Exhibit 2.2
FIRST AMENDMENT TO AGREEMENT AND PLAN OF
MERGER
This First
Amendment (this “ Amendment ”) to the Agreement
and Plan of Merger (the “ Agreement ”) dated
July 16, 2005, by and among Panolam Holdings II Co. (formerly
GS Holdings Co.), a Delaware corporation (“ Acquiror
”), PIH Acquisition Co., a Delaware corporation (“
Merger Sub ”), Panolam Industries Holdings, Inc.,
a Delaware corporation (“ Company ”), and TC
Group, L.L.C., a Delaware limited liability company, is entered
into effective as of September 30, 2005. All capitalized terms
used in this Amendment and not otherwise defined herein shall have
the respective meanings given to such terms in the
Agreement.
RECITALS
WHEREAS, the
parties hereto desire to amend the terms of the Agreement as
provided in this Amendment pursuant to Section 12.12 of the
Agreement;
NOW,
THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, and intending to be
legally bound, the parties hereto hereby agree as
follows:
1.
Amendment to Article I .
(a) The
defined terms “Exchange Agent,” “Fully-Diluted
Percentage” and “Funding Amount” in
Article I of the Agreement are hereby deleted in their
entirety.
(b) Article I of the Agreement is
hereby amended to insert in the appropriate alphabetical order the
following defined terms:
“
“ Acquiror Shares ” means any Common Shares
owned by Panolam Holdings Co., Acquiror or Merger Sub immediately
prior to the Effective Time.”
“
“ Escrow Percentage ” means, with respect to any
holder of Common Shares and/or Vested Options, the amount set forth
on Schedule 1.1(a) .”
“
“ Fully-Diluted Percentage” means, with respect
to any holder of Common Shares and/or Vested Options, a ratio
(expressed as a percentage) equal to (x) the sum of the number of
Common Shares held by such holder as of the Effective Time of the
Merger and the number of Common Shares issuable upon the exercise
of any Vested Options held by such holder at the Effective Time of
the Merger and, if applicable, Acquiror Shares held by such holder
prior to any transfer or contribution of such Acquiror Shares,
divided by (y) the Aggregate Fully-Diluted Common
Shares.”
2.
Amendment to Section 2.1 Conversion of Company Shares and
Vested Options .
(a) Section 2.1(c) of the
Agreement is hereby amended and restated in its entirety to read as
follows:
“Subject
to the adjustments set forth in Sections 2.4 and 2.5, the
“Merger Consideration ” shall consist of
$345,000,000 in cash, less (i) the aggregate principal
amount of Funded Debt of the Company, if any, that remains unpaid
as of the Closing (as defined below), less (ii) the
amount of Holder Allocable Expenses paid by Acquiror to, or at the
direction of, the Holder Representative at Closing in accordance
with Section 2.6.”
(b) The
definition of “ Aggregate Fully-Diluted Common Shares
” set forth in Section 2.1(d) is hereby amended and
restated in its entirety to read as follows:
“The
“ Aggregate Fully-Diluted Common Shares ” shall
be the sum of (i) the Common Shares held by all holders
immediately prior to the Effective Time of the Merger (including
any Acquiror Shares), and (ii) the aggregate number of
Common Shares issuable upon the exercise in full of all Vested
Options held by all holders immediately prior to the Effective Time
of the Merger, and (iii) the aggregate number of
Dissenting Common Shares.”
(c) Section 2.1 of the Agreement is
hereby amended to insert at the end of such Section the
following:
“(e)
Notwithstanding the foregoing, any Acquiror Shares outstanding
immediately prior to the Effective Time shall not be converted as
described in Section 2.1(a) above but shall instead, by
virtue of the Merger and without any action on the part of the
holder thereof, be cancelled and retired and shall cease to exist
with no payment being made hereunder with respect thereto (such
cancellation of Acquiror Shares held by Panolam Holdings Co. at the
Effective Time to be deemed a contribution to Acquiror).”
3.
Amendment to Section 2.2 Payment and Exchange of
Certificates .
(a) Section 2.2(a) of the
Agreement is hereby amended and restated in its entirety to read as
follows:
“(a)
[Intentionally Omitted.]”
(b) Section 2.2(b) of the
Agreement is hereby amended and restated in its entirety to read as
follows:
2
“(b)
After the Effective Time of the Merger but on the Closing Date,
each holder of an outstanding certificate or certificates for
Common Shares (collectively, the “ Certificates
”) and/or Vested Options, upon surrender of such Certificates
to the Acquiror (or, in the case of a holder of Vested Options,
upon delivery of a Holder Acknowledgment to the Acquiror) shall be
entitled to receive from the Acquiror in exchange therefor (subject
to the provisions of Section 2.5 and Section 2.2(d)) such
portion of the Merger Consideration into which such holder’s
Common Shares and/or Vested Options shall have been converted as a
result of the Merger; provided , however , that a
portion of the Merger Consideration otherwise payable to each
holder of Common Shares and/or Vested Options equal to the Escrow
Amount multiplied by such holder’s Escrow
Percentage shall be held in escrow in accordance with
Section 2.5(d) and the Escrow Agreement. Pending such
surrender and exchange (or, in the case of a holder of Vested
Options, upon such delivery of a Holder Acknowledgment), such
Common Shares and Vested Options shall be deemed no longer
outstanding and a holder’s certificate or certificates for
Common Shares and/or Vested Options shall be deemed for all
purposes to evidence only a right to receive such holder’s
portion of the Merger Consideration into which such Common Shares
and/or Vested Options shall have been converted by the
Merger.”
(c) Section 2.2(c) of the
Agreement is hereby amended and restated in its entirety to read as
follows:
“(c)
The Acquiror and/or the Company shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this
Agreement such amounts as may be required to be deducted and
withheld with respect to the making of such payment under the Code
and the rules and regulations promulgated there under, or
under any provision of state, local or foreign Tax law. To the
extent that amounts are so withheld and paid over to the
appropriate taxing authority, such withheld amounts shall be
treated for the purposes of this Agreement as having been paid to
the former holder of Company Common Stock or to the former holders
of Vested Options.”
(d) Section 2.2 of the Agreement is
hereby amended to insert at the end of such Section the
following:
“(d)
Notwithstanding the provisions of Section 2.2(b), the holders
of any Acquiror Shares outstanding immediately prior to the
Effective Time shall not be entitled to receive any portion of the
Merger Consideration in respect of such Acquiror Shares. For the
avoidance of doubt, the portion of the Merger Consideration that
would otherwise be payable but for the provisions of this
Section 2.2(d) shall be retained by the
Acquiror.”
3
4.
Amendment to Section 2.4 Estimated Adjustment Amount
.
(a) Section 2.4(a) of the
Agreement is hereby amended and restated in its entirety to read as
follows:
“Not
less than three (3) Business Days prior to the Closing Date
and in no event more than ten (10) Business Days prior to the
Closing Date, the Company shall deliver to Acquiror a good faith
estimated Closing Balance Sheet and an estimate of (i) the Net
Working Capital (as defined below) of the Company and its
Subsidiaries as of the close of business on the Closing Date (the
“ Estimated Closing Date Net Working Capital ”)
and (ii) the cash and cash equivalents of the Company and its
Subsidiaries (net of uncleared checks) as of the close of business
on the Closing Date (the “ Estimated Closing Date Cash
”).”
(b) Section 2.4(b) of the
Agreement is hereby amended and restated in its entirety to read as
follows:
“The
“ Estimated Adjustment Amount, ” which
may be positive or negative, shall mean (i)(x) the Estimated
Closing Date Net Working Capital, minus (y) $38,900,000,
plus (ii) the lesser of (x) $3,000,000 and (y) the
Estimated Closing Date Cash (the “ Estimated Cash
Adjustment Amount ”). If the Estimated Adjustment Amount
is a positive number, then the Merger Consideration shall be
increased on the Closing Date by the Estimated Adjustment Amount,
and if the Estimated Adjustment Amount is a negative number, the
Merger Consideration shall be decreased on the Closing Date by the
absolute value of the Estimated Adjustment
Amount.”
5.
Amendment to Section 2.5 Post-Closing Adjustments .
(a) The
first sentence of Section 2.5(a) of the Agreement is
hereby amended and restated in its entirety to read as
follows:
“As soon
as reasonably practicable following the Closing Date, and in any
event within sixty (60) calendar days thereafter, Acquiror shall
prepare and deliver to the Holder Representative (i) an
unaudited consolidated balance sheet of the Company and its
Subsidiaries as of the close of business on the Closing Date (the
“ Closing Balance Shee t”), (ii) a
calculation of Net Working Capital of the Company and its
Subsidiaries as set forth on the Closing Balance Sheet (“
Closing Date Net Working Capital ”) and (iii) a
calculation of cash and cash equivalents of the Company and its
Subsidiaries (net of uncleared checks) set forth on the Closing
Balance Sheet (“ Closing Date Cash
”).”
(b) Section 2.5(b) of the
Agreement is hereby amended and restated in its entirety to read as
follows:
“If the
Holder Representative sha
| 
