AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ADC TELECOMMUNICATIONS, INC.,
HAZELTINE MERGER SUB, INC.
AND
ANDREW CORPORATION
DATED AS OF MAY 30, 2006
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN
OF MERGER (this Agreement) is made and entered into as of
May 30, 2006, by and among ADC Telecommunications, Inc., a Minnesota corporation
(ADC), Hazeltine Merger Sub, Inc., a Delaware corporation and a
direct wholly owned subsidiary of ADC (Merger Sub), and Andrew
Corporation, a Delaware corporation (Andrew).
WITNESSETH:
WHEREAS,
the respective Boards of Directors of ADC, Merger Sub and Andrew have deemed it
advisable and in the best interests of their respective corporations and
stockholders that ADC and Andrew engage in a business combination in order to
advance their respective long-term strategic business interests;
WHEREAS,
in furtherance thereof, the Board of Directors of each of ADC, Merger Sub and
Andrew have approved this Agreement and the merger of Merger Sub with and into
Andrew (the Merger) so that Andrew continues as the surviving
corporation in the Merger (sometimes referred to in such capacity as the Surviving
Corporation), upon the terms of and subject to the conditions set forth
in this Agreement and in accordance with the provisions of the Delaware General
Corporation Law (the DGCL);
WHEREAS,
the Board of Directors of Andrew has determined to recommend to its stockholders
the approval and adoption of this Agreement and the Merger;
WHEREAS,
the Board of Directors of ADC has determined to recommend to its shareholders
approval of the issuance of shares of ADC Common Stock (as defined in
Section 2.1(a)) in connection with this Agreement (the ADC Share Issuance);
WHEREAS,
ADC, as the sole stockholder of Merger Sub, has approved this Agreement and the
Merger;
WHEREAS,
for United States federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the Code), and this
Agreement is intended to be, and is hereby, adopted as a plan of reorganization
within the meaning of Section 368 of the Code; and
WHEREAS,
the parties desire to make certain representations, warranties and agreements in
connection with the Merger and also to prescribe certain conditions to the
Merger.
NOW, THEREFORE,
in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
Article I
The Merger
1.1 The Merger. Upon
the terms of and subject to the conditions set forth in this Agreement, and in
accordance with the DGCL, at the Effective Time (as defined in Section 1.3),
Merger Sub shall be merged with and into Andrew, the separate corporate
existence of Merger Sub shall cease and Andrew shall continue as the Surviving
Corporation in the Merger and shall succeed to and assume all the property,
rights, privileges, powers and franchises of Merger Sub in accordance with the
DGCL.
1.2 Closing. The
closing of the Merger (the Closing) shall take place at
10:00 a.m., Central Time, on a date to be specified by the parties, which shall
be no later than the third business day after satisfaction or waiver of all of
the conditions set forth in Article VII (other than delivery of items to be
delivered at the Closing and other than those conditions that by their nature
are to be satisfied at the Closing, it being understood that the occurrence of
the Closing shall remain subject to the delivery of such items and the
satisfaction or waiver of such conditions at the Closing) at the offices of
Dorsey & Whitney LLP, 50 South Sixth Street, Minneapolis, Minnesota 55402,
unless another time, date or place is agreed to in writing by the parties
hereto. The date on which the Closing occurs is referred to herein as the Closing
Date.
1.3 Effective Time.
Upon the terms of and subject to the conditions of this Agreement, as soon as
practicable on the Closing Date, the parties shall cause the Merger to be
consummated by filing a certificate of merger executed in accordance with the
relevant provisions of the DGCL (the Certificate of Merger) with
the Secretary of State of the State of Delaware (the Secretary of State)
and shall make all other filings or recordings required under the DGCL. The
Merger shall become effective at such time as the Certificate of Merger is duly
filed with the Secretary of State, or at such subsequent date or time as Andrew
and ADC shall agree and specify in the Certificate of Merger. The date and time
at which the Merger becomes effective as set forth in the Certificate of Merger
is referred to herein as the Effective Time.
1.4 Effects of the Merger.
At the Effective Time, the Merger shall have the effects set forth in this
Agreement and in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, powers and franchises of Andrew and Merger Sub
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of Andrew and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
1.5 Organizational
Documents of the Surviving Corporation. At the Effective Time, and subject
to compliance with Section 6.4(a), the Andrew Charter (as defined in
Section 4.1(b)) shall be amended and restated in its entirety to be identical to
the certificate of incorporation of Merger Sub in the form attached as Exhibit A
hereto, and such amended Andrew Charter shall be the certificate
of incorporation of the Surviving Corporation until thereafter amended in
accordance with the DGCL and as provided in such certificate of incorporation;
provided, however, that, at the Effective Time, Article I of the
certificate of incorporation of the Surviving Corporation shall be amended and
restated in its entirety to read as follows: The name of the corporation is
Andrew Corporation. After the Effective Time, the authorized capital stock of
the Surviving Corporation shall consist of 1,000 shares of common stock, par
value $0.01 per
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share. At the Effective
Time, the Andrew By-Laws (as defined in Section 4.1(b)) shall be amended and
restated in their entirety to be identical to the by-laws of Merger Sub, as in
effect immediately prior to the Effective Time, in the form attached as Exhibit B
hereto, and such by-laws shall be the by-laws of the Surviving
Corporation until thereafter amended in accordance with the DGCL and as provided
in such by-laws.
1.6 Directors and
Officers of the Surviving Corporation. The initial directors of the
Surviving Corporation shall be the individuals designated as such on Section 1.6
of the ADC Disclosure Letter hereto until their respective successors are duly
elected or appointed and qualified. The initial officers of the Surviving
Corporation shall be the individuals designated as such on Section 1.6 of the
ADC Disclosure Letter hereto until their respective successors are duly
appointed.
1.7 Alternative Structure.
ADC and Andrew may mutually agree to revise the structure of the Merger provided
for herein at any time prior to receipt of either the Andrew Stockholder
Approval (as defined in Section 4.3(c)) or ADC Share Issuance Approval (as
defined in Section 3.3(c)), or at any time thereafter if, with appropriate
disclosure, any required further approval of the revised structure is obtained
from the stockholders of ADC and Andrew, as applicable; provided, however,
that under any such revised structure the Merger would qualify as a
reorganization within the meaning of Section 368(a) of the Code or as a transfer
qualifying under Section 351 of the Code.
Article II
Effects of the Merger; Exchange of Certificates
2.1 Effect on Capital
Stock. Upon the terms and subject to the conditions of this Agreement, at
the Effective Time, by virtue of the Merger and without any action on the part
of ADC, Merger Sub, Andrew or the holders of any shares of common stock, par
value $0.01 per share, of Andrew (together with any associated Andrew Rights (as
defined in Section 4.2(a)), Andrew Common Stock):
(a) Conversion of Andrew
Common Stock. Each share of Andrew Common Stock issued and outstanding
immediately prior to the Effective Time, other than any shares of Andrew
Common Stock to be canceled pursuant to Section 2.1(c) shall automatically be
converted into the right to receive 0.57 (the Exchange Ratio) of
a fully paid and nonassessable share of common stock, par value $0.20 per share,
of ADC (ADC Common Stock) upon surrender of the Certificate (as
defined in Section 2.2(b)) which immediately prior to the Effective Time
represented such share of Andrew Common Stock in the manner provided in
Section 2.2(b) (or, in the case of a lost, stolen or destroyed Certificate,
Section 2.2(h)). The shares of ADC Common Stock, together with the associated
ADC Rights (as defined in Section 3.2(a)), to be issued or paid to holders of
Andrew Common Stock pursuant to this Agreement, together with any cash in lieu
of fractional shares pursuant to Section 2.2(e), are referred to as the Merger
Consideration. As a result of the Merger, at the Effective Time, each
holder of a Certificate shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration payable in respect of
the shares of Andrew Common Stock represented by such Certificate immediately
prior to the Effective Time, any cash in lieu of fractional shares payable
pursuant to Section 2.1(e) and any dividends or other distributions payable
pursuant to
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Section 2.2(c), all to be
issued or paid, without interest, in consideration therefor upon the surrender
of such Certificate in accordance with Section 2.2(b) (or, in the case of a
lost, stolen or destroyed Certificate, Section 2.2(h)).
(b) Capital Stock of
Merger Sub. Each issued and outstanding share of common stock, par value
$0.01 per share, of Merger Sub shall be converted into one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
(c) Cancellation of
Treasury Shares. Each share of Andrew Common Stock held as treasury stock by
Andrew, if any, shall automatically be extinguished without any conversion, and
no consideration shall be delivered in respect thereof.
(d) Andrew Options,
Andrew Warrant, Andrew Note and Andrew Restricted Stock Units. At the
Effective Time, (i) all issued and outstanding options to purchase Andrew Common
Stock under any Andrew Stock Plan (as defined in Section 4.2(a)) (each, an Andrew
Option) shall be assumed by ADC in accordance with Section 6.10(a),
(ii) the warrant, dated January 16, 2006, to purchase 1,000,000 shares of Andrew
Common Stock issued to True Position, Inc. (the Andrew Warrant)
shall be assumed by ADC in accordance with Section 6.10(b), (iii) all issued and
outstanding 3 1/4%
Convertible Subordinated Notes Due 2013 (the Andrew Notes),
subject to the indenture, dated August 8, 2003, between Andrew and BNY Midwest
Trust Company (the Andrew Indenture) shall become convertible
into ADC Common Stock in accordance with Section 6.10(c), and (iv) all
restricted stock units issued under the Andrew Stock Plans shall be treated as
set forth in Section 6.10(d).
(e) Fractional Shares.
No fraction of a share of ADC Common Stock will be issued by virtue of the
Merger, but in lieu thereof each holder of shares of Andrew Common Stock who
would otherwise be entitled to receive a fraction of a share of ADC Common Stock
(after aggregating all fractional shares of ADC Common Stock that otherwise
would be received by such holder) shall, upon surrender of such holders
Certificate(s), receive from ADC an amount of cash (rounded to the nearest whole
cent), without interest, equal to the product of:
(i) such fraction, multiplied
by (ii) the average closing price of one share of ADC Common Stock for the ten
most recent trading days that ADC Common Stock has traded ending on the trading
day one day prior to the Effective Time, as reported on the NASDAQ National
Market (NASDAQ).
(f) Adjustments to
Exchange Ratio. Notwithstanding any provision of this Article II to the
contrary (but without in any way limiting the covenants in Section 5.1), the
Exchange Ratio shall be adjusted to reflect fully the appropriate effect of any
stock split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into ADC Common Stock or Andrew Common
Stock), reorganization, recapitalization, reclassification or other like change
with respect to ADC Common Stock or Andrew Common Stock having a record date on
or after the date hereof and prior to the Effective Time.
2.2 Exchange of Shares
and Certificates.
(a) Exchange Agent.
At or prior to the Effective Time, ADC shall engage Computershare Investor
Services LLC (or such other institution reasonably satisfactory to ADC and
Andrew) to act as exchange agent in connection with the Merger (the Exchange
Agent),
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pursuant to an agreement
reasonably satisfactory to ADC and Andrew. Immediately prior to the Effective
Time, ADC shall deposit with the Exchange Agent, in trust for the benefit of the
holders of shares of Andrew Common Stock, the shares of ADC Common Stock
issuable pursuant to Section 2.1(a). In addition, ADC shall make available by
depositing with the Exchange Agent, as necessary from time to time after the
Effective Time as needed, cash in an amount sufficient to make the payments in
lieu of fractional shares pursuant to Section 2.1(e) and any dividends or
distributions to which holders of shares of Andrew Common Stock may be entitled
pursuant to Section 2.2(c). All cash and ADC Common Stock deposited with the
Exchange Agent shall hereinafter be referred to as the Exchange Fund.
(b) Exchange Procedures.
Promptly after the Effective Time, ADC shall cause the Exchange Agent to mail to
each holder of record of a certificate or certificates that immediately prior to
the Effective Time represented outstanding shares of Andrew Common Stock and
that at the Effective Time were converted into the right to receive the Merger
Consideration pursuant to Section 2.1 (the Certificates), (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for whole shares of ADC Common
Stock, cash in lieu of any fractional shares pursuant to Section 2.1(e) and any
dividends or other distributions payable pursuant to Section 2.2(c). Upon
surrender of Certificates for cancellation to the Exchange Agent, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such Certificates shall be
entitled to receive in exchange therefor the number of whole shares of ADC
Common Stock to which such holder is entitled pursuant to Section 2.1 (which, as
required by the ADC By-Laws (as defined in Section 3.1(b)), shall be issued in
uncertificated book entry form only), payment in lieu of fractional shares which
such holder is entitled to receive pursuant to Section 2.1(e) and any dividends
or distributions payable pursuant to Section 2.2(c), and the Certificates so
surrendered shall forthwith be canceled. In the event of a transfer of ownership
of Andrew Common Stock which is not registered in the transfer records of
Andrew, the proper number of shares of ADC Common Stock may be issued to a
Person other than the Person in whose name the Certificate so surrendered is
registered, if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the Person requesting such issuance shall pay any
transfer or other taxes required by reason of the issuance of shares of ADC
Common Stock to a Person other than the registered holder of such Certificate or
establish to the reasonable satisfaction of ADC that such tax has been paid or
is not applicable. Until surrendered as contemplated by this Section 2.2(b),
each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration (and any amounts to
be paid pursuant to Section 2.2(c)) upon such surrender. No interest shall be
paid or shall accrue on any amount payable pursuant to Section 2.1(e) or
Section 2.2(c).
(c) Distributions with
Respect to Unexchanged Shares. No dividends or other distributions with
respect to ADC Common Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to the shares
of ADC Common Stock represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 2.1(e),
until such Certificate has been surrendered in accordance with this Article II.
Subject to Applicable Law (as defined in Section 3.7(a)), following surrender of
any such Certificate, there shall be paid to the recordholder thereof,
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without interest, (i)
promptly after such surrender, the number of whole shares of ADC Common Stock
issuable in exchange therefor pursuant to this Article II, together with any
cash payable in lieu of a fractional share of ADC Common Stock to which such
holder is entitled pursuant to Section 2.1(e) and the amount of dividends or
other distributions with a record date after the Effective Time theretofore paid
with respect to such whole shares of ADC Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time and a payment date subsequent to such
surrender payable with respect to such whole shares of ADC Common Stock.
(d) No Further Ownership
Rights in Andrew Common Stock. All shares of ADC Common Stock issued upon
the surrender for exchange of Certificates in accordance with the terms of this
Article II and any cash paid pursuant to Section 2.1(e) or Section 2.2(c) shall
be deemed to have been issued (and paid) in full satisfaction of all rights
pertaining to the shares of Andrew Common Stock previously represented by such
Certificates. At the Effective Time, the stock transfer books of Andrew shall be
closed and there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Andrew Common Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation or the
Exchange Agent for any reason, they shall be canceled and exchanged as provided
in this Article II.
(e) Termination of
Exchange Fund. Any portion of the Exchange Fund which remains undistributed
to the holders of Certificates six months after the Effective Time shall be
delivered to ADC, upon demand, and any holders of Certificates who have not
theretofore complied with this Article II shall thereafter look only to ADC for
payment of their claim for the Merger Consideration, and any dividends or
distributions pursuant to Section 2.2(c).
(f) No Liability.
None of ADC, Merger Sub, Surviving Corporation or the Exchange Agent shall be
liable to any Person in respect of any shares of ADC Common Stock (or dividends
or distributions with respect thereto) or cash from the Exchange Fund delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificate shall not have been surrendered prior to seven
years after the Effective Time, or immediately prior to such earlier date on
which any shares of ADC Common Stock, any cash in lieu of fractional shares of
ADC Common Stock or any dividends or distributions with respect to ADC Common
Stock issuable in respect of such Certificate would otherwise escheat to or
become the property of any Governmental Entity (as defined in Section 3.3(e)),
any such shares, cash, dividends or distributions in respect of such Certificate
shall, to the extent permitted by Applicable Law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any Person
previously entitled thereto.
(g) Withholding Rights.
ADC or the Exchange Agent shall be entitled to deduct and withhold from any
consideration payable pursuant to this Agreement to any Person who was a holder
of Andrew Common Stock, options or other securities or rights immediately prior
to the Effective Time such amounts as ADC or the Exchange Agent may be required
to deduct and withhold with respect to the making of such payment under the
Code, or any provision of federal, state, local or foreign tax law. To the
extent that amounts are so withheld by ADC or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the Person to whom such consideration would otherwise have been paid.
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(h) Lost, Stolen or
Destroyed Certificates. In the event any Certificates shall have been lost,
stolen or destroyed, the Exchange 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, such shares of ADC Common Stock as may be required
pursuant to Section 2.1(a), cash for fractional shares pursuant to
Section 2.1(e) and any dividends or distributions payable pursuant to Section
2.2(c); provided, however, that ADC may, in its reasonable discretion and
as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed Certificates to deliver an agreement of
indemnification in form reasonably satisfactory to ADC, or a bond in such sum as
ADC may reasonably direct as indemnity, against any claim that may be made
against ADC or the Exchange Agent in respect of the Certificates alleged to have
been lost, stolen or destroyed.
(i) Investment of
Exchange Fund. The Exchange Agent shall invest any cash included in the
Exchange Fund as directed by ADC on a daily basis provided that no such
investment or loss thereon shall affect the amounts payable to former
stockholders of Andrew after the Effective Time pursuant to this Article II. Any
interest and other income resulting from such investment shall become a part of
the Exchange Fund and any amounts in excess of the amounts payable pursuant to
this Article II shall promptly be paid to ADC.
Article III
Representations and Warranties of ADC and Merger Sub
Except as disclosed in
(x) an ADC SEC Document (as defined in Section 3.4(a)), but excluding any risk
factor disclosure contained in any such ADC SEC Document under the heading Risk
Factors or Forward-Looking Information, or (y) the ADC Disclosure Letter (as
defined in Section 9.5), ADC and Merger Sub jointly and severally represent and
warrant to Andrew as follows:
3.1 Corporate
Organization.
(a) ADC is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Minnesota. ADC has the corporate power and authority to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or
qualified would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on ADC.
As used in this Agreement,
the terms Material Adverse Change or Material Adverse
Effect mean, with respect to ADC or Andrew, as the case may be, any
change, effect, event, occurrence or state of facts that has or has had a
material adverse effect (i) on the business, results of operations (other than
short-term effects on results of operations) or financial condition of such
party and its Subsidiaries, taken as a whole, provided, however, that a
Material Adverse Effect/Material Adverse Change will be deemed not to include
effects to the extent resulting from: (A) any change, after the date hereof, in
U.S. generally accepted accounting principles (GAAP) or the
accounting rules and regulations of the Securities and Exchange Commission
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(the SEC),
(B) any change in the market price or trading volume of ADC Common Stock or
Andrew Common Stock (it being understood that any change, effect, event,
occurrence or state of facts that is an underlying cause of such change in price
or trading volume shall not be excluded by virtue of this exception), (C) any
change in the market price of copper or any short-term adverse effects to such
party or its Subsidiaries directly resulting from such change, (D) any change,
effect, event, occurrence or state of facts exclusively relating to any acts of
terrorism, sabotage, military action or war, (E) any change in or relating to
the United States economy or United States financial, credit or securities
markets in general, (F) any change in or relating to the industry in which such
party operates or the markets for any of such partys products or services in
general, which change in the case of clauses (D), (E) and (F) does not affect
such party to a materially disproportionate degree relative to other entities
operating in such markets or industries or serving such markets, or (G) any
change, effect, event, occurrence or state of facts arising directly or
indirectly out of the execution, delivery, performance or disclosure of this
Agreement or the transactions contemplated hereby, including any impact thereof
on relationships, contractual or otherwise, with customers, suppliers,
distributors, partners or employees; or (ii) the ability of such party to
consummate the transactions contemplated by this Agreement in the manner
contemplated hereby.
(b) True and complete copies
of the Restated Articles of Incorporation of ADC, as amended through, and as in
effect as of, the date of this Agreement (the ADC Charter) and
the Restated By-laws of ADC, as amended through, and as in effect as of, the
date of this Agreement (the ADC By-Laws, and, together with the
ADC Charter, the ADC Organizational Documents) have previously
been made available to Andrew.
(c) Each Subsidiary (as
defined in Section 3.2(g)) of ADC (i) is duly organized and validly existing
under the laws of its jurisdiction of organization, (ii) is duly qualified to do
business and, where applicable, in good standing in all jurisdictions (whether
federal, state, local or foreign) where its ownership or leasing of property or
the conduct of its business requires it to be so qualified, and (iii) has all
requisite corporate power and authority to own or lease its properties and
assets and to carry on its business as now conducted, except for such
variances from the matters set forth in any of clauses (i), (ii) or (iii) as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on ADC.
3.2 Capital Structure.
(a) The authorized capital
stock of ADC consists of 342,857,142 shares of ADC Common Stock, and 10,000,000
shares of preferred stock, no par value per share (ADC Preferred Stock).
At the close of business on May 25, 2006:
(i) 117,237,040 shares of ADC Common
Stock were issued and outstanding;
(ii) no shares of ADC Preferred Stock were
issued and outstanding;
(iii) an aggregate of 33,634,686 shares of ADC Common
Stock were reserved for issuance pursuant to ADCs Global Stock Incentive Plan,
2001 Special Stock Option Plan, CommTech Corporation 1997 Equity Incentive Plan,
PairGain 1993 Stock Option Plan, PairGain 1996 Stock Option Plan, PairGain
Directors Stock Option Plan, Saville 1995 Share Option Plan, Altitun AB Stock
Option Plan, BAS Stock Plan, 1997 NewNet, Inc. Stock Option Plan, Teledata
Director Share Incentive Plan (1992), Teledata Key Employee Stock Option Plan
(1994-1997), Teledata Key Employee Stock Option Plan (1998), Centigram 1995
Nonstatutory Stock Option Plan, Centigram 1997 Stock Plan, Nvision Share Option
Plan, Spectracom Inc. 1997 Stock
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Option Plan, Option
Conversion Agreement and Non-Incentive Stock Option and Indemnification
Agreement (such plans, as amended to date, are collectively referred to herein
as the ADC Stock Plans);
(iv) 14,239,436 shares of ADC Common
Stock were reserved for issuance upon the conversion of ADCs 1% Convertible
Unsecured Subordinated Notes Due 2008 and ADCs Variable Rate Convertible
Unsecured Subordinated Notes Due 2013 (collectively, the ADC Notes);
(v) 2,000,000 shares of ADC Preferred Stock were designated as Series A Junior
Participating Preferred Stock, par value $0.0001 per share, and were reserved
for issuance upon the exercise of preferred share purchase rights (the ADC
Rights) issued pursuant to the ADC Rights Agreement, amended and
restated as of July 30, 2003, between ADC and Computershare Investor Services,
LLC, as rights agent (the ADC Rights Agreement); and (vi) one
ADC Right was outstanding for each outstanding share of ADC Common Stock. All of
the outstanding shares of capital stock of, or other equity interests in, ADC
have been validly issued and are fully paid and nonassessable.
(b) As of the close of business on May 25, 2006:
(i) 6,719,352 shares of ADC Common Stock were subject
to issuance pursuant to outstanding options to acquire shares of ADC Common
Stock (ADC Options) under the ADC Stock Plans;
(ii) 588,677
shares of ADC Common Stock were subject to issuance pursuant to outstanding
restricted stock units issued under the ADC Stock Plans and (iii) 14,239,436
shares of ADC Common Stock were subject to issuance upon the conversion of the
ADC Notes. All shares of ADC Common Stock subject to issuance under the ADC
Stock Plans, upon issuance upon the terms and subject to the conditions set
forth in the instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and nonassessable. Except as contemplated
by this Agreement, there are no commitments or agreements of any character to
which ADC is bound obligating ADC to accelerate the vesting of any ADC Option as
a result of the Merger. Except as set forth in this Section 3.2, there are no
outstanding or authorized stock appreciation, phantom stock, profit
participation or other similar rights with respect to ADC.
(c) No bonds, debentures,
notes or other evidences of indebtedness having the right to vote on any matters
on which stockholders of ADC may vote (Voting Debt) are issued
or outstanding.
(d) Except as otherwise set
forth in this Section 3.2, there are no securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which ADC or any of its Subsidiaries is a party or by which any of them is bound
obligating ADC or any of its Subsidiaries to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock, Voting Debt or
other voting securities of ADC or any of its Subsidiaries, or obligating ADC or
any of its Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
All outstanding shares of ADC Common Stock, all outstanding ADC Options, and all
outstanding shares of capital stock of each Subsidiary of ADC have been issued
and granted (as applicable) in compliance in all material respects with (A) all
applicable securities laws and all other Applicable Laws and (B) all
requirements set forth in applicable material Contracts (as defined in
Section 3.17(a)).
(e) Since May 25, 2006, and
through the date hereof, except for issuances of ADC Common Stock
pursuant to the exercise of ADC Options outstanding as of May 25, 2006, there
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has been no change in
(x) the outstanding capital stock of ADC, (y) the number of ADC Options
outstanding, or (z) the number of other options, warrants or other rights to
purchase ADC Common Stock.
(f) Neither ADC nor any
Subsidiary of ADC is a party to any agreement, arrangement or understanding
restricting the purchase or transfer of, relating to the voting of, requiring
registration of, or granting any preemptive or antidilutive rights with respect
to, any capital stock of ADC or any of its Subsidiaries or any securities of the
type referred to in Section 3.2(d) hereof.
(g) All of the issued and
outstanding shares of capital stock or other equity ownership interests of each
significant subsidiary (as such term is defined under Regulation S-X of the
SEC) of ADC are owned by ADC, directly or indirectly, free and clear of any
material liens, pledges, charges and security interests and similar
encumbrances, other than for Taxes that are not yet due (Liens),
and free of any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other equity ownership interest (other than restrictions
under applicable securities laws), and all of such shares or equity ownership
interests are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. No such significant subsidiary is
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of capital stock or any other equity security of such significant subsidiary or
any securities representing the right to purchase or otherwise receive any
shares of capital stock or any other equity security of such significant
subsidiary. Except for the capital stock or other equity ownership interests of
its Subsidiaries, as of the date of this Agreement, ADC does not beneficially
own directly or indirectly any capital stock, membership interest, partnership
interest, joint venture interest or other equity interest in any Person that
constitutes a Substantial Investment. As used in this Agreement, (i) Subsidiary,
when used with respect to either party, means any corporation, partnership,
limited liability company or other organization, whether incorporated or
unincorporated, (x) of which such party or any other Subsidiary of such party is
a general partner (excluding partnerships, the general partnership interests of
which held by such party or any Subsidiary of such party do not have a majority
of the voting interests in such partnership) or (y) a majority of the securities
or other interests of which having by their terms ordinary voting power to elect
a majority of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party and/or by any one or more of its Subsidiaries,
and (ii) Substantial Investment, when used with respect to
either party, means a stock or other equity investment having a fair market
value or book value in excess of $10,000,000, directly or indirectly, in any
Person.
(h) The authorized capital
stock of Merger Sub consists of 1,000 shares of common stock, par value $0.01
per share, all of which shares are issued and outstanding. ADC is the legal and
beneficial owner of all of the issued and outstanding shares of Merger Sub.
Merger Sub was formed at the direction of ADC on May 25, 2006, solely for the
purposes of effecting the Merger and the other transactions contemplated hereby.
Except as required by or provided for in this Agreement, Merger Sub (A) does not
hold, nor has it held, any assets, (B) does not have, nor has it incurred, any
liabilities and (C) has not carried on any business activities other than
in connection with the Merger and the transactions contemplated hereby. All of
the outstanding
10
shares of capital stock of
Merger Sub have been duly authorized and validly issued, and are fully paid and
nonassessable and not subject to any preemptive rights.
3.3 Authority; Board
Approval; Voting Requirements; No Conflict; Required Filings and Consents.
(a) Authority.
Subject to obtaining the ADC Share Issuance Approval, each of ADC and Merger Sub
has all requisite corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by ADC and Merger Sub, and the consummation by ADC and Merger
Sub of the transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of ADC and Merger Sub, and no other
corporate proceedings on the part of ADC or Merger Sub and no shareholder votes
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby, other than ADC Share Issuance Approval necessary for
the ADC Share Issuance. This Agreement has been duly executed and delivered by
ADC and Merger Sub. Assuming the due authorization, execution and delivery of
this Agreement by Andrew, this Agreement constitutes the legal, valid and
binding obligation of each of ADC and Merger Sub, enforceable against ADC and
Merger Sub in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
the rights and remedies of creditors generally and to general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
(b) Board Approval.
Subject to Section 5.3, the Board of Directors of ADC has (A) determined that
this Agreement, the Merger and the ADC Share Issuance are advisable and fair to
and in the best interest of ADC and its shareholders, (B) approved and adopted
this Agreement, the Merger, the ADC Share Issuance and the other transactions
contemplated hereby, which adoption has not been rescinded or modified,
(C) resolved to recommend the ADC Share Issuance to its shareholders for
approval and (D) directed that the ADC Share Issuance be submitted to its
shareholders for consideration in accordance with this Agreement.
(c) Voting Requirements.
The affirmative vote in favor of approval of the ADC Share Issuance by a
majority of the votes cast thereon by holders of shares of ADC Common Stock
present in person or by proxy (the ADC Share Issuance Approval)
at a duly convened and held ADC Shareholders Meeting (as defined in
Section 6.1(b)) at which a quorum is present is the only vote of the holders of
any class or series of ADCs capital stock necessary to approve the ADC Share
Issuance, this Agreement, the Merger and the other transactions contemplated
hereby.
(d) No Conflict. The
execution and delivery of this Agreement by ADC and Merger Sub do not, and the
consummation by ADC and Merger Sub of the transactions contemplated hereby and
compliance by ADC and Merger Sub with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, require any consent, waiver or approval under,
give rise to any right of termination or other right, or the cancellation or
acceleration of any right or obligation or loss of a benefit under, or result in
the creation of any Lien upon any of the properties or assets of ADC or any of
its Subsidiaries or any restriction on the conduct of ADCs business or
operations under, (A) the ADC Organizational Documents, (B) any Contract,
permit, concession, franchise, license or
11
authorization applicable to
ADC or any of its Subsidiaries or their respective properties or assets, (C) any
judgment, order or decree, or (D) subject to the governmental filings and other
matters referred to in Section 3.3(e), any statute, law, ordinance, rule or
regulation applicable to ADC or any of its Subsidiaries or their respective
properties or assets, other than, in the case of clauses (B), (C) and
(D), any such conflicts, violations, defaults, rights, losses, restrictions or
Liens, or failure to obtain consents, waivers or approvals, which would not,
individually or in the aggregate, reasonably be likely to have a Material
Adverse Effect on ADC.
(e) Required Filings or
Consents. No consent, approval, order or authorization of, action by or in
respect of, or registration, declaration or filing with, any federal, state,
local or foreign government, any court, administrative, regulatory or other
governmental agency, commission or authority or any non-governmental
self-regulatory agency, commission or authority (a Governmental Entity)
is required to be made or obtained by or with respect to ADC or any of its
Subsidiaries in connection with the execution and delivery of this Agreement by
ADC or Merger Sub, the approval of the ADC Share Issuance or the consummation by
ADC or Merger Sub of the transactions contemplated hereby, except for:
(i) the filing of a
pre-merger notification and report form by ADC and Merger Sub under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR
Act) and any applicable filings or notifications under the antitrust,
competition or similar laws of any foreign jurisdiction;
(ii) the filing with the SEC
of:
(A) the registration
statement on Form S-4 to be filed with the SEC by ADC in connection with the
issuance of ADC Common Stock in the Merger (including any amendments or
supplements, the Form S-4);
(B) a proxy statement
relating to the ADC Shareholders Meeting (such proxy statement, together with
the proxy statement relating to the Andrew Stockholders Meeting (as defined in
Section 6.1(b)), in each case as amended or supplemented from time to time, the
Joint Proxy Statement); and
(C) such reports under
Section 13(a), 13(d), 15(d) or 16(a) of the Securities Exchange Act of 1934, as
amended (the Exchange Act) and communications under Rules 165
and 425 under the Securities Act of 1933, as amended (the Securities Act),
in each case as may be required in connection with this Agreement and the
transactions contemplated hereby;
(iii) the filing of a
Notification Form: Listing of Additional Shares with NASDAQ in connection with
the ADC Share Issuance;
(iv) the filing of the
Certificate of Merger with the Secretary of State and appropriate documents with
the relevant authorities of other states in which ADC or Merger Sub is qualified
to do business;
(v) filings required by
state securities laws or other blue sky laws, if any; and
12
(vi) other consents,
approvals, orders or authorizations, the failure of which to be made or
obtained, would not reasonably be likely to have a Material Adverse Effect on
ADC.
3.4 SEC Documents;
Financial Statements.
(a) ADC and each of its
Subsidiaries has timely filed all reports, registrations, schedules, forms,
statements and other documents, together with any amendments required to be made
with respect thereto, that they were required to file since November 1, 2002
with (i) the SEC, (ii) any state or other federal regulatory authority (other
than any taxing authority, which is covered by Section 3.10) and (iii) any
foreign regulatory authority (other than any taxing authority, which is covered
by Section 3.10) (collectively, Regulatory Agencies), and have
paid all fees and assessments due and payable in connection therewith, except
in each case where the failure to file such report, registration, schedule,
form, statement or other document, or to pay such fees and assessments, would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on ADC. No publicly available final registration statement,
prospectus, report, form, schedule or definitive proxy statement filed since
November 1, 2002 and prior to the close of business on March 2, 2006 (the ADC
Measurement Date) by ADC with the SEC pursuant to the Securities Act or
the Exchange Act (collectively, the ADC SEC Documents), as of
their respective dates or, if amended prior to the date of this Agreement, as of
the date of such amendment, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances in
which they were made, not misleading, except that information contained
in any subsequent ADC SEC Document filed as of a later date (but before the date
of this Agreement) will be deemed to modify information contained in any ADC SEC
Document filed as of an earlier date. As of their respective filing dates, all
ADC SEC Documents complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act. None of
ADCs Subsidiaries is required to file any reports with the SEC.
(b) The principal executive
officer and principal financial officer of ADC have made all certifications
required by the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act)
and any related rules and regulations promulgated thereunder by the SEC, and the
statements contained in all such certifications were complete and correct in all
material respects as of the respective dates made. Neither ADC nor any of its
officers has received notice from the SEC or the NASDAQ questioning or
challenging the accuracy, completeness, content, form or manner of filing or
submission of such certifications. ADC is, and through the Closing Date will be,
otherwise in material compliance with all applicable effective provisions of the
Sarbanes-Oxley Act and the applicable listing and corporate governance rules of
the NASDAQ.
(c) The financial statements
of ADC included in the ADC SEC Documents complied, as of their respective dates
of filing with the SEC, in all material respects with accounting requirements
and the published rules and regulations of the SEC applicable with respect
thereto, have been prepared in accordance with United States generally accepted
accounting principles (except, in the case of unaudited statements, as permitted
by the instructions and applicable rules of Form 10-Q or Form 8-K of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
13
position of ADC and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments which are
not, individually or in the aggregate, material).
(d) The financial statements
of ADC included in each publicly available final registration statement,
prospectus, report, form, schedule or definitive proxy statement to be filed
with the SEC pursuant to the Securities Act or Exchange Act after the date
hereof until the Effective Time will comply, as of their respective dates of
filing with the SEC, in all material respects with accounting requirements and
the published rules and regulations of the SEC applicable with respect thereto,
will be prepared in accordance with United States generally accepted accounting
principles (except, in the case of unaudited statements, as permitted by the
instructions or other applicable rules of Form 10-Q or Form 8-K of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and will fairly present the consolidated
financial position of ADC and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments which are not, individually or in the aggregate,
expected to be material).
(e) Except as reflected or
reserved against in the balance sheet of ADC dated January 27, 2006 included in
the Form 10-Q filed by ADC with the SEC on March 2, 2006 (including the notes
thereto, the ADC Balance Sheet), neither ADC nor any of its
Subsidiaries has any liabilities (absolute, accrued, contingent or otherwise)
which are required by GAAP to be set forth on a consolidated balance sheet of
ADC and its consolidated Subsidiaries or in the notes thereto, other than
(A) liabilities and obligations incurred since January 27, 2006 in the ordinary
course of business which would not, individually or in the aggregate, reasonably
be likely to have a Material Adverse Effect on ADC, or (B) liabilities and
obligations incurred in connection with this Agreement or the transactions
contemplated hereby.
(f) Neither ADC nor any of
its Subsidiaries is a party to, or has any commitment to become a party to, any
contract, agreement, arrangement or understanding (including any contract or
arrangement relating to any transaction or relationship between or among ADC and
any of its Subsidiaries, on the one hand, and any unconsolidated affiliate (as
such term is defined Rule 12b-2 under the Exchange Act (an Affiliate)),
including any structured finance, special purpose or limited purpose entity or
Person, on the other hand), where the result, purpose or intended effect of such
contract or arrangement is to avoid disclosure of any material transaction
involving, or material liabilities of, ADC or any of its Subsidiaries in ADCs
or its Subsidiaries published financial statements.
3.5 Information Supplied.
None of the information supplied or to be supplied by or on behalf of ADC or
Merger Sub for inclusion or incorporation by reference in (i) the Form S-4 will,
at the time the Form S-4 becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or
14
necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading or (ii) the Joint Proxy Statement will, at the date it is first
mailed to ADCs shareholders or at the time of the ADC Shareholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Joint Proxy Statement and the Form S-4 will comply as to form in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by ADC with respect to information or
statements with respect to Andrew or its Subsidiaries made or incorporated by
reference therein or otherwise supplied by or on behalf of Andrew for inclusion
or incorporation by reference in the Joint Proxy Statement or the Form S-4.
3.6 Absence of Certain
Changes or Events.
(a) Since January 27, 2006
through the date hereof, except as and to the extent (i) disclosed in
ADCs quarterly report for the fiscal quarter ended January 27, 2006 filed with
the SEC on Form 10-Q, or (ii) expressly contemplated by this Agreement:
(i) ADC and its Subsidiaries
have conducted their business only in the ordinary course consistent with past
practice in all material respects;
(ii) there has not been any
split, combination or reclassification of any of ADCs capital stock or any
declaration, setting aside or payment of any dividend on, or other distribution
(whether in cash, stock or property) in respect of, in lieu of, or in
substitution for, shares of ADCs capital stock;
(iii) except as required by
a change in GAAP, there has not been any material change in accounting methods,
principles or practices by ADC; and
(iv) there has not been any
action taken by ADC or any of its Subsidiaries that, if taken during the period
from the date of this Agreement through the Effective Time, would constitute a
breach of any of clauses (iii), (iv), (vii), (x), (xi) or (xii) of Section
5.1(b), other than actions in connection with entering into this
Agreement.
(b) Since January 27, 2006
through the date hereof, there have not been any changes, circumstances or
events that, individually or in the aggregate, have had, or would reasonably be
likely to have, a Material Adverse Effect on ADC.
3.7 Compliance with
Applicable Laws; Permits; Litigation.
(a) ADC, its Subsidiaries
and employees hold all permits, licenses, easements, variances, exemptions,
orders, consents, registrations and approvals of all Governmental Entities which
are required for the operation of the businesses of ADC and its Subsidiaries in
the manner described in the ADC SEC Documents filed prior to the date hereof and
as they are being conducted as of the date hereof (the ADC Permits),
and all ADC Permits are in full force and effect, except where the
failure to have, or the suspension or cancellation of, or the failure to be
valid or in full force and effect of, any such ADC Permit would not reasonably
be likely to have a Material Adverse Effect on ADC. ADC and its Subsidiaries are
in compliance with the terms of the ADC Permits and all applicable laws,
statutes, orders, rules, regulations, policies or guidelines promulgated, or
judgments, decisions or orders entered by any Governmental Entity (all such
laws, statutes, orders, rules, regulations, policies, guidelines, judgments,
decisions and orders, collectively, Applicable Laws or Applicable
Law ) relating to ADC and its
15
Subsidiaries or their
respective business or properties, except where the failure to be in
compliance with the terms of the ADC Permits or such Applicable Laws would not,
individually or in the aggregate, reasonably be likely to have a Material
Adverse Effect on ADC.
(b) As of the date hereof,
except as and to the extent disclosed in the ADC SEC Documents filed
prior to the date of this Agreement, no action, demand, suit, proceeding,
requirement or investigation by any Governmental Entity and no suit, action,
mediation, arbitration or proceeding by any Person, against or affecting ADC or
any of its Subsidiaries or any of their respective properties, including
Intellectual Property (as defined in Section 3.12(a)), is pending or, to the
Knowledge of ADC, threatened which, individually or in the aggregate, has had,
or is reasonably likely to have, a Material Adverse Effect on ADC.
(c) As of the date hereof
and except with respect to environmental matters which are covered by
Section 3.11, neither ADC nor any of its Subsidiaries is subject to any material
outstanding order, injunction or decree.
3.8 Employees.
(a) Except as would not,
individually or in the aggregate, reasonably be likely to have a Material
Adverse Effect on ADC, (i) no work stoppage, slowdown, lockout, labor strike,
material arbitrations or other labor disputes against ADC or any of its
Subsidiaries are pending or, to the Knowledge of ADC, threatened, (ii) no unfair
labor practice charges, grievances or complaints are pending or, to the
Knowledge of ADC, threatened against ADC or any of its Subsidiaries, (iii)
neither ADC nor any of its Subsidiaries is delinquent in payments to any of its
employees for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed for it or amounts required to be
reimbursed to such employees, (iv) ADC and each of its Subsidiaries are in
compliance with all Applicable Laws respecting labor and employment, including
terms and conditions of employment, workers compensation, occupational safety
and health requirements, plant closings, wages and hours, employment
discrimination, disability rights or benefits, equal opportunity, affirmative
action, labor relations, employee leave issues and unemployment insurance and
related matters, (v) there are no complaints, charges or claims against ADC or
any of its Subsidiaries pending with or, to the Knowledge of ADC, threatened by
any Governmental Entity or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment of any employees by ADC and or any
of its Subsidiaries, other than those occurring in the ordinary course of
business, such as claims for workers compensation or unemployment benefits,
(vi) ADC and each of its Subsidiaries have withheld all amounts required by
Applicable Laws to be withheld from the wages, salaries, benefits and other
compensation to employees, and is not liable for any arrears of wages or any
Taxes (as defined in Section 3.10(a)) or any penalty for failure to comply with
any of the foregoing, and (vii) neither ADC nor any of its Subsidiaries is
liable for any payment to any trust or other fund or to any Governmental Entity,
with respect to unemployment compensation benefits, social security or other
benefits or obligations for employees (other than routine payments to be made in
the ordinary course of business consistent with past practice).
(b) As of the date hereof:
16
(i) other than as required
by Applicable Law, neither ADC nor any of its Subsidiaries is a party to, or
otherwise bound by, any material collective bargaining agreement or any other
material agreement with a labor union, work council or labor organization, nor
is any such agreement presently being negotiated;
(ii) no labor organization
or group of employees of ADC or any of its Subsidiaries has made a pending
demand for recognition or certification, and there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or, to the Knowledge of ADC, threatened to be brought or filed
with the National Labor Relations Board or any other labor relations tribunal or
authority; and
(iii) to the Knowledge of
ADC, no labor union is seeking to organize any employees of ADC or any of its
Subsidiaries.
3.9 Benefit Plans.
(a) As of the date of this
Agreement, the ADC Disclosure Letter sets forth a true and complete list of each
material benefit or compensation plan, program, fund, contract, arrangement or
agreement, including any material bonus, incentive, deferred compensation,
vacation, stock purchase, stock option, severance, employment, golden parachute,
retention, salary continuation, change of control, retirement, pension, profit
sharing or fringe benefit plan, program, fund, contract, arrangement or
agreement of any kind (whether written or oral, tax-qualified or non-tax
qualified, funded or unfunded, foreign or domestic, active, frozen or
terminated) and any related trust, insurance contract, escrow account or similar
funding arrangement, that is maintained or contributed to by ADC or any
Subsidiary (or required to be maintained or contributed to by ADC or any
Subsidiary) for the benefit of current or former directors, officers or
employees of, or consultants to, ADC and its Subsidiaries or with respect to
which ADC or its Subsidiaries may, directly or indirectly, have any liability,
as of the date of this Agreement (the ADC Benefit Plans).
(b) ADC has heretofore made
available to Andrew true and complete copies of (i) each written ADC Benefit
Plan, (ii) the actuarial report for each ADC Benefit Plan (if applicable) for
each of the last three years, (iii) the most recent determination letter from
the Internal Revenue Service (IRS) (if applicable) for each ADC
Benefit Plan, (iv) the current summary plan description of each ADC Benefit Plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended (ERISA), (v) a copy of the description of each ADC
Benefit Plan not subject to ERISA that is currently provided to participants in
such plan, (vi) a summary of the material terms of each unwritten ADC Benefit
Plan, and (vii) the annual report for each ADC Benefit Plan (if applicable) for
each of the last three years.
(c) Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on ADC, with respect to each ADC Benefit Plan subject to United
States law (each, an ADC Domestic Benefit Plan) (i) each of the
ADC Domestic Benefit Plans has been operated and administered in compliance with
its terms and Applicable Law, including ERISA and the Code, (ii) each of the ADC
Domestic Benefit Plans intended to be qualified within the meaning of Section
401(a) of the Code is so qualified, and there are no
17
existing circumstances or
any events that have occurred that would reasonably be expected to adversely
affect the qualified status of any such ADC Domestic Benefit Plan, and each such
plan has a favorable determination letter from the IRS to the effect that it is
so qualified or the applicable remedial amendment period has not expired and, if
the letter for such plan is not current, such plan is the subject of a timely
request for a current favorable determination letter or the applicable remedial
amendment period has not expired, (iii) with respect to each ADC Domestic
Benefit Plan that is subject to Title IV of ERISA, the present value (as defined
under Section 3(27) of ERISA) of accumulated benefit obligations under such ADC
Domestic Benefit Plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such ADC Domestic
Benefit Plans actuary with respect to such ADC Domestic Benefit Plan, did not,
as of its latest valuation date, exceed the then current value (as defined under
Section 3(26) of ERISA) of the assets of such ADC Domestic Benefit Plan
allocable to such accrued benefits, (iv) no ADC Domestic Benefit Plan that is an
employee welfare benefit plan (including any plan described in Section 3(1) of
ERISA) (a Welfare Plan) provides benefits coverage, including
death or medical benefits coverage (whether or not insured), with respect to
current or former employees or directors of ADC or its Subsidiaries beyond their
retirement or other termination of service, other than (A) coverage
mandated by Applicable Law, (B) benefits the full cost of which is borne by such
current or former employee or director (or his or her beneficiary), (C) coverage
through the last day of the calendar month in which retirement or other
termination of service occurs, or (D) medical expense reimbursement accounts,
(v) no liability under Title IV of ERISA has been incurred by ADC, its
Subsidiaries or any trade or business, whether or not incorporated, all of which
together with ADC would be deemed a single employer within the meaning of
Section 414(b), 414(c) or 414(m) of the Code or Section 4001(b) of ERISA (an ADC
ERISA Affiliate), that has not been satisfied in full, and no condition
exists that presents a material risk to ADC, its Subsidiaries or any ADC ERISA
Affiliate of incurring a liability thereunder, (vi) no ADC Domestic Benefit Plan
is a multiemployer plan (as such term is defined in Section 3(37) of ERISA),
(vii) none of ADC or its Subsidiaries or, to the Knowledge of ADC, any other
Person, including any fiduciary, has engaged in a transaction in connection with
which ADC, its Subsidiaries or any ADC Domestic Benefit Plan would reasonably be
expected to be subject to either a civil penalty assessed pursuant to
Section 409 or 502(i) of ERISA or a Tax imposed pursuant to Section 4975 or 4976
of the Code, (viii) to the Knowledge of ADC, there are no pending, threatened or
anticipated claims (other than routine claims for benefits) by, on behalf of or
against any of the ADC Domestic Benefit Plans or any trusts, insurance
contracts, escrow accounts or similar funding arrangements related thereto,
(ix) all contributions or other amounts required to be paid by ADC or its
Subsidiaries as of the Effective Time with respect to each ADC Domestic Benefit
Plan in respect of current or former plan years have been paid in accordance
with Section 412 of the Code or accrued in accordance with GAAP (as applicable)
and (x) since January 1, 2005, no ADC Domestic Benefit Plan has been amended or
modified in a manner that increases in any material amount the benefits payable
pursuant to such ADC Domestic Benefit Plan.
(d) Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on ADC, with respect to each ADC Benefit Plan not subject to
United States law (each, an ADC Foreign Benefit Plan), (i) the
fair market value of the assets of each funded ADC Foreign Benefit Plan, the
liability of each insurer for any ADC Foreign Benefit Plan funded through
insurance or the reserve shown on the consolidated financial statements of ADC
included in the ADC SEC Documents for any unfunded ADC Foreign
18
Benefit Plan, together with
any accrued contributions, is sufficient to provide for the projected benefit
obligations, as of the Effective Time, with respect to all current and former
participants in such plan based on reasonable, country-specific actuarial
assumptions and valuations and no transaction contemplated by this Agreement
shall cause such assets or insurance obligations or book reserve to be less than
such projected benefit obligations, (ii) each ADC Foreign Benefit Plan has been
operated and administered in compliance with its terms and Applicable Law and
(iii) each ADC Foreign Benefit Plan required to be registered has been
registered and has been maintained in good standing with the appropriate
regulatory authorities, (iv) to the Knowledge of ADC, there are no pending,
threatened or anticipated claims (other than routine claims for benefits) by, on
behalf of or against any of the ADC Foreign Benefit Plans or any trusts,
insurance contracts, escrow accounts or similar funding arrangements related
thereto, and (v) since January 1, 2005, no ADC Foreign Benefit Plan has been
amended or modified in a manner that increases in any material amount the
benefits payable pursuant to such ADC Foreign Benefit Plan.
(e) Neither the execution
and delivery of this Agreement nor the consummation of the transactions
contemplated by this Agreement will (either alone or in conjunction with any
other event) (i) increase any amounts or benefits otherwise payable or due to
any such Person under any ADC Benefit Plan or otherwise, or (ii) result in any
acceleration of the time of payment or vesting of, or any requirement to fund or
secure, any such amounts or benefits (including any ADC Stock Option) or result
in any breach of or default under any ADC Benefit Plan.
3.10 Taxes.
(a) As used in this
Agreement, the term Tax or Taxes means (i) all
federal, state, local and foreign income, excise, gross receipts, gross income,
ad valorem, profits, gains, property, capital, sales, transfer, use, payroll,
employment, severance, withholding, duties, intangibles, franchise, backup
withholding and other taxes, charges, levies or like assessments together with
all penalties and additions to tax and interest thereon and (ii) any liability
for Taxes described in clause (i) under Treasury Regulation Section 1.1502-6 (or
any similar provision of state, local or foreign law), and the term Tax
Return means any return, filing, report, questionnaire, information
statement or other document required to be filed, including any amendments that
may be filed, for any taxable period with any taxing authority (whether or not a
payment is required to be made with respect to such filing).
(b) Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on ADC:
(i) ADC and its Subsidiaries have timely filed all Tax
Returns required to be filed by them on or prior to the date of this Agreement
(all such returns being accurate and complete in all material respects) and have
paid all Taxes required to be paid by them other than Taxes that are not
yet due or that are being contested in good faith in appropriate proceedings;
(ii) there are no Liens for Taxes on any assets of ADC or its Subsidiaries;
(iii) no deficiency for any Tax has been asserted or assessed by a taxing
authority against ADC or any of its Subsidiaries which deficiency has not been
paid or is not being contested in good faith in appropriate proceedings;
(iv) ADC and its Subsidiaries have provided adequate reserves in their financial
statements for any Taxes that have not been paid; and (v) neither ADC nor any of
its Subsidiaries is a party to or is bound by any Tax sharing, allocation or
19
indemnification agreement or
arrangement (other than such an agreement or arrangement exclusively between or
among ADC and its Subsidiaries).
(c) Within the past five
years, neither ADC nor any of its Subsidiaries has been a distributing
corporation or a controlled corporation in a distribution intended to qualify
for tax-free treatment under Section 355 of the Code.
(d) Neither ADC nor any of
its Subsidiaries has been a party to a transaction that, as of the date of this
Agreement, constitutes a listed transaction for purposes of Section 6011 of
the Code and applicable Treasury Regulations thereunder (or a similar provision
of state law). To the Knowledge of ADC, ADC has disclosed to Andrew all
reportable transactions within the meaning of Treasury
Regulation Section 1.6011-4(b) (or a similar provision of state law) to which it
or any of its Subsidiaries has been a party.
(e) As of the date of this
Agreement, ADC is not aware of any fact or circumstance that could reasonably be
expected to prevent the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
(f) No disallowance of a
deduction under Section 162(m) or 280G of the Code for any amount paid or
payable by ADC or any of its Subsidiaries as employee compensation, whether
under any contract, plan, program or arrangement, understanding or otherwise,
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on ADC.
3.11 Environmental
Matters. There are no pending or, to the Knowledge of ADC, threatened legal,
administrative, arbitral or other proceedings, claims, actions, causes of
action, private environmental investigations or remediation activities, or
governmental investigations, requests for information or notices of violation of
any nature seeking to impose, or that are reasonably likely to result in the
imposition, on ADC or any of its Subsidiaries, of any liability or obligation
arising under common law or under any local, state, federal or foreign
environmental statute, regulation, permit or ordinance including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (CERCLA), and the Waste of Electronic and Electrical
Equipment (WEEE) and Reduction of Hazardous Substances (RoHS)
Directives of the European Union, which liability or obligation would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on ADC. Neither ADC nor any of its Subsidiaries is subject to any
agreement, order, judgment, decree, directive or Lien by or with any
Governmental Entity or third party with respect to any environmental liability
or obligation that would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on ADC.
3.12 Intellectual
Property.
(a) Intellectual
Property shall mean trademarks, service marks, brand names,
certification marks, logos and slogans, commercial symbols, business name
registrations, domain names, trade dress and other indications of origin, the
goodwill associated with the foregoing and registrations in any domestic or
foreign jurisdiction of, and applications in any such jurisdiction to register,
the foregoing, including any extension, modification or renewal of any such
20
registration or application;
inventions, discoveries, whether patentable or reduced to practice or not, in
any domestic or foreign jurisdiction; patents, applications for patents
(including provisionals, divisions, continuations, continuations in part and
renewal applications), and any renewals, extensions, supplementary protection
certificates or reissues or reexams thereof, in any such jurisdiction; research
and development data, formulae, know-how, technical information, designs, mask
works, procedures, customer and supplier lists, trade secrets and confidential
information and rights in any domestic or foreign jurisdiction to limit the use
or disclosure thereof by any Person; copyrights, writings and other works,
whether copyrightable or not, in any such jurisdiction; computer software; and
registrations or applications for registration of copyrights in any domestic or
foreign jurisdiction, and any renewals or extensions thereof; rights in data or
databases; and any similar intellectual property or proprietary rights.
(b)
(i) ADC and each of its
Subsidiaries owns or has a legally enforceable right to use (in each case, free
and clear of any material Liens) all material Intellectual Property used in or
necessary for the conduct of its business as currently conducted, including all
material patents and patent applications and all material trademark
registrations and trademark applications;
(ii) to the Knowledge of ADC, the
conduct of the business of ADC and its Subsidiaries as currently conducted does
not infringe on or misappropriate the Intellectual Property rights of any
Person, and ADC and its Subsidiaries are not in breach of any applicable grant,
license, agreement, instrument or other arrangement pursuant to which ADC or any
Affiliate acquired the right to use such Intellectual Property, except as
would not, individually or in the aggregate, reasonably be likely to have a
Material Adverse Effect on ADC;
(iii) to the Knowledge of ADC, no Person is
materially misappropriating, infringing, diluting or otherwise violating any
right of ADC or any of its Subsidiaries with respect to any material
Intellectual Property owned or used by ADC or its Subsidiaries;
(iv) within the
three-year period prior to the date hereof, neither ADC nor any of its
Subsidiaries has received written notice of any pending or threatened material
claim, order or proceeding with respect to the ownership, validity, enforcement,
infringement, misappropriation or maintenance of any material Intellectual
Property owned or used by ADC or its Subsidiaries or with respect to the
infringement, misappropriation, or licensing of any material Intellectual
Property of any Person in connection with the conduct of the business of ADC or
its Subsidiaries as currently conducted;
(v) ADC and each of its Subsidiaries
have implemented commercially reasonable measures to maintain the
confidentiality of the material Intellectual Property used in the business of
ADC or its Subsidiaries as currently conducted;
(vi) all of the material
Intellectual Property owned or used by ADC or its Subsidiaries (other than
software and software systems used by ADC or its Subsidiaries for information
technology purposes only) shall be owned or available for use by ADC or its
Subsidiaries immediately after the Closing on terms and conditions substantially
identical to those under which ADC or its Subsidiaries owned or used such
Intellectual Property immediately prior to the Closing;
(vii) to the Knowledge
of ADC, ADC and each of its Subsidiaries have executed written agreements with
all former and current employees, consultants, contractors and any and all other
third parties who materially participated in the design or creation of material
Intellectual Property which assign to ADC or such Subsidiary any and all rights
to such material Intellectual Property including material inventions,
improvements, or discoveries of information, whether patentable or not, made by
them during their service to ADC or such Subsidiary, and which are not
considered a work made for hire, except as would not, individually or in
the aggregate, be reasonably likely to have a Material Adverse Effect on ADC;
and (viii) ADC, together with its Subsidiaries, solely owns all material
Intellectual Property that is conceived, made, discovered,
21
reduced to practice or
developed (in whole or in part, either alone or jointly with others) by any
third parties performing any development, engineering, or manufacturing services
on behalf of ADC or any other services that have created any material
Intellectual Property, such third parties including but not limited to all
contract manufacturers, consultants providing contract engineering services,
joint venture partners and providers of maquiladora services, except with
respect to such material Intellectual Property the lack of sole ownership of
which would not, individually or in the aggregate, be reasonably likely to have
a Material Adverse Effect on ADC; and (ix) no Person has any right, title, or
interest of any kind in or to any material Intellectual Property owned by ADC or
its Subsidiaries other than a non-exclusive license granted to customers of ADC
or its Subsidiaries, either directly or through a chain of distribution, to use
any software of ADC or its Subsidiaries.
3.13 State Takeover
Statutes. To the Knowledge of ADC, other than Section 203 of the
DGCL, no state takeover statute is applicable to the Merger or the other
transactions contemplated hereby.
3.14 Brokers. Except
for fees payable to Credit Suisse Securities (USA) LLC and Dresdner Kleinwort
Wasserstein Securities LLC, no broker, investment banker, financial advisor or
other Person, is entitled to any brokers, finders, financial advisors or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of ADC or Merger
Sub.
3.15 Opinion of Financial
Advisor. ADC has received the opinion of its financial advisor, Dresdner
Kleinwort Wasserstein Securities LLC, as of the date of this Agreement, to the
effect that subject to the limitations set forth in the opinion, as of such
date, the Exchange Ratio is fair, from a financial point of view, to ADC.
3.16 Ownership of Andrew
Common Stock. None of ADC, Merger Sub, their respective Subsidiaries, nor
the officers or directors of ADC or Merger Sub nor, to the Knowledge of ADC
without independent investigation, any of their respective Affiliates
beneficially owns (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, or is party to any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of, shares of capital stock
of Andrew.
3.17 Material Contracts.
(a) For the purposes of this
Agreement, a Contract shall mean any written or oral agreement,
contract, subcontract, settlement agreement, lease, binding understanding,
instrument, note, option, bond, mortgage, indenture, trust document, loan or
credit agreement, warranty, purchase order, license, sublicense, insurance
policy, benefit plan or legally binding commitment or undertaking of any nature,
as in effect as of the date hereof or as may hereinafter be in effect.
(b) For purposes of this
Agreement, ADC Material Contract shall mean:
(i) any contracts to which
ADC or any of its Subsidiaries is a party, that would need to be filed as an
exhibit to a SEC filing made by ADC in which exhibits were
22
required to be filed with
the SEC in response to Item 601(b)(10) of Regulation S-K promulgated under the
Securities Act and the Exchange Act;
(ii) any Contract to which
ADC or any of its Subsidiaries is a party, which is material to ADC and its
Subsidiaries, taken as a whole, and which contains any covenant limiting or
restricting the right of ADC or any of its Subsidiaries, or that would, after
the Effective Time, limit or restrict ADC or any of its Subsidiaries (including
the Surviving Corporation and its Subsidiaries), from engaging or competing in
any material line of business or in any geographic area or with any Person in
any material line of business; or
(iii) any Contract or group
of Contracts with a Person (or group of affiliated Persons) to which ADC or any
of its Subsidiaries is a party, the termination or breach of which would
reasonably be likely to have a Material Adverse Effect on ADC.
(c) All ADC Material
Contracts are valid and in full force and effect and enforceable in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting the rights and
remedies of creditors generally and to general principles of equity (regardless
of whether considered in a proceeding in equity or at law), except to the
extent that (A) they have previously expired in accordance with their terms or
(B) the failure to be in full force and effect or enforceable would not,
individually or in the aggregate, reasonably be likely to have a Material
Adverse Effect on ADC. Neither ADC nor any of its Subsidiaries, nor, to ADCs
Knowledge, any counterparty to any ADC Material Contract, has breached or
violated any provision of, or committed or failed to perform any act which, with
or without notice, lapse of time or both would constitute a default under the
provisions of, any ADC Material Contract, except in each case for those
breaches, violations and defaults which would not permit any other party to
cancel or terminate such ADC Material Contract, and would not permit any other
party to seek damages or other remedies (for any or all of such breaches
violations or defaults, individually or in the aggregate) which would reasonably
be likely to have a Material Adverse Effect on ADC.
3.18 Interested Party
Transactions. Since the date of the ADC Balance Sheet, no event has occurred
that would be required to be reported as a Certain Relationship or Related
Transaction pursuant to Statement of Financial Accounting Standards No. 57 or
Item 404 of Regulation S-K of the SEC.
3.19 Internal Controls
and Disclosure Controls. ADC and its Subsidiaries have designed and maintain
a system of internal controls over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable
assurances regarding the reliability of financial reporting. ADC (i) has
designed and maintains disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material
information required to be disclosed by ADC in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SECs rules and forms and is
accumulated and communicated to ADCs management as appropriate to allow timely
decisions regarding required disclosure and (ii) has disclosed, based on its
most recent evaluation of such disclosure controls and procedures prior to the
date hereof, to ADCs auditors and the audit committee of ADCs Board of
Directors (A) any significant deficiencies and material weaknesses in the design
or operation of internal
23
controls over financial
reporting that are reasonably likely to adversely affect in any material respect
ADCs ability to record, process, summarize and report financial information and
(B) any fraud, whether or not material, that involves management or other
employees who have a significant role in ADCs internal controls over financial
reporting.
3.20 ADC Rights
Agreement; ADC Charter. ADC has taken all action, if any, so that the
execution of this Agreement, the consummation of the Merger and the other
transactions contemplated hereby do not and will not result in the grant of any
rights to any Person under the ADC Rights Agreement or enable, require or cause
the ADC Rights to be exercised, distributed or triggered, except for any rights
under the ADC Rights Plan associated with shares of ADC Common Stock issuable in
connection with this Agreement. ADC has taken all action to render the eighty
percent voting requirement for certain Business Combination transactions set
forth in Article 5 of the ADC Charter inapplicable to the execution of this
Agreement, the consummation of the Merger and the other transactions
contemplated hereby.
Article IV
Representations and Warranties of Andrew
Except as disclosed in
(x) an Andrew SEC Document (as defined in Section 4.4(a)), but excluding any
risk factor disclosure contained in any such Andrew SEC Document under the
heading Risk Factors or Forward-Looking Information, or (y) the Andrew
Disclosure Letter (as defined in Section 9.5), Andrew represents and warrants to
ADC and Merger Sub as follows:
4.1 Corporate
Organization.
(a) Andrew is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Andrew has the corporate power and authority to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or
qualified would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Andrew.
(b) True and complete copies
of the Restated Certificate of Incorporation of Andrew, as amended through, and
as in effect as of, the date of this Agreement (the Andrew Charter)
and the By-laws of Andrew, as amended through, and as in effect as of, the date
of this Agreement (the Andrew By-Laws, and, together with the
Andrew Charter, the Andrew Organizational Documents) have
previously been made available to ADC.
(c) Each Subsidiary of Andrew
(i) is duly organized and validly existing under the laws of its
jurisdiction of organization, (ii) is duly qualified to do business and, where
applicable, in good standing in all jurisdictions (whether federal, state, local
or foreign) where its ownership or leasing of property or the conduct of its
business requires it to be so qualified, and (iii) has all requisite corporate
power and authority to own or lease its properties and assets and to carry on
its business as now conducted, except for such variances from the matters
set forth in any of
24
clauses (i), (ii) or
(iii) as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Andrew.
4.2 Capital Structure.
(a) The authorized capital
stock of Andrew consists of 400,000,000 shares of Andrew Common Stock and
1,000,000 shares of Series A 7.75% Convertible Preferred Stock, no par value per
share (Andrew Preferred Stock). At the close of business on
May 25, 2006:
(i) 159,659,113 shares of Andrew Common Stock were issued and
outstanding;
(ii) 2,817,401 shares of Andrew Common Stock were held by Andrew in
its treasury;
(iii) no shares of Andrew Preferred Stock were issued and
outstanding;
(iv) an aggregate of 22,615,225 shares of Andrew Common Stock were
reserved for issuance pursuant to the Andrews Management Incentive Plan,
Non-Employee Directors Stock Option Plan, 2005 Long-Term Incentive Plan, Allen
Telecom Inc. Amended and Restated 1992 Stock Plan, Allen Telecom Inc. Amended
and Restated 1994 Non-Employee Director Stock Plan (such plans, as amended to
date, are collectively referred to herein as the Andrew Stock Plans);
(v) 1,000,000 shares of Andrew Common Stock were reserved for issuance upon the
exercise of the Andrew Warrant;
(vi) 17,531,568 shares of Andrew Common Stock
were reserved for issuance upon the conversion of the Andrew Notes and (vii) one
Andrew common stock purchase right (collectively, the Andrew Rights)
issued pursuant to the Rights Agreement dated November 14, 1996, and amended
October 26, 2005, between Andrew and Computershare Investor Services LLC as
successor Rights Agent to Harris Trust and Savings Bank (the Andrew
Rights Agreement) was outstanding for each outstanding share of Andrew
Common Stock. All the outstanding shares of capital stock of, or other equity
interests in, Andrew have been validly issued and are fully paid and
nonassessable.
(b) As of the close of business on May 25, 2006:
(i) no shares of Andrew Common Stock were subject to
issuance pursuant to outstanding Andrew Options under the Andrew 2005 Long-Term
Incentive Plan;
(ii) 7,995,209 shares of Andrew Common Stock were subject to
issuance pursuant to outstanding Andrew Options under the Andrew Stock Plans
other than the Andrew 2005 Long-Term Incentive Plan;
(iii) 1,509,229 shares of
Andrew Common Stock were subject to issuance pursuant to outstanding restricted
stock units issued under the Andrew Stock Plans;
(iv) 1,000,000 shares were
subject to issuance upon the exercise of the Andrew Warrant; and (v) 17,531,568
shares were subject to issuance upon the conversion of the Andrew Notes. All
shares of Andrew Common Stock subject to issuance under the Andrew Stock Plans,
upon issuance upon the terms and subject to the conditions set forth in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. Except as contemplated by this
Agreement, there are no commitments or agreements of any character to which
Andrew is bound obligating Andrew to accelerate the vesting of any Andrew Option
as a result of the Merger. Except as set forth in this Section 4.2, there are no
outstanding or authorized stock appreciation, phantom stock, profit
participation or other similar rights with respect to Andrew.
(c) No Voting Debt of Andrew
is issued or outstanding.
(d) Except as otherwise set
forth in this Section 4.2, there are no securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
25
which Andrew or any of its
Subsidiaries is a party or by which any of them is bound obligating Andrew or
any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock, Voting Debt or other
voting securities of Andrew or any of its Subsidiaries, or obligating Andrew or
any of its Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
All outstanding shares of Andrew Common Stock, all outstanding Andrew Options,
the Andrew Warrant, the Andrew Note and all outstanding shares of capital stock
of each Subsidiary of Andrew have been issued and granted (as applicable) in
compliance in all material respects with (A) all applicable securities laws and
all other Applicable Law and (B) all requirements set forth in applicable
material Contracts.
(e) Since May 25, 2006, and
through the date hereof, except for issuances of Andrew Common Stock
pursuant to the exercise of Andrew Options granted and outstanding as of May 25,
2006, there has been no change in (x) the outstanding capital stock of Andrew,
(y) the number of Andrew Options outstanding, or (z) the number of other
options, warrants or other rights to purchase Andrew capital stock.
(f) Neither Andrew nor any
Subsidiary of Andrew is a party to any agreement, arrangement or understanding
restricting the purchase or transfer of, relating to the voting of, requiring
registration of, or granting any preemptive or antidilutive rights with respect
to, any capital stock of Andrew or any of its Subsidiaries or any securities of
the type referred to in Section 4.2(d) hereof.
(g) All of the issued and
outstanding shares of capital stock or other equity ownership interests of each
significant subsidiary (as such term is defined under Regulation S-X of the
SEC) of Andrew are owned by Andrew, directly or indirectly, free and clear of
any Liens and free of any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other equity ownership interest (other than
restrictions under applicable securities laws), and all of such shares or equity
ownership interests are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. No such significant subsidiary is
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of capital stock or any other equity security of such significant subsidiary or
any securities representing the right to purchase or otherwise receive any
shares of capital stock or any other equity security of such significant
subsidiary. Except for the capital stock or other equity ownership interests of
its Subsidiaries, as of the date of this Agreement, Andrew does not beneficially
own directly or indirectly any capital stock, membership interest, partnership
interest, joint venture interest or other equity interest in any Person that
constitutes a Substantial Investment.
(h) Andrew terminated its
Amended and Restated Employee Stock Purchase Plan, as amended to date (the Andrew
Purchase Plan), effective prior to the date hereof.
4.3 Authority; Board
Approval; Voting Requirements; No Conflict; Required Filings and Consents.
(a) Authority.
Subject to obtaining the Andrew Stockholder Approval, Andrew has all requisite
corporate power and authority to enter into this Agreement and to consummate the
26
transactions contemplated
hereby. The execution and delivery of this Agreement by Andrew, and the
consummation by Andrew of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Andrew, and no other
corporate proceedings on the part of Andrew and no stockholder votes are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby, other than with respect to approval of this
Agreement, the Merger and the other transactions contemplated hereby, the Andrew
Stockholder Approval. This Agreement has been duly executed and delivered by
Andrew. Assuming the due authorization, execution and delivery of this Agreement
by ADC and Merger Sub, this Agreement constitutes the legal, valid and binding
obligation of Andrew enforceable against Andrew in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity (regardless of whether considered
in a proceeding in equity or at law).
(b) Board Approval.
Subject to Section 5.3, the Board of Directors of Andrew has (A) determined that
this Agreement and the Merger are advisable and fair to and in the best interest
of Andrew and its stockholders, (B) approved and declared advisable this
Agreement, the Merger and the other transactions contemplated hereby, which
approval and declaration have not been rescinded or modified, (C) resolved to
recommend this Agreement and the Merger to its stockholders for approval,
(D) directed that this Agreement and the Merger be submitted to its stockholders
for consideration in accordance with this Agreement; and (E) approved
termination of the Andrew Rights immediately prior to the Effective Time.
(c) Voting Requirements.
The affirmative vote in favor of approval of this Agreement and the Merger by
the holders of a majority of the outstanding shares of Andrew Common Stock
entitled to vote thereon (the Andrew Stockholder Approval) at a
duly convened and held Andrew Stockholders Meeting (as defined in
Section 6.1(b)) at which a quorum is present is the only vote of the holders of
any class or series of Andrews capital stock necessary to approve and adopt
this Agreement, the Merger and the other transactions contemplated hereby.
(d) No Conflict. The
execution and delivery of this Agreement by Andrew does not, and the
consummation by Andrew of the transactions contemplated hereby and compliance by
Andrew with the provisions of this Agreement will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or
both) under, require any consent, waiver or approval under, give rise to any
right of termination or other right, or the cancellation or acceleration of any
right or obligation or loss of a benefit under, or result in the creation of any
Lien upon any of the properties or assets of Andrew or any of its Subsidiaries
or any restriction on the conduct of Andrews business or operations under,
(A) the Andrew Organizational Documents, (B) any Contract, permit, concession,
franchise, license or authorization applicable to Andrew or any of its
Subsidiaries or their respective properties or assets, (C) any judgment, order
or decree, or (D) subject to the governmental filings and other matters referred
to in Section 4.3(e), any statute, law, ordinance, rule or regulation applicable
to Andrew or any of its Subsidiaries or their respective properties or assets,
other than, in the case of clauses (B), (C) and (D), any such conflicts,
violations, defaults, rights, losses, restrictions or Liens, or failure to
obtain consents, waivers or approvals, which would not, individually or in the
aggregate, reasonably be likely to have a Material Adverse Effect on Andrew.
27
(e) Required Filings or
Consents. No consent, approval, order or authorization of, action by or in
respect of, or registration, declaration or filing with, any Governmental Entity
is required to be made or obtained by or with respect to Andrew or any of its
Subsidiaries in connection with the execution and delivery of this Agreement by
Andrew or the consummation by Andrew of the transactions contemplated hereby,
except for:
(i) the filing of a
pre-merger notification and report form by Andrew under the HSR Act, and any
applicable filings or notifications under the antitrust, competition or similar
laws of any foreign jurisdiction;
(ii) the filing with the SEC
of:
(A) a proxy statement
relating to the Andrew Stockholders Meeting to be included in the Joint Proxy
Statement;
(B) such reports under
Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act and communications
under Rules 165 and 425 under the Securities Act, in each case, as may be
required in connection with this Agreement and the transactions contemplated
hereby;
(iii) the filing of the
Certificate of Merger with the Secretary of State and appropriate documents with
the relevant authorities of other states in which Andrew is qualified to do
business;
(iv) filings required by
state securities laws or other blue sky laws; and
(v) other consents,
approvals, orders or authorizations, the failure of which to be made or obtained
would not reasonably be likely to have a Material Adverse Effect on Andrew.
4.4 SEC Documents;
Financial Statements.
(a) Andrew and each of its
Subsidiaries has timely filed all reports, registrations, schedules, forms,
statements and other documents, together with any amendments required to be made
with respect thereto, that they were required to file since October 1, 2002 with
Regulatory Agencies, and have paid all fees and assessments due and payable in
connection therewith, except in each case where the failure to file such
report, registration, schedule, form, statement or other document, or to pay
such fees and assessments, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Andrew. No publicly
available final registration statement, prospectus, report, form, schedule or
definitive proxy statement filed since October 1, 2002 and prior to the close of
business on May 10, 2006 (the Andrew Measurement Date) by Andrew
with the SEC pursuant to the Securities Act or the Exchange Act (collectively,
the Andrew SEC Documents), as of their respective dates or, if
amended prior to the date of this Agreement, as of the date of such amendment,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, except that information contained in any subsequent
Andrew SEC Document filed as of a later date (but before the date of this
Agreement) will be deemed to
28
modify information contained
in any Andrew SEC Document filed as of an earlier date. As of their respective
filing dates, all Andrew SEC Documents complied as to form in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act. None of Andrews Subsidiaries is required to file any reports with the SEC.
(b) The principal executive
officer and principal financial officer of Andrew have made all certifications
required by the Sarbanes-Oxley Act and any related rules and regulations
promulgated thereunder by the SEC, and the statements contained in all such
certifications were complete and correct in all material respects as of the
respective dates made. Neither Andrew nor any of its officers has received
notice from the SEC or the NASDAQ questioning or challenging the accuracy,
completeness, content, form or manner of filing or submission of such
certifications. Andrew is, and through the Closing Date will be, otherwise in
material compliance with all applicable effective provisions of the
Sarbanes-Oxley Act and the applicable listing and corporate governance rules of
the NASDAQ.
(c) The financial statements
of Andrew included in the Andrew SEC Documents complied, as of their respective
dates of filing with the SEC, in all material respects with accounting
requirements and the published rules and regulations of the SEC applicable with
respect thereto, have been prepared in accordance with United States generally
accepted accounting principles (except, in the case of unaudited statements, as
permitted by the instructions and applicable rules of Form 10-Q or Form 8-K of
the SEC) applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present the consolidated
financial position of Andrew and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments which are not, individually or in the aggregate,
material).
(d) The financial statements
of Andrew included in each publicly available final registration statement,
prospectus, report, form, schedule or definitive proxy statement to be filed
with the SEC pursuant to the Securities Act or Exchange Act after the date
hereof until the Effective Time will comply, as of their respective dates of
filing with the SEC, in all material respects with accounting requirements and
the published rules and regulations of the SEC applicable with respect thereto,
will be prepared in accordance with United States generally accepted accounting
principles (except, in the case of unaudited statements, as permitted by the
instructions or other applicable rules of Form 10-Q or Form 8-K of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and will fairly present the consolidated
financial position of Andrew and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments which are not, individually or in the aggregate,
expected to be material).
(e) Except as reflected or
reserved against in the balance sheet of Andrew dated March 31, 2006 included in
the Form 10-Q filed by Andrew with the SEC on May 10, 2006 (including the notes
thereto, the Andrew Balance Sheet), neither Andrew nor any of
its Subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise) which are required by GAAP to be set forth on a consolidated balance
sheet of Andrew and its consolidated Subsidiaries or in the notes thereto,
other than (A) liabilities and obligations incurred since
29
March 31, 2006 in the
ordinary course of business which would not, individually or in the aggregate,
reasonably be likely to have a Material Adverse Effect on Andrew, or
(B) liabilities and obligations incurred in connection with this Agreement or
the transactions contemplated hereby.
(f) Neither Andrew nor any
of its Subsidiaries is a party to, or has any commitment to become a party to,
any contract, agreement, arrangement or understanding (including any contract or
arrangement relating to any transaction or relationship between or among Andrew
and any of its Subsidiaries, on the one hand, and any unconsolidated Affiliate,
including any structured finance, special purpose or limited purpose entity or
Person, on the other hand), where the result, purpose or intended effect of such
contract or arrangement is to avoid disclosure of any material transaction
involving, or material liabilities of, Andrew or any of its Subsidiaries in
Andrews or its Subsidiaries published financial statements.
4.5 Information Supplied.
None of the information supplied or to be supplied by or on behalf of Andrew for
inclusion or incorporation by reference in (i) the Form S-4 will, at the time
the Form S-4 becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading or (ii) the Joint
Proxy Statement will, at the date it is first mailed to Andrews stockholders or
at the time of the Andrew Stockholders Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Joint Proxy
Statement and the Form S-4 will comply as to form in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty is made
by Andrew with respect to information or statements with respect to ADC or its
Subsidiaries made or incorporated by reference therein or otherwise supplied by
or on behalf of ADC for inclusion or incorporation by reference in the Joint
Proxy Statement or the Form S-4.
4.6 Absence of Certain
Changes or Events.
(a) Since March 31, 2006
through the date hereof, except as and to the extent (i) disclosed in
Andrews quarterly report for the fiscal quarter ended March 31, 2006 and filed
on Form 10-Q with the SEC on May 10, 2006, or (ii) expressly contemplated by
this Agreement:
(i) Andrew and its
Subsidiaries have conducted their business only in the ordinary course
consistent with past practice in all material respects;
(ii) there has not been any
split, combination or reclassification of any of Andrews capital stock or any
declaration, setting aside or payment of any |