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Title: |
Agreement and Plan of Merger |
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Entities: |
Citibank, NA; DAL Tile International Inc; First Union Securities, Inc.; Mohawk Industries, Inc.; Alston & Bird LLP; Vinson & Elkins |
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Date: |
2001 |
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Size: |
Preview shows 19KB of 245KB total |
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Price: |
$90 |
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ID: |
#1617017 |
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================================================================================
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MOHAWK INDUSTRIES, INC.,
MAVERICK MERGER SUB, INC.,
AND
DAL-TILE INTERNATIONAL INC.
DATED AS OF NOVEMBER 19, 2001
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 TRANSACTIONS AND TERMS OF MERGER........................................................................2
1.1 Merger...................................................................................................2
1.2 Time and Place of Closing................................................................................2
1.3 Effective Time...........................................................................................2
1.4 Restructure of Transaction...............................................................................2
ARTICLE 2 TERMS OF MERGER.........................................................................................3
2.1 Charter..................................................................................................3
2.2 Bylaws...................................................................................................3
2.3 Directors and Officers...................................................................................3
ARTICLE 3 MANNER OF CONVERTING SHARES.............................................................................4
3.1 Conversion of Shares.....................................................................................4
3.2 Anti-Dilution Provisions.................................................................................4
3.3 Shares Held by Target or Buyer...........................................................................5
3.4 Dissenting Stockholders..................................................................................5
3.5 Conversion of Stock Options..............................................................................5
3.6 Fractional Shares........................................................................................7
ARTICLE 4 EXCHANGE OF SHARES......................................................................................7
4.1 Exchange Procedures......................................................................................7
4.2 Rights of Former Target Stockholders.....................................................................9
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF TARGET................................................................9
5.1 Organization, Standing, and Power........................................................................9
5.2 Authority of Target; No Breach By Agreement..............................................................9
5.3 Capital Stock...........................................................................................11
5.4 Target Subsidiaries.....................................................................................11
5.5 SEC Filings; Financial Statements.......................................................................12
5.6 Absence of Undisclosed Liabilities......................................................................12
5.7 Absence of Certain Changes or Events....................................................................13
5.8 Tax Matters.............................................................................................13
5.9 Intellectual Property...................................................................................14
5.10 Environmental Matters...................................................................................15
5.11 Compliance with Laws....................................................................................17
5.12 Labor Relations.........................................................................................18
5.13 Employee Benefit Plans..................................................................................19
5.14 Material Contracts......................................................................................22
5.15 Legal Proceedings.......................................................................................23
5.16 Information Supplied....................................................................................23
5.17 Tax and Regulatory Matters..............................................................................24
5.18 State Takeover Laws.....................................................................................24
5.19 Charter Provisions......................................................................................24
5.20 Opinion of Financial Advisor............................................................................24
5.21 Board Recommendation....................................................................................24
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER................................................................25
6.1 Organization, Standing, and Power.......................................................................25
6.2 Authority; No Breach By Agreement.......................................................................25
6.3 Capital Stock...........................................................................................26
6.4 SEC Filings; Financial Statements.......................................................................26
6.5 Compliance with Laws....................................................................................27
6.6 Legal Proceedings.......................................................................................28
6.7 Absence of Certain Changes or Events....................................................................28
6.8 Absence of Undisclosed Liabilities......................................................................28
6.9 Tax Matters.............................................................................................28
6.10 Employee Benefits Plans; ERISA..........................................................................29
6.11 Environmental Matters...................................................................................29
6.12 Information Supplied....................................................................................29
6.13 Authority of Sub........................................................................................30
6.14 Tax and Regulatory Matters..............................................................................30
6.15 Opinion of Financial Advisor............................................................................31
6.16 Board Recommendation....................................................................................31
ARTICLE 7 CONDUCT OF BUSINESS PENDING CONSUMMATION...............................................................31
7.1 Affirmative Covenants of Target.........................................................................31
7.2 Negative Covenants of Target............................................................................31
7.3 Covenants of Buyer......................................................................................33
7.4 Adverse Changes in Condition............................................................................34
7.5 Reports.................................................................................................34
ARTICLE 8 ADDITIONAL AGREEMENTS..................................................................................35
8.1 Joint Proxy Statement/Prospectus; Registration Statement................................................35
8.2 Meetings of Stockholders; Board Recommendation..........................................................35
8.3 Acquisition Proposals...................................................................................36
8.4 Exchange Listing........................................................................................39
8.5 Antitrust Notification; Consents of Regulatory Authorities..............................................39
8.6 Filings with State Offices..............................................................................40
8.7 Agreement as to Efforts to Consummate...................................................................40
8.8 Investigation and Confidentiality.......................................................................40
8.9 Press Releases..........................................................................................41
-ii-
8.10 Tax Treatment...........................................................................................41
8.11 Agreement of Affiliates.................................................................................42
8.12 Employee Benefits and Contracts.........................................................................42
8.13 Indemnification.........................................................................................44
8.14 Board of Directors of Buyer.............................................................................45
8.15 Section 16(b) Board Approval............................................................................45
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE......................................................46
9.1 Conditions to Obligations of Each Party.................................................................46
9.2 Conditions to Obligations of Buyer......................................................................47
9.3 Conditions to Obligations of Target.....................................................................48
ARTICLE 10 TERMINATION...........................................................................................49
10.1 Termination.............................................................................................49
10.2 Effect of Termination...................................................................................51
10.3 Expenses................................................................................................51
ARTICLE 11 MISCELLANEOUS.........................................................................................52
11.1 Definitions.............................................................................................52
11.2 Non-Survival of Representations and Covenants...........................................................61
11.3 Brokers and Finders.....................................................................................61
11.4 Entire Agreement........................................................................................62
11.5 Amendments..............................................................................................62
11.6 Waivers.................................................................................................62
11.7 Assignment..............................................................................................63
11.8 Notices.................................................................................................63
11.9 Governing Law...........................................................................................64
11.10 Counterparts............................................................................................64
11.11 Captions, Articles and Sections.........................................................................64
11.12 Interpretations.........................................................................................64
11.13 Enforcement of Agreement................................................................................64
11.14 Severability............................................................................................65
11.15 No Affiliate Liability..................................................................................65
11.16 Schedule Definitions....................................................................................65
-iii-
EXHIBIT INDEX
Exhibit Description PAGE
------- ----------- ----
Exhibit 1 Target Voting Agreements........................................................................1
Exhibit 2 Buyer Voting Agreement..........................................................................1
Exhibit 3 Form of Affiliate Agreement....................................................................42
Exhibit 4 Tax Certificates...............................................................................47
-iv-
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is made and entered
into as of November 19, 2001 by and among MOHAWK INDUSTRIES, INC. ("BUYER"), a
Delaware corporation; MAVERICK MERGER SUB, INC. ("SUB"), a Delaware corporation;
and DAL-TILE INTERNATIONAL INC. ("TARGET"), a Delaware corporation.
PREAMBLE
The respective Boards of Directors of Target, Sub and Buyer are of the
opinion that the transactions described herein are advisable and in the best
interests of the parties to this Agreement and their respective stockholders.
This Agreement provides for the acquisition of Target by Buyer pursuant to the
merger of Target with and into Sub. At the effective time of such merger, the
outstanding shares of the capital stock of Target shall be converted into the
right to receive a cash payment from Buyer or the Surviving Corporation and
shares of the common stock of Buyer (except as provided herein). As a result,
Sub shall continue to conduct the business and operations of Target as a wholly
owned subsidiary of Buyer. The transactions described in this Agreement are
subject to the approvals of the stockholders of Target, the stockholders of
Buyer, expiration of the required waiting period under the HSR Act, and the
satisfaction of certain other conditions described in this Agreement. It is the
intention of the parties to this Agreement that the Merger for federal income
tax purposes shall qualify as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code.
Concurrently with the execution and delivery of this Agreement, as a
condition and inducement to Buyer's willingness to enter into this Agreement,
certain of the holders of the outstanding shares of Target Common Stock have
executed and delivered to Buyer an agreement in substantially the form of
Exhibit 1 (the "TARGET VOTING AGREEMENTS"), pursuant to which they have agreed,
among other things, subject to the terms of such Target Voting Agreement, to
vote the shares of Target Common Stock over which such Persons have voting power
to approve and adopt this Agreement and approve the Merger.
Concurrently with the execution and delivery of this Agreement, as a
condition and inducement to Target's willingness to enter into this Agreement, a
stockholder of Buyer has executed and delivered to Target an agreement in
substantially the form of Exhibit 2 (the "BUYER VOTING AGREEMENT"), pursuant to
which such stockholder has agreed, among other things, subject to the terms of
such Buyer Voting Agreement, to vote the shares of Buyer Common Stock over which
such stockholder has voting power to approve the issuance of the shares of Buyer
Common Stock pursuant to the Merger.
Certain capitalized terms used in this Agreement are defined in Section
11.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties agree
as follows:
ARTICLE 1 TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER.
Subject to the terms and conditions of this Agreement and subject to the
provisions of Section 1.4 of this Agreement, at the Effective Time, Target shall
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