareholder will pay his respective expenses, if any,
incurred in connection with or as part of the Transaction, and in no event
will any such expenses be paid or reimbursed by Parent or Merger Sub.
Shareholder will not permit the Company to assume, directly or indirectly,
any expenses or liabilities, whether fixed or contingent, of Shareholder in
connection with the Transaction except as provided in the Merger Agreement.
Section 3.6 Compensation. None of the compensation
received (or to be received) by Shareholder, if any, represents separate
consideration for, or is allocable to, any of the Company Shares to be
surrendered by Shareholder in the Transaction. None of the Parent Common
Stock or cash that has been or will be received by Shareholder in the
Transaction represents separately bargained-for consideration which is
allocable to any employment agreement or similar arrangement.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Termination. This Agreement and the parties'
obligations hereunder (including the proxies granted hereunder) shall
terminate on the earliest of (a) the payment for all of the Committed
Shares pursuant to the Offer by Parent, or (b) termination of the Merger
Agreement pursuant to Section 8.1 thereof, provided, however, that in any
event this Agreement (other than Article III hereof) shall terminate no
later than the first anniversary of the date hereof, provided, further,
that the provisions of Article III of this Agreement shall not terminate as
described above but shall survive any such termination. No such termination
of this Agreement shall relieve any party hereto from any liability for any
breach or violation of, or misrepresentation in, this Agreement prior to
termination.
Section 4.2 Further Assurances. Shareholder will, from
time to time and without further consideration, execute and deliver, or
cause to be executed and delivered, such additional or further Consents,
documents and other instruments as Parent may reasonably request for the
purpose of effectively carrying out the transactions contemplated by this
Agreement.
Section 4.3 Expenses. Each party hereto shall pay their
own expenses incurred in connection with this Agreement.
Section 4.4 Capitalized Terms and Other Terms.
Capitalized terms used in this Agreement that are not defined herein shall
have such meanings as set forth in the Merger Agreement.
Section 4.5 Waiver of Appraisal Rights. Shareholder
hereby waives any rights of appraisal with respect to, or rights to dissent
from, the Merger that he may have.
Section 4.6 Shareholder Capacity. Shareholder is
executing this Agreement solely in his capacity as an owner of Company
Shares, and nothing herein shall limit or affect any actions taken by
Shareholder solely in his capacity as an officer or director of the
Company.
Section 4.7 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given
when delivered in person, by facsimile, receipt confirmed, or when received
if sent by overnight courier or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Shareholder, to the address set forth on
the signature page hereto;
(ii) if to Parent or Merger Sub, to:
Union Pacific Corporation
1416 Dodge Street, Room 1230
Omaha, Nebraska 68179
Attention: Carl W. von Bernuth
Telecopy: 401-271-6633
with a copy to (but which shall not constitute
notice to Parent):
Overnite Transportation Company
1000 Semmes Avenue
P.O. Box 1216
Richmond, Virginia 23224
Attention: Pat Hanley
Telecopy: 804-231-8312
with a copy to (but which shall not constitute
notice to Parent or Merger Sub):
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Paul T. Schnell, Esq.
Richard J. Grossman, Esq.
Telecopy: 212-735-2000
Section 4.8 Binding Effect; Permitted Assignment. This
Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the parties hereto and their respective successors,
heirs, beneficiaries and permitted assigns. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto prior to the termination of this Agreement without
the prior written consent of the other parties hereto, which consent may be
withheld in the sole and absolute discretion of the party requested to
consent.
Section 4.9 Governing Law. This Agreement shall be deemed
to be made in, and in all respects shall be interpreted, construed and
governed by and in accordance with the internal laws of, the State of Utah,
without regard to the conflict of laws rules thereof.
Section 4.10 Submission to Jurisdiction; Waivers. Each of
the parties hereto irrevocably and unconditionally agrees that any legal
action or proceeding with respect to this Agreement or for recognition and
enforcement of any judgment in respect hereof brought by the other party
hereto or such party's successors or assigns may be brought and determined
in the federal and state courts located in Salt Lake City, Utah and each of
the parties hereto hereby irrevocably submits with regard to any such
action or proceeding for such party and in respect to such party's
property, generally and unconditionally, to the nonexclusive jurisdiction
of the aforesaid courts. Each of the parties hereto hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (a) any claim that such party is not personally subject to the
jurisdiction of the above-named courts for any reason other than the
failure to lawfully serve process, (b) that such party or such party's
property is exempt or immune from jurisdiction of any such court or from
any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to the fullest
extent permitted by applicable law, that (i) the suit, action or proceeding
in any such court is brought in an inconvenient forum, (ii) the venue of
such suit, action or proceeding is improper and (iii) this Agreement, or
the subject matter hereof, may not be enforced in or by such courts.
Section 4.11 Waiver of Jury Trial. Each of parties hereto
hereby irrevocably waives all right to a trial by jury in any action,
proceeding, or counterclaim arising out of or related to this Agreement or
the transactions contemplated hereby.
Section 4.12 Counterparts. This Agreement may be executed
in one or more counterparts, each of which together be deemed an original,
but both of which together shall constitute one and the same instrument.
Section 4.13 Interpretation. The article and section
headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties as set forth in
this Agreement and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (a) the term
"person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an
association, an unincorporated organization, a Governmental Authority and
any other entity or group (as defined in the Exchange Act), (b) unless
otherwise specified herein, the term "affiliate," with respect to any
person, shall mean and include any person controlling, controlled by or
under common control with such person, (c) the term "subsidiary" of any
specified person shall mean any corporation, any of the outstanding voting
power of which, or any partnership, joint venture, limited liability
company or other entity any of the total equity interest of which, is
directly or indirectly owned by such specified person, other than in any
such case any entity which may be deemed to be a "subsidiary" of such
specified person solely by reason of the ownership of equity securities of
such entity which are registered under the Exchange Act and held by such
specified person for investment purposes only, and (d) the term "including"
shall mean "including, without limitation."
Section 4.14 Entire Agreement. This Agreement, the Merger
Agreement, and the annexes, schedule, exhibits, documents or instruments
referred to herein and therein, and any other written agreement entered
into contemporaneously herewith embody the entire agreement and
understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, representations,
warranties, covenants, or undertakings, other than those expressly set
forth or referred to therein. This Agreement and such other agreements
supersede all prior agreements and the understandings between the parties
with respect to such subject matter.
Section 4.15 Severability. In case any provision in this
Agreement shall be held invalid, illegal or unenforceable in a
jurisdiction, such provision shall be modified or deleted, as to the
jurisdiction involved, only to the extent necessary to render the same
valid, legal and enforceable, and the validity, legality and enforceability
of the remaining provisions hereof shall not in any way be affected or
impaired thereby nor shall the validity, legality or enforceability of such
provision be affected thereby in any other jurisdiction.
Section 4.16 Specific Performance. Shareholder agrees
that (a) Parent and its affiliates would be irreparably harmed by a breach
or threatened breach of this Agreement by Shareholder and (b) monetary
remedies would be inadequate to protect Parent and its affiliates against
any actual or threatened breach of this Agreement by Shareholder. Without
prejudice to any other rights and remedies otherwise available to Parent,
Shareholder agrees to the granting of equitable relief, including
injunctive relief and specific performance, in Parent's favor without proof
of actual damages as a remedy for any breach or threatened breach.
Shareholder further agrees to waive any requirement for the securing or
posting of any bond in connection with such remedy. No failure or delay by
Parent in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
Section 4.17 Third-Party Beneficiaries. Nothing contained
in this Agreement or in any instrument or document executed by any party in
connection with the transactions contemplated hereby shall create any
rights in, or be deemed to have been executed for the benefit of, any
person or entity that is not a party hereto or thereto or a successor or
permitted assign of such a party; provided, however, that the parties
hereto specifically acknowledge that the provisions of Section 1.11 hereof
are intended to be for the benefit of the Company and Merger Sub.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
UNION PACIFIC CORPORATION
By: /s/ Carl W. von Bernuth
------------------------------------------
Name: Carl W. von Bernuth
Title: Senior Vice President,
General Counsel and
Secretary
/s/ Harold R. Tate
-----------------------------------------
Name: Harold R. Tate
Address: c/o Motor Cargo Industries, Inc.
845 West Center Street
North Salt Lake City, Utah 84054
Telecopy: 801-299-5225
SCHEDULE A
Harold R. Tate
Column A Column B
Number of Company Shares Number of Company Shares
Owned of Record Beneficially Owned
(all of which are held
of record by Shareholder)
3,858,000 3,858,000
EXHIBIT 3
SHAREHOLDER AGREEMENT
This Shareholder Agreement (this "Agreement") is made and
entered into as of October 15, 2001, by and between Union Pacific
Corporation, a Utah corporation ("Parent"), and Marvin L. Friedland (the
"Shareholder").
WHEREAS, concurrently herewith, Motor Cargo Industries,
Inc., a Utah corporation (the "Company"), Parent and Motor Merger Co., a
Utah corporation and wholly owned subsidiary of Parent, ("Merger Sub") are
entering into an Agreement and Plan of Merger of even date herewith (the
"Merger Agreement"), and pursuant to the Merger Agreement, Parent is
offering to exchange (the "Offer") each outstanding share of common stock,
no par value, of the Company ("Company Shares"), for, at the election of
the holder thereof, either (A) 0.26 of a share of common stock, par value
$2.50 per share, of Parent ("Parent Common Stock"), or (B) $12.10 in cash.
WHEREAS, upon consummation of the Offer and pursuant to
the terms of the Merger Agreement, the Company will be merged with and into
Merger Sub (the "Merger"), with Merger Sub continuing as the surviving
corporation, and outstanding shares of Company Stock will be converted into
the right to receive $12.10 per share;
WHEREAS, as of the date hereof, Shareholder (1) owns of
record that number of Company Shares appearing under Column A on Schedule A
attached hereto (such Company Shares, together with all other shares of
capital stock or other securities of the Company acquired by such
Shareholder hereafter, whether acquired upon the exercise of options or by
purchase, dividend, distribution, stock split, recapitalization, exchange
or otherwise, and all securities into which or for any or all of such
Company Shares may be changed or exchanged, now or in the future, are
collectively referred to as the "Shareholder's Shares"), and (2)
Beneficially Owns, and possesses the sole power to vote and sole power of
disposition with respect to, the number of Shareholder's Shares appearing
under Column B on Schedule A attached hereto (such shares, together with
all other shares of capital stock or other securities of the Company as to
which such Shareholder hereafter acquires Beneficial Ownership are
collectively referred to as the "Beneficially Owned Shares" and, together
with the Shareholder's Shares, the "Committed Shares"); and
WHEREAS, as a condition and inducement to the willingness
of Parent and Merger Sub to enter into the Merger Agreement and make the
Offer and effect the Merger, Parent and Merger Sub have required that
Shareholder agree, and Shareholder hereby agrees, to enter into the
agreements set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the
mutual promises and the mutual covenants and agreements contained herein,
the receipt and sufficiency of which are hereby acknowledged, and intending
to be legally bound hereby, the parties agree as follows:
ARTICLE I
COVENANTS OF SHAREHOLDER
Section 1.1 Agreement to Tender and Elect Stock.
Shareholder hereby agrees to validly tender (or cause the record owner of
such shares, as applicable, to validly tender), pursuant to and in
accordance with the terms of the Offer, but in no event later than ten
business days after the date on which Parent commences the Offer, all of
the Committed Shares, by physical delivery of the certificates therefor,
and to not withdraw any of the Committed Shares, except following
termination of the Offer pursuant to its terms or expiration of this
Agreement pursuant to Section 4.1 hereof. Shareholder shall irrevocably
elect to receive only Parent Common Stock in exchange for each Committed
Share so tendered and shall not modify or otherwise change, or seek to
modify or change, such election.
Section 1.2 Agreement to Vote. Unless Parent consents or
requests otherwise, Shareholder hereby agrees that he shall, and shall
cause the holder(s) of record of the Beneficially Owned Shares on any
applicable record date to, from time to time, at any meeting (whether
annual or special and whether or not an adjourned or postponed meeting) of
shareholders of the Company, however called, or in connection with any
written consent of the holders of Company Shares, or in any other
circumstances upon which a vote, consent or approval with respect to the
Merger, the Merger Agreement or any of the transactions contemplated
thereby are sought, (a) if a meeting is held, appear at such meeting or
otherwise cause the Committed Shares to be counted as present thereat for
purposes of establishing a quorum, and (b) vote (or cause to be voted), in
person or by proxy, or consent (or cause to be consented) the Committed
Shares, and any other voting securities of the Company (whether acquired
heretofore or hereafter) as to which such Shareholder has, directly or
indirectly, the right to vote or direct the voting, in favor of the Merger,
the Merger Agreement and the other transactions contemplated hereby and by
the Merger Agreement.
Section 1.3 Other Votes. Unless Parent consents or
requests otherwise, at any meeting (whether annual or special and whether
or not an adjourned or postponed meeting) of shareholders of the Company,
however called, or in connection with any written consent of the holders of
Company Shares, or in any other circumstances in which a vote, consent or
approval of any of the shareholders of the Company is sought, Shareholder
hereby agrees that he shall vote (or cause to be voted) or consent (or
cause to be consented) the Committed Shares against (a) any merger
agreement, merger, consolidation, combination, sale or issuance of
securities, sale or other disposition of substantial assets, spin-off,
reorganization, recapitalization, dissolution, liquidation or winding up
of, by or involving the Company or any of its subsidiaries (other than the
Merger Agreement and the Merger), (b) any Acquisition Proposal and (c) any
amendment or modification of the Articles of Incorporation or Bylaws of the
Company or of any of its subsidiaries or other proposal or transaction
involving the Company or any of its subsidiaries which is reasonably likely
to, in any manner, directly or indirectly, materially impair the ability of
Parent, Merger Sub or the Company to consummate, or to prevent or
materially delay the consummation of, the Offer, the Merger or the other
transactions contemplated by the Merger Agreement (collectively, the
"Negative Voting Matters"). Shareholder further agrees not to commit or
agree to take any action inconsistent with any of the foregoing.
Section 1.4 Grant of Proxy. (a) Shareholder, by this
Agreement, with respect to the Committed Shares, does hereby make,
constitute and appoint Parent, or any nominee of Parent, with full power of
substitution and resubstitution, to the fullest extent of Shareholder's
rights with respect to the Committed Shares (including any and all other
shares or securities issued or issuable in respect thereof on or after the
date hereof) as his true and lawful attorney and proxy, for and in his
name, place and stead, to exercise all voting and other rights (including,
the power to execute and deliver written consents with respect to the
Committed Shares) of each of the Committed Shares as his proxy, at any
meeting (whether annual or special and whether or not an adjourned or
postponed meeting) of shareholders of the Company, however called, or in
connection with any written consent of the holders of Company Shares, or in
any other circumstances in which a vote, consent or approval of any of the
shareholders of the Company is sought (including the right to sign his name
(as shareholder) to any consent, certificate or other document relating to
the Company that the law of the State of Utah may permit or require) (i) in
favor of the Merger, the Merger Agreement, this Agreement and the other
transactions contemplated hereby and by the Merger Agreement, (ii) against
any Negative Voting Matter or any other action or agreement that would
result in a breach or inaccuracy of, or failure to fulfill, any covenant,
representation, warranty, obligation or agreement of the Company under the
Merger Agreement, and (iii) in favor of any other matter necessary for the
consummation of the Offer and the other transactions contemplated by the
Merger Agreement and this Agreement. Shareholder further agrees to cause
the Committed Shares to be voted or consented in accordance with the
foregoing.
(b) The proxy hereby granted by Shareholder to Parent, or
any nominee of Parent, is granted as of the date hereof in order to secure
the obligations of Shareholder provided for herein and is irrevocable and
coupled with an interest in such obligations and is granted in
consideration of Parent's entering into this Agreement and the Merger
Agreement. This proxy will terminate upon the termination of this Agreement
in accordance with its terms.
(c) Any obligation of the undersigned hereunder shall be
binding upon the successors and assigns of the undersigned. Shareholder
authorizes Parent, or any nominee of Parent, to file this proxy and any
substitution or revocation of substitution with the Secretary of the
Company and with any Inspector of Elections at any meeting of the
shareholders of the Company.
(d) Upon the execution hereof, all prior proxies in
conflict with this proxy given by the undersigned with respect to the
Committed Shares (including any and all other shares or securities issued
or issuable in respect thereof on or after the date hereof) are hereby
revoked.
Section 1.5 No Inconsistent Agreements. Shareholder
hereby covenants and agrees: (a) (i) that except as contemplated by this
Agreement and the Merger Agreement, Shareholder has not entered any voting
agreement, voting trust or similar understanding or obligation, whether
written or oral, with respect to any of the Committed Shares, or (ii) that
any voting agreement, voting trust, proxy or power of attorney he has
previously entered into or granted with respect to the Committed Shares has
expired or been revoked or terminated, and (b) that Shareholder shall not,
at any time while this Agreement remains in effect, (i) enter into any
voting agreement or voting trust with respect to any of the Committed
Shares, or (ii) grant a proxy or power of attorney with respect to any of
the Committed Shares. This Agreement supersedes any and all durable powers
of attorney or similar arrangements that Shareholder may have entered into
with respect to the Committed Shares.
Section 1.6 No Transfers. Shareholder agrees not to,
directly or indirectly, (a) donate, pledge, encumber, issue, sell,
transfer, assign, or otherwise dispose of, in any manner (including by
gift, operation of law, merger, consolidation or reorganization, whether
voluntary or involuntary) (collectively, "Transfer") to any person, or
(except for this Agreement) enter into any contract, agreement, commitment,
option or other arrangement (including any profit-sharing arrangement) (a
"Contract") with respect to the Transfer of, any of the Committed Shares,
(b) except for this Agreement, grant any proxy or enter into any Contract
(including any voting arrangement relating to any of the Committed Shares),
(c) change, modify or alter in any manner, or agree to change, modify or
alter in any manner, the Beneficial Ownership of any of the Committed
Shares, or (d) seek, solicit, commit or agree to take any of the actions
described in this Section 1.6. Shareholder will not request that the
Company or its transfer agent register the Transfer (book entry or
otherwise) of any certificated or uncertificated interest representing any
of the Committed Shares, and Shareholder hereby consents to the entry or
issuance of stop transfer instructions by the Company of any Transfer of
any of the Committed Shares. Shareholder agrees to immediately notify
Parent and to provide all details reasonably requested by Parent if such
Shareholder is approached or solicited, directly or indirectly, by any
person with respect to any of the foregoing.
Section 1.7 No Solicitation. Shareholder hereby agrees
that he shall, and shall cause his Representatives to, immediately cease
and terminate any existing solicitation, initiation, encouragement,
activity, discussion or negotiation with any Third Party conducted
heretofore by Shareholder or his Representatives with respect to any
Acquisition Proposal and Shareholder shall not, and Shareholder shall cause
his Representatives not to, directly or indirectly, (a) solicit, initiate
or knowingly encourage (including by way of furnishing information), or
knowingly take any other action to facilitate, any inquiries or the making
or submission of any proposal that constitutes, or may reasonably be
expected to lead to, any Acquisition Proposal; (b) enter into any
agreement, arrangement or understanding with respect to any Acquisition
Proposal or enter into any agreement, arrangement or understanding
requiring Shareholder to abandon, terminate or fail to consummate the
exchange of the Committed Shares pursuant to the Offer or the Merger or any
other transaction contemplated by this Agreement; (c) participate or engage
in any discussions or negotiations with any Third Party relating to an
Acquisition Proposal, or knowingly facilitate any effort or attempt to make
or implement an Acquisition Proposal or accept an Acquisition Proposal; or
(d) enter into any letter of intent or similar document or any contract,
agreement or commitment contemplating or otherwise relating to any
Acquisition Proposal. Any and all action taken by Shareholder, in his
capacity as an officer or director of the Company, in accordance with
Section 6.4 or Section 6.5 of the Merger Agreement, to the extent
inconsistent with this Section 1.7, shall be deemed not to violate this
Section 1.7.
Section 1.8 Best Efforts. Shareholder shall use his best
efforts to take, or cause to be taken, all actions, execute and deliver all
instruments, and do, cause to be done, and assist and cooperate with the
Company, Parent and Merger Sub in doing, all things necessary, proper or
advisable to consummate and effect completely, in the most expeditious
manner practicable, the Offer, the Merger, the Merger Agreement, this
Agreement and the other transactions contemplated hereby and thereby
(except in his capacity as a director or officer to the extent as otherwise
permitted by Section 6.4 and Section 6.5 of the Merger Agreement).
Section 1.9 Acquisition of Additional Shares. Shareholder
agrees to promptly notify Parent in writing of the nature and amount of any
acquisition by Shareholder of any capital share or securities of the
Company acquired directly or indirectly by Shareholder on or after the date
hereof.
Section 1.10 Documents Delivered. Shareholder
acknowledges receipt of a copy of the Merger Agreement and all exhibits,
annexes and schedules thereto.
Section 1.11 Disclosure. Shareholder hereby permits the
Company, Merger Sub and Parent to publish and disclose in the Offer
Documents and, if approval of the Company's shareholders is required under
applicable law, the Proxy Statement (including all documents and schedules
filed with the Securities and Exchange Commission) his identity and
ownership of the Committed Shares and the nature of his commitments,
arrangements and understandings under this Agreement.
Section 1.12 Margin Accounts. Notwithstanding any of the
covenants set forth in this Agreement, Shareholder shall not be required or
otherwise obligated to take any action or make any election which conflicts
with his existing contractual obligations arising under either his margin
agreement with Prudential Securities Incorporated or his margin agreement
with Morgan Keegan & Company, Inc. (the "Margin Agreements").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder represents and warrants to Parent as follows:
Section 2.1 Authorization; Validity of Agreement.
Shareholder has full power and authority to execute and deliver this
Agreement, to perform Shareholder's obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and
performance by Shareholder of this Agreement and the consummation by
Shareholder of the transactions contemplated hereby have been duly and
validly authorized by Shareholder and no other actions or proceedings on
the part of Shareholder are necessary to authorize the execution and
delivery by him of this Agreement and the consummation by him of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Shareholder and assuming this Agreement constitutes a valid
and binding obligation of Parent, constitutes a valid and binding
obligation of Shareholder, enforceable against Shareholder in accordance
with its terms, except to the extent that such enforcement may be subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and by general equitable principals. If this Agreement is being
executed in a representative or fiduciary capacity, the person signing this
Agreement has full power and authority to enter into and perform such
Agreement.
Section 2.2 Ownership. Shareholder has, and at all times
prior to the termination of this Agreement or the acceptance by Parent of
the validly tendered Committed Shares will have, and will convey to Parent
in the Offer, good and valid title, free and clear of any Liens, mortgages,
hypothecations, adverse interests, encroachments, title defects, or other
restrictions or limitations of any nature whatsoever to (a) the number of
Company Shares, of which Shareholder is the sole and lawful record owner,
set forth under Column A on Schedule A attached hereto, and (b) the number
of Company Shares, of which Shareholder is the sole and lawful Beneficial
Owner, set forth under Column B on Schedule A attached hereto. The Company
Shares set forth under Column A and Column B on Schedule A attached hereto
constitute all of the capital stock and other securities of the Company
owned of record or Beneficially Owned by such Shareholder as of the date
hereof. Except as set forth on Schedule A attached hereto, Shareholder does
not own any options to purchase, warrants or rights to subscribe for or
otherwise acquire any securities of the Company. Shareholder has, and at
all times prior to termination of this Agreement will have, sole voting
power and sole power to issue instructions with respect to the matters set
forth in Article I hereof, sole power of disposition, sole power of
conversion and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Committed Shares with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement. The terms
"Beneficially Own," "Beneficially Owned," "Beneficial Ownership" and
similar terms 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"). None
of the Committed Shares is currently subject to any voting trust, proxy or
other contract, arrangement or restriction with respect to the voting or
disposition of the Committed Shares, except as expressly contemplated by
this Agreement.
Section 2.3 No Conflict; Consents. Neither the execution,
delivery or performance by Shareholder of this Agreement nor the
consummation of the transactions contemplated hereby nor compliance by
Shareholder with any of the provisions hereof will (a) require the Consent
of any Governmental Authority or any other person, (b) violate any Law
applicable to the Shareholder or any of his properties or assets, or (c)
conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of
the properties or assets of Shareholder under, (i) any contract,
instrument, agreement or decree or other judicial determination to which
Shareholder is a party or by which he or any of his assets or properties
are bound, or (ii) any applicable Law.
Section 2.4 Finder's Fees. No investment banker, broker
or finder is entitled to a commission or fee from Parent, Merger Sub or the
Company in respect of this Agreement based upon any contract, agreement or
understanding made by or on behalf of Shareholder.
Section 2.5 No Group. Shareholder is acting individually
and not as part of a "group," as defined in the Exchange Act.
Section 2.6 Margin Accounts. All representations and
warranties of Shareholder set forth herein are qualified in their entirety
by the terms and conditions of the Margin Agreements.
ARTICLE III
TAX-FREE REORGANIZATION TREATMENT
Section 3.1 Representation of Shareholder. Shareholder
has not taken or agreed to take any action, and does not know of any fact,
circumstance, plan or intention that will, or would be reasonably likely
to, prevent the Transaction from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
Section 3.2 Representation of Parent. Neither Parent nor
any of its subsidiaries, including Merger Sub, has taken or agreed to take
any action, or knows of any fact, circumstance, plan or intention that
will, or would be reasonably likely to, prevent the Transaction from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code.
Section 3.3 Reasonable Best Efforts. Each party hereto
shall use its reasonable best efforts to cause the Transaction to qualify
as a reorganization within the meaning of Section 368(a) of the Code.
Section 3.4 Continuing Interest. Prior to the Effective
Time, Shareholder will not sell, exchange or otherwise transfer ownership
(including by derivative transactions such as an equity swap which would
have the economic effect of a transfer of ownership) to Parent, the Company
or any person related to either of them within the meaning of Section
1.368-1(e)(3) of the Treasury Regulations, directly or indirectly
(including through partnerships or through third parties in connection with
a plan to so transfer ownership), any of the Parent Common Stock received
by him in the Offer. Following the Effective Time, there is no plan or
intention on the part of Shareholder to sell, exchange or otherwise
transfer ownership (including by derivative transactions such as an equity
swap which would have the economic effect of a transfer of ownership) to
Parent, Merger Sub or any person related to either of them within the
meaning of Section 1.368-1(e)(3) of the Treasury Regulations, directly or
indirectly (including through partnerships or through third parties in
connection with a plan to so transfer ownership), any of the Parent Common
Stock received by him in the Offer. Shareholder understands that, for
purposes of this representation, (i) a corporation that is a partner in a
partnership will be treated as owning or acquiring any stock owned or
acquired, as the case may be, by the partnership and as having furnished
its share of any consideration furnished by the partnership to acquire the
stock, in each case, in accordance with its interest in the partnership and
(ii) any reference to Parent or the Company includes a reference to any
successor or predecessor of such corporation, except that the Company is
not treated as a predecessor of Parent and Parent is not treated as a
successor of the Company.
Section 3.5 Expenses. Except as otherwise provided in the
Merger Agreement, Shareholder will pay his respective expenses, if any,
incurred in connection with or as part of the Transaction, and in no event
will any such expenses be paid or reimbursed by Parent or Merger Sub.
Shareholder will not permit the Company to assume, directly or indirectly,
any expenses or liabilities, whether fixed or contingent, of Shareholder in
connection with the Transaction except as provided in the Merger Agreement.
Section 3.6 Compensation. None of the compensation
received (or to be received) by Shareholder, if any, represents separate
consideration for, or is allocable to, any of the Company Shares to be
surrendered by Shareholder in the Transaction. None of the Parent Common
Stock or cash that has been or will be received by Shareholder in the
Transaction represents separately bargained-for consideration which is
allocable to any employment agreement or similar arrangement.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Termination. This Agreement and the parties'
obligations hereunder (including the proxies granted hereunder) shall
terminate on the earliest of (a) the payment for all of the Committed
Shares pursuant to the Offer by Parent, or (b) termination of the Merger
Agreement pursuant to Section 8.1 thereof, provided, however, that in any
event this Agreement (other than Article III hereof) shall terminate no
later than the first anniversary of the date hereof, provided, further,
that the provisions of Article III of this Agreement shall not terminate as
described above but shall survive any such termination. No such termination
of this Agreement shall relieve any party hereto from any liability for any
breach or violation of, or misrepresentation in, this Agreement prior to
termination.
Section 4.2 Further Assurances. Shareholder will, from
time to time and without further consideration, execute and deliver, or
cause to be executed and delivered, such additional or further Consents,
documents and other instruments as Parent may reasonably request for the
purpose of effectively carrying out the transactions contemplated by this
Agreement.
Section 4.3 Expenses. Each party hereto shall pay their
own expenses incurred in connection with this Agreement.
Section 4.4 Capitalized Terms and Other Terms.
Capitalized terms used in this Agreement that are not defined herein shall
have such meanings as set forth in the Merger Agreement.
Section 4.5 Waiver of Appraisal Rights. Shareholder
hereby waives any rights of appraisal with respect to, or rights to dissent
from, the Merger that he may have.
Section 4.6 Shareholder Capacity. Shareholder is
executing this Agreement solely in his capacity as an owner of Company
Shares, and nothing herein shall limit or affect any actions taken by
Shareholder solely in his capacity as an officer or director of the
Company.
Section 4.7 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given
when delivered in person, by facsimile, receipt confirmed, or when received
if sent by overnight courier or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Shareholder, to the address set forth on
the signature page hereto;
(ii) if to Parent or Merger Sub, to:
Union Pacific Corporation
1416 Dodge Street, Room 1230
Omaha, Nebraska 68179
Attention: Carl W. von Bernuth
Telecopy: 401-271-6633
with a copy to (but which shall not constitute
notice to Parent):
Overnite Transportation Company
1000 Semmes Avenue
P.O. Box 1216
Richmond, Virginia 23224
Attention: Pat Hanley
Telecopy: 804-231-8312
with a copy to (but which shall not constitute
notice to Parent or Merger Sub):
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Paul T. Schnell, Esq.
Richard J. Grossman, Esq.
Telecopy: 212-735-2000
Section 4.8 Binding Effect; Permitted Assignment. This
Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the parties hereto and their respective successors,
heirs, beneficiaries and permitted assigns. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto prior to the termination of this Agreement without
the prior written consent of the other parties hereto, which consent may be
withheld in the sole and absolute discretion of the party requested to
consent.
Section 4.9 Governing Law. This Agreement shall be deemed
to be made in, and in all respects shall be interpreted, construed and
governed by and in accordance with the internal laws of, the State of Utah,
without regard to the conflict of laws rules thereof.
Section 4.10 Submission to Jurisdiction; Waivers. Each of
the parties hereto irrevocably and unconditionally agrees that any legal
action or proceeding with respect to this Agreement or for recognition and
enforcement of any judgment in respect hereof brought by the other party
hereto or such party's successors or assigns may be brought and determined
in the federal and state courts located in Salt Lake City, Utah and each of
the parties hereto hereby irrevocably submits with regard to any such
action or proceeding for such party and in respect to such party's
property, generally and unconditionally, to the nonexclusive jurisdiction
of the aforesaid courts. Each of the parties hereto hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (a) any claim that such party is not personally subject to the
jurisdiction of the above-named courts for any reason other than the
failure to lawfully serve process, (b) that such party or such party's
property is exempt or immune from jurisdiction of any such court or from
any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to the fullest
extent permitted by applicable law, that (i) the suit, action or proceeding
in any such court is brought in an inconvenient forum, (ii) the venue of
such suit, action or proceeding is improper and (iii) this Agreement, or
the subject matter hereof, may not be enforced in or by such courts.
Section 4.11 Waiver of Jury Trial. Each of parties hereto
hereby irrevocably waives all right to a trial by jury in any action,
proceeding, or counterclaim arising out of or related to this Agreement or
the transactions contemplated hereby.
Section 4.12 Counterparts. This Agreement may be executed
in one or more counterparts, each of which together be deemed an original,
but both of which together shall constitute one and the same instrument.
Section 4.13 Interpretation. The article and section
headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties as set forth in
this Agreement and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (a) the term
"person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an
association, an unincorporated organization, a Governmental Authority and
any other entity or group (as defined in the Exchange Act), (b) unless
otherwise specified herein, the term "affiliate," with respect to any
person, shall mean and include any person controlling, controlled by or
under common control with such person, (c) the term "subsidiary" of any
specified person shall mean any corporation, any of the outstanding voting
power of which, or any partnership, joint venture, limited liability
company or other entity any of the total equity interest of which, is
directly or indirectly owned by such specified person, other than in any
such case any entity which may be deemed to be a "subsidiary" of such
specified person solely by reason of the ownership of equity securities of
such entity which are registered under the Exchange Act and held by such
specified person for investment purposes only, and (d) the term "including"
shall mean "including, without limitation."
Section 4.14 Entire Agreement. This Agreement, the Merger
Agreement, and the annexes, schedule, exhibits, documents or instruments
referred to herein and therein, and any other written agreement entered
into contemporaneously herewith embody the entire agreement and
understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, representations,
warranties, covenants, or undertakings, other than those expressly set
forth or referred to therein. This Agreement and such other agreements
supersede all prior agreements and the understandings between the parties
with respect to such subject matter.
Section 4.15 Severability. In case any provision in this
Agreement shall be held invalid, illegal or unenforceable in a
jurisdiction, such provision shall be modified or deleted, as to the
jurisdiction involved, only to the extent necessary to render the same
valid, legal and enforceable, and the validity, legality and enforceability
of the remaining provisions hereof shall not in any way be affected or
impaired thereby nor shall the validity, legality or enforceability of such
provision be affected thereby in any other jurisdiction.
Section 4.16 Specific Performance. Shareholder agrees
that (a) Parent and its affiliates would be irreparably harmed by a breach
or threatened breach of this Agreement by Shareholder and (b) monetary
remedies would be inadequate to protect Parent and its affiliates against
any actual or threatened breach of this Agreement by Shareholder. Without
prejudice to any other rights and remedies otherwise available to Parent,
Shareholder agrees to the granting of equitable relief, including
injunctive relief and specific performance, in Parent's favor without proof
of actual damages as a remedy for any breach or threatened breach.
Shareholder further agrees to waive any requirement for the securing or
posting of any bond in connection with such remedy. No failure or delay by
Parent in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
Section 4.17 Third-Party Beneficiaries. Nothing contained
in this Agreement or in any instrument or document executed by any party in
connection with the transactions contemplated hereby shall create any
rights in, or be deemed to have been executed for the benefit of, any
person or entity that is not a party hereto or thereto or a successor or
permitted assign of such a party; provided, however, that the parties
hereto specifically acknowledge that the provisions of Section 1.11 hereof
are intended to be for the benefit of the Company and Merger Sub.
[signatures appear on following page]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
UNION PACIFIC CORPORATION
By: /s/ Carl W. von Bernuth
------------------------------------------
Name: Carl W. von Bernuth
Title: Senior Vice President, General
Counsel and Secretary
/s/ Marvin L. Friedland
---------------------------------------
Name: Marvin L. Friedland
Address: c/o Motor Cargo Industries, Inc.
845 West Center Street
North Salt Lake City, Utah 84054
Telecopy: 801-299-5225
SCHEDULE A
Marvin L. Friedland
Column A Column B
-------- --------
Number of Company Shares Number of Company Shares
Owned of Record Beneficially Owned
(of which 174,000
are held of record
by Shareholder)
174,000 188,153