UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Rule 14a-101)
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2)
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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AMERICAN COMMERCIAL LINES INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
Common stock, par value $0.01
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(2)
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Aggregate number of securities to which transaction applies:
16,052,774 shares of common stock issued and outstanding, 523,291 options to purchase shares
of common stock with a per share exercise price less than the per share merger consideration
of $33.00 per share of common stock, and 381,046 restricted share units.
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it
was determined):
Solely for the purpose of calculating the filing fee, the underlying value of the
transaction was calculated as the sum of: (a) 12,818,300 shares of common stock multiplied
by $33.00 per share and 3,234,474 shares of common stock multiplied by $31.25 per share;
(b) 523,291 options to purchase shares of common stock multiplied by $20.96 (which is the
difference between $33.00 and the weighted average exercise price for the options of $12.04
per share) and (c) 381,046 restricted stock units multiplied by $33.00 per restricted stock
unit. The filing fee was determined by multiplying $0.00007130 by the maximum aggregate
value of the transaction as determined in accordance with the preceding sentence.
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(4)
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Proposed maximum aggregate value of transaction:
$547,623,909.86
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(5)
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Total fee paid:
$39,046.00
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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AMERICAN COMMERCIAL LINES
INC.
[ ],
2010
Dear Stockholder:
The board of directors of American Commercial Lines Inc., a
Delaware corporation, or ACL, has approved a merger agreement
providing for the acquisition of ACL by an affiliate of Platinum
Equity, LLC. If the merger contemplated by the merger agreement
is completed, except as described below, shareholders will be
entitled to receive $33.00 in cash, without interest, less any
applicable withholding taxes, for each share of our common stock
owned by them (unless appraisal rights have been properly
exercised with respect to such shares). GVI Holdings, Inc. and
certain of its affiliates, or GVI Stockholders, who collectively
own approximately 25.26% of our common stock, have agreed to
receive $31.25 less any applicable withholding taxes for each
share of our common stock owned by them if the transaction
closes before December 31, 2010 and $33.00 less any
applicable withholding taxes per share thereafter. GVI
Stockholders have entered into a voting agreement pursuant to
which they have agreed to vote shares owned by them in favor of
the merger.
At a special meeting of our stockholders, you will be asked to
consider and vote upon a proposal to adopt the merger agreement
and a proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies if there are
insufficient votes at the time of the special meeting to approve
the proposal to adopt the merger agreement. The special meeting
is to be held on December [ ], 2010 at
[ ] a.m. EST, at
[ ].
Our board of directors, after considering the unanimous
recommendation of a special committee of independent directors,
has determined that the merger is advisable and in the best
interests of ACL and its stockholders and approved and declared
advisable the merger agreement and the merger and the other
transactions contemplated by the merger agreement.
The board
of directors of ACL recommends that you vote FOR
approval of the proposal to adopt the merger agreement and
FOR approval of the proposal to adjourn the special
meeting, if necessary or appropriate, to solicit additional
proxies.
Your vote is very important.
Whether or not
you plan to attend the special meeting, please complete, date,
sign and return, as promptly as possible, the enclosed proxy
card in the accompanying prepaid reply envelope, or submit your
proxy by telephone or the Internet. If you attend the special
meeting and vote in person, your vote by ballot will revoke any
proxy previously submitted.
The failure to vote will have the
same effect as a vote against approval of the proposal to adopt
the merger agreement.
If your shares of common stock are held in street
name by your bank, brokerage firm or other nominee, your
bank, brokerage firm or other nominee will be unable to vote
your shares of common stock without instructions from you. You
should instruct your bank, brokerage firm or other nominee to
vote your shares of common stock, following the instructions
provided by your bank, brokerage firm or other nominee.
The
failure to instruct your bank, brokerage firm or other nominee
to vote your shares of common stock FOR approval of
the proposal to adopt the merger agreement will have the same
effect as voting against the proposal to adopt the merger
agreement.
The accompanying proxy statement provides you with detailed
information about the special meeting, the merger agreement and
the merger. A copy of the merger agreement is attached as
Annex A
to the proxy statement. We encourage you to
read the entire proxy statement and its annexes, including the
merger agreement, carefully. You may also obtain additional
information about ACL from documents we have filed with the
Securities and Exchange Commission.
If you have any questions or need assistance voting your shares
of common stock, please call
[ ],
our proxy solicitor, toll-free at
[ ].
Thank you in advance for your cooperation and continued support.
Sincerely,
Clayton K. Yeutter
Chairman of the Board of Directors
The proxy statement is dated November [ ], 2010,
and is first being mailed to our stockholders on or about
November [ ], 2010.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE MERGER,
PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE PROPOSED
MERGER, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
AMERICAN COMMERCIAL LINES
INC.
1701 East Market Street
Jeffersonville, Indiana 47130
NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS
[ ],
2010
To the Stockholders of American Commercial Lines Inc.:
A special meeting of stockholders of American Commercial Lines
Inc., a Delaware corporation, ACL, we, us or our, will be held
at
[ ],
on December [ ], 2010, beginning at
[ ] a.m. EST, for the following purposes:
1. To consider and vote on a proposal to adopt the
Agreement and Plan of Merger, dated as of October 18, 2010,
as it may be amended from time to time, which we refer to as the
merger agreement, by and among ACL, Finn Holding Corporation, a
Delaware corporation, which we refer to as Parent, and Finn
Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of Parent, which we refer to as Merger Sub. A copy of
the merger agreement is attached as
Annex A
to the
accompanying proxy statement.
2. To consider and vote on a proposal to adjourn the
special meeting, if necessary or appropriate, to solicit
additional proxies if there are insufficient votes at the time
of the special meeting to approve the proposal to adopt the
merger agreement.
Only stockholders of record of our common stock as of the close
of business on
[ ],
2010, will be entitled to notice of, and to vote at, the special
meeting and any adjournment or postponement of the special
meeting. All stockholders of record are cordially invited to
attend the special meeting in person.
Your vote is very important, regardless of the number of
shares of common stock you own.
The merger cannot be completed unless the merger agreement is
adopted by the affirmative vote of the holders of a majority of
the outstanding shares of common stock entitled to vote thereon.
Even if you plan to attend the special meeting in person, we
request that you complete, sign, date and return, as promptly as
possible, the enclosed proxy card in the accompanying prepaid
reply envelope or submit your proxy by telephone or the Internet
prior to the special meeting to ensure that your shares of
common stock will be represented at the special meeting if you
are unable to attend. If you fail to return your proxy card or
fail to submit your proxy by phone or the Internet and do not
attend and vote at the special meeting in person, your shares of
common stock will not be counted for purposes of determining
whether a quorum is present at the special meeting and will have
the same effect as a vote
AGAINST
the
proposal to adopt the merger agreement.
If you are a stockholder of record, voting in person at the
special meeting will revoke any proxy previously submitted. If
you hold your shares of common stock through a bank, brokerage
firm or other nominee, you should follow the instructions
provided by your banker, brokerage firm or other nominee in
order to vote.
Our board of directors, upon the unanimous recommendation of the
special committee of the board of directors, has determined
(with Mr. Ryan abstaining) that the merger is advisable and
in the best interests of ACL and its stockholders and approved
and declared advisable the merger agreement and the merger and
the other transactions contemplated by the merger agreement.
Our board of directors recommends that you vote
FOR the proposal to adopt the merger agreement and
FOR the proposal to adjourn the special meeting, if
necessary or appropriate, to solicit additional proxies.
Only stockholders of record or their duly authorized proxies
have the right to attend the special meeting. To gain
admittance, you must present valid photo identification, such as
a drivers license or passport. If your shares of common
stock are held through a bank, brokerage firm or other nominee,
please bring to the special meeting a copy of your brokerage
statement evidencing your beneficial ownership of the common
stock and valid photo identification. If you are the
representative of a corporate or institutional stockholder, you
must present valid photo identification along with proof that
you are the representative of such stockholder. Please note that
cameras, recording devices and other electronic devices will not
be permitted at the special meeting.
Stockholders who do not vote in favor of the proposal to adopt
the merger agreement will have the right to seek appraisal of
the fair value of their shares of common stock of ACL if they
deliver a demand for appraisal before the vote is taken on the
merger agreement and comply with all the requirements of
Delaware law, which are summarized in the accompanying proxy
statement and provided in their entirety on
Annex C
of the accompanying proxy statement.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE
ENCLOSED PROXY CARD IN THE ACCOMPANYING PREPAID REPLY ENVELOPE,
OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. IF YOU ATTEND
THE SPECIAL MEETING AND VOTE IN PERSON, YOUR VOTE BY BALLOT WILL
REVOKE ANY PROXY PREVIOUSLY SUBMITTED.
By Order of the Board of
Directors,
Clayton K. Yeutter
Chairman of the Board of Directors
Dated:
[ ],
2010
Jeffersonville, Indiana
TABLE OF
CONTENTS
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iii
SUMMARY
TERM SHEET
The following summary term sheet highlights selected
information in this proxy statement and may not contain all the
information that may be important to you. Accordingly, we
encourage you to read carefully this entire proxy statement, its
annexes and the documents referred to or incorporated by
reference in this proxy statement. Each item in this summary
term sheet includes a page reference directing you to a more
complete description of that topic. You may obtain the
information incorporated by reference in this proxy statement
without charge by following the instructions under the section
entitled Where You Can Find More Information
beginning on page 85.
Parties
to the Merger (Page 20)
American Commercial Lines Inc.,
or ACL, the Company, we
or us, is a Delaware corporation headquartered in
Jeffersonville, Indiana, and is one of the largest and most
diversified marine transportation and services companies in the
United States providing barge transportation and related
services under the provisions of the Jones Act, as well as
manufacturing barges and other vessels, including ocean-going
liquid tank barges.
Finn Holding Corporation,
or Parent, a Delaware
corporation formed by Platinum Equity, LLC, or Platinum Equity,
has the sole purpose of entering into the merger agreement and
completing the transactions contemplated by the merger
agreement. Upon completion of the merger, the Company will be a
wholly-owned subsidiary of Parent.
Finn Merger Corporation,
or Merger Sub, a Delaware
corporation formed by Parent, has the sole purpose of entering
into the merger agreement and completing the transactions
contemplated by the merger agreement. Upon completion of the
merger, Merger Sub will cease to exist.
In this proxy statement, we refer to the Agreement and Plan of
Merger, dated October 18, 2010, as it may be amended from
time to time, among the Company, Parent and Merger Sub, as the
merger agreement, and the merger of Merger Sub with and into the
Company as the merger. We refer to the voting agreement, dated
October 18, 2010 among Parent and GVI Stockholders, as the
voting agreement.
The
Special Meeting (Page 21)
Time,
Place and Purpose of the Special Meeting
(Page 20)
The special meeting will be held on
[ ],
2010, starting at [ ] a.m. EST, at
[ ].
At the special meeting, holders of our common stock, par value
$0.01 per share, or the common stock, will be asked to approve
the proposal to adopt the merger agreement and to approve any
adjournment of the special meeting, if necessary or appropriate,
for the purpose of soliciting additional proxies if there are
insufficient votes at the time of the special meeting to approve
the proposal to adopt the merger agreement.
Record
Date and Quorum
(Page 27)
You are entitled to receive notice of, and to vote at, the
special meeting if you owned shares of common stock at the close
of business on
[ ],
2010, which the Company has set as the record date for the
special meeting and which we refer to as the record date. You
will have one vote for each share of common stock that you owned
on the record date. As of the record date, there were
[ ] shares
of common stock outstanding and entitled to vote at the special
meeting. A majority of the shares of common stock outstanding at
the close of business on the record date and entitled to vote,
present in person or represented by proxy, at the special
meeting constitutes a quorum for the purposes of the special
meeting. Whether or not a quorum is represented at the special
meeting, the holders of a majority of the shares of common stock
present in person or by proxy and entitled to vote at the
special meeting will have power to adjourn the meeting to
another time, or to another time and place, without notice other
than announcement of adjournment at the meeting, and there may
be successive adjournments for like cause and in like manner. At
such adjourned
1
meeting at which a quorum is present, any business may be
transacted that may have been transacted at the special meeting
as originally notified.
Vote
Required
(Page 21)
Approval of the proposal to adopt the merger agreement requires
the affirmative vote of the holders of a majority of the
outstanding shares of our common stock entitled to vote thereon.
Approval of the proposal to adjourn the special meeting, if
necessary or appropriate, for the purpose of soliciting
additional proxies requires the affirmative vote of a majority
of the votes cast thereon in person or by proxy at the special
meeting, whether or not a quorum is present.
GVI Stockholders have entered into a voting agreement pursuant
to which they have agreed to vote shares owned by them
representing, in the aggregate, 25.26% of the outstanding shares
of the Company in favor of the proposal to adopt the merger
agreement as discussed in the section entitled The Voting
Agreement beginning on page 74. The voting agreement
automatically terminates upon the termination of the merger
agreement or the occurrence of certain other events. In the
voting agreement GVI Stockholders have agreed to accept $1.75
less than other stockholders in consideration per share in the
event that either the merger occurs on or prior to
December 31, 2010 or the merger agreement is terminated
because the Company has accepted a superior proposal, as defined
in the merger agreement, if that transaction closes on or prior
to December 31, 2010. GVI Stockholders have also granted an
option to Parent to acquire GVI Stockholders shares at a
price equal to the then-applicable merger consideration per
share less $1.75, exercisable from and after December 15 so long
as such shares are purchased by Parent on or prior to
December 31, 2010, provided that, if Parent exercises the
option and the merger agreement is subsequently terminated for a
superior proposal, Parent has agreed to both vote for such
proposal and accept the same consideration that GVI Stockholders
would have received in respect of those shares, subject to
Parents obligation to share 50% of the profits with GVI
Stockholders from its subsequent disposition of those shares (on
or prior to the termination of the transaction contemplated by
such proposal) within one year of the purchase of the shares if
the Company terminates to accept a superior proposal prior to
January 15, 2011.
As of the record date, the directors and executive officers of
the Company beneficially owned and were entitled to vote, in the
aggregate,
[ ] shares
of common stock (not including any shares of common stock
deliverable upon exercise or conversion of any options or
restricted stock units), representing
[ ]% of the outstanding shares of
common stock.
Proxies
and Revocation
(Page 23)
Any stockholder of record entitled to vote at the special
meeting may submit a proxy by telephone, over the Internet, or
by returning the enclosed proxy card in the accompanying prepaid
reply envelope, or may vote in person by appearing at the
special meeting. If your shares of common stock are held in
street name by your broker, you should instruct your
broker on how to vote your shares of common stock using the
instructions provided by your broker. If you fail to submit a
proxy or to vote in person at the special meeting, or do not
provide your broker with instructions, your shares of common
stock will not be voted on the proposal to adopt the merger
agreement, which will have the same effect as a vote
AGAINST
the proposal to adopt the merger
agreement, and your shares of common stock will not have an
effect on the proposal to adjourn the special meeting.
You have the right to revoke a proxy, whether delivered by
telephone, over the Internet, or by mail, at any time before it
is exercised, by signing and returning a proxy card with a later
date, revoking your proxy by telephone or the Internet, or by
giving written notice of revocation to our Corporate Secretary,
which must be filed with the Corporate Secretary by the time the
special meeting begins, or by attending the special meeting and
voting in person. If you instructed your broker on how to vote
your shares of common stock, you may revoke your proxy by using
the instructions provided by your broker.
2
The
Merger (Page 25)
The merger agreement provides that Merger Sub will merge with
and into the Company. The Company will be the surviving
corporation in the merger and will continue to do business
following the merger. As a result of the merger, the Company
will cease to be a publicly traded company. If the merger is
completed, you will not own any shares of the capital stock of
the surviving corporation.
Merger
Consideration
(Page 25)
In the merger, each outstanding share of common stock (except
for certain shares owned, if any, by Company, Parent, Merger
Sub, and their indirect and direct wholly owned subsidiaries,
GVI Stockholders, and shares owned by stockholders who have
properly exercised their appraisal rights) will be converted
into the right to receive $33.00 in cash, without interest,
which amount we refer to as the per share merger consideration,
less any applicable withholding taxes. GVI Stockholders will be
entitled to receive $31.25 less any applicable withholding taxes
in cash for each share of Company common stock they hold if the
transaction closes on or before December 31, 2010 and
$33.00 less any applicable withholding taxes in cash per share
if the transaction closes thereafter.
Reasons
for the Merger; Recommendation of the Special Committee and
Board of Directors (Page 33)
After consideration of various factors described in the section
entitled The Merger Reasons for the Merger;
Recommendation of the Special Committee and Board of
Directors, upon the unanimous recommendation of the
special committee of the board of directors, the board of
directors of the Company, which we refer to as the board of
directors, (i) determined that the merger is advisable, and
in the best interests of, the Company and our stockholders,
(ii) authorized, approved and declared advisable the merger
agreement, the merger and the other transactions contemplated by
the merger agreement, (iii) resolved that the merger
agreement be submitted for consideration by the stockholders of
the Company at a special meeting of stockholders, and
(iv) recommended that our stockholders vote to adopt the
merger agreement. Mike Ryan, a director and our President and
Chief Executive Officer, abstained from the boards
decision.
In considering the recommendation of the board of directors with
respect to the proposal to adopt the merger agreement, you
should be aware that our directors and executive officers may
have interests in the merger that may be different from, or in
addition to, yours. The board of directors was aware of and
considered these interests, among other matters, in evaluating
and negotiating the merger agreement and the merger, and in
recommending that the merger agreement be adopted by the
stockholders of the Company. See the section entitled The
Merger Interests of Certain Persons in the
Merger beginning on page 48.
The board of directors recommends that you vote
FOR the proposal to adopt the merger agreement and
FOR the proposal to adjourn the special meeting, if
necessary or appropriate, to solicit additional proxies.
Opinion
of Merrill Lynch, Pierce, Fenner & Smith Incorporated
(Page 37)
In connection with the merger, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, or
BofA Merrill Lynch, financial advisor to the Special
Committee, delivered to the Special Committee at its meeting on
October 17, 2010, an oral opinion, which was confirmed by
delivery of a written opinion dated October 18, 2010, as to
the fairness, from a financial point of view and as of the date
of the opinion, to the holders of the Companys common
stock (other than Parent and its affiliates, GVI Stockholders
and any holders of the Companys common stock that are also
holders of assumed awards
and/or
assumed RSU awards, referred to collectively as the Excluded
Holders) of the per share merger consideration of $33.00 to be
received by such holders in the merger. The full text of the
written opinion of BofA Merrill Lynch, which describes, among
other things, the assumptions made, procedures followed, factors
considered and limitations on the review undertaken, is attached
as
Annex B
to this proxy statement and is
incorporated by reference herein in its entirety.
BofA
Merrill Lynch provided its opinion to the Special Committee for
the benefit and use of the Special Committee (in its capacity as
such) in connection with and for purposes of its evaluation of
the per share merger consideration from a financial point of
view. BofA Merrill Lynchs
3
opinion does not address any other aspect of the merger and
does not constitute a recommendation to any stockholder as to
how to vote or act in connection with the merger.
Financing
of the Merger
(Page 45)
We anticipate that the total funds needed to complete the
merger, including the funds needed to:
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pay our stockholders (and holders of our other equity-based
interests) the amounts due to them under the merger agreement;
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refinance the outstanding indebtedness that comes due as a
result of the merger; and
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pay fees and expenses related to the merger and the debt that
will finance the merger,
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will be approximately $798 million.
We expect this amount to be funded through a combination of:
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up to $550 million from a senior secured asset-based credit
facility to be obtained by Intermediate Holdco; and
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equity financing of up to $500 million.
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ACL intends to keep the Companys existing senior secured
notes outstanding and will comply with the indenture governing
the notes, including making any required offer to purchase the
notes upon a change of control, subject to Parents right
to require us prior to closing to make an offer to purchase the
notes.
Finn Intermediate Holding Corporation, a Delaware corporation
and an indirect wholly owned subsidiary of Parent and the sole
stockholder of Merger Sub, which we refer to as Intermediate
Holdco, has obtained the debt financing commitment described
below. The funding under that commitment is subject to certain
conditions precedent, including conditions that do not relate
directly to the merger agreement. We believe the committed
amounts will be sufficient to complete the transaction, but we
cannot assure you of that. Those amounts might be insufficient
if, among other things, Intermediate Holdco obtains
substantially less net proceeds from the debt financing than we
currently expect. Although obtaining the debt financing is not a
condition to the completion of the merger, the failure of
Intermediate Holdco to obtain sufficient financing is likely to
result in the failure of the merger to be completed. In that
case, Parent may be obligated to pay the Company the Parent
termination fee, as described under The Merger Agreement
Fees and Expenses beginning on page 71.
That obligation is guaranteed by the guarantor referred to below.
Equity
Financing
(Page 46)
Parent and Merger Sub received an equity commitment for an
aggregate investment of up to $500 million from Platinum
Equity Capital Partners II, L.P, which we refer to as guarantor.
Guarantor is a fund affiliated with Platinum Equity and an
affiliate of Parent.
Debt
Financing
(Page 46)
In connection with entering into the merger agreement,
Intermediate Holdco received a debt commitment letter, dated
October 18, 2010, from Wells Fargo Capital Finance, LLC,
which we refer to as Wells Fargo, to provide in the aggregate up
to $550 million in debt financing to Intermediate Holdco,
subject to certain availability limitations described below,
consisting of a senior secured asset-based revolving credit
facility in an aggregate principal amount of up to
$550 million; subject to (x) a $160 million
availability block so long as the Companys indenture
governing its senior secured second lien notes is in effect,
(y) a $150 million availability block, which will
initially be available solely to finance any obligation of the
Company to repurchase such second lien notes on account of a
change of control under the applicable indenture, and
(z) adequate capacity under the borrowing base (which
includes accounts receivable, fuel inventory, raw steel
inventory and vessels, in each case, subject to certain
limitations including advance rates, eligibility criteria and
reserves).
4
Although the debt financing described in this proxy statement is
not subject to due diligence or a so called market
out provision, which allows lenders not to fund their
commitments if certain conditions in the financial markets
prevail, there is still a risk that such financing may not be
funded when required. As of the date of this proxy statement,
Parent has not informed us of any alternative financing
arrangements or alternative financing plans that have been made
in the event the debt financing described in this proxy
statement is not available as anticipated.
Limited
Guarantee
(Page 47)
Pursuant to a limited guarantee delivered by the guarantor, in
favor of the Company, dated October 18, 2010, the guarantor
has agreed to guarantee certain obligations of Parent and Merger
Sub under the merger agreement, including the obligation to pay
a termination fee of either $16,000,000 or $20,000,000 to the
Company, depending on the circumstances of the termination, as
and when due. See the section entitled The Merger
Agreement Fees and Expenses beginning on
page 71.
Interests
of Certain Persons in the Merger
(Page 48)
When considering the recommendation of our board of directors,
you should be aware that our executive officers and directors
have interests in the merger that are different from, or in
addition to, your interests as a stockholder. The board of
directors was aware of and considered these interests, among
other matters, in evaluating and negotiating the merger
agreement and the merger, and in recommending that the merger
agreement be adopted by the stockholders of the Company. These
interests include the following:
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the cash-out of all vested stock options and vested restricted
stock units held by our executive officers and directors and
unvested equity grants held by our directors and the assumption
or, at Parents election, cash-out by Parent of all
unvested stock options and restricted stock units held by our
executive officers; and
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pursuant to employment and severance agreements with certain of
our executive officers, the payment of severance payments in the
event of a termination of employment without cause, whether
before or after the merger.
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Material
U.S. Federal Income Tax Consequences of the Merger
(Page 51)
The exchange of shares of common stock for cash pursuant to the
merger will be a taxable transaction to U.S. holders for
U.S. federal income tax purposes. Stockholders who are
U.S. holders and who exchange their shares of common stock
in the merger will recognize gain or loss in an amount equal to
the difference, if any, between the cash payments made pursuant
to the merger and their adjusted tax basis in their shares of
common stock. Backup withholding may also apply to the cash
payments made pursuant to the merger unless the U.S. holder
or other payee provides a taxpayer identification number,
certifies that such number is correct and otherwise complies
with the backup withholding rules. You should read the section
entitled The Merger Material U.S. Federal
Income Tax Consequences of the Merger beginning on
page 51 for a definition of U.S. holder
and a more detailed discussion of the U.S. federal income
tax consequences of the merger. You should also consult your tax
advisor for a complete analysis of the effect of the merger on
your federal, state and local
and/or
foreign taxes.
Regulatory
Approvals
(Page 52)
Under the terms of the merger agreement, the merger cannot be
completed until certain approvals, consents and consultations
required to consummate the merger pursuant to applicable
U.S. and foreign antitrust laws, including the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, or the HSR Act, have been
obtained or any applicable waiting period thereunder has been
terminated or has expired.
Under the HSR Act and the rules promulgated thereunder by the
Federal Trade Commission, or the FTC, the merger cannot be
completed until each of the Company and Parent file a
notification and report form with the FTC and the Antitrust
Division of the Department of Justice, or the DOJ, under the HSR
Act, and the
5
applicable waiting period has expired or been terminated. Each
of the Company and Parent filed such a notification and report
form on
[ ],
2010 and requested early termination of the waiting period.
Litigation
Relating to the Merger
(Page 53)
On October 22, 2010, a putative class action lawsuit was
commenced against us, our directors, Platinum Equity, Parent and
Merger Sub in the Court of Chancery of the State of Delaware.
The lawsuit is captioned
Leonard Becker v. American
Commercial Lines, Inc., et al.
In the lawsuit, plaintiff
alleges generally that our directors breached their fiduciary
duties in connection with the transaction by, among other
things, carrying out a process that inhibits maximization of
shareholder value and the disclosure of material information,
and that Platinum Equity aided and abetted the alleged breaches
of duties. Plaintiff purports to bring the lawsuit on behalf of
the public stockholders of the Company and seeks equitable
relief to enjoin consummation of the merger, rescission of the
merger
and/or
rescissory damages, and fees and costs, among other relief. The
Company believes the lawsuit is without merit.
The
Merger Agreement (Page 53)
Treatment
of Common Stock, Options and Other Equity Awards
(Page 54)
Common
Stock.
At the effective time of the merger, or effective time, each
share of Company common stock issued and outstanding (except for
certain shares held by the Company, Parent and Merger Sub, and
their direct and indirect wholly-owned subsidiaries, GVI
Stockholders and shares owned by stockholders who have properly
exercised their appraisal rights) will convert into the right to
receive the per share merger consideration of $33.00 in cash,
without interest, less any applicable withholding taxes. GVI
Stockholders will be entitled to receive for each share of
Company common stock they own $31.25 in cash, without interest,
less applicable withholding taxes, if the transaction is closed
on or before December 31, 2010 and $33.00 in cash, without
interest, less applicable withholding taxes, if the transaction
closes thereafter.
Options.
Under the merger agreement, all outstanding vested stock options
(and for our directors and our employees below the vice
president level, outstanding unvested stock options) will be
cancelled and converted into the right to receive cash, in an
amount equal to the product of (x) the total number of
shares of common stock subject to such option immediately prior
to the effective time and (y) the excess, if any, of the
per share merger consideration over the exercise price per share
of such option, less any applicable withholding taxes.
Under the merger agreement, at the effective time and without
any action on the part of the holders thereof, each unvested
option held by an employee at or above the vice president level
that is outstanding immediately prior to the effective time and
set forth on the disclosure schedule relating to the merger
agreement, or an assumed award, will, unless Parent elects to
cash-out such awards on the terms of the preceding paragraph, be
assumed or substituted by Parent and converted automatically at
the effective time into an option denominated in shares of
common stock of Parent, or Parent common stock, and with other
terms and conditions substantially similar to those of the
related options, except that (i) the number of shares of
Parent common stock subject to each such assumed award shall be
determined by multiplying the number of shares of our common
stock subject to such assumed award immediately prior to the
effective time by the exchange ratio (rounded down to the
nearest whole share) and (ii) the exercise price per share
of Parent common stock (rounded upwards to the nearest whole
cent) shall equal (x) the per share exercise price for the
shares of our common stock otherwise purchasable pursuant to
such assumed award immediately prior to the effective time
divided by (y) the exchange ratio. The exchange ratio will
be equal to the quotient of (1) the per share merger
consideration, divided by (2) the fair market value of a
share of Parent common stock immediately following the effective
time as determined by Parent consistent with the price paid by
the affiliates of Parent for (including contributions by such
affiliates with respect to) a share of Parent common stock.
6
Restricted
Stock Units.
Under the merger agreement, each outstanding vested restricted
stock unit, and each outstanding restricted stock unit held by
an employee below the vice president level or by our directors
whether or not vested and without regard to any performance
criteria set forth therein, will be cancelled and converted into
the right to receive cash in an amount equal to the product of
(x) the total number of shares of common stock subject to
such restricted stock unit immediately prior to the effective
time and (y) the per share merger consideration, less any
applicable withholding taxes.
Each unvested restricted stock unit held by an employee at or
above the vice president level that is outstanding immediately
prior to the effective time and set forth on the disclosure
schedule relating to the merger agreement, or an assumed RSU
award, will, unless Parent elects to cash-out such awards on the
terms of the preceding paragraph, be assumed or substituted by
Parent and converted automatically at the effective time into a
restricted stock unit denominated in Parent common stock and
with other terms and conditions substantially similar to those
of the related restricted stock unit awards, except that the
number of shares of Parent common stock subject to each such
assumed RSU award shall be determined by multiplying the number
of shares of our common stock subject to such assumed RSU award
immediately prior to the effective time by the exchange ratio
(rounded down to the nearest whole share).
Solicitation
of Acquisition Proposals
(Page 63)
The merger agreement provides that, until 11:59 p.m., EST,
on November 27, 2010, which we refer to as the no-shop
period start date, we and our subsidiaries and our
representatives are permitted to:
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initiate, solicit or encourage the submission of one or more
acquisition proposals, including by providing non-public
information relating to the Company or any of its subsidiaries
or by affording to any person access to the business,
properties, assets, books, records or other non-public
information, or to the personnel, of the Company or any of its
subsidiaries pursuant to an acceptable confidentiality agreement;
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continue, enter into, participate in or engage in any
discussions or negotiations with one or more persons with
respect to one or more acquisition proposals or any other
proposals that could reasonably be expected to lead to an
acquisition proposal; and
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otherwise cooperate with, assist or take any action to
facilitate any acquisition proposals or any other proposals that
could reasonably be expected to lead to any acquisition
proposals.
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On the no-shop period start date the Company must cease and
cause to be terminated any discussions or negotiations it is
engaged in with any person (other than any excluded party, as
defined in the section entitled The Merger
Agreement Solicitation Restrictions on
Solicitation of Acquisition Proposals) that would
otherwise be prohibited by the merger agreement provisions
summarized below.
From and after the no-shop period start date (11:59 p.m.,
EST, on November 27, 2010), subject to certain exceptions
for excluded parties and others who submit unsolicited superior
proposals, we have agreed that, until the effective time
or, if earlier, the termination of the merger agreement, we, our
subsidiaries and our representatives may not:
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solicit, initiate, propose or induce or knowingly encourage the
making, submission or announcement of, or take actions that
could reasonably be expected to encourage, facilitate or assist,
an acquisition proposal;
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furnish to any person (other than Parent, Merger Sub or any
designees of Parent or Merger Sub) any non-public information
relating to the Company or any of its subsidiaries, or afford to
any person access to the business, properties, assets, books,
records or other non-public information, or to any personnel, of
the Company or any of its subsidiaries (other than Parent,
Merger Sub or any designees of Parent or Merger Sub), in each
case with the intent to induce the making, submission or
announcement of, or to encourage, knowingly facilitate or
assist, an acquisition proposal or any inquiries or the making
of any proposal that would reasonably be expected to lead to an
acquisition proposal;
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participate or engage in discussions or negotiations with any
person with respect to an acquisition proposal or which may
reasonably be expected to lead to an acquisition
proposal; or
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enter into any letter of intent, memorandum of understanding or
other contract with respect to an acquisition transaction (other
than an acceptable confidentiality agreement).
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Conditions
to the Merger
(Page 68)
The respective obligations of the Company, Parent and Merger Sub
to consummate the merger are subject to the satisfaction or
waiver of certain customary conditions, including the adoption
of the merger agreement by our stockholders, receipt of required
antitrust approvals, the accuracy of the representation and
warranties of the parties, compliance by the parties with their
respective obligations under the merger agreement, and the
absence of any change, occurrence, event, effect or circumstance
that is or would reasonably be expected to be materially adverse
to the Company as a whole as further described in the section
entitled The Merger Agreement Representations
and Warranties beginning on page 57.
Termination
(Page 70)
The merger agreement may be validly terminated at any time prior
to the effective time only as follows:
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by mutual written agreement of Parent and the Company after
action by their respective boards of directors;
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by either Parent or the Company, if:
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the effective time shall not have occurred by 5:00 p.m.
(New York time) on March 18, 2011, which date we refer to
as the termination date (but, the right to terminate will not be
available to a party whose actions or omissions were the primary
cause of, or the primary factor that resulted in the failure to
consummate the merger prior to the termination date);
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our stockholders have not adopted the merger agreement at a
stockholders meeting (as it may be adjourned or postponed) at
which a vote has been taken on the adoption of the merger
agreement; or
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a governmental authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered a law that is
in effect at the time of such termination that renders illegal
or restricts, restrains, enjoins or otherwise prohibits the
merger or issued or entered a permanent, final and
non-appealable injunction, ruling, decree or order that
restricts, restrains, enjoins or otherwise prohibits the merger
in the United States or any state thereof.
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(i) the Company is not in material breach of any of its
covenants under the merger agreement and (ii) Parent
and/or
Merger Sub have breached or failed to perform any of their
respective covenants or agreements, or any representations or
warranties of Parent
and/or
Merger Sub in the merger agreement shall have become incorrect,
in any case such that one or more of the conditions to the
Companys obligations to effect the merger would not be
satisfied and have failed to cure such material breach, failure
to perform or inaccuracy within thirty calendar days after
Parent and Merger Sub have received written notice of such
breach, failure to perform or inaccuracy from the Company or, if
earlier, the date that is two business days prior to the
termination date;
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at any time prior to the adoption of the merger agreement by our
stockholders, in order to enter into an alternative acquisition
agreement with respect to a superior proposal that the board of
directors has authorized and directed us to execute, provided
that (i) prior to or simultaneously with the termination of
the merger agreement, we pay to Parent the Company termination
fee discussed under the section entitled The Merger
Agreement Fees and Expenses beginning on
page 71, (ii) simultaneously or promptly following
such termination, we enter into the superior proposal merger
agreement and (iii) we have complied with certain of our
obligations in the merger agreement, including our obligation to
negotiate with Parent in good faith (to the extent Parent
desires to
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negotiate) for three business days prior to termination to make
adjustments in the terms and conditions of the merger agreement
so that such superior proposal would cease to constitute a
superior proposal; or
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(A) the conditions to the obligations of Parent and Merger
Sub to effect the merger have been satisfied (other than those
conditions that (i) by their nature are to be satisfied at
the closing and that would be capable of being satisfied if
there were a closing or (ii) have not been satisfied as a
result of Parent or Merger Subs breach or failure to
perform any of their respective covenants in the merger
agreement), (B) we, at least one business day prior to the
date on which the closing should have occurred pursuant to the
merger agreement, delivered in good faith written notice (by
e-mail
or by
such other notice that complies with the terms of the merger
agreement) to Parent to the effect that we would be, ready,
willing and able to consummate the merger on such date, and
(C) Parent fails to consummate the merger within three
business days of such date.
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(i) neither Parent nor Merger Sub is in material breach of
its covenants under the merger agreement and (ii) the
Company has breached or failed to perform any of its covenants
or agreements in the merger agreement or any representations or
warranties of the Company in the merger agreement shall have
become incorrect in any case such that one or more of the
conditions to Parents and Merger Subs obligations to
effect the merger would not be satisfied, and have failed to
cure such material breach, failure to perform or inaccuracy
within thirty calendar days after the Company has received
written notice of such breach, failure to perform or inaccuracy
from Parent or, if earlier, the date that is two business days
prior to the termination date; or
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at any time any of the following trigger events has occurred:
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the board of directors shall have effected a board
recommendation change; or
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a tender or exchange offer for the common stock that would, if
consummated in accordance with its terms, constitute a competing
acquisition transaction is commenced by a person unaffiliated
with Parent and, within ten business days after the public
announcement of the commencement of such acquisition proposal,
the Company shall not have issued a public statement reaffirming
the board recommendation and recommending that the Company
stockholders reject such acquisition proposal and not tender any
shares of the common stock into such tender or exchange offer.
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Fees
and Expenses
(Page 71)
We must pay a termination fee to Parent under the following
circumstances:
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if the Company has terminated the merger agreement in order to
enter into an alternative acquisition agreement with respect to
a superior proposal;
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if Parent has terminated the merger agreement because any of the
trigger events described above have occurred;
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in the event that:
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(i) prior to the termination of the merger agreement, a
competing acquisition proposal has been made to the Company and
publicly disclosed or publicly announced and not publicly
withdrawn;
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(ii) the merger agreement is terminated pursuant to the
termination provisions providing for termination as a result of
the (1) failure of the Companys stockholders to adopt
the merger agreement or (2) failure to consummate the
merger by the termination date; and
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(iii) within twelve months of the termination of the merger
agreement either an acquisition transaction is consummated or we
enter into a definitive agreement providing for an acquisition
transaction that is subsequently consummated (whether or not
during such twelve-month period).
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The termination fee payable by us shall be $14,000,000; provided
that, if prior to the no-shop period start date the merger
agreement is terminated by us in order to enter into an
alternative acquisition agreement with respect to a superior
proposal, the termination fee shall instead be $12,000,000.
The parties have agreed that in no event will the Company be
required to pay the termination fee on more than one occasion,
whether or not the termination fee may be payable under more
than one provision of the merger agreement at the same time or
at different times.
Parent must pay us a termination fee under the following
circumstances:
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if the Company has terminated the merger agreement pursuant to
the termination provision relating to a breach by Parent
and/or
Merger Sub of their respective covenants under the merger
agreement or the inaccuracy of the representations and
warranties of Parent and Merger Sub under the merger agreement;
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the Company has terminated the merger agreement pursuant to the
termination provision relating (A) to the conditions to the
obligations of Parent and Merger Sub having been satisfied,
(B) the Company having been ready, willing and able to
consummate the merger, and (C) Parent having failed to
consummate the merger; or
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if Parent or the Company has terminated the merger agreement
pursuant to the termination provision relating to the failure to
consummate the merger by the termination date and, at the time
of termination, the merger agreement could have been terminated
by the Company pursuant to the termination provisions referenced
in the two bullet points above.
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The termination fee payable by Parent shall be $16,000,000,
except that such amount may be increased to $20,000,000 in the
event that the following are also true:
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the conditions to the funding of the debt commitment letter have
been satisfied and the financing party thereto is prepared to
fund the financing (or, if alternative financing is obtained in
accordance with the merger agreement, such alternative
financing); and
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all conditions of Parent and Merger Sub to consummate the merger
have been satisfied at the time when the closing would have
occurred but for the failure of the equity financing to be
funded (or, with respect to those conditions that by their
nature are to be satisfied at the closing, are capable of being
satisfied at the closing).
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The guarantor has agreed to guarantee the obligation of Parent
to pay the Parent termination fee pursuant to the limited
guarantee, as discussed in the section entitled The
Merger Limited Guarantee on page 47.
The parties have agreed that in no event will Parent be required
to pay the termination fee on more than one occasion, whether or
not the termination fee may be payable under more than one
provision of the merger agreement at the same time or at
different times.
Remedies
(Page 73)
Our receipt of the Parent termination fee, and the guarantee
thereof pursuant to the Guarantee, will be our sole and
exclusive remedy against Parent, its subsidiaries, the
guarantor, and any of their respective former, current and
future directors, officers, employees, agents, general and
limited partners, managers, members, shareholders, affiliates
and assignees and each former, current or future director,
officer, employee, agent, shareholder, general or limited
partner, manager, member, affiliate or assignee of any of the
foregoing, which we refer to as the parent parties, for any loss
or damage suffered as a result of the failure of the merger to
be consummated or for a breach or failure to perform under the
merger agreement and no parent party will have any other
liability or obligation relating to or arising out of the merger
agreement or the transactions contemplated by the merger
agreement.
In the circumstances in which the Company termination fee is
payable, Parents receipt of the Company termination fee
payable by us will, subject to certain specific performance
rights described below, be the sole and exclusive remedy of
Parent and Merger Sub and their respective affiliates against
the Company, its subsidiaries and each of their respective
former, current and future directors, officers, employees,
agents,
10
general and limited partners, managers, members, shareholders,
affiliates and assignees and each former, current or future
director, officer, employee, agent, shareholder, general or
limited partner, manager, member, shareholder, affiliate or
assignee of any of the foregoing, which we refer to as the
company parties, for any loss or damage suffered as a result of
the failure of the merger to be consummated or for a breach or
failure to perform under the merger agreement, and no company
party shall have any other liability or obligation relating to
or arising out of the merger agreement or the transactions
contemplated by the merger agreement; provided that the Company
will be liable for its willful material breach of the merger
agreement.
Under no circumstances will the Company be entitled to monetary
damages in excess of the amount of the termination fee payable
by Parent. Subject to certain exceptions, Parent will not be
entitled to monetary damages in excess of the amount of the
termination fee payable by the Company. While Parent may pursue
both a grant of specific performance in the circumstances
described below and the payment of the termination fee by the
Company, under no circumstances will Parent be permitted or
entitled to receive both a grant of specific performance that
results in the merger occurring and all or any portion of the
payment of the termination fee by the Company.
Under the merger agreement, we are not entitled to specific
performance of, or injunctive relief with respect to, the
covenants or agreements of Parent or Merger Sub in the merger
agreement. In the event of any breach or threatened breach by
the Company of any of its covenants or obligations set forth in
the merger agreement, Parent and Merger Sub will be entitled to
an injunction or injunctions to prevent or restrain breaches or
threatened breaches of the merger agreement by the Company, and
to specifically enforce the terms and provisions of the merger
agreement to prevent breaches or threatened breaches of, or to
enforce compliance with, the covenants and obligations of the
Company under the merger agreement.
The
Voting Agreement (Page 74)
GVI Stockholders have entered into a voting agreement pursuant
to which they have agreed to vote shares owned by them
representing, in the aggregate, 25.26% of the outstanding shares
of the Company in favor of the proposal to adopt the merger
agreement as discussed in the section entitled The Voting
Agreement beginning on page 74. The voting agreement
automatically terminates upon the termination of the merger
agreement or the occurrence of certain other events. In the
voting agreement GVI Stockholders have agreed to accept $1.75
less than other stockholders in consideration per share in the
event that either the merger occurs on or prior to
December 31, 2010 or the merger agreement is terminated
because the Company has accepted a superior proposal, as defined
in the merger agreement, if that transaction closes on or prior
to December 31, 2010. GVI Stockholders have also granted an
option to Parent to acquire GVI Stockholders shares at a
price equal to the then-applicable merger consideration per
share less $1.75, exercisable from and after December 15 so long
as such shares are purchased by Parent on or prior to
December 31, 2010, provided that, if Parent exercises the
option and the merger agreement is subsequently terminated for a
superior proposal, Parent has agreed to both vote for such
proposal and accept the same consideration that GVI Stockholders
would have received in respect of those shares, subject to
Parents obligation to share 50% of the profits with GVI
Stockholders from its subsequent disposition of those shares (on
or prior to the termination of the transaction contemplated by
such proposal) within one year of the purchase of the shares if
the Company terminates to accept a superior proposal prior to
January 15, 2011.
Market
Price of Common Stock (Page 77)
The common stock trades on the Nasdaq Global Market, or Nasdaq,
under the symbol ACLI. The closing price of the
common stock on Nasdaq on October 15, 2010, the last
trading day prior to the public announcement of the execution of
the merger agreement, was $33.31 per share. The per share merger
consideration represents a 1.2% premium to the
five-day
volume weighted average price, or VWAP, for the week of
October 11, 2010, a 14.8% premium to the
30-day
VWAP
and a 23.1% premium to the
90-day
VWAP,
in each case for the respective period prior to October 15,
2010. On
[ ],
2010, the most recent practicable date before this proxy
statement was mailed to our stockholders, the closing price for
the common stock on Nasdaq was $[ ]
per share. The market price for our common stock may fluctuate
prior to the
11
effective time. You are encouraged to obtain current market
quotations for common stock in connection with voting your
shares of common stock.
Appraisal
Rights (Page 81)
Stockholders are entitled to appraisal rights under the General
Corporation Law of the State of Delaware, or the DGCL, in
connection with the merger, provided that stockholders meet all
of the conditions set forth in Section 262 of the DGCL.
This means that you are entitled to have the value of your
shares of common stock determined by the Delaware Court of
Chancery and to receive payment based on that valuation if you
properly exercise your appraisal rights. The ultimate amount you
receive in an appraisal proceeding may be less than, equal to or
more than the amount you would have received under the merger
agreement.
To exercise your appraisal rights, you must submit a written
demand for appraisal to the Company before the vote is taken on
the merger agreement and you must not submit a proxy or
otherwise vote in favor of the proposal to adopt the merger
agreement. Your failure to follow exactly the procedures
specified under the DGCL will result in the loss of your
appraisal rights. See the section entitled Appraisal
Rights beginning on page 85 and the text of the
Delaware appraisal rights statute reproduced in its entirety as
Annex C
to this proxy statement. If you hold your
shares of common stock through a bank, brokerage firm or other
nominee and you wish to exercise appraisal rights, you should
consult with your bank, broker or other nominee to determine the
appropriate procedures for the making of a demand for appraisal
by the nominee. In view of the complexity of the DGCL,
stockholders who may wish to pursue appraisal rights should
consult their legal and financial advisors.
Delisting
and Deregistration of Common Stock (Page 85)
If the merger is completed, the common stock will be delisted
from Nasdaq and deregistered under the Securities Exchange Act
of 1934, as amended, or the Exchange Act. As such, we would no
longer file reports with the Securities and Exchange Commission,
or the SEC, on account of the common stock.
12
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER
The following questions and answers are intended to address
briefly some commonly asked questions regarding the merger, the
merger agreement and the special meeting. These questions and
answers may not address all questions that may be important to
you as a Company stockholder. Please refer to the Summary
Term Sheet and the more detailed information contained
elsewhere in this proxy statement, the annexes to this proxy
statement and the documents referred to in this proxy statement,
which you should read carefully. You may obtain the information
incorporated by reference in this proxy statement without charge
by following the instructions under the section entitled
Where You Can Find More Information beginning on
page 85.
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Q.
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What is the proposed transaction and what effects will it
have on the Company?
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A.
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The proposed transaction is the acquisition of American
Commercial Lines Inc., or the Company, by Finn Holding
Corporation, or Parent, pursuant to the merger agreement. If the
proposal to adopt the merger agreement is approved by our
stockholders and the other closing conditions under the merger
agreement have been satisfied or waived, Finn Merger
Corporation, or Merger Sub, a wholly-owned subsidiary of Parent,
will merge with and into us and we will continue as the
surviving corporation. We refer to this transaction as the
merger. As a result of the merger, we will become a subsidiary
of Parent and will no longer be a publicly held corporation, our
common stock will be delisted from Nasdaq and deregistered under
the Exchange Act, we will no longer file reports with the SEC on
account of the common stock, and you will no longer have any
interest in our future earnings or growth.
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Q.
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What will I receive if the merger is completed?
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A.
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Upon completion of the merger, you will be entitled to receive
the per share merger consideration of $33.00 in cash, without
interest, less any applicable withholding taxes, for each share
of common stock that you own, unless you have properly exercised
and not withdrawn your appraisal rights under the DGCL with
respect to such shares. For example, if you own 100 shares
of common stock, you will receive $3,300 in cash in exchange for
your shares of common stock, less any applicable withholding
taxes. You will not own any shares of the capital stock in the
surviving corporation. GVI Stockholders will be entitled to
receive $31.25 in cash, without interest, less any applicable
withholding taxes, for each share of common stock that they own,
if the transaction closes on or before December 31, 2010
and $33.00 per share if the transaction closes thereafter.
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Q.
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How does the per share merger consideration compare to the
market price of the common stock prior to announcement of the
merger?
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A.
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The per share merger consideration represents a 1.2% premium to
the
five-day
volume weighted average price, or VWAP, for the week of
October 11, 2010, a 14.8% premium to the
30-day
VWAP
and a 23.1% premium to the
90-day
VWAP,
in each case for the respective period prior to October 15,
2010.
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Q.
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How does the board of directors recommend that I vote?
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A.
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The board of directors recommends that you vote
FOR
the proposal to adopt the merger
agreement and
FOR
the proposal to adjourn the
special meeting, if necessary or appropriate, to solicit
additional proxies.
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Q.
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When do you expect the merger to be completed?
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A.
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We are working towards completing the merger as soon as
possible. Assuming timely satisfaction of necessary closing
conditions, we anticipate that the merger will be completed by
the end of the fourth quarter of 2010. If our stockholders vote
to approve the proposal to adopt the merger agreement, the
merger will become effective as promptly as practicable
following the satisfaction or waiver of the other conditions to
the merger.
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Q.
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What happens if the merger is not completed?
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A.
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If the merger agreement is not adopted by our stockholders or if
the merger is not completed for any other reason, our
stockholders will not receive any payment for their shares of
the common stock in connection
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13
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with the merger. Instead, we will remain an independent public
company and the common stock will continue to be listed and
traded on Nasdaq. Under specified circumstances, we may be
required to pay to or receive from Parent a fee with respect to
the termination of the merger agreement as described under the
section entitled The Merger Agreement Fees and
Expenses beginning on page 71.
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Q.
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Is the merger expected to be taxable to me?
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A.
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Yes. The exchange of shares of common stock for cash pursuant to
the merger will be a taxable transaction to U.S. holders (as
defined in the section entitled The Merger
Material U.S. Federal Income Tax Consequences of the
Merger beginning on page 51) for U.S. federal
income tax purposes. If you are a U.S. holder and you exchange
your shares of common stock in the merger, you will recognize
gain or loss in an amount equal to the difference, if any,
between the cash payments made pursuant to the merger and your
adjusted tax basis in your shares of common stock. Backup
withholding may also apply to the cash payments made pursuant to
the merger unless the U.S. holder or other payee provides a
taxpayer identification number, certifies that such number is
correct and otherwise complies with the backup withholding
rules. You should read the section entitled The
Merger Material U.S. Federal Income Tax Consequences
of the Merger beginning on page 51 for a more
detailed discussion of the U.S. federal income tax consequences
of the merger. You should also consult your tax advisor for a
complete analysis of the effect of the merger on your federal,
state and local and/or foreign taxes.
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Q:
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Do any of our directors or officers have interests in the
merger that may differ from or be in addition to my interests as
a stockholder?
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A:
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Yes. In considering the recommendation of the board of directors
with respect to the adoption of the merger agreement, you should
be aware that our directors and executive officers have
interests in the merger that are different from, or in addition
to, the interests of our stockholders generally. The board of
directors was aware of and considered these interests, among
other matters, in evaluating and negotiating the merger
agreement and the merger, and in recommending that the merger
agreement be adopted by our stockholders. See the section
entitled The Merger Interests of Certain
Persons in the Merger beginning on page 48.
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Q.
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Why am I receiving this proxy statement and proxy card or
voting instruction form?
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A.
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You are receiving this proxy statement and proxy card or voting
instruction form because you own shares of our common stock.
This proxy statement describes matters on which we urge you to
vote and is intended to assist you in deciding how to vote your
shares of the common stock with respect to such matters.
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Q.
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When and where is the special meeting?
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A.
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The special meeting of our stockholders will be held on
December [ ], 2010 at [ ]
a.m. EST, at
[ ].
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Q.
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What am I being asked to vote on at the special meeting?
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A.
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You are being asked to consider and vote on a proposal to adopt
the merger agreement, as amended from time to time, that
provides for the acquisition of us by Parent and to approve a
proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies if there are
insufficient votes at the time of the special meeting to approve
the proposal to adopt the merger agreement.
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Q.
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What vote is required for our stockholders to approve the
proposal to adopt the merger agreement?
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A.
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The adoption of the merger agreement requires the affirmative
vote of the holders of a majority of the outstanding shares of
our common stock entitled to vote thereon. GVI Stockholders
entered into the voting agreement pursuant to which they have
agreed to vote shares owned by them representing, in the
aggregate, 25.26% of the outstanding shares of the Company in
favor of the merger as discussed in the section entitled
The Voting Agreement beginning on page 74. The
voting agreement automatically terminates upon the termination
of the Merger Agreement or the occurrence of certain other
events.
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14
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Because the affirmative vote required to approve the proposal to
adopt the merger agreement is based upon the total number of
outstanding shares of common stock, if you fail to submit a
proxy or vote in person at the special meeting, or abstain, or
you fail to provide your broker with instructions, this will
have the same effect as a vote
AGAINST
the
proposal to adopt the merger agreement.
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Q.
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What vote of our stockholders is required to approve the
proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies?
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A.
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Approval of the proposal to adjourn the special meeting, if
necessary or appropriate, for the purpose of soliciting
additional proxies requires the affirmative vote of a majority
of the votes cast thereon in person or by proxy at the special
meeting, whether or not a quorum is present.
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Because the affirmative vote required to approve the proposal to
adjourn the special meeting is based upon the number of votes
cast thereon in person or by proxy at the special meeting, if
you fail to submit a proxy or vote in person at the special
meeting, or if you abstain or fail to provide your broker with
instructions as to the proposal to adjourn the special meeting,
it will have no effect on the proposal to adjourn the special
meeting, if necessary or appropriate.
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Q.
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Who can vote at the special meeting?
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A.
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All of our holders of common stock of record as of the close of
business on
[ ],
2010, the record date for the special meeting, are entitled to
receive notice of, and to vote at, the special meeting. Each
holder of our common stock is entitled to cast one vote on each
matter properly brought before the special meeting for each
share of common stock that such holder owned as of the record
date.
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Q.
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What is a quorum?
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A.
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A majority of the shares of common stock outstanding at the
close of business on the record date and entitled to vote,
present in person or represented by proxy, at the special
meeting constitutes a quorum for the purposes of the special
meeting. Abstentions are counted as present for the purpose of
determining whether a quorum is present. Broker non-votes are
not counted as present for the purpose of determining whether a
quorum is present. If a quorum is not represented at the special
meeting, the holders of the shares of common stock present in
person or by proxy and entitled to vote at the special meeting
will have the power, by vote of a majority of the votes cast on
a proposal to adjourn the meeting, to adjourn the meeting to
another time, or to another time and place, without notice other
than announcement of adjournment at the meeting, and there may
be successive adjournments for like cause and in like manner
until a quorum is present. At such adjourned meeting at which a
quorum is present, any business may be transacted that may have
been transacted at the special meeting as originally notified.
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Q.
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How do I vote?
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A.
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If you are a stockholder of record, you may have your shares of
the common stock voted on matters presented at the special
meeting in any of the following ways:
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in person you may attend the special
meeting and cast your vote there; or
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by proxy stockholders of record have a
choice of submitting a proxy:
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over the Internet (the website for submitting your
proxy over the Internet is on your proxy card);
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by using a toll-free telephone number noted on your
proxy card; or
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by completing, signing, dating and returning the
enclosed proxy card in the accompanying prepaid reply envelope.
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If you are not a stockholder of record, please refer to the
instructions provided by your bank, brokerage firm or other
nominee to see which of the above choices are available to you.
Please note that if you are a beneficial owner and wish to vote
in person at the special meeting, you must provide a legal proxy
from your bank, brokerage firm or other nominee.
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15
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A control number, located on your proxy card, is designed to
verify your identity and allow you to vote your shares of the
common stock, and to confirm that your voting instructions have
been properly recorded when submitting a proxy over the Internet
or by telephone. Please be aware that if you submit a proxy over
the Internet, you may incur costs such as telephone and Internet
access charges for which you will be responsible.
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Q.
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What is the difference between holding shares as a
stockholder of record and as a beneficial owner?
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A.
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If your shares of the common stock are registered directly in
your name with our transfer agent, American Stock
Transfer & Trust Company, you are considered,
with respect to those shares of common stock, the
stockholder of record. This proxy statement, and
your proxy card, have been sent directly to you by us.
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If your shares of the common stock are held through a bank,
brokerage firm or other nominee, you are considered the
beneficial owner of shares of the common stock held
in street name. In that case, this proxy statement has been
forwarded to you by your bank, brokerage firm or other nominee
who is considered, with respect to those shares of the common
stock, the stockholder of record. As the beneficial owner, you
have the right to direct your bank, brokerage firm or other
nominee how to vote your shares of the common stock by following
their instructions for voting.
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Q.
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I am the beneficial owner of my shares of the common stock,
but my shares are held in street name by my bank,
brokerage firm or other nominee. Will my bank, brokerage firm or
other nominee vote my shares of common stock for me?
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A.
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No. Your bank, brokerage firm or other nominee will only be
permitted to vote your shares of the common stock if you
instruct your bank, brokerage firm or other nominee how to vote.
You should follow the instructions provided by your bank,
brokerage firm or other nominee regarding the voting of your
shares of common stock. If you do not instruct your bank,
brokerage firm or other nominee to vote your shares of common
stock, your shares of common stock will not be voted and the
effect will be the same as a vote
AGAINST
the
proposal to adopt the merger agreement. If you do not instruct
your bank, brokerage firm or other nominee how to vote your
shares of common stock as to the proposal to adjourn the special
meeting, your shares of common stock will not be voted on the
proposal to adjourn and will have no effect on that proposal.
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Q.
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How can I change or revoke my vote?
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A.
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You have the right to revoke a proxy, whether delivered over the
Internet, by telephone or by mail, at any time before it is
exercised, by submitting a different proxy at a later date
through any of the methods available to you, by giving written
notice of revocation to our Corporate Secretary, which must be
filed with the Corporate Secretary by the time the special
meeting begins, or by attending the special meeting and voting
in person.
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Q.
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What is a proxy?
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A.
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A proxy is your legal designation of another person, referred to
as a proxy, to vote your shares of stock. The written document
describing the matters to be considered and voted on at the
special meeting is called a proxy statement. The document used
to designate a proxy to vote your shares of stock is called a
proxy card. Our board of directors has designated
[ ],
[ ]
and
[ ],
and each of them, with full power of substitution, as proxies
for the special meeting.
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Q.
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If a stockholder gives a proxy, how are the shares of common
stock voted?
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A.
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Regardless of the method you choose to vote, the individuals
named on the enclosed proxy card, or your proxies, will vote
your shares of common stock in the way that you indicate. When
completing the Internet or telephone processes or the proxy
card, you may specify whether your shares of common stock should
be voted for or against or to abstain from voting on all, some
or none of the specific items of business to come before the
special meeting.
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If you properly sign your proxy card but do not mark the boxes
showing how your shares should be voted on a matter, the shares
represented by your properly signed proxy will be voted
FOR
the proposal to
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adopt the merger agreement and
FOR
the
proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies.
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Q.
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How are votes counted?
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A.
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For the proposal to adopt the merger agreement, you may vote
FOR, AGAINST,
or
ABSTAIN,
. Abstentions and broker non-votes
with respect to the proposal to adopt the merger agreement will
have the same effect as votes
AGAINST
the
proposal to adopt the merger agreement.
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For the proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies, you may vote
FOR, AGAINST,
or
ABSTAIN
. Abstentions and broker non-votes
with respect to the proposal to adjourn the special meeting will
have no effect on the proposal.
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Q.
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What do I do if I receive more than one proxy or set of
voting instructions?
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A.
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If you hold shares of the common stock in street
name and also directly as a record holder or otherwise,
you may receive more than one proxy and/or set of voting
instructions relating to the special meeting. These should each
be voted and/or returned separately in accordance with the
instructions provided in this proxy statement in order to ensure
that all of your shares of common stock are voted.
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Q.
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What happens if I sell my shares of common stock before the
special meeting?
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A.
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The record date for stockholders entitled to vote at the special
meeting is earlier than both the date of the special meeting and
the consummation of the merger. If you transfer your shares of
the common stock after the record date but before the special
meeting you will, unless special arrangements are made, retain
your right to vote at the special meeting but will transfer the
right to receive the merger consideration to the person to whom
you transfer your shares.
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Q.
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Who will solicit and pay the cost of soliciting proxies?
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A.
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The expenses of preparing, printing and mailing this proxy
statement and the proxies solicited hereby will by borne by us.
Our directors, officers and employees may also solicit proxies
by telephone, by facsimile, by mail, on the Internet or in
person. They will not be paid any additional amounts for
soliciting proxies.
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We have engaged
[ ]
to assist in the solicitation of proxies for the special
meeting. The Company estimates that it will pay
[ ] a
fee of approximately $[ ], plus
customary administrative fees for expenses related to calls made
to or received from our stockholders. We will reimburse
[ ]
for reasonable
out-of-pocket
expenses and will indemnify
[ ]
and its affiliates against certain claims, liabilities, losses,
damages and expenses.
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We may also reimburse brokers, banks and other custodians,
nominees and fiduciaries representing beneficial owners of
shares of common stock for their expenses in forwarding
soliciting materials to beneficial owners of the common stock
and in obtaining voting instructions from those owners.
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Q.
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What do I need to do now?
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A.
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Even if you plan to attend the special meeting, after carefully
reading and considering the information contained in this proxy
statement, please submit a proxy promptly to ensure that your
shares are represented and voted at the special meeting. If you
hold your shares of the common stock in your own name as the
stockholder of record, please submit a proxy to have your shares
of the common stock voted at the special meeting by completing,
signing, dating and returning the enclosed proxy card in the
accompanying prepaid reply envelope; by using the telephone
number printed on your proxy card; or by using the Internet
instructions printed on your proxy card. If you decide to attend
the special meeting and vote in person, your vote by ballot will
revoke any proxy previously submitted. If you are a beneficial
owner, please refer to the instructions provided by your bank,
brokerage firm or other nominee to see which of the above
choices are available to you.
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Q.
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Should I send in my stock certificates now?
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17
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A.
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No. You will be sent a letter of transmittal promptly after
the completion of the merger, describing how you may exchange
your shares of common stock for the per share merger
consideration. If your shares of common stock are held in
street name by your bank, brokerage firm or other
nominee, you will receive instructions from your bank, brokerage
firm or other nominee as to how to effect the surrender of your
street name shares of common stock in exchange for
the per share merger consideration. Please do NOT return your
stock certificate(s) with your proxy.
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Q.
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Am I entitled to exercise appraisal rights under the DGCL
instead of receiving the per share merger consideration for my
shares of the common stock?
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A.
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Yes. As a holder of common stock, you are entitled to appraisal
rights under the DGCL in connection with the merger if you take
certain actions and meet certain conditions. See the section
entitled Appraisal Rights beginning on page 81.
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Q.
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Who can help answer my other questions?
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A.
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If you have additional questions about the merger, need
assistance in submitting your proxy or voting your shares of
common stock, or need additional copies of the proxy statement
or the enclosed proxy card, please call
[ ],
our proxy solicitor, toll-free at
[ ].
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CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This proxy statement contains certain forward-looking
statements within the meaning of the safe harbor
provisions of the United States Private Securities Litigation
Reform Act of 1995. Forward-looking statements are statements
that are not historical facts. Words such as
expect(s), feel(s),
believe(s), will, may,
anticipate(s), intend(s) and similar
expressions are intended to identify such forward-looking
statements. These statements include, but are not limited to,
the expected timing of the acquisition; the availability of the
financing under the debt commitment letter; the ability of
Parent and the Company to close the acquisition; the performance
of the parties under the terms of the merger agreement and
related transaction documents; and statements regarding future
performance. All of such information and statements are subject
to certain risks and uncertainties, the effects of which are
difficult to predict and generally beyond the control of the
Company, that could cause actual results to differ materially
from those expressed in, or implied or projected by, the
forward-looking information and statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date of this proxy
statement. Investors are also urged to carefully review and
consider the various disclosures in the Companys SEC
periodic and interim reports, including but not limited to its
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009, Quarterly
Reports on
Form 10-Q
for the fiscal quarters ended March 31, 2010 and
June 30, 2010 and Current Reports on
Form 8-K
filed from time to time by the Company, and the following
factors:
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uncertainties associated with the acquisition of the Company by
Parent;
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uncertainties as to the timing of the merger;
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the failure to receive approval of the transaction by the
stockholders of the Company;
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the ability of the parties to satisfy closing conditions to the
transaction, including the receipt of regulatory approvals;
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changes in economic, business, competitive, technological
and/or
regulatory factors;
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the outcome of any legal proceedings that have been or may be
instituted against the Company
and/or
others relating to the merger agreement;
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failure of a party to comply with its obligations under the
merger agreement and the related transaction documents; and
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failure of Parent to satisfy the conditions under the debt
commitment letter.
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Consequently, all of the forward-looking statements we make in
this document are qualified by the information contained or
incorporated by reference herein, including, but not limited to,
(a) the information contained under this heading and
(b) the information contained under the headings Risk
Factors and in our consolidated financial statements and
notes thereto included in our most recent filings on
Forms 10-Q
and
10-K
(see the section entitled Where You Can Find More
Information beginning on page 85. We are under no
obligation to publicly release any revision to any
forward-looking statement contained or incorporated herein to
reflect any future events or occurrences.
You should carefully consider the cautionary statements
contained or referred to in this section in connection with any
subsequent written or oral forward-looking statements that may
be issued by us or persons acting on our behalf.
19
PARTIES
TO THE MERGER
The
Company
American Commercial Lines Inc.
1701 East Market Street
Jeffersonville, Indiana 47130
(812) 288-0100
The Company, a Delaware corporation with its headquarters in
Jeffersonville, Indiana, is one of the largest and most
diversified marine transportation and services companies in the
United States, providing barge transportation and related
services under the provisions of the Jones Act, as well as
manufacturing barges and other vessels, including ocean-going
liquid tank barges. Information about ACL can be found at
www.aclines.com. Our website address is provided as an inactive
textual reference only. The information contained on our website
is not incorporated into, and does not form a part of, this
proxy statement or any other report or document on file with or
furnished to the SEC. See also the section entitled Where
You Can Find More Information beginning on page 85.
Our common stock is publicly traded on Nasdaq under the symbol
ACLI.
Parent
Finn Holding Corporation
c/o Platinum
Equity, LLC
52 Vanderbilt Avenue
New York, NY 10017
(212) 905-0010
Parent, is a Delaware corporation that was formed by Platinum
Equity, LLC, or Platinum Equity, solely for the purpose of
entering into the merger agreement and completing the
transactions contemplated by the merger agreement. Upon
completion of the merger, the Company will be a wholly-owned
subsidiary of Parent.
Merger
Sub
Finn Merger Corporation
c/o Platinum
Equity, LLC
52 Vanderbilt Avenue
New York, NY 10017
(212) 905-0010
Merger Sub, a Delaware corporation, has the sole purpose of
entering into the merger agreement and completing the
transactions contemplated by the merger agreement. Upon
completion of the merger, Merger Sub will cease to exist.
20
THE
SPECIAL MEETING
Time,
Place and Purpose of the Special Meeting
This proxy statement is being furnished to our stockholders as
part of the solicitation of proxies by the board of directors
for use at the special meeting to be held on
December [ ] 2010, starting
at [ ] a.m. EST, at
[ ],
or at any postponement or adjournment thereof. At the special
meeting, holders of our common stock will be asked to approve
the proposal to adopt the merger agreement and to approve the
proposal to adjourn the special meeting, if necessary or
appropriate, for the purpose of soliciting additional proxies if
there are insufficient votes at the time of the special meeting
to approve the proposal to adopt the merger agreement.
Our stockholders must approve the proposal to adopt the merger
agreement in order for the merger to occur. If our stockholders
fail to approve the proposal to adopt the merger agreement, the
merger will not occur. A copy of the merger agreement is
attached as
Annex A
to this proxy statement, which
we encourage you to read carefully in its entirety.
Record
Date and Quorum
We have fixed the close of business on
[ ],
2010 as the record date for the special meeting, and only
holders of record of common stock on the record date are
entitled to vote at the special meeting. You are entitled to
receive notice of, and to vote at, the special meeting if you
owned shares of common stock at the close of business on the
record date. On the record date, there were
[ ] shares
of common stock outstanding and entitled to vote. Each share of
common stock entitles its holder to one vote on all matters
properly coming before the special meeting.
A majority of the shares of common stock outstanding at the
close of business on the record date and entitled to vote,
present in person or represented by proxy, at the special
meeting constitutes a quorum for the purposes of the special
meeting. Shares of common stock represented at the special
meeting but not voted, including shares of common stock for
which a stockholder directs an abstention from
voting, will be counted for purposes of establishing a quorum.
Broker non-votes will not be counted as present for purposes of
determining whether a quorum is present. A quorum is necessary
to transact business at the special meeting. Once a share of
common stock is represented at the special meeting, it will be
counted for the purpose of determining a quorum at the special
meeting and any adjournment of the special meeting. However, if
a new record date is set for an adjourned special meeting, then
a new quorum will have to be established. In the event that a
quorum is not present at the special meeting, it is expected
that the special meeting will be adjourned to solicit additional
proxies.
Attendance
Only stockholders of record or their duly authorized proxies
have the right to attend the special meeting. To gain
admittance, you must present valid photo identification, such as
a drivers license or passport. If your shares of our
common stock are held through a bank, brokerage firm or other
nominee, please bring to the special meeting a copy of your
brokerage statement evidencing your beneficial ownership of our
common stock and valid photo identification. If you are the
representative of a corporate or institutional stockholder, you
must present valid photo identification along with proof that
you are the representative of such stockholder. Please note that
cameras, recording devices and other electronic devices will not
be permitted at the special meeting.
Vote
Required
Approval of the proposal to adopt the merger agreement requires
the affirmative vote of the holders of a majority of the
outstanding shares of our common stock. For the proposal to
adopt the merger agreement, you may vote
FOR,
AGAINST,
or
ABSTAIN.
Abstentions will not be counted as votes cast in favor of
the proposal to adopt the merger agreement, but will count for
the purpose of determining whether a quorum is present.
If
you fail to submit a proxy or to vote in person at the special
meeting, or abstain, it will have the same effect as a vote
AGAINST the proposal to adopt the merger
agreement.
21
The proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies requires the
affirmative vote of a majority of the votes cast thereon in
person or by proxy at the special meeting, whether or not a
quorum is present. For the proposal to adjourn the special
meeting, if necessary or appropriate, you may vote
FOR
,
AGAINST
or
ABSTAIN
. For purposes of this proposal, if
your shares of common stock are present at the special meeting
but are not voted on this proposal, or if you have given a proxy
and abstained on this proposal, this will have no effect on the
proposal.
If your shares of the common stock are registered directly in
your name with our transfer agent, American Stock
Transfer & Trust Company, you are considered,
with respect to those shares of common stock, the stockholder of
record. This proxy statement and proxy card have been sent
directly to you by the Company.
If your shares of common stock are held in street name through a
bank, brokerage firm or other nominee, you are considered the
beneficial owner of your shares of common stock. In that case,
this proxy statement has been forwarded to you by your bank,
brokerage firm or other nominee who is considered, with respect
to those shares of common stock, the stockholder of record. As
the beneficial owner, you have the right to direct your bank,
brokerage firm or other nominee how to vote your shares by
following their instructions for voting.
Brokers who hold shares in street name for customers only have
the authority to vote on routine proposals when they have not
received instructions from beneficial owners. However, brokers
are precluded from exercising their voting discretion with
respect to approving non-routine matters this is
known as a broker non-vote. Both the proposal to adopt the
merger agreement and the proposal to adjourn the special meeting
are considered non-routine matters. As a result, absent specific
instructions from the beneficial owner of such shares of common
stock, brokers are not empowered to vote those shares of common
stock.
If you fail to direct your bank or brokerage how to vote your
shares for both of the proposals, your shares will not be
counted for purposes of determining a quorum, but will have the
same effect as a vote AGAINST the proposal to adopt
the merger agreement, and will have no effect on the proposal to
adjourn the special meeting.
If you fail to direct your bank or brokerage how to vote your
shares for the proposal to adopt the merger agreement, but you
do give direction for how to vote your shares for the proposal
to adjourn the special meeting, your shares will be counted for
the purposes of determining a quorum, but will have the same
effect as a vote AGAINST the proposal to adopt the
merger agreement.
If you fail to direct your bank or brokerage how to vote your
shares for the proposal to adjourn the special meeting, but you
do give direction for how to vote your shares for the proposal
to adopt the merger agreement, your shares will be counted for
the purposes of determining a quorum, but will have no effect on
the proposal to adjourn the special meeting.
If you are a stockholder of record, you may have your shares of
our common stock voted on matters presented at the special
meeting in any of the following ways:
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in person you may attend the special meeting and
cast your vote there; or
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by proxy stockholders of record have a choice of
submitting a proxy:
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over the Internet (the website for submitting your proxy over
the Internet is on your proxy card);
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by using a toll-free telephone number noted on your proxy
card; or
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by completing, signing and dating the proxy card you receive and
returning it in the enclosed prepaid reply envelope.
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If you are not a stockholder of record, you will receive
instructions from your bank, brokerage firm or other nominee
that you must follow in order to have your shares of common
stock voted. Those instructions will identify which of the above
choices are available to you in order to have your shares voted.
Please note that if you are a beneficial owner and wish to vote
in person at the special meeting, you must provide a legal proxy
from your bank, brokerage firm or other nominee.
22
A control number, located on your proxy card, is designed to
verify your identity and allow you to vote your shares of common
stock, and to confirm that your voting instructions have been
properly recorded when submitting a proxy over the Internet or
by telephone. Please be aware that if you submit a proxy over
the Internet, you may incur costs such as telephone and Internet
access charges for which you will be responsible.
Please refer to the instructions on your proxy or voting
instruction card to determine the deadlines for submitting a
proxy over the Internet or by telephone. If you choose to have
your shares voted at the special meeting by mailing a proxy
card, your proxy card must be filed with the corporate secretary
of the Company by the time the special meeting begins.
Please
do not send in your stock certificates with your proxy card.
When the merger is completed, a separate letter of
transmittal will be mailed to you that will enable you to
receive the per share merger consideration in exchange for your
stock certificates.
If you submit a proxy, regardless of the method you choose, the
individuals named on the enclosed proxy card, and each of them,
with full power of substitution, or your proxies, will vote your
shares of the common stock in the way that you indicate. When
completing the Internet or telephone processes or the proxy
card, you may specify whether your shares of common stock should
be voted for or against or to abstain from voting on all, some
or none of the specific items of business to come before the
special meeting.
If you properly sign your proxy card but do not mark the boxes
showing how your shares of common stock should be voted on a
matter, the shares of common stock represented by your properly
signed proxy will be voted
FOR
the proposal
to adopt the merger agreement and
FOR
the
proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies.
If you have any questions or need assistance voting your shares,
please call
[ ],
our proxy solicitor, toll-free at
[ ].
IT IS IMPORTANT THAT YOU PROMPTLY SUBMIT A PROXY TO HAVE YOUR
SHARES OF COMMON STOCK VOTED AT THE SPECIAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE
ENCLOSED PROXY CARD IN THE ACCOMPANYING PREPAID REPLY ENVELOPE,
OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. STOCKHOLDERS
WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXIES AND VOTE
IN PERSON.
As of
[ ],
2010, the record date, the directors and executive officers of
the Company beneficially owned and were entitled to vote, in the
aggregate,
[ ] shares
of common stock (not including any shares of common stock
deliverable upon exercise or conversion of any options or
restricted stock units), representing
[ ]% of the outstanding shares of
common stock.
Proxies
and Revocation
Any stockholder of record entitled to vote at the special
meeting may submit a proxy by telephone, over the Internet, or
by returning the enclosed proxy card in the accompanying prepaid
reply envelope, or may vote in person by appearing at the
special meeting. If your shares of common stock are held in
street name by your broker, you should instruct your
broker on how to vote your shares of common stock using the
instructions provided by your broker. If you fail to submit a
proxy or to vote in person at the special meeting, or do not
provide your broker with instructions, your shares of common
stock will not be voted on the proposal to adopt the merger
agreement, which will have the same effect as a vote
AGAINST
the proposal to adopt the merger
agreement, and your shares of common stock will not have an
effect on the proposal to adjourn the special meeting.
You have the right to revoke a proxy, whether delivered by
telephone, over the Internet, or by mail, at any time before it
is exercised, by submitting another proxy again at a later date
through any of the methods available to you, by giving written
notice of revocation to our Corporate Secretary, which must be
filed with the Corporate Secretary by the time the special
meeting begins, or by attending the special meeting and voting
in person. If you instructed your broker on how to vote your
shares of common stock, you may revoke your proxy by using the
instructions provided by your broker.
23
Adjournments
and Postponements
Although it is not currently expected, the special meeting may
be adjourned or postponed for the purpose of soliciting
additional proxies if there are insufficient votes at the time
of the special meeting to approve the proposal to adopt the
merger agreement. Other than an announcement to be made at the
special meeting of the time, date and place of an adjourned
meeting, any adjournment may be made without notice (if the
adjournment is not for more than thirty days and a new record
date has not been fixed). Any adjournment or postponement of the
special meeting for the purpose of soliciting additional proxies
will allow the Companys stockholders who have already sent
in their proxies to revoke them at any time prior to their use
at the special meeting as adjourned or postponed.
Anticipated
Date of Completion of the Merger
We are working towards completing the merger as soon as
possible. Assuming timely satisfaction of necessary closing
conditions, we anticipate that the merger will be completed by
the end of the fourth quarter of 2010. If our stockholders vote
to approve the proposal to adopt the merger agreement, the
merger will become effective as promptly as practicable
following the satisfaction or waiver of the other conditions to
the merger.
Rights of
Stockholders Who Seek Appraisal
Stockholders are entitled to appraisal rights under the DGCL in
connection with the merger. This means that you are entitled to
have the fair value of your shares of common stock determined by
the Delaware Court of Chancery and to receive payment based on
that valuation if you properly exercise your appraisal rights.
The ultimate amount you receive in an appraisal proceeding may
be less than, equal to or more than the amount you would have
received under the merger agreement.
To exercise your appraisal rights, you must submit a written
demand for appraisal to the Company before the vote is taken on
the merger agreement and you must not vote in favor of the
proposal to adopt the merger agreement. Your failure to follow
exactly the procedures specified under the DGCL may result in
the loss of your appraisal rights. See the section entitled
Appraisal Rights beginning on page 81 and the
text of the Delaware appraisal rights statute reproduced in its
entirety as
Annex C
to this proxy statement. If you
hold your shares of common stock through a bank, brokerage firm
or other nominee and you wish to exercise appraisal rights, you
should consult with your bank, broker or other nominee to
determine the appropriate procedures for the making of a demand
for appraisal by the nominee. In view of the complexity of the
DGCL, stockholders who may wish to pursue appraisal rights
should consult their legal and financial advisors.
Solicitation
of Proxies; Payment of Solicitation Expenses
The expenses of preparing, printing and mailing this proxy
statement and the proxies solicited hereby will by borne by us.
Our directors, officers and employees may also solicit proxies
by telephone, by facsimile, by mail, on the Internet or in
person. They will not be paid any additional amounts for
soliciting proxies.
We have engaged
[ ]
to assist in the solicitation of proxies for the special
meeting. The Company estimates that it will pay
[ ] a
fee of approximately $[ ], plus
customary administrative fees for expenses related to calls made
to or received from our stockholders. We will reimburse
[ ]
for reasonable
out-of-pocket
expenses and will indemnify
[ ]
and its affiliates against certain claims, liabilities, losses,
damages and expenses.
We may also reimburse brokers, banks and other custodians,
nominees and fiduciaries representing beneficial owners of
shares of common stock for their expenses in forwarding
soliciting materials to beneficial owners of the common stock
and in obtaining voting instructions from those owners.
Questions
and Additional Information
If you have more questions about the merger or how to submit
your proxy, or if you need additional copies of this proxy
statement or the enclosed proxy card or voting instructions,
please call
[ ],
our proxy solicitor, toll-free at
[ ].
24
THE
MERGER
This discussion of the merger is qualified in its entirety by
reference to the merger agreement, which is attached to this
proxy statement as
Annex A.
You should read the
entire merger agreement carefully as it is the legal document
that governs the merger.
The merger agreement provides that Merger Sub will merge with
and into the Company. The Company will be the surviving
corporation in the merger and will continue to do business
following the merger. As a result of the merger, the Company
will cease to be a publicly traded company. You will not own any
shares of the capital stock of the surviving corporation.
Merger
Consideration
In the merger, each outstanding share of common stock (except
for certain shares owned, if any, by Company, Parent, Merger
Sub, and their direct and indirect wholly owned subsidiaries,
GVI Stockholders, and shares owned by stockholders who have
properly exercised their appraisal rights) will be converted
into the right to receive $33.00 in cash, without interest,
which amount we refer to as the per share merger consideration,
less any applicable withholding taxes. GVI Stockholders will be
entitled to receive $31.25 less any applicable withholding taxes
in cash for each share of Company common stock they hold if the
transaction closes on or before December 31, 2010, and
$33.00 less any applicable withholding taxes in cash per share
if the transaction closes thereafter.
GVI Stockholders have entered into a voting agreement pursuant
to which they have agreed to vote shares owned by them
representing, in the aggregate, 25.26% of the outstanding shares
of the Company, in favor of the transaction. The voting
agreement automatically terminates upon the termination of the
merger agreement or the occurrence of certain other events. In
the voting agreement GVI Stockholders have agreed to accept
$1.75 less than other stockholders in consideration per share in
the event that either the merger occurs on or prior to
December 31, 2010 or the merger agreement is terminated
because the Company has accepted a superior proposal, as defined
in the merger agreement, if that transaction closes on or prior
to December 31, 2010. GVI Stockholders have also granted an
option to Parent to acquire GVI Stockholders shares at a
price equal to the then-applicable merger consideration per
share less $1.75, exercisable from and after December 15 so long
as shares are purchased by Parent on or prior to
December 31, 2010, provided that, if Parent exercises the
option and the merger agreement is subsequently terminated for a
superior proposal, Parent has agreed to both vote for such
proposal and accept the same consideration that GVI Stockholders
would have received in respect of those shares, subject to
Parents obligation to share 50% of the profits with GVI
Stockholders from its subsequent disposition of those shares (on
or prior to the termination of the transaction contemplated by
such proposal) within one year of the purchase of the shares if
the Company terminates to accept a superior proposal prior to
January 15, 2011.
The board of directors recommends that you vote
FOR the proposal to adopt the merger agreement and
FOR the proposal to adjourn the special meeting, if
necessary or appropriate, to solicit additional proxies.
In considering the recommendation of the board of directors with
respect to the proposal to adopt the merger agreement, you
should be aware that our directors and executive officers have
interests in the merger that are different from, or in addition
to, yours. The board of directors was aware of and considered
these interests, among other matters, in evaluating and
negotiating the merger agreement and the merger, and in
recommending that the merger agreement be adopted by the
stockholders of the Company. See the section entitled The
Merger Interests of Certain Persons in the
Merger beginning on page 48.
Background
of the Merger
Our board of directors and senior management regularly review
our business, our future business plans and strategic
opportunities. As part of this review, factors they have
considered include the Companys competitive market
position; growth and revenue potential; and the viability of
potential strategic alternatives, such as acquisitions,
expansion of service offerings and potential merger or sale.
25
In May 2010, Louis Samson, a Platinum Equity principal,
approached a representative of BofA Merrill Lynch to seek an
introduction to representatives of Equity Group Investments,
L.L.C., or EGI, a private investment group and an affiliate of
GVI Stockholders. At Mr. Samsons request, a representative
of BofA Merrill Lynch contacted EGI to determine if EGI would
entertain a meeting about ACL with Platinum Equity.
Later in May 2010, Mr. Samson met with representatives of EGI
about a potential transaction with the Company. EGI informed
Platinum Equity that it would not be opposed to a transaction
with the Company so long as any offer was at a sufficient
premium to the market price at the time ($20.43 per share).
Following the meeting, a representative of EGI contacted
Mr. Ryan and requested that he put Dawn Landry, Senior Vice
President, General Counsel and Corporate Secretary of the
Company, in touch with Platinum Equity to facilitate the
entering into of a nondisclosure agreement so that Mr. Ryan
could make a presentation to Platinum Equity about the Company.
On May 28, 2010, the Company provided a draft
non-disclosure agreement to Platinum Equity. The non-disclosure
agreement was executed by Platinum Equity on June 1, 2010.
On June 3, 2010, a representative of EGI contacted Mr. Ryan
to request a meeting between Platinum Equity, EGI and
Mr. Ryan on June 7th or 8th, 2010.
On the evening of June 7, 2010, representatives of Platinum
Equity met in Chicago with Mr. Ryan and representatives of
EGI. At that meeting, Platinum Equity indicated that it was
interested in a transaction with the Company, although no
specific proposal was made. The next day, Mr. Ryan met
further with representatives from Platinum Equity and discussed
various facets of the Companys business. The Platinum
Equity representatives and Mr. Ryan agreed to keep in touch.
On June 14, 2010, the Company provided limited due
diligence information to Platinum Equity.
On June 17, 2010, Mr. Samson submitted to Clayton
Yeutter, the Chairman of the board of directors, a non-binding
letter of intent to acquire the Company at a proposed price of
$25.00 per share in cash, subject to due diligence and other
conditions. Platinum Equity requested a period of exclusive
negotiations to pursue its offer. Its offer suggested that the
Company would be afforded a post-signing go shop
period to occur concurrently with the tender offer contemplated
by Platinum Equitys proposal. On the day the offer was
submitted, the closing price of the Companys shares on the
Nasdaq Stock Market was $20.64. On the day the offer was
submitted, Platinum Equity contacted EGI to inform EGI of the
proposal to the ACL board of directors and to solicit EGIs
support for the proposal in the form of a voting agreement from
the GVI Stockholders. EGI informed Platinum Equity that EGI
would be supportive if Platinum Equity could reach an agreement
with the board of directors.
On June 23, 2010, the Companys board of directors
held a meeting to discuss Platinum Equitys proposal.
Because Platinum Equity had expressed interest in retaining
senior management and providing management an interest in the
surviving company, the board of directors discussed the
advisability of forming a special committee consisting solely of
independent and disinterested directors who are not members of
the Companys management and who do not have a material
interest in the merger that is different from, or in addition
to, the interests of the Companys stockholders generally.
After discussion, the board of directors formed a committee,
referred to as the Special Committee, consisting of all members
of the Companys board of directors other than
Mr. Ryan. Mr. Ryan was excluded from the Special Committee
to avoid any perception that his potential retention by the
surviving company if the merger should occur would influence the
negotiations and, ultimately, the approval of any transaction
with Platinum Equity.
The Special Committee was delegated authority to, among other
things, review strategic alternatives for the Company; review
and evaluate Platinum Equitys proposal; review, evaluate
and determinate whether a process to further explore strategic
alternatives is desirable for the Company and, if so, the design
and implementation of such a process; have general oversight of
any and all agreements and activities involving, responding to
or relating to any potential transaction that might be
considered; take actions with respect to any strategic
alternative and any review, discussion, consideration, analysis,
evaluation, response, negotiation, termination, rejection,
approval
and/or
authorization on behalf of the Company of the terms and
conditions of any potential transaction; manage, respond,
negotiate, accept or reject on behalf of the Company the
proposed
26
terms of any potential transaction; terminate any and all
negotiations concerning any potential transaction at any time;
and recommend to the board of directors what action should be
taken in respect of any potential transaction. Mr. Yeutter
was appointed chair of the Special Committee. The Special
Committee then met without Mr. Ryan. After discussion, the
Special Committee instructed Mr. Yeutter to communicate to
Platinum Equity, among other things, that, were the Special
Committee interested in a business combination transaction, it
would likely only be interested at a value per share that was
higher than that proposed by Platinum Equity in its letter and
was unwilling at this time to grant exclusivity to Platinum
Equity. Attorneys from Hogan Lovells US LLP, counsel to the
Company, or Hogan Lovells, and Richards, Layton &
Finger, P.A., or RLF, engaged as counsel to the Special
Committee, were present at the meeting of the board of directors
and the Special Committee. The Special Committee also determined
to retain a financial advisor. The Special Committee considered
the qualifications and independence of BofA Merrill Lynch and
noted their familiarity with the Company, and determined to
engage that firm as financial advisor.
On June 24, 2010, Mr. Yeutter and Ms. Landry
spoke by telephone with Mr. Samson and indicated that the
board of directors had convened to discuss Platinum
Equitys offer and had formed the Special Committee, which
had engaged legal advisors and determined to retain a financial
advisor. Mr. Yeutter also stated that if the Special
Committee were interested in a business combination transaction,
it would likely only be interested at a value per share that was
higher than that proposed by Platinum Equity in its letter of
intent, and that the Special Committee was not currently
prepared to grant exclusivity to Platinum Equity.
Mr. Yeutter further stated that he or another Company
representative would provide Platinum Equity with an update as
to the likely timing of any further response from the Special
Committee after the Fourth of July holiday.
On June 25, 2010, representatives of the Special Committee
spoke by telephone to representatives of BofA Merrill Lynch
regarding an engagement as financial advisor to the Special
Committee, to assist in evaluating Platinum Equitys
proposed offer and prepare a financial analysis of the Company.
Following that discussion, BofA Merrill Lynch was retained by
the Special Committee.
On June 28, 2010, Mr. Yeutter contacted
Mr. Samson to inform him that the Special Committee had
selected BofA Merrill Lynch as its financial advisor and planned
to convene a meeting of the Special Committee in late July.
Mr. Yeutter also indicated that he hoped to communicate any
further response from the Special Committee to Platinum Equity
by August 1, 2010.
On July 23, 2010, BofA Merrill Lynch representatives
reviewed with the Special Committee at a telephonic meeting its
preliminary financial analyses regarding the Company, including
its financial analysis in connection with a potential
transaction with Platinum Equity at the indicated price. The
Special Committee discussed that analysis, the potential
transaction and other strategic considerations including
potential strategic alternatives available to the Company other
than a potential transaction with Platinum Equity. The Special
Committee resolved to continue this analysis at a subsequent
meeting after obtaining additional information from Platinum
Equity with respect to its proposal. Later that day, a
representative from BofA Merrill Lynch called Mr. Samson to
inform him of the Special Committees meeting and to ask
certain
follow-up
questions.
On July 26, 2010, the Special Committee convened in person
with representatives from BofA Merrill Lynch to continue the
Special Committees evaluation of a proposed transaction,
as well as to further discuss the Companys financial
performance and prospects as a stand-alone entity relative to a
potential transaction with Platinum Equity and other potential
strategic alternatives. Attorneys from Hogan Lovells and RLF
were also present. The Special Committee concluded that it might
be willing consider a potential transaction with Platinum Equity
at an appropriate price, but that the offer from Platinum Equity
at a proposed price of $25.00 per share was inadequate. Further,
the Special Committee discussed other possible transaction terms
that would be important to it were it to consider a transaction,
including a post-signing period to solicit alternative offers
(commonly called a go-shop) and the possible range
of potential termination fees. The Special Committee directed
BofA Merrill Lynch to convey the Special Committees
response to Platinum Equity. The Special Committee also directed
BofA Merrill Lynch to inform Platinum Equity that, in order to
allow Platinum Equity to make a better informed proposal, the
Special Committee would grant Platinum Equity a period of three
weeks to perform due diligence on non-public matters and access
to Mr. Ryan and Mr. Thomas Pilholski,
27
Senior Vice President and Chief Financial Officer of the
Company, provided that Platinum would agree to enter into a
customary standstill agreement. The Special Committee also
indicated a preference not to grant exclusivity to Platinum
Equity during the three-week due diligence period.
On July 27, 2010, representatives from BofA Merrill Lynch
informed Mr. Samson of the Special Committees
position. Mr. Samson suggested that Platinum Equity meet
with Messrs. Ryan and Pilholski for management meetings
early the next week in Louisville, Kentucky, and stated that
Platinum Equity would send to the Company a list of additional
requested information. Mr. Samson also agreed to execute a
standstill agreement as a condition to the further diligence,
and confirmed that Platinum Equity did not require exclusivity
to proceed at that time. He also indicated that he would provide
the Special Committee with Platinum Equitys views
regarding any revised offer at the end of the three weeks.
On July 31, 2010, Platinum Equity and the Company entered
into a standstill agreement.
On August 2, 2010, the Special Committee met telephonically
with Messrs. Ryan and Pilholski in attendance for a portion
of the meeting. The Special Committee reviewed with
Messrs. Ryan and Pilholski managements most recent
internal financial projections for the Company, including
certain of the assumptions underlying such projections.
Representatives of BofA Merrill Lynch, Hogan Lovells and RLF
were present. After discussion, the Special Committee authorized
making those projections available to Platinum Equity. That day,
Mr. Samson also contacted Mr. Yeutter to express again
Platinum Equitys continuing interest in pursuing a
transaction.
Platinum Equity commenced additional diligence activities
beginning the week of August 2, 2010. From August 4 through
August 6, 2010, representatives of Platinum Equity were
present in Louisville, Kentucky to conduct due diligence, which
included meetings with representatives of the Company and BofA
Merrill Lynch. Representatives of Platinum Equity also conducted
due diligence at the Jeffboat facility in Jeffersonville,
Indiana during that time.
On August 17, 2010, with the permission of the Special
Committee, Mr. Ryan met (along with a representative of
BofA Merrill Lynch) with senior members of Platinum
Equitys management to discuss the Companys business
and operations and other diligence matters.
On August 23, 2010, a representative of Platinum Equity
contacted a representative of BofA Merrill Lynch to
discuss its diligence review and indicated that a revised
non-binding proposal would be delivered later that day or the
following morning.
On August 24, 2010, Mr. Samson contacted
Mr. Yeutter to inform him that Platinum Equity would be
submitting a revised offer letter, and to discuss possible next
steps. Later that day, Platinum Equity delivered a revised offer
to acquire the Company at a proposed price per share of $27.50
in cash, and required a 20 business day period of
exclusivity to continue due diligence and negotiate definitive
agreements. The letter also provided that the Company would be
granted a
30-day
go-shop period after signing a definitive agreement.
On the day the revised offer was submitted, the closing price of
the Companys shares on the Nasdaq Stock Market was $26.40.
On August 26, 2010, the Special Committee met
telephonically to discuss Platinum Equitys revised offer.
Attorneys from Hogan Lovells and RLF were present, as well as
representatives of BofA Merrill Lynch. The representatives from
BofA Merrill Lynch reviewed with the Special Committee the
revised offer of $27.50 per share and discussed with the Special
Committee potential responses. The members of the Special
Committee discussed the implications of the various options,
their views of near and long-term value for the Company and its
stockholders and possible responses to Platinum Equity. The
Special Committee reached a unanimous view that it was not
prepared to accept an offer of $27.50 per share at that time,
but that it was willing to allow Platinum Equity to continue
with the 20 business days of additional due diligence requested
by Platinum Equity, after which it would further consider that
offer or any revised offer that Platinum Equity might make. The
Special Committee agreed that this due diligence process could
be undertaken under the exclusivity arrangement Platinum Equity
had requested in light of the expense and time Platinum Equity
would need to invest in the continued diligence process and to
allow Platinum Equity the opportunity to make its best possible
proposal. The Special Committee also discussed several
structural aspects of a possible transaction
28
and certain terms and conditions, including its view of the need
for a further opportunity for the Company to explore alternative
offers were it to accept an offer from Platinum Equity. Among
other potential terms the Special Committee considered, the
Special Committee discussed requesting a go-shop
period of 45 to 60 days in response to Platinum
Equitys offer of 30 days, a lower termination fee in
the go-shop period of 1-2% of the equity value of a
potential transaction, a termination fee of 2-3% of the equity
value of a potential transaction in the post-go-shop period and
an appropriate reverse termination fee or other adequate
recourse if Platinum Equity were unable or unwilling to close a
transaction. The Special Committee also discussed its
preference, were a transaction to proceed, for a single-step
transaction structure over the tender offer structure proposed
by Platinum Equity, both to avoid the potential early triggering
of change in control provisions under the
Companys outstanding bonds and to allow for a longer time
period for any additional offers to be made by third parties.
The Special Committee requested BofA Merrill Lynch to convey its
positions to Platinum Equity.
On August 27, 2010, representatives of BofA Merrill Lynch
informed Mr. Samson of the outcome of the previous
days Special Committee meeting. Mr. Samson indicated
that he would review the Special Committees positions with
his colleagues before responding. Mr. Samson also
reiterated his requirement to be granted a 20 business day
period of exclusivity while additional due diligence was
performed and agreements negotiated. Later that day, the Company
and Platinum Equity executed an exclusivity agreement
prohibiting the Company and its representatives from pursuing
alternative transactions until 11:59 PM, EDT, on
September 27, 2010.
On September 2, 2010, representatives of Platinum Equity
met with representatives of the Companys management in
Louisville, Kentucky to continue due diligence. Representatives
of BofA Merrill Lynch also participated in the meeting. Over the
next several weeks, Platinum Equity and its representatives,
including legal advisors, engaged in additional due diligence on
the Company and its operations.
On September 11, 2010, the Special Committee met
telephonically, along with representatives of BofA Merrill
Lynch, Hogan Lovells and RLF, to discuss the status of Platinum
Equitys diligence process and to review and discuss a
draft merger agreement prepared by Hogan Lovells to be proposed
for use in the event that the Special Committee determined to
proceed with a transaction. The draft merger agreement
contemplated, among other things, a
60-day
go-shop period and Company and Parent termination
fees consistent with the views expressed by the Special
Committee at its August 26 meeting. On September 15, 2010,
Platinum was provided a copy of the draft merger agreement
prepared by Hogan Lovells, and asked that Platinum Equity
provide its comments, and those of its counsel
Latham & Watkins LLP, or Latham, to the merger
agreement, as well as a draft of any bank commitment letter
related to any required debt financing, when submitting any
revised offer at the end of the exclusivity period.
On September 17, 2010, the Special Committee met
telephonically, with Mr. Ryan and Mr. Pilholski in
attendance for a portion of that meeting. The Special Committee
reviewed with Messrs. Ryan and Pilholski managements
updated financial projections for the Company, including
projected results of operations, certain of the assumptions
underlying the projections, and changes reflected in the updated
projections. Members of the Special Committee discussed the
implications of the Companys downward revised financial
projections. A representative of BofA Merrill Lynch discussed
with the Special Committee his recent discussions with
Mr. Samson concerning Platinum Equitys proposal.
After discussion, the Special Committee authorized making
managements updated financial projections available to
Platinum Equity. Representatives of Hogan Lovells and RLF were
also present at the meeting.
On September 28, 2010, Platinum Equity provided the Special
Committee a revised offer and a marked copy of the merger
agreement, together with a draft commitment letter for debt
financing. The revised offer provided for a price of $30.00 per
share and noted several changes to other terms and conditions,
including a request that unvested equity awards not be
accelerated and paid out at closing. The revised offer also
included a request for a voting agreement from the
Companys largest stockholder, GVI and affiliates, to
support the transaction. Other revisions proposed a
30-day
go-shop period, a single Company termination fee of
over 3.5% for accepting a superior offer, limitations on the
Special Committees ability to negotiate with persons
making offers in the go-shop period that were not
determined on their face to be superior, payment of
29
Platinum Equitys expenses if the stockholders voted
against the proposed merger, and a Parent termination fee of
$14 million for failure to close in breach of the merger
agreement. On the day the revised offer was submitted the
closing price of the Companys shares on the Nasdaq Stock
Market was $28.52.
On September 29, 2010, the Special Committee met
telephonically, along with representatives of BofA Merrill
Lynch, Hogan Lovells and RLF, and discussed the revised offer
from Platinum Equity and the terms of its proposal, including
the issues raised in its marked draft merger agreement. The
Special Committee reiterated its view that, in addition to price
considerations, a number of additional terms were important to
the Special Committee, including a longer go-shop
period, lower termination fees payable by the Company than those
proposed by Platinum Equity, particularly for any fees payable
during the go-shop period, and a higher termination
fee payable by Platinum Equity in the case of its failure to
close the merger in breach of its obligation to do so. The
Special Committee also instructed BofA Merrill Lynch to
communicate to Platinum Equity a counter offer of $32.00 per
share.
On October 2, 2010, representatives of Hogan Lovells and
Latham held a conference call to discuss certain aspects of
Platinum Equitys proposed changes to the draft merger
agreement. Among other things, Latham clarified that unvested
equity awards would be assumed by Parent (not cancelled) and
would continue vesting but would otherwise not be part of the
merger consideration. Further discussions were held between
representatives of BofA Merrill Lynch and Platinum Equity
regarding the potential transaction, including the Special
Committees request for an increase in the proposed merger
consideration. Following those discussions, Mr. Samson
conveyed to representatives of BofA Merrill Lynch that Platinum
Equity would raise its offer price to $30.25 per share but was
unwilling to increase its price beyond that level. This revised
offer represented an almost 10% premium to the closing price of
the Companys shares, $27.56, on the Nasdaq Stock Market on
the day before the revised offer was submitted. Further
discussions between counsel regarding transaction terms were
held on October 4 and 7, 2010.
The Special Committee met telephonically on October 5, 2010
and received an update from its legal and financial advisors on
the status of discussions, including the latest price proposal
from Platinum Equity, and Platinum Equitys continued
request for an additional
ten-day
period of exclusivity to complete negotiations and to perform
certain targeted environmental due diligence. On the day before
the Special Committees meeting, the closing price of the
Companys shares on the Nasdaq Stock Market was $27.33. The
Special Committee determined, after consultation with its
financial advisor, that the then current price offered by
Platinum Equity was attractive when compared to both the current
market price of the Companys common stock and the
intrinsic value of the Company, and it instructed its advisors
to move forward with the proposed transaction with Platinum
Equity, subject to satisfactory resolution of terms and a review
of the status of negotiations at the conclusion of the ten day
exclusivity period requested by Platinum Equity. The Special
Committee then agreed to accept Platinum Equitys request
for an exclusivity period until October 15, 2010. The
Special Committee also reiterated to its legal and financial
advisors its views on other terms and conditions, including
that, should any transaction with Platinum Equity be entered
into, these terms and conditions should be consistent with
customary and reasonable practice and the Special
Committees specific views with respect to the period of
the go-shop, the size of termination fees and other
fees and the circumstances under which those fees were payable.
On October 11, 2010, representatives of BofA Merrill Lynch,
Platinum Equity, the Company, Latham, Hogan Lovells and RLF met
at Platinum Equitys offices in New York to discuss the
issues relating to transaction documents and to negotiate
several non-price related transaction terms. At that meeting,
the parties discussed a series of terms acceptable to Platinum
Equity that would be presented to the Special Committee for
consideration providing, among other things, that the
go-shop period would be 40 days, the Company
would be permitted to negotiate with bidders who submit offers
in the go shop period that were reasonably likely to
lead to a superior proposal, that the Company termination fees
would be lower in the go-shop period and higher only thereafter,
that the Company would not be required to pay Parents
expenses should stockholders not adopt the merger agreement
absent a competing offer, and that the Parent termination fee
would be closer to the fee level requested by the Special
Committee. The parties also discussed that unvested equity
awards held by employees below operational level 16 would
be accelerated and their value paid at
30
Closing. On October 12, 2010, Hogan Lovells circulated
revised transaction documents to Latham reflecting these terms.
Also on October 11, 2010, BB&T Capital Markets issued
a research report on the Company in which it upgraded its
recommendation of the Companys common stock from
Hold to Buy and set a price target for
the Companys common stock of $50.00 per share. The trading
price of the Companys common stock on that day closed at
$32.18 per share, a 13.6% increase from the $28.34 closing price
on the preceding trading day of Friday, October 8, 2010.
On October 13, 2010, the Special Committee met
telephonically to consider the status of the discussions and its
view of the current offer from Platinum Equity. Representatives
of BofA Merrill Lynch, Hogan Lovells and RLF participated in the
discussions. The Special Committee was briefed on the result of
the negotiations that had taken place on October 11, 2010,
including the agreement of Platinum Equity to a
go-shop provision and termination fees that were
within the ranges requested by the Special Committee and as to
which the Special Committee had received advice from its legal
counsel and financial advisors. The Special Committee discussed
the October 11 BB&T Capital Markets research report and the
fact that the trading price of the common stock had increased
above the last offer from Platinum Equity. The Special Committee
received an update from Mr. Ryan as to his views as to the
contents of such report, as well as of the Companys
performance and prospects and how the Companys prospects
compared with those contained in that report. Specifically,
Mr. Ryan noted that the report was premised upon more
optimistic projections than the Companys internal
forecasts, which may have indirectly resulted in recent
increases in the Companys stock price, and which do not
reflect managements views of the intrinsic value of the
Company or the common stock. Moreover, Mr. Ryan confirmed
that this analyst report was published without input from
management. After discussion, the Special Committee determined
that, despite its prior conclusion that Platinum Equitys
offer of $30.25 was attractive relative to the intrinsic value
of the Company, BofA Merrill Lynch should communicate to
Platinum Equity that it would need to raise its offer further,
as the Special Committee was skeptical that it would be willing
to approve a transaction at Platinums proposed price of
$30.25 per share in light of the current market price of the
Common Stock. BofA Merrill Lynch subsequently contacted Platinum
Equity and communicated the Special Committees views.
On October 14, 2010, Platinum Equity contacted EGI and
informed EGI that Platinum Equity was considering raising its
offer price if EGI would be willing to sell its shares at a
meaningful per share discount.
On October 15, 2010, EGI and Platinum Equity discussed an
arrangement, subject to the board of directors approving a
transaction with Platinum Equity, whereby EGI would take a $1.75
per share discount on its shares if the merger closed by the end
of the calendar year. In connection with this proposed
arrangement, EGI would give Platinum Equity an option to
purchase EGIs shares at a $1.75 discount to the offer
price prior to the end of the calendar year even if the merger
had not yet closed.
Later on October 15, 2010, Platinum Equity proposed an
offer price of $32.00 per share for the shares held by all
stockholders other than GVI, and advised the Special Committee
that it had contacted GVI and requested and received an
indication by GVI of a willingness to accept an offer of $30.25
for its shares. The Special Committee met on October 16,
2010 to consider the revised offer, and noted that the latest
offer represented a substantial premium to Platinum
Equitys original offer but was still below the recent
trading price of the common stock, which closed at $33.31 on the
last trading day before the latest revised offer was submitted.
The Special Committee also was informed that GVI stockholders
intended to seek to dispose of their shares through a demand
registration process prior to the end of 2010 if the Company did
not enter into the proposed merger or another transaction under
which their shares would be sold before
year-end
2010. Representatives of BofA Merrill Lynch, Hogan Lovells and
RLF participated in the discussions. The Special Committee
understood that GVI was willing to accept a lower price for its
shares than was being offered to other shareholders so long as
the sale could be completed by year end. The Special Committee
continued to consider the current trading price of the common
stock, which remained above the $32.00 offer by Platinum Equity,
as well as its own views as to the short and long-term outlook
for the Company notwithstanding the recent higher trading prices
of the common stock. The Special Committee requested that
representatives of BofA Merrill Lynch communicate to Platinum
Equity that the Special Committee would likely be able to
31
support a transaction with Platinum Equity were it to increase
its offer price to $33.00 per share for the public shareholders.
Following the meeting, representatives of BofA Merrill Lynch
contacted Platinum Equity to deliver that message and the
representatives of Hogan Lovells and Latham negotiated other
terms of the merger agreement and related documents.
On October 17, 2010, representatives of Platinum Equity
communicated to BofA Merrill Lynch that they would agree to an
offer price of $33.00 per share for the shares held by all
stockholders other than GVI Stockholders, and $31.25 for shares
held by GVI Stockholders so long as the closing occurred by
year-end 2010, after which GVI Stockholders would receive $33.00
per share, and that this was Platinum Equitys best and
final offer and was conditioned on acceptance before the opening
of the market on October 18, 2010. Further, Platinum Equity
informed BofA Merrill Lynch that Platinum Equity and GVI
Stockholders had discussed tentative arrangements under which
Platinum Equity would have an option to purchase shares directly
from GVI Stockholders under certain circumstances at
$31.25 per share. The Special Committee met that afternoon
with its financial and legal advisors and discussed the latest
Platinum Equity offer. The Special Committee received and
discussed advice from its legal counsel and its financial
advisors, including reviewing fiduciary duties, the material
terms of the merger agreement and factors the Special Committee
had considered and was considering in evaluating the appropriate
course of action. The Special Committee agreed that while
Platinum Equitys current offer was attractive relative to
the intrinsic value of the Company and that it could support the
price being offered, it was concerned that certain implications
of the proposed arrangement between Platinum Equity and GVI
Stockholders could affect the ability of the board of directors
to receive or accept a superior proposal from an alternative
bidder. Specifically, the Special Committee wanted to ensure
that alternative bidders could avail themselves of the terms of
the proposed arrangement that GVI had discussed with Platinum
Equity, or the Company termination fee should be proportionately
reduced, with the net effect being that an alternative bidder
that could close by year-end 2010 would be able to take
advantage of the same reduced price for the GVI Stockholders
available to Platinum Equity. The Special Committee also
expressed concern with respect to the option proposed to be
granted to Platinum Equity, including with respect to its
ability to vote any shares acquired by it on exercise of the
option against an alternative offer that the board of directors
considered superior. Accordingly, representatives of BofA
Merrill Lynch and Hogan Lovells conveyed the Special
Committees views to Platinum Equity and Latham, and the
representatives of Hogan Lovells and Latham negotiated other
terms of the merger agreement and related documents. Separately,
BofA Merrill Lynch contacted representatives of GVI Stockholders
to discuss a proposed arrangement providing a similar option to
alternative bidders.
The Special Committee met later that evening with its financial
and legal advisors to receive an update on the status of
discussions. The advisors briefed the Special Committee on the
status and noted that the provisions relating to a potential
superior offer and the effect of the option proposed to be
provided to Platinum Equity and the related lower price GVI
Stockholders would receive from Platinum Equity were close to
resolution but significant differences remained to be resolved.
Also at this meeting, BofA Merrill Lynch reviewed with the
Special Committee its financial analysis of the per share merger
consideration of $33.00 and delivered to the Special Committee
an oral opinion, which was confirmed by delivery of a written
opinion dated October 18, 2010, to the effect that, as of
that date and based on and subject to various assumptions and
limitations described in its written opinion, the per share
merger consideration of $33.00 to be received in the merger by
holders of the Companys common stock, was fair, from a
financial point of view, to such holders (other than the
Excluded Holders). The Special Committee also received advice
from its counsel regarding its fiduciary duties and other
matters. Because certain issues regarding the proposed agreement
between GVI Stockholders and Platinum Equity and their effect on
the provisions in the merger agreement regarding a superior
offer remained unresolved, the Special Committee agreed to
reconvene at 7:00 a.m. EDT on October 18, 2010,
and requested that the Special Committees financial and
legal advisors convey the Special Committees views
regarding these matters to Platinum Equity.
Prior to the Special Committee meeting on October 18, 2010,
the representatives of Hogan Lovells and Latham negotiated final
terms of the merger agreement and related documents. Separately,
Platinum Equity and GVI Stockholders discussed a proposed
arrangement regarding the circumstances under which the voting
agreement might be terminated, the option granted thereunder
exercised, and the $1.75 differential in merger
32
consideration provided to a person making a superior offer who
consummates a transaction prior to December 31, 2010, as
well as certain other matters consistent with the requests made
by the Special Committee to address its concerns regarding the
effects on an alternative bidder of the proposed arrangements
between Platinum Equity and GVI.
Accordingly, following discussion, the Special Committee
unanimously determined that it was advisable and in the best
interests of the Company and its stockholders to approve the
voting agreement and to approve, enter into and effect the
merger agreement, including the merger, and resolved to
recommend that the board of directors approve the voting
agreement and approve, enter into and effect the merger
agreement, including the merger and recommend that the
stockholders of the Company adopt the merger agreement. The full
board of directors thereafter convened and (with Mr. Ryan
abstaining) determined that it was advisable and in the best
interests of the Company and its stockholders to approve the
voting agreement and to approve, enter into and effect the
merger agreement, including the merger, and resolved to
recommend that the stockholders of the Company adopt the merger
agreement.
Shortly thereafter on the morning of October 18, 2010, the
merger agreement and the voting agreement were executed. Also
that morning, the Company issued a press release announcing the
execution of the merger agreement and voting agreement and the
commencement of the go-shop period.
Beginning later on the morning of October 18, 2010, at the
direction of the Special Committee and under the supervision of
the Companys executive officers, representatives of BofA
Merrill Lynch began the go shop process of
contacting parties to determine whether they might be interested
in pursuing a transaction that would be superior to the proposed
transaction with Platinum Equity. As of
October [ ], 2010, representatives of BofA
Merrill Lynch had contacted
[ ]
parties, consisting of
[ ]
potential strategic buyers and
[ ]
potential financial sponsor buyers.
On October 18, 2010, GVI Stockholders delivered a letter to
the Company requesting that the Company file a resale
registration statement for their shares pursuant to a
registration rights agreement entered into in 2005 during the
course of the Companys reorganization that year. Under the
voting agreement, GVI Stockholders are not permitted to sell
their shares to any party whether or not registered, except to
Parent, before the termination of the voting agreement. See the
section entitled The Voting Agreement, beginning on
p. 74. The Company expects to prepare and file a resale
registration of
Form S-3
promptly following the date of this proxy statement but does not
expect sales to be made thereunder unless the merger agreement
is terminated.
As of October [ ], 2010, none of the parties
contacted during the go-shop process by BofA Merrill Lynch had
submitted an acquisition proposal for the Company. The process
for the solicitation of other third party interest is ongoing,
although there can be no assurance that such efforts will result
in an alternative transaction being proposed or in a definitive
agreement for such a transaction being entered into.
Reasons
for the Merger; Recommendation of the Special Committee and
Board of Directors
Special
Committee of the Board of Directors
The Special Committee of the board of directors, consisting
solely of independent directors, and acting with the advice and
assistance of independent legal and financial advisors,
evaluated and participated in the negotiation of the merger,
including the terms and conditions of the merger agreement, with
Parent and Merger Sub. At the meeting held on
October 18, 2010 described above, the Special Committee
unanimously recommended the approval of the merger agreement and
the voting agreement to the board of directors.
Board
of Directors
In reaching their decision to approve the merger and the merger
agreement and the voting agreement, and to recommend that our
stockholders vote FOR adoption of the merger
agreement, the directors, in addition to drawing on their own
experience, expertise and knowledge of the Company and its
business, consulted with senior management, outside legal
counsel and a financial advisor. The following discussion
includes the
33
material reasons and factors considered by the board of
directors, in connection with the recommendation of the Special
Committee, in making its recommendation:
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an assessment of the fundamental value of the Company, in
particular with respect to cash flows;
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the financial risks inherent to the Companys operating
plan, specifically related to the age of the Companys
fleet, which will require substantial investment in order to
maintain the Companys earnings capacity;
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the current and historical market prices of the Companys
common stock and the fact that the price of $33.00 per share
represented 1.2% premium to the
five-day
volume weighted average price (VWAP) for the week of
October 11, 2010; a 16.4% premium to the closing price on
the trading day prior to issuance of the BB&T Capital
Markets research report described in the section entitled
The Merger Background of the Merger
beginning on page 25; and a 59.9% premium to the closing
price on the date on which Platinum Equity submitted its first
proposal letter on June 17, 2010;
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a review of recently published analyst reports that contained
more optimistic projections than the Companys internal
forecasts and may have resulted in recent increases in the
Companys common stock price which do not reflect the
directors views of the intrinsic value of the Company or
the common stock;
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the current volatile state of the national and global economy
and general uncertainty surrounding forecasted economic
conditions in both the near- and long-term, globally as well as
within the transportation industry;
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the Companys historical performance relative to its
operating plan and strategic goals;
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the fact that the all-cash per share merger consideration will
provide our stockholders with immediate value, in cash, for all
of their shares of common stock, while avoiding long-term
business risk and providing stockholders certainty of value for
their shares;
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the results of the boards strategic review of alternatives
available to the Company other than the sale of control of the
Company, including:
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The perceived risks and uncertainties of electing to continue as
an independent public company, including the Companys
business, financial condition and prospects, the capital
investment required to maintain the Companys barge fleet
over the short- and long-term, and the range of possible values
to the Companys stockholders arising from remaining an
independent public company and the timing and uncertainty of
successfully accomplishing meaningful growth by continuing to
operate the Company as an independent public company;
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The perceived lack of meaningful opportunities to acquire or
combine with another company with the right attributes,
including scale and growth potential, to generate value for the
Companys stockholders; and
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The risks and uncertainties inherent in relatively large
acquisitions;
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the then-current financial market conditions and the recent and
historical market prices of the Companys common stock,
including relative to that of market indices and the
Companys peers (see the section entitled Market
Price of Common Stock beginning on page 77);
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the terms of the merger agreement, the voting agreement and the
related agreements, including:
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the limited number and nature of the conditions to Parent and
Merger Subs obligation to consummate the merger;
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the fact that the terms of the merger agreement provide for a
40-day
post-signing go-shop period during which the Company
may solicit additional interest in and negotiate transactions
involving the Company, and, after such
40-day
period, continue discussions with certain persons or respond to
unsolicited proposals under certain circumstances;
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34
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our ability, under certain circumstances, to furnish information
to and conduct negotiations with third parties regarding other
proposals to acquire the Company;
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our ability to terminate the merger agreement in order to accept
a financially superior proposal (both during and after the
40-day
go-shop period), subject to paying Parent a
termination fee of either $12,000,000 or $14,000,000, depending
on the timing and circumstances of such termination;
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that a fund affiliated with Platinum Equity guaranteed
Parents obligations under the merger agreement to pay the
Parent termination fee and certain potential related expenses.
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that the negotiations of the merger agreement were conducted
under the oversight of the Special Committee, which:
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is comprised solely of independent directors who are not
employees of the Company;
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retained and received advice and assistance from its own
independent financial and legal advisors in evaluating and
negotiating the terms of the merger agreement;
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had ultimate authority to decide whether or not to proceed with
a transaction or any alternative thereto, subject to our board
of directors approval of the merger agreement.
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the consideration for the merger and the other terms of the
merger agreement resulted from extensive negotiations between
the Special Committee and its legal and financial advisors on
the one hand, and Parent and its legal advisor on the other hand;
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the retention of and the efforts, advice and financial analyses
provided by BofA Merrill Lynch as the Special Committees
financial advisor;
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the opinion of BofA Merrill Lynch, delivered to the Special
Committee at its meeting on October 17, 2010, as to the
fairness, from a financial point of view and as of the date of
the opinion, of the per share merger consideration of $33.00 to
be received by holders of the Companys common stock (other
than the Excluded Holders), as more fully described below in the
section entitled Opinion of Financial Advisor
Opinion of Merrill Lynch, Pierce, Fenner & Smith
Incorporated beginning on page 37;
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the unanimous recommendation by the Special Committee of the
terms and conditions of the merger agreement;
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the view expressed by several of the Companys significant
stockholders, including EGI, that such stockholders are
generally supportive of a merger transaction at the current time;
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the fact that EGI, the Companys 25.26% and largest
stockholder, has agreed to accept $1.75 per share less than the
other stockholders of the Company in connection with the merger;
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the fact that the GVI Stockholders have preexisting registration
rights with respect to the Companys common stock and had
advised the committee that it will likely seek to invoke the
registration rights in the event that a transaction is not
entered into, and the potential effect that such a registration
and sale of shares of our common stock by EGI would have on
the price of the Companys common stock; and
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the availability of appraisal rights under the DGCL to holders
of the common stock who comply with all of the required
procedures under the DGCL, which allows such holders to seek
appraisal and payment of the fair value of their shares of
common stock as determined by the Delaware Court of Chancery.
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35
The Special Committee and the board of directors, at the
recommendation of the Special Committee, also considered a
variety of potentially negative factors in its deliberations
concerning the merger agreement and the merger, including the
following (not in any relative order of importance):
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the merger would preclude our stockholders from having the
opportunity to participate in the future performance of the
Companys assets, including possible future earnings growth
and future appreciation of the value of its common stock that
could result if the Company were able to carry out a new
strategic plan successfully;
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the significant costs involved in connection with entering into
and completing the merger and the substantial time and effort of
management required to complete the merger and related
disruptions to the operation of the Companys business;
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the restrictions on the conduct of the Companys business
prior to the completion of the merger, which could delay or
prevent the Company from undertaking business opportunities that
may arise or any other action it would otherwise take with
respect to the operations of the Company absent the pending
completion of the merger;
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the restrictions on the Companys ability to continue to
solicit proposals for alternative transactions after the
40-day
go-shop period and the limitations on the
circumstances in which the Company is permitted to respond to
proposals for alternative transactions thereafter;
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the announcement and pendency of the merger, or failure to
complete the merger, may cause substantial harm to relationships
with the Companys employees, customers and partners and
may divert management and employee attention away from the
day-to-day
operation of our business;
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the requirement that we pay Parent a termination fee of either
$12,000,000 or $14,000,000, depending on the timing and
circumstances surrounding our termination of the merger
agreement and the possibility that such termination fee could
discourage other potential acquirers from making a competing bid
to acquire the Company, although neither the Special Committee
nor the board of directors believe that this fee would
materially discourage possible competing offers for the Company;
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the fact that, while the Company expects the merger to be
consummated, there can be no assurance that all conditions to
the parties obligations, including with respect to
required regulatory approvals, to complete the merger agreement
will be satisfied, and, as a result, the merger may not be
consummated;
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as of the day they approved the merger agreement, certain
securities analysts had target prices for the Companys
common stock in excess of the price being offered in the merger;
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the fact that an all-cash transaction would be taxable to the
Companys stockholders that are U.S. holders for
U.S. federal income tax purposes;
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the risk that the financing contemplated by the debt commitment
letter for the consummation of the merger might not be
obtained; and
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the fact that our directors and executive officers may have
interests in the merger that are different from, or in addition
to, our stockholders. See the section entitled The
Merger Interests of Certain Persons in the
Merger beginning on page 48.
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The foregoing discussion of the information and factors
considered by the Special Committee and by the board of
directors, at the recommendation of the Special Committee, is
not intended to be exhaustive, but includes the material factors
considered by the Special Committee and by the board of
directors. In view of the variety of factors considered in
connection with its evaluation of the merger, the directors did
not find it practicable to, and did not, quantify or otherwise
assign relative weights to the specific factors considered in
reaching its determination and recommendation. In addition,
individual directors may have given different weights to
different factors. Neither the Special Committee nor the board
of directors made any specific determination as to whether any
factor, or any particular aspect of any factor, supported or did
not support its ultimate determination. The Special Committee
and the board of directors based its recommendation,
respectively, on the totality of the information presented.
36
The board of directors recommends that you vote
FOR the proposal to adopt the merger agreement and
FOR the proposal to adjourn the special meeting, if
necessary or appropriate, to solicit additional proxies.
In considering the recommendation of the board of directors with
respect to the proposal to adopt the merger agreement, you
should be aware that our directors and executive officers have
interests in the merger that are different from, or in addition
to, yours. The board of directors was aware of and considered
these interests, among other matters, in evaluating and
negotiating the merger agreement and the merger, and in
recommending that the merger agreement be adopted by the
stockholders of the Company. See the section entitled The
Merger Interests of Certain Persons in the
Merger beginning on page 48.
Opinion
of Financial Advisor
Opinion
of Merrill Lynch, Pierce, Fenner & Smith
Incorporated
The Company has retained BofA Merrill Lynch to act as the
financial advisor to the Special Committee in connection with
the merger. BofA Merrill Lynch is an internationally recognized
investment banking firm which is regularly engaged in the
valuation of businesses and securities in connection with
mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private
placements and valuations for corporate and other purposes. The
Company selected BofA Merrill Lynch to act as the financial
advisor to the Special Committee in connection with the merger
on the basis of BofA Merrill Lynchs experience
in transactions similar to the merger, its reputation in the
investment community and its familiarity with the Company and
its business.
On October 17, 2010, at a meeting of the Special Committee
held to evaluate the merger, BofA Merrill Lynch
delivered to the Special Committee an oral opinion, which was
confirmed by delivery of a written opinion dated
October 18, 2010, to the effect that, as of that date and
based on and subject to various assumptions and limitations
described in its written opinion, the per share merger
consideration of $33.00 to be received in the merger by holders
of the Companys common stock, was fair, from a financial
point of view, to such holders (other than the Excluded Holders).
The full text of BofA Merrill Lynchs written opinion to
the Special Committee, which describes, among other things, the
assumptions made, procedures followed, factors considered and
limitations on the review undertaken, is attached as
Annex B to this proxy statement and is incorporated by
reference herein in its entirety. The following summary of BofA
Merrill Lynchs opinion is qualified in its entirety by
reference to the full text of the opinion. BofA Merrill Lynch
delivered its opinion to the Special Committee for the benefit
and use of the Special Committee (in its capacity as such) in
connection with and for purposes of its evaluation of the per
share merger consideration of $33.00 from a financial point of
view. BofA Merrill Lynchs opinion does not address any
other aspect of the merger and does not constitute a
recommendation to any stockholder as to how to vote or act in
connection with the merger.
In connection with rendering its opinion, BofA Merrill Lynch:
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reviewed certain publicly available business and financial
information relating to the Company;
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|
reviewed certain internal financial and operating information
with respect to the business, operations and prospects of the
Company furnished to or discussed with BofA Merrill Lynch by the
management of the Company, including certain financial forecasts
relating to the Company prepared by the management of the
Company under various scenarios reflecting varying assumptions
of the management of the Company, including, without limitation,
with respect to the timing and amount of the Companys
estimated capital expenditures, referred to herein as the
Company forecasts;
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discussed the past and current business, operations, financial
condition and prospects of the Company with members of senior
management of the Company;
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|
reviewed the trading history for the Companys common stock
and a comparison of that trading history with the trading
histories of other companies BofA Merrill Lynch deemed relevant;
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37
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compared certain financial and stock market information of the
Company with similar information of other companies BofA Merrill
Lynch deemed relevant;
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|
compared certain financial terms of the merger to financial
terms, to the extent publicly available, of other transactions
BofA Merrill Lynch deemed relevant;
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reviewed the merger agreement and the voting agreement; and
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performed such other analyses and studies and considered such
other information and factors as BofA Merrill Lynch deemed
appropriate.
|
In arriving at its opinion, BofA Merrill Lynch assumed and
relied upon, without independent verification, the accuracy and
completeness of the financial and other information and data
publicly available or provided to or otherwise reviewed by or
discussed with it and relied upon the assurances of the
management of the Company that they were not aware of any facts
or circumstances that would make such information or data
inaccurate or misleading in any material respect. With respect
to the Company forecasts, BofA Merrill Lynch was advised by the
Company, and assumed, that they were reasonably prepared on
bases reflecting the best currently available estimates and good
faith judgments of the management of the Company as to the
future financial performance of the Company under the
alternative scenarios reflected therein. BofA Merrill Lynch did
not make or was not provided with any independent evaluation or
appraisal of the assets or liabilities (contingent or otherwise)
of the Company, other than a third-party appraisal of the
Companys fleet of barges, nor did it make any physical
inspection of the properties or assets of the Company. BofA
Merrill Lynch did not evaluate the solvency or fair value of the
Company or Parent under any state, federal or other laws
relating to bankruptcy, insolvency or similar matters. BofA
Merrill Lynch assumed, at the direction of the Company, that the
merger would be consummated in accordance with its terms,
without waiver, modification or amendment of any material term,
condition or agreement and that, in the course of obtaining the
necessary governmental, regulatory and other approvals,
consents, releases and waivers for the merger, no delay,
limitation, restriction or condition, including any divestiture
requirements or amendments or modifications, would be imposed
that would have an adverse effect on the Company or the
contemplated benefits of the merger.
BofA Merrill Lynch expressed no view or opinion as to any terms
or other aspects of the merger (other than the per share merger
consideration to the extent expressly specified in its opinion),
including, without limitation, the form or structure of the
merger. Prior to the date of its opinion, BofA Merrill Lynch was
not requested to, and it did not, solicit indications of
interest or proposals from third parties regarding a possible
acquisition of all or any part of the Company or any alternative
transaction. BofA Merrill Lynchs opinion was limited to
the fairness, from a financial point of view, of the per share
merger consideration to be received by the holders of the
Companys common stock (other than the Excluded Holders)
and no opinion or view was expressed with respect to any
consideration received in connection with the merger by the
holders of any other class of securities, creditors or other
constituencies of any party or in connection with the voting
agreement by GVI Stockholders. In addition, no opinion or view
was expressed with respect to the fairness (financial or
otherwise) of the amount, nature or any other aspect of any
compensation to any of the officers, directors or employees of
any party to the merger, or class of such persons, relative to
the per share merger consideration. Furthermore, no opinion or
view was expressed as to the relative merits of the merger in
comparison to other strategies or transactions that might be
available to the Company or in which the Company might engage or
as to the underlying business decision of the Company to proceed
with or effect the merger. In addition, BofA Merrill Lynch
expressed no opinion or recommendation as to how any stockholder
should vote or act in connection with the merger or any related
matter. Except as described above, neither the Company nor the
Special Committee imposed other limitations on the
investigations made or procedures followed by BofA Merrill
Lynch in rendering its opinion.
BofA Merrill Lynchs opinion was necessarily based on
financial, economic, monetary, market and other conditions and
circumstances as in effect on, and the information made
available to BofA Merrill Lynch as of, the date of its opinion.
It should be understood that subsequent developments may affect
its opinion, and BofA Merrill Lynch does not have any
obligation to update, revise or reaffirm its opinion. The
issuance of
38
BofA Merrill Lynchs opinion was approved by BofA Merrill
Lynchs Americas Fairness Opinion Review Committee.
The following represents a brief summary of the material
financial analyses presented by BofA Merrill Lynch to
the Special Committee in connection with its opinion.
The
financial analyses summarized below include information
presented in tabular format. In order to fully understand the
financial analyses performed by BofA Merrill Lynch, the tables
must be read together with the text of each summary. The tables
alone do not constitute a complete description of the financial
analyses performed by BofA Merrill Lynch. Considering the data
set forth in the tables below without considering the full
narrative description of the financial analyses, including the
methodologies and assumptions underlying the analyses, could
create a misleading or incomplete view of the financial analyses
performed by BofA Merrill Lynch.
Company
Financial Analyses
Selected Publicly Traded Companies
Analysis.
BofA Merrill Lynch reviewed publicly
available financial and stock market information for the Company
and the following five publicly traded marine companies
operating under the Jones Act in the barge, container and other
marine transportation, distribution and logistics services
industries:
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Alexander & Baldwin, Inc.;
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Horizon Lines, Inc.;
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Kirby Corporation;
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K-Sea Transportation Partners L.P.; and
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Seacor Holdings Inc.
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BofA Merrill Lynch reviewed, among other things, per share
equity values, based on closing stock prices on October 15,
2010, of the selected publicly traded companies as a multiple of
calendar years 2010 and 2011 estimated earnings per share,
commonly referred to as EPS. BofA Merrill Lynch also reviewed
enterprise values of the selected publicly traded companies,
calculated as equity values based on closing stock prices on
October 15, 2010, plus debt, less cash, as a multiple of
calendar years 2010 and 2011 estimated earnings before interest,
taxes, depreciation and amortization, commonly referred to as
EBITDA. BofA Merrill Lynch then applied a multiple range of
15.0x 18.0x of calendar year 2011 estimated EPS
derived from the selected publicly traded companies to
corresponding estimated EPS of the Company based on consensus
estimates of recently released research analysts reports
on the Company, which we refer to as the Wall Street Case.
Estimated financial data of the selected publicly traded
companies were based on publicly available consensus estimates
of research analysts reports. This analysis indicated the
following implied per share equity value reference range for the
Company (rounded to the nearest $0.25), as compared to the per
share merger consideration of $33.00:
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Implied per Share Equity
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|
|
Value Reference Range for
|
|
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the Company
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|
Consideration
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$
|
28.75 - $34.50
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$
|
33.00
|
|
No company used in this analysis is identical or directly
comparable to the Company. Accordingly, an evaluation of the
results of this analysis is not entirely mathematical. Rather,
this analysis involves complex considerations and judgments
concerning differences in financial and operating
characteristics and other factors that could affect the public
trading or other values of the companies to which the Company
was compared.
39
Selected Precedent Transactions Analysis.
BofA
Merrill Lynch reviewed, to the extent publicly available,
financial information relating to the following thirteen
selected transactions involving companies in the barge,
container and other marine transportation, distribution and
logistics services industries:
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Announcement Date
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Acquiror
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Target
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July 29, 2009
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Overseas Shipholding Group, Inc.
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OSG America L.P.
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February 20, 2008
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Brooklyn NY Holdings Inc.
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M/G Transport Services, Inc.
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October 29, 2007
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Greenstreet Equity Partners L.L.C., Jefferies Capital Partners,
AMCI Capital L.P. and First Reserve Corporation
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TECO Transport Corporation
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March 21, 2007
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KRG Capital Partners LLC
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Marquette Transportation Company Holdings, LLC
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September 25, 2006
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Overseas Shipholding Group, Inc.
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Maritrans Inc.
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August 23, 2005
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K-Sea Transportation Partners L.P.
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Sea Coast Towing Inc.
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July 2, 2005
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Rand Logistics, Inc.
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Lower Lakes Towing Ltd.
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March 16, 2005
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Seacor Holdings Inc.
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Seabulk International Inc.
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May 22, 2004
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Castle Harlan
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Horizon Lines LLC
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December 6, 2002
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Carlyle Group
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Horizon Lines LLC
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January 24, 2002
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Ingram Barge Company
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Midland Enterprises Inc.
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December 20, 2000
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Crowley Maritime Corporation
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Marine Transport Corporation
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July 29, 1999
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Kirby Corporation
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Hollywood Marine Inc.
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BofA Merrill Lynch reviewed transaction values, calculated as
the equity value implied for the target company based on the
consideration payable in the selected transaction, as a multiple
of the target companys last twelve-month, commonly
referred to as LTM EBITDA. BofA Merrill Lynch then applied a
multiple range of 6.0x 9.0x of LTM EBITDA derived
from the selected transactions to the Companys LTM EBITDA.
This analysis indicated the following implied per share equity
value reference range for the Company (rounded to the nearest
$0.25), as compared to the per share merger consideration of
$33.00:
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|
|
|
|
Implied per Share Equity
|
|
|
|
|
Value Reference Range for
|
|
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|
|
the Company
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|
|
Consideration
|
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$
|
21.25 - $44.75
|
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$
|
33.00
|
|
No company, business or transaction used in this analysis is
identical or directly comparable to the Company or the merger.
Accordingly, an evaluation of the results of this analysis is
not entirely mathematical. Rather, this analysis involves
complex considerations and judgments concerning differences in
financial and operating characteristics and other factors that
could affect the acquisition or other values of the companies,
business segments or transactions to which the Company and the
merger were compared.
Discounted Cash Flow Analysis.
BofA Merrill
Lynch performed a discounted cash flow analysis of the Company
to calculate the estimated present value of the standalone
unlevered, after-tax free cash flows that the Company could
generate during the Companys fiscal years 2010 through
2014 based on two sets of forecasts relating to the Company
prepared by the management of the Company under various
scenarios reflecting varying assumptions of the management of
the Company, including, without limitation, with respect to the
timing and amount of the Companys estimated capital
expenditures, which we refer to as the Cash Flow Neutral Case
and the Deferred Investment Case. For illustrative purposes,
BofA Merrill Lynch also performed a discounted cash flow
analysis of the Company based on the Wall Street Case.
BofA Merrill Lynch calculated terminal values for the
Company by applying to the Companys mid-cycle EBITDA a
terminal multiple of 7.0x for the Cash Flow Neutral Case and the
Wall Street Case, and a terminal multiple of 6.0x for the
Deferred Investment Case. For the purposes of this analysis,
mid-cycle EBITDA means the Companys normalized EBITDA over
the period covered by the Company forecasts, which was utilized
to account for future cyclicality consistent with historical
fluctuations in the Companys financial
40
performance. The cash flows and terminal values were then
discounted to present value using discount rates ranging from
8.5% to 10.5%, which were chosen based upon a weighted average
cost of capital, commonly referred to as WACC, calculation for
the Company. This analysis indicated the following implied per
share equity value reference ranges for the Company (rounded to
the nearest $0.25), as compared to the per share merger
consideration of $33.00:
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|
|
|
|
|
|
|
|
|
|
Implied per Share Equity Value
|
|
|
Reference Range for the Company
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Cash Flow Neutral Case
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|
Deferred Investment Case
|
|
Wall Street Case
|
|
Consideration
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$28.50 - $32.50
|
|
$
|
19.75 - $22.75
|
|
|
$
|
26.00 - $29.75
|
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$
|
33.00
|
|
BofA Merrill Lynch also performed a discounted cash flow
analysis of the Company based on the Cash Flow Neutral Case,
with the Companys EBITDA and capital expenditures adjusted
to reflect returns on invested capital, commonly referred to as
ROIC, ranging from 7% to 12%. BofA Merrill Lynch noted the
Companys historical median ROIC from 1995 to 2009 was
8.5%. BofA Merrill Lynch calculated terminal values for the
Company by applying to the Companys EBITDA, adjusted as
described above, a terminal multiple of 7.0x. The cash flows and
terminal values were then discounted to present value using
discount rates ranging from 8.5% to 10.5%, which were chosen
based upon a WACC calculation for the Company. This analysis
indicated the following implied per share equity value reference
ranges for the Company (rounded to the nearest $0.25), as
compared to the per share merger consideration of $33.00:
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|
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Implied per Share Equity
|
|
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Value Reference Range for the
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ROIC
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Company
|
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Consideration
|
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7%
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|
$
|
16.75 - $19.75
|
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|
$
|
33.00
|
|
8%
|
|
$
|
19.25 - $22.50
|
|
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|
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9%
|
|
$
|
22.00 - $25.25
|
|
|
|
|
|
10%
|
|
$
|
24.50 - $28.25
|
|
|
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|
11%
|
|
$
|
27.50 - $31.50
|
|
|
|
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12%
|
|
$
|
30.75 - $34.75
|
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Other
Factors
In rendering its opinion, BofA Merrill Lynch also reviewed and
considered other factors, including:
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the implied premium the per share merger consideration
represented over the historical trading prices of the
Companys common stock immediately preceding
October 15, 2010, the trading day immediately prior to
announcement of the merger, noting that the per share merger
consideration of $33.00 represented an implied premium
(discount) of:
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(0.9%) over the closing price of the Companys common stock
on October 15, 2010;
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1.2% over the
five-day
volume weighted average price of the Companys common
stock, or VWAP;
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14.8% over the one-month VWAP;
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23.1% over the three-month VWAP;
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37.6% over the six-month VWAP; and
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46.0% over the
12-month
VWAP;
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the historical trading prices of the Companys common stock
during the one-year period ending on October 15, 2010,
noting that the low and high closing prices during such period
were $15.24 and $33.31, respectively; and
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the present value of analyst stock price targets for the
Companys common stock in recently published, publicly
available research analysts reports, noting that the low
and high stock price targets discounted to present value
utilizing a cost of equity of 12% ranged, when rounded to the
nearest $0.25, from $25.00 to $44.75 per share.
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41
Miscellaneous
As noted above, the discussion set forth above is a summary of
the material financial analyses presented by BofA Merrill Lynch
to the Companys board of directors in connection with its
opinion and is not a comprehensive description of all analyses
undertaken by BofA Merrill Lynch in connection with its opinion.
The preparation of a financial opinion is a complex analytical
process involving various determinations as to the most
appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances
and, therefore, a financial opinion is not readily susceptible
to partial analysis or summary description. BofA Merrill Lynch
believes that its analyses summarized above must be considered
as a whole. BofA Merrill Lynch further believes that selecting
portions of its analyses and the factors considered or focusing
on information presented in tabular format, without considering
all analyses and factors or the narrative description of the
analyses, could create a misleading or incomplete view of the
processes underlying BofA Merrill Lynchs analyses and
opinion. The fact that any specific analysis has been referred
to in the summary above is not meant to indicate that such
analysis was given greater weight than any other analysis
referred to in the summary.
In performing its analyses, BofA Merrill Lynch considered
industry performance, general business and economic conditions
and other matters, many of which are beyond the control of the
Company and BofA Merrill Lynch. The estimates of the future
performance of the Company in or underlying
BofA Merrill Lynchs analyses are not necessarily
indicative of actual values or actual future results, which may
be significantly more or less favorable than those estimates or
those suggested by BofA Merrill Lynchs analyses. These
analyses were prepared solely as part of BofA Merrill
Lynchs analysis of the fairness, from a financial point of
view, of the per share merger consideration and were provided to
the Special Committee in connection with the delivery of BofA
Merrill Lynchs opinion. The analyses do not purport to be
appraisals or to reflect the prices at which a company might
actually be sold or the prices at which any securities have
traded or may trade at any time in the future. Accordingly, the
estimates used in, and the ranges of valuations resulting from,
any particular analysis described above are inherently subject
to substantial uncertainty and should not be taken to be BofA
Merrill Lynchs view of the actual values of the Company.
The type and amount of consideration payable in the merger was
determined through negotiations between the Company and Parent,
rather than by any financial advisor, and was approved by the
Special Committee. The decision to enter into the merger
agreement was solely that of the Special Committee and the board
of directors. As described above, BofA Merrill Lynchs
opinion and analyses were only one of many factors considered by
the Special Committee in its evaluation of the merger and should
not be viewed as determinative of the views of the Special
Committee or management with respect to the merger or the per
share merger consideration.
The Company has agreed to pay BofA Merrill Lynch for its
services in connection with the merger an aggregate fee
currently estimated to be approximately $8.3 million, a
portion of which was payable in connection with its opinion and
a significant portion of which is contingent upon the completion
of the merger. The Company also has agreed to reimburse BofA
Merrill Lynch for its expenses incurred in connection with BofA
Merrill Lynchs engagement and to indemnify BofA Merrill
Lynch, any controlling person of BofA Merrill Lynch and each of
their respective directors, officers, employees, agents and
affiliates against specified liabilities, including liabilities
under the federal securities laws.
BofA Merrill Lynch and its affiliates comprise a full service
securities firm and commercial bank engaged in securities,
commodities and derivatives trading, foreign exchange and other
brokerage activities, and principal investing as well as
providing investment, corporate and private banking, asset and
investment management, financing and financial advisory services
and other commercial services and products to a wide range of
companies, governments and individuals. In the ordinary course
of their businesses, BofA Merrill Lynch and its
affiliates may invest on a principal basis or on behalf of
customers or manage funds that invest, make or hold long or
short positions, finance positions or trade or otherwise effect
transactions in the equity, debt or other securities or
financial instruments (including derivatives, bank loans or
other obligations) of the Company, Parent and certain of their
respective affiliates.
42
BofA Merrill Lynch and its affiliates in the past have provided,
currently are providing, and in the future may provide,
investment banking, commercial banking and other financial
services to the Company and have received or in the future may
receive compensation for the rendering of these services,
including having acted or acting as (i) administrative
agent, arranger and book-running manager for, and lender under,
one of the Companys existing credit facilities as well as
a lender under other credit and leasing facilities for the
Company and (ii) book-running manager for a certain debt
offering for the Company.
In addition, BofA Merrill Lynch and its affiliates in the past
have provided, currently are providing, and in the future may
provide, investment banking, commercial banking and other
financial services to Parent and certain of its affiliates and
portfolio companies and have received or in the future may
receive compensation for the rendering of these services,
including having acted or acting as an underwriter or manager
for certain equity and debt offerings for certain of
Parents portfolio companies.
In addition, BofA Merrill Lynch and its affiliates in the past
have provided, currently are providing, and in the future may
provide, investment banking, commercial banking and other
financial services to GVI and have received or in the future may
receive compensation for the rendering of these services,
including having acted or acting as a lender under various
credit and leasing facilities for GVI.
Certain
Company Forecasts
Below are two sets of financial forecasts of our financial
performance for the fiscal years of 2010 through 2014 provided
by our senior management. Our senior management provided both
sets of financial forecasts to BofA Merrill Lynch for purposes
of the opinion described above and provided the Cash Flow
Neutral Case projections to Platinum Equity. The tables below
set forth such forecasts, and set forth forecasts of free cash
flow derived by BofA Merrill Lynch, based on information
provided by the Company, and used by BofA Merrill Lynch in
preparing its opinion.
The first set of projections, the Cash Flow Neutral Case,
reflects a capital expenditures plan funded through cash flow
from operations, not from further indebtedness. The Cash Flow
Neutral Case was provided to Platinum Equity in connection with
its consideration of the merger.
Cash Flow
Neutral Case
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Fiscal Year Ended December 31(1)
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2010E
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2011E
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2012E
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2013E
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2014E
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Revenue
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|
$
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741
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$
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782
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$
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837
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$
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870
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$
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907
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EPS
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$
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1.03
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$
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1.72
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$
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2.87
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$
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4.35
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$
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5.10
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Capital Expenditures
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$
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64
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$
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84
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$
|
94
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$
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125
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$
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145
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Total Debt(2)
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$
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325
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$
|
326
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$
|
327
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$
|
336
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$
|
337
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EBITDA(3)
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$
|
109
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$
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124
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$
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151
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$
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187
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$
|
207
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Free Cash Flow(4)
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$
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20
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$
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6
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$
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3
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$
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3
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$
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3
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(1)
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All numbers in millions, except EPS per share data.
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(2)
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Total debt net of original issue discount.
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(3)
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Earnings before interest, taxes, depreciation and amortization
and excludes stock based compensation expense.
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(4)
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Cash Flow From Operations less Capital Expenditures.
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43
The second set of projections, the Deferred Investment Case,
assumes a prolonged period of economic stagnation whereby fleet
renewal is delayed and certain strategic initiatives have
approximately a third of the effect as in the Cash Flow Neutral
Case. The Deferred Investment Case was not provided to Platinum
Equity.
Deferred
Investment Case
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Fiscal Year Ended December 31(1)
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2010E
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2011E
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2012E
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2013E
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2014E
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Revenue
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|
$
|
741
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$
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764
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$
|
798
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$
|
804
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$
|
817
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EPS
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$
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1.03
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$
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0.80
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$
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1.28
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$
|
1.27
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$
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1.50
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Capital Expenditures
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$
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64
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$
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30
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$
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30
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$
|
30
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|
$
|
30
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|
Total Debt(2)
|
|
$
|
325
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|
$
|
254
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$
|
202
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$
|
196
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$
|
197
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|
EBITDA(3)
|
|
$
|
109
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|
$
|
101
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$
|
109
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|
|
$
|
109
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|
$
|
113
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Free Cash Flow(4)
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|
$
|
29
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|
|
$
|
31
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|
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$
|
48
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|
$
|
57
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|
|
$
|
61
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|
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(1)
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All numbers in millions, except EPS per share data.
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(2)
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Total debt net of original issue discount.
|
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(3)
|
|
Earnings before interest, taxes, depreciation and amortization
and excludes stock based compensation expense.
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(4)
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Cash Flow From Operations less Capital Expenditures.
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Each of EBITDA and Free Cash Flow is a non-GAAP measure.
Non-GAAP financial measures are not intended to be a substitute
for any GAAP financial measure and, as calculated, may not be
comparable to other similarly titled measures of the performance
of other companies.
The financial forecasts are included in this proxy statement
solely because, in the case of the Cash Flow Neutral Case, they
were provided to Platinum Equity in connection with its
consideration of the merger and, in the case of the Cash Flow
Neutral Case and the Deferred Investment Case, they were
provided to BofA Merrill Lynch in connection with its opinion to
the Special Committee described above. The inclusion of this
information should not be regarded as an indication to any
stockholder that the board of directors or any other recipient
of this information considered, or now considers, it to be
predictive of actual future results, and they should not be
relied on as such.
At the time the financial forecasts set forth above were
prepared, the forecasts contained in each of the Cash Flow
Neutral Case and the Deferred Investment Case represented the
best estimates and judgments of the Companys management
and, to the best of managements knowledge and belief, the
future financial performance of the Company under each of those
scenarios. While the financial projections set forth above were
prepared in good faith, no assurance can be given regarding
future events. The financial forecasts also reflect numerous
estimates and assumptions with respect to industry performance,
general business, economic, regulatory, market and financial
conditions, as well as matters specific to the Companys
business, all of which are difficult to predict and many of
which are beyond the Companys control. As a result, there
can be no assurance that the forecasted results will be realized
or that actual results will not be significantly higher or lower
than forecasted. Since the financial forecasts cover multiple
years, such information by its nature becomes less predictive
with each successive year. Also, the economic and business
environments can and do change quickly, which adds a significant
level of unpredictability, unreliability and execution risk.
These factors create significant doubt as to whether the
forecasts for fiscal years 2010 and beyond are likely to be
achieved. As a result, the financial forecasts are not
necessarily indicative of future results. In addition, the
Company prepared the financial forecasts prior to the board of
directors approval of the merger agreement and,
accordingly, the financial forecasts do not reflect the effects
of the merger or the merger agreement, which may cause results
to differ materially. Although presented with numeric
specificity, the financial forecasts reflect numerous estimates
and assumptions that may not be realized and are subject to
significant uncertainties and contingencies, many of which are
beyond the Companys control. Accordingly, readers of this
proxy statement are cautioned not to place undue reliance on the
financial forecasts.
44
The financial forecasts were prepared for internal use and not
with a view toward public disclosure or toward complying with
GAAP, the published guidelines of the SEC regarding forecasts or
the guidelines established by the American Institute of
Certified Public Accountants for preparation and presentation of
prospective financial information. The financial forecasts
included in this proxy statement were prepared by, and are the
responsibility of, our management. We do not assume any
responsibility to update these financial forecasts. Neither our
independent registered public accounting firm, nor any other
independent accountants, have compiled, examined, or performed
any procedures with respect to the financial forecasts contained
herein, nor have they expressed any opinion or any other form of
assurance on such financial forecasts or their achievability,
and assume no responsibility for, and disclaim any association
with, the financial forecasts. Furthermore, the financial
forecasts do not take into account any circumstances or events
occurring after the date the financial forecasts were prepared
that were unforeseen by our management at the time of
preparation. We have made publicly available our actual results
of operations for the quarter ended June 30, 2010. Our
stockholders should review our Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2010 to obtain this
information. See the section entitled Where You Can Find
More Information beginning on page 85.
None of the Company or our affiliates, advisors, officers,
directors or representatives has made or makes any
representation to any stockholder or other person regarding the
ultimate performance of the Company compared to the information
contained in the financial forecasts or that forecasted results
will be achieved.
Financing
of the Merger
We anticipate that the total funds needed to complete the
merger, including the funds needed to:
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pay our stockholders (and holders of our other equity-based
interests) the amounts due to them under the merger agreement;
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refinance the outstanding indebtedness that comes due as a
result of the merger; and
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pay fees and expenses related to the merger and the debt that
will finance the merger
|
will be approximately $798 million.
We expect this amount to be funded through a combination of:
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up to $550 million from a senior secured asset-based
revolving credit facility to be obtained by Intermediate
Holdco; and
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equity financing of up to $500 million.
|
ACL intends to keep the Companys existing senior secured
notes outstanding and will comply with the indenture governing
the notes, including making any required offer to purchase the
notes upon a change of control, subject to Parents right
to require us prior to closing to make an offer to purchase the
notes.
Parent and Merger Sub have received an equity commitment for an
aggregate investment of up to $500 million from the
guarantor, as described below.
Intermediate Holdco has obtained the debt financing commitment
described below. The funding under that commitment is subject to
certain conditions precedent, including conditions that do not
relate directly to the merger agreement. We believe the
committed amounts will be sufficient to complete the
transaction, but we cannot assure you of that. Those amounts
might be insufficient if, among other things, the Company
realizes substantially less net proceeds from the debt financing
than we currently expect. Although obtaining the debt financing
is not a condition to the completion of the merger, the failure
of Intermediate Holdco to obtain sufficient financing is likely
to result in the failure of the merger to be completed. In that
case, Parent may be obligated to pay the Company the Parent
termination fee, as described under the section entitled
The Merger Agreement Fees and Expenses
beginning on page 71. That obligation is guaranteed by the
guarantor.
45
Equity
Financing
Parent and Merger Sub have received an equity commitment letter
for an aggregate investment at closing of up to
$500 million, which will constitute the equity portion of
the merger financing. The guarantor has agreed to cause up to
$500 million of cash to be contributed to Parent and Merger
Sub at closing. Subject to certain conditions, the guarantor may
assign all or a portion of its equity commitment obligations to
other affiliates of the guarantor, provided that the guarantor
will not be released from its commitment until such affiliate
actually contributes the commitment assigned to such affiliate.
The equity commitment is generally subject to the satisfaction
of the conditions to closing under the merger agreement. The
obligations of the guarantor under the equity commitment letter
will terminate upon the earlier to occur of (i) the
termination of the merger agreement or (ii) the assertion
by the Company of certain claims and (iii) the consummation
of the merger.
Debt
Financing
In connection with entering into the merger agreement,
Intermediate Holdco received a debt commitment letter, dated
October 18 2010, from Wells Fargo Capital Finance, LLC, which we
refer to as Wells Fargo, to provide in the aggregate up to
$550 million in debt financing to Intermediate Holdco,
subject to certain availability limitations described below,
consisting of a senior secured asset-based revolving credit
facility in an aggregate principal amount of up to
$550 million; subject to (x) a $160 million
availability block so long as the Companys indenture
governing its senior secured second lien notes is in effect,
(y) a $150 million availability block, which will
initially be available solely to finance any obligation of the
Company to repurchase such second lien notes on account of a
change of control under the applicable indenture, and
(z) adequate capacity under the borrowing base (which
includes accounts receivable, fuel inventory, raw steel
inventory and vessels, in each case, subject to certain
limitations including advance rates, eligibility criteria and
reserves).
The facilities contemplated by the debt financing commitments
are subject to customary closing conditions, including without
limitation:
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that, since October 18, 2010, there has not occurred a
Company material adverse effect, as defined in the merger
agreement;
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|
the negotiation, execution and delivery of customary and
reasonable documents consistent with the terms set forth in the
debt commitment letter and fee arrangements entered into between
the parties, and delivery of certain customary closing documents
(including, among others, a customary payoff letter for the
Companys existing credit facility), delivery of specified
items of collateral, notice of borrowing and certain financial
statements in form and substance reasonably satisfactory to
Wells Fargo;
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|
the accuracy of certain specified representations and warranties
in the loan documents and merger agreement;
|
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|
receipt of evidence of corporate authority and certificates of
status (including certified copies of the governing documents)
issued by the jurisdictions of organization of each borrower
(defined as Commercial Barge Line Company, American Commercial
Lines LLC, ACL Transportation Services LLC, Jeffboat LLC and
such other subsidiaries of Intermediate Holdco as may be agreed)
and each guarantor (defined as Intermediate Holdco, the Company
and certain present and future subsidiaries of the Company);
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|
minimum excess availability (taking into account any aged
payables) under the facility of the loan parties at closing,
after giving effect to the initial use of proceeds (including
the payment of all fees, expenses and closing date
distributions), of not less than $65,000,000, which calculation
shall be based upon the results of an updated takeover field
examination performed prior to the closing date;
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|
completion of Patriot Act searches, OFAC/PEP searches and
customary individual background checks, for Intermediate Holdco
and any other entity which will directly own the Company after
the merger
|
46
|
|
|
|
|
(other than Commercial Barge Line Company, American Commercial
Lines LLC, ACL Transportation Services LLC or Jeffboat
LLC) who will become a borrower under the facility on the
closing date, and their respective senior management and key
principals, if applicable;
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|
the absence of any intentional misrepresentation of material
fact contained in, or intentional omission of a material fact
necessary to make the statements made by Platinum Equity
Advisors, LLC or the loan parties not misleading in, certain
loan materials; and
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|
prior to or concurrently with the initial extension of credit
under the facility, the acquisition shall have been consummated
on the closing date in accordance with the terms and conditions
of the merger agreement, and the Company shall have delivered a
certificate certifying as to the solvency of the loan parties
after giving effect to the acquisition and the debt financing.
|
In the event that all the conditions to the closing of the
merger are satisfied (or upon funding will be satisfied), Parent
and Merger Sub have agreed to use their reasonable best efforts
to cause the lenders and any other person providing debt
financing to fund on the closing date of the merger the debt
financing required to complete the merger and the other
transactions contemplated by the merger agreement. Parent and
Merger Sub acknowledge in the merger agreement that the
obtaining of the equity and debt financing is not a condition to
the consummation of the merger, such that if the equity or debt
financing has not been obtained, Parent and Merger Sub will
continue to be obligated, subject to the satisfaction or waiver
of the closing conditions in the merger agreement, to consummate
the merger.
We have agreed to use our reasonable best efforts to cooperate
with Parent and Merger Sub in connection with obtaining the
equity and debt financing including by providing financial and
other pertinent information regarding the Company as may be
reasonably requested by Parent; provided that the Company shall
not be required to pay any commitment or other similar fee or to
incur any other liability in connection with the financing, and
such cooperation shall not be required if it would require the
Company of any of its subsidiaries of representatives to waive
or amend any terms of the merger agreement.
Although the debt financing described in this proxy statement is
not subject to due diligence or a so called market
out provision, which allows lenders not to fund their
commitments if certain conditions in the financial markets
prevail, there is still a risk that such financing may not be
funded when required. As of the date of this proxy statement,
Parent has not informed us of any alternative financing
arrangements or alternative financing plans that have been made
in the event the debt financing described in this proxy
statement is not available as anticipated.
Limited
Guarantee
Pursuant to a limited guarantee delivered by the guarantor in
favor of the Company, dated October 18, 2010, the guarantor
has agreed to guarantee the payment obligations of Parent
relating to the Parent termination fee and certain costs
associated therewith, if and when payable. The guarantors
maximum liability under the limited guarantee is limited to the
amount of the Parent termination fee, which will be $16,000,000
or $20,000,000, plus enforcement costs and interest payable in
the event of a suit that results in a judgment against Parent
for payment of the Parent termination fee.
Effective
Time of Merger
The closing of the merger will take place on the third business
day following the later of (x) the date on which the
conditions to closing of the merger (described under the section
entitled The Merger Agreement Conditions to
the Merger beginning on page 68) have been
satisfied or waived (other than the conditions that by their
terms are to be satisfied at the closing of the merger, but
subject to the satisfaction or waiver of those conditions) and
(y) the final day of the marketing period or such earlier
date as may be specified by Parent by written notice to the
Company, or in any case at such other location, date and time as
Parent, Merger Sub and the Company shall mutually agree upon in
writing. What we refer to as the marketing period, means the
period beginning on the date of the merger agreement and ending
on (i) December 21, 2010 if the requisite stockholder
approval shall have been obtained on or before December 20,
2010, and (ii) if the requisite
47
stockholder approval shall not have been obtained by
December 20, 2010, five business days after the date on
which the requisite stockholder approval is obtained.
The effective time will occur on the date of the closing of the
merger upon the filing of a certificate of merger with the
Secretary of State of the State of Delaware (or at such later
date as we and Parent may agree and specify in the certificate
of merger).
Payment
of Merger Consideration and Surrender of Stock
Certificates
Each record holder of shares of the common stock (other than
holders of solely the excluded shares) will be sent a letter of
transmittal describing how such holder may exchange their shares
of common stock for the per share merger consideration promptly
after the completion of the merger.
You should not return your stock certificates with the
enclosed proxy card, and you should not forward your stock
certificates to the paying agent without a letter of
transmittal.
You will not be entitled to receive the per share merger
consideration until you deliver a duly completed and executed
letter of transmittal to the paying agent. If your shares are
certificated, you must also surrender your stock certificate or
certificates to the paying agent. If ownership of your shares is
not registered in the transfer records of the Company, a check
for any cash to be delivered will only be issued if the
applicable letter of transmittal is accompanied by all documents
reasonably required to evidence and effect transfer and to
evidence that any applicable stock transfer taxes have been paid
or are not applicable.
Interests
of Certain Persons in the Merger
In considering the recommendation of our board of directors that
you vote to approve the proposal to adopt the merger agreement,
you should be aware that our directors and executive officers
have interests in the merger that are different from, or in
addition to, those of our stockholders generally. The board of
directors was aware of and considered these interests, among
other matters, in evaluating and negotiating the merger
agreement and the merger, and in recommending that the merger
agreement be adopted by the stockholders of the Company.
Equity
Compensation Awards
Options
Under the merger agreement, all outstanding vested stock options
(and for our directors and our employees below the vice
president level, unvested stock options) will be cancelled and
converted into the right to receive cash, in an amount equal to
the product of (x) the total number of shares of common
stock subject to such option immediately prior to the effective
time and (y) the excess, if any, of the per share merger
consideration over the exercise price per share of such option,
less any applicable withholding taxes.
Under the merger agreement, at the effective time and without
any action on the part of the holders thereof, each unvested
option held by an employee at or above our vice president level
that is outstanding immediately prior to the effective time and
set forth on the disclosure schedule relating to the merger
agreement will, unless Parent elects to cash-out such awards on
the terms of the preceding paragraph, be assumed or substituted
by Parent, each such award we refer to as an assumed award, and
converted automatically at the effective time into an option
denominated in shares of Parent common stock and with other
terms and conditions substantially similar to those of the
related options, except that (i) the number of shares of
Parent common stock subject to each such assumed award shall be
determined by multiplying the number of shares of our common
stock subject to such assumed award immediately prior to the
effective time by the exchange ratio (rounded down to the
nearest whole share) and (ii) if applicable, the exercise
price per share of Parent common stock (rounded upwards to the
nearest whole cent) shall equal (x) the per share exercise
price for the shares of our common stock otherwise purchasable
pursuant to such assumed award immediately prior to the
effective time divided by (y) the exchange ratio. The
exchange ratio will be equal to the quotient of (1) the per
share merger consideration, divided by (2) the fair market
value of a share of Parent common stock immediately following
the effective time as determined by Parent consistent with the
price paid
48
by the affiliates of Parent for (including contributions by such
affiliates with respect to) a share of Parent common stock.
Restricted
Stock Units
Under the merger agreement, each outstanding vested restricted
stock unit, and each outstanding restricted stock unit held by
our directors or by an employee below the vice president level,
whether or not vested, and without regard to any performance
criteria set forth in therein, will be cancelled and converted
into the right to receive cash in an amount equal to the product
of (x) the total number of shares of common stock subject
to such restricted stock unit immediately prior to the effective
time and (y) the per share merger consideration, less any
applicable withholding taxes.
Each unvested restricted stock unit held by an employee at or
above the vice president level that is outstanding immediately
prior to the effective time and set forth on the disclosure
schedule relating to the merger agreement, or an assumed RSU
award, will, unless Parent elects to cash-out such awards on the
terms of the preceding paragraph, be assumed or substituted by
Parent and converted automatically at the effective time into a
restricted stock unit denominated in Parent common stock and
with other terms and conditions substantially similar to those
of the related restricted stock unit awards, except that the
number of shares of Parent common stock subject to each such
assumed RSU award shall be determined by multiplying the number
of shares of our common stock subject to such assumed RSU award
immediately prior to the effective time by the exchange ratio
(rounded down to the nearest whole share).
The table below provides detail as to the value of the
outstanding options and restricted stock units held by our
directors which at the effective time, whether or not vested,
will become fully vested and cancelled and converted into the
right to receive the per share merger consideration. The table
below also provides detail as to the value of the outstanding
vested options and restricted stock units held by our executive
officers that will be cancelled and converted into the right to
receive the per share merger consideration and the value of the
outstanding unvested options and restricted stock units held by
our executive officers that will be assumed by Parent unless
Parent elects to cash them out.
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(a)
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(b)
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(d)
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Value of
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Value of
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(c)
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Value of
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Vested Stock
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Unvested
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Value of
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Assumed
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Option
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Stock Option
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Restricted
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Unvested
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Name
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Awards
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Awards
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Stock Units
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Awards
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Non-Employee Directors
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Clayton K. Yeutter
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$
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$
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$
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Richard L. Huber
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$
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$
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$
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Nils E. Larsen
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$
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$
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$
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Emanuel L. Rouvelas
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$
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$
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$
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R. Christopher Weber
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$
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Executive Officers
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$
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(1)
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(1)
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$
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(2)
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Michael P. Ryan
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$
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(1)
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(1)
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$
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(2)
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Thomas R. Pilholski
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$
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(1)
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(1)
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$
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(2)
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Dawn R. Landry
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$
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(1)
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(1)
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$
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(2)
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Richard W. Spriggle
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$
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(1)
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(1)
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$
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(2)
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(1)
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Unvested equity awards held by our executive officers will be
assumed by Parent for the right to receive equity of Parent. The
values of these assumed awards are found in column (d).
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(2)
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The value of assumed equity awards is determined by the same
method as described above for determining the amount of cash to
be paid for unvested equity awards that are not being assumed.
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49
Post-Employment
Provisions
On March 12, 2008, the Company entered into an employment
letter agreement with Michael P. Ryan, the President and Chief
Executive Officer of ACL. Pursuant to the terms of
Mr. Ryans employment letter agreement, if his
employment is terminated after a
change-in-control,
as defined in the stock option agreement, certain options
granted to Mr. Ryan pursuant to the offer letter become
100 percent vested and exercisable. The employment letter
agreement also provides that Mr. Ryan will be entitled to
twelve months severance as well as a pro-rated annual bonus paid
in one lump sum, not to exceed 100 percent of the payout,
in the year of termination if his employment is involuntarily
terminated without cause or if Mr. Ryan terminates his
employment for good reason (as defined in the employment letter
agreement). Mr. Ryan is not entitled to severance pay for
separations that are the result of voluntary termination,
discharge for performance, death, retirement or permanent
disability.
On March 18, 2008, the Company entered into an employment
letter agreement with Thomas R. Pilholski, the Senior
Vice President and Chief Financial Officer of ACL. Pursuant to
the terms of Mr. Pilholskis employment letter
agreement, if his employment is terminated involuntarily without
cause or if he terminates employment for good reason (as defined
in the stock option agreement), certain options granted to
Mr. Pilholski pursuant to the offer letter become
100 percent vested and exercisable. The employment letter
agreement also provides Mr. Pilholski will be entitled to
twelve months severance as well as a pro-rata annual bonus paid
in one lump sum, not to exceed 100 percent of the payout,
in the year of termination (based on Company performance
achievement at that time) if his employment is involuntarily
terminated without cause or if Mr. Pilholski terminates his
employment for good reason (as defined in the employment letter
agreement). Mr. Pilholski is not entitled to severance pay
for separations that are the result of voluntary termination,
discharge for cause, death, retirement or permanent disability.
On October 28, 2008, the Company entered into an employment
letter agreement with Richard W. Spriggle, the Senior
Vice President, Human Resources of ACL. Pursuant to the terms of
Mr. Spriggles employment letter agreement, if his
employment is terminated involuntarily without cause or if he
terminates employment for good reason (as defined in the
employment letter agreement), Mr. Spriggle will be entitled
to twelve months severance. Mr. Spriggle is not entitled to
severance pay for separations that are the result of voluntary
termination, discharge for cause, death, retirement or permanent
disability.
Upon a change in control (as defined in the applicable
nonqualified stock option agreement, incentive stock option
agreement, restricted stock award agreement and restricted stock
unit award agreement), any outstanding options granted prior to
2009 will immediately become fully vested and restricted stock
units granted prior to 2008 will fully lapse for each of the
Companys named executive officers.
Upon a termination without cause within one year of a change in
control (as defined in the applicable nonqualified stock option
agreement, incentive stock option agreement, restricted stock
award agreement and restricted stock unit award agreement), any
outstanding options, restricted stock and restricted stock units
granted during or after 2009 will immediately become fully
vested for each of the Companys named executive officers.
Arrangements
with the Surviving Corporation
As of the date of this proxy statement except as described above
with respect to the possible assumption of unvested equity
awards held by certain of our officers, no members of our
current management have entered into any agreement, arrangement
or understanding with Parent or its affiliates regarding
employment with, or the right to convert into or reinvest or
participate in the equity of, the surviving corporation or
Parent or its affiliates. Although it would not be unexpected
that some members of our current management team will enter into
arrangements, agreements or understandings with Parent or its
affiliates regarding employment (and severance arrangements)
with, and the right to purchase or participate in the equity of,
Parent (and/or a subsidiary of Parent), as of the date of this
proxy statement except as described above with respect to the
possible assumption of unvested equity awards held by certain of
our officers, no such agreements, arrangements or understandings
have been reached between members of our current management and
representatives of Parent, and there can be no assurance that
any parties will reach an agreement, arrangement or
understanding. New arrangements, agreements or understandings,
if any, are currently expected to be entered into at or prior to
completion of the merger and would not become effective until
after the merger is completed.
50
Except as disclosed in this proxy statement, there is no present
or proposed material agreement, arrangement, understanding or
relationship between Parent, Merger Sub, the guarantor or any of
their respective executive officers, directors, controlling
persons or subsidiaries, on the one hand, and the Company or any
of its executive officers, directors, controlling persons or
subsidiaries, on the other hand.
Accounting
Treatment
The merger will be accounted for as a purchase
transaction for financial accounting purposes.
Material
U.S. Federal Income Tax Consequences of the Merger
The following is a summary of the material U.S. federal
income tax consequences of the merger to U.S. holders (as
defined below) whose shares of common stock are converted into
the right to receive cash in the merger. This summary does not
purport to consider all aspects of U.S. federal income
taxation that might be relevant to our stockholders. For
purposes of this discussion, we use the term
U.S. holder to mean a beneficial owner of
shares of common stock that is, for U.S. federal income tax
purposes:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity or arrangement taxable as a
corporation for U.S. federal income tax purposes) created
or organized under the laws of the United States, any state
thereof or the District of Columbia;
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a trust that (i) is subject to the supervision of a court
within the United States and the control of one or more
U.S. persons or (ii) has a valid election in effect
under applicable U.S. Treasury regulations to be treated as
a U.S. person; or
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an estate that is subject to U.S. federal income tax on its
income regardless of its source.
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If a partnership (including an entity or arrangement treated as
a partnership for U.S. federal income tax purposes) holds
common stock, the tax treatment of a partner generally will
depend on the status of the partner and the activities of the
partnership. A partner of a partnership holding common stock
should consult the partners tax advisor regarding the
U.S. federal income tax consequences of the merger to such
partner.
This discussion is based on current law, which is subject to
change, possibly with retroactive effect. The discussion applies
only to beneficial owners who hold shares of common stock as
capital assets, and does not apply to shares of common stock
received in connection with the exercise of employee stock
options or otherwise as compensation, stockholders who hold an
equity interest, actually or constructively, in Parent or the
surviving corporation after the merger, stockholders who validly
exercise their rights under the DGCL to object to the merger or
to certain types of beneficial owners who may be subject to
special rules (such as insurance companies, banks, tax-exempt
organizations, financial institutions, broker-dealers,
partnerships, S corporations or other pass-through
entities, mutual funds, traders in securities who elect the
mark-to-market
method of accounting, stockholders subject to the alternative
minimum tax, stockholders that have a functional currency other
than the U.S. dollar or stockholders who hold common stock
as part of a hedge, straddle, constructive sale or conversion
transaction). This discussion also does not address the
U.S. tax consequences to any stockholder who, for
U.S. federal income tax purposes, is a non-resident alien
individual, foreign corporation, foreign partnership or foreign
estate or trust, and does not address the receipt of cash in
connection with the cancellation of shares of stock appreciation
rights, restricted stock units or options to purchase shares of
common stock, or any other matters relating to equity
compensation or employee benefit plans. This discussion does not
address any aspect of state, local or foreign tax laws.
Exchange
of Shares of Common Stock for Cash Pursuant to the Merger
Agreement.
The exchange of shares of common stock for cash in the merger
will be a taxable transaction for U.S. federal income tax
purposes. In general, a U.S. holder whose shares of common
stock are converted into the right to receive cash in the merger
will recognize capital gain or loss for U.S. federal income
tax purposes equal to the difference, if any, between the amount
of cash received with respect to such shares (determined
51
before the deduction of any applicable withholding taxes) and
the U.S. holders adjusted tax basis in such shares.
Gain or loss will be determined separately for each block of
shares of common stock (i.e., shares of common stock acquired at
the same cost in a single transaction). Such gain or loss will
be long-term capital gain or loss provided that the
U.S. holders holding period for such shares of common
stock is more than one year at the time of the completion of the
merger. Long-term capital gains of non-corporate
U.S. holders are eligible for reduced rates of taxation.
There are limitations on the deductibility of capital losses.
Backup
Withholding and Information Reporting.
Backup withholding of tax (at the rate of 28%) may apply to cash
payments to which a U.S. holder is entitled under the
merger agreement, unless the U.S. holder or other payee
provides a taxpayer identification number, certifies that such
number is correct, and otherwise complies with the backup
withholding rules. Each of our U.S. holders should complete
and sign, under penalty of perjury, a
Form W-9
included as part of the letter of transmittal and return it to
the paying agent, in order to provide the information and
certification necessary to avoid backup withholding, unless an
exemption applies and is established in a manner satisfactory to
the paying agent.
Backup withholding is not an additional tax. Any amounts
withheld from cash payments to a U.S. holder pursuant to
the merger under the backup withholding rules will be allowable
as a refund or a credit against such U.S. holders
U.S. federal income tax liability provided the required
information is timely furnished to the Internal Revenue Service.
Cash payments made pursuant to the merger will also be subject
to information reporting unless an exemption applies.
The U.S. federal income tax consequences described above
are not intended to constitute a complete description of all tax
consequences relating to the merger. Because individual
circumstances may differ, each stockholder should consult the
stockholders tax advisor regarding the applicability of
the rules discussed above to the stockholder and the particular
tax effects to the stockholder of the merger in light of such
stockholders particular circumstances, the application of
state, local and foreign tax laws, and, if applicable, the tax
consequences of the receipt of cash in connection with the
cancellation of options to purchase shares of common stock,
stock appreciation rights or restricted stock units, including
the transactions described in this proxy statement relating to
our other equity compensation and benefit plans.
Regulatory
Approvals
Under the terms of the merger agreement, the merger cannot be
completed until the waiting period applicable to the
consummation of the merger under the HSR Act has expired or been
earlier terminated.
Under the HSR Act, and the rules promulgated thereunder by the
FTC, the merger cannot be completed until each of the Company
and Parent file a notification and report form with the FTC and
the Antitrust Division of the DOJ under the HSR Act and the
applicable waiting period has expired or been terminated. Each
of the Company and Parent filed such a notification and report
form on
[ ],
2010 and each requested early termination of the waiting period.
At any time before or after consummation of the merger,
notwithstanding the termination of the waiting period under the
HSR Act, the Antitrust Division of the DOJ or the FTC could take
such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin
the completion of the merger or seeking divestiture of
substantial assets of the Company or Parent. At any time before
or after the completion of the merger, and notwithstanding the
termination of the waiting period under the HSR Act, any state
could take such action under the antitrust laws as it deems
necessary or desirable in the public interest. Such action could
include seeking to enjoin the completion of the merger or
seeking divestiture of substantial assets of the Company or
Parent. Private parties may also seek to take legal action under
the antitrust laws under certain circumstances.
There can be no assurance that the regulatory approvals
described above will be sought or obtained and, if obtained,
there can be no assurance as to the timing of any approvals,
ability to obtain the approvals on
52
satisfactory terms or the absence of any litigation challenging
such approvals. There can also be no assurance that the DOJ, the
FTC or any other governmental entity or any private party will
not attempt to challenge the merger on antitrust grounds, and,
if such a challenge is made, there can be no assurance as to its
result.
Litigation
Relating to the Merger
On October 22, 2010, a putative class action lawsuit was
commenced against us, our directors, Platinum Equity, Parent and
Merger Sub in the Court of Chancery of the State of Delaware.
The lawsuit is captioned
Leonard Becker v. American
Commercial Lines, Inc., et al.
In the lawsuit, plaintiff
alleges generally that our directors breached their fiduciary
duties in connection with the transaction by, among other
things, carrying out a process that inhibits maximization of
shareholder value and the disclosure of material information,
and that Platinum Equity aided and abetted the alleged breaches
of duties. Plaintiff purports to bring the lawsuit on behalf of
the public stockholders of the Company and seeks equitable
relief to enjoin consummation of the merger, rescission of the
merger
and/or
rescissory damages, and fees and costs, among other relief. The
Company believes the lawsuit is without merit.
THE
MERGER AGREEMENT
This section describes the material terms of the merger
agreement. The description in this section and elsewhere in this
proxy statement is qualified in its entirety by reference to the
complete text of the merger agreement, a copy of which is
attached as
Annex A
and is incorporated by
reference into this proxy statement. This summary does not
purport to be complete and may not contain all of the
information about the merger agreement that is important to you.
We encourage you to read the merger agreement carefully and in
its entirety. This section is not intended to provide you with
any factual information about us. Such information can be found
elsewhere in this proxy statement and in the public filings we
make with the SEC, as described in the section entitled
Where You Can Find More Information beginning on
page 85.
Explanatory
Note Regarding the Merger Agreement
The merger agreement is included to provide you with information
regarding its terms. Factual disclosures about the Company
contained in this proxy statement or in the Companys
public reports filed with the SEC may supplement, update or
modify the factual disclosures about the Company contained in
the merger agreement. The representations, warranties and
covenants contained in the merger agreement were made only for
purposes of the merger agreement and were made as of specified
dates, were solely for the benefit of the parties to the merger
agreement, and are qualified by information in confidential
disclosure schedules that the Company exchanged with Parent and
Merger Sub in connection with the execution of the merger
agreement. The representations and warranties may have been made
for the purposes of allocating contractual risk between the
parties to the merger agreement instead of establishing these
matters as facts, and may be subject to standards of materiality
applicable to the contracting parties that differ from those
applicable to your investment decision. In particular, in your
review of the representations and warranties contained in the
merger agreement and described in this summary, it is important
to bear in mind that the representations and warranties were
negotiated with the principal purposes of establishing the
circumstances in which a party to the merger agreement may have
the right not to close the merger if the representations and
warranties of the other party prove to be untrue due to a change
in circumstance or otherwise, and allocating risk between the
parties to the merger agreement, rather than establishing
matters as facts. Although these representations and warranties
may not constitute the actual state of facts about the parties
to the agreements as of a specific date, any specific material
facts that qualify the representations and warranties in the
merger agreement have been disclosed in this proxy statement or
in the information incorporated by reference herein, as
applicable. Accordingly, the representations and warranties and
other provisions of the merger agreement should not be read
alone, but instead should be read only in conjunction with the
other information provided elsewhere in this proxy statement or
incorporated by reference into this proxy statement. None of the
representations and warranties of the parties to the merger
agreement will survive the effective time of the merger.
53
The
Merger
The merger agreement provides for the merger of Merger Sub with
and into the Company upon the terms, and subject to the
conditions, set forth in the merger agreement. As the surviving
corporation, the Company will continue to exist following the
merger.
Following the completion of the merger, we expect the common
stock to be delisted from Nasdaq and deregistered under the
Exchange Act, and to cease to be publicly traded.
Closing
and Effective Time of the Merger
The closing of the merger will take place on the third business
day following the later of (x) the date on which the
conditions to closing of the merger (described under the section
entitled The Merger Agreement Conditions to
the Merger beginning on page 68) have been
satisfied or waived (other than the conditions that by their
terms are to be satisfied at the closing of the merger, but
subject to the satisfaction or waiver of those conditions) and
(y) the final day of the marketing period or such earlier
date as may be specified by Parent by written notice to the
Company, or in any case at such other location, date and time as
Parent, Merger Sub and the Company shall mutually agree upon in
writing. Marketing period means the period beginning on
October 18, 2010, the date of the merger agreement and
ending on (i) December 21, 2010 if the requisite
stockholder approval shall have been obtained on or before
December 20, 2010, and (ii) if the requisite
stockholder approval shall not have been obtained by
December 20, 2010, five business days after the date on
which the requisite stockholder approval is obtained.
The effective time will occur on the date of the closing of the
merger upon the filing of a certificate of merger with the
Secretary of State of the State of Delaware (or at such later
date as we and Parent may agree and specify in the certificate
of merger).
Directors
and Officers; Certificate of Incorporation; Bylaws
The board of directors of the surviving corporation will, from
and after the effective time, consist of the directors of Merger
Sub until their successors have been duly appointed and
qualified, or until their earlier death, resignation or removal
in accordance with the certificate of incorporation and bylaws
of the surviving corporation. The officers of Merger Sub at the
effective time will, from and after the effective time, be the
officers of the surviving corporation until their successors
have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the
certificate of incorporation and bylaws of the surviving
corporation.
The certificate of incorporation of the surviving corporation
will be in the form attached as Exhibit B to the merger
agreement, until amended in accordance with applicable law and
its terms. The bylaws of the Company immediately prior to the
effective time will, from and after the effective time, be
amended in their entirety in the form of the bylaws of Merger
Sub as in effect immediately prior to the effective time, until
amended in accordance with applicable law, its terms and the
certificate of incorporation of the surviving corporation.
Treatment
of Common Stock, Options and Other Equity Awards
Common
Stock
In the merger, each outstanding share of Company common stock
(except for certain shares owned, if any, by Company, Parent,
Merger Sub, and their direct and indirect wholly owned
subsidiaries, GVI Stockholders, and shares owned by stockholders
who have properly exercised their appraisal rights) will be
converted into the right to receive $33.00 in cash, without
interest, which amount we refer to as the per share merger
consideration, less any applicable withholding taxes. GVI
Stockholders be entitled to will receive for each share of
Company common stock they hold $31.25 in cash, without interest,
less applicable withholding taxes, if the transaction closes on
or before December 31, 2010 and $33.00 in cash, without
interest, less applicable withholding taxes, if the transaction
closes thereafter.
54
Common stock owned by Parent, Merger Sub or any other direct or
indirect wholly owned subsidiary of Parent or Merger Sub will be
cancelled without payment of consideration. Each share of our
common stock that is held by any of our direct or indirect
wholly owned subsidiaries shall remain outstanding and will
become that number of shares of the surviving corporation that
bears the same ratio to the aggregate number of outstanding
shares of the surviving corporation as the number of shares of
our common stock held by any one of our subsidiaries bore to the
aggregate number of outstanding shares of our common stock
immediately prior to the effective time. Common stock owned by
stockholders who have properly exercised, and not effectively
withdrawn or lost or failed to perfect, appraisal rights under
the DGCL will be not be entitled to receive the per share merger
consideration. Such stockholders will instead be entitled to the
appraisal rights provided under the DGCL as described under the
section entitled Appraisal Rights beginning on
page 81.
Options
Under the merger agreement, all outstanding vested stock options
(and for our directors and our employees below the vice
president level, unvested stock options) will be cancelled and
converted into the right to receive cash, in an amount equal to
the product of (x) the total number of shares of common
stock subject to such option immediately prior to the effective
time and (y) the excess, if any, of the per share merger
consideration over the exercise price per share of such option,
less any applicable withholding taxes.
Under the merger agreement, at the effective time and without
any action on the part of the holders thereof, each unvested
option held by an employee at or above the vice president level
that is outstanding immediately prior to the effective time and
set forth on the disclosure schedule relating to the merger
agreement will, unless Parent elects to cash-out such awards on
the terms of the preceding paragraph, be assumed or substituted
by Parent, each such award we refer to as an assumed award, and
converted automatically at the effective time into an option
denominated in shares of Parent common stock and with other
terms and conditions substantially similar to those of the
related options, except that (i) the number of shares of
Parent common stock subject to each such assumed award shall be
determined by multiplying the number of shares of our common
stock subject to such assumed award immediately prior to the
effective time by the exchange ratio (rounded down to the
nearest whole share) and (ii) if applicable, the exercise
price per share of Parent common stock (rounded upwards to the
nearest whole cent) shall equal (x) the per share exercise
price for the shares of our common stock otherwise purchasable
pursuant to such assumed award immediately prior to the
effective time divided by (y) the exchange ratio. The
exchange ratio will be equal to the quotient of (1) the per
share merger consideration, divided by (2) the fair market
value of a share of Parent common stock immediately following
the effective time as determined by Parent consistent with the
price paid by the affiliates of Parent for (including
contributions by such affiliates with respect to) a share of
Parent common stock.
Restricted
Stock Units
Under the merger agreement, each outstanding vested restricted
stock unit, and each outstanding restricted stock unit held by
an employee below the vice president level or by our directors
whether or not vested and without regard to any performance
criteria set forth in therein, will be cancelled and converted
into the right to receive cash in an amount equal to the product
of (x) the total number of shares of common stock subject
to such restricted stock unit immediately prior to the effective
time and (y) the per share merger consideration, less any
applicable withholding taxes.
Each unvested restricted stock unit held by an employee at or
above the vice president level that is outstanding immediately
prior to the effective time and set forth on the disclosure
schedule relating to the merger agreement, or an assumed RSU
awards will, unless Parent elects to cash-out such awards on the
terms of the preceding paragraph, be assumed or substituted by
Parent and converted automatically at the effective time into a
restricted stock unit denominated in Parent common stock and
with other terms and conditions substantially similar to those
of the related restricted stock unit awards, except that the
number of shares of Parent common stock subject to each such
assumed RSU award shall be determined by multiplying the number
of shares of our common stock subject to such assumed RSU award
immediately prior to the effective time by the exchange ratio
(rounded down to the nearest whole share).
55
Exchange
and Payment Procedures
At the effective time, Parent has agreed to deposit, or cause to
be deposited, with the paying agent a cash amount in immediately
available funds necessary for the paying agent to make payment
of the aggregate per share merger consideration to the holders
of shares of our common stock (other than holders of dissenting
shares, who shall have such rights as described in greater
detail in the merger agreement and discussed under the section
entitled Appraisal Rights beginning on page 81).
Promptly following the consummation of the merger (but in no
event more than three business days thereafter), Parent and the
surviving corporation have agreed to cause the paying agent to
send each record holder of shares of common stock a letter of
transmittal and / or instructions advising you how to
surrender your certificates and uncertificated shares in
exchange for an amount in cash equal to the product obtained by
multiplying the aggregate number of shares of the common stock
represented by your certificate(s) or the uncertificated shares,
as the case may be, and the per share merger consideration (less
any applicable withholding taxes payable in respect thereof).
The merger agreement contemplates that the paying agent will pay
you your merger consideration after you have surrendered your
certificates for cancellation to the payment agent together with
the letter of transmittal duly completed and validly executed,
or upon receipt of an agents message by the
paying agent in the case of a book-entry transfer or
uncertificated shares.
You should not return your stock
certificates with the enclosed proxy card, and you should not
forward your stock certificates to the paying agent without a
letter of transmittal.
No interest will be paid or accrued on the per share merger
consideration. Parent, the surviving corporation and the paying
agent will be entitled to deduct and withhold any applicable
taxes from the per share merger consideration. Any sum that is
withheld will be deemed to have been paid to the person with
regard to whom it is withheld.
From and after the effective time, there will be no transfers on
our stock transfer books of shares of common stock that were
outstanding immediately prior to the effective time. If, after
the effective time, any person presents to the surviving
corporation, Parent or the paying agent any certificates or any
transfer instructions relating to shares cancelled in the
merger, such person will be given a copy of the letter of
transmittal and told to comply with the instructions in that
letter of transmittal in order to receive the cash to which such
person is entitled.
Any portion of the per share merger consideration deposited with
the paying agent that remains unclaimed by former record holders
of common stock for twelve months after the effective time will
be delivered to the surviving corporation. Holders of common
stock who have not surrendered their certificates or
uncertificated shares by that time will thereafter only look to
the surviving corporation for payment of the per share merger
consideration. None of the surviving corporation, Parent, the
paying agent or any other person will be liable to any former
holders of common stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat
or similar laws.
If you have lost a certificate, or if it has been stolen or
destroyed, then before you will be entitled to receive the per
share merger consideration, you will have to make an affidavit
of the loss, theft or destruction, and if required by Parent,
post a bond in a customary amount as indemnity against any claim
that may be made against it, the paying agent or the surviving
corporation with respect to such certificate. These procedures
will be described in the letter of transmittal that you will
receive, which you should read carefully in its entirety.
Financing
Covenant; Company Cooperation
The guarantor, pursuant to an equity financing letter, has
committed to contribute to Parent and Merger Sub up to
$500 million, which will constitute the equity portion of
the merger financing.
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Parent and Merger Sub have agreed to use their reasonable best
efforts to obtain debt financing for the merger on the terms and
conditions described in the debt commitment letter from Wells
Fargo Capital Finance, LLC, including:
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maintaining in effect the debt commitment letter;
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negotiating the definitive agreements with respect to the debt
financing on the terms and conditions set forth in the debt
commitment letter or on terms not materially less favorable to
Parent or Merger Sub;
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satisfying on a timely basis all conditions applicable to Parent
and Merger Sub set forth in the definitive debt financing
agreements that are within their reasonable control; and
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consummating the debt financing at or prior to the closing of
the merger.
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Parent and Merger Sub have agreed not to amend or waive any
provision under the debt commitment letter without the prior
written consent of the Company if such amendment or waiver
(i) reduces the aggregate amount of the financing, or
(ii) amends any of the conditions precedent to the receipt
to the financing in a manner that would reasonably be expected
to delay or prevent the closing of the merger or make the
funding of the financing less likely to occur.
In the event that all the conditions to the closing of the
merger are satisfied (or upon funding will be satisfied), Parent
and Merger Sub have agreed to use their reasonable best efforts
to cause the lenders and any other person providing debt
financing to fund on the closing date of the merger the debt
financing required to complete the merger and the other
transactions contemplated by the merger agreement, but not
before the end of the marketing period. Parent and Merger Sub
acknowledge in the merger agreement that the obtaining of the
equity and debt financing is not a condition to the consummation
of the merger, such that if the equity or debt financing has not
been obtained, Parent and Merger Sub will continue to be
obligated, subject to the satisfaction or waiver of the closing
conditions in the merger agreement, to consummate the merger.
We have agreed to use our reasonable best efforts to cooperate
with Parent and Merger Sub in connection with obtaining the
equity and debt financing including by providing financial and
other pertinent information regarding the Company as may be
reasonably requested by Parent; provided that the Company shall
not be required to pay any commitment or other similar fee or to
incur any other liability in connection with the financing, and
such cooperation shall not be required if it would require the
Company or any of its subsidiaries or representatives to waive
or amend any terms of the merger agreement.
Representations
and Warranties
We made customary representations and warranties in the merger
agreement that are subject, in some cases, to specified
exceptions and qualifications contained in the merger agreement,
in the disclosure schedule the Company delivered in connection
therewith, or in the public filings we have made with the SEC.
These representations and warranties relate to, among other
things:
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due organization, existence, good standing and authority to
carry on our businesses and the business of our subsidiaries;
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our corporate power and authority to enter into, and consummate
the transactions under, the merger agreement, and the
enforceability of the merger agreement against us;
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the approval and declaration of advisability of the merger
agreement, the voting agreement and the merger by the board of
directors and the adoption of a resolution by the board of
directors recommending that the Company stockholders adopt the
merger agreement in accordance with the applicable provisions of
the DGCL;
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the stockholder approval required to adopt the merger agreement;
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the absence of violations of, or conflicts with, our or our
subsidiaries governing documents, applicable law and
certain agreements as a result of our entering into and
performing under the merger agreement, and subject to
stockholder approval, completing the merger;
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the required governmental consents and approvals;
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our capitalization;
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the absence of encumbrances on our ownership of the equity
interests of our subsidiaries;
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our SEC filings since January 1, 2009 and the financial
statements included therein;
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compliance with the Sarbanes-Oxley Act of 2002, as amended, and
the rules and regulations promulgated thereunder or any
successor statute, rules or regulations thereto;
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compliance with the applicable listing standards and corporate
governance rules and regulations of Nasdaq;
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our disclosure controls and procedures and internal controls
over financial reporting;
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the absence of a Company material adverse effect (as described
below) and the absence of certain other changes or events since
January 1, 2009;
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the absence of certain undisclosed liabilities;
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the conduct of business in accordance with the ordinary course
consistent with past practice;
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material contracts, the enforceability of the material
contracts, and the absence of any default under any material
contract;
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possession of and title to personal property and assets;
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real property;
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intellectual property;
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tax matters;
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employee benefit plans;
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certain employment and labor matters;
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compliance with applicable laws, licenses and permits;
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the absence of legal proceedings and governmental orders against
us or our subsidiaries;
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qualification as a U.S. Citizen in connection with the
Jones Act;
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environmental matters;
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insurance policies;
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the absence of certain undisclosed affiliate transactions;
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the absence of any undisclosed brokers or finders
fees;
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the receipt of an opinion from BofA Merrill Lynch;
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the inapplicability of any anti-takeover law or rights agreement
to the merger;
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information supplied for inclusion in this proxy statement;
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vessel matters;
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capital expenditures; and
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changes in accounts receivable.
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Many of our representations and warranties are qualified by,
among other things, exceptions relating to the absence of a
Company material adverse effect, which is defined to mean any
change, occurrence, event, violation, inaccuracy, effect or
circumstance (each of which we refer to as an effect) that,
individually or taken together with all other effects is or
would reasonably be expected to be materially adverse to
(A) the business,
58
assets, liabilities, condition (financial or otherwise) or
results of operations of the Company and our subsidiaries, taken
as a whole, or (B) the ability of the Company to consummate
the merger or otherwise perform our obligations under the merger
agreement other than:
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changes in general economic conditions in the United States or
any other country or region in the world, or changes in
conditions in the global economy generally;
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changes in conditions generally affecting the financial markets,
credit markets or capital markets in the United States or any
other country or region in the world, including (A) such
changes in interest rates in the United States or any other
country and such changes in exchange rates for the currencies of
any countries and (B) any suspension of trading in
securities (whether equity, debt, derivative or hybrid
securities) generally on any securities exchange or
over-the-counter
market operating in the United States or any other country or
region in the world;
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changes in conditions generally affecting the industries in
which the Company and our subsidiaries conduct business,
including changes in conditions in the cargo barge
transportation industry generally, or the shipbuilding and
repair industry generally;
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changes in political conditions generally affecting the United
States or any other country or region in the world, acts of war,
sabotage or terrorism (including any escalation or general
worsening of any such acts of war, sabotage or terrorism),
earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides,
wild fires or other natural disasters, weather conditions and
other force majeure events, in each case in the United States or
any other country or region in the world;
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changes in law or other legal or regulatory conditions (or the
interpretation thereof) after the date of the merger agreement;
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changes in GAAP or other accounting standards (or the
interpretation thereof) after the date of the merger agreement;
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subject to certain exceptions, the negotiation, execution,
announcement or performance of the merger agreement or the
pendency or consummation of the transactions contemplated by the
merger agreement;
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subject to certain exceptions, compliance with the terms of, or
the taking of any action required or contemplated by or
permitted by, the merger agreement, or the failure to take any
action prohibited by the merger agreement;
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any actions taken, or failure to take action, in each case, to
which Parent has in writing expressly approved, consented to or
requested subject to certain limitations;
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changes in the Companys stock price or the trading volume
of the Companys stock, in and of itself (provided,
however, that the exception in this clause shall not in any way
prevent or otherwise affect a determination that any effect
underlying such change has resulted in, or contributed to, a
Company material adverse effect);
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any failure, in and of itself, by the Company to meet any public
estimates or expectations of the Companys revenue,
earnings or other financial performance or results of operations
for any period, or any failure by the Company to meet any
internal budgets, plans or forecasts of its revenues, earnings
or other financial performance or results of operations (it
being understood that any cause of any such failure may be taken
into consideration when determining whether a Company material
adverse effect has occurred);
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changes in the Companys analysts recommendations
with respect to the Company; or
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the availability or cost of equity, debt or other financing to
Parent or Merger Sub;
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except, in the case of the first six bullets above, to the
extent such effect has not had a disproportionate effect on the
Company and our subsidiaries, taken as a whole, relative to
other companies in our industry.
59
The merger agreement also contains customary representations and
warranties made by Parent and Merger Sub that are subject, in
some cases, to specified exceptions and qualifications contained
in the merger agreement. The representations and warranties of
Parent and Merger Sub relate to, among other things:
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their due organization, existence, good standing and authority
to carry on their businesses;
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their corporate power and authority to enter into, and
consummate the transactions under, the merger agreement, and the
enforceability of the merger agreement against them;
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the absence of violations of, or conflicts with, their governing
documents, applicable law and certain agreements as a result of
entering into and performing under the merger agreement and
completing the merger;
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the required governmental consents and approvals;
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the absence of legal proceedings and governmental orders against
Parent and Merger Sub;
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qualification as a U.S. Citizen in connection with the
Jones Act;
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information supplied for inclusion in this proxy statement;
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the inapplicability of interested stockholder
provisions of Section 203 of the DGCL to Parent or Merger
Sub;
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the absence of any undisclosed brokers or finders
fees;
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the operations of Merger Sub, Parent, and Intermediate Holdco;
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the availability of the funds necessary to perform their
respective obligations under the merger agreement;
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validity and enforceability of the equity financing letter and
the debt commitment letter, which we refer to as the financing
letters;
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the absence of contingencies related to the funding of the
financing other than as set forth in the financing commitment
letters;
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the absence of any default under the financing commitment
letters;
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payment of fees under the financing commitment letters;
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the guarantee delivered to the Company by the guarantor;
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the absence of management arrangements with any Company
stockholder, the directors and officers or employee of the
Company or its subsidiaries;
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the solvency of Parent and the surviving corporation immediately
following consummation of the merger;
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acknowledgement as to the absence of any other representations
and warranties of the Company; and
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the non-reliance of Parent and Merger Sub with respect to any
estimates, forecasts, projections, forward-looking statements or
business plans provided by the Company.
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The representations and warranties in the merger agreement of
each of the Company, Parent and Merger Sub will terminate upon
the consummation of the merger or the termination of the merger
agreement pursuant to its terms. The Guarantee will survive the
termination of the merger agreement pursuant to its terms.
Conduct
of Our Business Pending the Merger
Under the merger agreement, we have agreed that, subject to
certain exceptions in the merger agreement and disclosure
schedules we delivered in connection with the merger agreement,
between the date of the merger agreement and the effective time,
unless Parent gives its prior written approval (which cannot be
unreasonably withheld, delayed or conditioned) or as otherwise
required by law, we and our subsidiaries will
60
cause our businesses to be conducted in the ordinary course
consistent with past practice and will use our commercially
reasonable efforts to preserve our business organizations
intact, and preserve current relationships with significant
customers, suppliers and employees and executive officers.
Subject to certain exceptions set forth in the merger agreement
and disclosure schedules we delivered in connection with the
merger agreement, we will not, and we will not permit our
subsidiaries to, take any of the following actions without
Parents approval (which cannot be unreasonably withheld,
delayed or conditioned):
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amend our organizational documents;
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propose or adopt a plan of liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other
reorganization of the Company or any of our operating
subsidiaries;
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issue (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or
otherwise) any securities of the Company or any shares of
capital stock or other securities of any of our subsidiaries,
except for the vesting of restricted stock units and the
issuance of common stock upon the exercise of options, in each
case as outstanding prior to the date of the merger agreement;
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acquire or redeem any securities of the Company or any shares of
capital stock or other securities of any of our subsidiaries
(other than the withholding of shares in connection with the
vesting of restricted stock units or options), except that we
may redeem shares of our common stock as permitted by our
certificate of incorporation only at a redemption price that is
less than or equal to the per share merger consideration;
provided
that, with respect to any such redemption, all
applicable withholding tax laws are complied with;
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adjust, split, combine, subdivide or reclassify any shares of
capital stock or other securities;
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declare, set aside or pay any dividend or other distribution
(whether in cash, shares or property or any combination thereof)
in respect of any shares of capital stock or other securities,
except for cash dividends made by any direct or indirect
wholly-owned subsidiary of the Company to the Company or one of
its subsidiaries;
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pledge or encumber any shares of our capital stock or any of our
other securities;
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modify the terms of any shares of our capital stock or any of
our other securities;
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incur, create, assume or otherwise become liable for
indebtedness, other than in the ordinary course of business
consistent with past practice (A) under the Companys
existing credit facility or (B) with respect to letters of
credit or capital leases that do not exceed $1,000,000,
individually, or $2,500,000, in the aggregate;
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assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for
the obligations of any other person, except with respect to
obligations of direct or indirect wholly owned subsidiaries of
the Company;
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make any loans, advances or capital contributions to or
investments in any other person, except for expense and travel
advances in the ordinary course of business consistent with past
practice to employees of the Company or any of its subsidiaries;
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sell, license, mortgage, lease, transfer, encumber or pledge any
of its or its subsidiaries assets, tangible or intangible,
or create or suffer to exist any lien thereupon (other than
permitted liens), except (x) as set forth in the Company
disclosure schedule in connection with the merger agreement,
(y) sales and leases by Jeffboat of barges and other
equipment manufactured by Jeffboat to third parties or to the
Company and its subsidiaries, in each case, in the ordinary
course of business consistent with past practice and
(z) with respect to assets other than vessels, sales of
inventory and obsolete assets in the ordinary course of business
consistent with past practice;
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enter into, adopt, create, amend (including acceleration of
vesting), modify or terminate any bonus, profit sharing,
compensation, severance, termination, option, appreciation
right, performance unit, stock
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equivalent, share purchase agreement, pension, retirement,
deferred compensation, employment, severance or other employee
benefit agreement, trust, plan, fund or other arrangement for
the compensation, benefit or welfare of any director, officer or
employee in any manner, except in any such case (A) as may
be required by applicable law or (B) to any non-officer
employee in the ordinary course of business consistent with past
practice;
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increase the compensation of any director, officer or employee,
grant, provide, or pay any special bonus or special remuneration
to any director, officer or employee, or grant, provide or pay
any benefit not required by any plan or arrangement as in effect
as of the date of the merger agreement, except in any such case
(A) as may be required by applicable law or (B) to any
new non-officer employee hires in the ordinary course of
business consistent with past practice;
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incur any capital expenditures, or any obligations or
liabilities in connection therewith that individually or in the
aggregate, are in excess of $500,000, subject to certain
exceptions;
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pay, discharge, settle or satisfy any liabilities outside the
ordinary course of business, subject to certain exceptions;
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enter into, modify, amend or terminate (i) any contract
which if so entered into, modified, amended or terminated could
be reasonably likely to have, individually or in the aggregate,
a Company material adverse effect or (ii) except in the
ordinary course of business, any material contract;
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engage in any transaction with, or enter into any agreement,
arrangement or understanding with any affiliate of the Company
or other person covered by Item 404 of
Regulation S-K
promulgated under the Exchange Act that would be required to be
disclosed under such Item 404 other than those in existence
on the date of the merger agreement;
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settle or compromise (i) any pending or threatened material
legal proceeding by securities holders against the Company, any
of its subsidiaries or any of their respective directors or
officers that relates to the merger or other transactions
contemplated thereby or (ii) any other legal proceedings,
in each case, having a value or in an amount not covered by
insurance in excess of $250,000;
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except as may be required by applicable law or GAAP (including
as a result of any change in law or GAAP), make any change in
any of the accounting methods, principles or practices used by
it;
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adopt or change a material tax accounting method, principle or
practice;
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make or change any material tax election;
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settle or compromise any material U.S. federal, state,
local or
non-U.S. income
tax liability or claim for tax refund;
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fail to file any material tax return when due or fail to cause
such tax returns when filed to be complete and accurate in all
material respects;
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file any material amended tax return;
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consent to any extension or waiver of any limitation period with
respect to any claim or assessment for material taxes;
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enter into a material private letter ruling, closing agreement
or similar ruling or agreement with the IRS or any other taxing
authority;
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intentionally fail to file a claim for a material tax refund
within the applicable statute of limitations for filing such
claim;
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acquire (by merger, consolidation or acquisition of stock or
assets or otherwise) any other person or business or (outside
the ordinary course of business consistent with past practice)
assets or any material equity interest therein, in each case in
excess of $2,500,000;
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fail to use commercially reasonable efforts to maintain in full
force and effect material insurance policies covering the
Company and its subsidiaries and their respective properties,
assets and businesses in a form and amount consistent with past
practices;
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implement or effect any material reduction in labor force,
lay-off, early retirement program, severance program or other
program or effort concerning the termination of employment of a
material number of employees of the Company other than routine
employee terminations or announce any of the foregoing actions
by us or our Subsidiaries; or
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Authorize, or agree or commit to take any of the foregoing
actions.
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Solicitation
Solicitation
of Acquisition Proposals
The merger agreement provides that, until 11:59 p.m., EST,
on November 27, 2010, which we refer to as the no-shop
period start date, we and our subsidiaries and our
representatives are permitted to:
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initiate, solicit or encourage the submission of one or more
acquisition proposals, including by providing non-public
information relating to the Company or any of its subsidiaries
or by affording to any person access to the business,
properties, assets, books, records or other non-public
information, or to the personnel, of the Company or any of its
subsidiaries pursuant to an acceptable confidentiality agreement;
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continue, enter into, participate in or engage in any
discussions or negotiations with one or more persons with
respect to one or more acquisition proposals or any other
proposals that could reasonably be expected to lead to an
acquisition proposal; and
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otherwise cooperate with, assist or take any action to
facilitate any acquisition proposals or any other proposals that
could reasonably be expected to lead to any acquisition
proposals.
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Restrictions
on Solicitation of Acquisition Proposals
On the no-shop period start date the Company must cease and
cause to be terminated any discussions or negotiations it is
engaged in with any person (other than any excluded party) that
would otherwise be prohibited by the merger agreement provisions
summarized below.
From and after the no-shop period start date we have agreed
that, until the effective time or, if earlier, the termination
of the merger agreement, we, our subsidiaries and our
representatives may not:
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solicit, initiate, propose or induce or knowingly encourage the
making, submission or announcement of, or take actions that
could reasonably be expected to encourage, facilitate or assist,
an acquisition proposal;
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furnish to any person (other than Parent, Merger Sub or any
designees of Parent or Merger Sub) any non-public information
relating to the Company or any of its subsidiaries, or afford to
any person access to the business, properties, assets, books,
records or other non-public information, or to any personnel, of
the Company or any of its subsidiaries (other than Parent,
Merger Sub or any designees of Parent or Merger Sub), in each
case with the intent to induce the making, submission or
announcement of, or to encourage, knowingly facilitate or
assist, an acquisition proposal or any inquiries or the making
of any proposal that would reasonably be expected to lead to an
acquisition proposal;
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participate or engage in discussions or negotiations with any
person with respect to an acquisition proposal or which may
reasonably be expected to lead to an acquisition
proposal; or
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enter into any letter of intent, memorandum of understanding or
other contract with respect to an acquisition transaction (other
than an acceptable confidentiality agreement).
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At any time prior to obtaining the requisite stockholder
approval, the board of directors
and/or
any
authorized committee thereof may, directly or indirectly through
one or more representatives, participate or
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engage in discussions or negotiations with, furnish any
non-public information relating to the Company or any of its
subsidiaries to,
and/or
afford access to the business, properties, assets, books,
records or other non-public information, or to the personnel, of
the Company or any of its subsidiaries, in each case, pursuant
to an acceptable confidentiality agreement to:
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any excluded party; and/or
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any person that has made or delivered to the Company a bona fide
written acquisition proposal after the no-shop period start date
that did not result from a breach of the solicitation provision
in the merger agreement,
provided
that solely in the case
of this clause, the board of directors shall have determined in
good faith (after consultation with its outside legal counsel
and financial advisor) that such acquisition proposal
constitutes a superior proposal.
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In addition, at any time prior to obtaining the requisite
stockholder approval, (i) the board of directors may
(whether or not it has received a superior proposal) effect a
board recommendation change or (ii) after effecting a board
recommendation change, if the Company has received a bona fide
written acquisition proposal from any person that the board of
directors concludes in good faith constitutes a superior
proposal, the board of directors may authorize the Company to
terminate the merger agreement to enter into an alternative
acquisition agreement with respect to such superior proposal, if
and only if:
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the Company terminates the merger agreement under certain
provisions of the merger agreement (which provisions require the
Company to pay a termination fee);
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the board of directors shall have determined in good faith,
after consultation with its independent financial advisor and
outside legal counsel, that failure to do so would be
inconsistent with its fiduciary obligations under applicable
laws;
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the Company shall have provided prior written notice to Parent
at least three business days in advance to the effect that the
board of directors intends to effect a board recommendation
change which notice includes a reasonable description of the
basis for such company board recommendation change and, in the
case of a superior proposal, the identity of the party who made
such superior proposal and all of the material terms and
conditions of such superior proposal and attaches to such notice
the most current version of any agreement
and/or
other
written proposal, if any, which embodies such superior proposal;
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prior to effecting such board recommendation change or
termination, the Company shall, and shall cause its financial
and legal advisors to, during such three business day period,
negotiate with Parent and its representatives in good faith (to
the extent Parent desires to negotiate) to attempt to make such
adjustments in the terms and conditions of the merger agreement
proposed by Parent, so that such acquisition proposal would
cease to constitute a superior proposal or so as to obviate the
need for the board of directs to make a board recommendation
change, as applicable; and
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the board of directors shall have considered in good faith any
changes to the merger agreement, the equity financing letter,
the debt commitment letter and the Guarantee offered in writing
by Parent and shall have determined (after consultation with its
legal and financial advisors, and, in the case of an acquisition
proposal, taking into account all legal, financial and
regulatory aspects of such acquisition proposal and the offer
from Parent) (A) in the case of a company board
recommendation change that does not result from a superior
proposal, that no change has been made by Parent that would
obviate the need for such Company board recommendation change
and (B) in the case of a Company board recommendation
change in the case of an acquisition proposal, that such
acquisition proposal would still constitute a superior proposal
if such changes were to be given effect;
provided, further
that in the event that the acquisition proposal is
thereafter modified in any material respect (
provided
that any change in price will be considered material) by the
party making such acquisition proposal, the Company shall again
provide written notice of such modified terms and shall again
comply with the above, including providing a new period after
such notice during which the Company will negotiate in good
faith with Parent regarding any further proposed changes to the
terms of the merger agreement.
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in the event the Company desires to terminate the merger
agreement to accept a superior proposal, it shall prior to or
simultaneously with such termination make payment to Parent of
the Company termination fee. See the section entitled The
Merger Agreement Fees and Expenses beginning
on page 71.
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in the event that the board of directors desires to effect a
board recommendation change due to an intervening event, then
the Company shall also have complied with its obligations under
the solicitation provisions of the merger agreement.
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Nothing in the merger agreement prevents the board of directors
or any authorized committee thereof from taking and disclosing
to our stockholders a position contemplated by
Rule 14d-9
or
14e-2(a)
under the Exchange Act or making any
stop-look-and-listen or similar communication of the
type contemplated by
Rule 14d-9(f)
under the Exchange Act in which the Company indicates that it
has not changed the company board recommendation; provided that
the foregoing does not permit the board of directors to make a
board recommendation change in respect of the merger agreement
except in conformity with the merger agreement.
In this proxy statement an acceptable confidentiality agreement
means an agreement with respect to the confidentiality of the
Companys material non-public information that is either:
(i) in effect as of the execution and delivery of the
merger agreement; or (ii) executed, delivered and effective
after the execution, delivery and effectiveness of the merger
agreement and that contains provisions that require any
counter-party(ies) thereto that receive material non-public
information of or with respect to the Company to keep such
information confidential, provided that (x) such
confidentiality provisions are no less restrictive in the
aggregate to such counter-party(ies) than the terms of the
confidentiality agreement executed in connection with the merger
agreement and (y) such confidentiality agreement does not
prohibit the Company from providing to Parent the documents or
other information that the merger agreement contemplates the
Company providing to Parent. For the avoidance of doubt, an
acceptable confidentiality agreement need not contain any
standstill or other similar provisions.
In this proxy statement an acquisition proposal means any offer
or proposal (other than an offer or proposal by Parent or Merger
Sub) to engage in an acquisition transaction.
In this proxy statement, an acquisition transaction means any
transaction or series of related transactions (other than the
merger) involving:
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any direct or indirect purchase or other acquisition by any
person or group (as defined in or under Section 13(d) of
the Exchange Act), whether from the Company
and/or
any
other person(s), of shares of the common stock representing more
than fifteen percent of the common stock outstanding after
giving effect to the consummation of such purchase or other
acquisition, including pursuant to a tender offer or exchange
offer by any person or group that, if consummated in accordance
with its terms, would result in such person or group
beneficially owning more than fifteen percent of the
companys common stock outstanding after giving effect to
the consummation of such tender or exchange offer;
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any direct or indirect purchase or other acquisition by any
person or group (as defined in or under Section 13(d) of
the Exchange Act) of more than fifteen percent of the
consolidated assets of the Company and its subsidiaries taken as
a whole (measured by the fair market value thereof, the related
revenues applicable to such assets or the related net income
applicable to such assets, in each case as of the date of such
sale, transfer, acquisition or disposition); or
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any merger, consolidation, business combination, sale of capital
stock, recapitalization, reorganization, liquidation,
dissolution or other similar transaction involving the Company
pursuant to which any person or group (as defined in or under
Section 13(d) of the Exchange Act), other than the Company
stockholders (as a group) immediately prior to the consummation
of such transaction, would hold shares of the common stock
representing more than fifteen percent of the common stock
outstanding after giving effect to the consummation of such
transaction.
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In this proxy statement, an excluded party means any person that
has made or delivered to us (or any of our representatives in
their capacity as such) a bona fide written acquisition proposal
on or prior to the no-
65
shop period start date which did not result from a breach of the
solicitation provisions of the merger agreement and which the
board of directors shall have determined in good faith (after
consultation with its outside legal counsel and financial
advisor) either constitutes a superior proposal or is reasonably
likely to lead to a superior proposal.
In this proxy statement an intervening event means any material
development (other than an acquisition proposal) after the date
of the merger agreement that was not known or reasonably
foreseeable by the board of directors on the date of the merger
agreement (or, if known, the material consequences of which
could not reasonably have been known to or understood by the
board of directors as of the date of the merger agreement).
In this proxy statement, a superior proposal means any written
acquisition proposal for an acquisition transaction (with the
percentages set forth in the definition of such term changed
from fifteen percent to fifty percent) on terms that the board
of directors shall have determined in good faith (after
consultation with its outside legal counsel and financial
advisor) (i) is reasonably likely to be consummated in
accordance with its terms on a timely basis, taking into account
all legal and financial, antitrust and other regulatory aspects
of the proposal and the person making the proposal, including
the financing thereof and any conditions thereto and
(ii) would be more favorable to the Companys
stockholders (in their capacity as such) from a financial point
of view than the merger (taking into account (A) any
amendments to the merger agreement made or proposed by Parent to
be made in accordance with the terms of the merger agreement and
(B) any amounts payable by the Company or any of its
subsidiaries as a result of the termination of the merger
agreement, including the Company termination fee).
Citizenship
During the period beginning on the date of the merger agreement
and ending upon consummation of the merger, we have agreed to,
and have agreed to cause each of our subsidiaries that owns
and/or
operates any vessels in the U.S. coastwise trade to, remain
a U.S. citizen.
In addition, during the period beginning on the date of the
merger agreement and ending upon consummation of the merger,
other than such noncompliance that is not material with respect
to the vessels taken as a whole, (i) we will, and we will
cause our subsidiaries to, maintain the eligibility of the
vessels owned by us or our subsidiaries to operate in the
U.S. coastwise trade, including maintaining valid
certificates of documentation with coastwise endorsements for
such vessels that are currently documented under the
U.S. flag, and (ii) we will not, and we will cause our
subsidiaries not to, sell or demise or
sub-demise
charter or lease any such vessel to any person, that does not
qualify as a U.S. citizen, in each case except where the
failure to do so (x) would be permitted under applicable
law and (y) would not result in the permanent loss of the
eligibility of any such vessels to operate in the
U.S. coastwise trade.
Stockholders
Meeting
We have agreed to hold a meeting of our stockholders as promptly
as reasonably practicable, and to use our best efforts to hold
such meeting within 20 business days following dissemination of
this proxy statement, subject to our right to postpone or
adjourn the meeting if (i) Parent has consented to such
postponement or adjournment; (ii) there are holders of
insufficient shares of the common stock present or represented
by a proxy to constitute a quorum, (iii) the Company is
required to postpone or adjourn the meeting by applicable law,
or an order or written request with respect to such postponement
or adjournment from the SEC, or (iv) the Company has
provided written notice to Parent in accordance with merger
agreement that it intends to effect a company board
recommendation change in connection with a superior proposal and
the notice period required by the merger agreement has not yet
lapsed.
Required
Actions; Filings
We, Parent and Merger Sub have agreed to take, or cause to be
taken, all actions reasonably necessary, and to do, or cause to
be done, and assist and cooperate with the other party or
parties in doing, all things reasonably necessary, proper or
advisable under applicable law to consummate the merger in the
most
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expeditious manner reasonably practicable, including using
reasonable best efforts to cause the conditions of the merger to
be satisfied.
We, Parent and Merger Sub have also agreed to file with the FTC
and the Antitrust Division of the DOJ a Notification and Report
Form relating to the merger agreement as required by the HSR Act
within fourteen calendar days following the execution and
delivery of the merger agreement, and to file comparable
pre-merger or post-merger notification filings, forms and
submissions with any foreign governmental authority that are
required by the other applicable antitrust laws in connection
with the merger
provided, however
, notwithstanding
anything in the merger agreement to the contrary, in no event
shall Parent or Merger Sub (or any of their respective
affiliates) be required to offer or agree to sell or otherwise
dispose of, or hold separate, agree to conduct, license or
otherwise limit the use of any of the assets, categories of
asset or businesses or other segments of the Company or Parent
or eithers respective subsidiaries or affiliates or to
agree to any other restriction or condition with respect thereto
required or requested by a governmental authority, in each case
to the extent that doing so would reasonably be expected to
materially and adversely affect the operation of the business of
the Company, Parent or eithers respective subsidiaries or
affiliates.
Employee
Benefit Matters
Following the consummation of the merger, Parent has agreed to
cause the surviving corporation to honor the employee plans
included in the disclosure schedule to the merger agreement,
which we refer to as continuing plans, in accordance with their
terms as in effect immediately prior to the effective time
provided
that the surviving corporation may amend or
terminate any such employee plans, arrangements or agreements in
accordance with their terms or if otherwise required by
applicable law.
Parent has agreed to cause the surviving corporation or one of
its subsidiaries continue employment immediately following the
effective time by the surviving corporation or one of its
subsidiaries of all employees of the Company and its
subsidiaries as of the effective time, subject to the terms of
the merger agreement. From the effective time until
December 31, 2011, Parent has agreed to cause the surviving
corporation to either, at the option of the surviving
corporation, (i) maintain for the benefit of each
continuing employee the continuing plans (but excluding equity
based benefits, pensions and retiree medical, life and
disability) at benefit levels that are substantially comparable
in the aggregate to those in effect at the Company or its
subsidiaries on the date of the merger agreement (other than
equity based benefits, pensions and retiree medical, life and
disability) and provide to each continuing employee compensation
substantially comparable in the aggregate to the compensation
provided to such continuing employee immediately prior to the
effective time; or (ii) provide compensation, and benefits
(other than equity based benefits, pensions and retiree medical,
life and disability) to each continuing employee that, taken as
a whole, are substantially comparable in the aggregate to the
compensation and benefits (other than equity based benefits,
pensions and retiree medical, life and disability) provided to
such continuing employee immediately prior to the effective
time; or (iii) provide some combination of (i) and
(ii) above such that each continuing employee receives
compensation and benefits (other than equity based benefits,
pensions and retiree medical, life and disability) that, taken
as a whole, are substantially comparable in the aggregate to the
compensation and benefits (other than equity based benefits,
pensions and retiree medical, life and disability) provided to
such continuing employee immediately prior to the effective time.
Parent has also agreed to cause the surviving corporation to
cause to be granted to any continuing employee credit for all
service with the Company and its subsidiaries prior to the
consummation of the merger for purposes of eligibility to
participate, vesting and, solely for purposes of vacation
accrual and severance pay, or benefit entitlement prior to the
consummation of the merger, except that such service need not be
credited under any equity-based or non-qualified deferred
compensation plan or arrangement or to the extent that it would
result in duplication of coverage or benefits. In addition,
(i) each continuing employee shall be immediately eligible
to participate, without any waiting time, in any and all new
employee benefit plans sponsored by the surviving corporation
and its subsidiaries to the extent coverage under any such new
plan replaces coverage in the plan year in which the merger
occurs under a continuing plan in which such continuing employee
participates immediately before the merger; and (ii) for
purposes of each new plan providing medical, dental,
pharmaceutical, or vision benefits to any continuing employee,
the surviving
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corporation shall cause all waiting periods, pre-existing
condition exclusions, evidence of insurability requirements and
actively-at-work or similar requirements of such new plan to be
waived in the plan year in which the merger occurs for such
continuing employee and his or her covered dependents to the
extent waived or satisfied under the corresponding old plan as
of the consummation of the merger, and the surviving corporation
shall cause any eligible expenses incurred by such continuing
employee and his or her covered dependents during the portion of
the plan year of the old plan ending on the date such
employees participation in the corresponding new plan
begins in the plan year in which the consummation of the merger
occurs to be given full credit under such new plan for purposes
of satisfying all deductible, coinsurance and maximum
out-of-pocket
requirements applicable to such continuing employee and his or
her covered dependents for the applicable plan year as if such
amounts had been paid in accordance with such new plan. Any
vacation or paid time off accrued but unused by a continuing
employee as of immediately prior to the consummation of the
merger shall be credited to such continuing employee following
the consummation of the merger to the extent reflected as a
working capital liability on the Companys balance sheet.
Parent has also agreed to cause the surviving corporation to
provide compensation and benefits to applicable continuing
employees under the terms set forth in any collective bargaining
agreements to which the Company or any of its subsidiaries is a
party and to which, under the terms of such agreements, the
surviving corporation or its applicable subsidiaries shall be
bound.
Treatment
of Certain Company Indebtedness
The Company has agreed that, Parent may, at its option, direct
the Company to direct its wholly owned subsidiary, Commercial
Barge Line Company, which we refer to as Commercial Barge Line,
to (x) commence a tender offer for any and all of the
Commercial Barge Lines
12
1
/
2
% Senior
Secured Notes due 2017, which we refer to as the 2017 Notes,
issued under the indenture, dated as of July 7, 2009, by
and among Commercial Barge Line, the guarantors named therein
and The Bank of New York Mellon Trust Company, N.A., as
trustee, which, as supplemented from time to time, we refer to
as the Indenture,
and/or
(y) subject to the terms and conditions of the Indenture,
seek consents to amendment or waiver of one or more covenants
and other provisions in the 2017 Notes and the Indenture, in
each case, on such terms and conditions as specified by Parent
from time to time, and Parent and Merger Sub shall provide such
assistance as may be reasonably requested by the Company and
Commercial Barge Line in connection therewith.
Stockholder
Litigation
In the event that any stockholder litigation related to the
merger agreement, the merger or the other transactions
contemplated by the merger agreement is brought, or, to the
knowledge of the Company, threatened in writing, against Parent,
Merger Sub, the Company
and/or
the
members of the board of directors of the Company prior to the
effective time, the Company is required to promptly notify
Parent of any such stockholder litigation and the Company will
keep Parent, and Parent will keep the Company, reasonably
informed with respect to the status thereof.
Conditions
to the Merger
The respective obligations of the Company, Parent and Merger Sub
to consummate the merger are subject to the satisfaction or
waiver of the following conditions:
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the merger agreement must have been duly adopted by our
stockholders;
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the waiting period applicable to the consummation of the merger
under the HSR Act and any foreign antitrust laws having expired
or early terminated; and
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no court or governmental authority of competent jurisdiction has
enacted, issued, promulgated, enforced or entered a law that is
in effect that makes consummation of the merger illegal,
restricts, restrains, enjoins or otherwise prohibits, the
consummation of the merger in the United States or any state
thereof or issued or entered an order that is in effect and
restricts, restrains, enjoins or otherwise prohibits, the
consummation of the merger in the United States or any state
thereof.
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The obligations of Parent and Merger Sub to effect the merger
are also subject to the satisfaction or waiver by Parent at or
prior to the effective time of the following additional
conditions:
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our representations and warranties with respect to our existence
and good standing as a corporation, our corporate power and
authority to execute the merger agreement, our board of
directors, approval of the merger agreement, the board
recommendation to our stockholders and the required vote of
stockholders to adopt the merger agreement, the absence of a
Company material adverse effect and the inapplicability of
anti-takeover statutes must each be true and correct in all
respects as of the date of the merger agreement and as of the
closing date;
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our representations and warranties relating to the
capitalization of the Company must each be true and correct in
all respects as of the date of the merger agreement and as of
the closing date (other than those representations and
warranties that address matters only as of a particular date,
which representations and warranties need only be true and
correct as of such particular date), except where the failure to
be so true and correct would not result in the payment by Parent
of an aggregate value of consideration in connection with the
merger that is in excess, by more than a
de minimis
extent, of the aggregate value of the consideration that
would have been payable by Parent in the merger in the absence
of such failure to be true and correct;
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our representations and warranties relating to qualification as
a U.S. citizen, retention of an investment banker, broker
or finder agent in connection with the merger, and indebtedness
in excess of $1,000,000 individually or $5,000,000 in the
aggregate will be true and correct in all material respects
(without giving effect to any materiality or Company material
adverse effect qualifiers) on and as of the closing date, except
for such of those representations and warranties that that
address matters only as of a particular date, which
representations and warranties need only be true and correct in
all material respects (without giving effect to any materiality
or Company material adverse effect qualifiers) as of such
particular date;
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our representations and warranties relating to our vessels
(except for those related to the operating condition and repair
of such vessels) will be true and correct in all material
respects (without giving effect to any materiality or Company
material adverse effect qualifiers) as of the date of the merger
agreement and true and correct in all respects (without giving
effect to any materiality or Company material adverse effect
qualifiers) on and as of the closing date, except for any
failure to be true and correct which has not had and would not
have, individually or in the aggregate, a Company material
adverse effect;
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all other representations and warranties made by us in the
merger agreement, with the exception of those listed above, must
be true and correct (without giving effect to any materiality or
Company material adverse effect qualifiers) on and as of the
closing date, except for those representations and warranties
that address matters only as of a particular date, which
representations and warranties need only be true and correct
(without giving effect to any materiality or Company material
adverse effect qualifiers) as of such particular date, and
except for any failure to be so true and correct which has not
had and would not have, individually or in the aggregate, a
Company material adverse effect;
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we must have performed in all material respects all of our
obligations that are to be performed under the merger agreement
prior to the consummation of the merger;
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we must have delivered to Parent and Merger Sub at closing a
certificate with respect to the satisfaction of the foregoing
conditions relating to representations, warranties, obligations,
covenants and agreements;
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no Company material adverse effect shall have arisen or occurred
following the execution, delivery and effectiveness of the
merger agreement; and
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we must have delivered to Parent an affidavit from the Company
to the effect that the Company is not and has not during the
previous five years been a U.S. real property holding
company.
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Our obligation to effect the merger is subject to the
satisfaction or waiver by us at or prior to the effective time
of the following additional conditions:
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the representations and warranties made by Parent and Merger Sub
in the merger agreement must be true and correct in all material
respects on and as of the Closing Date with the same force and
effect as if made on and as of such date, except (i) for
any failure to be so true and correct that would not,
individually or in the aggregate, prevent or materially delay
the consummation of the transactions contemplated by the merger
agreement or the ability of Parent or Merger Sub to perform
their covenants under the merger agreement, (ii) for
changes contemplated by the merger agreement, and (iii) for
those representations and warranties that address matters only
as of a particular date, which representations shall have been
so true and correct as of such particular date, except for or
any failure to be so true and correct that would not,
individually or in the aggregate, prevent or materially delay
the consummation of the transactions contemplated by the merger
agreement or the ability of Parent or Merger Sub to perform
their covenants under the merger agreement;
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Parent and Merger Sub must have performed in all material
respects all obligations that are to be performed by them under
the merger agreement prior to the consummation of the
merger; and
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Parent and Merger Sub must have delivered to us a certificate
with respect to the satisfaction of the foregoing conditions
relating to representations, warranties, obligations, covenants
and agreements.
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The conditions to each of the parties obligations to
complete the merger are for the benefit of such party and may be
waived exclusively by such party in whole or in part (to the
extent permitted by applicable law).
Termination
The merger agreement may be validly terminated at any time prior
to the effective time only as follows:
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by mutual written agreement of Parent and the Company after
action by their respective boards of directors;
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by either Parent or the Company, if:
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the effective time shall not have occurred by 5:00 p.m.
(New York time) on March 18, 2011, which date we refer to
as the termination date (but, the right to terminate will not be
available to a party whose actions or omissions were the primary
cause of, or the primary factor that resulted in the failure to
consummate the merger prior to the termination date);
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our stockholders have not adopted the merger agreement at a
stockholders meeting (as it may be adjourned or postponed) at
which a vote has been taken on the adoption of the merger
agreement; or
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a governmental authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered a law that is
in effect at the time of such termination that renders illegal
or restricts, restrains, enjoins or otherwise prohibits the
merger or issued or entered a permanent, final and
non-appealable injunction, ruling, decree or order that
restricts, restrains, enjoins or otherwise prohibits the merger
in the United States or any state thereof.
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(i) the Company is not in material breach of any of its
covenants under the merger agreement and (ii) Parent
and/or
Merger Sub have breached or failed to perform any of their
respective covenants or agreements, or any representations or
warranties of Parent
and/or
Merger Sub in the merger agreement shall have become incorrect,
in any case such that one or more of the conditions to the
Companys obligations to effect the merger would not be
satisfied and have failed to cure such material breach, failure
to perform or inaccuracy within thirty calendar days after
Parent and Merger Sub have received written notice of such
breach, failure to perform or inaccuracy from the Company or, if
earlier, the date that is two business days prior to the
termination date;
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at any time prior to the adoption of the merger agreement by our
stockholders, in order to enter into an alternative acquisition
agreement with respect to a superior proposal that the board of
directors has authorized and directed us to execute, provided
that (i) prior to or simultaneously with the termination of
the merger agreement, we pay to Parent the Company termination
fee discussed under the section entitled The Merger
Agreement Fees and Expenses beginning on
page 71, (ii) simultaneously or promptly following
such termination, we enter into the superior proposal merger
agreement and (iii) we have complied with certain of our
obligations in the merger agreement, including our obligation to
negotiate with Parent in good faith (to the extent Parent
desires to negotiate) for three business days prior to
termination to make adjustments in the terms and conditions of
the merger agreement so that such superior proposal would cease
to constitute a superior proposal; or
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(A) the conditions to the obligations of Parent and Merger
Sub to effect the merger have been satisfied (other than those
conditions that (i) by their nature are to be satisfied at
the closing and that would be capable of being satisfied if
there were a closing or (ii) have not been satisfied as a
result of Parent or Merger Subs breach or failure to
perform any of their respective covenants in the merger
agreement), (B) we, at least one business day prior to the
date on which the closing should have occurred pursuant to the
merger agreement, delivered in good faith written notice (by
e-mail
or by
such other notice that complies with the terms of the merger
agreement) to Parent to the effect that we would be, ready,
willing and able to consummate the merger on such date, and
(C) Parent fails to consummate the merger within three
business days of such date.
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(i) neither Parent nor Merger Sub is in material breach of
its covenants under the merger agreement and (ii) the
Company has breached or failed to perform any of its covenants
or agreements in the merger agreement or any representations or
warranties of the Company in the merger agreement shall have
become incorrect in any case such that one or more of the
conditions to Parents and Merger Subs obligations to
effect the merger would not be satisfied, and have failed to
cure such material breach, failure to perform or inaccuracy
within thirty calendar days after the Company has received
written notice of such breach, failure to perform or inaccuracy
from Parent or, if earlier, the date that is two business days
prior to the termination date; or
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at any time any of the following trigger events has occurred:
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the board of directors shall have effected a board
recommendation change; or
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a tender or exchange offer for the common stock that would, if
consummated in accordance with its terms, constitute a competing
acquisition transaction is commenced by a person unaffiliated
with Parent and, within ten business days after the public
announcement of the commencement of such acquisition proposal,
the Company shall not have issued a public statement reaffirming
the board recommendation and recommending that the Company
stockholders reject such acquisition proposal and not tender any
shares of the common stock into such tender or exchange offer.
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Fees and
Expenses
Except as set forth below, all fees and expenses incurred in
connection with the merger agreement will be paid by the party
or parties incurring the expense whether or not the merger is
consummated.
Termination
Fees Payable by the Company
We must pay a termination fee to Parent under the following
circumstances:
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if the Company has terminated the merger agreement in order to
enter into an alternative acquisition agreement with respect to
a superior proposal;
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if Parent has terminated the merger agreement because any of the
trigger events described above have occurred;
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(i) prior to the termination of the merger agreement, a
competing acquisition proposal has been made to the Company and
publicly disclosed or publicly announced and not publicly
withdrawn;
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(ii) the merger agreement is terminated pursuant to the
termination provisions providing for termination as a result of
the (1) failure of the Companys stockholders to adopt
the merger agreement or (2) failure to consummate the
merger by the termination date; and
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(iii) within twelve months of the termination of the merger
agreement either an acquisition transaction is consummated or we
enter into a definitive agreement providing for an acquisition
transaction that is subsequently consummated (whether or not
during such twelve-month period).
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The termination fee payable by us shall be $14,000,000; provided
that, if prior to the no-shop period start date the merger
agreement is terminated by us in order to enter into an
alternative acquisition agreement with respect to a superior
proposal, the termination fee shall instead be $12,000,000.
The parties have agreed that in no event will the Company be
required to pay the termination fee on more than one occasion,
whether or not the termination fee may be payable under more
than one provision of the merger agreement at the same time or
at different times.
Termination
Fee Payable by Parent
Parent must pay us a termination fee under the following
circumstances:
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if the Company has terminated the merger agreement pursuant to
the termination provision relating to a breach by Parent
and/or
Merger Sub of their respective covenants under the merger
agreement or the inaccuracy of the representations and
warranties of Parent and Merger Sub under the merger agreement;
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the Company has terminated the merger agreement pursuant to the
termination provision relating (A) to the conditions to the
obligations of Parent and Merger Sub having been satisfied,
(B) the Company having been ready, willing and able to
consummate the merger, and (C) Parent having failed to
consummate the merger; or
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if Parent or the Company has terminated the merger agreement
pursuant to the termination provision relating to the failure to
consummate the merger by the termination date and, at the time
of termination, the merger agreement could have been terminated
by the Company pursuant to the termination provisions referenced
in the two bullet points above.
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The termination fee payable by Parent shall be $16,000,000,
except that such amount may be increased to $20,000,000 in the
event that the following are also true:
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the conditions to the funding of the debt commitment letter have
been satisfied and the financing party thereto is prepared to
fund the financing (or, if alternative financing is obtained in
accordance with the merger agreement, such alternative
financing); and
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all conditions of Parent and Merger Sub to consummate the merger
have been satisfied at the time when the closing would have
occurred but for the failure of the equity financing to be
funded (or, with respect to those conditions that by their
nature are to be satisfied at the closing, are capable of being
satisfied at the closing).
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The guarantor has agreed to guarantee the obligation of Parent
to pay the Parent termination fee pursuant to the limited
guarantee, as discussed in the section entitled The
Merger Limited Guarantee beginning on
page 47.
The parties have agreed that in no event will Parent be required
to pay the termination fee on more than one occasion, whether or
not the termination fee may be payable under more than one
provision of the merger agreement at the same time or at
different times.
72
Remedies
Our receipt of the Parent termination fee, and the guarantee
thereof pursuant to the Guarantee will be our sole and exclusive
remedy against Parent, its subsidiaries, the guarantor, and any
of their respective former, current and future directors,
officers, employees, agents, general and limited partners,
managers, members, shareholders, affiliates and assignees and
each former, current or future director, officer, employee,
agent, shareholder, general or limited partner, manager, member,
affiliate or assignee of any of the foregoing, which we refer to
as the parent parties, for any loss or damage suffered as a
result of the failure of the merger to be consummated or for a
breach or failure to perform under the merger agreement and no
parent party will have any other liability or obligation
relating to or arising out of the merger agreement or the
transactions contemplated by the merger agreement.
In the circumstances in which the Company termination fee is
payable, Parents receipt of the Company termination fee
payable by us will, subject to certain specific performance
rights described below, be the sole and exclusive remedy of
Parent and Merger Sub and their respective affiliates against
the Company, its subsidiaries and each of their respective
former, current and future directors, officers, employees,
agents, general and limited partners, managers, members,
shareholders, affiliates and assignees and each former, current
or future director, officer, employee, agent, shareholder,
general or limited partner, manager, member, shareholder,
affiliate or assignee of any of the foregoing, which we refer to
as the company parties, for any loss or damage suffered as a
result of the failure of the merger to be consummated or for a
breach or failure to perform under the merger agreement, and no
company party shall have any other liability or obligation
relating to or arising out of the merger agreement or the
transactions contemplated by the merger agreement; provided that
the Company will be liable for its willful material breach of
the merger agreement.
Under no circumstances will the Company be entitled to monetary
damages in excess of the amount of the termination fee payable
by Parent. Subject to certain exceptions, Parent will not be
entitled to monetary damages in excess of the amount of the
termination fee payable by the Company. While Parent may pursue
both a grant of specific performance in the circumstances
described below and the payment of the termination fee by the
Company, under no circumstances will Parent be permitted or
entitled to receive both a grant of specific performance that
results in the merger occurring and all or any portion of the
payment of the termination fee by the Company.
Under the merger agreement, we are not entitled to specific
performance of, or injunctive relief with respect to, the
covenants or agreements of Parent or Merger Sub in the merger
agreement. In the event of any breach or threatened breach by
the Company of any of its covenants or obligations set forth in
the merger agreement, Parent and Merger Sub will be entitled to
an injunction or injunctions to prevent or restrain breaches or
threatened breaches of the merger agreement by the Company, and
to specifically enforce the terms and provisions of the merger
agreement to prevent breaches or threatened breaches of, or to
enforce compliance with, the covenants and obligations of the
Company under the merger agreement.
Indemnification;
Directors and Officers Insurance
Parent has agreed to cause the surviving corporation and its
subsidiaries to honor the obligations of the Company and its
subsidiaries under any and all indemnification agreements with
their respective current or former directors and officers and
any person who becomes a director or officer of the Company or
any of its subsidiaries prior to the consummation of the merger,
which we refer to as the indemnified persons.
For a period of six years following the consummation of the
merger, Parent has agreed to cause the surviving corporation to
cause the certificate of incorporation and bylaws of the
surviving corporation and its subsidiaries to contain provisions
with respect to indemnification, exculpation and advancement of
expenses that are at least as favorable as the indemnification,
exculpation and advancement of expenses set forth in the
certificate of incorporation and bylaws of the Company and its
subsidiaries as of the date of the merger agreement, and such
provisions shall not be repealed, amended or otherwise modified
in any manner that would adversely affect the rights of the
indemnified persons thereunder except as required by applicable
law.
73
In addition, for a period of six years following the
consummation of the merger, Parent has agreed to cause the
surviving corporation to, subject to any restrictions under
applicable law, indemnify and hold harmless each indemnified
person from and against, and advance expenses to each
indemnified person in respect of, any costs, fees and expenses
(including reasonable attorneys fees and investigation
expenses), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with
any claim, proceeding, investigation or inquiry, whether civil,
criminal, administrative or investigative, to the extent such
claim, proceeding, investigation or inquiry arises directly or
indirectly out of or pertains directly or indirectly to any
action or omission or alleged action or omission in an
indemnified persons capacity as a director, officer,
employee or agent of the Company or any of its subsidiaries or
other affiliates at or prior to the consummation of the merger,
including in connection with any of the transactions
contemplated by the merger agreement.
Moreover, during the period of six years following the
consummation of the merger, Parent will cause the surviving
corporation to maintain in effect the Companys current
directors and officers liability insurance, or
D&O insurance, in respect of acts or omissions occurring at
or prior to the consummation of the merger, covering each person
covered by the D&O insurance. Parent is also permitted to
substitute a six-year tail policy in lieu thereof.
Access
Subject to certain exceptions and limitations, we will, and we
will cause our subsidiaries to, afford Parent and its authorized
representatives reasonable access to the Company and will
furnish Parent information concerning our business, properties
and personnel as may reasonably be requested and furnish
promptly to Parent such information concerning the business,
properties, assets, liabilities, personnel or other aspect of us
and our subsidiaries as Parent or Merger Sub or their
representatives may reasonably request.
Modification
or Amendment
At any time prior to the effective time, whether before or after
receipt of the approval by our stockholders, the parties to the
merger agreement may modify or amend the merger agreement, by
written agreement executed and delivered by duly authorized
officers of the respective parties, except that after our
stockholders have adopted the merger agreement, there shall be
no amendment that by law requires further approval by our
stockholders without such approval having been obtained.
THE
VOTING AGREEMENT
This section describes the material terms of the voting
agreement. The description in this section and elsewhere in this
proxy statement is qualified in its entirety by reference to the
complete text of the voting agreement, a copy of which is
attached as
Exhibit A to Annex A
and is
incorporated by reference into this proxy statement. This
summary does not purport to be complete and may not contain all
of the information about the voting agreement that is important
to you. We encourage you to read the voting agreement carefully
and in its entirety. This section is not intended to provide you
with any factual information about us. Such information can be
found elsewhere in this proxy statement and in the public
filings we make with the SEC, as described in the section
entitled Where You Can Find More Information
beginning on page 85.
On October 18, 2010, GVI Stockholders and Parent entered
into a voting agreement pursuant to which GVI Stockholders have
agreed to vote shares owned by them representing, in the
aggregate, 25.26% of the outstanding shares of the Company in
favor of the merger. Below is a summary of the material terms of
the voting agreement.
During the term of the voting agreement, at any meeting of the
stockholders of the Company, however called, or at any
adjournment or postponement thereof, or in any other
circumstance in which the vote, consent or other approval of the
stockholders of the Company is sought, GVI Stockholders will,
with respect to the shares of Company common stock beneficially
owned by such GVI Stockholders, and will cause any other holder
of record of one or more such shares to, (i) appear at each
such meeting, in person or by proxy, or
74
otherwise cause such covered shares to be counted as present
thereat for purposes of calculating a quorum and (ii) vote
(or cause to be voted), or execute and deliver a written consent
(or cause a written consent to be executed and delivered)
covering, such covered shares (A) in favor of adopting the
merger agreement, including the agreement of merger contained
therein, the execution and delivery by the Company of the merger
agreement and the approval of the terms thereof and each of the
other actions contemplated by the merger agreement, (B) in
favor of any adjournment or postponement recommended by the
Company with respect to any stockholder meeting with respect to
the merger agreement and the merger, (C) against any
acquisition proposal or any proposal relating to an acquisition
proposal, (D) against any merger agreement or merger,
acquisition, consolidation, combination, sale of substantial
assets, reorganization, recapitalization, dissolution,
liquidation or winding up of or by the Company, or any other
extraordinary transaction involving the Company, in each case
other than the merger agreement and the merger, and
(E) against any other proposal, action or agreement, in
each case that would (1) prevent, impair, delay or
otherwise adversely affect the transactions contemplated by the
merger agreement or the consummation of the merger, or
(2) result in a breach in any material respect of any
covenant, representation, warranty or any other obligation or
agreement of the Company under the merger agreement. No GVI
Stockholders will commit or agree to take any action
inconsistent with the foregoing.
Irrevocable
Proxy
Concurrently with the execution of the voting agreement, each
GVI Stockholder will execute and deliver, and cause each other
holder of record of one or more covered shares beneficially
owned by such GVI Stockholder and any stockholder controlled by
such GVI Stockholder to execute and deliver, to Parent an
irrevocable proxy which shall be irrevocable during the term of
the voting agreement to the extent permitted by applicable law,
covering all of such GVI Stockholders covered shares.
No
Disposition or Adverse Act
Each GVI Stockholder will, except as contemplated by the voting
agreement and the merger agreement, not (with respect to the
covered shares beneficially owned by such GVI Stockholder), and
will cause each other GVI Stockholder controlled by such GVI
Stockholder (with respect to the covered shares beneficially
owned by such other GVI stockholder) not to, directly or
indirectly (i) transfer any or all of such covered shares
or any interest therein without the prior written consent of
Parent, (ii) enter into any contract, option or other
agreement or understanding with respect to any transfer of any
or all of such covered shares or any interest therein,
(iii) grant any proxy,
power-of-attorney,
right of first offer or refusal or other authorization or
consent in or with respect to any or all of such covered shares
(other than any such proxy,
power-of-attorney,
right of first offer or refusal or other authorization or
consent that is not inconsistent and could not reasonably be
expected to interfere in any manner with the voting obligations
of such GVI Stockholder contained in the voting agreement or the
proxy granted to Parent by such GVI Stockholder), or
(iv) deposit any or all of such covered shares into a
voting trust or enter into a voting agreement or arrangement
with respect to any or all of such covered shares;
provided
that the foregoing shall not prohibit the transfer by any
GVI Stockholder of any or all of the covered shares beneficially
owned by such GVI Stockholder or any interest therein to one or
more of its affiliates that, prior to such transfer, executes
and delivers to Parent a counterpart to the voting agreement and
a proxy.
Non-Solicitation
Each GVI Stockholder will not, and will cause its
representatives and each other GVI Stockholder controlled by
such GVI Stockholder not to, directly or indirectly:
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solicit, initiate, propose, induce or encourage the making,
submission or announcement of, or take actions that could
reasonably be expected to encourage, facilitate or assist, an
acquisition proposal;
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furnish to any person (other than Parent, Merger Sub or any
designees of Parent or Merger Sub) any non-public information
relating to the Company or any of its subsidiaries, or afford to
any person access to the business, properties, assets, books,
records or other non-public information, or to any
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personnel, of the Company or any of its subsidiaries (other than
Parent, Merger Sub or any designees of Parent or Merger Sub), in
any such case with the intent to induce the making, submission
or announcement of, or to encourage, knowingly facilitate or
assist, an acquisition proposal or any inquiries or the making
of any proposal that would reasonably be expected to lead to an
acquisition proposal;
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participate or engage in discussions or negotiations with any
person with respect to an acquisition proposal or which may
reasonably be expected to lead to an acquisition
proposal; or
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enter into any letter of intent, memorandum of understanding or
other contract with respect to an acquisition transaction.
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Each GVI Stockholder will immediately cease or cause to be
ceased any existing activities, discussions or negotiations
conducted theretofore with respect to any acquisition proposal.
Each GVI Stockholder will promptly (and, in any event, within
48 hours) notify Parent after receipt by such GVI
Stockholders representative of an acquisition proposal (or
any discussion, negotiation or inquiry with respect thereto) and
the identity of the person making such acquisition proposal or
inquiry. In addition, each GVI Stockholder will, on a current
basis, inform Parent of the status and material terms and
conditions of any such acquisition proposal or inquiry. Any
violation of the foregoing restrictions by a GVI Stockholder or
any of its representatives will be deemed to be a material
breach of the voting agreement by such GVI Stockholder.
Termination
The term of the voting agreement and the proxies granted
pursuant thereto, with respect to any GVI Stockholder, commenced
on October 18, 2010 and will terminate upon the earliest of
(i) the mutual agreement of Parent and such GVI
Stockholder, (ii) the effective time, (iii) the
termination of the merger agreement in accordance with its
terms, and (iv) the date of any amendment to the terms of
the merger agreement that reduces the amount, changes the form,
or imposes any material restrictions or additional conditions on
the receipt, of consideration payable in respect of each share
of Company common stock in the merger or that is otherwise
adverse in any material respect to such GVI Stockholder.
Stock
Purchase
Upon the terms and subject to the conditions set forth in the
voting agreement, on the stock purchase closing date, if any,
Parent will cause Intermediate Holdco or its designee, to
purchase, acquire and accept, from GVI Stockholders, and each
GVI Stockholder will sell, convey, assign, transfer and deliver
to Intermediate Holdco or its designee, all right, title and
interest of such GVI Stockholders in and to the covered shares,
free and clear of all liens (such sale and purchase referred to
as the stock purchase, and such shares referred to as the
acquired shares), for a purchase price per share of Company
common stock equal to the amount of the per share price under
the merger agreement
minus
$1.75. The stock purchase
closing date is the date, if any, that is the earlier of
(i) the closing date, if on or prior to December 31,
2010 and (ii) such date as identified in a written notice
delivered by Parent to GVI Stockholders no earlier than
December 15, 2010, which date (in the case of this clause
(ii)) is no earlier than three business days after the date of
such notice and no later than December 31, 2010).
Parent and each of the GVI Stockholders will cooperate in all
respects in doing all things reasonably necessary, proper or
advisable under applicable law or otherwise to consummate and
make effective, in the most expeditious manner practicable, the
stock purchase.
If the stock purchase closing date occurs, the closing of the
stock purchase shall take place (x) on the closing date at
the location of the closing, effective immediately prior to the
effective time or (y) if the stock purchase closing date is
prior to the closing date, at 10:00 a.m. EST on the
stock purchase closing date.
Each GVI Stockholder will, if the voting agreement is terminated
and substantially concurrently therewith the Company enters into
a definitive agreement in respect of a superior proposal,
promptly enter into an agreement with the party making such
superior proposal providing that the per share consideration to
be paid to such GVI Stockholder in connection with the
acquisition transaction contemplated by such superior proposal
76
will be $1.75 less (referred to as the consideration
differential) than the per share consideration paid to other
stockholders generally in such acquisition transaction so long
as the purchase of such GVI Stockholders shares in such
acquisition transaction occurs on or before December 31,
2010. In the event the consideration in such transaction does
not consist entirely of cash, then the consideration
differential will be determined in good faith by the Company and
GVI Stockholders.
If (i) the stock purchase occurs, (ii) on or prior to
January 15, 2011, in connection with a superior proposal,
the Company terminates the merger agreement pursuant to certain
terms of the merger agreement and pays the Company termination
fee to Parent in accordance with the merger agreement, and
(iii) prior to the first anniversary of the stock purchase
closing date, either (A) the applicable acquisition
transaction is consummated or (B) prior to any withdrawal
of, or termination of the definitive agreement with respect to,
such acquisition transaction, Parent sells one or more acquired
shares, then Parent, promptly upon receipt thereof, shall pay to
each GVI Stockholder 50% of Parents profit, if any, with
respect to the acquired shares acquired from such GVI
Stockholder which Parent sells in such acquisition transaction
or in the circumstances described in clause (B) above.
If (i) the stock purchase occurs, and (ii) in
connection with a superior proposal, the Company terminates the
merger agreement pursuant to the merger agreement and pays the
Company termination fee to Parent in accordance with the merger
agreement, then (x) Parent will vote the acquired shares in
favor of such superior proposal
and/or
tender such acquired shares in connection with the acquisition
transaction contemplated such superior proposal and
(y) Parent will enter into an agreement with the party
making such superior proposal providing that the per share
consideration to be paid to Parent with respect to the acquired
shares in connection with the acquisition transaction
contemplated by such superior proposal will be $1.75 less than
the per share consideration paid to other stockholders generally
in such acquisition transaction so long as the purchase of such
acquired shares in such acquisition transaction occurs on or
before December 31, 2010.
MARKET
PRICE OF COMMON STOCK
The Companys common stock is listed for trading on Nasdaq
under the symbol ACLI. The table below shows, for
the periods indicated, the high and low trading price per share
of the common stock, as reported by Nasdaq. The Company has
never declared or paid dividends.
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Common Stock Price
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High
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Low
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Fiscal Year ending December 31, 2008
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Quarter ended March 31
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$
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20.76
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$
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14.19
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Quarter ended June 30
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$
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17.51
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$
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10.86
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Quarter ended September 30
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$
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12.76
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$
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8.31
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Quarter ended December 31
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$
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10.63
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$
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3.38
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Fiscal Year ending December 31, 2009
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Quarter ended March 31
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$
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6.07
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$
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2.12
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Quarter ended June 30*
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$
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19.98
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$
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3.01
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Quarter ended September 30
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$
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30.50
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$
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11.25
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Quarter ending December 31
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$
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29.16
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$
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17.37
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Fiscal Year ending December 31, 2010
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Quarter ended March 31
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$
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26.71
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$
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14.78
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Quarter ending June 30
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$
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26.15
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$
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17.81
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Quarter ending September 30
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$
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30.33
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$
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21.00
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Quarter ending December 31 (through October 21, 2010)
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$
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35.00
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$
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26.07
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*
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On May 26, 2009, the Company effectuated a
one-for-four
reverse stock split. The common stock information dated after
May 26, 2009 presented in this table reflects the
one-for-four
reverse stock split.
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The closing price of the common stock on Nasdaq on
October 15, 2010, the last trading day prior to the public
announcement of the execution of the merger agreement, was
$33.31 per share of common stock. On
[ ],
2010, the most recent practicable date before this proxy
statement was mailed to our stockholders, the closing price for
the common stock on Nasdaq was $[ ]
per share of common stock. You are encouraged to obtain current
market quotations for common stock in connection with voting
your shares of common stock.
78
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below shows information regarding the number of shares
of common stock beneficially owned by each of our
directors and each of our named executive officers, consisting
of Michael P. Ryan, Thomas R. Pilholski, Dawn R. Landry and
Richard W. Spriggle, all of our current directors and executive
officers as a group, and each person known to be a beneficial
owner of more than five percent of our outstanding stock.
Beneficial ownership includes shares of common stock
that a stockholder has the power to vote or the power to
transfer, and also includes common stock options that were
either exercisable at the specified date or will become
exercisable within 60 days thereafter. Unless otherwise
indicated in the footnotes, this information is presented as of
March 15, 2010, the most recent practicable date prior to
the filing of this proxy statement. Percentages are based upon
the number of shares of common stock outstanding at
March 15, 2010, plus the number of shares of common stock
that the indicated person or group had a right to acquire within
60 days after such date. [Table and footnotes to be updated
with definitive proxy filing.]
The table reflects information provided by the directors,
executive officers and beneficial owners of more than five
percent of our outstanding common stock. Unless otherwise
stated, the indicated persons have sole voting and investment
power over the shares listed, and the beneficial ownership of
the person or group does not exceed one percent of the
outstanding common stock. Share figures have been rounded down
to whole shares.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
Nature of
|
|
|
|
|
Beneficial
|
|
Percent
|
Name of Beneficial Owner
|
|
Ownership(1)
|
|
of Class(1)
|
|
GVI Holdings, Inc.
|
|
|
3,234,474
|
(2)
|
|
|
25.26
|
%
|
2 North Riverside Plaza, Suite 600
Chicago, IL 60606
|
|
|
|
|
|
|
|
|
Columbia Wanger Asset Management, L.P.
|
|
|
1,879,000
|
(3)
|
|
|
14.67
|
%
|
227 West Monroe Street, Suite 3000
Chicago, IL 60606
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
|
|
|
1,675,810
|
(4)
|
|
|
13.09
|
%
|
40 East 52nd Street
New York, NY 10022
|
|
|
|
|
|
|
|
|
WS Management, LLLP
|
|
|
670,300
|
(5)
|
|
|
5.23
|
%
|
4306 Pablo Oaks Court
Jacksonville, FL 32224
|
|
|
|
|
|
|
|
|
FMR LLC
|
|
|
1,336,449
|
(6)
|
|
|
10.44
|
%
|
82 Devonshire Street
Boston, MA 02109
|
|
|
|
|
|
|
|
|
Clayton K. Yeutter
|
|
|
54,757
|
(7)
|
|
|
*
|
|
Eugene I. Davis
|
|
|
33,606
|
(8)
|
|
|
*
|
|
Richard L. Huber
|
|
|
221,660
|
(9)
|
|
|
1.73
|
%
|
Nils E. Larsen
|
|
|
37,321
|
(10)
|
|
|
*
|
|
Emanuel L. Rouvelas
|
|
|
36,106
|
(11)
|
|
|
*
|
|
R. Christopher Weber
|
|
|
42,122
|
(12)
|
|
|
*
|
|
Michael P. Ryan
|
|
|
30,173
|
(13)
|
|
|
*
|
|
Thomas R. Pilholski
|
|
|
9,521
|
(14)
|
|
|
*
|
|
Dawn R. Landry
|
|
|
6,572
|
(15)
|
|
|
*
|
|
Richard W. Spriggle
|
|
|
7,247
|
(16)
|
|
|
*
|
|
Directors and Executive Officers as a Group(10)
|
|
|
527,820
|
|
|
|
4.12
|
%
|
|
|
|
*
|
|
Less than one percent.
|
|
(1)
|
|
Applicable percentage of ownership is based on
12,806,051 shares of common stock outstanding as of
March 15, 2010 together with applicable options to purchase
shares of Common Stock for such
|
79
|
|
|
|
|
stockholder. Beneficial ownership is determined in accordance
with the rules of the SEC. In computing the number of shares
beneficially owned by a person and the percentage ownership of
that person, shares subject to options held by that person that
are currently exercisable or that become exercisable within
60 days following March 15, 2010 are deemed
outstanding. However, such shares are not deemed outstanding for
purposes of computing the percentage ownership of any other
person. Unless otherwise indicated, the stockholder named in
this table has sole voting and dispositive power with respect to
the shares of common stock shown as beneficially owned by such
stockholder. The common stock presented in this table reflects
the
one-for-four
reverse stock split of May 26, 2009.
|
|
(2)
|
|
According to the Schedule 13D/A filed with the SEC on
November 17, 2009, this includes:
(i) 1,329,270 shares of Common Stock as to which GVI
Holdings, Inc. shares beneficial ownership;
(ii) 34,882 shares of Common Stock as to which GAMI
Investments, Inc. shares beneficial ownership;
(iii) 1,870,322 shares of Common Stock as to which SZ
Investments, L.L.C. shares beneficial ownership;
(iv) 1,364,152 shares of Common Stock as to which
Great American Management and Investment, Inc. shares beneficial
ownership; (v) 440,537 shares of Common Stock as to
which HY I Investments, L.L.C. shares beneficial ownership;
(vi) 440,537 shares of Common Stock as to which
EGI-Managing Member (01), L.L.C. shares beneficial ownership
(vii) 393,281 shares of Common Stock as to which
EGI-Fund
(05-07)
Investors, L.L.C. shares beneficial ownership; and
(viii) 343,750 shares of Common Stock as to which
EGI-Fund
(08-10)
Investors, L.L.C. shares beneficial ownership, the aggregate
3,234,474 shares of Common Stock held by the stockholders,
as to which each of which Chai Trust Company, L.L.C. shares
beneficial ownership, represent approximately 25.26 percent
of the issued and outstanding Common Stock. As disclosed in the
Schedule 13D/A, 3,234,474 shares of Common Stock in
the aggregate held by the stockholders are pledged to various
financial institutions as collateral security for the repayment
of debit balances in respect of certain loan facilities.
|
|
(3)
|
|
Beneficial ownership of Common Stock is as of December 31,
2009 as reported on Schedule 13G/A filed by Columbia Wanger
Asset Management, L.P. with the SEC on February 9, 2010.
|
|
(4)
|
|
Beneficial ownership of Common Stock is as of December 31,
2009 as reported on Schedule 13G/A filed by BlackRock, Inc.
with the SEC on January 8, 2010.
|
|
(5)
|
|
Beneficial ownership of Common Stock is as of December 31,
2009 as reported on Schedule 13G/A filed by WS Management,
LLLP with the SEC on February 12, 2010.
|
|
(6)
|
|
Beneficial ownership of Common Stock is as of December 31,
2009 as reported on Schedule 13G filed by FMR LLC with the
SEC on January 11, 2010. FMR LLC reported sole voting power
over 694,689 shares and sole dispositive power over
1,336,449 shares.
|
|
(7)
|
|
This amount excludes 3,292 shares of restricted stock units
and options to purchase 6,285 shares of common stock that
will not vest within 60 days of March 15, 2010. This
amount includes 47,746 shares of common stock issuable upon
exercise of options that are currently exercisable or will
become exercisable within 60 days of March 15, 2010.
This amount includes 1,750 shares of common stock purchased
by Mr. Yeutter. This amount includes 425 shares
indirectly owned in a custodial account for the benefit of a
minor child. This amount excludes 312 shares in the Yeutter
Family Generation Skipping Trust account, for which
Mr. Yeutter has neither voting nor dispositive power.
|
|
(8)
|
|
This amount excludes 1,343 shares of restricted stock units
that will not vest within 60 days of March 15, 2010.
This amount includes 30,385 shares of common stock issuable
upon exercise of options that are currently exercisable or will
become exercisable within 60 days of March 15, 2010.
|
|
(9)
|
|
This amount excludes 2,195 shares of restricted stock units
and options to purchase 4,191 shares of common stock that
will not vest within 60 days of March 15, 2010. This
amount includes 123,787 shares of common stock issuable
upon exercise of options that are currently exercisable or will
become exercisable within 60 days of March 15, 2010.
This amount includes 7,500 shares of common stock purchased
by Mr. Huber.
|
|
(10)
|
|
This amount excludes 2,195 shares of restricted stock units
and options to purchase 4,191 shares of common stock that
will not vest within 60 days of March 15, 2010. This
amount includes 28,788 shares of common stock issuable upon
exercise of options that are currently exercisable or will
become exercisable
|
80
|
|
|
|
|
within 60 days of March 15, 2010. This amount includes
5,103 shares of common stock owned by Mr. Larsen not
granted as equity by the Company.
|
|
(11)
|
|
This amount excludes 2,195 shares of restricted stock units
and options to purchase 4,191 shares of common stock that
will not vest within 60 days of March 15, 2010. This
amount includes 30,385 shares of common stock issuable upon
exercise of options that are currently exercisable or will
become exercisable within 60 days of March 15, 2010.
This amount includes 2,500 shares held jointly with a
family member and 666 shares held in trust for a family
member.
|
|
(12)
|
|
This amount excludes 2,195 shares of restricted stock units
and options to purchase 4,191 shares of common stock that
will not vest within 60 days of March 15, 2010. This
amount includes 31,650 shares of common stock issuable upon
exercise of options that are currently exercisable or will
become exercisable within 60 days of March 15, 2010.
This amount includes 1,250 shares held jointly with a
family member.
|
|
(13)
|
|
This amount excludes 24,382 shares of restricted stock
units and options to purchase 91,506 shares of common stock
that will not vest within 60 days of March 15, 2010.
This amount includes 28,079 shares of common stock issuable
upon exercise of options that are currently exercisable or will
become exercisable within 60 days of March 15, 2010.
This amount also excludes 24,382 shares of performance
shares of restricted stock that will not have been earned within
60 days of March 15, 2010.
|
|
(14)
|
|
This amount excludes 11,850 shares of restricted stock
units and options to purchase 48,309 shares of common stock
that will not vest within 60 days of March 15, 2010.
This amount includes 8,771 shares of common stock issuable
upon exercise of options that are currently exercisable or will
become exercisable within 60 days of March 15, 2010.
This amount also excludes 11,850 shares of performance
shares of restricted stock that will not have been earned within
60 days of March 15, 2010. This includes
750 shares purchased by Mr. Pilholski.
|
|
(15)
|
|
This amount excludes 8,203 shares of restricted stock units
and options to purchase 20,008 shares of common stock that
will not vest within 60 days of March 15, 2010. This
amount includes 6,072 shares of common stock issuable upon
exercise of options that are currently exercisable or will
become exercisable within 60 days of March 15, 2010.
This amount also excludes 8,203 shares of performance
shares of restricted stock that will not have been earned within
60 days of March 15, 2010. This includes
500 shares purchased by Ms. Landry.
|
|
(16)
|
|
This amount excludes 9,116 shares of restricted stock units
and options to purchase 22,231 shares of common stock that
will not vest within 60 days of March 15, 2010. This
amount includes 6,747 shares of common stock issuable upon
exercise of options that are currently exercisable or will
become exercisable within 60 days of March 15, 2010.
This amount also excludes 9,116 shares of performance
shares of restricted stock that will not have been earned within
60 days of March 15, 2010. This includes
500 shares purchased by Mr. Spriggle.
|
APPRAISAL
RIGHTS
Under the DGCL, if you do not wish to accept the per share
merger consideration provided for in the merger agreement, you
have the right to seek appraisal of your shares of common stock
and to receive payment in cash for the fair value of your common
stock, exclusive of any element of value arising from the
accomplishment or expectation of the merger, as determined by
the Delaware Court of Chancery, together with interest, if any,
to be paid upon the amount determined to be fair value. The
fair value of your shares of common stock as
determined by the Delaware Court of Chancery may be more or less
than, or the same as, the $33.00 per share that you are
otherwise entitled to receive under the terms of the merger
agreement. These rights are known as appraisal rights. The
Companys stockholders who elect to exercise appraisal
rights must not vote in favor of the proposal to adopt the
merger agreement and must comply with the provisions of
Section 262 of the DGCL, which we refer to as
Section 262, in order to perfect their rights. Strict
compliance with the statutory procedures in Section 262 is
required. Failure to follow precisely any of the statutory
requirements will result in the loss of your appraisal rights.
This section is intended as a brief summary of the material
provisions of the Delaware statutory procedures that a
stockholder must follow in order to seek and perfect appraisal
rights. This summary,
81
however, is not a complete statement of all applicable
requirements, and it is qualified in its entirety by reference
to Section 262 of the DGCL, the full text of which appears
in
Annex C
to this proxy statement. The following
summary does not constitute any legal or other advice, nor does
it constitute a recommendation that stockholders exercise their
appraisal rights under Section 262.
Section 262 requires that where a merger agreement is to be
submitted for adoption at a meeting of stockholders, the
stockholders be notified that appraisal rights will be available
not less than twenty days before the meeting to vote on the
merger. A copy of Section 262 must be included with such
notice. This proxy statement constitutes the Companys
notice to our stockholders that appraisal rights are available
in connection with the merger, in compliance with the
requirements of Section 262. If you wish to consider
exercising your appraisal rights, you should carefully review
the text of Section 262 contained in
Annex C
.
Failure to comply timely and properly with the requirements of
Section 262 will result in the loss of your appraisal
rights under the DGCL.
If you elect to demand appraisal of your shares of common stock,
you must satisfy each of the following conditions:
You must deliver to the Company a written demand for appraisal
of your shares of common stock before the vote is taken on the
proposal to adopt the merger agreement, which must reasonably
inform us of the identity of the holder of record of the common
stock who intends to demand appraisal of his, her or its shares
of common stock; and you must not vote or submit a proxy in
favor of the proposal to adopt the merger agreement.
If you fail to comply with either of these conditions and the
merger is completed, you will be entitled to receive payment for
your shares of the common stock as provided for in the merger
agreement, but you will have no appraisal rights with respect to
your shares of the common stock. A holder of shares of common
stock wishing to exercise appraisal rights must hold of record
the shares of common stock on the date the written demand for
appraisal is made and must continue to hold the shares of common
stock of record through the effective time, because appraisal
rights will be lost if the shares of common stock are
transferred prior to the effective time. Voting against or
failing to vote for the proposal to adopt the merger agreement
by itself does not constitute a demand for appraisal within the
meaning of Section 262. A proxy that is submitted and does
not contain voting instructions will, unless revoked, be voted
in favor of the proposal to adopt the merger agreement, and it
will constitute a waiver of the stockholders right of
appraisal and will nullify any previously delivered written
demand for appraisal. Therefore, a stockholder who submits a
proxy and who wishes to exercise appraisal rights must either
submit a proxy containing instructions to vote against the
proposal to adopt the merger agreement or abstain from voting on
the proposal to adopt the merger agreement. The written demand
for appraisal must be in addition to and separate from any proxy
or vote on the proposal to adopt the merger agreement.
All demands for appraisal should be addressed to American
Commercial Lines Inc., Attention: Corporate Secretary, 1701 East
Market Street, Jeffersonville, Indiana 47130, and must be
delivered before the vote is taken on the proposal to adopt the
merger agreement at the special meeting, and should be executed
by, or on behalf of, the record holder of the shares of common
stock. The demand must reasonably inform the Company of the
identity of the stockholder and the intention of the stockholder
to demand appraisal of his, her or its shares of common stock.
To be effective, a demand for appraisal by a stockholder must be
made by, or in the name of, the stockholder of record, fully and
correctly, as the stockholders name appears on the
stockholders stock certificate(s) or in the transfer
agents records, in the case of uncertificated shares. The
demand cannot be made by the beneficial owner if he, she or it
does not also hold the shares of common stock of record. The
beneficial holder must, in such cases, have the stockholder of
record, such as a broker or other nominee, submit the required
demand in respect of those shares of common stock. If you hold
your shares of common stock through a bank, brokerage firm or
other nominee and you wish to exercise appraisal rights, you
should consult with your bank, broker or the other nominee to
determine the appropriate procedures for the making of a demand
for appraisal by the nominee.
82
If shares of common stock are owned of record in a fiduciary
capacity, such as by a trustee, guardian or custodian, execution
of a demand for appraisal should be made in that capacity. If
the shares of common stock are owned of record by more than one
person, as in a joint tenancy or tenancy in common, the demand
should be executed by or for all joint owners. An authorized
agent, including an authorized agent for two or more joint
owners, may execute the demand for appraisal for a stockholder
of record; however, the agent must identify the record owner or
owners and expressly disclose the fact that, in executing the
demand, he or she is acting as agent for the record owner. A
record owner, such as a broker, who holds shares of common stock
as a nominee for others, may exercise his, her or its right of
appraisal with respect to the shares of common stock held for
one or more beneficial owners, while not exercising this right
for other beneficial owners. In that case, the written demand
should state the number of shares of common stock as to which
appraisal is sought. Where no number of shares of common stock
is expressly mentioned, the demand will be presumed to cover all
shares of common stock held in the name of the record owner.
Within ten days after the effective time, the surviving
corporation in the merger must give notice of the date that the
merger has become effective to each of the Companys
stockholders who has properly filed a written demand for
appraisal and who did not vote in favor of the proposal to adopt
the merger agreement. At any time within sixty days after the
effective time, any stockholder who has not commenced an
appraisal proceeding or joined a proceeding as a named party may
withdraw the demand and accept the cash payment specified by the
merger agreement for that stockholders shares of common
stock by delivering to the surviving corporation a written
withdrawal of the demand for appraisal. However, any such
attempt to withdraw the demand made more than sixty days after
the effective time will require written approval of the
surviving corporation. Unless the demand is properly withdrawn
by the stockholder within sixty days after the effective date of
the merger, no appraisal proceeding in the Delaware Court of
Chancery will be dismissed as to any stockholder without the
approval of the Delaware Court of Chancery, with such approval
conditioned upon such terms as the Delaware Court of Chancery
deems just. If the surviving corporation does not approve a
request to withdraw a demand for appraisal when that approval is
required, or if the Delaware Court of Chancery does not approve
the dismissal of an appraisal proceeding, the stockholder will
be entitled to receive only the appraised value determined in
any such appraisal proceeding, which value could be less than,
equal to or more than the consideration offered pursuant to the
merger agreement.
Within one hundred twenty days after the effective time, but not
thereafter, either the surviving corporation or any stockholder
who has complied with the requirements of Section 262 and
is entitled to appraisal rights under Section 262 may
commence an appraisal proceeding by filing a petition in the
Delaware Court of Chancery demanding a determination of the fair
value of the shares of common stock held by all stockholders
entitled to appraisal. Upon the filing of the petition by a
stockholder, service of a copy of such petition shall be made
upon the surviving corporation. The surviving corporation has no
obligation to file such a petition, and holders should not
assume that the surviving corporation will file a petition.
Accordingly, the failure of a stockholder to file such a
petition within the period specified could nullify the
stockholders previous written demand for appraisal. In
addition, within one hundred twenty days after the effective
time, any stockholder who has properly filed a written demand
for appraisal and who did not vote in favor of the merger
agreement, upon written request, will be entitled to receive
from the surviving corporation, a statement setting forth the
aggregate number of shares of common stock not voted in favor of
the merger agreement and with respect to which demands for
appraisal have been received and the aggregate number of holders
of such shares. The statement must be mailed within ten days
after such written request has been received by the surviving
corporation. A person who is the beneficial owner of shares of
the common stock held either in a voting trust or by a nominee
on behalf of such person may, in such persons own name,
file a petition or request from the surviving corporation such
statement.
If a petition for appraisal is duly filed by a stockholder and a
copy of the petition is delivered to the surviving corporation,
then the surviving corporation will be obligated, within twenty
days after receiving service of a copy of the petition, to file
with the Delaware Register in Chancery a duly verified list
containing the names and addresses of all stockholders who have
demanded an appraisal of their shares of common stock and with
whom agreements as to the value of their shares of common stock
have not been reached. After notice to stockholders who have
demanded appraisal, if such notice is ordered by the Delaware
Court of
83
Chancery, the Delaware Court of Chancery is empowered to conduct
a hearing upon the petition and to determine those stockholders
who have complied with Section 262 and who have become
entitled to the appraisal rights provided by Section 262.
The Delaware Court of Chancery may require stockholders who have
demanded an appraisal of their shares of common stock to submit
their stock certificates to the Register in Chancery for
notation of the pendency of the appraisal proceedings; and if
any stockholder fails to comply with that direction, the
Delaware Court of Chancery may dismiss the proceedings as to
that stockholder.
After determination of the stockholders entitled to appraisal of
their shares of the common stock, the Delaware Court of Chancery
will appraise the shares of common stock, determining their fair
value as of the effective time after taking into account all
relevant factors exclusive of any element of value arising from
the accomplishment or expectation of the merger, together with
interest, if any, to be paid upon the amount determined to be
the fair value. When the value is determined, the Delaware Court
of Chancery will direct the payment of such value upon surrender
by those stockholders of the certificates representing their
shares of common stock. Unless the Delaware Court of Chancery in
its discretion determines otherwise for good cause shown,
interest from the effective date of the merger through the date
of payment of the judgment shall be compounded quarterly and
shall accrue at 5% over the Federal Reserve discount rate
(including any surcharge) as established from time to time
during the period between the effective time and the date of
payment of the judgment.
You should be aware that an investment banking opinion as to
fairness from a financial point of view is not necessarily an
opinion as to fair value under Section 262. Although we
believe that the per share merger consideration is fair, no
representation is made as to the outcome of the appraisal of
fair value as determined by the Delaware Court of Chancery and
stockholders should recognize that such an appraisal could
result in a determination of a value higher or lower than, or
the same as, the per share merger consideration. Moreover, we
reserve the right to assert, in any appraisal proceeding, that,
for purposes of Section 262, the fair value of
a share of common stock is less than the per share merger
consideration. In determining fair value, the
Delaware Court of Chancery is required to take into account all
relevant factors. In
Weinberger v. UOP, Inc.
, the
Delaware Supreme Court discussed the factors that could be
considered in determining fair value in an appraisal proceeding,
stating that proof of value by any techniques or methods
which are generally considered acceptable in the financial
community and otherwise admissible in court should be
considered and that [f]air price obviously requires
consideration of all relevant factors involving the value of a
company. The Delaware Supreme Court has stated that in
making this determination of fair value the court must consider
market value, asset value, dividends, earnings prospects, the
nature of the enterprise and any other facts which could be
ascertained as of the date of the merger which throw any light
on future prospects of the merged corporation. Section 262
provides that fair value is to be exclusive of any element
of value arising from the accomplishment or expectation of the
merger. In
Cede & Co. v. Technicolor,
Inc.
, the Delaware Supreme Court stated that such exclusion
is a narrow exclusion [that] does not encompass known
elements of value, but which rather applies only to the
speculative elements of value arising from such accomplishment
or expectation. In
Weinberger
, the Delaware Supreme Court
construed Section 262 to mean that elements of future
value, including the nature of the enterprise, which are known
or susceptible of proof as of the date of the merger and not the
product of speculation, may be considered.
Costs of the appraisal proceeding (which do not include
attorneys fees or the fees and expenses of experts) may be
determined by the Delaware Court of Chancery and imposed upon
the surviving corporation and the stockholders participating in
the appraisal proceeding by the Delaware Court of Chancery, as
it deems equitable in the circumstances. Upon the application of
a stockholder, the Delaware Court of Chancery may order all or a
portion of the expenses incurred by any stockholder in
connection with the appraisal proceeding, including, without
limitation, reasonable attorneys fees and the fees and
expenses of experts used in the appraisal proceeding, to be
charged pro rata against the value of all shares of common stock
entitled to appraisal. Any stockholder who demanded appraisal
rights will not, after the effective time, be entitled to vote
shares of common stock subject to that demand for any purpose or
to receive payments of dividends or any other distribution with
respect to those shares of common stock, other than with respect
to payment as of a record date prior to the effective time.
However, if no petition for appraisal is filed within one
hundred twenty days after the effective time, or if the
stockholder otherwise fails to perfect, successfully withdraws
or loses
84
such stockholders right to appraisal, then the right of
that stockholder to appraisal will cease and that stockholder
will be entitled to receive the $33.00 per share cash payment
(without interest) for his, her or its shares of the common
stock pursuant to the merger agreement.
In view of the complexity of Section 262 of the DGCL,
the Companys stockholders who may wish to pursue appraisal
rights should consult their legal and financial advisors.
DELISTING
AND DEREGISTRATION OF COMMON STOCK
If the merger is completed, the common stock will be delisted
from Nasdaq and deregistered under the Exchange Act and we will
no longer file reports with the SEC on account of the common
stock.
STOCKHOLDER
PROPOSALS
If the merger is completed, we will not have public stockholders
and there will be no public participation in any future meeting
of stockholders. If the merger is not completed prior to such
time as we would be required under the DGCL to hold an annual
meeting of stockholders in 2011, we would hold a 2011 annual
meeting of stockholders. Any stockholder nominations or
proposals for other business intended to be presented at our
next annual meeting must be submitted to us as set forth below.
A stockholder proposal submitted pursuant to
Rule 14a-8
under the Securities Exchange Act of 1934, as amended, for
inclusion in the Companys proxy statement and form of
proxy for the annual meeting of stockholders to be held in 2011
must be received by the Company by December 14, 2010. Such
a proposal must also comply with the requirements as to form and
substance established by the SEC for such proposals. A
stockholder otherwise desiring to bring matters before an annual
meeting of stockholders must, pursuant to the Companys
by-laws, deliver timely notice in writing to the Corporate
Secretary of the Company not less than 60 nor more than
90 days prior to the anniversary of the date the Company
first mails its proxy materials for the prior annual meeting. In
the event that less than 70 days notice or prior
public disclosure of the date of the annual meeting is given or
made to the stockholders, the by-laws provide that notice by a
stockholder of a stockholder proposal must be received in
writing by the Corporate Secretary of the Company on the tenth
day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure was made.
If any stockholder proposals are presented for action at the
annual meeting, but are not submitted within the time periods
described above, it is the intention of the persons named in the
accompanying proxy to vote the shares to which the proxy relates
in accordance with their best judgment as determined in their
sole discretion.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
document we file at the SEC public reference room located at
100 F Street, N.E., Room 1580,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the public reference room. Our SEC
filings are also available to the public at the SEC website at
www.sec.gov. You also may obtain free copies of the documents we
file with the SEC, including this proxy statement, by going to
the investor relations portion of our corporate website at
www.aclines.com. Our website address is provided as an inactive
textual reference only. The information provided on our website,
other than copies of the documents listed below that have been
filed with the SEC, is not part of this proxy statement, and
therefore is not incorporated herein by reference.
Statements contained in this proxy statement, or in any document
incorporated by reference in this proxy statement regarding the
contents of any contract or other document, are not necessarily
complete and each such statement is qualified in its entirety by
reference to that contract or other document filed as an exhibit
with the SEC. The SEC allows us to incorporate by
reference into this proxy statement documents we file with
the SEC. This means that we can disclose important information
to you by referring you to those
85
documents. The information incorporated by reference is
considered to be a part of this proxy statement, and later
information that we file with the SEC will update and supersede
that information. We incorporate by reference the documents
listed below and any documents filed by us pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this proxy statement and before the date of the
special meeting.
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Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 (filed with the
SEC on March 10, 2010);
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Quarterly Reports filed on
Form 10-Q
for the fiscal quarter ended March 31, 2010 (filed with the
SEC on May 7, 2010), for the fiscal quarter ended
June 30, 2010 (filed with the SEC on August 6, 2010),
and for the fiscal quarter ended September 30, 2010 (filed
with the SEC on November [ ]);
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Current Reports filed on
Form 8-K
filed with the SEC on February 3, 2010, February 18,
2010, May 20, 2010, June 4, 2010, June 25, 2010,
July 30, 2010 and October 18, 2010; and
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Definitive Proxy Statement for our 2010 Annual Meeting filed
with the SEC on April 16, 2010.
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Any person, including any beneficial owner, to whom this proxy
statement is delivered may request copies of proxy statements
and any of the documents incorporated by reference in this
document or other information concerning us, without charge, by
contacting American Commercial Lines Investor Relations by
e-mail
at
aclinesinvestor@aclines.com or by phone at
(800) 842-5491
or by going to the investor relations website portion of the ACL
website, www.aclines.com; or from our proxy solicitor,
[ ]
(toll-free at
[ ]);
or from the SEC through the SEC website at the address provided
above. Documents incorporated by reference are available without
charge, excluding any exhibits to those documents unless the
exhibit is specifically incorporated by reference into those
documents.
THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A
PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM
WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT
JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE
YOUR SHARES OF COMMON STOCK AT THE SPECIAL MEETING. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS
DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS
PROXY STATEMENT IS DATED
[ ],
2010. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN
THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT
DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS
DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.
86
ANNEX A
AGREEMENT
AND PLAN OF MERGER
by and among
FINN HOLDING CORPORATION,
FINN MERGER CORPORATION
and
AMERICAN COMMERCIAL LINES INC.
Dated as of October 18, 2010
TABLE
OF CONTENTS
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Page
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ARTICLE I THE MERGER
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A-1
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1.1
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The Merger
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A-1
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1.2
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The Effective Time
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A-2
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1.3
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The Closing
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A-2
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1.4
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Effect of the Merger
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A-2
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1.5
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Certificate of Incorporation and Bylaws
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A-2
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1.6
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Directors and Officers
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A-2
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1.7
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Effect on Capital Stock
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A-3
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1.8
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Exchange of Certificates
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A-5
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1.9
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No Further Ownership Rights in Company Common Stock
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A-7
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1.10
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Lost, Stolen or Destroyed Certificates
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A-7
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1.11
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Necessary Further Actions
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A-7
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ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
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A-7
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2.1
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Organization; Good Standing
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A-7
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2.2
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Corporate Power; Enforceability
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A-8
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2.3
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Company Board Approval
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A-8
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2.4
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Requisite Stockholder Approval
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A-8
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2.5
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Non-Contravention
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A-8
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2.6
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Requisite Governmental Approvals
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A-8
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2.7
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Company Capitalization
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A-9
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2.8
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Subsidiaries
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A-10
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2.9
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Company SEC Reports
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A-10
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2.10
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Company Financial Statements
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A-11
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2.11
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No Undisclosed Liabilities
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A-11
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2.12
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Absence of Certain Changes
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A-11
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2.13
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Material Contracts
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A-12
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2.14
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Personal Property and Assets
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A-13
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2.15
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Real Property
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A-13
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2.16
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Intellectual Property
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A-14
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2.17
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Tax Matters
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A-14
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2.18
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Employee Plans
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A-15
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2.19
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Labor Matters
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A-17
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2.20
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Permits
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A-18
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2.21
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Compliance with Laws
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A-18
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2.22
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Legal Proceedings; Orders
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A-18
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2.23
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Qualification as U.S. Citizen
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A-18
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2.24
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Environmental Laws
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A-18
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2.25
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Insurance
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A-19
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2.26
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Related Party Transactions
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A-19
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2.27
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Brokers; Fairness Opinions
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A-19
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2.28
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Anti-Takeover Statutes Not Applicable
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A-19
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2.29
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Proxy Statement and Other Required Company Filings
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A-19
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2.30
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Vessels
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A-20
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2.31
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Capital Expenditures
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A-21
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2.32
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Accounts Receivable
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A-21
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A-i
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Page
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB
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A-21
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3.1
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Organization; Good Standing
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A-21
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3.2
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Power; Enforceability
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A-21
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3.3
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Non-Contravention
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A-22
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3.4
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Requisite Governmental Approvals
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A-22
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3.5
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Legal Proceedings; Orders
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A-22
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3.6
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Qualification as a U.S. Citizen
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A-22
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3.7
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Proxy Statement; Other Required Company Filings
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A-22
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3.8
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Section 203
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A-23
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3.9
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Brokers
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A-23
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3.10
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Operations
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A-23
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3.11
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Financing
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A-23
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3.12
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Guarantee
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A-24
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3.13
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Management Arrangements
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A-24
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3.14
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Solvency
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A-24
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3.15
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No Other Company Representations or Warranties
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A-25
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3.16
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Non-Reliance on Company Estimates, Projections, Forecasts,
Forward-Looking Statements and Business Plans
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A-25
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ARTICLE IV INTERIM OPERATIONS OF THE COMPANY
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A-26
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4.1
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Affirmative Obligations
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A-26
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4.2
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Forbearance Covenants
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A-26
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4.3
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Solicitation
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A-28
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4.4
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Citizenship
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A-30
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ARTICLE V ADDITIONAL COVENANTS
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A-30
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5.1
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Required Action and Forbearance
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A-30
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5.2
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Antitrust Filings
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A-31
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5.3
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Proxy Statement and Other Required SEC Filings
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A-32
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5.4
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Company Stockholder Meeting
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A-33
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5.5
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Company Board Recommendation
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A-33
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5.6
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Financing
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A-34
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5.7
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Anti-Takeover Laws
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A-37
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5.8
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Access
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A-37
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5.9
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Section 16(b) Exemption
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A-38
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5.10
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Directors and Officers Exculpation, Indemnification
and Insurance
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A-38
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5.11
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Employee Matters
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A-39
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5.12
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Obligations of Parent in respect of Merger Sub and Surviving
Corporation
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A-41
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5.13
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Notification of Certain Matters
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A-41
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5.14
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Public Statements and Disclosure
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A-41
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5.15
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Company Stockholder, Director and Management Arrangements
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A-41
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5.16
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Treatment of Certain Company Indebtedness
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A-42
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5.17
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Stockholder Litigation
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A-43
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A-ii
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Page
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ARTICLE VI CONDITIONS TO THE MERGER
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A-44
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6.1
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Conditions to Each Partys Obligations to Effect the Merger
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A-44
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6.2
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Conditions to the Obligations of Parent and Merger Sub
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A-44
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6.3
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Conditions to the Companys Obligations to Effect the Merger
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A-45
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ARTICLE VII TERMINATION, AMENDMENT AND WAIVER
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A-45
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7.1
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Termination
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A-45
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7.2
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Notice of Termination; Effect of Termination
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A-47
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7.3
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Fees and Expenses
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A-47
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ARTICLE VIII GENERAL PROVISIONS
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A-49
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8.1
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Survival of Representations, Warranties and Covenants
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A-49
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8.2
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Notices
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A-49
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8.3
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Assignment
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A-51
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8.4
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Confidentiality
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A-51
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8.5
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Entire Agreement
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A-51
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8.6
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Third Party Beneficiaries
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A-51
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8.7
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Severability
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A-52
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8.8
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Remedies
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A-52
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8.9
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Governing Law
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A-52
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8.10
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Consent to Jurisdiction
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A-52
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8.11
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WAIVER OF JURY TRIAL
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A-53
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8.12
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Company Disclosure Schedule References
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A-53
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8.13
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Counterparts
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A-53
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8.14
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Amendment
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A-53
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8.15
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Extension; Waiver
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A-53
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ARTICLE IX DEFINITIONS & INTERPRETATIONS
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A-54
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9.1
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Certain Definitions
|
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A-54
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9.2
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Additional Definitions
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A-61
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9.3
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Certain Interpretations
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A-63
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A-iii
AGREEMENT
AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this
Agreement
) is made and entered into as of
October 18, 2010 by and among Finn Holding Corporation, a
Delaware corporation (
Parent
), Finn Merger
Corporation, a Delaware corporation and a wholly owned
subsidiary of Parent (
Merger Sub
), and
American Commercial Lines Inc., a Delaware corporation (the
Company
). Capitalized terms that are used in
this Agreement and not otherwise defined shall have the
respective meanings ascribed thereto in
Article IX
.
RECITALS:
WHEREAS, the Company Board, acting upon the recommendation of a
committee of the Company Board consisting only of independent
directors of the Company (the
Special
Committee
), has (i) approved, and declared
advisable, this Agreement providing for the merger of Merger Sub
with and into the Company (the
Merger
) in
accordance with the General Corporation Law of the State of
Delaware (the
DGCL
) upon the terms and
subject to the conditions set forth in this Agreement,
(ii) approved the execution and delivery of this Agreement
by the Company, the performance by the Company of its covenants
and other obligations hereunder and the consummation of the
Merger upon the terms and subject to the conditions set forth in
this Agreement, and (iii) resolved to recommend that the
Company Stockholders adopt this Agreement in accordance with the
DGCL; and
WHEREAS, concurrently with the execution of this Agreement, and
as a condition and inducement to Parents and Merger
Subs willingness to enter into this Agreement, GVI
Holdings, Inc. and certain of its Affiliates are entering into a
voting agreement with Parent and the Company in the form
attached hereto as
Exhibit A
(the
Voting
Agreement
), pursuant to which, among other things, and
subject to the terms and conditions contained therein, each of
them has agreed to vote the shares of Company Common Stock owned
by them for approval of the transactions contemplated hereby;
WHEREAS, each of the board of directors of Parent and the board
of directors of Merger Sub have (i) approved, and declared
advisable, this Agreement providing for the Merger, and
(ii) approved their respective execution and delivery of
this Agreement, performance of their respective covenants and
other obligations hereunder and the consummation of the Merger
upon the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, concurrently with the execution of this Agreement, and
as a condition and inducement to the Companys willingness
to enter into this Agreement, Platinum Equity Capital Partners
II, L.P., a Delaware limited partnership (the
Guarantor
) has entered into a guarantee,
dated as of the date hereof (the
Guarantee
),
in favor of the Company with respect to certain obligations and
liabilities of Parent and Merger Sub arising under, or in
connection with, this Agreement upon the terms and subject to
the conditions set forth in this Agreement and the Guarantee;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth
herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and
accepted, and intending to be legally bound, Parent, Merger Sub
and the Company hereby agree as follows:
ARTICLE I
THE MERGER
1.1
The Merger
.
Upon the terms and
subject to the conditions set forth in this Agreement, and in
accordance with the applicable provisions of the DGCL, at the
Effective Time Merger Sub shall be merged with and into the
Company. At the Effective Time and as a result of the Merger,
the separate corporate existence of Merger Sub shall cease and
the Company shall continue as the surviving corporation of the
Merger. The Company, in its capacity as the surviving
corporation of the Merger, is sometimes referred to herein as
the
Surviving Corporation
.
A-1
1.2
The Effective Time
.
Upon the
terms and subject to the conditions set forth in this Agreement,
on the Closing Date, Parent, Merger Sub and the Company shall
cause the Merger to be consummated under the DGCL by filing with
the Secretary of State of the State of Delaware (the
Delaware Secretary of State
) a certificate of
merger relating to the Merger (the
Certificate of
Merger
) in such form as is required by, and executed
and acknowledged in accordance with, the applicable provisions
of the DGCL (the time of such filing with the Delaware Secretary
of State, or such later time as may be agreed in writing by
Parent, Merger Sub and the Company and specified in the
Certificate of Merger, being referred to herein as the
Effective Time
).
1.3
The Closing
.
The consummation
of the Merger shall take place at a closing (the
Closing
) to occur at the offices of
Latham & Watkins, LLP, 885 Third Avenue, New York, New
York, 10022, at 10:00 a.m. (New York City time) on the
third (3rd) Business Day after the later to occur of
(x) the satisfaction or waiver (to the extent permitted
hereunder) of the conditions set forth in
Article VI
(other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or
waiver (to the extent permitted hereunder), of those conditions
at such time) and (y) the final day of the Marketing Period
or (in the case of this clause (y)) such earlier date as may be
specified by Parent by written notice to the Company, or in any
case at such other location, date and time as Parent, Merger Sub
and the Company shall mutually agree upon in writing. The date
upon which the Closing shall actually occur pursuant hereto is
referred to herein as the
Closing Date
.
1.4
Effect of the Merger
.
At the
Effective Time, the effect of the Merger shall be as provided in
this Agreement and the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all of the property, rights,
privileges, powers and franchises of the Company and Merger Sub
shall vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Merger Sub shall
become the debts, liabilities and duties of the Surviving
Corporation.
1.5
Certificate of Incorporation and Bylaws
.
(a)
Certificate of
Incorporation
.
At the Effective Time, the
certificate of incorporation of the Company (the
Certificate of Incorporation
) shall be
amended as of the Effective Time to read in its entirety in the
form of the certificate of incorporation attached hereto as
Exhibit B
, and, as so amended, shall become the
certificate of incorporation of the Surviving Corporation until
thereafter amended in accordance with the applicable provisions
of the DGCL and such certificate of incorporation;
provided
that any such amendment shall be subject to the provisions
of
Section 5.10(a)
.
(b)
Bylaws
.
The parties hereto
shall take all actions necessary so that the bylaws of the
Company in effect immediately prior to the Effective Time shall,
from and after the Effective Time, be amended in their entirety
in the form of the bylaws of Merger Sub as in effect immediately
prior to the Effective Time, until thereafter amended in
accordance with the applicable provisions of the DGCL, the
certificate of incorporation of the Surviving Corporation and
such bylaws;
provided
that (i) any such amendment
shall be subject to the provisions of
Section 5.10(a)
and (ii) prior to the Closing,
Parent will cause the bylaws of Merger Sub to be amended to the
extent necessary to cause them to meet the requirements of
Section 5.10(a)
.
1.6
Directors and Officers
.
(a)
Directors
.
The directors of
Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation immediately after the
Effective Time, each to hold office in accordance with the
certificate of incorporation and bylaws of the Surviving
Corporation until their respective successors are duly elected
or appointed and qualified or until their earlier death,
resignation or removal in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation.
(b)
Officers
.
The officers of
Merger Sub immediately prior to the Effective Time shall be the
officers of the Surviving Corporation immediately after the
Effective Time, each to hold office in accordance with the
certificate of incorporation and bylaws of the Surviving
Corporation until their respective successors are duly appointed
or until their earlier death, resignation or removal in
accordance with the certificate of incorporation and bylaws of
the Surviving Corporation.
A-2
1.7
Effect on Capital Stock
.
(a)
Capital Stock
.
Upon the terms
and subject to the conditions set forth in this Agreement, at
the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Merger Sub, the Company, or the
holders of any of the following securities, the following shall
occur:
(i) each share of Company Common Stock that is issued and
outstanding immediately prior to the Effective Time (other than
Owned Company Shares and Dissenting Shares) shall be canceled
and extinguished and automatically converted into the right to
receive cash in an amount equal to $33.00 (the
Per Share Price
), without interest
thereon; and
(ii) each share of Company Common Stock that is held by the
Company as treasury stock or owned by Parent or Merger Sub, or
by any direct or indirect wholly owned Subsidiary of Parent or
Merger Sub (other than Intermediate Holdco), in each case
immediately prior to the Effective Time (
Owned Company
Shares
), shall be cancelled and extinguished without
any conversion thereof or consideration paid therefor, and each
share of Company Common Stock that is held by Intermediate
Holdco or any direct or indirect wholly owned Subsidiary of the
Company (if any) shall remain outstanding and shall become that
number of shares of the Surviving Corporation that bears the
same ratio to the aggregate number of outstanding shares of the
Surviving Corporation as the number of shares of Company Common
Stock held by such Company Subsidiary bore to the aggregate
number of outstanding shares of Company Common Stock immediately
prior to the Effective Time; and
(iii) each share of common stock, par value $0.01 per
share, of Merger Sub that is issued and outstanding immediately
prior to the Effective Time shall be converted into one validly
issued, fully paid and nonassessable share of common stock of
the Surviving Corporation, and thereupon each certificate
representing ownership of such shares of common stock of Merger
Sub shall thereafter represent ownership of shares of common
stock of the Surviving Corporation.
(b)
Adjustment to Per Share
Price
.
The Per Share Price shall be adjusted
appropriately to reflect the effect of any stock split, reverse
stock split, stock dividend (including any dividend or other
distribution of securities convertible into Company Common
Stock, but excluding, for the avoidance of doubt, the granting
or other issuance of Company RSU Awards and Company Options in
accordance with this Agreement), reorganization,
recapitalization, reclassification, combination, exchange of
shares, issuer tender or exchange offer, or other like change or
transaction with respect to Company Common Stock occurring on or
after the date hereof and prior to the Effective Time, in each
case which is effected in accordance with or otherwise permitted
by the terms of this Agreement.
(c)
Dissenting Shares
.
(i) Notwithstanding any provision of this Agreement to the
contrary, subject to
Section 1.7(c)(ii)
, any shares
of Company Common Stock held by a holder who has properly
exercised appraisal rights for such shares pursuant to
Section 262 of the DGCL and who, as of the Effective Time,
has not effectively withdrawn or lost or failed to perfect such
appraisal rights (
Dissenting Shares
) shall
not be converted into or represent a right to receive the Per
Share Price pursuant to
Section 1.7(a)
, but instead
shall be converted into the right to receive only such
consideration as may be determined to be due with respect to
such Dissenting Shares under the DGCL. From and after the
Effective Time, a holder of Dissenting Shares shall not be
entitled to exercise any of the voting rights or other rights of
an equity owner of the Surviving Company or of a stockholder of
Parent.
(ii) Notwithstanding the provisions of
Section 1.7(c)(i)
, if any holder of shares of
Company Common Stock who demands appraisal for such shares in
accordance with the DGCL shall effectively withdraw or lose
(through failure to perfect or otherwise) the right to
appraisal, then such holders shares shall no longer be
Dissenting Shares and shall automatically be converted into and
represent only the right to receive the Per Share Price as
set forth in
Section 1.7(a)
, without any interest
thereon.
(iii) The Company shall give Parent (A) prompt notice
of any written demands for appraisal rights of any shares of
Company Common Stock, withdrawals of such demands, and any other
instruments served pursuant
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to the DGCL and received by the Company which relate to any such
demand for appraisal rights and (B) the opportunity to
participate in all negotiations and proceedings which take place
prior to the Effective Time with respect to demands for
appraisal rights under the DGCL. The Company shall not, except
with the prior written consent of Parent, make any payment with
respect to any demands for appraisal rights of Company Common
Stock or offer to settle or settle any such demands.
(d)
Company Stock-based Awards
.
(i) Except as provided in
Section 1.7(d)(iii)
,
at the Effective Time and without any action on the part of the
holders thereof, each then-outstanding Company RSU Award,
whether or not vested and without regard to any performance
criteria set forth therein, shall be canceled and converted into
the right to receive from the Surviving Corporation an amount
(less any applicable withholding tax) in cash equal to the
product of (x) the number of shares of Company Common Stock
subject to such Company RSU Award immediately prior to the
Effective Time and (y) the Per Share Price (such product,
the
RSU Consideration
). Parent shall,
or shall cause the Company to, pay to holders of Company RSU
Awards the RSU Consideration, without interest thereon, less
applicable Taxes required to be withheld with respect to such
payments, as soon as reasonably practicable following the
Effective Time.
(ii) Except as provided in
Section 1.7(d)(iii)
,
at the Effective Time and without any action on the part of the
holders thereof, each then-outstanding Company Option, whether
or not vested, shall be cancelled, and (A) in the case of
any Company Option having a per share exercise price less than
the Per Share Price (an
In-the-Money
Option
), be converted into the right to receive from
the Surviving Corporation, for each share of Company Common
Stock subject to such
In-the-Money
Option immediately prior to the Effective Time, an amount (less
any applicable withholding tax) in cash equal to the product of
(x) the number of shares of Company Common Stock subject to
such
In-the-Money
Option immediately prior to the Effective Time and (y) the
amount by which the Per Share Price exceeds the per share
exercise price of such
In-the-Money
Option (such product, the
Option
Consideration
), or (B) in the case of any Company
Option having a per share exercise price equal to or greater
than the Per Share Price, no cash shall be paid nor other
securities or consideration issued in respect thereof. Parent
shall, or shall cause the Company to, pay to each holder of
In-the-Money
Options the Option Consideration, without interest thereon, less
applicable Taxes required to be withheld with respect to such
payments, as soon as reasonably practicable following the
Effective Time.
(iii) Unless, prior to the Effective Time, Parent elects
for
Sections 1.7(d)(i)
and
1.7(d)(ii)
to
apply, at the Effective Time and without any action on the part
of the holders thereof, each Company Option and Company RSU
Award that is outstanding immediately prior to the Effective
Time and is set forth on
Section 1.7(d)(iii)
of the
Company Disclosure Schedule (each an
Assumed
Award
) shall be assumed or substituted by Parent and
converted automatically at the Effective Time into an option or
restricted stock unit award, as the case may be, denominated in
shares of common stock of Parent (
Parent Common
Stock
) and with other terms and conditions
substantially similar to those of the related Company Option or
Company RSU Award, as the case may be, except that the receipt
of Parent Common Stock from such Assumed Award shall be
conditioned on the holder executing and delivering to Parent a
stockholders agreement in the form prepared by Parent and
(i) the number of shares of Parent Common Stock subject to
each such Assumed Award shall be determined by multiplying the
number of shares of Common Stock subject to such Assumed Award
immediately prior to the Effective Time by the Exchange Ratio
(rounded down to the nearest whole share) and (ii) if
applicable, the exercise price per share of Parent Common Stock
(rounded upwards to the nearest whole cent) shall equal
(x) the per share exercise price for the shares of Common
Stock otherwise purchasable pursuant to such Assumed Award
immediately prior to the Effective Time divided by (y) the
Exchange Ratio. The Exchange Ratio shall be equal to
the quotient of (1) the Per Share Price, divided by
(2) the fair market value of a share of Parent Common Stock
immediately following the Effective Time, as determined by
Parent consistent with the price paid by the Affiliates of
Parent for (including contributions by such Affiliates with
respect to) a share of Parent Common Stock. For the avoidance of
doubt, unless, prior to the Effective Time, Parent elects for
Sections 1.7(d)(i)
and
1.7(d)(ii)
to apply,
no Assumed Award shall be entitled to consideration pursuant to
Sections 1.7(d)(i)
or
1.7(d)(ii)
. It is the
intention of the parties that the assumption of the Assumed
Awards that are stock options be performed in a manner that is
in compliance with the adjustment requirements of
Section 409A of the Code. Notwithstanding anything in an
award agreement or in the Companys equity
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incentive plans to the contrary, any holder of an Assumed Award
shall, subject to such holder executing and delivering to Parent
a stockholders agreement in the form prepared by Parent,
be entitled to satisfy his or her income tax withholding
obligations with respect to the exercise or vesting, as the case
may be, of an Assumed Award and payment of the exercise price,
if applicable, by the surrender of shares of Common Stock
otherwise purchasable or deliverable upon such exercise or
vesting.
(iv) Prior to the Effective Time, the Company shall use its
commercially reasonable efforts to take such actions as may be
necessary to give effect to the transactions contemplated by
this
Section 1.7(d)
, including by delivering to the
holders of Company RSU Awards and the holders of Company Options
notices, in form and substance reasonably acceptable to Parent,
setting forth such holders rights pursuant to this
Agreement.
1.8
Exchange of Certificates
.
(a)
Payment Agent
.
Prior to the
Effective Time, Parent shall select a bank or trust company
reasonably acceptable to the Company to act as the payment agent
for the Merger (the
Payment Agent
).
(b)
Exchange Fund
.
At the
Effective Time, Parent shall deposit (or cause to be deposited)
with the Payment Agent, for payment to the holders of shares of
Company Common Stock pursuant to the provisions of this
Article I
, an amount of cash equal to the aggregate
consideration to which holders of Company Common Stock become
entitled under this
Article I
(but not, for the
avoidance of doubt, payments with respect to Dissenting Shares
or payments to which holders of Company RSU Awards and holders
of Company Options become entitled, which Parent shall pay, or
cause to be paid, in accordance with
Section 1.7(d)
). From time to time after the
Effective Time, if any Dissenting Shares lose their status as
Dissenting Shares, and are converted into the right to receive
the Per Share Price in accordance with
Section 1.7(c)(ii)
, Parent shall deposit (or cause
to be deposited) with the Payment Agent additional funds equal
to the product of (x) the number of such former Dissenting
Shares multiplied by (y) the Per Share Price (less any
applicable withholding Tax). Until disbursed in accordance with
the terms and conditions of this Agreement, such cash shall be
invested by the Payment Agent (such cash being referred to
herein as the
Exchange Fund
) as directed by
Parent;
provided
that such investments shall be in
obligations of or guaranteed by the United States of America, in
commercial paper obligations rated
A-1
or P1 or
better by Moodys Investors Service, Inc. or
Standard & Poors Corporation, respectively, or
in certificates of deposit, bank repurchase agreements or
bankers acceptances of commercial banks with capital
exceeding $5 billion (based on the most recent financial
statements of such bank that are then publicly available), or in
money market funds having a rating in the highest investment
category granted by a recognized credit rating agency at the
time of investment. Any income from investment of the Exchange
Fund, which shall be in accordance with the terms of this
Agreement, will be payable to the Surviving Corporation. To the
extent that there are any losses with respect to any such
investments, or the Exchange Fund diminishes for any reason
below the level required for the Payment Agent to make prompt
cash payment under
Section 1.7(a)
, Parent shall, or
shall cause the Surviving Corporation to, promptly replace or
restore the cash in the Exchange Fund so as to ensure that the
Exchange Fund is at all times maintained at a level sufficient
for the Payment Agent to make such payments under
Section 1.7(a)
.
(c)
Payment Procedures
.
Promptly
following the Closing Date (but in no event more than three
(3) Business Days thereafter), Parent and the Surviving
Corporation shall cause the Payment Agent to mail to each holder
of record (as of immediately prior to the Effective Time) of
(i) a certificate or certificates (the
Certificates
) which immediately prior to the
Effective Time represented outstanding shares of Company Common
Stock and (ii) uncertificated shares of Company Common
Stock (the
Uncertificated Shares
) (A) a
letter of transmittal in customary form (which shall specify
that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon delivery of the
Certificates to the Payment Agent),
and/or
(B) instructions for use in effecting the surrender of the
Certificates and Uncertificated Shares in exchange for the Per
Share Price payable in respect thereof pursuant to the
provisions of this
Article I
. Upon surrender of
Certificates for cancellation to the Payment Agent or to such
other agent or agents as may be appointed by Parent, together
with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, the
holders of such Certificates shall be entitled to receive in
exchange therefor an amount in cash, payable by check or wire
transfer of immediately available Funds to an account designated
by such
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holder, equal to the product obtained by multiplying
(x) the aggregate number of shares of Company Common Stock
represented by such Certificate, by (y) the Per Share Price
(less any applicable withholding taxes payable in respect
thereof), and the Certificates so surrendered shall forthwith be
canceled. Upon receipt of an agents message by
the Payment Agent (or such other evidence, if any, of transfer
as the Payment Agent may reasonably request) in the case of a
book-entry transfer of Uncertificated Shares, the holders of
such Uncertificated Shares shall be entitled to receive in
exchange therefor an amount in cash, payable by check or wire
transfer of immediately available Funds to an account designated
by such holder, equal to the product obtained by multiplying
(x) the aggregate number of shares of Company Common Stock
represented by such holders transferred Uncertificated
Shares, by (y) the Per Share Price (less any applicable
withholding taxes payable in respect thereof), and the
transferred Uncertificated Shares so surrendered shall forthwith
be canceled. The Payment Agent shall accept such Certificates
and transferred Uncertificated Shares upon compliance with such
reasonable terms and conditions as the Payment Agent may impose
to effect an orderly exchange thereof in accordance with normal
exchange practices. No interest shall be paid or accrued for the
benefit of holders of the Certificates and Uncertificated Shares
on the Per Share Price payable upon the surrender of such
Certificates and Uncertificated Shares pursuant to this
Section 1.8
. Until so surrendered, outstanding
Certificates and Uncertificated Shares shall be deemed from and
after the Effective Time to evidence only the right to receive
the Per Share Price, without interest thereon, payable in
respect thereof pursuant to the provisions of this
Article I
.
(d)
Transfers of Ownership
.
In the
event that a transfer of ownership of shares of Company Common
Stock is not registered in the stock transfer books or ledger of
the Company, or if the Per Share Price is to be paid in a name
other than that in which the Certificates or Uncertificated
Shares surrendered in exchange therefor are registered in the
stock transfer books or ledger of the Company, the Per Share
Price may be paid to a Person other than the Person in whose
name the Certificate or Uncertificated Shares so surrendered is
registered in the stock transfer books or ledger of the Company
only if such Certificate is properly endorsed and otherwise in
proper form for surrender and transfer (and after compliance
with any other procedures reasonably required by the Payment
Agent or the Surviving Corporation to evidence and effect such
transfer and to evidence payment of any applicable Taxes) and
the Person requesting such payment has paid to Parent (or any
agent designated by Parent) or the Surviving Corporation any
transfer or other Taxes required by reason of the payment of the
Per Share Price to a Person other than the registered holder of
such Certificate or Uncertificated Shares, or established to the
satisfaction of Parent (or any agent designated by Parent) that
such transfer or other Taxes have been paid or are otherwise not
payable.
(e)
Required
Withholding
.
Notwithstanding anything to the
contrary in this Agreement, each of the Payment Agent, Parent
and the Surviving Corporation shall be entitled to deduct and
withhold from any cash amounts payable pursuant to this
Agreement to any holder or former holder of shares of Company
Common Stock, Company RSU Awards and Company Options such
amounts as may be required to be deducted or withheld therefrom
under U.S. federal or state, local or
non-U.S. Tax
laws. To the extent that such amounts are so deducted or
withheld and paid over to the appropriate taxing authority, such
amounts shall be treated for all purposes under this Agreement
as having been paid to the Person to whom such amounts would
otherwise have been paid.
(f)
No Liability
.
Notwithstanding
anything to the contrary set forth in this Agreement, none of
the Payment Agent, Parent, the Surviving Corporation or any
other party hereto shall be liable to a holder of shares of
Company Common Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat
or similar law.
(g)
Distribution of Exchange Fund to the Surviving
Corporation
.
Any portion of the Exchange Fund
that remains undistributed to the holders of the Certificates or
Uncertificated Shares on the date that is twelve
(12) months after the Effective Time shall be delivered to
the Surviving Corporation upon demand, and any holders of shares
of Company Common Stock that were issued and outstanding
immediately prior to the Merger who have not theretofore
surrendered their Certificates or Uncertificated Shares
representing such shares of Company Common Stock for exchange
pursuant to the provisions of this
Section 1.8
shall
thereafter look for payment of the Per Share Price payable in
respect of the shares of Company Common Stock represented by
such Certificates or Uncertificated Shares solely to the
Surviving Corporation (subject to
A-6
abandoned property, escheat or other similar laws), as general
creditors thereof, for any claim to the applicable Per Share
Price to which such holders may be entitled pursuant to the
provisions of this
Article I
.
1.9
No Further Ownership Rights in Company Common
Stock
.
Except as provided in
Section 1.7(a)(ii)
, from and after the Effective
Time, all shares of Company Common Stock shall no longer be
outstanding and shall automatically be cancelled, retired and
cease to exist, and each holder of Uncertificated Shares or a
Certificate theretofore representing any shares of Company
Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Per Share Price payable
therefor in accordance with the provisions of
Section 1.7
(or otherwise, in respect of Dissenting
Shares, the right to receive consideration in accordance with
Section 1.7(c)
). The Per Share Price paid in
accordance with the terms of this
Article I
shall be
deemed to have been paid in full satisfaction of all rights
pertaining to such shares of the Company Common Stock. From and
after the Effective Time, there shall be no further registration
of transfers on the records of the Surviving Corporation of
shares of Company Common Stock that were issued and outstanding
immediately prior to the Effective Time, other than transfers to
reflect, in accordance with customary settlement procedures,
trades effected prior to the Effective Time. If, after the
Effective Time, Certificates or Uncertificated Shares are
presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this
Article I
. Without limiting the foregoing, no
dividends or distributions with respect to the capital stock of
the Company with a record date on or after the Effective Time
shall be paid to the holders of any outstanding Certificates or
Uncertificated Shares.
1.10
Lost, Stolen or Destroyed
Certificates
.
In the event that any
Certificates shall have been lost, stolen or destroyed, the
Payment Agent shall issue in exchange for such lost, stolen or
destroyed Certificates, upon the making of an affidavit of that
fact by the holder thereof, the Per Share Price payable in
respect thereof pursuant to
Section 1.7
;
provided, however,
that Parent may, in its sole
discretion and as a condition precedent to the payment of such
Per Share Price, require the owners of such lost, stolen or
destroyed Certificates to deliver a bond in such reasonable sum
as it may reasonably direct as indemnity against any claim that
may be made against Parent, the Surviving Corporation or the
Payment Agent with respect to the Certificates alleged to have
been lost, stolen or destroyed.
1.11
Necessary Further
Actions
.
If, at any time after the Effective
Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of the
Company and Merger Sub, the Company, Parent and Merger Sub shall
cause their respective directors and officers to take all such
lawful and necessary action, so long as such action is not
inconsistent with this Agreement.
ARTICLE II
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except (i) as set forth in the disclosure schedule
delivered by the Company to Parent on the date of this Agreement
(the
Company Disclosure Schedule
), or
(ii) except with respect to any representation or warranty
in
Sections 2.2
,
2.3
,
2.4
,
2.5
,
2.6
,
2.7
,
2.12(b)
,
2.23
,
2.27
,
2.28
or
2.29
, as disclosed in any
Company SEC Reports (including through incorporation by
reference therein) filed by the Company with the SEC, and
publicly available, prior to the date hereof (to the extent it
is reasonably apparent that any such disclosure set forth in the
Company SEC Reports would qualify the representations and
warranties contained herein, and excluding any risk factor
disclosures or other cautionary, predictive or forward-looking
disclosures contained therein), the Company hereby represents
and warrants to Parent and Merger Sub as follows:
2.1
Organization; Good
Standing
.
The Company is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware, and has the requisite corporate power
and authority to conduct its business as it is presently being
conducted and to own, lease or operate its properties and
assets. The Company is duly qualified to do business and is in
good standing in each jurisdiction where the character of its
properties owned or leased or the nature of its activities make
such qualification necessary, except where the failure to be so
qualified or in good standing would not have, individually or in
the aggregate, a Company Material Adverse Effect. The Company
has delivered or made available to Parent complete and correct
copies
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of the Certificate of Incorporation and bylaws of the Company,
each as amended to date. As of the date hereof, the Company is
not in material violation of the Certificate of Incorporation or
its bylaws.
2.2
Corporate Power;
Enforceability
.
The Company has the requisite
corporate power and authority to execute and deliver this
Agreement, to perform its covenants and obligations hereunder
and, subject to receiving the Requisite Stockholder Approval, to
consummate the Merger. The execution and delivery of this
Agreement by the Company, the performance by the Company of its
covenants and obligations hereunder and the consummation of the
Merger have been duly authorized by all necessary corporate
action on the part of the Company, and no additional corporate
proceedings on the part of the Company are necessary to
authorize the execution and delivery of this Agreement by the
Company, the performance by the Company of its covenants and
obligations hereunder and thereunder or, subject to the receipt
of the Requisite Stockholder Approval, the consummation of the
Merger. This Agreement has been duly executed and delivered by
the Company and, assuming the due authorization, execution and
delivery by Parent and Merger Sub, constitutes a legal, valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except that such
enforceability is subject to the rules governing the
availability of specific performance, injunctive relief or other
equitable remedies and general principles of equity, regardless
of whether considered in a proceeding in equity or at law.
2.3
Company Board Approval
.
The
Company Board, acting upon the unanimous recommendation of the
Special Committee, has unanimously (subject to the abstention of
the Companys Chief Executive Officer) (a) approved
and declared advisable this Agreement and the Voting Agreement
and the consummation of the Merger upon the terms and subject to
the conditions set forth herein, (b) approved the execution
and delivery of this Agreement by the Company, the performance
by the Company of its covenants and obligations hereunder and
the consummation of the Merger upon the terms and conditions set
forth herein, and (c) resolved to recommend that the
Company Stockholders adopt this Agreement in accordance with the
applicable provisions of the DGCL (the
Company Board
Recommendation
).
2.4
Requisite Stockholder
Approval
.
The affirmative vote of the holders
of a majority of the outstanding shares of Company Common Stock
(the
Requisite Stockholder Approval
) is
the only vote of the holders of any class or series of Company
Capital Stock that is necessary under applicable Law, the
Certificate of Incorporation and the Companys bylaws to
adopt this Agreement and consummate the Merger.
2.5
Non-Contravention
.
The
execution and delivery of this Agreement by the Company, the
performance by the Company of its covenants and obligations
hereunder and thereunder and (subject to obtaining the Requisite
Stockholder Approval) the consummation of the Merger, do not and
will not (a) violate or conflict with any provision of the
Certificate of Incorporation or bylaws of the Company, or the
comparable governing documents of any of the Companys
Subsidiaries, except, in the case of those Subsidiaries that are
not Significant Subsidiaries, as would not have, individually or
in the aggregate, a Company Material Adverse Effect,
(b) violate, conflict with, or result in the breach of or
constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or result in the
termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, any
Contract, (c) assuming compliance with the matters referred
to in
Section 2.6
, violate or conflict with any Law
or order applicable to the Company or any of its Subsidiaries or
by which any of their respective properties or assets are bound,
or (d) result in the creation of any Lien upon any of the
properties or assets of the Company or any of its Subsidiaries,
except in the case of each of clauses (b), (c) and
(d) above, for such violations, conflicts, defaults,
terminations, accelerations or Liens that would not have,
individually or in the aggregate, a Company Material Adverse
Effect.
2.6
Requisite Governmental
Approvals
.
No consent, approval, order or
authorization of, filing or registration with, or notification
to (any of the foregoing being referred to herein as a
Consent
), any Governmental Authority is
required on the part of the Company in connection with the
execution and delivery of this Agreement by the Company, the
performance by the Company of its covenants and obligations
hereunder and thereunder or the consummation of the Merger,
except (a) the filing of the Certificate of Merger with the
Delaware Secretary of State, (b) such filings and approvals
as may be required by any federal or state securities laws,
including compliance with any applicable requirements of the
Exchange Act, (c) compliance
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with any applicable requirements of the HSR Act and any
applicable foreign Antitrust Laws, and (d) such additional
Consents the failure of which to make or obtain would not have,
individually or in the aggregate, a Company Material Adverse
Effect.
2.7
Company Capitalization
.
(a) The authorized capital stock of the Company consists of
(i) 50,000,000 (fifty million) shares of Company Common
Stock, and (ii) 5,000,000 (five million) shares of Company
Preferred Stock. As of the close of business on October 6,
2010 (the
Capitalization Date
):
(A) 16,052,774 shares of Company Common Stock were
issued and outstanding, (B) 3,210,897 shares of
Company Common Stock were held by the Company as treasury
shares, and (C) no shares of Company Preferred Stock were
issued and outstanding. All outstanding shares of Company Common
Stock are validly issued, fully paid, nonassessable and free of
any preemptive rights. Since the close of business on the
Capitalization Date, the Company has not issued any shares of
Company Capital Stock other than pursuant to the exercise of
Stock Options granted under a Company Stock Plan and pursuant to
Company RSU Awards, in each case, in accordance with the terms
thereof as in effect on the date hereof.
(b) The Company has authorized 1,146,055 shares of
Company Common Stock for issuance under the Company Stock Plans,
of which 1,023,401 shares of Company Common Stock have been
reserved for issuance pursuant to outstanding grants under
Company Stock Plans. As of the close of business on the
Capitalization Date, there were outstanding Company RSU Awards
related to 381,046 shares of Company Common Stock and
outstanding Company Options to purchase 642,355 shares of
Company Common Stock, and, since such date, the Company has not
granted, committed to grant or otherwise created or assumed any
obligation with respect to any Company RSU Awards or Company
Options. All outstanding shares of Company Common Stock have
been, and all shares that may be issued pursuant to any Company
Stock Plan will be, when issued in accordance with the
respective terms thereof, duly authorized and validly issued and
are (or, in the case of shares that have not yet been issued,
will be) fully paid, nonassessable and free of preemptive rights.
(c) Except as set forth in this
Section 2.7
,
and subject to Article XI (Citizenship of Stockholders,
Officers and Directors) of the Certificate of Incorporation, as
of the date hereof there are (i) no outstanding shares of
capital stock of, or other equity or voting interest in, the
Company, (ii) no outstanding securities of the Company
convertible into or exchangeable for shares of capital stock of,
or other equity or voting interest in, the Company,
(iii) no outstanding options, warrants or other rights or
arrangements to acquire from the Company, or that obligate or
commit the Company to issue, any capital stock of, or other
equity or voting interest in, or any securities convertible into
or exchangeable for shares of capital stock of, or other equity
or voting interest in, the Company, (iv) no obligations of
the Company to grant, extend or enter into any subscription,
warrant, right, convertible or exchangeable security or other
similar Contract relating to any capital stock of, or other
equity or voting interest (including any voting debt) in, the
Company, (v) no outstanding restricted shares, restricted
share units, stock appreciation rights, performance shares,
contingent value rights, phantom stock or similar
securities or rights that are derivative of, or provide economic
benefits based, directly or indirectly, on the value or price
of, any capital stock of, or other voting securities or
ownership interests in, the Company (the items in clauses (i),
(ii), (iii), (iv) and (v), together with the capital stock
of the Company, being referred to collectively as
Company Securities
), (vi) no voting
trusts, proxies or other similar agreements or understandings to
which Company is a party or by which the Company is bound with
respect to the voting of any Company Securities, (vii) no
obligations or commitments of any character restricting the
transfer of any Company Securities to which the Company is
bound, and (viii) no other obligations by the Company to
make any payments based on the price or value of any Company
Securities. Neither the Company nor any of its Subsidiaries is a
party to any Contract that obligates the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any
Company Securities, other than the Companys right to
withhold shares of Company Common Stock in connection with the
vesting or exercise of Company RSU Awards and Company Options.
There are no accrued and unpaid dividends with respect to any
outstanding Company Securities.
A-9
(d) Neither the Company nor any of its Subsidiaries is a
party to any Contract currently in force relating to the voting
of, requiring registration of, or granting any preemptive
rights, anti-dilutive rights, co-sale rights, or rights of first
refusal or other similar rights with respect to any securities
of the Company.
2.8
Subsidiaries
.
(a)
Section 2.8(a)
of the Company
Disclosure Schedule contains a complete and accurate list of the
name, jurisdiction of organization and capitalization of each
Subsidiary of the Company as of the date hereof. Each of the
Subsidiaries of the Company is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
respective organization (to the extent the good
standing concept is applicable in the case of any
jurisdiction outside the United States), except where the
failure to be in good standing would not have, individually or
in the aggregate, a Company Material Adverse Effect. Each of the
Subsidiaries of the Company has the requisite corporate power
and authority to carry on its respective business as it is
presently being conducted and to own, lease or operate its
respective properties and assets, except where the failure to be
in good standing would not have, individually or in the
aggregate, a Company Material Adverse Effect. Each of the
Subsidiaries of the Company is duly qualified to do business and
is in good standing in each jurisdiction where the character of
its properties owned or leased or the nature of its activities
make such qualification necessary, except where the failure to
be so qualified or in good standing would not have, individually
or in the aggregate, a Company Material Adverse Effect. The
Company has delivered or made available to Parent complete and
correct copies of the certificates of incorporation and bylaws
or other constituent documents, as amended to date, of each of
the Subsidiaries of the Company. None of the Subsidiaries of the
Company is in material violation of its certificate of
incorporation, bylaws or other constituent documents.
(b) All of the outstanding capital stock of, or other
equity or voting interest in, each Subsidiary of the Company
(i) has been duly authorized and validly issued and is
fully paid and nonassessable and (ii) is wholly owned,
directly or indirectly, by the Company, beneficially and of
record, free and clear of all Liens and free of any other
restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other equity
or voting interest) that would prevent any Subsidiary of the
Company from conducting its business as of the Effective Time in
substantially the same manner such businesses are conducted on
the date hereof.
(c) Except for the capital stock and other equity or voting
interests set forth in
Section 2.8(a)
of the Company
Disclosure Schedule, the Company does not own, directly or
indirectly, any capital stock or other equity or voting
interests in any Person. Except as set forth on
Section 2.8(c)
of the Company Disclosure Schedule,
neither the Company nor any Subsidiary has entered into any
commitment, arrangement or other Contract, or is otherwise
obligated, to contribute capital, loan money or otherwise
provide funds or make any investment in any Person.
2.9
Company SEC Reports
.
Since
January 1, 2009, the Company has filed or furnished on a
timely basis all forms, reports and documents with the SEC that
have been required to be filed or furnished by it under
applicable Law (all such forms, reports and documents, together
with all exhibits and schedules thereto, filed or furnished
since such time, including after the date hereof, the
Company SEC Reports
). Each Company SEC Report
complied as of its filing or furnishing date, or as of its last
date of amendment, in all material respects as to form with the
applicable requirements of the Securities Act, the Exchange Act
and the Sarbanes-Oxley Act, as the case may be, each as in
effect on the date such Company SEC Report was filed or
furnished. True and correct copies of all Company SEC Reports
filed or furnished prior to the date hereof have been furnished
to Parent or are publicly available in the Electronic Data
Gathering, Analysis and Retrieval (EDGAR) database of the SEC.
As of its filing or furnishing date (or, if amended or
superseded by a filing prior to the date of this Agreement, on
the date of such amended or superseded filing or furnishing),
each Company SEC Report did not contain any untrue statement of
a material fact or omit to state any material fact necessary to
be stated in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading. None of the Companys Subsidiaries is required
to file any forms, reports or other documents with the SEC. As
of the date hereof, there are no material outstanding or
unresolved comments received from the SEC with respect to any of
the Company SEC Reports.
A-10
Except as set forth on
Section 2.9
of the Company
Disclosure Schedule, since January 1, 2009 the Company has
been and is in compliance in all material respects with the
applicable provisions of the Sarbanes-Oxley Act and the
applicable listing and corporate governance rules and
regulations of Nasdaq.
2.10
Company Financial Statements
.
(a) The consolidated financial statements of the Company
and its Subsidiaries included or incorporated by reference into
the Company SEC Reports (including the related notes and
schedules) (i) complied, as of their respective filing
dates with the SEC, in all material respects as to form with the
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, (ii) were
prepared in accordance with GAAP consistently applied during the
periods and at the dates involved (except as may be indicated in
the notes thereto), and (iii) fairly present in all
material respects the consolidated financial position of the
Company and its Subsidiaries as of the dates thereof and the
consolidated results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements
to normal and recurring year-end adjustments). There are no
unconsolidated Subsidiaries of the Company.
(b) The Company maintains disclosure controls and
procedures required by
Rule 13a-15
or
15d-15
under the Exchange Act. Such disclosure controls and procedures
are designed to ensure that material information required to be
disclosed by the Company is recorded and reported on a timely
basis to the individuals responsible for the preparation of the
Companys SEC Reports and other public disclosure
documents. The Company has established and maintains, adheres to
and enforces a system of internal accounting controls that is
designed in all material respects to provide reasonable
assurance regarding the reliability of financial reporting (as
defined in
Rule 13a-15(f)
of the Exchange Act) and the preparation of financial statements
in accordance with GAAP. Neither the Company nor, to the
Knowledge of the Company, the Companys independent
auditors, has identified or been made aware of, in respect of
any fiscal year beginning on or after January 1, 2009,
(i) any significant deficiency or material weakness in the
system of internal accounting controls utilized by the Company
and its Subsidiaries, in each case which has not been
subsequently remediated, or (ii) fraud that involves the
Companys management or other employees who have a role in
the preparation of financial statements or the internal
accounting controls utilized by the Company and its
Subsidiaries. Except as would not reasonably be expected to
have, individually or in the aggregate, a Company Material
Adverse Effect, since January 1, 2009, neither the Company
nor any of its Subsidiaries has received or otherwise had or
obtained knowledge of any written complaint, allegation,
assertion or claim regarding the accounting or auditing
practices, procedures, methodologies or methods of the Company
or its Subsidiaries or their respective internal accounting
controls, including any written complaint, allegation, assertion
or claim that the Company or its Subsidiaries has engaged in
questionable accounting or auditing practices.
2.11
No Undisclosed
Liabilities
.
Neither the Company nor any of
its Subsidiaries has any liabilities that would be required by
GAAP to be reflected on a consolidated balance sheet of the
Company and its Subsidiaries, other than (a) liabilities
reflected or otherwise reserved against in the consolidated
balance sheet (and the related notes thereto) of the Company, as
of June 30, 2010, included in the Company SEC Reports,
(b) liabilities arising under this Agreement or incurred in
connection with the transactions contemplated by this Agreement,
(c) liabilities incurred in the ordinary course of business
consistent with past practice since June 30, 2010, and
(d) liabilities that would not, individually or in the
aggregate, have a Company Material Adverse Effect.
2.12
Absence of Certain
Changes
.
Since December 31, 2009 through
the date of this Agreement, (a) except for actions
expressly contemplated by this Agreement or disclosed in the
Company SEC Reports filed since December 31, 2009 (other
than any risk factor disclosures or other cautionary, predictive
or forward-looking disclosures contained therein), the business
of the Company and its Subsidiaries has been conducted, in all
material respects, in the ordinary course consistent with past
practice, (b) there has not been or occurred any Company
Material Adverse Effect and (c) since June 30, 2010,
neither the Company nor any of its Subsidiaries has taken any
action that, if taken after the date of this Agreement without
Parents consent, would constitute a breach of
Sections 4.2(a)
,
4.2(b)
,
4.2(d)
,
4.2(e)
,
4.2(f)
,
4.2(j)
,
4.2(k)
,
4.2(l)
,
4.2(n)
or (with respect to the foregoing)
4.2(o)
.
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2.13
Material Contracts
.
(a) Except for those agreements and other documents
(i) filed or incorporated by reference as exhibits to the
Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009, (ii) set
forth in
Section 2.13
of the Company Disclosure
Schedule, and (iii) the July 26, 2010 engagement
letter signed by the Company and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as of the date of this
Agreement neither the Company nor any of its Subsidiaries is a
party to, bound by or subject to any Contract (A) that is a
material contract within the meaning of
Item 601(b)(10) of the SECs
Regulation S-K;
(B) that restricts in any material respect the conduct of
business by the Company or any of its Subsidiaries or its or
their ability to compete in any line of business, industry or
geographical area or granting material exclusive rights to the
counterparty thereto; (C) the loss of which would
reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect; (D) that has
aggregate future sums due from the Company or any of its
Subsidiaries, taken as a whole, during the period commencing on
the date of this Agreement and ending on the
12-month
anniversary of this Agreement in excess of $2,500,000 (two
million five hundred thousand dollars); (E) having the
effect of providing that the consummation of the Merger or the
execution, delivery, performance or effectiveness of this
Agreement, or the consummation of the Merger, will give rise
under such Contract to any increased or accelerated material
rights of an employee of the Company or any of its Subsidiaries;
(F) involving any joint venture, legal partnership or
similar arrangement; (G) relating to Indebtedness in excess
of one million dollars ($1,000,000) individually or five million
dollars ($5,000,000) in the aggregate; (H) that is a Lease
involving individual annual payments in excess of two hundred
fifty thousand dollars ($250,000) or obligations continuing for
more than three (3) years from the date of this Agreement;
(I) that prohibits the payment of dividends or
distributions in respect of the capital stock or other equity
interests of the Company or any of its Subsidiaries, prohibits
the pledging of the capital stock of the Company or any of its
Subsidiaries or prohibits the issuance of guarantees by the
Company or any of its Subsidiaries; (J) that contains a
put, call or similar right pursuant to which the Company or any
of its Subsidiaries could be required to purchase or sell, as
applicable, any equity interests of any Person or assets that
have a fair market value or purchase price in excess of five
hundred thousand dollars ($500,000); (K) with any Affiliate
or that would be required to be disclosed by Section 404(a)
of
Regulation S-K
under the Exchange Act; (L) providing for indemnification
by the Company or any of its Subsidiaries of any Person, except
for any such Contract that is (x) not material to the
Company and its Subsidiaries, taken as a whole, and
(y) entered into in the ordinary course of business
consistent with past practice; (M) containing any
standstill or similar agreement pursuant to which the Company or
any of its Subsidiaries has agreed not to acquire assets or
securities of another Person, except for any such Contract that
is a confidentiality, non-disclosure or similar type of
agreement entered into in the ordinary course of business
consistent with past practice; (N) (i) entered into after
January 1, 2010 (or pursuant to which the Company or any of
its Subsidiaries has a continuing earn out or other
contingent payment obligation), or not yet consummated, for the
acquisition or disposition, directly or indirectly (by merger or
otherwise), of a business or capital stock or other equity
interests or (other than in the ordinary course of business)
assets of any Person for aggregate consideration under such
Contract in excess of five hundred thousand dollars ($500,000)
individually, or two million five hundred thousand dollars
($2,500,000) in the aggregate or (ii) for any disposition,
directly or indirectly (by merger or otherwise), of a business
or capital stock or other equity interests or (other than in the
ordinary course of business) assets of any Person, pursuant to
which the Company or any of its Subsidiaries has continuing
contingent payment or indemnification obligations; (O) with
any customer of the Company or any Subsidiary or any other
Person pursuant to which the Company and its Subsidiaries would
reasonably expect to receive aggregate payments in excess of
five million dollars ($5,000,000) in any calendar year;
(P) with any supplier of the Company or any Subsidiary or
any other Person pursuant to which the Company and its
Subsidiaries reasonably expect to make aggregate payments in
excess of five million dollars ($5,000,000) in any calendar
year; (Q) that is a material intellectual property license
agreement; (R) that is a mortgage, pledge, security agreement,
deed of trust or other Contract granting a Lien (other than
Permitted Liens) on any material property or asset of the
Company or any Subsidiary thereof; (S) that is a Collective
Bargaining Agreement, or (T) with any director, officer or
employee of the Company or any of its Subsidiaries which
provides total annual compensation of one hundred fifty thousand
dollars ($150,000) or greater to such director, officer or
employee or that cannot be terminated without the Company and
its Subsidiaries, in the
A-12
aggregate, incurring a liability of fifty thousand dollars
($50,000) or greater. Each Contract described in this
Section 2.13(a)
(without giving effect to the
exceptions in clauses (i)-(iii) of this
Section 2.13(a)
) is a
Material
Contract
for all purposes of and under this Agreement.
(b) Each Material Contract is valid and binding on the
Company (and/or each such Subsidiary of the Company party
thereto) and is in full force and effect, and neither the
Company nor any of its Subsidiaries party thereto, nor, to the
Knowledge of the Company, any other party thereto, is in breach
of, or default under, any such Material Contract, and no event
has occurred that with notice or lapse of time or both would
reasonably be expected to (i) constitute such a breach or
default thereunder by the Company or any of its Subsidiaries,
or, to the Knowledge of the Company, any other party thereto;
(ii) give any Person the right to declare a default or
exercise any remedy under any Material Contract; (iii) give
any Person the right to accelerate the maturity or performance
of any Material Contract; or (iv) give any Person the right
to cancel, terminate or modify any Material Contract; in each
case except as would not have, individually or in the aggregate,
a Company Material Adverse Effect. As of the date hereof, each
Material Contract is enforceable against the Company (or its
Subsidiaries, as applicable) in accordance with its terms and,
to the Knowledge of the Company, against each other party
thereto, except (A) where the failure to be so enforceable
would not have, individually or in the aggregate, a Company
Material Adverse Effect and (B) that such enforceability
(x) may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting or
relating to creditors rights generally, and (y) is
subject to the rules governing the availability of specific
performance, injunctive relief or other equitable remedies and
general principles of equity, regardless of whether considered
in a proceeding in equity or at law. Complete and correct copies
of each Material Contract have been made available to Parent
prior to the date hereof.
2.14
Personal Property and
Assets
.
The Company and its Subsidiaries are
in possession of and have good title to, or valid leasehold
interests in or valid rights under contract to use, the tangible
property and assets owned, leased or used by the Company or any
of its Subsidiaries, free and clear of all Liens other than
Permitted Liens, except as would not, individually or in the
aggregate, have a Company Material Adverse Effect;
provided,
however
, that the representations and warranties contained
in this
Section 2.14
do not apply to Vessels, with
respect to which the sole and exclusive representations and
warranties are set forth in
Section 2.30
.
2.15
Real Property
.
(a)
Section 2.15(a)
of the Company
Disclosure Schedule sets forth the address of each Owned Real
Property. Except for matters that, individually or in the
aggregate, would not have a Company Material Adverse Effect,
with respect to each Owned Real Property: (i) except as set
forth in
Section 2.15(a)(i)
of the Company
Disclosure Schedule, the Company or one of its Subsidiaries (as
the case may be) has good and marketable title to such Owned
Real Property, free and clear of all Liens, except for Permitted
Liens; (ii) except as set forth in
Section 2.15(a)(ii)
of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries has
leased or otherwise granted to any Person the right to use or
occupy such Owned Real Property or any material portion thereof;
and (iii) other than the right of Parent and Merger Sub
pursuant to this Agreement, there are no outstanding options,
rights of first offer or rights of first refusal to purchase
such Owned Real Property or any portion thereof or interest
therein.
(b)
Section 2.15(b)
of the Company
Disclosure Schedule contains a complete and accurate list of all
of the existing material leases, subleases or other agreements
(i) under which the Company or any of its Subsidiaries uses
or occupies or has the right to use or occupy, now or in the
future, any Leased Real Property or (ii) that grant
riparian rights or access to riparian uses or improvements
(collectively, the
Leases
). For the purposes
of this Agreement,
Leased Real Property
means
(i) any real property that is in excess of 25,000
(twenty-five thousand) square feet and (ii) any real
property that is currently used in the operation of the
Companys business. The Company
and/or
its
Subsidiaries have valid leasehold title to the Leased Real
Property and enjoy peaceful and undisturbed possession under all
such leases (except to the extent any leased premises are
sub-leased
to a third party and such subleases are disclosed to Parent
prior to the date of this Agreement) and there are no existing
defaults by the Company beyond any applicable grace period under
such leases. The Leased Real Property and the Owned Real
Property comprise all of the material real property used
A-13
in the Companys business. Each of the Company and its
Subsidiaries has complied with the terms of all Leases, and all
Leases are in full force and effect, except for such
non-compliances or failures to be in full force and effect that,
individually or in the aggregate, would have a Company Material
Adverse Effect. The Company has made available to Parent and
Merger Sub a true and complete copy of each Lease document.
2.16
Intellectual Property
.
(a) The Company and its Subsidiaries own, free and clear of
any Liens (other than Permitted Liens), or otherwise possess the
right to use, all Intellectual Property that is necessary for
and material to the conduct of the Companys business as of
the date hereof (such Intellectual Property, the
Company Intellectual Property
).
Section 2.16(a)
of the Company Disclosure Schedule
sets forth a list of all of the Companys and its
Subsidiaries (i) Trademark registrations and
applications for registration and Internet domain names,
(ii) Patents issued or pending and (iii) Copyright
registrations and applications for registration, in each
instance included in the Company Intellectual Property.
(b) Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, (i) no claim by any
third party contesting the validity, enforceability, or
ownership of the Company Intellectual Property has been made and
is currently outstanding against the Company, nor, to the
Knowledge of the Company, is any threatened; (ii) neither
the Company nor its Subsidiaries have given notice to any third
party alleging infringement, misappropriation or other violation
by such third party of any of the Company Intellectual Property
or offering to grant a license to such third party to such
Company Intellectual Property (that was the subject of such
allegation); (iii) neither the Company nor its Subsidiaries
have received notice from any third party alleging that the
Company or its Subsidiaries have infringed, misappropriated or
otherwise violated any Intellectual Property rights of such
third party or offering to grant a license to such third party
Intellectual Property rights (that was the subject of such
allegation); and (iv) to the Knowledge of the Company, the
operation of the business of the Company and its Subsidiaries,
including their transportation, manufacturing and design
activities, and the Companys and its Subsidiaries
use of the Company Intellectual Property, does not infringe,
misappropriate or otherwise violate, and has not infringed,
misappropriated or otherwise violated, the Intellectual Property
rights of any third party.
2.17
Tax Matters
.
Except as set
forth in
Section 2.17
of the Company Disclosure
Letter:
(a) The Company and each of its Subsidiaries have filed all
U.S. federal, state, local and
non-U.S. returns,
estimates, information statements and reports (including
amendments thereto) relating to Taxes (
Tax
Returns
) that are material and required to be filed by
any of them, and such Tax Returns are accurate and complete in
all material respects. The Company and each of its Subsidiaries
have paid all material Taxes due and payable and have adequately
reserved on the books and records of the Company (in accordance
with GAAP) for the payment of all other material Taxes not yet
due and payable. No deficiencies for any material Taxes have
been asserted or assessed, or to the Knowledge of the Company,
proposed, by any Taxing authority against the Company or any of
its Subsidiaries. Neither the Company nor any of its
Subsidiaries has executed a waiver of any statute of limitations
on or extended the period for the assessment or collection of
any material Tax. The Company and its Subsidiaries have
depreciated the Vessels in accordance with all applicable
provisions of the Code.
(b) No audit, investigation or other examination of any
material Tax Return of the Company or any of its Subsidiaries is
presently in progress, nor has the Company or any of its
Subsidiaries been notified in writing of any request for such an
audit or other examination.
(c) Neither the Company nor any of its Subsidiaries is, nor
has been at any time during the period described in
Section 897(c)(1)(A)(ii)(II) of the Code, a United
States Real Property Holding Corporation within the
meaning of Section 897(c)(2) of the Code.
(d) Neither the Company nor any of its Subsidiaries has
constituted either a distributing corporation or a
controlled corporation in a distribution of stock
intended to qualify for tax-free treatment under
Section 355 of the Code (i) in the two (2) years
prior to the date of this Agreement or (ii) in a
distribution which otherwise constitutes part of a
plan or series of related transactions
(within the meaning of Section 355(e) of the Code) that
includes the Merger.
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(e) Neither the Company nor any of its Subsidiaries has
engaged in a reportable transaction, as set forth in
Treas. Reg. § 1.6011-4(b).
(f) Neither the Company nor any of its Subsidiaries is
party to any Tax allocation or sharing agreement or any material
Tax indemnity agreement (other than any commercial Contracts
entered in the ordinary course of business that do not relate
primarily to Taxes).
(g) Neither the Company nor any of its Subsidiaries has any
liability for the Taxes of any Person (other than the Company or
any of its Subsidiaries) under Treasury
Regulation Section 1.1502-6
(or any similar provision of state, local or foreign Law), as a
transferee, successor, by contract, by Law or otherwise.
(h) Neither the Company nor any of its Subsidiaries will be
required to include amounts in income, or exclude items of
deduction, in a taxable period (or portion thereof) beginning
after the Closing Date that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect, as a result of (A) a change in method of accounting
occurring prior to the Closing Date or agreement with any Taxing
authority, (B) an installment sale or open transaction
arising in a taxable period (or portion thereof) ending on or
before the Closing Date, (C) a prepaid amount received, or
paid, prior to the Closing Date, (D) deferred gains arising
prior to the Closing Date, (E) any
Section 467 rental agreement or (F) intercompany
transaction or excess loss account described in
Section 1502 of the Code or any corresponding provision of
state, local or foreign Law.
(i) No amount that could be received (whether in cash or
property or the vesting of property) as a result of the
consummation of the transactions contemplated by this Agreement
by any employee, officer or director of the Company or any
Subsidiary of the Company who is a disqualified
individual (as such term is defined in proposed Treasury
Regulation Section 1.280G-1)
under any Employee Plan could be characterized as an
excess parachute payment (as defined in
Section 280G(b)(1) of the Code).
(j) Since June 30, 2010, neither the Company nor any
of its Subsidiaries has incurred any material liability for
Taxes outside the ordinary course of business or inconsistent
with past practice.
(k) To the Knowledge of the Company and without giving
effect to the transactions contemplated by this Agreement, the
Company has not had an ownership change, within the meaning of
Code Section 382, in the taxable year beginning on
January 1, 2010.
2.18
Employee Plans
.
(a)
Section 2.18(a)(i)
and
Section 2.18(a)(ii)
of the Company Disclosure
Schedule, respectively, set forth a complete and accurate list
of (i) all employee benefit plans (as defined
in Section 3(3) of ERISA), whether or not subject to ERISA
and (ii) all other employment, bonus, stock option, stock
purchase or other equity-based, benefit, incentive compensation,
profit sharing, savings, equity-like, pension, retiree medical,
life and disability insurance, supplemental retirement,
retirement, disability, insurance, vacation, deferred
compensation, severance, termination, retention, change of
control and other similar fringe, welfare or other material
benefit or compensation plans, programs, agreement, contracts,
policies or binding arrangements (whether or not in writing)
maintained, sponsored or contributed to for the benefit of any
current or former employee or director of the Company, any of
its Subsidiaries or any other trade or business (whether or not
incorporated) which would be treated as a single employer with
the Company or any of its Subsidiaries under Section 414 of
the Code (an
ERISA Affiliate
), or with
respect to which the Company or any of its Subsidiaries has or
could reasonably be expected to have any material liability
(together the
Employee Plans
). With respect
to each Employee Plan, to the extent applicable the Company has
made available to Parent complete and accurate copies of
(A) the three most recent annual reports on Form 5500
required to have been filed with the IRS for each Employee Plan,
including all schedules thereto; (B) the most recent
determination letter, if any, from the IRS for any Employee Plan
that is intended to qualify under Section 401(a) of the
Code; (C) the plan documents and summary plan descriptions
and a summary of material modifications, or a written
description of the terms of any Employee Plan that is not in
writing; (D) any related trust agreements, insurance
contracts, insurance policies or other documents of any funding
arrangements; (E) any material correspondence to or from
the IRS or any office or representative of the DOL or the
Pension Benefit Guaranty Corporation; (F) with
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respect to each material Employee Plan, to the extent
applicable, (x) the most recent annual report or similar
compliance documents required to be filed with any Governmental
Authority with respect to such plan and (y) any document
comparable to the determination letter reference under
clause (B) above issued by a Governmental Authority
relating to the satisfaction of law necessary to obtain the most
favorable tax treatment; and (G) the most recently prepared
actuarial report and financial statements in connection with
each Employee Plan.
(b) Except as set forth in
Section 2.18(b)
of
the Company Disclosure Schedule, no Employee Plan is, and
neither the Company nor any of its Subsidiaries has any current
or potential liability or obligation under or with respect to,
(i) a multiemployer plan (as defined in
Section 3(37) of ERISA), (ii) a multiple
employer plan (as defined in Section 4063 or 4064 of
ERISA) or (iii) any plan subject to Section 302 of
ERISA, Section 412 of the Code or Title IV of ERISA.
(c) Each Employee Plan has been maintained, operated,
funded and administered in all material respects in compliance
with its terms and with all applicable Law, including the
applicable provisions of ERISA and the Code.
(d) All Employee Plans subject to Section 409A of the
Code are in compliance the Section 409A and the regulations
issued pursuant thereto.
(e) Except as set forth in
Section 2.18(e)
of
the Company Disclosure Schedule, (i) there are no Legal
Proceedings pending or, to the Knowledge of the Company,
threatened on behalf of or against any Employee Plan, the assets
of any trust under any Employee Plan, or the plan sponsor, plan
administrator or any fiduciary or any Employee Plan, other than
routine claims for benefits and (ii) no Effect exists or
has occurred that could reasonably be expected to give rise to
any such Legal Proceeding.
(f) None of the Company, any of its Subsidiaries, or, to
the Knowledge of the Company, any of their respective directors,
officers, employees or agents has, with respect to any Employee
Plan, engaged in or been a party to any non-exempt
prohibited transaction, as such term is defined in
Section 4975 of the Code or Section 406 of ERISA,
which could reasonably be expected to result in the imposition
of a material penalty assessed pursuant to Section 502(i)
of ERISA or a material tax imposed by Section 4975 of the
Code, in each case applicable to the Company, any of its
Subsidiaries or any Employee Plan or for which the Company or
any of its Subsidiaries has any indemnification obligation.
(g) Except as set forth in
Section 2.18(g)
of
the Company Disclosure Schedule, (i) no Employee Plan
provides post-termination or retiree life insurance, health or
other welfare benefits to any person, except as required by
COBRA or any similar law and (ii) the Company has never
represented, promised or contracted (whether in oral or written
form) to any employee (either individually or to employees as a
group) or any other Person that such employee or other Person
would be provided with retiree health, disability, or life
insurance benefits, except to the extent required by statute.
(h) Except as set forth in
Section 2.18(h)
of
the Company Disclosure Schedule:
(i) each Employee Plan that is intended to be
qualified under Section 401 of the Code has
received a favorable determination letter from the IRS to such
effect and, to the Knowledge of the Company, no fact,
circumstance or event has occurred or exists that would
reasonably be expected to adversely affect the qualified status
of such Employee Plan;
(ii) all contributions, premiums and other payments with
respect to any Employee Plan for any time period ending on or
before the Effective Time have been timely made, accrued or
reserved for; and
(iii) except as required by applicable Law or this
Agreement, no condition or term under any relevant Employee Plan
exists which would prevent Parent or the Surviving Corporation
or any of its Subsidiaries from terminating, amending or
otherwise discontinuing any Employee Plan without material
liability to Parent or the Surviving Corporation or any of its
Subsidiaries.
(i) Except as set forth in
Section 2.18(i)
of
the Company Disclosure Schedule, neither the execution or
delivery of this Agreement by the Company nor the consummation
of the Merger will (i) result in any
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payment or benefit becoming due or payable, or required to be
provided, to any current or former director, employee or
independent contractor of the Company or any of its
Subsidiaries; (ii) increase the amount or value of any
benefit or compensation otherwise payable or required to be
provided to any such director, employee or independent
contractor; or (iii) result in the acceleration of the time
of payment, vesting or funding of any such benefit or
compensation.
(j) The Company has not incurred any liability under,
arising out of or by operation of Title IV of ERISA (other
than liability for premiums to the Pension Benefit Guaranty
Corporation arising in the ordinary course of business
consistent with past practice), including any liability in
connection with (i) the termination or reorganization of
any employee benefit plan subject to Title IV of ERISA or
(ii) the withdrawal from any multi-employer or multiple
employer plan, and no fact or Effect exists or has occurred
which could give rise to any such liability. No reportable
event, as described in Section 4043 of ERISA, has occurred
with respect to any such Employee Plan.
(k) Since January 1, 2006, the Company has not
terminated, suspended, discontinued contributions to or
withdrawn from any employee pension benefit plan, as defined in
Section 3(2) of ERISA.
2.19
Labor Matters
.
(a) The Company has provided Parent with copies of each
collective bargaining agreement, labor union contract and trade
union agreement (each a
Collective Bargaining
Agreement
) with any union or labor organization to
which the Company or any of its Subsidiaries is a party or by
which it is bound. To the Knowledge of the Company, in the past
three (3) years, no union or labor organization or group of
employees of the Company or any of its Subsidiaries has sought
to organize any employees of the Company or any of its
Subsidiaries for purposes of collective bargaining, made a
demand for recognition or certification, sought to bargain
collectively with the Company or any of its Subsidiaries, or
filed a petition for recognition with the National Labor
Relations Board (except with respect to any Collective
Bargaining Agreement previously provided to Parent). As of the
date of this Agreement, no Collective Bargaining Agreement is
being negotiated by the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries is the subject
of any proceeding asserting that the Company or any of its
Subsidiaries has committed an unfair labor practice and there is
no unfair labor practice complaint pending against the Company
before the National Labor Relations Board or any current union
representation questions involving employees of Company. As of
the date hereof, there is no pending or, to the Knowledge of the
Company, threatened, nor has there been since January 1,
2008, except as disclosed in the Company Reports, any material
labor strike, dispute, walk-out, work stoppage, slow-down or
lockout involving the Company or any of its Subsidiaries. Except
as set forth in
Section 2.19(a)
of the Company
Disclosure Schedule, during the 12 months prior to the date
of this Agreement, neither the Company nor any of its
Subsidiaries has implemented any plant closing or mass layoff of
employees that would reasonably be expected to implicate the
Worker Adjustment and Retraining Notification Act of 1988, as
amended, including the rules and regulations promulgated
thereunder.
(b) The Company and its Subsidiaries have complied in all
material respects with applicable Law and orders with respect to
employment (including applicable Laws, rules and regulations
regarding wage and hour requirements, immigration status,
discrimination in employment, employee health and safety, and
collective bargaining, eligibility for and payment of overtime
compensation, worker classification (including the proper
classification of independent contractors and consultants), Tax
withholding, unemployment insurance, workers compensation,
harassment, disability rights and benefits, affirmative action,
plant closing and mass layoff issues), except for such
noncompliance as has not had and would not have, individually or
in the aggregate, a Company Material Adverse Effect.
(c) The Company and each of its Subsidiaries have withheld
all material amounts required by applicable Law to be withheld
from the wages, salaries, and other payments to employees, and
are not, to the Knowledge of the Company, liable for any
material arrears of wages or any taxes or any penalty for
failure to comply with any of the foregoing. Neither the Company
nor any of its Subsidiaries is liable for any material payment
to any trust or other fund or to any Governmental Authority,
with respect to unemployment compensation benefits, social
security or other benefits for employees (other than routine
payments to be made in the ordinary course of business and
consistent with past practice).
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2.20
Permits
.
The Company and its
Subsidiaries have obtained and are in compliance with the terms
of all Permits from Governmental Authorities required to own or
lease their respective properties and assets and conduct their
respective businesses as currently conducted, and no suspension
or cancellation of any such Permits is pending or, to the
Knowledge of the Company, threatened, except for such
noncompliance, suspensions or cancellations that would not have,
individually or in the aggregate, a Company Material Adverse
Effect.
2.21
Compliance with Laws
.
The
Company and each of its Subsidiaries is, and during the past
three (3) years has been, in compliance with all Laws and
Orders that are applicable to the Company and its Subsidiaries
or to their respective properties and assets, the conduct of the
business or operations of the Company
and/or
its
Subsidiaries, except for such violations or noncompliance that
would not have, individually or in the aggregate, a Company
Material Adverse Effect.
2.22
Legal Proceedings; Orders
.
(a) Except as set forth in
Section 2.22
of the
Company Disclosure Schedule, there are no Legal Proceedings
pending or, to the Knowledge of the Company, threatened against
the Company or any of its Subsidiaries that would reasonably be
expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries is
subject to any Order, except for such Orders as would not have,
individually or in the aggregate, a Company Material Adverse
Effect.
2.23
Qualification as
U.S. Citizen
.
Each of the Company and
its Subsidiaries (including any Subsidiary in the chain of
ownership of such Subsidiaries) that own
and/or
operate any vessels in the U.S. Coastwise Trade is, and has
been during any period that it has owned
and/or
operated any vessel in the U.S. Coastwise Trade, a
U.S. Citizen.
2.24
Environmental Laws
.
Except as
set forth in
Section 2.24
of the Company Disclosure
Schedule or such matters that would not have, individually or in
the aggregate, a Company Material Adverse Effect: (a) the
Company and its Subsidiaries are in compliance with, and, for
the last 5 years have been in compliance with, all
Environmental Laws; (b) the Company and its Subsidiaries
possess all Permits, licenses, registrations, consents,
approvals and authorizations required under applicable
Environmental Laws for the operation of the business of the
Company and its Subsidiaries as presently conducted;
(c) neither the Company nor any of its Subsidiaries has
received any written claim, notice or citation concerning any
violation of or liability under, or alleged violation of or
liability under, any applicable Environmental Law during the
five (5) years preceding the date of this Agreement;
(d) there are no writs, injunctions, decrees, Orders or
judgments outstanding, or any actions, claims, citations, suits
or proceedings pending or, to the Knowledge of the Company,
threatened, concerning the Companys or any of its
Subsidiaries compliance with or liability under any
Environmental Law; (e) there has been no Release of
Hazardous Materials at, on, under or from any of the Owned Real
Property, Leased Real Property or Vessels which requires
Remediation under Environmental Laws or would reasonably be
expected to give rise to liabilities under Environmental Law;
(f) none of the Owed Real Property or Leased Real Property
is listed on, and the Company has not arranged, by contract,
agreement, or otherwise for the disposal or treatment of
Hazardous Materials at, any property listed on, the National
Priorities List, the Comprehensive Environmental Response,
Compensation or Liability Information System or any similar
governmental list of properties that require Remediation under
Environmental Law; (g) no third-party claims for
indemnification regarding liabilities arising under
Environmental Laws are pending against the Company or any of its
Subsidiaries; and (h) there have been no Marine
Environmental Incidents. The Company and its Subsidiaries have
made available to Parent (or made available to its
Representatives for review) copies of all material environmental
assessments, reports, and audits in its possession or under its
control (including all Phase 1 and Phase 2 reports, without
qualification for materiality) concerning the Companys or
any of its Subsidiaries compliance with Environmental laws
or the environmental condition of any other real property, asset
or Vessel that Company or the Subsidiaries own, operate or
lease. Notwithstanding any other provision of this Agreement,
this
Section 2.24
sets forth the sole and exclusive
representations and warranties (except as set forth in
Section 2.30(e)
) of the Company with respect to
compliance with Environmental Laws.
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2.25
Insurance
.
The Company has in
full force and effect the insurance coverage with respect to its
business and the businesses of its Subsidiaries as set forth in
Section 2.25
of the Company Disclosure Schedule. The
Company has made available to Parent true and complete copies of
all material insurance policies and all material self insurance
programs and arrangements relating to the business, assets and
operations of the Company and each of its Subsidiaries. The
Company and its Subsidiaries have paid all premiums that are due
as of the date of this Agreement for the current policy periods
of such insurance policies. From December 31, 2009 through
the date of this Agreement, no notice of cancellation has been
received, and there is no existing default or event which, with
the giving of notice or lapse of time or both, would constitute
a default, by any insured thereunder, except for such defaults
that would not have, individually or in the aggregate, a Company
Material Adverse Effect. As of the date hereof, there is no
material claim pending under any of such policies as to which
coverage is being questioned, denied or disputed by the
underwriters of such policies and there has been no threatened
termination of any such policies. The Company and each of its
Subsidiaries is in material compliance with all material
insurance coverage requirements with respect to the operation of
the Vessels.
2.26
Related Party
Transactions
.
Except as set forth in the
Company SEC Reports and for compensation or other employment
arrangements in the ordinary course of business, there are no
transactions, agreements, arrangements or understandings between
the Company or any of its Subsidiaries, on the one hand, and any
Affiliate (including any director or officer) thereof, but not
including any wholly owned Subsidiary of the Company, on the
other hand, that would be required to be disclosed pursuant to
Item 404 of
Regulation S-K
of the SEC in the Companys
Form 10-K
or proxy statement pertaining to an annual meeting of
stockholders.
2.27
Brokers; Fairness
Opinion
.
Except as set forth in
Section 2.27
of the Company Disclosure Schedule,
there is no financial advisor, investment banker, broker,
finder, agent or other Person that has been retained by or is
authorized to act on behalf of the Company or any of its
Subsidiaries who is entitled to any financial advisors,
investment banking, brokerage, finders or other fee or
commission in connection with the transactions contemplated by
this Agreement. The Special Committee has received the written
opinion of Merrill Lynch, Pierce, Fenner & Smith
Incorporated to the effect that, as of the date of such opinion
and subject to the assumptions and limitations set forth
therein, the Per Share Price to be received by Company
Stockholders in the Merger is fair, from a financial point of
view, to such holders (other than Parent and its Affiliates, the
parties to the Voting Agreement and the holders of Assumed
Awards).
2.28
Anti-Takeover Statutes Not
Applicable
.
Assuming that the representations
of Parent and Merger Sub set forth in
Section 3.8
are true and correct, the Company Board has taken all necessary
actions such that the restrictions on business combinations set
forth in Section 203 of the DGCL and any other similar
applicable anti-takeover law will not be applicable
to the Merger. The Company does not have in effect any
stockholder rights plan, poison pill or similar
arrangement.
2.29
Proxy Statement and Other Required Company
Filings
.
The proxy statement, letter to
stockholders, notice of meeting and form of proxy accompanying
the proxy statement that will be provided to the Company
Stockholders in connection with the solicitation of proxies for
use at the Company Stockholder Meeting (collectively, as amended
or supplemented, the
Proxy Statement
),
as well as any other document that is required to be filed by
the Company with the SEC in connection with the Merger (each, an
Other Required Company Filing
and
collectively, the
Other Required Company
Filings
) will, when filed with the SEC, comply as to
form in all material respects with the applicable requirements
of the Exchange Act. The Proxy Statement will not, at the time
the Proxy Statement is filed with the SEC, at the time the Proxy
Statement is first sent to the Company Stockholders or at the
time of the Company Stockholder Meeting, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to be stated in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading;
provided,
however,
that notwithstanding the foregoing, no
representation or warranty is made by the Company with respect
to information supplied by Parent or Merger Sub or any of their
Affiliates, partners, members, stockholders, directors,
officers, employees, agents or other representatives
specifically for inclusion or incorporation by reference in the
Proxy Statement. None of the Other Required Company Filings
will, when filed with the SEC, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to be stated in order to make the
statements therein, in light of
A-19
the circumstances under which they were made, not misleading;
provided, however,
that notwithstanding the foregoing, no
representation or warranty is made by the Company with respect
to information supplied by Parent or Merger Sub or any of their
respective Affiliates, partners, members, stockholders,
directors, officers, employees, agents or other representatives
specifically for inclusion or incorporation by reference in any
of the Other Required Company Filings.
2.30
Vessels
.
(a)
Section 2.30(a)
of the Company Disclosure
Schedule sets forth (except as may be noted on such section of
the Company Disclosure Schedule) a true, correct and complete
list of all of the Vessels as of October 13, 2010 (the
Report Date
), and since the Report Date
(except as may be noted on
Section 2.30(a)(i)
of the
Company Disclosure Schedule) the Company has not
scrapped or sold, or agreed to scrap or
sell, any Vessels set forth on such schedule (which schedule,
for the avoidance of doubt, does not include Vessels
manufactured by Jeffboat (other than any such Vessels which have
been acquired by the Company or its Subsidiaries prior to the
Report Date)). With respect to each Vessel that
Section 2.30(a)(i)
of the Company Disclosure
Schedule indicates is owned by the Company or one of its
Subsidiaries, the Company or one of its Subsidiaries, as
applicable, has valid and marketable title to such Vessel, free
and clear of all Liens, except Permitted Liens.
Section 2.30(a)(ii)
of the Company Disclosure
Schedule lists (except as may be noted on such section of the
Company Disclosure Schedule) all of the Vessels that, as of the
Report Date, the Company and its Subsidiaries lease on a
bareboat or demise basis from third parties, which leases are
valid and subsisting in all material respects, and such
leasehold interests are free and clear of Liens (other than
Permitted Liens).
Section 2.30(a)(iii)
of the
Company Disclosure Schedule lists (except as may be noted on
such section of the Company Disclosure Schedule) all of the
Vessels that, as of the Report Date, the Company and its
Subsidiaries lease on a bareboat or demise basis to third
parties, which leases are valid and subsisting in all material
respects.
(b) As of the Report Date, neither the Company nor any of
its Subsidiaries owns, operates, leases or charters any vessels
other than the Vessels set forth in
Sections 2.30(a)(i)
,
2.30(a)(ii)
and
2.30(a)(iii)
of the Company Disclosure Schedule.
(c) Except as set forth in
Section 2.30(c)
of
the Company Disclosure Schedule and other than such
noncompliance that is not material with respect to the Vessels
taken as a whole, the Vessels owned by the Company and its
Subsidiaries (i) were built in the United States,
(ii) are eligible for use in the U.S. Coastwise Trade,
(iii) if documented, are documented as
U.S.-flag
vessels and their Certificates of Documentation have coastwise
endorsements and are valid, and (iv) have never
(x) been owned by or sold to any Person, or demise or
sub-demise
chartered or leased to any Person, that did not qualify as a
U.S. Citizen, (y) been registered under the laws of a
foreign country, or (z) been rebuilt foreign, as defined in
46 C.F.R. § 67.177.
(d) None of the Vessels is (i) subject to any transfer
or trading restrictions that arise under the
Construction-Differential Subsidy program pursuant to
Title V of the Merchant Marine Act, 1936, as amended, or
(ii) financed by U.S. Government financing guaranties
issued pursuant to Chapter 537 of Title 46 of the
United States Code (or its predecessor). Neither the Company nor
any of its Subsidiaries maintains, has maintained or has applied
for a Capital Reserve Fund or a Capital Construction Fund
pursuant to Chapter 533 or Chapter 535 of
Title 46 of the United States Code, respectively.
(e) Other than such noncompliance that is not material with
respect to the Vessels taken as a whole, the Company
and/or
its
Subsidiaries maintain valid Certificates of Financial
Responsibility (Oil Pollution) issued by the U.S. Coast
Guard pursuant to the Federal Water Pollution Control Act for
their Vessels to the extent that such certificate may be
required by applicable Law and such other similar certificates
as may be required in the course of the operation of any of the
Vessels pursuant to applicable Law.
(f) The Vessels that are currently operated by the Company
and its Subsidiaries, taken as a whole, have no defects, are in
all respects in good operating condition and repair, have in all
respects been reasonably maintained consistent with standards
generally followed in the industry (giving due account to the
age and length of use of same, ordinary wear and tear excepted),
and are adequate and suitable for their present uses in
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all respects, in each case except as would not have,
individually or in the aggregate, a Company Material Adverse
Effect.
2.31
Capital
Expenditures
.
Section 2.31
of the
Company Disclosure Schedule sets forth (i) the consolidated
capital budget of the Company and its Subsidiaries for the year
ending December 31, 2010 (the
Budget
), and (ii) an accurate and
complete statement of the capital expenditures actually paid in
cash and committed to by the Company and its Subsidiaries during
the first nine (9) months of the year ending
December 31, 2010, including a reasonable summary of such
expenditures, broken down into reasonable categories, and
(iii) an accurate and complete statement of all capital
expenditures which the Company or any Subsidiary of the Company
was and is committed to make from and after October 1, 2010
that are not contemplated by the Budget. The consolidated
capital budget for the year ending December 31, 2010 has
been prepared in good faith based on reasonable assumptions and
the best available information to the Company and its
Subsidiaries.
2.32
Accounts Receivable
.
Since
December 31, 2009, neither the Company nor any Subsidiary
of the Company has changed its business practices in such a
manner as would reasonably be expected to result in an accounts
receivable portfolio that, in amount or character, is materially
different than that maintained by the Company and its
Subsidiaries in the ordinary course of business, consistent with
past practice, prior to such date. All accounts receivable,
notes and other receivables, taken as a whole, reflected in the
consolidated financial statements of the Company and its
Subsidiaries included or incorporated by reference into the
Company SEC Reports have in all material respects arisen in the
ordinary course of business, consistent with past practice, and
represent bona fide sales and valid obligations of the
counterparties thereto and, subject to the allowance for
doubtful accounts, are not subject to any valid defense, offset
or credit.
ARTICLE III
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and
warrant to the Company as follows:
3.1
Organization; Good
Standing
.
Parent is duly organized, validly
existing and in good standing under the laws of the State of
Delaware, and has the requisite power and authority to conduct
its business as it is presently being conducted and to own,
lease or operate its properties and assets, except where the
failure to be in good standing would not, individually or in the
aggregate, prevent or materially delay the consummation of the
Merger or the ability of Parent to fully perform its covenants
and obligations under this Agreement. Merger Sub is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the
requisite corporate power and authority to conduct its business
as it is presently being conducted and to own, lease or operate
its respective properties and assets, except where the failure
to be in good standing would not, individually or in the
aggregate, prevent or materially delay the consummation of the
Merger or the ability of Merger Sub to fully perform its
covenants and obligations under this Agreement. Parent has
delivered or made available to the Company complete and correct
copies of the certificates of incorporation and bylaws or other
constituent documents, as amended to date, of Parent and Merger
Sub. As of the date hereof, neither Parent nor Merger Sub is in
material violation of its certificate of incorporation or its
bylaws.
3.2
Power; Enforceability
.
Each of
Parent and Merger Sub has the requisite power and authority to
execute and deliver this Agreement, to perform its covenants and
obligations hereunder and to consummate the Merger. The
execution and delivery of this Agreement by each of Parent and
Merger Sub, the performance by each of Parent and Merger Sub of
its respective covenants and obligations hereunder and the
consummation of the Merger have been duly authorized by all
necessary corporate action on the part of each of Parent, Finn
Intermediate Holding Corporation, a Delaware corporation and an
indirect wholly owned Subsidiary of Parent and the sole
stockholder of Merger Sub (the
Intermediate
Holdco
), and Merger Sub and no additional proceedings
on the part of Parent, Intermediate Holdco or Merger Sub are
necessary to authorize the execution and delivery of this
Agreement by each of Parent and Merger Sub, the performance by
each of Parent and Merger Sub of its respective covenants and
obligations hereunder or, subject to the adoption of this
Agreement
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(immediately following its execution) by Intermediate Holdco in
its capacity as the sole stockholder of Merger Sub, the
consummation of the Merger. This Agreement has been duly
executed and delivered by each of Parent and Merger Sub and,
assuming the due authorization, execution and delivery by the
Company, constitutes a legal, 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 that
such enforceability is subject to the rules governing the
availability of specific performance, injunctive relief or other
equitable remedies and general principles of equity, regardless
of whether considered in a proceeding in equity or at law.
3.3
Non-Contravention
.
The
execution and delivery of this Agreement by each of Parent and
Merger Sub, the performance by each of Parent and Merger Sub of
their respective covenants and obligations under this hereunder
and, subject to the adoption of this Agreement by Intermediate
Holdco in its capacity as the sole stockholder of Merger Sub,
the consummation of the Merger do not and will not
(a) violate or conflict with any provision of the
certificate of incorporation or bylaws or other constituent
documents of Parent, Intermediate Holdco or Merger Sub,
(b) violate, conflict with, or result in the breach of or
constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or result in the
termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, any of
the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other
instrument or obligation to which Parent or Merger Sub is a
party or by which Parent, Intermediate Holdco, Merger Sub or any
of their respective properties or assets may be bound,
(c) assuming compliance with the matters referred to in
Section 3.4
, violate or conflict with any law or
order applicable to Parent, Intermediate Holdco or Merger Sub or
by which any of their respective properties or assets are bound,
or (d) result in the creation of any Lien (other than
Permitted Liens) upon any of the properties or assets of Parent,
Intermediate Holdco or Merger Sub, except in the case of each of
clauses (b), (c) and (d) above, for such violations,
conflicts, defaults, terminations, accelerations or Liens which
would not, individually or in the aggregate, prevent or
materially delay the consummation of the Merger or the ability
of Parent and Merger Sub to fully perform their respective
covenants and obligations under this Agreement.
3.4
Requisite Governmental
Approvals
.
No Consent of any Governmental
Authority is required on the part of Parent, Merger Sub or any
of their Affiliates in connection with the execution and
delivery of this Agreement by each of Parent and Merger Sub, the
performance by each of Parent and Merger Sub of their respective
covenants and obligations under this Agreement or the
consummation of the Merger, except (a) such filings with
Governmental Authorities to satisfy the applicable Law of states
in which the Company and its Subsidiaries are qualified to do
business, (b) such filings and approvals as may be required
by any federal or state securities laws, including compliance
with any applicable requirements of the Exchange Act,
(c) compliance with any applicable requirements of the HSR
Act and any applicable foreign Antitrust Laws and (d) such
additional Consents the failure of which to make or obtain would
not, individually or in the aggregate, prevent or materially
delay the consummation of the Merger or the ability of Parent
and Merger Sub to fully perform their respective covenants and
obligations under this Agreement.
3.5
Legal Proceedings; Orders
.
(a) There are no Legal Proceedings pending or, to the
Knowledge of Parent or any of its Affiliates, threatened against
Parent or Merger Sub or any of their Affiliates that would,
individually or in the aggregate, prevent or materially delay
the consummation of the Merger or the ability of Parent and
Merger Sub to fully perform their respective covenants and
obligations under this Agreement.
(b) Neither Parent nor Merger Sub nor any of their
Affiliates is subject to any legal order that would prevent or
materially delay the consummation of the Merger or the ability
of Parent and Merger Sub to fully perform their respective
covenants and obligations under this Agreement.
3.6
Qualification as a
U.S. Citizen
.
Each of Parent,
Intermediate Holdco and Merger Sub is a U.S. Citizen.
3.7
Proxy Statement; Other Required Company
Filings
.
The information supplied by Parent,
Merger Sub or any of their respective Affiliates, partners,
members, stockholders, directors, officers, employees, agents or
other representatives to the Company in writing specifically for
inclusion or incorporation by reference in
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the Proxy Statement will not, at the time the Proxy Statement is
filed with the SEC, at the time the Proxy Statement is first
sent to the Company Stockholders or at the time of the Company
Stockholder Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to be stated in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. The information supplied by
Parent, Merger Sub or any of their respective Affiliates,
partners, members, stockholders, directors, officers, employees,
agents or other representatives specifically for inclusion or
incorporation by reference in any of the Other Required Company
Filings will not, at the time the applicable Other Required
Company Filing is filed with the SEC, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to be stated in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading;
provided,
however,
that notwithstanding the foregoing, no
representation or warranty is made by Parent or Merger Sub with
respect to information supplied by the Company or any of its
Affiliates, directors, officers, employees, agents or other
representatives for inclusion or incorporation by reference in
the Proxy Statement or any of the Other Required Company Filings.
3.8
Section 203
.
At no time
during the three (3) years ended on the date immediately
preceding the date hereof was Parent, Merger Sub or any of their
Affiliates or Associates an
Interested Stockholder of the Company, in each case
as defined in Section 203 of the DGCL.
3.9
Brokers
.
No agent, broker,
finder or investment banker is entitled to any brokerage,
finders or other fee or commission payable by the Company
in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent
or Merger Sub.
3.10
Operations
.
Except as would
not, individually or in the aggregate, prevent or delay the
consummation of the Merger or the ability of Parent and Merger
Sub to fully perform their respective covenants and obligations
under this Agreement, each of Parent, Intermediate Holdco and
Merger Sub has been formed solely for the purpose of engaging in
the transactions contemplated hereby and, prior to the Effective
Time, neither Parent, Intermediate Holdco nor Merger Sub will
have engaged in any other business activities and will have
incurred no liabilities or obligations other than as
contemplated by this Agreement.
3.11
Financing
.
(a) Assuming the accuracy of the representations and
warranties set forth in
Article II
(without giving
effect to any materiality, Company Material Adverse Effect or
knowledge qualifiers) to the extent that the accuracy of such
representations and warranties (as so unqualified) is necessary
for the representations and warranties in this
Section 3.11(a)
to be true and correct, the amount
of funds contemplated to be provided pursuant to the Financing
Letters (as defined below), together with Company cash and cash
equivalents, are sufficient, if funded, to (i) pay the
aggregate Per Share Price and any other repayment or refinancing
of Indebtedness contemplated by this Agreement, the Financing
Letters or any Company Indebtedness; (ii) pay any and all
fees and expenses required to be paid by Parent, Merger Sub and
the Surviving Corporation in connection with the Merger and the
Financing; and (iii) satisfy all of the other payment
obligations of Parent, Merger Sub and the Surviving Corporation
contemplated hereunder.
(b) Parent and Merger Sub have delivered to the Company a
true, complete and accurate copy of (i) the executed
commitment letter, dated as of the date hereof, among Parent,
Merger Sub and the Guarantor (the
Equity Financing
Letter
), pursuant to which the Guarantor has
committed, subject to the terms thereof, to invest the cash
amounts set forth therein (the
Equity
Financing
) and (ii) the executed commitment
letter, dated as of the date hereof, between Intermediate Holdco
and Wells Fargo Capital Finance, LLC (the
Debt
Commitment Letter
and, together with the Equity
Financing Letter, the
Financing Letters
),
pursuant to which the lenders party thereto have committed,
subject to the terms thereof, to lend the amounts set forth
therein (the
Debt Financing
and, together
with the Equity Financing, the
Financing
).
(c) The Financing Letters have not been amended or modified
prior to the date hereof and, as of the date hereof, none of the
respective obligations and commitments contained in the
Financing Letters have been withdrawn or rescinded in any
respect. As of the date hereof, the Financing Letters, in the
form so delivered to the Company on the date hereof, are in full
force and effect. As of the date hereof, the Financing Letters
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are (i) legal, valid and binding obligations of Parent and
Merger Sub, as applicable, and, to the knowledge of Parent, each
of the other parties thereto and (ii) enforceable in
accordance with their respective terms against Parent and Merger
Sub, as applicable, and, to the knowledge of Parent, each of the
other parties thereto, in each case except that such
enforceability (x) may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws
affecting or relating to creditors rights generally and
(y) is subject to the rules governing the availability of
specific performance, injunctive relief or other equitable
remedies and general principles of equity, regardless of whether
considered in a proceeding in equity or at law. There are no
conditions precedent or other contingencies related to the
funding of the full amount of the Financing, other than as set
forth in the Financing Letters. As of the date of this
Agreement, assuming the accuracy of the representations and
warranties set forth in
Article II
, (I) no
event has occurred or circumstance exists which, with or without
notice, lapse of time or both, would or would reasonably be
expected to constitute a default or breach on the part of Parent
or Merger Sub, as applicable, or to the knowledge of Parent, any
other parties thereto, under the Financing Letters and
(II) neither Parent nor Merger Sub has any reason to
believe that any of the conditions to the Financing contemplated
in the Financing Letters will not be satisfied or that the
Financing will not be made available to Parent and Merger Sub at
or prior to the Effective Time. Parent and Merger Sub have fully
paid, or caused to be fully paid, any and all commitment or
other fees which are due and payable on or prior to the date
hereof pursuant to the terms of the Financing Letters.
3.12
Guarantee
.
Concurrently with
the execution and delivery of this Agreement the Guarantor has
delivered to the Company the Guarantee, duly executed by the
Guarantor, in favor of the Company with respect to the
performance by Parent and Merger Sub, respectively, of certain
of their respective obligations under this Agreement. The
Guarantee is in full force and effect and is a valid, binding
and enforceable obligation of Guarantor, except that such
enforceability is subject to the rules governing the
availability of specific performance, injunctive relief or other
equitable remedies and general principles of equity, regardless
of whether considered in a proceeding in equity or at law, and
no event has occurred which, with or without notice, lapse of
time or both, would constitute a default on the part of
Guarantor under the Guarantee.
3.13
Management Arrangements
.
As
of the date hereof, except for the Voting Agreement and as
otherwise previously disclosed to the Company Board, there are
no Contracts or any formal or informal arrangements or other
understandings (whether or not binding) between Parent, Merger
Sub or any of their respective Affiliates, on the one hand, and
any Company Stockholder or director, officer or employee of the
Company or its Subsidiaries, on the other hand, relating to this
Agreement, the Merger or any other transactions contemplated by
this Agreement (including as to any investments to be made in,
or contributions to be made to, Parent, Intermediate Holdco or
Merger Sub), or to the Surviving Corporation or any of its
Subsidiaries, businesses or operations (including as to
continuing employment) from and after the Closing.
3.14
Solvency
.
Assuming
(i) the accuracy of the representations and warranties set
forth in
Article II
(without giving effect to any
materiality, Company Material Adverse Effect or knowledge
qualifiers) to the extent that the accuracy of such
representations and warranties (as so unqualified) is necessary
for the representations and warranties in this
Section 3.14
to be true and correct, (ii) the
satisfaction of all of the conditions to Parents
obligation to consummate the Merger and (iii) that any
estimates, projections or forecasts of the Company and its
Subsidiaries that have been provided to the Company and its
Subsidiaries have been prepared in good faith based upon
assumptions that were and continue to be reasonable, as of the
Effective Time and immediately after giving effect to all of the
transactions contemplated by this Agreement, including the
Financing, the payment of the aggregate Per Share Price, any
repayment or refinancing of Indebtedness contemplated by this
Agreement, the Financing Letters or any Company Indebtedness,
the payment of all fees and expenses required to be paid by
Parent, Merger Sub, the Company and their respective
Subsidiaries in connection with the Merger and the Financing,
and the payment of all other obligations of Parent, Merger Sub,
the Company and their respective Subsidiaries contemplated
hereunder, (a) the amount of the fair saleable
value of the assets of each of the Surviving Corporation
and its Subsidiaries will exceed the value of all liabilities of
the Surviving Corporation and such Subsidiaries, including a
reasonable estimate of contingent and other liabilities;
(b) each of the Surviving Corporation and its Subsidiaries
will not have an unreasonably small amount of capital for the
operation of the businesses in which it is engaged or proposed
to be engaged; and (c) each of the Surviving Corporation
and its Subsidiaries will be able to pay its liabilities,
A-24
including a reasonable estimate of contingent and other
liabilities, as they mature. For purposes of the foregoing,
not have an unreasonably small amount of capital for the
operation of the businesses in which it is engaged or proposed
to be engaged and able to pay its liabilities,
including a reasonable estimate of contingent and other
liabilities, as they mature means that such Person will be
able to generate enough cash from operations, asset dispositions
or refinancing, or a combination thereof, to meet its
obligations as they become due.
3.15
No Other Company Representations or
Warranties
.
Except for the representations
and warranties set forth in
Article II
, Parent and
Merger Sub hereby acknowledge and agree that (a) neither
the Company, nor any of its Subsidiaries, nor any of their
respective Affiliates, stockholders, directors, officers,
employees, agents, representatives or advisors, nor any other
Person, has made or is making any other express or implied
representation or warranty with respect to the Company or any of
its Subsidiaries or their respective business or operations,
including with respect to any information provided or made
available to Parent, Merger Sub or any of their respective
Affiliates, stockholders, directors, officers, employees,
agents, representatives or advisors, or any other Person, and
(b) neither the Company or any of its Subsidiaries, nor or
any of their respective Affiliates, stockholders, directors,
officers, employees, agents, representatives or advisors, nor
any other Person, will have or be subject to any liability or
indemnification obligation or other obligation of any kind or
nature to Parent, Merger Sub or any of their respective
Affiliates, stockholders, directors, officers, employees,
agents, representatives or advisors, or any other Person,
resulting from the delivery, dissemination or any other
distribution to Parent, Merger Sub or any of their respective
Affiliates, stockholders, directors, officers, employees,
agents, representatives or advisors, or any other Person, or the
use by Parent, Merger Sub or any of their respective Affiliates,
stockholders, directors, officers, employees, agents,
representatives or advisors, or any other Person, of any such
information provided or made available to any of them by the
Company or any of its Subsidiaries, or any of their respective
Affiliates, stockholders, directors, officers, employees,
agents, representatives or advisors, or any other Person,
including any information, documents, estimates, projections,
forecasts or other forward-looking information, business plans
or other material provided or made available to Parent, Merger
Sub or any of their respective Affiliates, stockholders,
directors, officers, employees, agents, representatives or
advisors, or any other Person, in data rooms,
confidential information memoranda or management presentations
in anticipation or contemplation of the Merger or any other
transactions contemplated by this Agreement.
3.16
Non-Reliance on Company Estimates, Projections,
Forecasts, Forward-Looking Statements and Business
Plans
.
In connection with the due diligence
investigation of the Company by Parent and Merger Sub and their
respective Affiliates, stockholders, directors, officers,
employees, agents, representatives or advisors, Parent and
Merger Sub and their respective Affiliates, stockholders,
directors, officers, employees, agents, representatives and
advisors have received and may continue to receive after the
date hereof (including pursuant to
Section 5.8
of
this Agreement) from the Company and its Affiliates,
stockholders, directors, officers, employees, agents,
representatives and advisors certain estimates, projections,
forecasts and other forward-looking information, as well as
certain business plan information, regarding the Company and its
business and operations. Parent and Merger Sub hereby
acknowledge that there are uncertainties inherent in attempting
to make such estimates, projections, forecasts and other
forward-looking statements, as well as in such business plans,
and that Parent and Merger Sub will have no claim against the
Company or any of its Subsidiaries, or any of their respective
Affiliates, stockholders, directors, officers, employees,
agents, representatives or advisors, or any other Person, with
respect thereto. Accordingly, Parent and Merger Sub hereby
acknowledge and agree that none of the Company or any of its
Subsidiaries, nor any of their respective Affiliates,
stockholders, directors, officers, employees, agents,
representatives or advisors, nor any other Person, has made or
is making any express or implied representation or warranty with
respect to such estimates, projections, forecasts,
forward-looking statements or business plans (including the
reasonableness of the assumptions underlying such estimates,
projections, forecasts, forward-looking statements or business
plans).
A-25
ARTICLE IV
INTERIM
OPERATIONS OF THE COMPANY
4.1
Affirmative
Obligations
.
Except (w) as expressly
contemplated or required by this Agreement, (x) as set
forth in
Section 4.1
of the Company Disclosure
Schedule, (y) as approved by Parent in writing (which
approval will not be unreasonably withheld, delayed or
conditioned) or (z) as required by law, at all times during
the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the
termination of this Agreement pursuant to
Article VII
and the Effective Time, the Company
shall, and the Company shall cause each of its Subsidiaries to,
(i) conduct its business and operations in the ordinary and
usual course of business and in a manner consistent with past
practice and (ii) use commercially reasonable efforts to
preserve substantially intact its business organization and its
current relationships with significant customers, suppliers and
employees and executive officers.
4.2
Forbearance Covenants
.
Except
(w) as expressly contemplated or required by this
Agreement, (x) as set forth in
Section 4.2
of
the Company Disclosure Schedule, (y) as approved by Parent
(which approval will not be unreasonably withheld, delayed or
conditioned), or (z) as required by law, at all times
during the period commencing with the execution and delivery of
this Agreement and continuing until the earlier to occur of the
termination of this Agreement pursuant to
Article VII
and the Effective Time, the Company
shall not do any of the following and shall not permit any of
its Subsidiaries to do any of the following:
(a) amend its certificate of incorporation or bylaws or
comparable organizational documents;
(b) propose or adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any
of its operating Subsidiaries;
(c) issue, grant, sell, deliver or agree or authorize,
propose or commit to issue, grant, sell or deliver (whether
through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any
Company Securities or any shares of capital stock or other
securities in any Subsidiary of the Company, except for the
issuance of shares of Company Common Stock pursuant to the
vesting and terms of Company RSU Awards outstanding prior to the
date hereof and the issuance and sale of shares of Company
Common Stock pursuant to the exercise (in accordance with their
terms) of Company Options outstanding prior to the date hereof;
(d) directly or indirectly acquire, repurchase or redeem
any Company Securities or any shares of capital stock or other
securities of any Subsidiary of the Company (other than the
withholding of shares of Company Common Stock in connection with
the vesting in accordance with their terms of Company RSU Awards
or Company Options outstanding as of the date of this
Agreement), except that the Company may redeem shares of Company
Common Stock as permitted by
Section 11.3
(Redemption of Excess Stock) of the Certificate of Incorporation
only at a Redemption Price (as defined in the Certificate
of Incorporation) that is less than or equal to the Per Share
Price;
provided
that, with respect to any such
redemption, all applicable withholding Tax laws are complied
with;
(e) (i) adjust, split, combine, subdivide or
reclassify any shares of capital stock or other securities, or
issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for,
shares of its capital stock or other securities;
(ii) declare, set aside or pay any dividend or other
distribution (whether in cash, shares or property or any
combination thereof) in respect of any shares of capital stock
or other securities, or make any other actual, constructive or
deemed distribution in respect of the shares of capital stock or
other securities, except for cash dividends made by any direct
or indirect wholly owned Subsidiary of the Company to the
Company or one of its Subsidiaries; (iii) pledge or
encumber any shares of its capital stock or any of its other
securities; or (iv) modify the terms of any shares of its
capital stock or any of its other securities;
(f) (i) incur, create, assume or otherwise become
liable for Indebtedness, other than in the ordinary course of
business consistent with past practice (A) under the
Companys existing credit facility or (B) with respect
to letters of credit or capital leases that do not exceed one
million dollars ($1,000,000), individually, or two million five
hundred thousand dollars ($2,500,000), in the aggregate;
(ii) assume,
A-26
guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the
obligations of any other Person, except with respect to
obligations of direct or indirect wholly owned Subsidiaries of
the Company; (iii) make any loans, advances or capital
contributions to or investments in any other Person, except for
expense and travel advances in the ordinary course of business
consistent with past practice to employees of the Company or any
of its Subsidiaries; or (iv) sell, license, mortgage,
lease, transfer, encumber or pledge any of its or its
Subsidiaries assets, tangible or intangible, or create or
suffer to exist any Lien thereupon (other than Permitted Liens),
except (solely in the case of this clause (iv)) (x) as set
forth on
Section 4.2(f)
of the Company Disclosure
Schedule, (y) sales and leases by Jeffboat of barges and
other equipment manufactured by Jeffboat to third parties or to
the Company and its Subsidiaries, in each case, in the ordinary
course of business consistent with past practice and
(z) with respect to assets other than Vessels (which are
addressed in clauses (x) and (y) above and not subject
to this clause (z)), sales of inventory and obsolete assets in
the ordinary course of business consistent with past practice;
(g) (i) enter into, adopt, create, amend (including
acceleration of vesting), modify or terminate any bonus, profit
sharing, compensation, severance, termination, option,
appreciation right, performance unit, stock equivalent, share
purchase agreement, pension, retirement, deferred compensation,
employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the compensation,
benefit or welfare of any director, officer or employee in any
manner, except in any such case (A) as may be required by
applicable Law or (B) to any non-officer employee in the
ordinary course of business consistent with past practice; or
(ii) increase the compensation of any director, officer or
employee, grant, provide, or pay any special bonus or special
remuneration to any director, officer or employee, or grant,
provide or pay any benefit not required by any plan or
arrangement as in effect as of the date hereof, except in any
such case (A) as may be required by applicable Law or
(B) to any new non-officer employee hires in the ordinary
course of business consistent with past practice;
(h) (i) incur or commit to incur any capital
expenditures, or any obligations or liabilities in connection
therewith that individually or in the aggregate, are in excess
of five hundred thousand dollars ($500,000), except (A) as
otherwise included in the Companys capital expenditure
budget set forth in
Section 2.31
of the Company
Disclosure Schedule or (B) in respect of the ordinary
course maintenance, repair or reasonably necessary replacement
(other than replacement of Vessels) of assets or properties of
the Company or any of its Subsidiaries (consistent with past
practices of the Company and its Subsidiaries); (ii) except
as set forth in
Section 4.2(i)
below, pay,
discharge, settle or satisfy any liabilities, other than the
payment, discharge or satisfaction of liabilities in the
ordinary course of business, consistent with past practice, as
required by any applicable Law, as accrued for in the Audited
Company Balance Sheet or as required by the terms of any
Contract of the Company or its Subsidiaries, as in effect on the
date of this Agreement or entered into in compliance with the
terms of this Agreement; (iii) enter into, modify, amend or
terminate (x) any Contract which if so entered into,
modified, amended or terminated could be reasonably likely to
have, individually or in the aggregate, a Company Material
Adverse Effect or (y) any Material Contract (or any
Contract that, if in existence on the date of this Agreement,
would be a Material Contract);
provided
that, solely in
the ordinary course of business consistent with past practice,
the Company and its Subsidiaries may enter into and make
amendments to any Contract that is, or, if in existence on the
date of this Agreement, would be, a Material Contract solely as
a result of clauses (D), (O), (P) or (Q) of
Section 2.13(a)
; or (iv) engage in any
transaction with, or enter into any agreement, arrangement or
understanding with any Affiliate of the Company or other Person
covered by Item 404 of
Regulation S-K
promulgated under the Exchange Act that would be required to be
disclosed under such Item 404 other than those in existence
on the date of this Agreement;
(i) settle or compromise (i) any pending or threatened
material Legal Proceeding by securities holders against the
Company, any of its Subsidiaries or any of their respective
directors or officers that relates to the Merger or other
transactions contemplated hereby or (ii) any other Legal
Proceeding, in each case, having a value or in an amount not
covered by insurance in excess of two hundred fifty thousand
dollars ($250,000);
A-27
(j) except as may be required by GAAP (including as a
result of any change in GAAP), make any change in any of the
accounting methods, principles or practices used by it;
(k) (i) adopt or change a material Tax accounting
method, principle or practice; (ii) make or change any
material Tax election; (iii) settle or compromise any
material U.S. federal, state, local or
non-U.S. income
Tax liability or claim for Tax refund; (iv) fail to file
any material Tax Return when due or fail to cause such Tax
Returns when filed to be complete and accurate in all material
respects; (v) file any material amended Tax Return;
(vi) consent to any extension or waiver of any limitation
period with respect to any claim or assessment for material
Taxes; (vii) enter into a material private letter ruling,
closing agreement or similar ruling or agreement with the IRS or
any other taxing authority; or (viii) intentionally fail to
file a claim for a material Tax refund within the applicable
statute of limitations for filing such claim.
(l) acquire (by merger, consolidation or acquisition of
stock or assets or otherwise) any other Person or business or
(outside the ordinary course of business consistent with past
practice) assets or any material equity interest therein, in
each case in excess of $2,500,000 (two million five hundred
thousand dollars);
(m) fail to use commercially reasonable efforts to maintain
in full force and effect material insurance policies covering
the Company and its Subsidiaries and their respective
properties, assets and businesses in a form and amount
consistent with past practices;
(n) (i) implement or effect any material reduction in
labor force, lay-off, early retirement program, severance
program or other program or effort concerning the termination of
employment of a material number of employees of the Company
other than routine employee terminations or (ii) announce
any of the foregoing actions by the Company or its
Subsidiaries; or
(o) authorize, or agree or commit to take, any of the
actions described in this
Section 4.2
.
The parties hereto acknowledge and hereby agree that the
restrictions set forth in this
Section 4.2
are not
intended to give Parent or Merger Sub, directly or indirectly,
the right to control or direct the business or operations of the
Company or its Subsidiaries at any time prior to the Effective
Time, and notwithstanding anything to the contrary set forth in
this Agreement, no consent of Parent or Merger Sub will be
required with respect to any matter set forth in this Agreement
to the extent the requirement of such consent would violate any
applicable Law. Prior to the Effective Time, the Company and its
Subsidiaries shall exercise (consistent with and subject to the
terms, conditions and restrictions of this Agreement) control
and supervision over their own business and operations.
4.3
Solicitation
.
(a) Notwithstanding anything to the contrary set forth in
this Agreement, during the period commencing with the execution,
delivery and effectiveness of this Agreement and continuing
until 11:59 p.m. (Eastern time) on November 27, 2010
(the
No-Shop Period Start Date
), the Company
and its Subsidiaries and their respective Affiliates, directors,
officers, employees, consultants, agents, representatives and
advisors (collectively,
Representatives
)
shall have the right (acting under the direction of the Company
Board or any authorized committee thereof), to
(i) initiate, solicit
and/or
encourage the submission of one or more Acquisition Proposals
from one or more Persons (and/or such Persons Affiliates,
directors, officers, employees, consultants, agents,
representatives and advisors), including by furnishing to any
Person (and/or such Persons Affiliates, directors,
officers, employees, consultants, agents, representatives and
advisors) any non-public information relating to the Company or
any of its Subsidiaries or by affording to any Person (and/or
such Persons Affiliates, directors, officers, employees,
consultants, agents, representatives and advisors) access to the
business, properties, assets, books, records or other non-public
information, or to the personnel, of the Company or any of its
Subsidiaries pursuant to an Acceptable Confidentiality
Agreement; (ii) continue, enter into, participate in
and/or
engage in any discussions or negotiations with one or more
Persons (and/or such Persons Affiliates, directors,
officers, employees, consultants, agents, representatives and
advisors) with respect to one or more Acquisition Proposals or
any other proposals that could reasonably be expected to lead to
an Acquisition Proposal; and (iii) otherwise cooperate
with, assist or take any action to facilitate any Acquisition
Proposals or any other proposals that could reasonably be
expected to lead to any Acquisition
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Proposals. No later than two (2) Business Days after the
No-Shop Period Start Date, the Company shall notify Parent in
writing of the number of Excluded Parties then identified and,
with respect to each Excluded Party, shall provide to Parent a
copy of the Acquisition Proposal from such Excluded Party.
(b) Subject to the terms of
Section 4.3(c)
, on
the No-Shop Period Start Date the Company shall cease and cause
to be terminated any discussions or negotiations it is engaged
in with any Person (other than any Excluded Party) that would
otherwise be prohibited by this
Section 4.3(b)
.
Subject to the terms of
Section 4.3(c)
and
Section 4.3(d)
, during the period commencing with
the No-Shop Period Start Date and continuing until the earlier
to occur of the termination of this Agreement pursuant to
Article VII
and the Effective Time, the Company and
its Subsidiaries shall not, and the Company and its Subsidiaries
shall use their reasonable best efforts to cause their
respective Representatives not to, directly or indirectly,
(i) solicit, initiate, propose, induce or knowingly
encourage the making, submission or announcement of, or take
actions that could reasonably be expected to encourage,
facilitate or assist, an Acquisition Proposal; (ii) furnish
to any Person (other than Parent, Merger Sub or any designees of
Parent or Merger Sub) any non-public information relating to the
Company or any of its Subsidiaries, or afford to any Person
access to the business, properties, assets, books, records or
other non-public information, or to any personnel, of the
Company or any of its Subsidiaries (other than Parent, Merger
Sub or any designees of Parent or Merger Sub), in any such case
with the intent to induce the making, submission or announcement
of, or to encourage, knowingly facilitate or assist, an
Acquisition Proposal or any inquiries or the making of any
proposal that would reasonably be expected to lead to an
Acquisition Proposal; (iii) participate or engage in
discussions or negotiations with any Person with respect to an
Acquisition Proposal or which may reasonably be expected to lead
to an Acquisition Proposal; or (iv) enter into any letter
of intent, memorandum of understanding or other Contract with
respect to an Acquisition Transaction (other than an Acceptable
Confidentiality Agreement).
(c) Notwithstanding anything to contrary set forth in this
Section 4.3
or elsewhere in this Agreement, but
subject to compliance with
Section 4.3(d)
4.3(f)
, at any time prior to obtaining the Requisite
Stockholder Approval, the Company Board
and/or
any
authorized committee thereof may, directly or indirectly through
one or more Representatives, participate or engage in
discussions or negotiations with, furnish any non-public
information relating to the Company or any of its Subsidiaries
to,
and/or
afford access to the business, properties, assets, books,
records or other non-public information, or to the personnel, of
the Company or any of its Subsidiaries, in each case, pursuant
to an Acceptable Confidentiality Agreement to:
(i) any Excluded Party (and/or such Excluded Partys
Affiliates, directors, officers, employees, consultants, agents,
representatives and advisors); and/or
(ii) any Person (and/or such Persons Affiliates,
directors, officers, employees, consultants, agents,
representatives and advisors) that has made or delivered to the
Company (or any of its Representatives in their capacity as
such) a bona fide written Acquisition Proposal after the No-Shop
Period Start Date that did not result from a breach of this
Section 4.3
,
provided
that solely in the case
of this clause (ii), the Company Board shall have determined in
good faith (after consultation with its outside legal counsel
and financial advisor) that such Acquisition Proposal
constitutes a Superior Proposal.
(d) Notwithstanding anything to the contrary set forth in
this
Section 4.3
or elsewhere in this Agreement, at
any time prior to obtaining the Requisite Stockholder Approval,
(i) the Company Board may (whether or not it has received a
Superior Proposal), effect a Company Board Recommendation Change
solely in accordance with
Section 5.5(a)
, or
(ii) after effecting a Company Board Recommendation change
in accordance with
Section 5.5(a)
, if the Company
has received a bona fide written Acquisition Proposal from any
Person that the Company Board concludes in good faith
constitutes a Superior Proposal, the Company Board may authorize
the Company to terminate this Agreement to enter into an
Alternative Acquisition Agreement with respect to such Superior
Proposal, if and only if, in the case of this clause (ii), the
Company shall prior thereto terminate this Agreement in
accordance with
Section 7.1(h)
, including making
payment of the Company Termination Fee in accordance with
Section 7.3(b)(iii)
.
(e) The Company will promptly (and, in any event, within
forty-eight (48) hours) notify Parent after
(i) receipt of an Acquisition Proposal (including the
identity of the Person making such Acquisition Proposal and the
material terms and conditions of such Acquisition Proposal,
including, if applicable, by providing
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Parent with copies of any such Acquisition Proposal and any
proposed agreements with respect thereto); (ii) any request
for information relating to the Company (including non-public
information) or for access to the properties, books or records
of the Company by any third party that has made an Acquisition
Proposal; or (iii) receipt of an amendment to a previously
disclosed Acquisition Proposal (including the terms of such
amendment). The Company shall promptly inform Parent of any
change in the price, structure or form of consideration or
material terms and conditions of such Acquisition Proposal, and
provide Parent with copies of any revisions to such Acquisition
Proposal and any proposed agreements with respect thereto.
(f) Notwithstanding anything to the contrary in this
Section 4.3
, (i) the Company shall not make any
material, non-public information available pursuant to this
Section 4.3
other than pursuant to an Acceptable
Confidentiality Agreement and (ii) the Company shall
concurrently make available to Parent and Merger Sub any
material non-public information concerning the Company or its
Subsidiaries that the Company makes available to any Person
contemplated by this
Section 4.3
which was not
previously made available to Parent or Merger Sub.
(g) Notwithstanding anything to the contrary set forth in
this
Section 4.3
or elsewhere in this Agreement, at
any time prior to obtaining the Requisite Stockholder Approval,
if the Company receives a bona fide written Acquisition Proposal
from any Person that did not result from a breach of this
Section 4.3
, the Company
and/or
its
Representatives may contact such Person to clarify the terms
thereof.
(h) The Company agrees that in the event any Representative
of the Company takes any action which, if taken by the Company,
would constitute a breach of this
Section 4.3
, and
the Company does not take reasonable action to seek to cure such
breach within three (3) Business Days of the date on which
the Company obtains Knowledge of such breach, then the Company
shall be deemed to be in breach of this
Section 4.3
.
4.4
Citizenship
.
(a) During the period beginning on the date hereof and
ending upon the Closing Date, the Company shall, and shall cause
each of its Subsidiaries that owns
and/or
operates any vessels in the U.S. Coastwise Trade (including
any Subsidiary in the chain of ownership of such Subsidiaries)
to, remain a U.S. Citizen.
(b) During the period beginning on the date hereof and
ending upon the Closing Date, other than such noncompliance that
is not material with respect to the Vessels taken as a whole,
(i) the Company shall, and shall cause its Subsidiaries to,
maintain the eligibility of the Vessels owned by the Company or
its Subsidiaries to operate in the U.S. Coastwise Trade,
including maintaining valid Certificates of Documentation with
coastwise endorsements for such Vessels that are currently
documented under the U.S. flag, and (ii) the Company
shall not, and shall cause its Subsidiaries not to, sell or
demise or
sub-demise
charter or lease any such Vessel to any Person that does not
qualify as a U.S. Citizen, in each case except where the
failure to do so (x) would be permitted under applicable
Law and (y) would not result in the permanent loss of the
eligibility of any such Vessels to operate in the
U.S. Coastwise Trade.
ARTICLE V
ADDITIONAL
COVENANTS
5.1
Required Action and Forbearance
.
(a) Upon the terms and subject to the conditions set forth
in this Agreement, Parent and Merger Sub, on the one hand, and
(subject to the Companys rights under
Section 5.3
,
Section 5.4
and
Section 5.5
) the Company, on the other hand, shall
take (or cause to be taken) all actions reasonably necessary,
and do (or cause to be done), and assist and cooperate with the
other party or parties hereto in doing, all things reasonably
necessary, proper or advisable under applicable Law or otherwise
to consummate and make effective, in the most expeditious manner
practicable, the Merger, including by:
(i) using reasonable best efforts to cause the conditions
to the Merger set forth in
Article VI
to be
satisfied;
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(ii) obtaining all consents, waivers, approvals, orders and
authorizations from Governmental Authorities, and making all
registrations, declarations and filings with Governmental
Authorities, that are necessary to consummate the Merger;
(iii) using reasonable best efforts to obtain all consents,
waivers and approvals under any Contracts in connection with
this Agreement and the consummation of the Merger so as to
maintain and preserve the benefits under such Contracts as of
the consummation of the Merger;
provided
that the Company
may not, without Parents prior written consent, make, or
agree to make, any payments or material amendments, concessions
or waivers in connection therewith; and
(iv) executing and delivering any Contracts and other
instruments that are necessary to consummate the Merger.
(b) In addition to the foregoing, neither Parent or Merger
Sub, on the one hand, nor (subject to the Companys rights
under
Section 5.3
,
Section 5.4
and
Section 5.5
) the Company, on the other hand, shall
take any action, or fail to take any action, that is intended
to, or has (or would reasonably be expected to have) the effect
of, preventing, impairing, delaying or otherwise adversely
affecting the consummation of the Merger or the ability of such
party to fully perform its obligations under this Agreement.
(c) Notwithstanding the foregoing or anything to the
contrary set forth in this Agreement, the Company shall be
responsible for using (and causing its Subsidiaries to use)
commercially reasonable efforts to prepare and file the
necessary notices, reports or other filings and to obtain the
consents, approvals and authorizations identified or required to
be identified in
Section 2.5
or
Section 2.6
or in the related section of the Company
Disclosure Schedule (which, in the case of the consents,
approvals and notifications identified or required to be
identified in
Section 2.6
or in the related section
of the Company Disclosure Schedule, are required to be obtained
by the Company), and Parent and Merger Sub shall be responsible
for using their respective reasonable best efforts to cooperate
with the Company in preparing and filing such notices, reports
or other filings and obtaining such consents, approvals and
authorizations.
(d) Notwithstanding the foregoing or anything to the
contrary set forth in this Agreement, the obligations of Parent
and Merger Sub to consummate the Financing shall be governed
solely by
Section 5.6
and not this
Section 5.1
.
5.2
Antitrust Filings
.
Each of
Parent and Merger Sub (and their respective Affiliates, if
applicable), on the one hand, and the Company, on the other
hand, shall (a) file with the FTC and the Antitrust
Division of the DOJ a Notification and Report Form relating to
this Agreement and the transactions contemplated hereby as
required by the HSR Act within fourteen (14) calendar days
following the execution and delivery of this Agreement, and
(b) file comparable pre-merger or post-merger notification
filings, forms and submissions with any foreign Governmental
Authority that are required by the other applicable Antitrust
Laws in connection with the Merger. Each of Parent and the
Company shall (i) cooperate and coordinate with the other
in the making of such filings; (ii) supply the other with
any information that may be required in order to make such
filings; (iii) supply any additional information that
reasonably may be required or requested by the FTC, the DOJ or
the Governmental Authorities of any other applicable
jurisdiction in which any such filing is made under any other
Antitrust Laws; and (iv) take all action reasonably
necessary to cause the expiration or termination of the
applicable waiting periods under the HSR Act and any other
Antitrust Laws applicable to the Merger as soon as practicable,
and to obtain any required consents under any other Antitrust
Laws applicable to the Merger as soon as reasonably practicable;
provided, however
, notwithstanding anything in this
Agreement to the contrary, in no event shall Parent or Merger
Sub (or any of their respective Affiliates) be required to offer
or agree to sell or otherwise dispose of, or hold separate,
agree to conduct, license or otherwise limit the use of any of
the assets, categories of asset or businesses or other segments
of the Company or Parent or eithers respective
Subsidiaries or Affiliates or to agree to any other restriction
or condition with respect thereto required or requested by a
Governmental Authority, in each case to the extent that doing so
would reasonably be expected to materially and adversely affect
the operation of the business of the Company, Parent or
eithers respective Subsidiaries or Affiliates. Each of
Parent and Merger Sub (and their respective Affiliates, if
applicable), on the one hand, and the Company, on the other
hand, shall promptly inform the other of any communication from
any Governmental Authority regarding any of the transactions
A-31
contemplated by this Agreement in connection with such filings.
If any party hereto or Affiliate thereof shall receive a request
for additional information or documentary material from any
Governmental Authority with respect to the transactions
contemplated by this Agreement pursuant to the HSR or any other
Antitrust Laws applicable to the Merger with respect to which
any such filings have been made, then such party shall make (or
cause to be made), as soon as reasonably practicable and after
consultation with the other party, an appropriate response in
compliance with such request. Subject to applicable Laws
relating to the exchange of information, Parent and the Company
shall have the right to review in advance, and to the extent
practicable each will consult with the other on and consider in
good faith the views of the other in connection with, all of the
information relating to Parent or the Company, as the case may
be, and any of their respective Affiliates, that appears in any
filing made with, or written materials submitted to, any third
party
and/or
any Governmental Authority in connection with the Merger and the
other transactions contemplated by this Agreement. In exercising
the foregoing rights, each of the Company and Parent shall act
reasonably and as promptly as practicable.
5.3
Proxy Statement and Other Required SEC
Filings
.
(a) As soon as practicable following the date hereof (and
in any event the Company shall use best efforts to do so within
five (5) Business Days following the date hereof), the
Company shall prepare and file with the SEC a preliminary Proxy
Statement for use in connection with the solicitation of proxies
from the Company Stockholders for use at the Company Stockholder
Meeting. If the Company determines that it is required to file
with the SEC any Other Required Company Filing under applicable
Law, the Company shall promptly prepare and file with the SEC
such Other Required Company Filing within a reasonable amount of
time. The Company shall cause the Proxy Statement and any Other
Required Company Filing to comply as to form and substance in
all material respects with the applicable requirements of the
Exchange Act and the rules of the SEC and Nasdaq. Parent and
Merger Sub shall furnish all information concerning Parent and
Merger Sub (and their respective Affiliates, if applicable) as
the Company may reasonably request in connection with the
preparation and filing with the SEC of the Proxy Statement and
any Other Required Company Filing. If at any time prior to the
Company Stockholder Meeting, the Company, Parent or Merger Sub
discovers that information relating to it, or any of its
respective partners, members, stockholders, directors, officers
or other Affiliates, in each case, which should be set forth in
an amendment or supplement to the Proxy Statement or any Other
Required Company Filing, as the case may be, so that the Proxy
Statement or Other Required Company Filing, as the case may be,
would not include any misstatement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the
party which discovers such information shall promptly notify the
other, and the Company shall promptly prepare and file with the
SEC and, to the extent required by applicable Law or the SEC or
its staff, disseminate to the Company Stockholders an
appropriate amendment or supplement to the Proxy Statement or
the applicable Other Required Company Filing describing such
information.
(b) Subject to applicable Law, the Company shall use
commercially reasonable efforts to cause the Proxy Statement to
be disseminated to the Company Stockholders as promptly as
practicable following the filing thereof with the SEC and, in
any event, the Company shall use best efforts to mail the Proxy
Statement to the Company Stockholders within three
(3) Business Days after confirmation from the SEC that it
will not comment on, or that it has no additional comments on,
the Proxy Statement or any Other Required Company Filing.
(c) Unless the Company Board shall have effected a Company
Board Recommendation Change in accordance with the terms of
Section 5.5(a)
, (i) the Company and its
Affiliates shall not file with the SEC the Proxy Statement or
any Other Required Company Filing or any amendment or supplement
thereto, and (ii) the Company and its Affiliates shall not
correspond or otherwise communicate with the SEC or its staff
with respect to the Proxy Statement or any Other Required
Company Filing in any such case referenced in the preceding
clause (i) or (ii) without providing Parent and Merger
Sub a reasonable opportunity to review and comment thereon and
consider in good faith including in such filing, amendment or
communication comments reasonably requested by Parent.
A-32
(d) Unless the Company Board shall have effected a Company
Board Recommendation Change in accordance with the terms of
Section 5.5(a)
, the Company shall advise Parent and
Merger Sub, promptly after the Company receives notice thereof,
of any receipt of a request by the SEC or its staff for an
amendment or revisions to the Proxy Statement or any Other
Required Company Filing, any receipt of comments from the SEC or
its staff on the Proxy Statement or any Other Required Company
Filing, or any receipt of a request by the SEC or its staff for
additional information in connection therewith.
(e) Unless the Company Board shall have effected a Company
Board Recommendation Change in accordance with the terms of
Section 5.5(a)
, the Company shall include the
Company Board Recommendation in the Proxy Statement and, if
applicable, any Other Required Company Filings.
5.4
Company Stockholder Meeting
.
(a) Unless this Agreement has been terminated pursuant to
Article
VII
, the Company will take, in accordance with
applicable Law, the Certificate of Incorporation, the bylaws of
the Company and the rules of the SEC and Nasdaq, all reasonable
action necessary to convene and hold a meeting of the Company
Stockholders (or any adjournment or postponement thereof, the
Company Stockholder Meeting
) as
promptly as reasonably practicable and, in any event, the
Company shall use best efforts to convene and hold the Company
Stockholder Meeting within twenty (20) Business Days
following dissemination of the Proxy Statement to the Company
Stockholders for the purpose of voting to adopt this Agreement
in accordance with the DGCL;
provided, however,
nothing
herein shall prevent the Company from postponing or adjourning
the Company Stockholder Meeting if (i) Parent has consented
to such postponement or adjournment; (ii) there are holders
of insufficient shares of the Company Common Stock present or
represented by a proxy at the Company Stockholder Meeting to
constitute a quorum at the Company Stockholder Meeting;
(iii) the Company is required to postpone or adjourn the
Company Stockholder Meeting by applicable Law, or an order or
written request with respect to such postponement or adjournment
from the SEC; or (iv) the Company has provided written
notice to Parent in accordance with
Section 5.5
that
it intends to effect a Company Board Recommendation Change in
connection with a Superior Proposal and the notice period
required by
Section 5.5
has not yet lapsed.
(b) Unless the Company Board shall have effected a Company
Board Recommendation Change pursuant to the terms of
Section 5.5(a)
, the Company shall solicit from the
Company Stockholders proxies in favor of the adoption of this
Agreement in accordance with Delaware Law, submit this Agreement
for adoption by the Company Stockholders at the Company
Stockholder Meeting and use its commercially reasonable efforts
to secure the Requisite Stockholder Approval at the Company
Stockholder Meeting.
5.5
Company Board Recommendation
.
(a) Neither the Company Board nor any committee thereof
shall (i) withhold, withdraw, amend, qualify or modify in a
manner adverse to Parent, or publicly propose or resolve to
withhold, withdraw, amend, qualify or modify in a manner adverse
to Parent, the Company Board Recommendation or (ii) approve
or recommend, or propose publicly or resolve to approve or
recommend, any Acquisition Proposal (a
Company Board
Recommendation Change
);
provided, however,
that
a stop, look and listen communication by the Company
Board or any authorized committee thereof to the Company
Stockholders pursuant to
Rule 14d-9(f)
of the Exchange Act, or any substantially similar communication,
shall not be deemed to be a Company Board Recommendation Change;
and
provided further,
that notwithstanding the foregoing
or anything to the contrary set forth in this Agreement
(including the provisions of
Section 4.3
,
Section 5.1
, or
Section 5.3
), at any
time prior to the receipt of the Requisite Stockholder Approval,
the Company Board may effect a Company Board Recommendation
Change if the Company Board shall have determined in good faith
(after consultation with outside legal counsel) that, solely as
a result of (x) a Superior Proposal or (y) an
Intervening Event, the failure to effect a Company Board
Recommendation Change would be inconsistent with its fiduciary
duties under applicable Law;
provided, however
, that the
Company shall not effect a Company Board Recommendation Change
unless:
(i) with respect to a Company Board Recommendation Change
pursuant to
Section 5.5(a)(x)
, the Company has
complied with all of its obligations under
Section 4.3
;
A-33
(ii) at least three (3) Business Days prior to
effecting such Company Board Recommendation Change the Company
notifies Parent in writing that it intends to effect a Company
Board Recommendation Change, which notice includes a reasonable
description of the basis for such Company Board Recommendation
Change and, in the case of a Superior Proposal, the identity of
the party who made such Superior Proposal and all of the
material terms and conditions of such Superior Proposal and
attaches to such notice the most current version of any
agreement
and/or
other
written proposal, if any, which embodies such Superior Proposal;
(iii) after providing such notice and prior to making such
Company Board Recommendation Change, the Company shall, and
shall cause its Representatives to, negotiate in good faith with
Parent (to the extent Parent desires to negotiate) during such
three (3) Business Day period with respect to any revisions
to the terms of the transaction contemplated by this Agreement
proposed by Parent that, if made by Parent, would permit the
Company not to effect a Company Board Recommendation
Change; and
(iv) the Company Board shall have considered in good faith
any changes to this Agreement, the Equity Financing Letter, the
Debt Commitment Letter and the Guarantee offered in writing by
Parent and shall have determined (after consultation with its
legal and financial advisors, and, in the case of an Acquisition
Proposal, taking into account all legal, financial and
regulatory aspects of such Acquisition Proposal and the offer
from Parent) (A) in the case of a Company Board
Recommendation Change that does not result from a Superior
Proposal, that no change has been made by Parent that would
obviate the need for such Company Board Recommendation Change
and (B) in the case of a Company Board Recommendation
Change in the case of an Acquisition Proposal, that such
Acquisition Proposal would still constitute a Superior Proposal
if such changes were to be given effect;
provided, further
that in the event that the Acquisition Proposal is
thereafter modified in any material respect (
provided
that any change in price will be considered material) by the
party making such Acquisition Proposal, the Company shall again
provide written notice of such modified terms and shall again
comply with this
Section 5.5
, including providing a
new period after such notice during which the Company will
negotiate in good faith with Parent regarding any further
proposed changes to the terms of this Agreement.
(b) Nothing in this Agreement shall prohibit the Company
Board or any authorized committee thereof from (i) taking
and disclosing to the Company Stockholders a position
contemplated by
Rule 14e-2(a)
under the Exchange Act or complying with the provisions of
Rule 14d-9
promulgated under the Exchange Act, or (ii) making any
stop-look-and-listen communication to the
stockholders of the Company pursuant to
Section 14d-9(f)
promulgated under the Exchange Act (or any similar
communications to the stockholders of the Company) in which the
Company indicates that it has not changed the Company Board
Recommendation;
provided, however
, that this
Section 5.5(b)
shall not be deemed to permit the
Company Board to make a Company Board Recommendation Change
except to the extent permitted by this
Section 5.5(b)
.
(c) For purposes of
Section 4.3
,
Section 5.3
and this
Section 5.5
, to the
extent permitted by applicable Law, the Company Board may act
through the Special Committee, if the Special Committee is still
in existence.
5.6
Financing
.
(a)
Equity Financing
.
(i) Subject to the terms and conditions of this Agreement
and the applicable terms and conditions of the Equity Financing
Letter, each of Parent and Merger Sub shall use its reasonable
best efforts to take (or cause to be taken) all actions, and do
(or cause to be done) all things, necessary, proper or advisable
to (A) obtain the Equity Financing contemplated by the
Equity Financing Letter, (B) maintain in effect the Equity
Financing Letter, (C) satisfy on a timely basis all
conditions applicable to Parent and Merger Sub set forth in the
Equity Financing Letter that are within its or its
Affiliates reasonable control, and (D) consummate the
Equity Financing contemplated by the Equity Financing Letter at
or prior to the Closing.
(ii) Neither Parent nor Merger Sub shall amend, alter, or
waive, or agree to amend, alter or waive (in any case whether by
action or inaction), any term of the Equity Financing Letter
without the prior written consent of the Company. Parent shall
promptly (and in any event within one (1) Business Day)
notify the Company of
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(A) the termination (or attempted or purported termination,
whether or not valid) of the Equity Financing Letter, or
(B) any refusal by the Guarantor to provide or any stated
intent by the Guarantor to refuse to provide the full financing
contemplated by the Equity Financing Letter when such Financing
is required thereunder to be provided.
(b)
Debt Financing
.
(i) Subject to the terms and conditions of this Agreement,
each of Parent and Merger Sub shall use its respective
reasonable best efforts to obtain the Debt Financing on the
terms and conditions set forth in the Debt Commitment Letter,
after giving effect to the market flex terms in the
fee letter referred to therein, should such market
flex terms be required (or on terms which would not be
reasonably expected to delay or prevent the Closing (taking into
account the expected timing of the Marketing Period), or make
the funding of the Debt Financing less likely to occur), and use
its respective reasonable best efforts to (A) maintain in
effect the Debt Commitment Letter and negotiate definitive
agreements with respect to the Debt Commitment Letter on the
terms and conditions set forth in the Debt Commitment Letter (or
on terms which would not be reasonably expected to delay or
prevent the Closing or make the funding of the Debt Financing
less likely to occur), (B) satisfy on a timely basis
(taking into account the expected timing of the Marketing
Period) all conditions applicable to Parent and Merger Sub set
forth in such definitive agreements that are within their
reasonable control, and (C) consummate the Debt Financing
contemplated by the Debt Commitment Letter (or such lesser
amount as may be required to consummate the transactions
contemplated by this Agreement) at or prior to the Closing. In
the event that all conditions in the Debt Commitment Letter
(other than the availability of funding of any of the Equity
Financing) have been satisfied or upon funding will be
satisfied, each of Parent and Merger Sub shall use its
reasonable best efforts to cause such lenders and the other
Persons providing such Debt Financing to fund on the Closing
Date the Debt Financing required to consummate the transactions
contemplated by this Agreement and otherwise enforce its rights
under the Debt Commitment Letter. Notwithstanding anything to
the contrary in this Agreement, neither Parent nor Merger Sub
shall be required to obtain the Debt Financing prior to the
first (1st) Business Day after the final day of the Marketing
Period.
(ii) Neither Parent nor Merger Sub shall amend, alter, or
waive, or agree to amend, alter or waive (in any case, whether
by action or inaction), any term of the Debt Commitment Letter
or any provision of the fee letter referenced in the Debt
Commitment Letter (to the extent any such amendment, alteration,
or waiver would reasonably be expected to delay or prevent the
Closing or make the funding of the Debt Financing less likely to
occur) without the prior written consent of the Company if such
amendment, alteration or waiver reduces the aggregate amount of
the Debt Financing (unless the Equity Financing is increased by
a corresponding amount) or amends the conditions precedent to
the Debt Financing in a manner that would reasonably be expected
to delay or prevent the Closing or make the funding of the Debt
Financing less likely to occur;
provided
,
however
,
that Parent and Merger Sub may replace
and/or
amend
the Debt Commitment Letter so long as (A) the terms would
not be reasonably expected to delay or prevent the Closing or
make the funding of the Debt Financing less likely to occur and
(B) the conditions to the Debt Financing set forth in the
Debt Commitment Letter as of the date hereof would not be
expanded in a manner that would reasonably be expected to delay
or prevent the Closing; and in any such event, Parent shall
disclose to the Company its intention to obtain such alternative
financing, shall keep the Company informed of the terms thereof
and shall deliver to the Company final drafts of the commitment
letter (the
New Debt Commitment Letter
)
providing for such alternative financing. The term
Debt
Financing
as used herein shall be deemed to mean the
Debt Financing contemplated by the Debt Commitment Letter to the
extent not so superseded at the time in question and the New
Debt Commitment Letter to the extent then in effect. Parent
shall promptly (and in any event within one (1) business
day) notify the Company of the termination of the Debt
Commitment Letter and the New Debt Commitment Letter (if
applicable).
(iii) Prior to the Effective Time, the Company shall (and
the Company shall cause each of its Subsidiaries to) provide,
and shall use its reasonable best efforts to cause its
Representatives, including legal and accounting Representatives,
to provide, in each case, at Parents sole expense (in
accordance with the reimbursement provisions below), all
cooperation reasonably requested by Parent or Merger Sub in
connection with arranging and obtaining the Financing (or, in
each case in this
Section 5.6(b)(iii)
, any permitted
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replacement, amended, modified or alternative financing,
including (A) furnishing Parent and Merger Sub and their
Financing sources such financial and other pertinent information
regarding the Company as may be reasonably requested by Parent,
(B) causing its senior executives to participate in a
reasonable number of meetings (including customary
one-on-one
meetings with the parties acting as lead arrangers or agents
for, and prospective lenders and purchasers of, the Financing),
presentations, road shows, due diligence sessions, drafting
sessions and sessions with rating agencies in connection with
the Financing, (C) assisting Parent and its Financing
sources in the preparation of (1) offering documents for
any portion of the Debt Financing and (2) materials for
rating agency presentations, (D) cooperating with the
marketing efforts of Parent and its Financing sources for all or
any portion of the Debt Financing, (E) providing and
executing documents as may be reasonably requested by Parent,
including a certificate of the chief financial officer of the
Company with respect to solvency matters, (F) executing and
delivering customary pledge and security documents and otherwise
facilitate the pledging of collateral, (G) using reasonable
best efforts to obtain accountants comfort letters and
legal opinions reasonably requested by Parent and customary for
financings similar to the Financing, and (H) cooperating
with Parents efforts to obtain landlord consents, waivers
and estoppels, surveys and title insurance as reasonably
requested by Parent and customary for financings similar to the
Financing;
provided
, that (I) neither the Company
nor any of its Subsidiaries shall be required to pay any
commitment fee or other fee or payment to obtain consent or to
incur any liability (other than liability (x) that is
contingent upon the Closing occurring or (y) for reasonable
out-of-pocket
expenses subject to reimbursement by Parent in accordance with
this
Section 5.6(b)(iii)
) with respect to the Debt
Financing prior to the Effective Time and
(II) notwithstanding anything to the contrary contained in
this Agreement (including this
Section 5.6
)
(a) nothing in this Agreement (including this
Section 5.6
) shall require any such cooperation to
the extent that it would require the Company or any of its
Subsidiaries or Representatives, as applicable, to waive or
amend any terms of this Agreement, (b) no action, liability
or obligation of the Company or any of its Subsidiaries or any
of their respective Representatives under any certificate,
agreement, arrangement, document or instrument relating to the
Debt Financing shall be effective until the Effective Time and
(c) the bank information memoranda or other offering
documents required in relation to the Debt Financing will state
that the Debt Financing will not be an obligation of the Company
and/or
its
Subsidiaries unless and until the Merger occurs. Parent shall
promptly, upon request by the Company, reimburse the Company for
all reasonable and documented
out-of-pocket
costs and expenses (including reasonable attorneys fees)
incurred by the Company or any of its Subsidiaries in connection
with the cooperation of the Company and its Subsidiaries
contemplated by this
Section 5.6
and shall indemnify
and hold harmless the Company, its Subsidiaries and their
respective Representatives from and against any and all losses,
damages, claims, costs or expenses suffered or incurred by any
of them of any type in connection with the arrangement of any
Financing and any information used in connection therewith
except with respect to any information prepared or provided by
the Company or any of its Subsidiaries or any of their
respective Representatives or to the extent such losses,
damages, claims, costs or expenses result from the gross
negligence or willful misconduct of the Company, any of its
Subsidiaries or their respective Representatives, and the
foregoing obligations shall survive termination of this
Agreement. All material non-public information provided by the
Company or any of its Subsidiaries or any of their
Representatives pursuant to this
Section 5.6(b)(iii)
shall be kept confidential in accordance with the
Confidentiality Agreement, except that Parent and Merger Sub
shall be permitted to disclose such information to the financing
sources and other potential sources of capital, rating agencies
and prospective lenders and investors during syndication of the
Financing or any permitted replacement, amended, modified or
alternative financing subject to the potential sources of
capital, ratings agencies and prospective lenders and investors
entering into customary confidentiality undertakings with
respect to such information (including through a notice and
undertaking in a form customarily used in confidential
information memoranda for senior credit facilities). The Company
hereby consents to the use of its and its Subsidiaries
names, marks and logos in the offering materials for the Debt
Financing;
provided
that such names, marks and logos are
used solely in a manner that is not intended or not reasonably
likely to harm or disparage the Company or any of its
Subsidiaries or the reputation or goodwill of the Company or any
of its Subsidiaries or any of their respective intellectual
property rights or imply that the Company or its Subsidiaries
have prepared, endorsed or approved any such materials.
(c)
Acknowledgement
.
Parent and
Merger Sub acknowledge and agree that the obtaining of the
Financing is not a condition to Closing.
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(d) Notwithstanding anything to the contrary contained in
this Agreement, nothing contained in this
Section 5.6
shall require, and in no event shall the
reasonable best efforts of Parent or Merger Sub be deemed or
construed to require, either Parent or Merger Sub to
(i) bring any enforcement action against any source of the
Financing to enforce its respective rights under the Equity
Financing Letter or Debt Commitment Letter, except that Parent
shall seek enforcement of the Equity Financing Letter solely if
the Company seeks and is granted a decree of specific
performance after all conditions to the granting therefor set
forth in
Section 8.8(b)
have been satisfied,
(ii) seek the Equity Financing from any source other than
the Guarantor or in any amount in excess of that contemplated by
the Equity Financing Letter or (iii) pay any fees to any
source of Debt Financing in excess of those contemplated by the
Debt Commitment Letter (whether to secure waiver of any
conditions contained therein or otherwise).
5.7
Anti-Takeover Laws
.
In the
event that any state anti-takeover or other similar law is or
becomes applicable to any of the transactions contemplated by
this Agreement, the Company, Parent and Merger Sub shall use
their respective reasonable best efforts to ensure that the
transactions contemplated by this Agreement may be consummated
as promptly as practicable on the terms and subject to the
conditions set forth in this Agreement and otherwise to minimize
the effect of such law on this Agreement and the transactions
contemplated hereby.
5.8
Access
.
Until the earlier to
occur of the termination of this Agreement pursuant to
Article VII
and the Effective Time, the Company
shall, and shall cause its Subsidiaries to (i) afford
Parent and its financial advisors, business consultants, legal
counsel, accountants and other agents and representatives
reasonable access during normal business hours, upon reasonable
prior notice provided to one of the Companys senior
executive officers, to the properties, books and records and
personnel of the Company as Parent may reasonably request and
(ii) furnish promptly to Parent such information concerning
the business, properties, assets, liabilities, personnel or
other aspect of the Company and its Subsidiaries as Parent or
Merger Sub or their Representatives may reasonably request;
provided, however,
that the Company may restrict or
otherwise prohibit access to any documents or information to the
extent that (a) any applicable Law or regulation requires
the Company to restrict or otherwise prohibit access to such
documents or information; (b) access to such documents or
information would give rise to a material risk of waiving any
attorney-client privilege, work product doctrine or other
applicable privilege applicable to such documents or
information; (c) access to a Contract to which the Company
or any of its Subsidiaries is a party or otherwise bound would
violate or cause a default under, or give a third party the
right to terminate or accelerate the rights under, such Contract
(it being agreed, in the case of clause (b) or (c), that
the Company and Parent shall attempt in good faith to design and
implement alternative procedures to enable Parent to evaluate
any such documents, information or Contracts without, as
applicable, waiving such privilege or causing a violation or
causing a default thereunder or giving any third party a right
to terminate or accelerate the rights thereunder); or
(d) such disclosure relates to individual performance or
personnel evaluation records, medical histories or other
personnel information that, in each case, in the Companys
good faith opinion would reasonably be expected to subject the
Company or any of its Subsidiaries to liability; and
provided
further,
that nothing in this
Section 5.8
shall
be construed to require the Company or its Representatives to
prepare any reports, analyses, appraisals, opinions or other
information and nothing in this
Section 5.8
or
elsewhere in this Agreement shall be construed to require the
Company to allow Parent, its Affiliates or any of their
respective employees, consultants, agents or representatives to
conduct environmental testing (including any Phase 1 or similar
assessment) or sampling of any kind at any real property without
the prior written consent of the Company. Any investigation
conducted pursuant to the access contemplated by this
Section 5.8
shall be conducted in a manner that does
not unreasonably interfere with the conduct of the business of
the Company and its Subsidiaries or create a risk of damage or
destruction to any property or assets of the Company or any of
its Subsidiaries. Any access to the Companys properties
shall be subject to the Companys reasonable security
measures and insurance requirements and shall not include the
right to perform invasive testing. The terms and conditions of
the Confidentiality Agreement shall apply to any information
obtained by Parent or any of its financial advisors, business
consultants, legal counsel, accountants and other agents and
representatives in connection with any investigation conducted
pursuant to the access contemplated by this
Section 5.8
. Notwithstanding anything to the
contrary in this Agreement, no such access or investigation, or
any information obtained in connection
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therewith, shall affect or be deemed to modify or qualify any
representation or warranty made by the Company in this Agreement.
5.9
Section 16(b)
Exemption
.
The Company shall take all actions
reasonably necessary to cause the transactions contemplated by
this Agreement and any other dispositions of equity securities
of the Company (including derivative securities) in connection
with the transactions contemplated by this Agreement by each
individual who is a director or executive officer of the Company
to be exempt under
Rule 16b-3
promulgated under the Exchange Act.
5.10
Directors and Officers Exculpation,
Indemnification and Insurance
.
(a) The Surviving Corporation and its Subsidiaries shall
(and, from and after the Effective Time, Parent shall cause the
Surviving Corporation and its Subsidiaries to) honor and fulfill
in all respects the obligations of the Company and its
Subsidiaries under any and all indemnification agreements
between the Company or any of its Subsidiaries and any of their
respective current or former directors and officers and any
person who becomes a director or officer of the Company or any
of its Subsidiaries prior to the Effective Time (the
Indemnified Persons
). In addition, during the
period commencing at the Effective Time and ending on the sixth
(6th) anniversary of the Effective Time, the Surviving
Corporation and its Subsidiaries shall (and Parent shall cause
the Surviving Corporation and its Subsidiaries to) cause the
certificates of incorporation and bylaws (and other similar
organizational documents) of the Surviving Corporation and its
Subsidiaries to contain provisions with respect to
indemnification, exculpation and the advancement of expenses
that are at least as favorable as the indemnification,
exculpation and advancement of expenses provisions set forth in
the certificates of incorporation and bylaws (or other similar
organizational documents) of the Company and its Subsidiaries as
of the date hereof, and during such six-year period such
provisions shall not be repealed, amended or otherwise modified
in any manner that would adversely affect the rights of the
Indemnified Persons thereunder except as required by applicable
Law.
(b) Without limiting the generality of the provisions of
Section 5.10(a)
, during the period commencing at the
Effective Time and ending on the sixth
(6
th
)
anniversary of the Effective Time, the Surviving Corporation
shall (and Parent shall cause the Surviving Corporation to),
subject to any restrictions under applicable Law, indemnify and
hold harmless each Indemnified Person from and against, and
advance expenses to each Indemnified Person in respect of, any
costs, fees and expenses (including reasonable attorneys
fees and investigation expenses), judgments, fines, losses,
claims, damages, liabilities and amounts paid in settlement in
connection with any claim, proceeding, investigation or inquiry,
whether civil, criminal, administrative or investigative, to the
extent such claim, proceeding, investigation or inquiry arises
directly or indirectly out of or pertains directly or indirectly
to any action or omission or alleged action or omission in such
Indemnified Persons capacity as a director, officer,
employee or agent of the Company or any of its Subsidiaries or
other Affiliates at or prior to the Effective Time, including in
connection with any of the transactions contemplated by this
Agreement;
provided, however,
that if, at any time prior
to the sixth
(6
th
)
anniversary of the Effective Time, any Indemnified Person
delivers to Parent or the Surviving Corporation a written notice
asserting a claim for indemnification under this
Section 5.10(b)
, then the foregoing obligations of
the Parent and the Surviving Corporation to indemnify, hold
harmless and advance expenses to Indemnified Persons in respect
of the claim asserted in such notice shall survive the sixth
(6
th
)
anniversary of the Effective Time until such time as such claim
is fully and finally resolved.
(c) During the period commencing at the Effective Time and
ending on the sixth (6th) anniversary of the Effective Time, the
Surviving Corporation shall (and Parent shall cause the
Surviving Corporation to) maintain in effect the Companys
current directors and officers liability insurance
(
D&O Insurance
) in respect of acts or
omissions occurring at or prior to the Effective Time, covering
each person covered by the D&O Insurance, on terms with
respect to the coverage and amounts that are equivalent to those
of the D&O Insurance;
provided, however,
that in
satisfying its obligations under this
Section 5.10(c)
, the Surviving Corporation shall not
be obligated to pay annual premiums in excess of three hundred
percent (300%) of the amount paid by the Company for coverage
for its last full fiscal year (such three hundred percent (300%)
amount, the
Maximum Annual Premium
) (which
premiums the Company represents and warrants to be as set forth
in
Section 5.10(c)
of the Company Disclosure
Schedule);
provided, however,
that that if the annual
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premiums of such insurance coverage exceed such amount, the
Surviving Corporation shall be obligated to obtain a policy for
such year with the greatest coverage available for a cost not
exceeding the Maximum Annual Premium. Prior to the Effective
Time, notwithstanding anything to the contrary set forth in this
Agreement, at the Companys request, as of the Effective
Time Parent shall purchase a six-year tail prepaid
policy on the D&O Insurance at a cost per year covered for
such tail policy not to exceed the Maximum Annual Premium, which
policy shall be subject to the prior approval of the Company
(such approval not to be unreasonably withheld, conditioned or
delayed). In the event that Parent purchases such a
tail policy prior to the Effective Time, the
obligations of Parent and the Surviving Corporation under this
Section 5.10(c)
shall be deemed satisfied, provided
that the Surviving Corporation shall (and Parent shall cause the
Surviving Corporation to) use reasonable best efforts to
maintain such tail policy in full force and effect
and continue to honor their respective obligations thereunder.
(d) If the Surviving Corporation (or Parent) or any of its
successors or assigns shall (i) consolidate with or merge
into any other Person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger,
or (ii) transfer all or substantially all of its properties
and assets to any Person, then, and in each such case, proper
provisions shall be made so that the successors and assigns of
the Surviving Corporation shall assume all of the obligations of
the Surviving Corporation (or Parent) set forth in this
Section 5.10
.
(e) The obligations set forth in this
Section 5.10
shall not be terminated, amended or
otherwise modified in any manner that adversely affects any
Indemnified Person (or any other person who is a beneficiary
under the D&O Insurance or the tail policy
referred to in
Section 5.10(c)
(and their heirs and
representatives)) without the prior written consent of such
affected Indemnified Person or other person who is a beneficiary
under the D&O Insurance or the tail policy
referred to in
Section 5.10(c)
(and their heirs and
representatives). Each of the Indemnified Persons or other
persons who are beneficiaries under the D&O Insurance or
the tail policy referred to in
Section 5.10(c)
(and their heirs and
representatives) are intended to be third party beneficiaries of
this
Section 5.10
, with full rights of enforcement
against the Surviving Corporation (and Parent) as if a party
thereto. The rights of the Indemnified Persons (and other
persons who are beneficiaries under the D&O Insurance or
the tail policy referred to in
Section 5.10(c)
(and their heirs and
representatives)) under this
Section 5.10
shall be
in addition to, and not in substitution for, any other rights
that such persons may have under the certificates of
incorporation, bylaws or other equivalent organizational
documents, any and all indemnification agreements of or entered
into by the Company or any of its Subsidiaries, or applicable
Law (whether at law or in equity).
(f) Nothing in this Agreement is intended to, shall be
construed to or shall release, waive or impair any rights to
directors and officers insurance claims under any
policy that is or has been in existence with respect to the
Company or any of its Subsidiaries for any of their respective
directors, officers or other employees, it being understood and
agreed that the indemnification provided for in this
Section 5.10
is not prior to or in substitution for
any such claims under such policies.
5.11
Employee Matters
.
(a) From and after the Effective Time, the Surviving
Corporation shall (and Parent shall cause the Surviving
Corporation to) honor the Employee Plans set forth on
Schedule 5.11
(the
Continuing
Plans
) in accordance with their terms as in effect
immediately prior to the Effective Time,
provided
that
nothing in this sentence shall prohibit the Surviving
Corporation from amending or terminating any such Employee
Plans, arrangements or agreements in accordance with their terms
or if otherwise required by applicable Law.
(b) The Surviving Corporation or one of its Subsidiaries
shall (and Parent shall cause the Surviving Corporation or one
of its Subsidiaries to) continue employment immediately
following the Effective Time by the Surviving Corporation or one
of its Subsidiaries of all employees of the Company and its
Subsidiaries as of the Effective Time, subject to
Section 5.11(e)
hereof. From the Effective Time
until December 31, 2011, the Surviving Corporation shall
(and Parent shall cause the Surviving Corporation to) either, at
the option of the Surviving Corporation, (i) maintain for
the benefit of each Continuing Employee the Continuing Plans
(but excluding equity based benefits, pensions and retiree
medical, life and disability) at benefit levels that are
substantially comparable in the aggregate to those in effect at
the Company or its Subsidiaries on the date of
A-39
this Agreement (other than equity based benefits, pensions and
retiree medical, life and disability) and provide to each
Continuing Employee compensation substantially comparable in the
aggregate to the compensation provided to such Continuing
Employee immediately prior to the Effective Time; or
(ii) provide compensation, and benefits (other than equity
based benefits, pensions and retiree medical, life and
disability) to each Continuing Employee that, taken as a whole,
are substantially comparable in the aggregate to the
compensation and benefits (other than equity based benefits,
pensions and retiree medical, life and disability) provided to
such Continuing Employee immediately prior to the Effective Time
(
Comparable Plans
); or (iii) provide
some combination of (i) and (ii) above such that each
Continuing Employee receives compensation and benefits (other
than equity based benefits, pensions and retiree medical, life
and disability) that, taken as a whole, are substantially
comparable in the aggregate to the compensation and benefits
(other than equity based benefits, pensions and retiree medical,
life and disability) provided to such Continuing Employee
immediately prior to the Effective Time.
(c) To the extent that a Continuing Plan or Comparable Plan
is made available to any Continuing Employee on or following the
Effective Time, the Surviving Corporation shall (and Parent
shall cause the Surviving Corporation to) cause to be granted to
such Continuing Employee credit for all service with the Company
and its Subsidiaries prior to the Effective Time for purposes of
eligibility to participate, vesting and, solely for purposes of
vacation accrual and severance pay, benefit entitlement;
provided, however,
that such service need not be credited
under any equity-based or non-qualified deferred compensation
plan or arrangement or to the extent that it would result in
duplication of coverage or benefits. In addition, and without
limiting the generality of the foregoing: (i) each
Continuing Employee shall be immediately eligible to
participate, without any waiting time, in any and all employee
benefit plans sponsored by the Surviving Corporation and its
Subsidiaries (other than the Continuing Plans or Comparable
Plans) (such plans, collectively, the
New
Plans
) to the extent coverage under any such New Plan
replaces coverage in the plan year in which the Effective Time
occurs under a Continuing Plan in which such Continuing Employee
participates immediately before the Effective Time (such plans,
collectively, the
Old Plans
); and
(ii) for purposes of each New Plan providing medical,
dental, pharmaceutical, or vision benefits to any Continuing
Employee, the Surviving Corporation shall cause all waiting
periods, pre-existing condition exclusions, evidence of
insurability requirements and actively-at-work or similar
requirements of such New Plan to be waived in the plan year in
which the Effective Time occurs for such Continuing Employee and
his or her covered dependents to the extent waived or satisfied
under the corresponding Old Plan as of the Effective Time, and
the Surviving Corporation shall cause any eligible expenses
incurred by such Continuing Employee and his or her covered
dependents during the portion of the plan year of the Old Plan
ending on the date such employees participation in the
corresponding New Plan begins in the plan year in which the
Effective Time occurs to be given full credit under such New
Plan for purposes of satisfying all deductible, co-pay,
coinsurance and maximum
out-of-pocket
requirements applicable to such Continuing Employee and his or
her covered dependents for the applicable plan year as if such
amounts had been paid in accordance with such New Plan. Any
vacation or paid time off accrued but unused by a Continuing
Employee as of immediately prior to the Effective Time shall be
credited to such Continuing Employee following the Effective
Time to the extent reflected as a working capital liability on
the Companys balance sheet.
(d) Notwithstanding the foregoing, the Surviving
Corporation shall (and Parent shall cause the Surviving
Corporation to) provide compensation and benefits to applicable
Continuing Employees under the terms set forth in any Collective
Bargaining Agreements to which the Company or any of its
Subsidiaries is a party and to which, under the terms of such
agreements, the Surviving Corporation or its applicable
Subsidiaries shall be bound.
(e) No provision of this Agreement shall be deemed to
(i) guarantee employment for any period of time for, or
preclude the ability of Parent or the Surviving Corporation or
any of their Affiliates to terminate, any Continuing Employee at
any time and for any or no reason, subject to the terms of:
(x) any employment agreements between Continuing Employees
and the Company that govern termination of such employees
following a change in control, and (y) any Collective
Bargaining Agreements to which the Company or any of its
Subsidiaries is a party and to which, under the terms of such
agreements, the Surviving Corporation shall be bound; or
(ii) subject to the limitations and requirements
specifically set forth in this
Section 5.11
, require
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Parent or the Surviving Corporation to continue any Continuing
Plan or Comparable Plan or prevent the amendment, modification
or termination thereof after the Effective Time; or
(iii) create any third-party beneficiary rights or
obligations in any Person (including any Continuing Employee or
any dependent or beneficiary thereof) other than the parties to
this Agreement.
5.12
Obligations of Parent in respect of Merger Sub
and Surviving Corporation
.
Parent shall take
all action necessary to cause Merger Sub and the Surviving
Corporation to perform their respective obligations under this
Agreement and to consummate the transactions contemplated hereby
upon the terms and subject to the conditions set forth in this
Agreement. In furtherance of and without limiting the foregoing,
promptly following execution of this Agreement, Parent shall
cause Intermediate Holdco, acting in its capacity as the sole
stockholder of Merger Sub, to adopt this Agreement.
5.13
Notification of Certain Matters
.
(a) At all times during the period commencing with the
execution and delivery of this Agreement and continuing until
the earlier to occur of the termination of this Agreement
pursuant to
Article VII
and the Effective Time, the
Company shall give prompt notice to Parent upon becoming aware
that any representation made by it in this Agreement has become
untrue or inaccurate in any material respect, or of any failure
of the Company 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, in each case such that it
would result in a failure of the conditions set forth in
Section 6.2(a)
or
Section 6.2(b)
;
provided, however,
that no such notification shall affect
or be deemed to modify any representations or warranty of the
Company set forth in this Agreement or the conditions to the
obligations of Parent and Merger Sub to consummate the
transactions contemplated by this Agreement or the remedies
available to the parties hereunder; and
provided,
further
, that the terms and conditions of the
Confidentiality Agreement shall apply to any information
provided to Parent pursuant to this
Section 5.13(a)
.
(b) At all times during the period commencing with the
execution and delivery of this Agreement and continuing until
the earlier to occur of the termination of this Agreement
pursuant to
Article VII
and the Effective Time,
Parent shall give prompt notice to the Company upon becoming
aware that any representation or warranty made by Parent or
Merger Sub in this Agreement has become untrue or inaccurate in
any material respect, or of any failure of Parent or Merger Sub
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, in each case such that it would result in
a failure of the conditions set forth in
Section 6.3(a)
or
Section 6.3(b)
;
provided, however,
that no such notification shall affect
or be deemed to modify any representation or warranty of Parent
or Merger Sub set forth in this Agreement or the conditions to
the obligations of the Company to consummate the transactions
contemplated by this Agreement or the remedies available to the
parties hereunder; and
provided further,
that the terms
and conditions of the Confidentiality Agreement shall apply to
any information provided to the Company pursuant to this
Section 5.13(b)
.
5.14
Public Statements and
Disclosure
.
The initial press release
regarding the Merger shall be a joint press release by the
Company and Parent. Thereafter, neither the Company, on the one
hand, nor Parent and Merger Sub, on the other hand, shall issue
any public release or make any public announcement or disclosure
concerning this Agreement or the Merger without the prior
written consent of the other party(ies) (which consent shall not
be unreasonably withheld, delayed or conditioned), except as
such release, announcement or disclosure may be required by
applicable Law or the rules or regulations of any applicable
securities exchange or regulatory or Governmental Authority to
which the relevant party is subject or submits, wherever
situated, in which case the party required to make the release
or announcement shall use its reasonable best efforts to allow
the other party(ies) hereto reasonable time to comment on such
release or announcement in advance of such issuance (it being
understood that the final form and content of any such release
or announcement, as well as the timing of any such release or
announcement, shall be at the final discretion of the disclosing
party).
5.15
Company Stockholder, Director and Management
Arrangements
.
Except to the extent expressly
authorized by the Company Board, the Special Committee or any
other authorized committee of the Company Board in advance,
prior to the Stockholder Meeting, none of Parent, Merger Sub or
any of their respective
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Affiliates shall enter into any Contract, and none of Parent,
Merger Sub or any of their respective Affiliates shall make or
enter into any formal or informal arrangements or other
understandings (whether or not binding), with any Company
Stockholder, or any director or executive officer of the
Company, relating (a) to this Agreement, the Merger or any
other transactions contemplated by this Agreement, including as
to any investment to be made in, or contributions to be made to,
Parent or Merger Sub, or (b) to the Surviving Corporation
or any of its Subsidiaries, businesses or operations (including
as to continuing employment) from and after the Closing.
5.16
Treatment of Certain Company
Indebtedness
.
(a) Prior to the Closing, at its option, Parent may direct
the Company to direct its wholly owned subsidiary, Commercial
Barge Line Company (
Commercial Barge Line
),
to (x) commence a tender offer (the
Tender
Offer
) for any and all of the Commercial Barge
Lines
12
1
/
2
% Senior
Secured Notes due 2017 (the
2017 Notes
)
issued under the indenture, dated as of July 7, 2009, by
and among Commercial Barge Line, the guarantors named therein
and The Bank of New York Mellon Trust Company, N.A., as
trustee (as supplemented from time to time, the
Indenture
),
and/or
(y) subject to the terms and conditions of the Indenture,
seek consents to amendment or waiver of one or more covenants
and other provisions in the 2017 Notes and the Indenture
(the
Consent Solicitation
), in each case, on
such terms and conditions as specified by Parent from time to
time, and Parent and Merger Sub shall provide such assistance as
may be reasonably requested by the Company and Commercial Barge
Line in connection therewith. In the event Parent elects to
direct the Company to direct Commercial Barge Line to conduct
the Tender Offer
and/or
the
Consent Solicitation (together or individually, the
2017 Note Transactions
), (i) subject to
Parent timely providing the Company with the terms and
conditions of the 2017 Note Transactions and any relevant
information with respect thereto reasonably required by the
Company for the preparation of the Transaction Documents, the
Company shall promptly prepare all necessary and appropriate
documentation in connection with the 2017 Note Transactions (the
Transaction Documents
), which Transaction
Documents shall be subject to the review and approval of Parent;
(ii) Parent and the Company shall cooperate, and use their
reasonable best efforts to cause their respective advisors and
representatives to cooperate, with each other in the preparation
of the Transaction Documents; (iii) the Company, Parent and
Merger Sub shall cooperate in connection with the 2017 Note
Transactions in order to cause the closing of the 2017 Note
Transactions to occur (A) on a timely basis and (B) so
long as Parent elects prior to the Election Deadline to direct
the Company to direct Commercial Barge Line to conduct one or
more 2017 Note Transactions, simultaneously with the Closing;
(iv) upon the receipt of the consents required to effect
the Consent Solicitation, the Company shall direct Commercial
Barge Line to enter into a supplemental indenture reflecting the
amendments to such indenture approved by such consents and will
use its reasonable best efforts to cause the Indenture trustee
to promptly enter into such supplemental indenture; provided,
that (A) in the event that Parent directs the Company to
direct Commercial Barge Line to conduct both 2017 Note
Transactions, the amendments contained in such supplemental
indenture shall not become operative until the closing of the
Tender Offer, which shall be conditioned, among other things, on
the occurrence of the Closing and (B) in the event that
Parent directs the Company to direct Commercial Barge Line to
conduct only the Consent Solicitation, the amendments contained
in such supplemental indenture shall not become operative until
the closing of the Consent Solicitation, which shall be
conditioned, among other things, on the occurrence of the
Closing; and (v) simultaneously with the closing of the
2017 Note Transactions and in accordance with the terms of the
2017 Note Transactions, Parent shall provide to Commercial Barge
Line the funds necessary to consummate the 2017 Note
Transactions (including the payment of all applicable premiums,
consent fees and all related fees and expenses) and shall pay
all fees and expenses related thereto, including those of any
dealer managers. At the request of Parent, in connection with
the 2017 Note Transactions, the Company shall direct Commercial
Barge Line to enter into one or more dealer manager agreements
with such Persons as shall be determined by Parent and
reasonably acceptable to the Company. Without Parents
prior written consent, the Company shall not, and shall cause
each of its Subsidiaries not to, amend, waive, extend or agree
to pay any amount in connection with any 2017 Note Transaction.
If at any time prior to completion of any 2017 Note Transaction,
Parent or the Company discovers that any information relating to
it, or any of its respective partners, members, stockholders,
directors, officers or other Affiliates, in each case, that
should be set forth in an amendment or supplement to the
Transaction Documents, so that the Transaction Documents, as the
case may be, would not
A-42
include any misstatement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under
which they were made, not misleading, the party that discovers
such information shall promptly notify the other, and the
Company shall promptly prepare and disseminate or direct
Commercial Barge Line to prepare and disseminate to the holders
of the 2017 Notes an appropriate amendment or supplement to the
Transaction Documents describing such information.
(b) Notwithstanding anything in this
Section 5.16
, none of the Company or any of its
Subsidiaries shall (i) be required to pay any commitment or
other similar fee or to make any other payment (other than
reasonable
out-of-pocket
costs) or incur any other liability or provide or agree to
provide any indemnity in connection with the 2017 Note
Transactions, compliance with
Section 5.16(a)
or any
of the foregoing that is effective prior to the Effective Time
or (ii) be required to take any action pursuant to this
Section 5.16
if doing so would or would be
reasonably expected to prevent or delay the consummation of the
Merger or the ability of the Company to fully perform its
covenants under this Agreement. Parent shall indemnify and hold
harmless the Company, its Subsidiaries and the Representatives
of the Company from and against any and all liabilities, losses,
damages, claims, costs, expenses, interest, awards, judgments
and penalties suffered or incurred by them in connection with
the 2017 Note Transactions and in compliance with
Section 5.16(a)
(including any action taken in
accordance with
Section 5.16(a)
at Parents
request) and any information utilized in connection therewith
(other than historical information relating to the Company or
its Subsidiaries), except with respect to any information
prepared or provided by the Company or any of its Subsidiaries
or any of their respective Representatives or to the extent such
losses, damages, claims, costs or expenses result from the gross
negligence or willful misconduct of the Company, any of its
Subsidiaries or their respective Representatives. Parent shall,
promptly upon request by the Company, reimburse the Company for
all documented and reasonable
out-of-pocket
costs incurred by the Company or its Subsidiaries in connection
with this
Section 5.16
, including in connection with
the review of the Transaction Documents.
(c) No less than one (1) Business Day prior to the
Closing Date, the Company shall deliver to Parent one or more
customary payoff letters signed by Bank of America, N.A., as the
Administrative Agent under the Companys existing credit
facility, setting forth all amounts necessary to be paid in
order to fully pay off all of the Indebtedness under such
facility on the Closing Date and providing that, upon such
payment, such Indebtedness will be extinguished and all
Encumbrances relating thereto will be released.
5.17
Stockholder Litigation
.
In
the event that any stockholder litigation related to this
Agreement, the Merger or the other transactions contemplated by
this Agreement is brought, or, to the Knowledge of the Company,
threatened in writing, against Parent, Merger Sub, the Company
and/or
the
members of the board of directors of the Company prior to the
Effective Time, the Company shall promptly notify Parent of any
such stockholder litigation brought, or, to the Knowledge of the
Company, threatened in writing, against Parent, Merger Sub, the
Company
and/or
members of the board of directors of the Company and Parent
shall notify the Company of any such stockholder litigation
against Parent or Merger Sub, and the Company shall keep Parent,
and Parent shall keep the Company, reasonably informed with
respect to the status thereof;
provided
that such status
update need not include any documents or information that would
give rise to a material risk of waiving any attorney-client
privilege, work product doctrine or other applicable privilege
applicable to such documents or information;
provided,
further
, that that the Company and Parent shall attempt in
good faith to design and implement alternative procedures to
enable Parent to evaluate any such documents or information
without waiving such privilege. The Company shall give Parent
the opportunity to participate in the defense or settlement of
any such stockholder litigation. The Company shall not enter
into any settlement with respect to any such stockholder
litigation without Parents prior written consent (such
consent not to be unreasonably withheld or delayed).
A-43
ARTICLE VI
CONDITIONS
TO THE MERGER
6.1
Conditions to Each Partys Obligations to
Effect the Merger
.
The respective obligations
of Parent, Merger Sub and the Company to consummate the Merger
shall be subject to the satisfaction or waiver (where
permissible under applicable Law) prior to the Effective Time,
of each of the following conditions:
(a)
Requisite Stockholder
Approval
.
The Company shall have received the
Requisite Stockholder Approval.
(b)
Antitrust Approval
.
The
waiting period (and extensions thereof) applicable to the Merger
under the HSR Act and any foreign antitrust laws shall have
expired or been terminated.
(c)
No Prohibitive Laws or
Injunctions
.
No Governmental Authority of
competent jurisdiction shall have (i) enacted, issued,
promulgated, enforced or entered a Law that is in effect and
renders illegal, restricts, restrains, enjoins or otherwise
prohibits, the Merger in the United States or any State thereof,
or (ii) issued or entered an Order that is in effect and
restricts, restrains, enjoins or otherwise prohibits the Merger
in the United States or any State thereof.
6.2
Conditions to the Obligations of Parent and
Merger Sub
.
The obligations of Parent and
Merger Sub to consummate the Merger shall be subject to the
satisfaction or waiver prior to the Effective Time of each of
the following conditions, any of which may be waived exclusively
by Parent:
(a)
Representations and Warranties
.
(i) The representations and warranties of the Company set
forth in
Section 2.1
,
Section 2.2
,
Section 2.3
,
Section 2.4
,
Section 2.12(b)
and
Section 2.28
of this
Agreement shall be true and correct in all respects as of the
date of this Agreement and as of the Closing Date;
(ii) the representations and warranties of the Company set
forth in
Section 2.7
of this Agreement shall be true
and correct in all respects as of the date of this Agreement and
as of the Closing Date with the same force and effect as if made
on and as of such date (other than those representations and
warranties that address matters only as of a particular date,
which representations and warranties shall be true and correct
as of such particular date), except where the failure to be so
true and correct would not result in the payment by Parent of an
aggregate value of consideration in connection with the Merger
that is in excess, by more than a
de minimis
extent, of
the aggregate value of the consideration that would have been
payable by Parent in the Merger in the absence of such failure
to be true and correct;
(iii) the representations and warranties of the Company set
forth in
Section 2.23
,
Section 2.27
and
clause (G) of
Section 2.13(a)
shall be true and
correct in all material respects (without giving effect to any
materiality or Company Material Adverse Effect qualifiers
therein) on and as of the date of this Agreement and the Closing
Date with the same force and effect as if made on and as of such
date, except for such of those representations and warranties
that address matters only as of a particular date, which
representations and warranties shall have been true and correct
in all material respects (without giving effect to any
materiality or Company Material Adverse Effect qualifiers
therein) as of such particular date;
(iv) the representations and warranties of the Company set
forth in
Sections 2.30(a) 2.30(e)
shall
be (A) true and correct in all material respects (without
giving effect to any materiality or Company Material Adverse
Effect qualifiers therein) on and as of the date of this
Agreement and (B) true and correct (without giving effect
to any materiality or Company Material Adverse Effect qualifiers
therein) on and as of the Closing Date with the same force and
effect as if made on and as of such date, except in the case of
clause (B), for any failure to be so true and correct which has
not had and would not have, individually or in the aggregate, a
Company Material Adverse Effect; and
(v) all other representations and warranties of the Company
set forth in this Agreement shall be true and correct (without
giving effect to any materiality or Company Material Adverse
Effect qualifiers therein) on and as of the date of this
Agreement and the Closing Date with the same force and effect as
if
A-44
made on and as of such date, except (A) for any failure to
be so true and correct which has not had and would not have,
individually or in the aggregate, a Company Material Adverse
Effect; and (B) for such of those representations and
warranties that address matters only as of a particular date,
which representations and warranties shall have been true and
correct (without giving effect to any materiality or Company
Material Adverse Effect qualifiers therein) as of such
particular date, except for any failure to be so true and
correct as of such particular date which has not had and would
not have, individually or in the aggregate, a Company Material
Adverse Effect.
(b)
Performance of Obligations of the
Company
.
The Company shall have performed in
all material respects the obligations that are to be performed
by it under this Agreement prior to the Effective Time.
(c)
Officers
Certificate
.
Parent and Merger Sub shall have
received a certificate of the Company, validly executed for and
on behalf of the Company and in its name by a duly authorized
officer thereof, certifying that the conditions set forth in
Section 6.2(a)
and
Section 6.2(b)
have
been satisfied.
(d)
Company Material Adverse
Effect
.
No Company Material Adverse Effect
shall have arisen or occurred following the execution, delivery
and effectiveness of this Agreement.
(e)
Company Affidavit
.
The Company
shall have delivered to Parent an affidavit, dated as of the
Closing Date, setting forth the Companys name, address and
federal employer identification number and stating under
penalties of perjury that the Company is not and has not during
the previous five years been a United States real property
holding corporation within the meaning of Section 897(c)(2)
of the Code.
6.3
Conditions to the Companys Obligations to
Effect the Merger
.
The obligations of the
Company to consummate the Merger shall be subject to the
satisfaction or waiver prior to the Effective Time of each of
the following conditions, any of which may be waived exclusively
by the Company:
(a)
Representations and
Warranties
.
The representations and
warranties of Parent and Merger Sub set forth in this Agreement
shall be true and correct in all material respects on and as of
the Closing Date with the same force and effect as if made on
and as of such date, except (i) for any failure to be so
true and correct that would not, individually or in the
aggregate, prevent or materially delay the consummation of the
transactions contemplated by this Agreement or the ability of
Parent and Merger Sub to fully perform their respective
covenants and obligations under this Agreement; (ii) for
changes contemplated by this Agreement; and (iii) for those
representations and warranties that address matters only as of a
particular date, which representations shall have been so true
and correct as of such particular date, except for any failure
to be so true and correct as of such particular date that would
not, individually or in the aggregate, prevent the Merger or
prevent or materially delay the consummation of the transactions
contemplated by this Agreement or the ability of Parent and
Merger Sub to fully perform their respective covenants and
obligations under this Agreement.
(b)
Performance of Obligations of Parent and Merger
Sub
.
Each of Parent and Merger Sub shall have
performed in all material respects the obligations that are to
be performed by them under this Agreement prior to the Effective
Time.
(c)
Officers
Certificate
.
The Company shall have received
a certificate of Parent and Merger Sub, validly executed for and
on behalf of Parent and Merger Sub and in their respective names
by a duly authorized officer thereof, certifying that the
conditions set forth in
Section 6.3(a)
and
Section 6.3(b)
have been satisfied.
ARTICLE VII
TERMINATION,
AMENDMENT AND WAIVER
7.1
Termination
.
This Agreement
may be validly terminated at any time prior to the Effective
Time, except as otherwise provided below whether before or after
receipt of the Requisite Shareholder Approval,
A-45
only as follows (it being understood and hereby agreed that this
Agreement may not be terminated for any other reason or on any
other basis):
(a) by mutual written agreement of Parent and the Company
after action by their respective boards of directors; or
(b) by either Parent or the Company, in the event that any
Governmental Authority of competent jurisdiction shall have
(i) enacted, issued, promulgated, enforced or entered a Law
that is in effect at the time of such termination and renders
illegal or restricts, restrains, enjoins or otherwise prohibits
the Merger in the United States or any State thereof at the time
of such termination, or (ii) issued or entered a permanent,
final and non-appealable injunction, ruling, decree or order
that restricts, restrains, enjoins or otherwise prohibits the
Merger in the United States or any State thereof; or
(c) by either Parent or the Company, in the event that the
Effective Time shall not have occurred by 5:00 p.m. (New
York time) on March 18, 2011 (such date and time being
referred to herein as the
Termination Date
);
provided, however,
that the right to terminate this
Agreement pursuant to this
Section 7.1(c)
shall not
be available to any party hereto whose actions or omissions have
been the primary cause of, or the primary factor that resulted
in, either (A) the failure to satisfy the conditions to the
obligations of the terminating party set forth in
Article VI
to consummate the Merger prior to the
Termination Date or (B) the failure of the Effective Time
to have occurred prior to the Termination Date; or
(d) by either Parent or the Company, in the event that the
Company shall have failed to obtain the Requisite Stockholder
Approval at the meeting (as it may be adjourned or postponed) of
Company Stockholders at which a vote is taken on the adoption of
this Agreement; or
(e) by Parent, in the event that (i) neither Parent
nor Merger Sub is in material breach of its respective covenants
under this Agreement, and (ii) the Company shall have
breached or failed to perform any of its covenants or agreements
in this Agreement, or any representations or warranties of the
Company in this Agreement shall have become incorrect, in any
case such that one or more conditions set forth in
Section 6.2(a)
or
6.2(b)
would not be
satisfied, and shall have failed to cure such material breach,
failure to perform or inaccuracy within thirty
(30) calendar days after the Company has received written
notice of such breach, failure to perform or inaccuracy from
Parent or, if earlier, the date that is two (2) Business
Days prior to the Termination Date (it being understood that
Parent shall not be permitted to terminate this Agreement
pursuant to this
Section 7.1(e)
in respect of the
breach set forth in any such written notice (A) at any time
prior to the earlier of the end of such thirty
(30) calendar day period and the second (2nd) Business Day
prior to the Termination Date, and (B) at any time after
such thirty (30) calendar day period if the Company shall
have cured such breach, failure to perform or inaccuracy during
such thirty (30) calendar day period); or
(f) by Parent, in the event that (i) the Company Board
shall have effected a Company Board Recommendation Change; or
(ii) a tender or exchange offer for Company Common Stock
that would, if consummated in accordance with its terms,
constitute an Competing Acquisition Transaction is commenced by
a Person unaffiliated with Parent and, within ten
(10) Business Days after the public announcement of the
commencement of such Acquisition Proposal, the Company shall not
have issued a public statement (and filed a
Schedule 14D-9
pursuant to
Rule 14e-2
and
Rule 14d-9
promulgated under the Exchange Act) reaffirming the Company
Board Recommendation and recommending that the Company
Stockholders reject such Acquisition Proposal and not tender any
shares of Company Common Stock into such tender or exchange
offer; or
(g) by the Company, in the event that (i) the Company
is not in material breach of any of its covenants under this
Agreement, and (ii) Parent
and/or
Merger Sub shall have breached or failed to perform any of their
respective covenants or agreements in this Agreement, or any
representations or warranties of Parent
and/or
Merger Sub in this Agreement shall have become incorrect, in any
case such that one or more conditions set forth in
Section 6.3(a)
or
6.3(b)
would not be
satisfied, and shall have failed to cure such material breach,
failure to perform or inaccuracy within thirty
(30) calendar days after
A-46
Parent and Merger Sub have received written notice of such
breach, failure to perform or inaccuracy from the Company or, if
earlier, the date that is two (2) Business Days prior to
the Termination Date (it being understood that the Company shall
not be permitted to terminate this Agreement pursuant to this
Section 7.1(g)
in respect of the breach set forth in
any such written notice (A) at any time during such thirty
(30) calendar day period, and (B) at any time after
such thirty (30) calendar day period if Parent
and/or
Merger Sub shall have cured such breach, failure to perform or
inaccuracy during such thirty (30) calendar day
period); or
(h) by the Company, at any time prior to the receipt of the
Requisite Stockholder Approval, if the Company shall have
received a Superior Proposal and in order for the Company to
enter into a merger agreement, acquisition agreement, purchase
agreement or other similar agreement that the Company Board has
authorized and directed the Company to execute with respect to
such Superior Proposal;
provided
,
however
, that
this Agreement may not be so terminated unless (i) prior to
or simultaneously with such termination the payment required by
Section 7.3(b)
has been made in full to Parent in
accordance with
Section 7.3(b)
,
(ii) simultaneously or promptly following such termination
the Company enters into such agreement and (iii) the
Company has complied in all material respects with
Section 4.3
and
Section 5.5
; or
(i) by the Company, in the event (A) the conditions to
Closing set forth in
Section 6.1
and
Section 6.2
have been satisfied (other than those
conditions that (i) by their nature are to be satisfied at
the Closing and that would be capable of being satisfied if
there were a Closing or (ii) have not been satisfied as a
result of Parent or Merger Subs breach or failure to
perform any of their respective covenants in this Agreement),
(B) the Company was, and (at least one (1) Business
Day prior to the date on which the Closing should have occurred
pursuant to
Section 1.3
) delivered in good faith
written notice (by
e-mail
or by
such other notice that complies with the provisions of
Section 8.2
) to Parent (1) identifying such
date as the date on which the Company in good faith believes the
Closing should occur pursuant to Section 1.3 and
(2) to the effect that it would be, ready, willing and able
to consummate the Merger on such date, and (C) Parent fails
to close the transactions contemplated herein, including the
Merger, within three (3) Business Days of such date.
The party hereto terminating this Agreement pursuant to this
Section 7.1
shall deliver prompt written notice
thereof to the other party(ies) hereto setting forth the
provision of this
Section 7.1
pursuant to which this
Agreement is being terminated.
7.2
Notice of Termination; Effect of
Termination
.
Any valid termination of this
Agreement pursuant to
Section 7.1
shall be effective
immediately upon the delivery of written notice of the
terminating party to the other party or parties hereto, as
applicable. In the event of the termination of this Agreement
pursuant to
Section 7.1
, this Agreement shall be of
no further force or effect without liability of any party or
parties hereto, as applicable (or any partner, member,
stockholder, director, officer, employee, affiliate, agent or
other representative of such party or parties) to the other
party or parties hereto, as applicable, except (a) for the
terms of this
Section 7.2
,
Section 7.3
and
Article VIII
, each of which shall survive the
termination of this Agreement, and (b) subject to
Section 7.3(e)
, nothing in this Agreement shall
relieve any party or parties hereto, as applicable, from
liability for any material breach of, or fraud in connection
with, this Agreement. In addition to the foregoing, no
termination of this Agreement shall affect the obligations of
the parties hereto set forth in the Confidentiality Agreement,
all of which obligations shall survive termination of this
Agreement in accordance with their terms.
7.3
Fees and Expenses
.
(a)
General
.
Except as set forth
in
Section 5.6
,
Section 5.16
or this
Section 7.3
, all fees and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party or parties, as applicable,
incurring such expenses whether or not the Merger is consummated.
(b)
Company Payments
.
(i) In the event that (A) following the execution and
delivery of this Agreement and prior to the termination of this
Agreement pursuant to
Section 7.1(c)
or
Section 7.1(d)
an Acquisition Proposal shall have
A-47
been (1) (x) made to the Company and (y) publicly
disclosed or publicly announced by any Person other than Parent
or Merger Sub and (2) not publicly withdrawn, (B) this
Agreement is validly terminated pursuant to
Section 7.1(c)
or
Section 7.1(d)
, and
(C) within twelve (12) months following such
termination of this Agreement, either an Acquisition Transaction
is consummated or the Company enters into a definitive agreement
providing for an Acquisition Transaction that is subsequently
consummated (whether or not during such twelve-month period),
then the Company shall pay to Parent the Company Termination
Fee, by wire transfer of immediately available funds to an
account or accounts designated in writing by Parent,
concurrently with the consummation of such Acquisition
Transaction.
(ii) In the event that this Agreement is validly terminated
pursuant to
Section 7.1(f)
, the Company shall pay to
Parent the Company Termination Fee by wire transfer of
immediately available funds to an account or accounts designated
in writing by Parent within two (2) Business Days following
the occurrence of such termination.
(iii) In the event that this Agreement is validly
terminated pursuant to
Section 7.1(h)
, the Company
shall pay to Parent the Company Termination Fee, by wire
transfer of immediately available funds to an account or
accounts designated in writing by Parent, prior to, or
simultaneously with, the occurrence of such termination.
(c)
Parent Termination Fee
.
In the
event that this Agreement is validly terminated pursuant to (A)
Section 7.1(g)
or
Section 7.1(i)
or (B)
Section 7.1(c)
and at the time of such termination
this Agreement could have been terminated by the Company
pursuant to
Section 7.1(g)
or
Section 7.1(i)
, then Parent shall pay or cause to be
paid the Parent Termination Fee to the Company promptly, and in
any event within two (2) Business Days following such
termination, by wire transfer of same day funds to one or more
accounts designated by the Company;
provided
that, in the
event that (I) the Parent Termination Fee would otherwise
be payable in accordance with this
Section 7.3(c)
and (II) (A) all conditions in
Section 6.1
and
Section 6.2
have been satisfied at the time when the
Closing would have occurred but for the failure of the Equity
Financing to be funded (or, with respect to those conditions
that by their nature are to be satisfied at the Closing, are
capable of being satisfied at the Closing) and (B) the
financing provided for by the Debt Commitment Letter (or, if
alternative financing is being used in accordance with
Section 5.6
, pursuant to the commitments with
respect thereto) has been funded, or will be funded at the
Closing, in accordance with the terms of the Debt Commitment
Letter if the Equity Financing is funded at the Closing, then
the amount of the Parent Termination Fee payable shall be
increased to twenty million dollars ($20,000,000).
(d)
Single Payment Only
.
The
parties hereto acknowledge and hereby agree that in no event
shall (i) the Company be required to pay the Company
Termination Fee on more than one occasion or (ii) the
Parent Parties be required to pay, or to cause to be paid, the
Parent Termination Fee on more than one occasion, in each case
whether nor not the Company Termination Fee or Parent
Termination Fee, as applicable, may be payable under more than
one provision of this Agreement at the same or at different
times and the occurrence of different events.
(e)
Liquidated Damages
.
(i) In the circumstances in which the Company Termination
Fee is paid in accordance with
Section 7.3(b)
,
Parents receipt of the Company Termination Fee from the
Company pursuant to
Section 7.3(b)
shall
(A) subject to
Section 7.3(f)
, be deemed to be
liquidated damages for any and all losses or damages suffered or
incurred by Parent, Merger Sub, any of their respective
Affiliates or any other Person in connection with this Agreement
(and the termination hereof), the transactions contemplated
hereby (and the abandonment thereof) or any matter forming the
basis for the termination giving rise to payment of such Company
Termination Fee, and (B) subject to
Section 7.3(f)
and
Section 8.8
, be the
sole and exclusive remedy of Parent and Merger Sub against the
Company, its Subsidiaries and each of their respective former,
current and future directors, officers, employees, agents,
general and limited partners, managers, members, shareholders,
Affiliates and assignees and each former, current or future
director, officer, employee, agent, shareholder, general or
limited partner, manager, member, shareholder, Affiliate or
assignee of any of the foregoing (collectively, the
Company Parties
) for any loss or damage
suffered as a result of the failure of the Merger to be
consummated or for a breach or failure to perform hereunder, and
no Company Party shall have any other liability or obligation
relating to or arising out of this Agreement or the transactions
contemplated
A-48
hereby;
provided, however
, that in no event shall the
Companys liability for the Companys willful material
beach or failure to perform any of its covenants or agreements
in this Agreement be limited (it being understood and agreed
that the failure to consummate the transactions contemplated by
this Agreement in the event that all of the conditions to
Closing have been satisfied or waived in accordance with this
Agreement shall be deemed a willful material breach of this
Agreement).
(ii) The Companys receipt of the Parent Termination
Fee from Parent pursuant to
Section 7.3(c)
, and the
guarantee thereof pursuant to the Guarantee, shall, subject to
Section 7.3(f)
, be the sole and exclusive remedy of
the Company and its Affiliates against Parent, its Subsidiaries,
Guarantor and each of their respective former, current and
future directors, officers, employees, agents, general and
limited partners, managers, members, shareholders, Affiliates
and assignees and each former, current or future director,
officer, employee, agent, shareholder, general or limited
partner, manager, member, shareholder, Affiliate or assignee of
any of the foregoing (collectively, the
Parent
Parties
) for any loss or damage suffered as a result
of the failure of the Merger to be consummated or for a breach
or failure to perform hereunder, and no Parent Party shall have
any other liability or obligation relating to or arising out of
this Agreement or the transactions contemplated hereby.
(iii) For the avoidance of doubt, (A) under no
circumstances will the Company be entitled to monetary damages
in excess of the amount of the Parent Termination Fee (together
with any amounts payable pursuant to
Section 7.3(f)
), (B) subject to
Section 8.8
, under no circumstances (other than
willful material breach by the Company of any of its covenants
or agreements in this Agreement) will Parent be entitled to
monetary damages in excess of the amount of the Company
Termination Fee (together with any amounts payable pursuant to
Section 7.3(f)
), and (C) while Parent may
pursue both a grant of specific performance and the payment of
the Company Termination Fee, under no circumstance shall Parent
be permitted or entitled to receive both a grant of specific
performance that results in the Merger occurring and all or any
portion of the Company Termination Fee (
provided
that
Parent shall in any event be entitled to receive any and all
amounts payable pursuant to
Section 7.3(f)
).
(f)
Costs of Recovery
.
The parties
acknowledge that the agreements contained in this
Section 7.3
are an integral part of the transactions
contemplated by this Agreement, and that, without these
agreements, the parties would not enter into this Agreement;
accordingly, if the Company fails to promptly pay the amount due
pursuant to
Section 7.3(b)
or Parent fails to
promptly pay the amount due pursuant to
Section 7.3(c)
, and, in order to obtain such
payment, Parent or Merger Sub, on the one hand, or the Company,
on the other hand, commences a suit that results in a judgment
against the Company for the amount set forth in
Section 7.3(b)
or a judgment against Parent for the
amount set forth in
Section 7.3(c)
, the Company
shall pay to Parent or Merger Sub, on the one hand, or Parent
shall pay to the Company, on the other hand, (i) its costs
and expenses (including attorneys fees) in connection with
such suit and (ii) interest on the amount payable pursuant
to such judgment at the prime rate of Citibank N.A. in effect on
the date of payment, with such interest being payable in respect
of the period from the date that payment was originally required
to be made pursuant to
Section 7.3(b)
or
Section 7.3(c)
of this Agreement, as applicable,
through the date of payment.
ARTICLE VIII
GENERAL
PROVISIONS
8.1
Survival of Representations, Warranties and
Covenants
.
The representations, warranties
and covenants of the Company, Parent and Merger Sub contained in
this Agreement shall terminate at the Effective Time, and only
this
Article VIII
,
Article I
,
Section 5.10
and
Section 5.11
shall so
survive the Effective Time in accordance with their respective
terms. The Guarantee shall survive the termination of this
Agreement in accordance with its terms.
8.2
Notices
.
All notices and other
communications hereunder shall be in writing and shall be deemed
to have been duly delivered and received hereunder (i) four
(4) business days after being sent by registered or
certified mail, return receipt requested, postage prepaid,
(ii) one (1) business day after being sent for next
business day delivery, fees prepaid, via a reputable nationwide
overnight courier service, or (iii) immediately
A-49
upon delivery by hand or by facsimile (with a written or
electronic confirmation of delivery), in each case to the
intended recipient as set forth below:
|
|
|
|
(a)
|
if to Parent or Merger Sub, to:
|
Finn Holding Corporation
c/o Platinum
Equity, LLC
52 Vanderbilt Avenue
New York, NY 10017
Attn: Louis Samson
Fax:
(212) 905-0011
with copies (which shall not constitute notice) to:
Finn Holding Corporation
c/o Platinum
Equity, LLC
360 North Crescent Drive, South Building
Beverly Hills, CA 90210
Attn: Eva M. Kalawski
Fax:
(310) 712-1863
and
Latham & Watkins LLP
555 11th Street, N.W.
Suite 1000
Washington, DC 20004
Attn: David I. Brown, Esq.
Fax:
(202) 637-2201
|
|
|
|
(b)
|
if to the Company (prior to the Effective Time), to:
|
American Commercial Lines Inc.
1701 E. Market Street
Jeffersonville, Indiana 47130
Attention: General Counsel
Telecopy No.:
(812) 288-0294
with copies (which shall not constitute notice) to:
Hogan Lovells US LLP
875 Third Avenue
New York, New York 10022
Attn: Amy Bowerman Freed, Esq.
Alexander B. Johnson, Esq.
Fax:
(212) 918-3100
and
Hogan Lovells US LLP
100 International Drive
Suite 2000
Baltimore, Maryland 21202
Attn: Michael J. Silver, Esq.
Fax:
(410) 659-2701
A-50
and
Richards, Layton & Finger One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Attn: Mark J. Gentile, Esq.
Fax:
(302) 498-7722
or to such other persons or addresses as may be designated in
writing by the party to receive such notice as provided above
(or, if specifically provided for elsewhere in this Agreement
such as
Section 7.1(i)
, by email).
8.3
Assignment
.
No party may
assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the
other parties;
provided, however
, that Parent and Merger
Sub shall have the right to assign all or any portion of their
respective rights and obligations under this Agreement
(a) from and after the Effective Time, in connection with a
merger or consolidation involving Parent or other disposition of
all or substantially all of the assets of Parent or the
Surviving Corporation, (b) from and after the Effective
Time, to any lender providing financing to Parent or the
Surviving Corporation or any of their Affiliates, for collateral
security purposes, and any such lender may exercise all of the
rights and remedies of Parent hereunder or (c) to any
wholly owned Subsidiary of Parent;
provided
, that in the
event of an assignment pursuant to this
Section 8.3(c)
, each of Parent and Merger Sub will
remain bound by its obligations hereunder. Subject to the
preceding sentence, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
8.4
Confidentiality
.
Parent,
Merger Sub and the Company hereby acknowledge that an Affiliate
of Parent and the Company have previously executed a
Confidentiality Agreement, dated May 28, 2010 (as amended,
the
Confidentiality Agreement
), which will
continue in full force and effect in accordance with its terms.
8.5
Entire Agreement
.
This
Agreement and the documents and instruments and other agreements
among the parties hereto as contemplated by or referred to
herein, including the Company Disclosure Schedule and the
Guarantee, constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all
prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof;
provided, however,
the Confidentiality Agreement shall
not be superseded, shall survive any termination of this
Agreement and shall continue in full force and effect until the
earlier to occur of (a) the Effective Time and (b) the
date on which the Confidentiality Agreement expires in
accordance with its terms or is validly terminated by the
parties thereto. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT,
NEITHER PARENT AND MERGER SUB, ON THE ONE HAND, NOR THE COMPANY,
ON THE OTHER HAND, MAKES ANY REPRESENTATIONS OR WARRANTIES TO
THE OTHER, AND EACH PARTY HEREBY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO THE
ACCURACY OR COMPLETENESS OF ANY OTHER INFORMATION, MADE (OR MADE
AVAILABLE BY) BY ITSELF OR ANY OF ITS REPRESENTATIVES, WITH
RESPECT TO, OR IN CONNECTION WITH, THE NEGOTIATION, EXECUTION OR
DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER
OR THE OTHERS REPRESENTATIVES OF ANY DOCUMENTATION OR
OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE
FOREGOING.
8.6
Third Party
Beneficiaries
.
This Agreement is not intended
to, and shall not, confer upon any Person that is not a party
hereto any rights or remedies hereunder, except (a) as set
forth in or contemplated by the terms and provisions of
Section 5.10
, (b) with respect to the
reimbursement and indemnification obligations of Parent under
Section 5.6(b)(iii)
, (c) from and after the
Effective Time, the rights of holders of shares of the Company
Common Stock to receive the merger consideration set forth in
Article I
and (d) the Parent Parties and the
Company Parties (other than the parties to this Agreement
themselves) shall be intended third party beneficiaries of, and
permitted to enforce, the limitations on liability set forth in
or contemplated by
Section 7.3(e)
.
A-51
8.7
Severability
.
In the event
that any provision of this Agreement, or the application
thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder
of this Agreement will continue in full force and effect and the
application of such provision to other persons or circumstances
will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible,
the economic, business and other purposes of such void or
unenforceable provision.
8.8
Remedies
.
(a) Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by
a party of any one remedy will not preclude the exercise of any
other remedy;
provided
that, notwithstanding anything to
the contrary in this Agreement, the Company shall not be
entitled to specific performance of, or injunctive relief with
respect to, the covenants or agreements of Parent or Merger Sub
under this Agreement.
(b) The parties hereto hereby agree that irreparable damage
would occur in the event that any covenant or agreement of the
Company in this Agreement were not performed in accordance with
its specific terms or were otherwise breached, and that money
damages or other legal remedies would not be an adequate remedy
for any such damages. Accordingly, the parties hereto
acknowledge and hereby agree that, unless this Agreement has
been terminated in accordance with
Article VII
, in
the event of any breach or threatened breach by the Company of
any of its covenants or obligations set forth in this Agreement,
Parent and Merger Sub shall be entitled to an injunction or
injunctions to prevent or restrain breaches or threatened
breaches of this Agreement by the Company, and to specifically
enforce the terms and provisions of this Agreement to prevent
breaches or threatened breaches of, or to enforce compliance
with, the covenants and obligations of the Company under this
Agreement.
(c) The Company agrees not to raise any objections to the
availability of the equitable remedy of specific performance to
prevent or restrain breaches or threatened breaches of this
Agreement by the Company and to specifically enforce the terms
and provisions of this Agreement to prevent breaches or
threatened breaches of, or to enforce compliance with, the
covenants and obligations of the Company under this Agreement.
The Company further agrees that by seeking the remedies provided
for in
Section 8.8(a)
, Parent and Merger Sub shall
not in any respect waive their right to seek any other form of
relief that may be available to Parent and Merger Sub under this
Agreement (including monetary damages) in the event that this
Agreement has been terminated or in the event that the remedies
provided for in
Section 8.8
are not available or
otherwise are not granted, nor shall the commencement of any
Legal Proceeding pursuant to
Section 8.8(a)
or
anything set forth in this
Section 8.8
restrict or
limit Parents or Merger Subs right to terminate this
Agreement in accordance with the terms of
Article VII
or pursue any other remedies under this
Agreement that may be available then or thereafter. In
connection with seeking an injunction or injunctions to prevent
or restrain breaches or threatened breaches of this Agreement or
to enforce by specific performance the terms and provisions of
this Agreement, Parent and Merger Sub shall not be required to
provide any bond or other security in connection with any such
order or injunction.
8.9
Governing Law
.
This Agreement
shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving regard to any
principles of conflicts of law thereof to the extent they would
result in the application of the laws of another jurisdiction.
8.10
Consent to Jurisdiction
.
Each
of the parties hereto (a) irrevocably consents to the
service of the summons and complaint and any other process in
any action or proceeding relating to the transactions
contemplated by this Agreement, the Equity Financing Letter and
the Guarantee, for and on behalf of itself or any of its
properties or assets, in accordance with this
Section 8.10
or in such other manner as may be
permitted by applicable Law, and nothing in this
Section 8.10
shall affect the right of any party to
serve legal process in any other manner permitted by applicable
Law; (b) irrevocably and unconditionally consents and
submits itself and its properties and assets in any action or
proceeding to the exclusive general jurisdiction of the Court of
Chancery of the State of Delaware (the
Chancery
Court
) and any state appellate court therefrom
A-52
located within the State of Delaware (or, only if the Chancery
Court declines to accept jurisdiction over a particular matter,
any state or federal court within the State of Delaware) in the
event any dispute or controversy arises out of this Agreement,
the Equity Financing Letter, the Guarantee or the transactions
contemplated hereby or thereby, the Equity Financing Letter, the
Guarantee, or for recognition and enforcement of any judgment in
respect thereof; (c) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other
request for leave from any such court; (d) agrees that any
actions or proceedings arising in connection with this
Agreement, the Equity Financing Letter, the Guarantee or the
transactions contemplated hereby or thereby shall be brought,
tried and determined only in the Chancery Court and any state
appellate court therefrom located within the State of Delaware
(or, only if the Chancery Court declines to accept jurisdiction
over a particular matter, any state or federal court within the
State of Delaware); (e) waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or
claim the same; and (f) agrees that it will not bring any
action relating to this Agreement, the Equity Financing Letter,
the Guarantee or the transactions contemplated hereby or thereby
in any court other than the aforesaid courts. Each of Parent,
Merger Sub and the Company agrees that a final judgment in any
action or proceeding in such courts as provided above shall be
conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by applicable Law.
8.11
WAIVER OF JURY TRIAL
.
EACH OF
PARENT, THE COMPANY AND MERGER SUB HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE EQUITY FINANCING LETTER, THE
GUARANTEE OR THE ACTIONS OF PARENT, COMPANY OR MERGER SUB IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF
OR THEREOF.
8.12
Company Disclosure
Schedule References
.
The parties hereto
agree that the disclosure set forth in any particular section or
subsection of the Company Disclosure Schedule shall be deemed to
be an exception to (or, as applicable, a disclosure for purposes
of) (a) the representations and warranties (or covenants,
as applicable) of the Company that are set forth in the
corresponding section or subsection of this Agreement, and
(b) any other representations and warranties (or covenants,
as applicable) of the Company that are set forth in this
Agreement, but in the case of this clause (b) only if the
relevance of that disclosure as an exception to (or a disclosure
for purposes of) such other representations and warranties (or
covenants, as applicable) is reasonably apparent on the face of
such disclosure. The parties hereto further agree that the mere
inclusion of an item in the Company Disclosure Schedule as an
exception to the representations and warranties (or covenants as
applicable) of the Company shall not be deemed an admission that
such item represents a material exception or material fact,
event or circumstances or that such has had or, individually or
in the aggregate, would have a Company Material Adverse Effect.
8.13
Counterparts
.
This Agreement
may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.
8.14
Amendment
.
Subject to
applicable Law and subject to the other provisions of this
Agreement, this Agreement may be amended by the parties hereto
at any time, whether before or after receipt of the Requisite
Stockholder Approval, by execution of an instrument in writing
signed on behalf of each of Parent, Merger Sub and the Company;
provided, however,
that in the event that the Company has
received the Requisite Stockholder Approval, no amendment shall
be made to this Agreement that requires the approval of such
Company Stockholders under the DGCL without such approval.
8.15
Extension; Waiver
.
At any
time and from time to time prior to the Effective Time, any
party or parties hereto may, to the extent legally allowed and
except as otherwise set forth herein, (a) extend the time
for the performance of any of the obligations or other acts of
the other party or parties hereto, as applicable, (b) waive
any inaccuracies in the representations and warranties made to
such party or parties hereto contained herein or in any document
delivered pursuant hereto and (c) waive compliance with any
of the agreements or
A-53
conditions for the benefit of such party or parties hereto
contained herein. Any agreement on the part of a party or
parties hereto to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf
of such party or parties, as applicable. Any delay in exercising
any right under this Agreement shall not constitute a waiver of
such right.
ARTICLE IX
DEFINITIONS &
INTERPRETATIONS
9.1
Certain Definitions
.
For all
purposes of and under this Agreement, the following capitalized
terms shall have the following respective meanings:
(a)
Acceptable Confidentiality
Agreement
shall mean an agreement with respect to
the confidentiality of the Companys material non-public
information that is either: (i) in effect as of the
execution and delivery of this Agreement; or (ii) executed,
delivered and effective after the execution, delivery and
effectiveness of this Agreement and that contains provisions
that require any counter-party(ies) thereto (and any of
its(their) representatives named therein) that receive material
non-public information of or with respect to the Company to keep
such information confidential, provided that (x) such
confidentiality provisions are no less restrictive in the
aggregate to such counter-party(ies) (and any of its(their)
representatives named therein) than the terms of the
Confidentiality Agreement and (y) such confidentiality
agreement does not prohibit the Company from providing to Parent
the documents or other information that this Agreement
contemplates the Company providing to Parent. For the avoidance
of doubt, an Acceptable Confidentiality Agreement
need not contain any standstill or other similar
provisions.
(b)
Acquisition Proposal
shall
mean any offer or proposal (other than an offer or proposal by
Parent or Merger Sub) to engage in an Acquisition Transaction.
(c)
Acquisition Transaction
shall
mean any transaction or series of related transactions (other
than the Merger) involving:
(i) any direct or indirect purchase or other acquisition by
any Person or group (as defined in or under
Section 13(d) of the Exchange Act), whether from the
Company
and/or
any
other Person(s), of shares of Company Common Stock representing
more than fifteen percent (15%) of the Company Common Stock
outstanding after giving effect to the consummation of such
purchase or other acquisition, including pursuant to a tender
offer or exchange offer by any Person or group that,
if consummated in accordance with its terms, would result in
such Person or group beneficially owning more than
fifteen percent (15%) of the Company Common Stock outstanding
after giving effect to the consummation of such tender or
exchange offer;
(ii) any direct or indirect purchase or other acquisition
by any Person or group (as defined in or under
Section 13(d) of the Exchange Act) of more than fifteen
percent (15%) of the consolidated assets of the Company and its
Subsidiaries taken as a whole (measured by the fair market value
thereof, the related revenues applicable to such assets or the
related net income applicable to such assets, in each case as of
the date of such sale, transfer, acquisition or
disposition); or
(iii) any merger, consolidation, business combination, sale
of capital stock, recapitalization, reorganization, liquidation,
dissolution or other similar transaction involving the Company
pursuant to which any Person or group (as defined in
or under Section 13(d) of the Exchange Act), other than the
Company Stockholders (as a group) immediately prior to the
consummation of such transaction, would hold fifteen percent
(15%) or more of the shares of the outstanding Company Common
Stock or outstanding voting power or of any new series or new
class of preferred stock that would be entitled to a class or
series vote with respect to the Merger after giving effect to
the consummation of such transaction.
(d)
Affiliate
shall mean, with
respect to any Person, any other Person which directly or
indirectly controls, is controlled by or is under common control
with such Person. For purposes of the immediately
A-54
preceding sentence, the term control (including,
with correlative meanings, the terms controlling,
controlled by and under common control
with), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such
Person, whether through ownership of voting securities, by
contract or otherwise.
(e)
Antitrust Law
shall mean the
Sherman Act, as amended, the Clayton Act, as amended, the HSR
Act, the Federal Trade Commission Act, as amended, and all other
laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization
or restraint of trade or significant impediments or lessening of
competition or the creation or strengthening of a dominant
position through merger or acquisition, in any case that are
applicable to the transactions contemplated by this Agreement.
(f)
Audited Company Balance Sheet
shall mean the consolidated balance sheet of the Company and its
consolidated Subsidiaries as of December 31, 2009 set forth
in the Companys Annual Report on
Form 10-K
filed by the Company with the SEC for the fiscal year ended
December 31, 2009.
(g)
Business Day
shall mean any
day, other than a Saturday, Sunday and any day which is a legal
holiday under the laws of the State of New York, or is a day on
which banking institutions located in the State of New York are
authorized or required by law or other governmental action to
close.
(h)
COBRA
shall mean Part 6
of Subtitle B of Title I of ERISA, Section 4980B of
the Code and any similar state law.
(i)
Code
shall mean the Internal
Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder, or any successor statutes, rules and
regulations thereto.
(j)
Company Board
shall mean the
Board of Directors of the Company.
(k)
Company Capital Stock
shall
mean the Company Common Stock and the Company Preferred Stock.
(l)
Company Common Stock
shall
mean the Common Stock, par value $0.01 per share, of the Company.
(m)
Company Material Adverse
Effect
shall mean any change, occurrence, event,
violation, inaccuracy, effect or circumstance (each, an
Effect
) that, individually or taken
together with all other Effects, is or would reasonably be
expected to be materially adverse to (A) the business,
assets, liabilities, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries, taken
as a whole or (B) the ability of the Company to consummate
the Merger or otherwise perform its obligations under this
Agreement;
provided
,
however
, that no Effect (by
itself or when aggregated or taken together with any and all
other Effects) directly or indirectly resulting from, arising
out of or attributable to any of the following shall be deemed
to be or constitute a Company Material Adverse
Effect, or shall be taken into account when determining
whether a Company Material Adverse Effect has
occurred or may, would or could occur, in each case, pursuant to
clause (A) above:
(i) changes in general economic conditions in the United
States or any other country or region in the world, or changes
in conditions in the global economy generally;
(ii) changes in conditions generally affecting the
financial markets, credit markets or capital markets in the
United States or any other country or region in the world,
including (A) such changes in interest rates in the United
States or any other country and such changes in exchange rates
for the currencies of any countries and (B) any suspension
of trading in securities (whether equity, debt, derivative or
hybrid securities) generally on any securities exchange or
over-the-counter
market operating in the United States or any other country or
region in the world;
(iii) changes in conditions generally affecting the
industries in which the Company and its Subsidiaries conduct
business, including changes in conditions in the cargo barge
transportation industry generally or the shipbuilding and repair
industry generally;
A-55
(iv) changes in political conditions generally affecting
the United States or any other country or region in the world,
acts of war, sabotage or terrorism (including any escalation or
general worsening of any such acts of war, sabotage or
terrorism), earthquakes, hurricanes, tsunamis, tornadoes,
floods, mudslides, wild fires or other natural disasters,
weather conditions and other force majeure events, in each case
in the United States or any other country or region in the world;
(v) changes in law or other legal or regulatory conditions
(or the interpretation thereof) or changes in GAAP or other
accounting standards (or the interpretation thereof) after the
date hereof;
(vi) except as related to
Section 2.5
or
Section 2.6
, the negotiation, execution,
announcement or performance of this Agreement or the pendency or
consummation of the transactions contemplated hereby;
(vii) except as related to
Section 2.5
or
Section 2.6
, compliance with the terms of, or the
taking of any action required by this Agreement (other than
Section 4.1
), or the failure to take any action
prohibited by this Agreement (other than
Section 4.1
) or any actions taken, or failure to
take action, in each case, to which Parent has in writing
expressly approved, consented to or requested to the extent the
possibility of such Effects were described to Parent by the
Company in advance of such approval, consent or requested action
or failure to act or were otherwise reasonably foreseeable
Effects of the applicable action or failure to act;
(viii) changes in the Companys stock price or the
trading volume of the Companys stock, in and of itself
(provided, however, that the exception in this clause shall not
in any way prevent or otherwise affect a determination that any
Effect underlying such change has resulted in, or contributed
to, a Company Material Adverse Effect);
(ix) any failure, in and of itself, by the Company to meet
any public estimates or expectations of the Companys
revenue, earnings or other financial performance or results of
operations for any period, or any failure by the Company to meet
any internal budgets, plans or forecasts of its revenues,
earnings or other financial performance or results of operations;
(x) changes in the Companys analysts
recommendations with respect to the Company; and
(xi) the availability or cost of equity, debt or other
financing to Parent or Merger Sub;
provided, however
,
that (I) each Effect set forth in clause (i), (ii), (iii),
(iv), or (v) above may be taken into account in determining
whether a Company Material Adverse Effect has occurred, or may,
would or could occur pursuant to clause (x) above if such
Effect has a disproportionate adverse effect on the Company and
its Subsidiaries, taken as a whole, related to other companies
operating in the industries in which the Company and its
Subsidiaries operate and (II) any cause of any Effect
referred to in clause (viii), (ix), (x) or (xi) (if not
otherwise expressly falling within any of the clauses (i)
through (xi) above) may be taken into account in
determining whether a Company Material Adverse Effect has
occurred, or may, would or could occur pursuant to
clause (A) above.
(n)
Company Options
shall mean
any options to purchase shares of Company Common Stock
outstanding under any of the Company Stock Plans.
(o)
Company Preferred Stock
shall
mean the Preferred Stock, with no par value, of the Company.
(p)
Company RSU Awards
shall mean
any awards of restricted stock units, including any awards of
performance-based restricted stock units, outstanding under any
of the Company Stock Plans.
(q)
Company Stock Plans
shall
mean (i) the American Commercial Lines Inc. Equity Award
Plan for Employees, Officers and Directors, (ii) the
American Commercial Lines Inc. 2005 Stock Incentive Plan, as
amended, and (ii) the American Commercial Lines Inc. 2008
Omnibus Incentive Plan.
(r)
Company Stockholders
shall
mean holders of shares of Company Capital Stock immediately
prior to the Effective Time.
A-56
(s)
Company Termination Fee
shall
mean an amount in cash equal to fourteen million dollars
($14,000,000);
provided, however,
that notwithstanding
the foregoing, Company Termination Fee shall mean an
amount in cash (without interest) equal to twelve million
dollars ($12,000,000) in the event that, at any time prior to
the No-Shop Period Start Date, this Agreement is terminated
pursuant to
Section 7.1(h)
.
(t)
Competing Acquisition
Transaction
shall have the same meaning as an
Acquisition Transaction under this Agreement except
that all references therein to fifteen percent (15%)
shall be references to fifty percent (50%).
(u)
Continuing Employees
shall
mean all current employees of the Company who are offered and
timely accept employment by Parent or any Subsidiary of Parent
as of the Effective Time, who continue their employment with the
Company at the request of Parent as of the Effective Time or,
outside the U.S., who remain or become employees of the Company,
Parent or any Subsidiary of Parent as of the Effective Time as
required by applicable Law.
(v)
Contract
shall mean any
written or oral contract, subcontract, note, bond, mortgage,
indenture, lease, license, sublicense, agreement, obligation,
commitment or binding arrangement or understanding.
(w)
Delaware Law
shall mean the
DGCL and any other applicable Law (including common law) of the
State of Delaware.
(x)
DOJ
shall mean the United
States Department of Justice or any successor thereto.
(y)
DOL
shall mean the United
States Department of Labor or any
successor thereto.
(z)
Election Deadline
shall mean
five (5) Business Days prior to the date on which the Proxy
Statement is mailed to the Company Stockholders.
(aa)
Environmental Laws
shall
mean all applicable Laws, regulations, codes, licenses, permits,
orders, judgments, decrees and injunctions from any Governmental
Authority concerning (A) the protection of human health and
the environment, (including indoor and outdoor air, water, soil
and natural resources) or (B) the use, generation, storage,
handling, Release or disposal of Hazardous Materials, in each
case as presently in effect.
(bb)
ERISA
shall mean the
Employee Retirement Income Security Act of 1974, as amended, and
the rules and regulations promulgated thereunder, or any
successor statute, rules and regulations thereto.
(cc)
Exchange Act
shall mean the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, or any successor statute,
rules and regulations thereto.
(dd)
Excluded Party
shall mean
any Person that has made or delivered to the Company (or any of
its Representatives in their capacity as such) a bona fide
written Acquisition Proposal on or prior to the No-Shop Period
Start Date which did not result from a breach of
Section 4.3
and which the Company Board shall have
determined in good faith (after consultation with its outside
legal counsel and financial advisor) either constitutes a
Superior Proposal or is reasonably likely to lead to a Superior
Proposal.
(ee)
FTC
shall mean the United
States Federal Trade Commission or any successor thereto.
(ff)
GAAP
shall mean United
States generally accepted accounting principles, applied
consistently.
(gg)
Governmental Authority
shall
mean any government, any governmental or regulatory entity or
body, department, commission, board, agency, subdivision or
instrumentality, and any court, tribunal or judicial or arbitral
body, in each case whether federal, state, county, provincial,
and whether local or foreign.
(hh)
Hazardous Materials
shall
mean all substances presently listed, defined, designated or
classified as hazardous, toxic or radioactive, or regulated as
such, under any applicable Environmental
A-57
Law, including (i) petroleum and any derivative or
by-product thereof, and any asbestos and asbestos-containing
materials and (ii) with respect to Marine Environmental
Incidents, any other pollutant, contaminant, waste, deleterious
substance or dangerous good.
(ii)
HSR Act
shall mean the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder, or any successor
statute, rules and regulations thereto.
(jj)
Indebtedness
shall mean,
with respect to any Person, (a) any liability of that
Person (including any principal, premium, accrued and unpaid
interest, related expenses, prepayment penalties, commitment and
other fees, reimbursements and all other amounts payable in
connection therewith): (i) for borrowed money;
(ii) evidenced by a note, debenture or similar instrument;
(iii) for a purchase money obligation or similar obligation
given in connection with the acquisition of any property or
assets, including securities; (iv) for the deferred
purchase price of property or services, except trade accounts
payable arising in the ordinary course of business;
(v) under any lease or similar arrangement that is, or
would be required in accordance with GAAP to be, accounted for
by the lessee as a capital lease; or (vi) arising out of
interest rate and currency swap arrangements and any other
arrangements designed to provide protection against fluctuations
in interest or currency rates; and (b) any guarantee by
that Person of any such liability of others described in the
preceding clause (a).
(kk)
Intellectual Property
shall
mean all U.S. and foreign: (A) trademarks, service
marks, trade names, Internet domain names, designs, logos, and
slogans, together with goodwill, registrations, and applications
relating to the foregoing (
Trademarks
);
(B) patents and pending patent applications, invention
disclosures, and all renewals, reissues, reexaminations,
divisionals, continuations,
continuations-in-part
and extensions thereof (
Patents
);
(C) registered and unregistered copyrights, including all
applications therefor and renewals thereof, as well as software,
designs, and other works of authorship
(
Copyrights
); and (D) confidential
information, technology, know-how, inventions, processes,
formulae, algorithms, models, and methodologies.
(ll)
Intervening Event
shall mean
any material development (other than an Acquisition Proposal)
after the date of this Agreement that was not known or
reasonably foreseeable by the Company Board on the date of this
Agreement (or, if known, the material consequences of which
could not reasonably have been known to or understood by the
Company Board as of the date of this Agreement).
(mm)
IRS
shall mean the United
States Internal Revenue Service or any successor thereto.
(nn)
Jeffboat
shall mean Jeffboat
LLC, a Delaware limited liability company that is an indirect
wholly owned subsidiary of the Company.
(oo)
Knowledge
of the Company,
with respect to any matter in question, shall mean the actual
knowledge of the Persons set forth in
Section 9.1(nn)
of the Company Disclosure Schedule.
(pp)
Law
shall mean any domestic
or foreign, federal, state, provincial, or local statute, law,
ordinance, regulation, rule, code, Order or rule of common law.
(qq)
Legal Proceeding
shall mean
any legal action, charge, lawsuit, litigation, arbitration,
investigation (to the extent known by the investigated party) or
other similarly formal legal proceeding of any kind whatsoever,
whether at law or in equity, which has been brought by or is
pending before any Governmental Authority.
(rr)
Lien
shall mean any lien,
mortgage, pledge, deed of trust, security interest, charge,
easement,
right-of-way,
encroachment, covenant, condition, encumbrance or other right,
adverse claim or interest whether voluntarily incurred or
arising by operation of law (including, in the case of a Vessel
owned by the Company or its Subsidiaries, a charter or lease of
such Vessel).
(ss)
Marine Environmental
Incident
shall mean (a) any release of any
Hazardous Materials from any of the Vessels during the period
that such Vessels are owned, leased or chartered by the Company
or its Subsidiaries; or (b) any incident in which any
Hazardous Materials are released from a vessel other
A-58
than a Vessel and which involves a collision between a Vessel
while owned, leased or operated by the Company or its
Subsidiaries and such other vessel or some other incident of
navigation or operation, including an allision; in either case,
where such Vessel or the Company
and/or
one
of its Subsidiaries is actually or allegedly at fault or
otherwise liable (in whole or in part); or (c) any incident
in which any Hazardous Material is released from a vessel other
than a Vessel and where a Vessel while owned, leased or operated
by the Company or its Subsidiaries is actually or potentially
liable to be arrested as a result thereof
and/or
where
the Company
and/or
one
of its Subsidiaries
and/or
the
charter of the Vessel is actually or allegedly at fault or
otherwise liable.
(tt)
Marketing Period
shall mean
the period beginning on the date of this Agreement and ending on
(i) December 21, 2010 if the Requisite Stockholder
Approval shall have been obtained on or before December 20,
2010, and (ii) if the Requisite Stockholder Approval shall
not have been obtained by December 20, 2010, five
(5) Business days after the date on which the Requisite
Stockholder Approval is obtained.
(uu)
Nasdaq
shall mean the NASDAQ
Global Select Market, any successor stock exchange or
inter-dealer quotation system operated by The Nasdaq Stock
Market, Inc. or any successor thereto.
(vv)
Order
shall mean any order,
judgment, injunction, decree, stipulation, determination or
award entered by or with any Governmental Authority.
(ww)
Owned Real Property
shall
mean all land, together with all buildings, structures,
improvements and fixtures located thereon, including all
electrical, mechanical, plumbing and other building systems and
all easements and other rights and interests appurtenant
thereto, owned by the Company or any of its Subsidiaries as of
the date hereof.
(xx)
Parent Termination Fee
shall
mean an amount in cash equal to sixteen million dollars
($16,000,000), as such amount may be increased pursuant to
Section 7.3(c)
.
(yy)
Permits
shall mean permits,
licenses, Consents, certifications, registrations, franchises,
variances and exemptions issued or granted by a Governmental
Authority.
(zz)
Permitted Liens
shall mean
any of the following: (i) Liens for Taxes, assessments and
governmental charges or levies that (A) are not yet
delinquent, or (B) are being contested in good faith and by
appropriate proceedings and for which appropriate reserves have
been established to the extent required by GAAP; (ii) Liens
securing Indebtedness or liabilities that are reflected in the
Company SEC Reports; (iii) mechanics, carriers,
workmens, warehousemans, repairmens,
materialmens or other Liens or security interests incurred
in the ordinary course of business consistent with past practice
that are not yet due or that are being contested in good faith
and by appropriate proceedings and for which appropriate
reserves have been established to the extent required by GAAP;
(iv) leases and subleases disclosed in
Section 2.15(a)(ii)
of the Company Disclosure
Schedule; (v) defects, imperfections or irregularities in
title, easements, covenants and rights of way (unrecorded and of
record) and other similar Liens, and zoning, building and other
similar codes or restrictions, in each case that do not
adversely affect in any material respect the current use of the
applicable property leased, used or held for use by the Company
or any of its Subsidiaries; (vi) statutory Liens of
landlords under Leases; (vii) Liens that, in the aggregate,
do not materially impair the value or the continued use and
operation of the assets to which they relate; and
(viii) Liens that are released at or prior to Closing.
(aaa)
Person
shall mean any
individual, corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including
any limited liability company or joint stock company), firm or
other enterprise, association, organization, entity.
(bbb)
Release
shall mean any
emission, spill, seepage, leak, escape, leaching, discharge,
injection, pumping, pouring, emptying, dumping, disposal, or
release of Hazardous Materials into or upon the environment.
A-59
(ccc)
Remediation
shall mean any
investigation,
clean-up,
removal action, remedial action, restoration, repair, abatement,
response action, corrective action, monitoring, sampling and
analysis, reclamation, closure, or post-closure in connection
with the suspected, threatened or actual Release of Hazardous
Materials.
(ddd)
Sarbanes Oxley Act
shall
mean the Sarbanes-Oxley Act of 2002, as amended, and the rules
and regulations promulgated thereunder, or any successor
statute, rules or regulations thereto.
(eee)
SEC
shall mean the United
States Securities and Exchange Commission or any successor
thereto.
(fff)
Securities Act
shall mean
the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, or any successor statute,
rules or regulations thereto.
(ggg)
Significant Subsidiary
shall have the meaning set forth in Rule 1.02(w) of
Regulation S-X
promulgated pursuant to the Exchange Act.
(hhh)
Subsidiary
of any Person
shall mean, except as set forth on
Section 9.1(ggg)
of the Company Disclosure Schedule, (i) a corporation fifty
percent (50%) of the combined voting power of the outstanding
voting stock of which is owned, directly or indirectly, by such
Person or by one of more other Subsidiaries of such Person or by
such Person and one or more other Subsidiaries thereof,
(ii) a partnership of which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more
other Subsidiaries thereof, directly or indirectly, is the
general partner and has the power to direct the policies,
management and affairs of such partnership, (iii) a limited
liability company of which such Person or one or more other
Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, is the managing
member and has the power to direct the policies, management and
affairs of such company or (iv) any other Person in which
such Person, or one or more other Subsidiaries of such Person or
such Person and one or more other Subsidiaries thereof, directly
or indirectly, has at least a fifty percent (50%) ownership or
the power to direct the policies, management and affairs thereof.
(iii)
Superior Proposal
shall
mean any written Acquisition Proposal for an Acquisition
Transaction (with the percentages set forth in the definition of
such term changed from fifteen percent (15%) to fifty percent
(50%)) on terms that the Company Board shall have determined in
good faith (after consultation with its outside legal counsel
and financial advisor) (i) is reasonably likely to be
consummated in accordance with its terms on a timely basis,
taking into account all legal and financial, antitrust and other
regulatory aspects of the proposal and the Person making the
proposal, including the financing thereof and any conditions
thereto and (ii) would be more favorable to the Company
Stockholders (in their capacity as such) from a financial point
of view than the Merger (taking into account (A) any
amendments to this Agreement made or proposed by Parent to be
made in accordance with
Section 5.5(a)
and
(B) any amounts payable by the Company or any of its
Subsidiaries as a result of the termination of this Agreement,
including the Company Termination Fee).
(jjj)
Tax
shall mean (i) any
and all U.S. federal, state, local and
non-U.S. taxes,
charges, duties, fees, levies or other assessments of any kind
whatsoever imposed by a Governmental Authority, including taxes
based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem,
transfer, franchise, escheat, withholding, payroll, recapture,
employment, fuel, excise and property taxes, together with all
interest, penalties and additions imposed with respect to such
amounts and (ii) any liability for amounts described under
clause (i) above under Treasury
Regulation Section 1.1502-6
(or any similar provision of federal, state, local or foreign
Law), as a result of transferee or successor liability, by
contract, by Law or otherwise.
(kkk)
U.S. Citizen
shall
mean a Person that is a citizen of the United States within the
meaning of 46 U.S.C. § 50501, and the regulations
promulgated thereunder (as each may be amended from time to
time), eligible and qualified to own and operate vessels in the
U.S. Coastwise Trade.
A-60
(lll)
U.S. Coastwise Trade
shall mean the carriage or transport of merchandise
and/or
other
materials
and/or
passengers in the coastwise trade of the United States of
America within the meaning of Chapter 551 of Title 46
of the United States Code.
(mmm)
Vessels
shall mean the
vessels owned, leased or chartered by the Company and its
Subsidiaries, including towboats, tugs, and barges.
9.2
Additional Definitions
.
The
following capitalized terms shall have the respective meanings
ascribed thereto in the respective sections of this Agreement
set forth opposite each of the capitalized terms below:
|
|
|
Term
|
|
Section Reference
|
2017 Note Transactions
|
|
5.16(a)
|
2017 Notes
|
|
5.16(a)
|
Agreement
|
|
Preamble
|
Assumed Award
|
|
1.7(d)(iii)
|
Budget
|
|
2.31
|
Capitalization Date
|
|
2.7(a)
|
Certificate of Incorporation
|
|
1.5
|
Certificate of Merger
|
|
1.2
|
Certificates
|
|
1.8(c)
|
Chancery Court
|
|
8.10
|
Closing
|
|
1.3
|
Closing Date
|
|
1.3
|
Collective Bargaining Agreement
|
|
2.19(a)
|
Commercial Barge Line
|
|
5.16(a)
|
Company
|
|
Preamble
|
Company Board Recommendation
|
|
2.3
|
Company Board Recommendation Change
|
|
5.5(a)
|
Company Disclosure Schedule
|
|
Article II
|
Company Intellectual Property
|
|
2.16(a)
|
Company Parties
|
|
7.3(e)(i)
|
Company SEC Reports
|
|
2.9
|
Company Securities
|
|
2.7(c)
|
Company Stockholder Meeting
|
|
5.4(a)
|
Comparable Plans
|
|
5.11(b)
|
Confidentiality Agreement
|
|
8.4
|
Consent
|
|
2.6
|
Consent Solicitation
|
|
5.16(a)
|
Continuing Plans
|
|
5.11(a)
|
D&O Insurance
|
|
5.10(c)
|
Debt Commitment Letter
|
|
3.11(b)
|
Debt Financing
|
|
3.11(b)
|
Delaware Secretary of State
|
|
1.2
|
DGCL
|
|
Recitals
|
Dissenting Shares
|
|
1.7(c)(i)
|
Effective Time
|
|
1.2
|
Employee Plans
|
|
2.18(a)
|
Equity Financing
|
|
3.11(a)
|
A-61
|
|
|
Term
|
|
Section Reference
|
Equity Financing Letter
|
|
3.11(b)
|
ERISA Affiliate
|
|
2.18(a)
|
Exchange Fund
|
|
1.8(b)
|
Exchange Ratio
|
|
1.7(d)(iii)
|
Financing
|
|
3.11(b)
|
Financing Letters
|
|
3.11(b)
|
Guarantee
|
|
Recitals
|
Guarantor
|
|
Recitals
|
Indemnified Persons
|
|
5.10(a)
|
Indenture
|
|
5.16(a)
|
Intermediate Holdco
|
|
3.2
|
In-the-Money
Option
|
|
1.7(d)(ii)
|
Leased Real Property
|
|
2.15(b)
|
Leases
|
|
2.15(b)
|
Material Contract
|
|
2.13
|
Maximum Annual Premium
|
|
5.10(c)
|
Merger
|
|
Recitals
|
Merger Sub
|
|
Preamble
|
New Debt Commitment Letter
|
|
5.6(b)(ii)
|
New Plans
|
|
5.11(c)
|
No-Shop Period Start Date
|
|
4.3(a)
|
Old Plans
|
|
5.11(c)
|
Option Consideration
|
|
1.7(d)
|
Other Required Company Filing(s)
|
|
2.29
|
Owned Company Shares
|
|
1.7(a)(ii)
|
Parent
|
|
Preamble
|
Parent Common Stock
|
|
1.7(d)(iii)
|
Parent Parties
|
|
7.3(e)(ii)
|
Payment Agent
|
|
1.8
|
Per Share Price
|
|
1.7(a)(i)
|
Proxy Statement
|
|
2.29
|
Report Date
|
|
2.30(a)
|
Representatives
|
|
4.3(a)
|
Requisite Stockholder Approval
|
|
2.4
|
RSU Consideration
|
|
1.7(d)
|
Special Committee
|
|
Recitals
|
Surviving Corporation
|
|
1.1
|
Tax Returns
|
|
2.17(a)
|
Tender Election Deadline
|
|
5.16(a)
|
Tender Offer
|
|
5.16(a)
|
Termination Date
|
|
7.1(c)
|
Transaction Documents
|
|
5.16(a)
|
Uncertificated Shares
|
|
1.8(c)
|
Voting Agreement
|
|
Recitals
|
A-62
9.3
Certain Interpretations
.
(a) Unless otherwise indicated, all references herein to
Articles, Sections, Annexes, Exhibits or Schedules, shall be
deemed to refer to Articles, Sections, Annexes, Exhibits or
Schedules of or to this Agreement, as applicable.
(b) Unless otherwise indicated, the words
include, includes and
including, when used herein, shall be deemed in each
case to be followed by the words without limitation.
(c) The table of contents and headings set forth in this
Agreement are for convenience of reference purposes only and
shall not affect or be deemed to affect in any way the meaning
or interpretation of this Agreement or any term or provision
hereof.
(d) References to $ and dollars are
to the currency of the United States.
(e) References to made available shall mean
that such documents or information referenced shall have been
contained in the Companys electronic data room for Project
Monticello to which Parent and its counsel had access, or which
have otherwise been delivered to the applicable Person.
(f) When reference is made herein to a Person, such
reference shall be deemed to include all direct and indirect
Subsidiaries of such Person unless otherwise indicated or the
context otherwise requires.
(g) Unless otherwise indicted, all references herein to the
Subsidiaries of a Person shall be deemed to include all direct
and indirect Subsidiaries of such Person unless otherwise
indicated or the context otherwise requires.
(h) Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and
pronouns shall include the plural, and vice versa.
(i) The parties hereto agree that they have been
represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any law,
holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party
drafting such agreement or document.
[Remainder
of Page Intentionally Left Blank]
A-63
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be executed by their respective duly authorized officers to
be effective as of the date first above written.
FINN HOLDING CORPORATION
Name: Mary Ann Sigler
FINN MERGER CORPORATION
Name: Mary Ann Sigler
AMERICAN COMMERCIAL LINES INC.
Name: Michael P. Ryan
|
|
|
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Title:
|
President and Chief Executive Officer
|
[
signature
page to agreement and plan of
merger
]
EXHIBIT A
FORM OF
VOTING AGREEMENT
See attached.
VOTING
AGREEMENT
This VOTING AGREEMENT (this
Agreement
), dated
as of October 18, 2010, is entered into by and among the
persons listed on
Schedule I
hereto (each, a
Stockholder
and collectively, the
Stockholders
), and Finn Holding Corporation,
a Delaware corporation (
Parent
).
WHEREAS, contemporaneously with the execution of this Agreement,
Parent, Finn Merger Corporation, a Delaware corporation
(
Merger Sub
), and American Commercial Lines
Inc., a Delaware corporation (the
Company
),
are entering into an Agreement and Plan of Merger, dated as of
the date hereof (the
Merger Agreement
),
providing, among other things, for the merger of Merger Sub with
and into the Company with the Company continuing as the
surviving corporation (the
Merger
), upon the
terms and subject to the conditions set forth in the Merger
Agreement;
WHEREAS, as a condition to the willingness of Parent and Merger
Sub to enter into the Merger Agreement, each of Parent and
Merger Sub has required that the Stockholders agree, and in
order to induce Parent and Merger Sub to enter into the Merger
Agreement, the Stockholders have agreed, to enter into this
Agreement, including with respect to the voting of, their
respective Covered Shares (as defined below) as described herein.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
set forth in this Agreement and in the Merger Agreement, and
intending to be legally bound hereby, the parties hereto agree
as follows:
1.
Certain Definitions
.
For the
purposes of this Agreement, capitalized terms used and not
otherwise defined herein shall have the respective meanings
ascribed to them in this
Section 1
, or if no meaning
is ascribed in this
Section 1
or elsewhere in this
Agreement, then such terms shall have the respective meanings
ascribed to them in the Merger Agreement.
Additional Owned Shares
means all
shares of Company Common Stock and any other equity securities
of the Company which are beneficially owned by a Stockholder and
are acquired after the date hereof and prior to the termination
of this Agreement, including any shares of Company Common Stock
or other equity securities of the Company acquired by means of
purchase, dividend or distribution, or issued upon the exercise
of any warrants or options, or the conversion of any convertible
securities or otherwise.
Affiliate
has the meaning set forth in
the Merger Agreement;
provided
,
however
, that the
Company shall be deemed not to be an Affiliate of any
Stockholder for purposes of this Agreement.
beneficial ownership
(and related
terms such as beneficially owned or beneficial
owner) has the meaning set forth in
Rule 13d-3
under the Exchange Act, including all securities as to which
such Person has the right to acquire, without regard to the
60-day
period set forth in such rule.
Control
means the possession, directly
or indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the
ownership of voting securities, by contract, as trustee or
otherwise.
Covered Shares
means the Owned Shares
and Additional Owned Shares.
Encumbrances
has the meaning assigned
thereto in
Section 5(a)
hereof.
Owned Shares
means all shares of
Company Common Stock and any other equity securities of the
Company which are beneficially owned by a Stockholder as of the
date hereof, each as set forth opposite such Stockholders
name on
Schedule I
hereto.
Person
means any individual,
corporation, partnership, limited liability company, firm, joint
venture, association, joint-stock company, trust, unincorporated
organization, governmental authority or other entity.
Term
has the meaning assigned thereto
in
Section 6
hereof.
Transfer
means, with respect to a
security, the transfer, pledge, hypothecation, encumbrance,
assignment or other disposition (whether by sale, merger,
consolidation, liquidation, dissolution, dividend,
distribution or otherwise) of such security or the beneficial
ownership thereof. As a verb,
Transfer
shall
have a correlative meaning.
2.
Stockholder Vote
.
(a)
Voting Agreement
.
During the
Term, at any meeting of the stockholders of the Company, however
called, or at any adjournment or postponement thereof, or in any
other circumstance in which the vote, consent or other approval
of the stockholders of the Company is sought, each Stockholder
shall, with respect to the Covered Shares beneficially owned by
such Stockholder, and shall cause any other holder of record of
one or more Covered Shares beneficially owned by such
Stockholder to, (i) appear at each such meeting, in person
or by proxy, or otherwise cause such Covered Shares to be
counted as present thereat for purposes of calculating a quorum
and (ii) vote (or cause to be voted), or execute and
deliver a written consent (or cause a written consent to be
executed and delivered) covering, such Covered Shares
(A) in favor of adopting the Merger Agreement (for the
purposes of this
Section 2(a)
, as it may be modified
or amended from time to time, unless such modification or
amendment would constitute an Adverse Amendment), including the
agreement of merger contained therein, the execution and
delivery by the Company of the Merger Agreement and the approval
of the terms thereof and each of the other actions contemplated
by the Merger Agreement, (B) in favor of any adjournment or
postponement recommended by the Company with respect to any
stockholder meeting with respect to the Merger Agreement and the
Merger, (C) against any Acquisition Proposal or any
proposal relating to an Acquisition Proposal, (D) against
any merger agreement or merger, acquisition, consolidation,
combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or
by the Company, or any other extraordinary transaction involving
the Company, in each case other than the Merger Agreement and
the Merger, and (E) against any other proposal, action or
agreement, in each case that would (1) prevent, impair,
delay or otherwise adversely affect the transactions
contemplated by the Merger Agreement or the consummation of the
Merger, or (2) result in a breach in any material respect
of any covenant, representation, warranty or any other
obligation or agreement of the Company under the Merger
Agreement. No Stockholder shall commit or agree to take any
action inconsistent with the foregoing.
(b)
Irrevocable
Proxy
.
Concurrently with the execution of
this Agreement, each Stockholder agrees to execute and deliver,
and to cause each other holder of record of one or more Covered
Shared beneficially owned by such Stockholder and any
Stockholder Controlled by such Stockholder to execute and
deliver, to Parent an irrevocable proxy in the form attached as
Exhibit A
hereto (each, a
Proxy
and, collectively, the
Proxies
), each of
which shall be irrevocable during the Term of this Agreement to
the extent permitted by applicable law, covering all of the
applicable Stockholders Covered Shares. The Stockholders
hereby represent and warrant to Parent that any proxies
heretofore given in respect of any Covered Shares are not
irrevocable and that any such proxies are hereby revoked. The
Stockholders hereby affirm that each of the Proxies is given in
connection with the execution of the Merger Agreement and that
such irrevocable proxy is given to secure the performance of the
duties of the applicable Stockholder under this Agreement. The
Stockholders hereby further affirm that each Proxy is coupled
with an interest and may under no circumstances be revoked, it
being acknowledged and agreed however that each Proxy, by its
terms, shall automatically and without any further action by any
Person terminate and be of no further force and effect upon and
after the termination of this Agreement. Parent (or its
designee) agrees not to exercise the proxy granted in each Proxy
for any purpose other than the purposes described in this
Agreement. Each Stockholder hereby ratifies and confirms all
that its irrevocable proxy may lawfully do or cause to be done
by virtue hereof. Without limiting the generality of the
foregoing, such irrevocable proxy is executed and intended to be
irrevocable in accordance with the provisions of
Section 212(e) of the Delaware General Corporation Law. If
for any reason its proxy granted herein is not irrevocable, each
Stockholder agrees to vote its Covered Shares in accordance with
Section 2(a)
hereof.
3.
No Disposition or Solicitation
.
(a)
No Disposition or Adverse
Act
.
Each Stockholder hereby covenants and
agrees that, except as contemplated by this Agreement and the
Merger Agreement, such Stockholder shall not (with respect to
the Covered Shares beneficially owned by such Stockholder), and
shall cause each other Stockholder Controlled by such
Stockholder (with respect to the Covered Shares beneficially
owned by such other Stockholder) not to,
2
directly or indirectly (i) Transfer any or all of such
Covered Shares or any interest therein without the prior written
consent of Parent, (ii) enter into any contract, option or
other agreement or understanding with respect to any Transfer of
any or all of such Covered Shares or any interest therein,
(iii) grant any proxy,
power-of-attorney,
right of first offer or refusal or other authorization or
consent in or with respect to any or all of such Covered Shares
(other than any such proxy,
power-of-attorney,
right of first offer or refusal or other authorization or
consent that is not inconsistent and could not reasonably be
expected to interfere in any manner with the voting obligations
of such Stockholder contained in this Agreement or the Proxy
granted to Parent by such Stockholder), or (iv) deposit any
or all of such Covered Shares into a voting trust or enter into
a voting agreement or arrangement with respect to any or all of
such Covered Shares;
provided
that the foregoing shall
not prohibit the Transfer by any Stockholder of any or all of
the Covered Shares beneficially owned by such Stockholder or any
interest therein to one or more of its Affiliates that, prior to
such Transfer, executes and delivers to Parent a counterpart to
this Agreement and a Proxy. Any attempted Transfer of Covered
Shares or any interest therein in violation of this
Section 3(a)
shall be null and void.
(b)
Non-Solicitation
.
Each
Stockholder hereby agrees that such Stockholder shall not, and
shall cause its Representatives and each other Stockholder
Controlled by such Stockholder not to, directly or indirectly:
(i) solicit, initiate, propose, induce or encourage the
making, submission or announcement of, or take actions that
could reasonably be expected to encourage, facilitate or assist,
an Acquisition Proposal; (ii) furnish to any Person (other
than Parent, Merger Sub or any designees of Parent or Merger
Sub) any non-public information relating to the Company or any
of its Subsidiaries, or afford to any Person access to the
business, properties, assets, books, records or other non-public
information, or to any personnel, of the Company or any of its
Subsidiaries (other than Parent, Merger Sub or any designees of
Parent or Merger Sub), in any such case with the intent to
induce the making, submission or announcement of, or to
encourage, knowingly facilitate or assist, an Acquisition
Proposal or any inquiries or the making of any proposal that
would reasonably be expected to lead to an Acquisition Proposal;
(iii) participate or engage in discussions or negotiations
with any Person with respect to an Acquisition Proposal or which
may reasonably be expected to lead to an Acquisition Proposal;
or (iv) enter into any letter of intent, memorandum of
understanding or other Contract with respect to an Acquisition
Transaction. Each Stockholder shall immediately cease or cause
to be ceased any existing activities, discussions or
negotiations conducted heretofore with respect to any
Acquisition Proposal. Each Stockholder shall promptly (and, in
any event, within forty-eight (48) hours) notify Parent
after such Stockholders Representative receipt of an
Acquisition Proposal (or any discussion, negotiation or inquiry
with respect thereto) and the identity of the person making such
Acquisition Proposal or inquiry. In addition, each Stockholder
shall, on a current basis, inform Parent of the status and
material terms and conditions of any such Acquisition Proposal
or inquiry. Any violation of the foregoing restrictions by a
Stockholder or any of its Representatives shall be deemed to be
a material breach of this Agreement by such Stockholder.
4.
Additional Agreements
.
(a)
Certain Events
.
In the event
of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of the
Company, (i) if it would result in the issuance to or
acquisition by a Stockholder of Covered Shares, this Agreement
and the obligations hereunder shall automatically attach to such
Covered Shares and (ii) the Per Share Purchase Price (as
defined below) shall be adjusted appropriately.
(b)
Waiver of Appraisal and Dissenters Rights
and Actions
.
Each Stockholder hereby
(i) waives and agrees not to exercise any rights of
appraisal or rights to dissent from the Merger that such
Stockholder may have and (ii) agrees not to commence or
participate in, and to take all actions necessary to opt out of
any class in any class action with respect to, any claim,
derivative or otherwise, against Parent, Merger Sub, the Company
or any member of the Company Board or any of their respective
successors, relating to the negotiation, execution or delivery
of this Agreement or the Merger Agreement or the consummation of
the Merger, including any claim (x) challenging the
validity of, seeking to enjoin the operation of, any provision
of this Agreement or (y) alleging a breach of any fiduciary
duty of the Company Board in connection with the Merger
Agreement or the transactions contemplated thereby;
provided
that the foregoing covenants shall not be deemed
a consent to or a waiver of any right of any Stockholder for any
breach of this Agreement by Parent.
3
(c)
Disclosure
.
Unless required by
applicable law, each Stockholder shall not, and shall cause its
Representatives not to, make any press release, public
announcement or other communication with respect to the business
or affairs of the Company, Parent or Merger Sub, including this
Agreement and the Merger Agreement and the transactions
contemplated hereby and thereby, without the prior written
consent of Parent. Each Stockholder hereby consents to and
authorizes the publication and disclosure by Parent of
Stockholders identity and holding of Covered Shares, and
the nature of such Stockholders commitments, arrangements
and understandings under this Agreement, in any announcement or
disclosure document required by the SEC.
(d)
No Inconsistent
Agreement
.
Each Stockholder hereby covenants
and agrees that, except for this Agreement and the Proxies, such
Stockholder (a) has not entered into and shall not enter
into at any time during the Term any voting agreement or voting
trust, and has not granted and shall not grant at any time
during the Term a proxy, consent or power of attorney, with
respect to the Covered Shares beneficially owned by such
Stockholder and (b) shall not knowingly take any action
that would reasonably be expected to make any of such
Stockholders representations and warranties contained
herein untrue or incorrect in any material respect or have the
effect of preventing or disabling it from performing its
material obligations under this Agreement.
(e)
Additional Owned Shares
.
Each
Stockholder hereby agrees, while this Agreement is in effect, to
notify Parent promptly in writing of the number and description
of any Additional Owned Shares.
5.
Representations and Warranties of
Stockholder
.
Each Stockholder hereby
represents and warrants to Parent as follows:
(a)
Title
.
Such Stockholder is the
beneficial owner of the Owned Shares set forth opposite such
Stockholders name on
Schedule I
hereto. Such
Owned Shares constitute all of the capital stock and any other
equity securities of the Company owned of record or beneficially
by such Stockholder on the date hereof. Such Stockholder does
not beneficially own, and does not have any right to acquire
(whether currently, upon lapse of time, following the
satisfaction of any conditions, upon the occurrence of any event
or any combination of the foregoing) any shares of Company
Common Stock or any other equity securities of the Company or
any securities convertible into or exchangeable or exercisable
for shares of Company Common Stock or such other equity
securities, in each case other than the Owned Shares set forth
opposite such Stockholders name on
Schedule I
hereto. Such Stockholder has the sole power to vote and to
direct the voting of, and the sole power to dispose and to
direct the disposal of, the Owned Shares set forth opposite such
Stockholders name on
Schedule I
hereto with no
limitations, qualifications or restrictions on such powers,
subject to applicable securities laws and the terms of this
Agreement, and such Stockholder covenants to ensure that no such
limitations, qualifications or restrictions arise as a result of
any Encumbrances. Except as permitted by this Agreement, and
except as disclosed in the Stockholders
Schedule 13D/A filed with the SEC on March 24, 2009,
the Owned Shares set forth opposite such Stockholders name
on
Schedule I
hereto and the certificates
representing such shares, if any, are now, and at all times
during the Term will be, held by such Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free
and clear of any and all liens, pledges, claims, options,
proxies, voting trusts or agreements, rights, security
interests, understandings or arrangements or any other
encumbrances whatsoever on title, transfer or exercise of any
rights of a stockholder in respect of the Owned Shares set forth
opposite such Stockholders name on
Schedule I
hereto (other than as created by this Agreement) (collectively,
Encumbrances
).
(b)
Organization and
Qualification
.
Such Stockholder is a legal
organization duly organized and validly existing in good
standing under the Laws of the jurisdiction of its organization
indicated on
Schedule I
hereto.
(c)
Authority
.
Such Stockholder
has all necessary power and authority and legal capacity to
execute, deliver and perform all of Stockholders
obligations under this Agreement, and consummate the
transactions contemplated hereby, and no other proceedings or
actions on the part of such Stockholder are necessary to
authorize the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated
hereby.
4
(d)
Due Execution and
Delivery
.
This Agreement has been duly and
validly executed and delivered by such Stockholder and, assuming
due authorization, execution and delivery hereof by Parent,
constitutes a legal, valid and binding agreement of such
Stockholder, enforceable against such Stockholder in accordance
with its terms, subject to general equity principles.
(e)
No Filings; No Conflict or
Default
.
Except for filings under the HSR
Act, any competition, antitrust and investment laws or
regulations of foreign jurisdictions and the Exchange Act, no
filing with, and no permit, authorization, consent or approval
of, any Governmental Authority or any other Person is necessary
for the execution and delivery of this Agreement by such
Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby and the compliance by such
Stockholder with the provisions hereof. None of the execution
and delivery of this Agreement by such Stockholder, the
consummation by such Stockholder of the transactions
contemplated hereby or compliance by such Stockholder with any
of the provisions hereof will (i) result in a violation or
breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any third party right
of termination, cancellation, modification or acceleration)
under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, permit, contract,
commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind, including any voting
agreement, proxy arrangement, pledge agreement, shareholders
agreement or voting trust, to which such Stockholder is a party
or by which such Stockholder or any of such Stockholders
properties or assets may be bound, (ii) violate any
judgment, order, writ, injunction, decree or award of any court,
administrative agency or other Governmental Authority that is
applicable to such Stockholder or any of such Stockholders
properties or assets, or (iii) contravene or conflict with
such Stockholders certificate of incorporation and bylaws
or other organizational documents, in each case, except for any
conflict, breach, default or violation described which would not
adversely effect in any material respect the ability of such
Stockholder to perform its obligations hereunder or consummate
the transactions contemplated hereby.
(f)
No Litigation
.
As of the date
hereof, there is no suit, claim, action, investigation or
proceeding pending or, to the knowledge of such Stockholder,
threatened against such Stockholder at law or in equity before
or by any Governmental Authority that could reasonably be
expected to impair the ability of such Stockholder to perform
its obligations hereunder or consummate the transactions
contemplated hereby. As of the date hereof, such Stockholder is
not subject to any outstanding order, writ, injunction,
judgment, decree or arbitration ruling, settlement, award or
other finding that would impair the ability of such Stockholder
to perform its obligations hereunder or consummate the
transactions contemplated hereby.
(g)
Reliance
.
Such Stockholder
understands and acknowledges that Parent and Merger Sub are
entering into the Merger Agreement in reliance upon such
Stockholders execution, delivery and performance of this
Agreement.
6.
Termination
.
The term (the
Term
) of this Agreement and the Proxies
granted pursuant hereto, with respect to any Stockholder, shall
commence on the date hereof and shall terminate upon the
earliest of (i) the mutual agreement of Parent and such
Stockholder, (ii) the Effective Time, (iii) the
termination of the Merger Agreement in accordance with its
terms, and (iv) the date of any amendment to the terms of
the Merger Agreement that reduces the amount, changes the form,
or imposes any material restrictions or additional conditions on
the receipt, of consideration payable in respect of each share
of Company Common Stock in the Merger or that is otherwise
adverse in any material respect to such Stockholder (any such
amendment, an
Adverse Amendment
);
provided
that (A) nothing herein shall relieve any
party hereto from liability for any breach of this Agreement and
(B)
Sections 6
and
8
shall survive any
termination of this Agreement.
7.
Stock Purchase
.
(a)
Purchase and Sale
.
Upon the
terms and subject to the conditions set forth in this Agreement,
on the Stock Purchase Closing Date, if any, Parent shall cause
Intermediate Holdco or its designee, to purchase, acquire and
accept, from the Stockholders, and each Stockholder shall sell,
convey, assign, transfer and deliver to Intermediate Holdco or
its designee, all right, title and interest of such Stockholders
in and to the Covered Shares, free and clear of all Liens (the
Stock Purchase
), for a purchase price
per share of Company Common Stock equal to the amount of the Per
Share Price
minus
$1.75 (the
Per Share Purchase
Price
). For
5
the purposes of this
Section 7
hereof, the
Stock Purchase Closing Date
means the date,
if any, that is the earlier of (i) the Closing Date, if on
or prior to December 31, 2010 and (ii) such date as
identified in a written notice delivered by Parent to the
Stockholders no earlier than December 15, 2010, which date
(in the case of this clause (ii) is no earlier than three
(3) Business Days after the date of such notice and no
later than December 31, 2010. For the purposes of this
Agreement, any Covered Shares acquired by Parent in the Stock
Purchase are referred to as the
Acquired
Shares
.
(b)
Efforts
.
Parent and each of
the Stockholders shall cooperate in all respects in doing all
things reasonably necessary, proper or advisable under
applicable Law or otherwise to consummate and make effective, in
the most expeditious manner practicable, the Stock Purchase.
Without limiting the foregoing, Parent, on the one hand, and the
Stockholders, on the other hand, shall (a) file with the
FTC and the Antitrust Division of the DOJ a Notification and
Report Form relating to this Agreement and the transactions
contemplated hereby as required by the HSR Act within fourteen
(14) calendar days following the execution and delivery of
this Agreement, and (b) file comparable pre-merger or
post-merger notification filings, forms and submissions with any
foreign Governmental Authority that are required by the other
applicable Antitrust Laws in connection with the Stock Purchase.
Each of Parent and the Stockholders shall (i) cooperate and
coordinate with the other in the making of such filings;
(ii) supply the other with any information that may be
required in order to make such filings; (iii) supply any
additional information that reasonably may be required or
requested by the FTC, the DOJ or the Governmental Authorities of
any other applicable jurisdiction in which any such filing is
made under any other Antitrust Laws; and (iv) take all
action reasonably necessary to cause the expiration or
termination of the applicable waiting periods under the HSR Act
and any other Antitrust Laws applicable to the Merger as soon as
practicable, and to obtain any required consents under any other
Antitrust Laws applicable to the Stock Purchase as soon as
reasonably practicable;
provided
,
however
,
notwithstanding anything in this Agreement to the contrary, in
no event shall Parent or Merger Sub (or any of their respective
Affiliates) be required to offer or agree to sell or otherwise
dispose of, or hold separate, agree to conduct, license or
otherwise limit the use of any of the assets, categories of
asset or businesses or other segments of the Company or Parent
or eithers respective Subsidiaries or Affiliates or to
agree to any other restriction or condition with respect thereto
required or requested by a Governmental Authority, in each case
to the extent that doing so would reasonably be expected to
materially and adversely affect the operation of the business of
the Company, Parent or eithers respective Subsidiaries or
Affiliates. Each of Parent, on the one hand, and the
Stockholders, on the other hand, shall promptly inform the other
of any communication from any Governmental Authority regarding
any of the transactions contemplated by this Agreement in
connection with such filings. If any party hereto or Affiliate
thereof shall receive a request for additional information or
documentary material from any Governmental Authority with
respect to the transactions contemplated by this Agreement
pursuant to the HSR or any other Antitrust Laws applicable to
the Stock Purchase with respect to which any such filings have
been made, then such party shall make (or cause to be made), as
soon as reasonably practicable and after consultation with the
other party, an appropriate response in compliance with such
request. Subject to applicable Laws relating to the exchange of
information, Parent and the Stockholders shall have the right to
review in advance, and to the extent practicable each will
consult with the other on and consider in good faith the views
of the other in connection with, all of the information relating
to Parent or the Stockholders or the Company, as the case may
be, and any of their respective Affiliates, that appears in any
filing made with, or written materials submitted to, any third
party
and/or
any Governmental Authority in connection with the Stock
Purchase. In exercising the foregoing rights, each of the
Stockholders and Parent shall act reasonably and as promptly as
practicable.
(c)
Closing
.
If the Stock Purchase
Closing Date occurs, the closing of the Stock Purchase (the
Stock Purchase Closing
) shall take place
(x) on the Closing Date at the location of the Closing,
effective immediately prior to the Effective Time or (y) if
the Stock Purchase Closing Date is prior to the Closing Date, at
10:00 a.m. Eastern time on the Stock Purchase Closing
Date at the offices of Latham & Watkins, LLP, 885
Third Avenue, New York, New York 10022. At the Stock Purchase
Closing, (i) the Stockholders shall deliver certificates
representing all of the Covered Shares, duly endorsed (or
accompanied by a duly executed stock power) for transfer with
signatures guaranteed (if applicable), Intermediate Holdco or
its designee and shall authorize the Company (or the
Companys transfer agent, if any) to record in the
Companys books and records the transfer to Intermediate
Holdco or its designee of the Covered Shares; (ii) each
Stockholder shall
6
deliver to Parent a certificate of such Stockholder, validly
executed for and on behalf of such Stockholder and in its name
by a duly authorized officer thereof, certifying that all of the
representations and warranties made in Section 5 hereof
were true and correct in all respects as of the date of this
Agreement and are true and correct in all material respects
(other than the representations and warranties in
Section 5(a) hereof, which shall be true in all respects)
as of the Closing Date with the same force and effect as if made
on and as of such date; (iii) in respect of each Covered
Share sold, conveyed, assigned, transferred and delivered to
Intermediate Holdco or its designee in accordance with this
Agreement, Parent shall pay the Per Share Purchase Price in cash
(by wire transfer of immediately available funds to an account
specified in writing by the applicable Stockholder at least two
(2) Business Days prior to the date of such closing) or by
certified or official bank check; and (iv) each Stockholder
shall take all actions Parent may request as necessary to vest
in Intermediate Holdco or its designee record and beneficial
ownership of all Covered Shares, free and clear of all Liens.
(d) Each Stockholder agrees that, in the event that this
Agreement is terminated and substantially concurrently therewith
the Company enters into a definitive agreement in respect of a
Superior Proposal, such Stockholder will promptly enter into an
agreement with the party making such Superior Proposal providing
that the per share consideration to be paid to such Stockholder
in connection with the Acquisition Transaction contemplated by
such Superior Proposal shall be $1.75 less (the
Consideration Differential
) than the per
share consideration paid to other stockholders generally in such
Acquisition Transaction so long as the purchase of such
Stockholders shares in such Acquisition Transaction occurs
on or before December 31, 2010. In the event the
consideration in such transaction does not consist entirely of
cash, then the Consideration Differential shall be determined in
good faith by the Company and the Stockholders.
(e) If (i) the Stock Purchase occurs, (ii) on or
prior to January 15, 2011, in connection with a Superior
Proposal, the Company terminates the Merger Agreement pursuant
to Section 7.1(h) of the Merger Agreement and pays the
Company Termination Fee to Parent in accordance with the Merger
Agreement, and (iii) prior to the first anniversary of the
Stock Purchase Closing Date, either (A) the applicable
Acquisition Transaction is consummated or (B) prior to any
withdrawal of, or termination of the definitive agreement with
respect to, such Acquisition Transaction, Parent sells one or
more Acquired Shares, then Parent, promptly upon receipt
thereof, shall pay to each Stockholder one-half (50%) of
Parents Profit (as hereinafter defined), if any, with
respect to the Acquired Shares acquired from such Stockholder
which Parent sells in such Acquisition Transaction or in the
circumstances described in clause (B) above (collectively,
the
Sold Shares
).
(f) For purposes of
Section 7(e)
hereof:
(i)
Profit
of Parent shall equal the
aggregate consideration paid to Parent (in the Acquisition
Transaction or other sale described in
Section 7(e)
hereof) in respect of Sold Shares (valuing any
non-cash
consideration at its fair market value as of the date of
consummation) less the product obtained by multiplying
(x) Per-Share Purchase Price by (y) the number of such
Sold Shares.
(ii) The fair market value of any non-cash consideration
consisting of:
(A) securities listed on a national securities exchange or
traded on the Nasdaq Global Select Market or the Nasdaq Global
Market of The Nasdaq Stock Market, Inc. (collectively,
Nasdaq Global Market
) shall be equal to the
average of the closing prices per share of such security as
reported on such exchange or Nasdaq Global Market for each of
the five (5) trading days prior to the date of
determination; and
(B) non-cash consideration which is other than securities
of the type specified in subclause (A) above shall be equal
to the amount a reasonable, willing seller would pay a
reasonable, willing buyer, taking into account the nature and
terms of such property. In the event of a dispute as to the fair
market value of such property, such disputed amount shall be
determined, which determination shall be binding on all parties
to this Agreement, by a nationally recognized independent
investment banking firm mutually agreed upon by the parties
within twenty (20) Business Days of the event requiring
selection of such banking firm;
provided
,
however
,
that if the parties are unable to agree within five
(5) Business Days after the date of such event as to the
investment banking firm, then
7
Parent, on the one hand, and Stockholder, on the other hand,
shall each select one firm, and those firms shall select a third
investment banking firm, which third firm shall make such
determination, which determination shall be binding on all
parties to this Agreement; provided, further, that the fees and
expenses of such investment banking firm shall be borne 50% by
Parent and 50% by Stockholder.
(iii) In the event that the Company shall declare and pay a
stock or extraordinary dividend or other distribution, or effect
a stock split, reverse stock split, reclassification,
reorganization, recapitalization, combination or other like
change with respect to the Sold Shares, the calculations set
forth in this
Section 7(f)
shall be adjusted to
reflect fully such dividend, distribution, stock split,
reclassification, reorganization, recapitalization, combination
or other like change and the value of any such dividend,
distribution, stock split, reclassification, reorganization,
recapitalization, combination or other like change (including
any residual interest in the Company whether represented by the
Sold Shares or other securities of the Company to the extent
that the Company has engaged in a spin-off, recapitalization or
similar transaction) shall be considered in determining the
Profit as provided in this
Section 7(f)
, in each
case, to the extent not previously adjusted pursuant to
Section 4(a)
hereof.
(g) Any payment to the Stockholders under
Section 7(e)
hereof shall be made in the same form
as the consideration received by Parent from the applicable
Acquisition Transaction (and, if the consideration so received
was in more than one form, then in the same proportion as the
forms of consideration so received). Any payment to be made
under
Section 7(e)
hereof (i) in cash, shall be
paid by wire transfer of immediately available funds to an
account specified in writing by the applicable Stockholder and
(ii) in the form of securities or other property, shall be
paid through delivery of the securities or other property
received, suitably endorsed for transfer, and free and clear of
any and all Liens (other than those imposed by, through or under
the Acquisition Transaction or as required by law, as the case
may be).
(h) If (i) the Stock Purchase occurs, and (ii) in
connection with a Superior Proposal, the Company terminates the
Merger Agreement pursuant to Section 7.1(h) of the Merger
Agreement and pays the Company Termination Fee to Parent in
accordance with the Merger Agreement, then (x) Parent will
vote the Acquired Shares in favor of such Superior Proposal
and/or
tender such Acquired Shares in connection with the Acquisition
Transaction contemplated such Superior Proposal and
(y) Parent will enter into an agreement with the party
making such Superior Proposal providing that the per share
consideration to be paid to Parent with respect to the Acquired
Shares in connection with the Acquisition Transaction
contemplated by such Superior Proposal shall be $1.75 less (the
Consideration Differential
) than the
per share consideration paid to other stockholders generally in
such Acquisition Transaction so long as the purchase of such
Acquired Shares in such Acquisition Transaction occurs on or
before December 31, 2010. In the event the consideration in
such transaction does not consist entirely of cash, then the
Consideration Differential shall be determined in good faith by
Parent and the Company.
8.
No Limitation
.
Nothing in this
Agreement shall be construed to prohibit any Stockholder or any
of such Stockholders Representatives who is an officer or
member of the Company Board from taking any action in his or her
capacity as an officer or member of the Company Board or from
taking any action as an officer or member of the Company Board
in accordance with the terms of the Merger Agreement and
applicable Delaware Law. For purposes of this
Section 8
, the term Representative, when
used in respect of a Stockholder, shall be deemed to include any
member of the Company Board designated by such Stockholder or
its Affiliates.
9.
Miscellaneous
.
(a)
Entire Agreement
.
This
Agreement (together with
Schedule I
and
Exhibit A
) and the Proxies constitute the entire
agreement among the parties hereto with respect to the subject
matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties hereto
with respect to the subject matter hereof.
(b)
Reasonable Efforts
.
Subject to
the terms and conditions of this Agreement, each of the parties
hereto agrees to use all reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be
8
done, all things necessary, proper or advisable under applicable
laws to consummate and make effective the transactions
contemplated hereby. At the other partys reasonable
request and without further consideration, each party hereto
shall execute and deliver such additional documents and take all
such further lawful action as may be necessary or desirable to
consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated hereby. Without
limiting the foregoing, each Stockholder shall execute and
deliver to Parent and any of its designees any additional
proxies, including with respect to Additional Owned Shares,
reasonably requested by Parent in furtherance of this Agreement.
(c)
No Assignment
.
This Agreement
shall not be assigned by operation of law or otherwise without
the prior written consent of Stockholders holding a majority of
the Owned Shares (in the case of any assignment by Parent) or
Parent (in the case of an assignment by a Stockholder);
provided
that Parent may assign its rights and
obligations hereunder to Merger Sub or any other Subsidiary of
Parent, but no such assignment shall relieve Parent of its
obligations hereunder.
(d)
Amendments
.
This Agreement may
not be amended, changed, supplemented or otherwise modified
except by an instrument in writing signed on behalf of Parent
and each Stockholder; provided that Parent and the Stockholders
may not amend (i)
Section 7(d)
hereof, (ii) in
any manner that would allow Parent to deliver the notice
contemplated thereby prior to December 15, 2010,
Section 7(a)
hereof or (iii) with respect to
the provisions described in the immediately preceding
clauses (i) and (ii), this Section 9(d) or
Section 9(i) hereof (collectively, the
Company
Beneficiary Provisions
), in each case, without the
Companys consent (not unreasonably to withheld).
(e)
Notice
.
All notices and other
communications hereunder shall be in writing and shall be deemed
to have been duly delivered and received hereunder (i) four
(4) business days after being sent by registered or
certified mail, return receipt requested, postage prepaid,
(ii) one (1) business day after being sent for next
business day delivery, fees prepaid, via a reputable nationwide
overnight courier service, or (iii) immediately upon
delivery by hand or by facsimile (with a written or electronic
confirmation of delivery), in each case to the intended
recipient as set forth below:
If to a Stockholder
:
At the address and facsimile number set forth on
Schedule I
hereto.
Copy to
:
Skadden, Arps, Slate, Meagher & Flom LLP
155 N. Wacker Drive
Chicago, Illinois 60606
Attention: Peter Krupp, Esq.
Facsimile No.:
(312) 827-9322
If to Parent
:
Finn Holding Corporation
c/o Platinum
Equity, LLC
52 Vanderbilt Avenue
New York, NY 10017
Attention: Louis Samson
Facsimile No.:
(212) 905-0011
Copy to
:
Finn Holding Corporation
c/o Platinum
Equity, LLC
360 North Crescent Drive, South Building
Beverly Hills, CA 90210
Attention: Eva M. Kalawski
Facsimile No.:
(310) 712-1863
9
and
Latham & Watkins LLP
555 11th Street, N.W.
Suite 1000
Washington, DC 20004
Attention: David I. Brown, Esq.
Facsimile No.:
(202) 637-2201
or to such other address or facsimile number as the person to
whom notice is given may have previously furnished to the other
parties hereto in writing in the manner set forth above.
(f)
Severability
.
In the event
that any provision of this Agreement, or the application
thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder
of this Agreement will continue in full force and effect and the
application of such provision to other persons or circumstances
will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to negotiate in good
faith to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and
other purposes of such void or unenforceable provision.
(g)
Remedies
.
All rights, powers
and remedies provided under this Agreement or otherwise
available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any such
right, power or remedy by any party hereto shall not preclude
the simultaneous or later exercise of any other such right,
power or remedy by such party.
(h)
No Waiver
.
The failure of any
party hereto to exercise any right, power or remedy provided
under this Agreement or otherwise available in respect hereof at
law or in equity, or to insist upon compliance by any other
party hereto with such partys obligations hereunder, and
any custom or practice of the parties at variance with the terms
hereof, shall not constitute a waiver by such party of such
partys right to exercise any such or other right, power or
remedy or to demand such compliance.
(i)
No Third Party
Beneficiaries
.
This Agreement shall be
binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies
of any nature whatsoever under or by reason of this Agreement,
except in each case for Merger Sub, which is an intended third
party beneficiary of, and shall be entitled to enforce, this
Agreement, and the Company, which is an intended third party
beneficiary of, and shall be entitled to enforce, the Company
Beneficiary Provisions.
(j)
Governing Law
.
This Agreement
shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving regard to any
principles of conflicts of law thereof to the extent they would
result in the application of the laws of another jurisdiction.
(k)
Submission to
Jurisdiction
.
Each of the parties hereto
(a) irrevocably consents to the service of the summons and
complaint and any other process in any action or proceeding
relating to this Agreement for and on behalf of itself or any of
its properties or assets, in accordance with this
Section 9(k)
or in such other manner as may be
permitted by applicable law, and nothing in this
Section 9(k)
shall affect the right of any party to
serve legal process in any other manner permitted by applicable
law; (b) irrevocably and unconditionally consents and
submits itself and its properties and assets in any action or
proceeding to the exclusive general jurisdiction of the Court of
Chancery of the State of Delaware (the
Chancery
Court
) and any state appellate court therefrom located
within the State of Delaware (or, only if the Chancery Court
declines to accept jurisdiction over a particular matter, any
state or federal court within the State of Delaware) in the
event any dispute or controversy arises out of this Agreement,
or for recognition and enforcement of any judgment in respect
thereof; (c) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for
leave from any such court; (d) agrees that any actions or
proceedings arising in connection with this Agreement shall be
brought, tried and determined only in the Chancery Court and any
state appellate court therefrom located within the State of
Delaware (or, only if the Chancery Court declines to accept
jurisdiction over a particular matter, any state or federal
court within the State of Delaware); (e) waives
10
any objection that it may now or hereafter have to the venue of
any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same; and (f) agrees that
it will not bring any action relating to this Agreement in any
court other than the aforesaid courts. Each of the parties
hereto agrees that a final judgment in any action or proceeding
in such courts as provided above shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in
any other manner provided by applicable law.
(l)
Waiver of Jury Trial
.
EACH
PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ACTIONS OF A STOCKHOLDER, PARENT, THE COMPANY
OR MERGER SUB IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
AND ENFORCEMENT HEREOF OR THEREOF.
(m)
Specific Performance
.
The
parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that each of the
parties hereto shall be entitled, without posting any bond or
other undertaking, to specific performance and injunctive and
other equitable relief to prevent breaches of this Agreement and
to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which
they are entitled at law or in equity.
(n)
Interpretation
.
The
descriptive headings used herein are inserted for convenience of
reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement. The words
include, includes and
including shall be deemed to be followed by
without limitation whether or not they are in fact
followed by such words or words of like import. The parties
hereto have participated jointly in the negotiation and drafting
of this Agreement. No provision of this Agreement shall be
interpreted for or against any party hereto because that party
or its legal representatives drafted the provision. The words
hereof, hereto, hereby,
herein, hereunder and words of similar
import, when used in this Agreement, shall refer to this
Agreement as a whole and not any particular section in which
such words appear.
(o)
Counterparts
.
This Agreement
may be executed in counterparts, each of which shall be deemed
to be an original, but all of which, taken together, shall
constitute one and the same agreement.
(p)
Expenses
.
Except as otherwise
provided herein, each party hereto shall pay such partys
own expenses incurred in connection with this Agreement.
(q)
No Ownership Interest
.
Nothing
contained in this Agreement shall be deemed, upon execution, to
vest in Parent any direct or indirect ownership or incidence of
ownership of or with respect to any Covered Shares. All rights,
ownership and economic benefits of and relating to the Covered
Shares shall remain vested in and belong to the Stockholders,
and Parent shall have no authority to manage, direct,
superintend, restrict, regulate, govern or administer any of the
policies or operations of the Company or exercise any power or
authority to direct Stockholder in the voting of any of the
Covered Shares, except as otherwise provided herein.
[Signature
page follows.]
11
IN WITNESS WHEREOF, Parent and the Stockholders have caused this
Agreement to be duly executed as of the day and year first above
written.
PARENT:
FINN HOLDING CORPORATION
Name: Mary Ann Sigler
Title: Vice President
STOCKHOLDERS:
GVI HOLDINGS, INC.
Name: Philip Tinkler
Title: Vice President
GAMI INVESTMENTS, INC.
Name: Philip Tinkler
Title: Vice President
HY I INVESTMENTS, L.L.C.
Name: Philip Tinkler
Title: Vice President
SZ INVESTMENTS, L.L.C.
Name: Philip Tinkler
Title: Vice President
EGI-FUND
(05-07)
INVESTORS, L.L.C.
Name: Philip Tinkler
Title: Vice President
EGI-FUND
(08-10)
INVESTORS, L.L.C.
Name: Philip Tinkler
Title: Vice President
12
SCHEDULE I
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares of
|
|
|
|
|
|
|
Company Common
|
|
|
|
Jurisdiction of
|
|
|
Stock Beneficially
|
|
Name of Each Stockholder
|
|
Organization
|
|
|
Owned
|
|
|
GVI Holdings, Inc.
|
|
|
Delaware
|
|
|
|
1,329,270
|
|
GAMI Investments, Inc.
|
|
|
Delaware
|
|
|
|
34,882
|
|
HY I Investments, L.L.C.
|
|
|
Delaware
|
|
|
|
440,537
|
|
SZ Investments, L.L.C.
|
|
|
Delaware
|
|
|
|
692,754
|
|
EGI-Fund
(05-07)
Investors, L.L.C.
|
|
|
Delaware
|
|
|
|
393,281
|
|
EGI-Fund
(08-10)
Investors, L.L.C.
|
|
|
Delaware
|
|
|
|
343,750
|
|
Unless otherwise provided to Parent in accordance with
Section 9(e)
of this Agreement, the address and
facsimile number of each Stockholder is:
c/o Equity
Group Investments, L.L.C., 2 N. Riverside Plaza,
Suite 600, Chicago, IL 60606; Attention: Jon Wasserman,
Philip Tinkler; Facsimile No.:
(312) 559-1280.
13
EXHIBIT A
FORM OF
IRREVOCABLE PROXY
The undersigned stockholder (
Stockholder
) of
American Commercial Lines Inc., a Delaware corporation (the
Company
), hereby (i) irrevocably grants
to, and appoints, Finn Holding Corporation, a Delaware
corporation (
Parent
), and any Person
designated in writing by Parent, and each of them individually,
Stockholders proxy and attorney-in-fact (with full power
of substitution and re-substitution), for and in the name, place
and stead of Stockholder, to vote all of the Covered Shares or
grant a written consent or approval in respect of the Covered
Shares, in accordance with the terms of this Proxy and
(ii) revokes any and all proxies heretofore given in
respect of the Covered Shares.
This Proxy is granted pursuant to that certain Voting Agreement,
dated as of the date hereof, by and among Parent, the Company,
Stockholder and certain other stockholders of the Company (the
Voting Agreement
). For the purposes of
this Proxy,
Covered Shares
means (i) all
shares of common stock, par value $0.01 per share of the Company
(
Company Common Stock
) and any other equity
securities of the Company which are beneficially owned by
Stockholder as of the date hereof and (ii) all shares of
Company Common Stock and any other equity securities of the
Company which are beneficially owned by Stockholder and are
acquired after the date hereof and prior to the termination of
the Voting Agreement. The Covered Shares as of the date hereof
are set forth on the signature page hereof.
Stockholder hereby affirms that the irrevocable proxy set forth
in this Proxy is given in connection with the execution of that
certain Agreement and Plan of Merger (the
Merger
Agreement
), dated as of the date hereof, by and among
Parent, Finn Merger Corporation, a Delaware corporation
(
Merger Sub
), and the Company, providing,
among other things, for the merger of Merger Sub with and into
the Company, and that such irrevocable proxy is given to secure
the performance of the duties of Stockholder under the Voting
Agreement. Stockholder hereby further affirms that the
irrevocable proxy set forth in this Proxy is coupled with an
interest and may under no circumstances be revoked during the
Term of the Voting Agreement, it being acknowledged however that
this Proxy, by its terms, shall automatically and without any
further action by any Person terminate and be of no further
force and effect upon and after the termination of the Voting
Agreement. Stockholder hereby ratifies and confirms all that
such irrevocable proxy may lawfully do or cause to be done by
virtue hereof. Without limiting the generality of the foregoing,
this Proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212(e) of the
Delaware General Corporation Law.
The attorneys-in-fact and proxies named above are hereby
authorized and empowered by the undersigned at any time after
the date hereof and prior to the termination of the Voting
Agreement with respect to the undersigned to act as the
undersigneds attorney-in-fact and proxy to vote the
Covered Shares, and to exercise all voting, consent and similar
rights of the undersigned with respect to the Covered Shares
(including, without limitation, the power to execute and deliver
written consents), at every annual, special, adjourned or
postponed meeting of the stockholders of the Company and in
every action by written consent in lieu of such a meeting:
(A) in favor of adopting the Merger Agreement (for the
purposes of this Proxy, as it may be modified or amended from
time to time, unless such modification or amendment would
constitute an Adverse Amendment), including the agreement of
merger contained therein, the execution and delivery by the
Company of the Merger Agreement and the approval of the terms
thereof and each of the other actions contemplated by the Merger
Agreement;
(B) in favor of any adjournment or postponement recommended
by the Company with respect to any stockholder meeting with
respect to the Merger Agreement and the Merger;
(C) against any Acquisition Proposal (as defined in the
Merger Agreement) or any proposal relating to an Acquisition
Proposal;
(D) against any merger agreement or merger, acquisition,
consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or
winding up of or by the
14
Company, or any other extraordinary transaction involving the
Company, in each case other than the Merger Agreement and the
Merger; and
(E) against any other proposal, action or agreement, in
each case that would (1) prevent, impair, delay or
otherwise adversely affect the transactions contemplated by the
Merger Agreement or the consummation of the Merger, or
(2) result in a breach in any material respect of any
covenant, representation, warranty or any other obligation or
agreement of the Company under the Merger Agreement.
Any obligation of the undersigned hereunder shall be binding
upon the successors and assigns of the undersigned. This Proxy
shall automatically and without any further action by any Person
terminate and be of no further force and effect upon and after
the termination of the Voting Agreement.
[Signature
page follows.]
15
Dated: October 18, 2010
EGI-FUND (05-07) INVESTORS, L.L.C.
Name: Philip Tinkler
Title: Vice President
c/o Equity Group Investments, L.L.C.
2 N. Riverside Plaza
Suite 600
Chicago, IL 60606
[Signature
Page to Proxy]
Dated: October 18, 2010
EGI-FUND (08-10) INVESTORS, L.L.C.
Name: Philip Tinkler
Title: Vice President
c/o Equity Group Investments, L.L.C.
2 N. Riverside Plaza
Suite 600
Chicago, IL 60606
[Signature
Page to Proxy]
Dated: October 18, 2010
GAMI INVESTMENTS, INC.
Name: Philip Tinkler
Title: Vice President
c/o Equity Group Investments, L.L.C.
2 N. Riverside Plaza
Suite 600
Chicago, IL 60606
[Signature
Page to Proxy]
Dated: October 18, 2010
GVI HOLDINGS, INC.
Name: Philip Tinkler
Title: Vice President
c/o Equity Group Investments, L.L.C.
2 N. Riverside Plaza
Suite 600
Chicago, IL 60606
[Signature
Page to Proxy]
Dated: October 18, 2010
HY I INVESTMENTS, L.L.C.
Name: Philip Tinkler
Title: Vice President
c/o Equity Group Investments, L.L.C.
2 N. Riverside Plaza
Suite 600
Chicago, IL 60606
[Signature
Page to Proxy]
Dated: October 18, 2010
SZ INVESTMENTS, L.L.C.
Name: Philip Tinkler
Title: Vice President
c/o Equity Group Investments, L.L.C.
2 N. Riverside Plaza
Suite 600
Chicago, IL 60606
[Signature
Page to Proxy]
EXHIBIT B
FORM OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
AMERICAN COMMERCIAL LINES INC.
FIRST
:
The name of the Corporation is
AMERICAN COMMERCIAL LINES INC.
SECOND
:
The address of the registered
office of the Corporation in the State of Delaware is 1209
Orange Street, in the City of Wilmington, County of New Castle,
Delaware 19801. The name of the Corporations registered
agent at such address is The Corporation Trust Company.
THIRD
:
The purpose of the Corporation
is to engage in any lawful act or activity for which a
corporation may now or hereafter be organized under the General
Corporation Law of the State of Delaware as set forth in
Title 8 of the Delaware Code.
FOURTH
:
The total number of shares of
stock which the Corporation shall have authority to issue is one
thousand (1,000), consisting of one thousand (1,000) shares of
common stock, $0.01 par value per share.
FIFTH
:
The business and affairs of the
Corporation shall be managed by and under the direction of the
Board of Directors. The exact number of directors of the
Corporation shall be fixed by or in the manner provided in the
Bylaws of the Corporation (the Bylaws).
SIXTH
:
In furtherance and not in
limitation of the powers conferred by statute, the Board of
Directors is expressly authorized:
(a) to adopt, repeal, rescind, alter or amend in any
respect the Bylaws, and to confer in the Bylaws powers and
authorities upon the directors of the Corporation in addition to
the powers and authorities expressly conferred upon them by
statute;
(b) from time to time to set apart out of any funds or
assets of the Corporation available for dividends an amount or
amounts to be reserved as working capital or for any other
lawful purpose and to abolish any reserve so created and to
determine whether any, and, if any, what part, of the surplus of
the Corporation or its net profits applicable to dividends shall
be declared in dividends and paid to its stockholders, and all
rights of the holders of stock of the Corporation in respect of
dividends shall be subject to the power of the Board of
Directors so to do;
(c) subject to the laws of the State of Delaware, from time
to time to sell, lease or otherwise dispose of any part or parts
of the properties of the Corporation and to cease to conduct the
business connected therewith or again to resume the same, as it
may deem best; and
(d) in addition to the powers and authorities hereinbefore
and by the laws of the State of Delaware conferred upon the
Board of Directors, to execute all such powers and to do all
acts and things as may be exercised or done by the Corporation;
subject, nevertheless, to the express provisions of said laws,
of the Certificate of Incorporation of the Corporation and its
Bylaws.
SEVENTH
:
Meetings of stockholders of
the Corporation may be held within or without the State of
Delaware, as the Bylaws provide. The books of Corporation may be
kept (subject to any provision of applicable law) outside the
State of Delaware at such place or places as may be designated
from time to time by the Board or in the Bylaws.
EIGHTH
:
The Corporation reserves the
right to adopt, repeal, rescind, alter or amend in any respect
any provision contained in this Certificate of Incorporation in
the manner now or hereafter prescribed by applicable law, and
all rights conferred on stockholders herein are granted subject
to this reservation.
NINTH
:
The Corporation is to have
perpetual existence.
TENTH
:
A director of this Corporation
shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty
as a director, except for liability (i) for any breach of
the directors duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under the Section 174 of the
Delaware General Corporation Law, as the same exists or
hereafter may be amended, or (iv) for any transaction for
which the director derived an improper personal benefit. If the
Delaware General Corporation Law hereafter is amended to
authorize the further elimination or limitation of the liability
of directors, then the liability of a director of the
Corporation, in addition to the limitation on personal liability
provided herein, shall be limited to the fullest extent
permitted by the amended Delaware Corporation Law. No amendment
to or repeal of this Article Tenth shall apply to or have
any effect on the liability or alleged liability of any director
of the Corporation for or with respect to any acts or omissions
of such director occurring prior to such amendment or appeal.
ELEVENTH
:
The Corporation shall, to the
fullest extent permitted by the provisions of Section 145
of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section
from and against any and all of the expenses, liabilities, or
other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be
entitled under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators
of such a person.
2
ANNEX B
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Merrill Lynch, Pierce,
Fenner & Smith Incorporated
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October 18, 2010
The Special Committee of the Board of Directors
American Commercial Lines Inc.
1701 East Market Street
Jeffersonville, IN 47130
Members of the Special Committee of the Board of Directors:
We understand that American Commercial Lines Inc.
(ACL) has entered into an Agreement and Plan of
Merger, dated as of October 18, 2010 (the
Agreement), among ACL, Finn Holding Corporation
(Finn) and Finn Merger Corporation, a wholly owned
subsidiary of Finn (Merger Sub), pursuant to which,
among other things, Merger Sub will merge with and into ACL (the
Merger) and each outstanding share of the common
stock, par value $0.01 per share, of ACL (ACL Common
Stock) will be converted into the right to receive $33.00
in cash (the Consideration), other than shares of
ACL Common Stock owned by GVI Holdings, Inc. (GVI
Holdings) and certain affiliates of GVI Holdings that are
party to the Voting Agreement (as defined in the Agreement)
(such affiliates, together with GVI Holdings, being referred to
as the GVI Stockholders), which, on the terms and
subject to the conditions set forth in the Voting Agreement, may
be acquired by an affiliate of Finn pursuant to the Voting
Agreement at a price of $31.25 per share in cash or $33.00 per
share in cash, as set forth in such agreement. The Agreement
contemplates that certain outstanding ACL restricted stock unit
awards and options, at the election of Finn, may be assumed or
substituted by Finn and converted at the effective time of the
Merger into restricted stock unit awards and options, as the
case may be, denominated in shares of common stock of Finn. The
terms and conditions of the Merger are more fully set forth in
the Agreement.
You have requested our opinion as to the fairness, from a
financial point of view, to the holders of ACL Common Stock
(other than Finn and its affiliates, the GVI Stockholders and
any holders of ACL Common Stock that are also holders of ACL
restricted stock unit awards
and/or
options that are assumed or substituted by Finn at the effective
time of the Merger (collectively, the Excluded
Holders)) of the Consideration to be received by such
holders in the Merger.
In connection with this opinion, we have, among other things:
(1) reviewed certain publicly available business and
financial information relating to ACL;
(2) reviewed certain internal financial and operating
information with respect to the business, operations and
prospects of ACL furnished to or discussed with us by the
management of ACL, including certain financial forecasts
relating to ACL prepared by the management of ACL under various
scenarios reflecting varying assumptions of the management of
ACL, including, without limitation, with respect to the timing
and amount of ACLs estimated capital expenditures (such
forecasts, ACL Forecasts);
(3) discussed the past and current business, operations,
financial condition and prospects of ACL with members of senior
management of ACL;
(4) reviewed the trading history for ACL Common Stock and a
comparison of that trading history with the trading histories of
other companies we deemed relevant;
Merrill Lynch, Pierce,
Fenner & Smith Incorporated member FINRA/SIPC, is a
subsidiary of Bank of America Corporation
Merrill Lynch, Pierce, Fenner and
Smith Incorporated
One Bryant Park, New York, NY 10036
B-1
The Special Committee of the Board of Directors
American Commercial Lines Inc.
Page 2
(5) compared certain financial and stock market information
of ACL with similar information of other companies we deemed
relevant;
(6) compared certain financial terms of the Merger to
financial terms, to the extent publicly available, of other
transactions we deemed relevant;
(7) reviewed the Agreement and the Voting
Agreement; and
(8) performed such other analyses and studies and
considered such other information and factors as we deemed
appropriate.
In arriving at our opinion, we have assumed and relied upon,
without independent verification, the accuracy and completeness
of the financial and other information and data publicly
available or provided to or otherwise reviewed by or discussed
with us and have relied upon the assurances of the management of
ACL that they are not aware of any facts or circumstances that
would make such information or data inaccurate or misleading in
any material respect. With respect to the ACL Forecasts, we have
been advised by ACL, and have assumed, that they have been
reasonably prepared on bases reflecting the best currently
available estimates and good faith judgments of the management
of ACL as to the future financial performance of ACL under the
alternative scenarios reflected therein. We have not made or
been provided with any independent evaluation or appraisal of
the assets or liabilities (contingent or otherwise) of ACL,
other than a third-party appraisal of ACLs fleet of
barges, nor have we made any physical inspection of the
properties or assets of ACL. We have not evaluated the solvency
or fair value of ACL or Finn under any state, federal or other
laws relating to bankruptcy, insolvency or similar matters. We
have assumed, at the direction of ACL, that the Merger will be
consummated in accordance with its terms, without waiver,
modification or amendment of any material term, condition or
agreement and that, in the course of obtaining the necessary
governmental, regulatory and other approvals, consents, releases
and waivers for the Merger, no delay, limitation, restriction or
condition, including any divestiture requirements or amendments
or modifications, will be imposed that would have an adverse
effect on ACL or the contemplated benefits of the Merger.
We express no view or opinion as to any terms or other aspects
of the Merger (other than the Consideration to the extent
expressly specified herein), including, without limitation, the
form or structure of the Merger. As you are aware, prior to the
date hereof, we were not requested to, and we did not, solicit
indications of interest or proposals from third parties
regarding a possible acquisition of all or any part of ACL or
any alternative transaction. Our opinion is limited to the
fairness, from a financial point of view, of the Consideration
to be received by holders of ACL Common Stock (other than the
Excluded Holders) and no opinion or view is expressed with
respect to any consideration received in connection with the
Merger by the holders of any other class of securities,
creditors or other constituencies of any party or in connection
with the Voting Agreement by the GVI Stockholders. In addition,
no opinion or view is expressed with respect to the fairness
(financial or otherwise) of the amount, nature or any other
aspect of any compensation to any of the officers, directors or
employees of any party to the Merger, or class of such persons,
relative to the Consideration. Furthermore, no opinion or view
is expressed as to the relative merits of the Merger in
comparison to other strategies or transactions that might be
available to ACL or in which ACL might engage or as to the
underlying business decision of ACL to proceed with or effect
the Merger. In addition, we express no opinion or recommendation
as to how any stockholder should vote or act in connection with
the Merger or any related matter.
We have acted as financial advisor to the Special Committee of
the Board of Directors of ACL in connection with the Merger and
will receive a fee for our services, a portion of which is
payable upon the rendering of this opinion and a significant
portion of which is contingent upon consummation of the Merger.
In addition, ACL has agreed to reimburse our expenses and
indemnify us against certain liabilities arising out of our
engagement.
B-2
The Special Committee of the Board of Directors
American Commercial Lines Inc.
Page 3
We and our affiliates comprise a full service securities firm
and commercial bank engaged in securities, commodities and
derivatives trading, foreign exchange and other brokerage
activities, and principal investing as well as providing
investment, corporate and private banking, asset and investment
management, financing and financial advisory services and other
commercial services and products to a wide range of companies,
governments and individuals. In the ordinary course of our
businesses, we and our affiliates may invest on a principal
basis or on behalf of customers or manage funds that invest,
make or hold long or short positions, finance positions or trade
or otherwise effect transactions in equity, debt or other
securities or financial instruments (including derivatives, bank
loans or other obligations) of ACL, Finn and certain of their
respective affiliates.
We and our affiliates in the past have provided, currently are
providing, and in the future may provide, investment banking,
commercial banking and other financial services to ACL and have
received or in the future may receive compensation for the
rendering of these services, including having acted or acting as
(i) administrative agent, arranger and book-running manager
for, and lender under, one of ACLs existing credit
facilities as well as a lender under other credit and leasing
facilities for ACL and (ii) book-running manager for a
certain debt offering for ACL.
In addition, we and our affiliates in the past have provided,
currently are providing, and in the future may provide,
investment banking, commercial banking and other financial
services to Finn and certain of its affiliates and portfolio
companies and have received or in the future may receive
compensation for the rendering of these services, including
having acted or acting as an underwriter or manager for certain
equity and debt offerings for certain of Finns portfolio
companies.
In addition, we and our affiliates in the past have provided,
currently are providing, and in the future may provide,
investment banking, commercial banking and other financial
services to GVI Holdings and have received or in the future may
receive compensation for the rendering of these services,
including having acted or acting as a lender under various
credit and leasing facilities for GVI Holdings.
It is understood that this letter is for the benefit and use of
the Special Committee of the Board of Directors of ACL (in its
capacity as such) in connection with and for purposes of its
evaluation of the Merger.
Our opinion is necessarily based on financial, economic,
monetary, market and other conditions and circumstances as in
effect on, and the information made available to us as of, the
date hereof. It should be understood that subsequent
developments may affect this opinion, and we do not have any
obligation to update, revise, or reaffirm this opinion. The
issuance of this opinion was approved by our Americas Fairness
Opinion Review Committee.
Based upon and subject to the foregoing, including the various
assumptions and limitations set forth herein, we are of the
opinion on the date hereof that the Consideration to be received
in the Merger by holders of ACL Common Stock is fair, from a
financial point of view, to such holders (other than the
Excluded Holders).
Very truly yours,
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Merrill Lynch, Pierce, Fenner & Smith Incorporated
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MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
B-3
ANNEX C
GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
SECTION 262 APPRAISAL RIGHTS
§
262. Appraisal rights.
(a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery
of the fair value of the stockholders shares of stock
under the circumstances described in subsections (b) and
(c) of this section. As used in this section, the word
stockholder means a holder of record of stock in a
corporation; the words stock and share
mean and include what is ordinarily meant by those words; and
the words depository receipt mean a receipt or other
instrument issued by a depository representing an interest in
one or more shares, or fractions thereof, solely of stock of a
corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a
merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to
§ 251(g) of this title), § 252,
§ 254, § 255, § 256,
§ 257, § 258, § 263 or
§ 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect
thereof, at the record date fixed to determine the stockholders
entitled to receive notice of the meeting of stockholders to act
upon the agreement of merger or consolidation, were either
(i) listed on a national securities exchange or
(ii) held of record by more than 2,000 holders; and further
provided that no appraisal rights shall be available for any
shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote
of the stockholders of the surviving corporation as provided in
§ 251(f) of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to
§§ 251, 252, 254, 255, 256, 257, 258, 263 and 264
of this title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or
depository receipts in respect thereof) or depository receipts
at the effective date of the merger or consolidation will be
either listed on a national securities exchange or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.
and b. of this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.,
b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under § 253 or
§ 267 of this title is not owned by the parent
immediately prior to the merger, appraisal rights shall be
available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as
a result of an amendment to its certificate of incorporation,
any merger or consolidation in which the corporation is a
constituent corporation or the sale
C-1
of all or substantially all of the assets of the corporation. If
the certificate of incorporation contains such a provision, the
procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply
as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for notice of such meeting (or such members who received
notice in accordance with § 255(c) of this title) with
respect to shares for which appraisal rights are available
pursuant to subsection (b) or (c) hereof of this
section that appraisal rights are available for any or all of
the shares of the constituent corporations, and shall include in
such notice a copy of this section and, if one of the
constituent corporations is a nonstock corporation, a copy of
§ 114 of this title. Each stockholder electing to
demand the appraisal of such stockholders shares shall
deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of such
stockholders shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand
the appraisal of such stockholders shares. A proxy or vote
against the merger or consolidation shall not constitute such a
demand. A stockholder electing to take such action must do so by
a separate written demand as herein provided. Within
10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall
notify each stockholder of each constituent corporation who has
complied with this subsection and has not voted in favor of or
consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to
§ 228, § 253, or § 267 of this
title, then either a constituent corporation before the
effective date of the merger or consolidation or the surviving
or resulting corporation within 10 days thereafter shall
notify each of the holders of any class or series of stock of
such constituent corporation who are entitled to appraisal
rights of the approval of the merger or consolidation and that
appraisal rights are available for any or all shares of such
class or series of stock of such constituent corporation, and
shall include in such notice a copy of this section and, if one
of the constituent corporations is a nonstock corporation, a
copy of § 114 of this title. Such notice may, and, if
given on or after the effective date of the merger or
consolidation, shall, also notify such stockholders of the
effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the
date of mailing of such notice, demand in writing from the
surviving or resulting corporation the appraisal of such
holders shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand
the appraisal of such holders shares. If such notice did
not notify stockholders of the effective date of the merger or
consolidation, either (i) each such constituent corporation
shall send a second notice before the effective date of the
merger or consolidation notifying each of the holders of any
class or series of stock of such constituent corporation that
are entitled to appraisal rights of the effective date of the
merger or consolidation or (ii) the surviving or resulting
corporation shall send such a second notice to all such holders
on or within 10 days after such effective date; provided,
however, that if such second notice is sent more than
20 days following the sending of the first notice, such
second notice need only be sent to each stockholder who is
entitled to appraisal rights and who has demanded appraisal of
such holders shares in accordance with this subsection. An
affidavit of the secretary or assistant secretary or of the
transfer agent of the corporation that is required to give
either notice that such notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated
therein. For purposes of determining the stockholders entitled
to receive either notice, each constituent corporation may fix,
in advance, a record date that shall be not more than
10 days prior to the date the notice is given, provided,
that if the notice is given on or after the effective date of
the merger or consolidation, the record date shall be such
effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the
close of business on the day next preceding the day on which the
notice is given.
C-2
(e) Within 120 days after the effective date of the
merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a)
and (d) of this section hereof and who is otherwise
entitled to appraisal rights, may commence an appraisal
proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within
60 days after the effective date of the merger or
consolidation, any stockholder who has not commenced an
appraisal proceeding or joined that proceeding as a named party
shall have the right to withdraw such stockholders demand
for appraisal and to accept the terms offered upon the merger or
consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied
with the requirements of subsections (a) and (d) of
this section hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholders
written request for such a statement is received by the
surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal
under subsection (d) of this section hereof, whichever is
later. Notwithstanding subsection (a) of this section, a
person who is the beneficial owner of shares of such stock held
either in a voting trust or by a nominee on behalf of such
person may, in such persons own name, file a petition or
request from the corporation the statement described in this
subsection.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after
such service file in the office of the Register in Chancery in
which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or
resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the
time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1
or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the
City of Wilmington, Delaware or such publication as the Court
deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall
determine the stockholders who have complied with this section
and who have become entitled to appraisal rights. The Court may
require the stockholders who have demanded an appraisal for
their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After the Court determines the stockholders entitled to
an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including
any rules specifically governing appraisal proceedings. Through
such proceeding the Court shall determine the fair value of the
shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation,
together with interest, if any, to be paid upon the amount
determined to be the fair value. In determining such fair value,
the Court shall take into account all relevant factors. Unless
the Court in its discretion determines otherwise for good cause
shown, interest from the effective date of the merger through
the date of payment of the judgment shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve
discount rate (including any surcharge) as established from time
to time during the period between the effective date of the
merger and the date of payment of the judgment. Upon application
by the surviving or resulting corporation or by any stockholder
entitled to participate in the appraisal proceeding, the Court
may, in its discretion, proceed to trial upon the appraisal
prior to the final determination of the stockholders entitled to
an appraisal. Any stockholder whose name appears on the list
filed by the surviving or resulting
C-3
corporation pursuant to subsection (f) of this section and
who has submitted such stockholders certificates of stock
to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal
rights under this section.
(i) The Court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto.
Payment shall be so made to each such stockholder, in the case
of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock.
The Courts decree may be enforced as other decrees in the
Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in
the circumstances. Upon application of a stockholder, the Court
may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys fees
and the fees and expenses of experts, to be charged pro rata
against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights
as provided in subsection (d) of this section shall be
entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the
merger or consolidation); provided, however, that if no petition
for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholders demand for an
appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval
may be conditioned upon such terms as the Court deems just;
provided, however that this provision shall not affect the right
of any stockholder who has not commenced an appraisal proceeding
or joined that proceeding as a named party to withdraw such
stockholders demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days
after the effective date of the merger or consolidation, as set
forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the
surviving or resulting corporation.
C-4
FORM OF PROXY
IMPORTANT NOTICE TO STOCKHOLDERS
of American Commercial Lines Inc.
The Special Meeting of Stockholders will be held on
December [
], 2010
[
] a.m. ET
American Commercial Lines Inc.
1701 E. Market Street
Jeffersonville, Indiana 47130
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR SPECIAL MEETING,
December [
], 2010
The undersigned, a stockholder of American Commercial Lines Inc., a Delaware corporation (the
Company), acknowledges receipt of a copy of the Notice of Special Meeting of Stockholders and the
accompanying proxy statement, and revoking any proxy previously given, hereby constitutes and
appoints
[ ],
[ ] and [ ] and each of them his
or her true and lawful agents and proxies with full power of substitution in each to vote the
shares of common stock of the Company standing in the name of undersigned for purposes identified
on this proxy and with discretionary authority as to any other matters that may properly be raised
at the Special Meeting of Stockholders of the Company to be held at [ ].
(continued and to be signed on the other side)
FORM OF PROXY
6
Please Detach and Mail in the Envelope Provided
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Please mark your
votes as in this example
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To adopt the Agreement and Plan of Merger, dated as of October 18, 2010, as it may be amended from time to time, by and among American Commercial Lines Inc., Finn Holding Corporation and Finn Merger Corporation (the Agreement and Plan of Merger).
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2.
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To approve an adjournment of the Special Meeting, if necessary or appropriate, to solicit
additional proxies if there are insufficient votes at the time of the Special Meeting to approve the proposal
to adopt the Agreement and Plan of Merger.
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FOR
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THIS
PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREBY BY THE UNDERSIGNED STOCKHOLDER. IF YOU SIGN YOUR PROXY CARD
WITHOUT INDICATING YOUR VOTE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1 AND 2 AND IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
DIRECTORS ON ANY OTHER MATTERS PROPERLY BROUGHT BEFORE THE SPECIAL
MEETING, OR AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF. YOU MAY
REVOKE THIS PROXY AT ANY TIME PRIOR TO THE VOTE AT THE SPECIAL MEETING.
PLEASE MARK , SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
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Signature of Stockholder
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Dated
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, 2010
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Signature of Stockholder
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Dated
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, 2010
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NOTE: This Proxy must be signed exactly as your name appears hereon. For joint accounts, each
owner should sign. Executors, administrators, trustees, etc., should give full title, as such. If
the stockholder is a corporation, a duly authorized officer should sign on behalf of the
corporation and should indicate his or her title.
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