Exhibit 2.1
AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND PLAN OF MERGER is
dated as of December 10, 2004 (this “ Agreement
”), by and among Interline Brands, Inc., a New Jersey
corporation (“ Interline NJ ”), Interline
Brands, Inc., a Delaware corporation (“ Holdco
”), and Interline Subsidiary, Inc., a New Jersey
corporation (“ Subco ”).
WHEREAS, as of the date hereof,
Holdco is a direct wholly-owned subsidiary of Interline NJ and
Subco is a direct wholly-owned subsidiary of Holdco;
WHEREAS, Interline NJ and Subco
desire to engage in a transaction consisting of the merger of
Interline NJ with and into Subco with Interline NJ as the surviving
corporation (the “ Merger ”), pursuant to the
terms and conditions of this Agreement and in accordance with
Section 14A:10-1 of the New Jersey Business Corporation
Act, as amended (the “ NJBCA ”);
WHEREAS, the respective boards of
directors of Interline NJ, Holdco and Subco have determined that
the Merger, structured in the manner contemplated herein, is
desirable and in the best interests of their respective
shareholders and, by resolutions duly adopted, have approved and
adopted this Agreement;
WHEREAS, Interline NJ has formed
Holdco in connection with the initial public offering (the “
IPO ”) of shares of common stock of Holdco, par value
$0.01 per share (the “ Holdco Common ”), in
order to have a Delaware holding company issuer for the
IPO;
WHEREAS, Holdco, the sole
shareholder of Subco, and Interline NJ, the sole shareholder of
Holdco, have each adopted and approved this Agreement in accordance
with Section 14A:10-3 of the NJBCA;
WHEREAS, for U.S. federal income tax
purposes the parties intend that, so long as former shareholders of
Interline NJ exchange an amount of stock in Interline NJ which
constitutes “control” of Interline NJ (within the
meaning of Section 368(a)(2)(E) of the Internal Revenue Code
of 1986, as amended (the “ Code ”)), the Merger
will qualify as a reorganization within the meaning of
Section 368(a) of the Code and the rules and regulations
promulgated thereunder (the “ Regulations ”);
that this Agreement constitutes a plan of reorganization within the
meaning of Regulation Section 1.368-2(g); and the Merger will
be treated as part of a transaction that qualifies under
Section 351 of the Code and the Regulations thereunder;
and
WHEREAS, Interline NJ, Holdco and
Subco desire to make certain representations, warranties, covenants
and agreements, each to the other, in connection with the Merger
and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of
the premises and agreements contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
1.1
The Merger . Subject to the terms and conditions
hereof, Interline NJ shall merge with and into Subco as soon as
practicable following the satisfaction or waiver of the conditions
set forth in Section 4.1 hereof. Interline NJ
shall be the surviving corporation in the Merger (the “
Surviving Corporation ”), and, at the Effective Time
(as defined in Section 1.2 ), the separate existence of
Subco shall cease. The corporate existence of Interline NJ,
with its purposes, powers and objects, shall continue unaffected
and unimpaired by the Merger, and as the Surviving Corporation it
shall succeed to all rights, assets, liabilities and obligations of
Subco as and to the extent provided in Section 14A:10-6 of the
NJBCA.
1.2
Effective Time . The Merger shall become effective
(the “ Effective Time ”) upon the filing by
Interline NJ of a certificate of merger (the “ Certificate
of Merger ”) with the Secretary of State of the State of
New Jersey, or such later time as may be set forth in the
Certificate of Merger, pursuant to Sections 14A:1-6 and
14A:10-4.1(2) of the NJBCA.
1.3
Certificate of Incorporation . The Certificate of
Incorporation of Interline NJ, as amended and restated at the
Effective Time to read in its entirety as set forth on
Exhibit A, shall be the Second Amended and Restated
Certificate of Incorporation of the Surviving Corporation (the
“ Restated Charter ”), until duly amended or
repealed in accordance with the provisions thereof and of
applicable law.
1.4
By-Laws . The Bylaws of Interline NJ, as amended and
restated in its entirety at the Effective Time, shall be the Second
Amended and Restated By-laws of the Surviving Corporation (the
“ Restated By-Laws ”) until duly amended or
repealed in accordance with the provisions thereof and of
applicable law.
1.5
Officers and Directors . At the Effective Time, the
directors and officers of Interline NJ immediately prior to the
Effective Time shall be and constitute the directors and officers
of the Surviving Corporation until their successors shall have been
duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Restated
Charter and By-Laws.
2
ARTICLE II
CONVERSION OF SECURITIES
2.1
Effect of the Merger on Capital Stock . At the
Effective Time, by virtue of the Merger and without any action on
the part of Interline NJ, Holdco, Subco, or the holder of any
shares of capital stock of Interline NJ, Holdco or
Subco:
(a)
Conversion of Subco Capital Stock . Each share of
common stock, without par value, of Subco (the “ Subco
Common ”) issued and outstanding immediately prior to the
Effective Time shall be converted into and become the right to
receive (i) one hundred (100) shares of common stock, without
par value, of the Surviving Corporation and (ii) one share of
Senior Preferred Stock, par value $0.01 per share, of the Surviving
Corporation, each of which shall be fully paid and
non-assessable.
(b)
Cancellation of Holdco Stock . Each share of stock of
Holdco owned by Interline NJ immediately prior to the Effective
Time shall be automatically cancelled and shall cease to exist
without being converted into any stock or other consideration
whatsoever.
(c)
Cancellation of Interline NJ Treasury Stock . Each
share of stock of Interline NJ owned by Interline NJ immediately
prior to the Effective Time shall be automatically cancelled and
shall cease to exist without being converted into any stock or
other consideration whatsoever.
(d)
Effect of Merger on Common Stock and Preferred Stock of
Interline NJ . Each share of common stock, without par
value, of Interline NJ (the “ Interline NJ Common
”) and each share of Senior Preferred Stock, par value $0.01
per share, of Interline NJ, (the “ Interline NJ
Preferred ”) issued and outstanding immediately prior to
the Effective Time, shall be converted into the following (the
“ Merger Consideration ”):
(i)
Interline Common Stock . Each issued and outstanding
share of Interline NJ Common shall be converted into the right to
receive that number of newly issued, fully paid and non-assessable
shares of Holdco Common equal to the Common Stock Equity
Consideration Per Share without interest, subject to the fractional
share provisions in Section 2.2(c) . Each share
of Interline NJ Common that has been converted into the right to
receive shares of Holdco Common as provided in this
subsection 2.1(d)(i) shall be canceled in accordance with
Section 2.2 and shall cease to exist, and the holder of
certificates which immediately prior to the Effective Time
represented those shares (the “ Interline NJ Common
Certificates ”) shall cease to have any rights with
respect to those shares, other than the right to receive
certificates representing shares of Holdco Stock (“ Holdco
Certificates ”) upon surrender of the Interline NJ Common
Certificates in accordance with Section 2.2
.
3
(ii)
Interline Preferred Stock . Each issued and
outstanding share of Interline NJ Preferred shall be converted into
the right to receive (a) cash in an amount equal to the
Preferred Stock Cash Consideration Per Share without interest and
(b) that number of shares of Holdco Common equal to the
Preferred Stock Equity Consideration Per Share, subject to the
fractional share provisions in Section 2.2(c) .
Each share of Interline NJ Preferred that has been converted
into the right to receive shares of Holdco Common and cash as
provided in this subsection 2.1(d)(ii) shall be cancelled
in accordance with Section 2.2 and shall cease to
exist, and the holder of certificates which immediately prior to
the Effective Time represented those shares (the “
Interline NJ Preferred Certificates ”) shall cease to
have any rights with respect to those shares, other than the right
to receive Holdco Certificates and the Preferred Stock Cash
Consideration Per Share upon surrender of the Interline NJ
Preferred Certificates in accordance with Section 2.2
.
(iii)
Interline Options . Upon the consummation of the
Merger, each option to purchase shares of Interline Common
outstanding immediately prior to the Effective Time (each, an
“ Interline NJ Option ” and collectively, the
“ Interline NJ Options ”) shall by virtue of
Section 5 of the Wilmar Industries, Inc. 2000 Stock Award Plan
(the “ Stock Plan ”) pursuant to which it was
granted, and without any action by the holder of each such
Interline NJ Option, be adjusted and deemed to be an option (each,
an “ Exchange Option ”) such that the holder of
the Exchange Option shall have an option to purchase that number of
shares of Holdco Common equal to the number of shares of Interline
NJ Common underlying such Interline NJ Option multiplied by the
Common Stock Equity Consideration Per Share. Each Exchange
Option shall have an exercise price equal to the exercise price of
the corresponding Interline NJ Option prior to such adjustment
divided by the Common Stock Equity Consideration Per Share.
The Exchange Options shall be administered by the board of
directors of Holdco or such committee thereof as shall be
designated from time to time by such board, and shall continue to
be subject to the other terms and conditions to which the
corresponding Interline NJ Option was subject immediately prior to
the Effective Time. For the avoidance of doubt, other than as
provided in this paragraph, the Exchange Option will be governed by
the Stock Plan and the award agreement entered into thereunder.
In connection with the issuance of the Exchange Options,
Holdco shall reserve for issuance the number of shares of Holdco
Common that will become subject to the Exchange Options pursuant to
this Section 2.1(b)(iii) .
For purposes of this Section 2:
“ Common Stock Equity Consideration Per
Share ” means the Common Stock Equity Consideration Share
Number divided by the Interline NJ Common Share Number.
“ Common Stock Equity Consideration
Share Number ” means an amount equal to the greater of
(a) the Total Existing Equity Value less the Preferred Stock
Equity Consideration Value and (b) the Total Existing Common
Minimum Equity Consideration Amount, in each case divided by the
IPO Price Per Share.
“ Existing Common Minimum Equity
Consideration ” means $1,000,000.
4
“ Existing Holdco Common Share
Number ” means the aggregate number of shares of Holdco
Common to be outstanding immediately after the IPO, less the
number of shares of Holdco Common to be issued in the IPO, in each
case as set forth in the Prospectus.
“ Interline NJ Common Share Number
” means the aggregate number of shares of Interline NJ Common
issued and outstanding immediately prior to the Effective Time plus
the aggregate number of shares of Interline NJ Common issuable upon
exercise of the Interline NJ Warrants issued and outstanding
immediately prior to the Effective Time.
“ Interline NJ Warrant
” means each outstanding warrant to purchase shares of
Interline NJ Common pursuant to the Warrant Agreement between
Wilmar Industries, Inc. (a predecessor-in-interest to Interline NJ)
and Fleet Corporate Finance, Inc. and Allied Capital Corporation,
dated as of May 16, 2000, as amended September 29,
2000.
“ IPO Price Per Share ” means
the price to the public of each share of Holdco Common to be issued
and sold in connection with the IPO, as set forth in the
Prospectus.
“ Preferred Stock Cash Consideration
Per Share ” means an amount, calculated as to each share
of Interline NJ Preferred, equal to the Preferred Stock Cash
Consideration multiplied by a fraction, the numerator of which is
(a) the Liquidation Value per share of Interlin
