Exhibit 2.1
AMENDMENT NO. 2
TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. 2 (the
“ Second Amendment ” ),
dated as of May 17, 2007, to the Agreement and Plan of Merger,
dated as of November 16, 2006, as amended on April 18,
2007 (as amended, the “ Agreement
” ), by and among BT Triple Crown Merger Co., Inc., a
Delaware corporation ( “ Mergerco
” ), B Triple Crown Finco, LLC, a Delaware limited
liability company, T Triple Crown Finco, LLC, a Delaware limited
liability company (together with B Triple Crown Finco, LLC, the
“ Parents ” ), BT Triple
Crown Capital Holdings III, Inc. a Delaware corporation (
“ New Holdco ” ) and Clear
Channel Communications, Inc., a Texas corporation (the
“ Company ” ).
RECITALS
WHEREAS ,
Section 8.03 of the Agreement permits the parties, by
action by or on behalf of their respective board of directors, to
amend the Agreement by an instrument in writing signed on behalf of
each of parties; and
WHEREAS , in furtherance of
the recapitalization of the Company by Mergerco, the parties have
agreed to certain revised terms and conditions, including a
provision which allows each holder of a Public Share (as defined
below) to elect to receive cash or stock (subject to certain
restrictions set forth below) as consideration for the
Merger;
WHEREAS, the Affiliated
Holders (as defined below) have entered into agreements with the
Parents pursuant to which they have agreed to elect the Cash
Consideration (as defined below), except in the case of Rollover
Shares;
WHEREAS , the parties hereto
desire to amend the Agreement as provided herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE , in
consideration of the foregoing and the mutual representations,
warranties and covenants and subject to the conditions herein
contained and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Definitions;
References. Unless otherwise specifically defined herein, each
capitalized term used but not defined herein shall have the meaning
assigned to such term in the Agreement. Each reference to
“hereof,” “hereunder,”
“hereby,” and “this Agreement” shall, from
and after the date of this Second Amendment, refer to the
Agreement, as amended by this Second Amendment. Each reference
herein to “the date of this Second
Amendment” shall refer to the date set forth above, each
reference to the “the date of the First Amendment”
shall mean April 18, 2007, and each reference to the
“date of this Agreement” or similar references shall
refer to November 16, 2006.
ARTICLE II.
AMENDMENT TO AGREEMENT
SECTION 2.01. Addition of a New
Party . New Holdco shall be added as a party to the
Agreement.
SECTION 2.02. Amendment to Third
Whereas Clause. The third whereas clause shall be amended by
adding a reference to “, New Holdco” after the
reference to “Parents”.
SECTION 2.03. Amendment to
Section 2.02. Section 2.02 shall be amended by
replacing the phrase “neither the Parents nor Mergerco”
with “none of the Parents, New Holdco or
Mergerco”.
SECTION 2.04. Amendment to
Article III of the Agreement. Article III of the
Agreement shall be deleted and replaced in its entirety with the
following:
“
Section 3.01 Effect on Securities. At the Effective
Time, by virtue of the Merger and without any action on the part of
the Company, Mergerco or the holders of any securities of the
Company:
(a)
Cancellation of Company Securities . Each share of the
Company’s common stock, par value $0.10 per share (the
“ Company Common Stock ”), held by the
Company as treasury stock or held by Mergerco or New Holdco
immediately prior to the Effective Time shall automatically be
cancelled, retired and shall cease to exist, and no consideration
or payment shall be delivered in exchange therefor or in respect
thereof.
(b)
Conversion of Company Securities .
(i)
Except as otherwise provided in this Agreement, each Public Share
issued and outstanding immediately prior to the Effective Time
shall, subject to Section 3.01(c) and Section
3.01(g) , be cancelled and converted into the right to receive
either (A) an amount equal to $39.20 in cash without interest,
plus the Additional Per Share Consideration, if any (the
“ Cash Consideration ” ) or
(B) one validly issued, fully paid and non assessable share of
the New Holdco Common Stock valued at $39.20 per share based on the
cash purchase price to be paid by investors that buy New Holdco
Common Stock for cash in connection with the Closing, plus the
Additional Per Share Consideration, if any, payable in cash (the
“ Stock Consideration ” ).
The Cash Consideration or Stock Consideration, as applicable shall
be referred to herein as the “ Merger
Consideration ” , which when used herein shall
be deemed to include cash in lieu of the fractional shares of New
Holdco Common Stock pursuant to Section 3.01(j) ;
and
(ii)
Pursuant to separate agreements entered into between the Parents
and each Affiliated Holder as of the date hereof, each of the
Affiliated Holders has agreed, as part of the Merger, to convert
each Public Share held by it, or issuable upon exercise of
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Company Options
and each Restricted Share held by it, immediately prior to the
Effective Time (other than Rollover Shares) into the Cash
Consideration.
(c)
Election Procedures . (i) Each Person who is a record
holder of Public Share(s) on the Election Form Record Date (as
defined below) (including each Person other than an Affiliated
Holder who is a record owner of Restricted Shares) and each Person
who has made an Irrevocable Option Election (as defined below)
shall be entitled to make an election (the “
Elections ” ), with respect to each
Public Share held by it as of such time, to receive the Cash
Consideration (a “ Cash Election
” ) or with respect to each Public Share or Net
Electing Option Share held by it as of such time, to receive the
Stock Consideration (a “ Stock Election
” ) (each Public Share or Net Electing Option Share
for which a valid Stock Election has been made is hereinafter
referred to as a “ Stock Election Share
” ). All such Elections shall be made on a form (a
“ Form of Election ” ) in
compliance with the terms of this Section 3.01(c) and
Section 3.01(d) . Each holder of record and, if not
otherwise a holder of record, each holder of Net Electing Option
Shares, shall submit only one Form of Election except that holders
of record of Public Share(s) who hold such Public Share(s) as
nominees, trustees or in other representative capacities (each, a
“ Shares Representative ” )
may submit a separate Form of Election on or before the Election
Deadline with respect to each beneficial owner for whom such Shares
Representative holds Public Share(s); provided that
such Shares Representative certifies that such Form of Election
covers all of the Public Share(s) held by such Shares
Representative for such beneficial owner whose Public Share(s) are
covered by such Form of Election. For purposes hereof, a holder of
Public Shares or Net Electing Option Shares who does not make a
valid Election prior to the Election Deadline, including but not
limited to any failure to return the Form of Election to the Paying
Agent prior to the Election Deadline, any revocation of a Form of
Election, or any failure to properly complete the Form of Election,
each in accordance with the procedures set forth in this
Section 3.01 shall be deemed (i) to have elected
to receive the Cash Consideration for each such Public Share and
(ii) not to have made a Stock Election with respect to each
such Net Electing Option Share (such that the Company Option(s)
related to each such Net Electing Option Share will be treated in
accordance with Section 3.03(a)(i) ). New Holdco may,
in its sole discretion reject all or any part of a Stock Election
made by (i) a Non-U.S. Person if New Holdco determines that
such rejection would be reasonable in light of the requirements of
Article VIII, Section 6 of the Company’s by-laws or
Article X of New Holdco’s certificate of incorporation,
or that such rejection is otherwise advisable to facilitate
compliance with FCC restrictions on foreign ownership, or
(ii) made in contravention of an agreement entered into
pursuant to Section 3.01(b)(ii) . In the event that a Stock
Election or portion of a Stock Election is rejected pursuant to the
preceding sentence, then such a Stock Election or portion of a
Stock Election shall be deemed of no force and effect and the
record holder making such Stock Election shall for purposes hereof
be (i) deemed to have made a Cash Election for each Public
Share that is subject to such a rejected Stock Election or portion
of a Stock Election and (ii) shall be deemed not to have made
a Stock Election for each Net Electing Option Share that is subject
to such a rejected Stock Election (such that the Company Option(s)
related to each such share will be treated in accordance with
Section 3.03(a)(i) ).
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(ii) Each
Person (other than an Affiliated Holder) who is a holder of a
Company Option on the Election Form Record Date shall be
entitled to submit a Form of Election specifying the number of
Company Options held by such holder, if any, that such Person
irrevocably commits to exercise (subject to any requirements with
respect to method of exercise imposed by the Company in order to
facilitate the implementation of this Section 3.01 and
Section 3.03 ) immediately prior to the Effective Time
(an “Irrevocable Option Election” ). All
such Irrevocable Option Elections shall be made on a Form of
Election. Any such holder who fails properly to submit a Form of
Election with respect to Company Options on or before the Election
Deadline in accordance with the procedures set forth in this
Section 3.01(c) shall be deemed to have failed to make
an Irrevocable Option Election and all of such holder’s
Company Stock Options that are not covered by a valid Irrevocable
Option Election shall be treated in accordance with
Section 3.03(a)(i) . The aggregate number of shares of
Company Common Stock subject to an Irrevocable Option Election made
pursuant to this Section 3.01(c)(ii) is referred to as
the “Gross Electing Option Shares” , and
the “ Net Electing Option Shares” shall
mean the aggregate number of shares of Company Common Stock that
would be issued in the event the Company Options covering the Gross
Electing Option Shares were exercised on a net share basis (
i.e ., paying the exercise price of the Company Options
using the value of the shares of Company Common Stock underlying
such Company Options) at a price equal to the Cash Consideration
taking into account the exercise price and any required tax
withholding. For the avoidance of doubt, all holders of Net
Electing Option Shares must make a Stock Election pursuant to
Section 3.01(c) in order to be eligible to receive the
Stock Consideration.
(d)
Mailing of Form of Election; Election Deadline, Shareholder
Notification . Mergerco and New Holdco shall prepare and direct
the Paying Agent to mail a Form of Election, which form shall
(i) include a Letter of Transmittal and (ii) be subject
to the reasonable approval of the Company, with the Proxy
Statement/Prospectus to the record holders of Public Share(s) and
Company Options as of the record date for the Shareholders’
Meeting (the “ Election Form Record
Date ” ) (by posting the Form of Election and
related materials on the Company’s website or otherwise). To
be effective, a Form of Election must be properly completed and
signed by a record owner of Public Shares or Company Options, as
the case may be and received by the Paying Agent at its designated
office, by 5:00 p.m. New York City time on the business day
immediately preceding the Shareholders’ Meeting (the
“ Election Deadline ” ). If
the shareholders approve the Merger, the Paying Agent will
coordinate with Mergerco, New Holdco and the Company to perform the
proration and cutback calculations set forth in
Section 3.01(g) and related acceptance and rejection of
Elections as provided in Section 3.01(c) promptly after
the Shareholders’ Meeting and notify each Public Holder and
holder of a Net Electing Option Share whose Form of Election
included a Stock Election of the number of Final Stock Election
Shares (as defined below) covered by such Form of Election that
have been accepted (the “Final Stock Election
Notice” ). Within 30 days of receipt of the
Final Stock Election Notice accompanied by a Letter of Transmittal,
such holder shall deliver a Letter of Transmittal with respect to
the Final Stock Election Shares and the Company Options together
with the Final Stock Election Shares and/or Company Options to
which such Final Stock Election Notice relates in accordance with
the instructions and subject to the terms and conditions of the
Letter of Transmittal accompanying such notice, including but not
limited to (i) for Public Shares held as physical certificates
and for Company Options, the certificates for such Public Shares or
Company Options, as applicable, a Letter of Transmittal properly
completed and duly executed, any required signature guarantees and
any other required documents; and (ii) for Book Entry
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Shares
either a Letter of Transmittal, properly completed and duly
executed, and any required signature guarantees, or a message,
transmitted by the official book-entry transfer facility to, and
received by, the depositary, which states that the book-entry
transfer facility has received an express acknowledgment from the
holder tendering the Public Share that such participant has
received and agrees to be bound by the terms of the Letter of
Transmittal and that the Parents may enforce such agreement against
the holder; or (iii) for Certificates or Book Entry Shares,
such form of “guaranteed delivery” that is acceptable
to the Paying Agent as described in the instructions to the Letter
of Transmittal. The Company will hold the Final Stock Election
Shares (as defined below), the Company Options delivered in
accordance with this Section 3.01(d) and the Letters of
Transmittals relating thereto until the earlier of termination of
this Agreement or the Effective Time. Any Public Holder or holder
of Company Options that does not deliver a Letter of Transmittal
and Final Stock Election Shares or Company Options within
30 days of receipt of the Final Stock Election Notice shall be
deemed to have elected to (i) receive the Cash Consideration
for each Final Stock Election Share that is not so delivered and/or
(ii) have each Company Option that is not so delivered treated
in accordance with Section 3.03(a)(i) and
(iii) the Stock Election or portion of the Stock Election
relating to such Final Stock Election Shares shall be rejected. In
the event that a Stock Election or portion of a Stock Election is
rejected pursuant to the preceding sentence, then such a Stock
Election or portion of a Stock Election shall be deemed of no force
and effect and the record holder making such Stock Election shall
for purposes hereof be (i) deemed to have made a Cash Election
for each Public Share that is subject to such a rejected Stock
Election or such rejected portion of a rejected Stock Election and
(ii) shall be deemed not to have made a Stock Election for
such Net Electing Option Share that is subject to such a rejected
Stock Election or such rejected portion of a rejected Stock
Election (such that the Company Option(s) related to each such
share will be treated in accordance with
Section 3.03(a)(i) ).
(e)
Ability to Revoke Stock Elections . All Stock Elections and
Irrevocable Option Elections may be revoked by the holder at any
time prior to the Election Deadline. From and after the Election
Deadline, all Stock Elections and Irrevocable Option Elections
shall be irrevocable. All Stock Elections and Irrevocable Option
Elections shall automatically be revoked if the Paying Agent is
notified in writing by Parents and the Company that the Merger has
been abandoned and this Agreement has been terminated. If an
Election or Irrevocable Option Election is revoked due to
termination of this Agreement, the certificate or certificates (or
guarantees of delivery, as appropriate), if any, for the Final
Stock Election Shares or Company Options, as applicable, to which
such Form of Election relates shall be promptly returned without
charge to the stockholders and option holders submitting the same
to the Paying Agent.
(f)
Determination of Paying Agent Binding . The determination of
the Paying Agent shall be binding as to whether Forms of Election
have been properly made pursuant to Section 3.01(c) and
Section 3.01(d) with respect to Public Share(s) of
Company Common Stock and Company Options and when Elections and
Irrevocable Option Elections were received by it. If the Paying
Agent determines that any Form of Election was not properly made
with respect to any Public Share(s) or Company Options, such shares
shall be treated by the Paying Agent as shares of Company Common
Stock or Company Options, as the case may be, for which a Cash
Election was made and such shares of Company Common Stock shall be
exchanged in the Merger for the Cash Consideration pursuant to
Section 3.01(b) and such Company Options for which an
Irrevocable Option Election was made will be treated in accordance
with Section
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3.03(a)(i) . None of the Company, Parents nor the Paying
Agent shall be under any obligation to notify any person of any
defect in a Form of Election submitted to the Paying Agent. The
Paying Agent shall also make all computations as to the allocation
and the proration contemplated by Section 3.01(g) , and
any such computation shall be conclusive and binding on the holders
of Public Share(s) and Company Options absent manifest error. The
Paying Agent may, with the mutual agreement of Parents and the
Company, make such rules as are consistent with this
Section 3.01 for the implementation of the Elections
and Irrevocable Option Elections provided for herein as shall be
necessary or desirable fully to effect such elections.
(g)
Proration and Individual Cutbacks . Notwithstanding anything
in this Agreement to the contrary, (x) the maximum aggregate
number of Public Shares and Net Electing Option Shares to be
converted into the right to receive New Holdco Common Stock at the
Effective Time pursuant to Stock Elections shall not exceed
30,612,245 (the “ Maximum Stock Election
Number ” ) and (y) the parties will use
reasonable efforts to ensure that, upon consummation of the Merger,
no holder of Public Shares and/or Net Electing Option Shares will
receive shares of New Holdco Common Stock pursuant to a single Form
of Election which represent more than 9.9% of the New Holdco Common
Stock outstanding as of the Effective Time (the “
Individual Cap ” ). The Stock Election
Shares shall be converted into the right to receive New Holdco
Common Stock or to receive Cash Consideration, each in accordance
with the terms of Section 3.01(b) , in the following
manner:
(i)
No Proration . If the total number of Stock Election Shares
is equal to or less than the Maximum Stock Election Number then,
subject to Section 3.01(g)(iii) , all such Stock
Election Shares, shall be converted into the right to receive the
Stock Consideration from New Holdco in accordance with the terms of
Section 3.01(b) and Section 3.01(c) .
(ii)
Proration . If the total number of Stock Election Shares
exceeds the Maximum Stock Election Number then, the Stock Election
Shares shall be converted into the right to receive the Stock
Consideration from New Holdco or the Cash Consideration from the
Surviving Corporation, each in accordance with the terms of
Section 3.01(b) , in the following manner:
(A) A
proration factor (the “ Proration Factor
” ) shall be determined by dividing the Maximum Stock
Election Number by the total number of Stock Election Shares;
(B) Subject
to Section 3.01(g)(iii) , with respect to each Form of
Election validly submitted and signed by a record holder of Public
Shares and/or holder of Company Options, the number of Stock
Election Shares reflected on such Form of Election shall be
converted into the right to receive a number of shares of New
Holdco Common Stock (plus the Additional Per Share Consideration,
if any, which shall be paid in cash) as is equal to the product of
(w) the Proration Factor times (y) the total number of
Stock Election Shares reflected on such Form of Election (the
result of such calculation the “ First
Allocation Distributable Shares ” ). The
difference between the Stock Election Shares and the First
Allocation Distributable Shares relating to each Form of Election
submitted shall be the “ First Prorated Returned
Shares ” ; and
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(C) All
First Allocation Distributable Shares shall be subject to cutback
pursuant to Section 3.01(g)(iii) . Subject to
Section 3.01(g)(iv) and Section 3.01(g)(vi), all
First Prorated Returned Shares shall be converted into the right to
receive the Cash Consideration in accordance with the terms of
Section 3.01(b) .
(iii)
Individual Cutback . In the event that the number of First
Allocation Distributable Shares (or Stock Election Shares if no
proration is required pursuant to Section 3.01(g)(ii) )
reflected on any individual Form of Election represent more than
the Individual Cap (the holder relating to such individual Form of
Election, a “ Capped Holder ”), the
number of First Allocation Distributable Shares or Stock Election
Shares, as applicable, will be cutback to the number of shares
representing the Individual Cap (for each Capped Holder, the shares
required for such cutback, the “ First Individual
Cutback Shares ”). If there has been a cutback in
accordance with this Section 3.01(g)(iii) , a number of
shares of New Holdco Common Stock equal to the aggregate number of
First Individual Cutback Shares (the “ Second
Allocation Shares ”) shall be reallocated pro rata to
holders of First Prorated Returned Shares reflected on Forms of
Election which do not constitute Capped Holders (a “
Second Allocation Participant ”) in a second
allocation in accordance with Section 3.01(g)(iv) (the
“ Second Allocation ”). The number of
“ First Allocation Stock Election Shares
” relating to a holder’s Form of Election shall equal
(1) the Stock Election Shares reflected on such Form of Election,
minus (2) the First Prorated Return Shares (if any) determined
pursuant to Section 3.01(g)(ii)(B) , minus (3) the
First Individual Cutback Shares (if any) determined pursuant to
Section 3.01(g)(iii) .
(iv)
Second Allocation . A Second Allocation proration factor
(the “ Second Allocation Proration
Factor ” ) shall be determined by dividing the
total number of Second Allocation Shares by the total number of
First Prorated Return Shares. For the avoidance of doubt, if the
total number of Second Allocation Shares is equal to or greater
than the number of First Prorated Return Shares then, subject to
Section 3.01(g)(v) , a number of shares of New Holdco
Common Stock equal to the number of First Prorated Return Shares
shall be converted into the right to receive the Stock
Consideration from New Holdco in accordance with the terms of
Section 3.01(b) and Section 3.01(c) .
(A) Subject
to Section 3.01(g)(v) , the number of Second Allocation
Shares covered by each Second Allocation Participant’s Form
of Election to be converted into Stock Consideration, shall be
equal to the product of (w) the Second Allocation Proration
Factor times (x) the total number of Second Allocation Shares
covered by such participant’s Form of Election,
provided that if such calculation results in a number
higher than the First Prorated Return Shares for any Second
Allocation Participant, the excess shares shall be reallocated to
the remaining participant(s) pursuant to the above calculation as
if they were “Second Allocation Shares” (the result of
such calculation the “ Second Allocation
Distributable Shares ” ). The total of the
First Allocation Stock Election Shares and the Second Allocation
Distributable Shares for each Second Allocation Participant shall
be the “ Second Prorated Stock Election
Shares ” .
(B) All
Second Allocation Distributable Shares shall be subject to cutback
pursuant to Section 3.01(g)(v) .
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(v)
Second Cutback . In the event that the number of Second
Prorated Stock Election Shares reflected on an individual Form of
Election submitted by any Second Allocation Participant represents
more than the Individual Cap, the number of Second Prorated Stock
Election Shares for such participant’s Form of Election will
be cutback to the number of Shares representing the Individual Cap
(for each such Form of Election, the shares required for such
cutback, the “ Second Individual Cutback
Shares ” ). The “ Second
Allocation Stock Election Shares ” for any
Second Allocation Participant shall be: (1) the difference
between the Second Prorated Stock Election Shares and the Second
Individual Cutback Shares if such participant’s Second
Allocation is subject to proration and cutback and (2) the
number of Second Prorated Stock Election Shares if such
participant’s Second Allocation is subject to proration, but
not cutback.
(vi) If,
after the Second Allocation, there are still holder(s) who have not
been allocated Stock Consideration for all of their Stock Election
Shares reflected on an individual Form of Election which is not yet
subject to the Individual Cap, a number of shares of New Holdco
Common Stock equal to the aggregate number of the Second Individual
Cutback Shares shall be reallocated pro rata to such holder(s) in a
third allocation pursuant to the procedures set out in Section
3.01(g)(iv) and Section 3.01(g)(v) (subject to this
Section 3.01(g)(vi)) (with references to
“First” replaced with “second” and
references to “second” replaced with
“third”) and the allocation process will continue in
this manner until (x) the Maximum Stock Election Number is
reached or (y) the Stock Election Shares reflected on each
Form of Election submitted has reached its Individual Cap.
The
number of “ Final Stock Election Shares
” for each holder shall be: (x) if there is no
Second Allocation, the First Allocation Stock Election Shares;
(y) if there is a Second Allocation, but no additional
allocations pursuant to Section 3.01(g)(vi ), the
Second Allocation Stock Election Shares, and (z) if there is a
Second Allocation and additional allocations pursuant to
Section 3.01(g)(vi) , the sum of (1) the Second
Allocation Stock Election Shares and (2) any additional shares
allocated pursuant to Section 3.01(g)(vi) .
The
number of “ Final Return Shares
” for each holder shall be the difference between
(1) such holder’s Stock Election Shares and
(2) such Holder’s Final Stock Election Shares.
(vii) All
Final Stock Election Shares shall be converted into the right to
receive the Stock Consideration in accordance with the terms of
Section 3.01(b) . All Final Return Shares shall be
converted into the right to receive the Cash Consideration in
accordance with the terms of Section 3.01(b) .
(viii) Any
Stock Election subject to proration or cutback pursuant to
Section 3.01(g) shall automatically be deemed to be
revised such that the number of Stock Election Shares in such Stock
Election reflects the Final Stock Election Shares (a “
Final Stock Election ” ).
(h) Each
share of Company Common Stock (including each Net Electing Option
Share) to be converted into the right to receive the Merger
Consideration as provided in this Section 3.01 shall be
automatically cancelled at the Effective Time and shall cease to
exist and the holders of Certificates or Book-Entry Shares which
immediately prior to the Effective
8
Time
represented such Company Common Stock shall cease to have any
rights with respect to such Company Common Stock other than the
right to receive, upon surrender of each such Certificate or
Book-Entry Share in accordance with Section 3.01(b) of
this Agreement, the Merger Consideration.
(i)
Conversion of Mergerco Capital Stock . At the Effective
Time, by virtue of the Merger and without any action on the part of
the holder thereof, each share of common stock, par value $0.001
per share, of Mergerco (the “ Mergerco Common
Stock ” ) issued and outstanding immediately
prior to the Effective Time shall be converted into and become
validly issued, fully paid and nonassessable shares of the
Surviving Corporation (with the relative rights and preferences
described in an amendment to the Articles of Incorporation adopted
as of the Effective Time as provided in Section 2.4 ,
the “ Surviving Corporation Common Stock
” ). As of the Effective Time, all such shares of
Mergerco Common Stock cancelled in accordance with this
Section 3.01(i) , when so cancelled, shall no longer be
issued and outstanding and shall automatically cease to exist, and
each holder of a certificate representing any such shares of
Mergerco Common Stock shall cease to have any rights with respect
thereto, except the right to receive the shares of Surviving
Corporation Common Stock as set forth in this
Section 3.01 .
(j)
No Fractional Shares . Notwithstanding any other provision
in this Agreement, no fractional shares of New Holdco Common Stock
shall be issued in the Merger to any holder of Public Shares,
Company Options or Rollover Shares as Stock Consideration or to any
holder of Public Shares, Company Options or Rollover Shares
pursuant to any exchange involving Rollover Shares. Each holder of
Public Shares, Company Options or Rollover Shares, as applicable,
who otherwise would have been entitled to a fraction of a share of
New Holdco Common Stock shall receive in lieu thereof cash (without
interest) in an amount determined by multiplying the fractional
share interest to which such holder would otherwise be entitled by
the Cash Consideration. No such holder shall be entitled to
dividends, voting rights or any other rights in respect of any
fractional share of New Holdco Common Stock.
(k)
Adjustments . Without limiting the other provisions of this
Agreement, if at any time during the period between the Original
Agreement Date and the Effective Time, any change in the number of
outstanding shares of Company Common Stock shall occur as a result
of a reclassification, recapitalization, stock split (including a
reverse stock split), or combination, exchange or readjustment of
shares, or any stock dividend or stock distribution with a record
date during such period, the Merger Consideration as provided in
Section 3.01(b) shall be equitably adjusted to reflect
such change (including, without limitation, to provide holders of
shares of Company Common Stock the same economic effect as
contemplated by this Agreement prior to such transaction); provided
that in no event shall the Stock Consideration be adjusted in a
manner that increases the Maximum Stock Election Number.
Section 3.02 Exchange of Certificates.
(a)
Designation of Paying Agent; Deposit of Exchange Fund .
Prior to the Effective Time, New Holdco and Mergerco shall
designate a paying agent and exchange agent (the “
Paying Agent ” ) reasonably acceptable
to the Company for the payment of the Merger Consideration as
provided in Section 3.01(b) and
Section 3.01(g) . On the Closing Date, promptly
following the Effective Time, the Surviving Corporation and New
Holdco shall (i)
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deposit,
or cause to be deposited with the Paying Agent for the benefit of
holders of Cash Consideration Shares, cash amounts in immediately
available funds constituting an amount equal to the aggregate
amount of the Cash Consideration, (ii) deposit or cause to be
deposited with the Paying Agent for the benefit of holders of Stock
Consideration Shares certificates representing New Holdco Common
Stock in an amount equal to the aggregate amount of Stock
Consideration (including the cash portion of the Stock
Consideration, if any), (iii) deposit or cause to be deposited
with the Paying Agent for the benefit of those entitled thereto
cash in an amount sufficient to fund cash payments in lieu of any
fractional shares pursuant to Section 3.01(j) , and
(iv) deposit, or cause to be deposited with the Paying Agent the
Total Option Cash Payments (together, the “
Aggregate Merger Consideration ” )
(exclusive of any amounts in respect of Dissenting Shares, the
Rollover Shares and Company Common Stock to be cancelled pursuant
to Section 3.01(a) (such amount as deposited with the
Paying Agent, the “ Exchange Fund
” ). In the event the Exchange Fund shall be
insufficient to make the payments contemplated by
Section 3.01(b) , Section 3.01(g) ,
Section 3.01(j) , and Section 3.03 , the
Surviving Corporation and New Holdco shall promptly deposit, or
cause to be deposited, additional funds with the Paying Agent in an
amount which is equal to the deficiency in the amount required to
make such payment; provided that in no event shall the Surviving
Corporation or New Holdco be required to contribute shares of New
Holdco Common Stock to the Exchange Fund in an amount in excess of
the Maximum Stock Election Number. The Paying Agent shall cause the
Exchange Fund to be (A) held for the benefit of the holders of
Company Common Stock and Company Options, and (B) applied
promptly to making the payments pursuant to
Section 3.02(b) , Section 3.01(g) ,
Section 3.01(j) , and Section 3.03 hereof. The
Exchange Fund shall not be used for any purpose that is not
expressly provided for in this Agreement.
(b)
Letter of Transmittal . As promptly as practicable following
the Effective Time and in any event not later than the second
business day after the Effective Time, the Surviving Corporation
and New Holdco shall cause the Paying Agent to mail (and to make
available for collection by hand) (i) to each holder of record
of a Certificate or Book-Entry Share not previously submitted to
the Paying Agent accompanied by a valid Letter of Transmittal, a
Letter of Transmittal and accompanying instructions for use in
effecting the surrender of the Certificates or Book-Entry Shares
and (ii) to each holder of a Company Option, other than Net
Electing Option Shares, a check in an amount due and payable to
such holder pursuant to Section 3.03 hereof in respect
of such Company Option. If any Letter of Transmittal submitted to
the Paying Agent provides that payment of the Merger Consideration
is made to a person other than the person in whose name the
surrendered Certificate is registered or Company Option is held of
record, it shall be a condition of payment that (i) the
Certificate so surrendered shall be properly endorsed or shall
otherwise be in proper form for transfer and (ii) the person
requesting such payment shall have paid any transfer and other
Taxes required by reason of the payment of the applicable portion
of the Merger Consideration to a person other than the registered
holder of such Certificate surrendered or shall have established to
the reasonable satisfaction of the Surviving Corporation that such
Tax either has been paid or is not applicable. Until surrendered as
contemplated by Section 3.01(d) or this
Section 3.02 , each Certificate, Book-Entry Share or
option certificate, as applicable, shall be deemed at any time
after the Effective Time to represent only the right to receive the
applicable portion of the Aggregate Merger Consideration or Option
Cash Payment, as applicable, in cash as contemplated by this
Section 3.02 or Section 3.03 without interest
thereon.
10
(c) Surrender of Shares
. Upon surrender of a Certificate (or affidavit of loss in lieu
thereof) or Book-Entry Share for cancellation to the Paying Agent,
together with a Letter of Transmittal duly completed and validly
executed in accordance with the instructions thereto, and such
other documents as may be required pursuant to such instructions,
the holder of such Certificate or Book-Entry Share shall be
entitled to receive in exchange therefor the Merger Consideration
for each share of Company Common Stock formerly represented by such
Certificate or Book-Entry Share, to be mailed (or made available
for collection by hand if so elected by the surrendering holder)
within twenty (20) business days following the later to occur
of (i) the Effective Time; or (ii) the Paying
Agent’s receipt of such Certificate (or affidavit of loss in
lieu thereof) or Book-Entry Share, and the Certificate (or
affidavit of loss in lieu thereof) or Book-Entry Share so
surrendered shall be forthwith cancelled. The Paying Agent shall
accept such Certificates (or affidavits of loss in lieu thereof) or
Book-Entry Shares upon compliance with such reasonable terms and
conditions as the Paying Agent may impose to effect an orderly
exchange thereof in accordance with normal exchange practices. No
interest shall be paid or accrued for the benefit of holders of the
Certificates or Book-Entry Shares on the Merger Consideration (or
the cash pursuant to Section 3.02(b) ) payable upon the
surrender of the Certificates or Book-Entry Shares.
(d) Termination of Exchange
Fund . Any portion of the Exchange Fund which remains
undistributed to the holders of the Certificates, Book-Entry Shares
or Company Options for twelve (12) months after the Effective
Time shall be delivered to (i) if cash, the Surviving
Corporation or (ii) if shares of New Holdco Common Stock, New
Holdco, in each case, upon demand, and any such holders prior to
the Merger who have not theretofore complied with this
Section 3.02(d) shall thereafter look only to the
Surviving Corporation, as general creditors thereof for payment of
their claim for cash, without interest, to which such holders may
be entitled. If any Certificates or Book-Entry Shares shall not
have been surrendered prior to one (1) year after the
Effective Time (or immediately prior to such earlier date on which
any cash in respect of such Certificate or Book-Entry Share would
otherwise escheat to or become the property of any Governmental
Authority), any such cash in respect of such Certificate or
Book-Entry Share shall, to the extent permitted by applicable Law,
become the property of the Surviving Corporation, subject to any
and all claims or interest of any person previously entitled
thereto.
(e) No Liability . None
of the Parents, Mergerco, New Holdco, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any person in
respect of any cash held in the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or
similar Law.
(f) Investment of Exchange
Fund . The Paying Agent shall invest any cash included in the
Exchange Fund as directed by the Parents or, after the Effective
Time, the Surviving Corporation; provided that (i) no such
investment shall relieve the Surviving Corporation or the Paying
Agent from making the payments required by this
Section 3.02(f) , and following any losses the
Surviving Corporation shall promptly provide additional funds to
the Paying Agent for the benefit of the holders of Company Common
Stock and Company Options in the amount of such losses; and
(ii) such investments shall be in short-term obligations of
the United States of America with maturities of no more than thirty
(30) days or guaranteed by the United States of America and
backed by the full faith and credit of the United States of
America
11
or in
commercial paper obligations rated A-1 or P-1 or better by
Moody’s Investors Service, Inc. or Standard &
Poor’s Corporation, respectively. Any interest or income
produced by such investments will be payable to the Surviving
Corporation or Mergerco, as directed by Mergerco.
Section 3.03 Stock Options and Other Awards
(a)
Company Options . As of the Effective Time, except as
otherwise agreed by the Parents, New Holdco and a holder of Company
Options with respect to such holder’s Company Options:
(i) each Company Option (other
than Company Options subject to a valid Irrevocable Option
Election), whether vested or unvested, shall, by virtue of the
Merger and without any action on the part of any holder of any such
Company Option, become fully vested and converted into the right at
the Effective Time to receive, as promptly as practicable following
the Effective Time, a cash payment (less applicable withholding
taxes and without interest) with respect thereto calculated as
follows: the product of (a) the excess, if any, of the Cash
Consideration over the exercise price per share of such Company
Option multiplied by (b) the number of shares of Company
Common Stock issuable upon exercise of such Option (the
“ Option Cash Payment ” and
the sum of all such payments, the “ Total Option
Cash Payment ” ). ; and
(ii) each Company Option which
is subject to a valid Irrevocable Option Election, subject to
Section 3.01(c) and Section 3.01(g) , shall
be converted into Merger Consideration in accordance with
Section 3.01(b) .
In the
event that the exercise price of any Company Option is equal to or
greater than the Cash Consideration such Company Option shall be
cancelled without payment therefor and have no further force or
effect. Except for the Company Options set forth in
Section 3.03(a) of the Company Disclosure Schedule, as
of the Effective Time, all Company Options shall no longer be
outstanding and shall automatically cease to exist, and each holder
of a Company Option shall cease to have any rights with respect
thereto, except the right to receive the Option Cash Payment. Prior
to the Effective Time, the Company shall take any and all actions
reasonably necessary to effectuate this Section 3.03(a)
, including, without limitation, providing holders of Company
Options with notice of their rights with respect to any such
Company Options as provided herein.
(b)
Other Awards . As of the Effective Time, except as otherwise
agreed by the Parents and a holder of Restricted Shares with
respect to such holder’s Restricted Shares, each share
outstanding immediately prior to the Effective Time subject to
vesting or other lapse restrictions pursuant to any Company Option
Plan or an applicable restricted stock agreement (each, a
“ Restricted Share ” )
which is outstanding immediately prior to the Effective Time shall
vest and become free of restriction as of the Effective Time and
shall, as of the Effective Time, be cancelled and converted into
the right to receive the Cash Consideration or the Stock
Consideration, in accordance with Section 3.01(b)
.
(c)
Amendments to and Termination of Plans . Prior to the
Effective Time, the Company shall use its reasonable best efforts
to make any amendments to the terms of the
12
Company
Option Plans and to obtain any consents from holders of Company
Options and Restricted Shares that, in each case, are necessary to
give effect to the transactions contemplated by
Section 3.03(a) and Section 3.03(b) .
Without limiting the foregoing the Company shall use its reasonable
best efforts to ensure that the Company will not at the Effective
Time be bound by any options, stock appreciation rights, warrants
or other rights or agreements which would entitle any person, other
than the holders of the capital stock (or equivalents thereof) of
the Parents, Mergerco, New Holdco and their respective
subsidiaries, to own any capital stock of the Surviving Corporation
or New Holdco or to receive any payment in respect thereof. In
furtherance of the foregoing, and subject to applicable Law and
agreements existing between the Company and the applicable person,
the Company shall explicitly condition any new awards or grants to
any person under its Company Option Plans, annual bonus plans and
other incentive plans upon such person’s consent to the
amendments described in this Section 3.03(c) and, to
the fullest extent permitted by applicable Law, shall withhold
payment of the Cash Consideration to or require payment of the
exercise price for all Company Options by any holder of a Company
Option as to which the Cash Consideration exceeds the amount of the
exercise price per share under such option unless such holder
consents to all of the amendments described in this
Section 3.03(c) . Prior to the Effective Time, the
Company shall take all actions necessary to terminate all Company
Stock Plans, such termination to be effective at or before the
Effective Time.
(d) Employee Stock Purchase
Plan . The Board of Directors of the Company shall terminate
all purchases of stock under the Company’s 2000 Employee
Stock Purchase Plan (the “ Company ESPP
” ) effective as of the day immediately after the end
of the month next following the Original Agreement Date, and no
additional offering periods shall commence under the Company ESPP
after the Original Agreement Date. The Company shall terminate the
Company ESPP in its entirety immediately prior to the Closing Date,
and all shares held under such plan, other than Rollover Shares,
shall be delivered to the participants and shall, as of the
Effective Time, be cancelled and converted into the right to
receive the Cash Consideration or the Stock Consideration, in
accordance with Section 3.01(b) .
Section 3.04 Lost
Certificates . If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed
and, if required by the Surviving Corporation, the posting by such
person of a bond, in such reasonable amount as the Surviving
Corporation may direct, as indemnity against any claim that may be
made against it with respect to such Certificate, the Paying Agent
will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration to which the holder thereof is
entitled pursuant to this Article III .
Section 3.05 Dissenting
Shares . Notwithstanding Section 3.01(b) hereof, to
the extent that holders thereof are entitled to appraisal rights
under Article 5.12 of the TBCA, shares of Company Common Stock
issued and outstanding immediately prior to the Effective Time and
held by a holder who has properly exercised and perfected his or
her demand for appraisal rights under Article 5.12 of the TBCA
(the “ Dissenting Shares ”
), shall not be converted into the right to receive the Merger
Consideration, but the holders of such Dissenting Shares shall be
entitled to receive such consideration as shall be determined
pursuant to Article 5.12 of the TBCA (and at the Effective
Time, such Dissenting Shares shall no longer be outstanding and
shall cease to have any rights with respect thereto, except the
right to receive such consideration as shall be determined pursuant
to Article 5.12 of the TBCA); provided ,
13
however , that if any such holder shall have failed to
perfect or shall have effectively withdrawn or lost his or her
right to appraisal and payment under the TBCA, such holder’s
shares of Company Common Stock shall thereupon be deemed to have
been converted as of the Effective Time into the right to receive
the Cash Consideration without any interest thereon and such shares
shall not be deemed to be Stock Election Shares or Dissenting
Shares. Any payments required to be made with respect to the
Dissenting Shares shall be made by the Surviving Corporation (and
not the Company, Mergerco, New Holdco or either Parent) and the
Aggregate Merger Consideration shall be reduced, on a dollar for
dollar basis, as if the holder of such Dissenting Shares had not
been a shareholder on the Closing Date. The Company shall give the
Parents notice of all demands for appraisal and the Parents shall
have the right to participate in all negotiations and proceedings
with respect to all holders of Dissenting Shares. The Company shall
not, except with the prior written consent of the Parents,
voluntarily make any payment with respect to, or settle or offer to
settle, any demand for payment from any holder of Dissenting
Shares.
Section 3.06 Transfers; No
Further Ownership Rights . After the Effective Time, there
shall be no registration of transfers on the stock transfer books
of the Company of shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If
Certificates are presented to the Surviving Corporation for
transfer following the Effective Time, they shall be cancelled
against delivery of the Merger Consideration, as provided for in
Section 3.01(b) hereof, for each share of Company
Common Stock formerly represented by such Certificates.
Section 3.07 Withholding
. Each of the Paying Agent, the Company, Mergerco, New Holdco and
the Surviving Corporation shall be entitled to deduct and withhold
from payments otherwise payable pursuant to this Agreement any
amounts as they are respectively required to deduct and withhold
with respect to the making of such payment under the Code and the
rules and regulations promulgated thereunder, or any provision of
state, local or foreign Tax Law. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the person in respect of
which such deduction and withholding was made.
Section 3.08 Rollover by
Shareholders . At the Effective Time, each Rollover Share
issued and outstanding immediately before the Effective Time shall
be cancelled and be converted into and become the number of validly
issued shares of equity securities of New Holdco calculated in
accordance with Section 3.08 of the Second Amended Disclosure
Letter (which shall be identical to Section 3.08 of the
Mergerco Disclosure Schedule except that the Rollover Shares shall
be converted into shares of New Holdco). As of the Effective Time,
all such Rollover Shares when so cancelled, shall no longer be
issued and outstanding and shall automatically cease to exist, and
each holder of a certificate representing any such Rollover Shares
shall cease to have any rights with respect thereto, except the
right to receive the shares of equity securities of New Holdco as
set forth in this Section 3.08 .
Section 3.09 Additional Per
Share Consideration .
(a) No later than ten
(10) business days before the Closing Date, if the Closing
Date shall occur after the Additional Consideration Date, the
Company shall prepare and
14
deliver
to the Parents a good f
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