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Exhibit 2.1
REORGANIZATION
AGREEMENT
REORGANIZATION AGREEMENT,
dated as of June 10, 2008 (this “ Agreement
”), by and among TOYS “R” US, INC., a Delaware
corporation (“ Toys ”), and TOYS “R”
US HOLDINGS, INC., a Delaware corporation (“ Parent
”), and sole stockholder of Toys.
WHEREAS, in order to simplify
the corporate structure of Parent, Parent and Toys desire to
reorganize within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the “ Code
”).
NOW, THEREFORE, in
consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth in this Agreement,
and intending to be legally bound hereby, Parent and Toys, agree as
follows:
ARTICLE I
THE
REORGANIZATION
1.1 The Reorganization
. Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing Parent shall transfer to Toys
(i) all of Parent’s assets, including all of the Toys
common stock, par value $.01 per share (the “ Old Toys
Common Stock ”) owned by it immediately prior to the
Closing (as defined below), all excess cash on hand and all other
assets after the payment of any intercompany debt and (ii) all
of Parent’s outstanding liabilities, in exchange for
48,955,808 shares of Toys common stock, par value $.001 per share
(the “ New Toys Common Stock ”); provided that
if the outstanding amount of stock in Parent is reduced from
48,955,808 shares outstanding immediately prior to the consummation
of the Reorganization (as defined below) for any reason, including,
but not limited to, due to the cancellation of any restricted
stock, then the amount of New Toys Common Stock to be provided in
the exchange shall be reduced by an amount such that the aggregate
amount of outstanding New Toys Common Stock immediately after the
exchange is identical to the aggregate amount of outstanding stock
of Parent immediately prior to the exchange (the foregoing, the
“ Adjustment ”). At the Closing, Toys will
accept all transferred assets of Parent, including transferred
shares of Old Toys Common Stock, all of Parent’s excess cash
on hand and all other assets after the payment of intercompany
debt, and assume all of Parent’s outstanding liabilities.
Immediately after such exchange and transfer, Parent shall
dissolve, liquidate and distribute (such dissolution, liquidation
and distribution, together with the stock exchange described above,
is referred to herein as the “ Reorganization ”)
its New Toys Common Stock pro rata to its stockholders
(collectively, the “ Stockholders ”) in
accordance with the provisions of the Delaware General Corporation
Law (the “ DGCL ”) with Stockholders receiving
for each share of Parent common stock, $.01 per share (“
Parent Common Stock ”), one share of New Toys Common
Stock.
1.2 Tax Treatment .
Parent and Toys intend that the Reorganization be treated as a
reorganization within the meaning of Section 368(a) of the
Code, and this agreement has been adopted as a “plan of
reorganization.” Neither Parent nor Toys will (i) take
any position
with the Internal Revenue Service or any
other federal, state or local taxing authority with respect to the
Reorganization that is inconsistent with the intended tax treatment
described in this Section 1.2 or (ii) take any action
that would cause the Reorganization to fail to qualify as a
reorganization within the meaning of Section 368(a) of the
Code.
1.3 Treatment of
Outstanding Equity Awards .
(a) Parent maintains the
Amended and Restated Toys “R” Us Holdings, Inc. 2005
Management Equity Plan (the “Equity Plan”). Effective
as of the time of the Reorganization, Toys shall assume the
obligations and succeed to the rights of Parent under the Equity
Plan and all awards outstanding thereunder. Awards granted under
the Equity Plan shall be converted to awards with respect to New
Toys Common Stock as set forth below in this
Section 1.3.
(b) At the Closing, by virtue
of the Reorganization and without any action on the part of the
holders thereof, each Option to purchase shares of Parent Common
Stock granted under the Equity Plan, including Rollover Options (as
defined in the Equity Plan), that is outstanding immediately prior
to the Closing (collectively, the “ Parent Options
”) shall be converted into an option (a “ Converted
Option ”) to purchase, on the same terms and conditions
(including applicable vesting requirements) as applied to each such
Parent Option immediately prior to the Closing, the number of
shares of New Toys Common Stock equal to the number of shares of
Parent Common Stock subject to such Parent Option immediately prior
to the Closing, at an exercise price per share of New Toys Common
Stock equal to the exercise price for each such share of Parent
Common Stock subject to such Parent Option immediately prior to the
Closing. The Converted Options shall continue to be subject to the
terms of the Equity Plan and the applicable Award Agreement
(including applicable vesting requirements, except that any vesting
requirement based on continued employment with Parent shall mean
continued employment with Toys or its Subsidiaries).
(c) At the Closing, each
award of Restricted Stock (as defined in the Equity Plan)
consisting of shares of Parent Common Stock granted under the
Equity Plan that is outstanding immediately prior to the Closing
(collectively, the “ Parent Restricted Stock Awards
”) shall, by virtue of the Reorganization and without any
action on the part of the holder thereof, be converted into an
award of Restricted Stock consisting of shares of New Toys Common
Stock, on the same terms and conditions as applied to each such
Parent Restricte
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