EXHIBIT 2.5
AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF MARCH 22, 1999
BY AND AMONG
U.S. CONCRETE, INC.,
XXXX ACQUISITION INC.,
XXXX CONCRETE, INCORPORATED
AND
THE STOCKHOLDER NAMED HEREIN
Reverse Triangular Merger; Non-Delaware Company; Single Stockholder; Company
Financial Statements
-1-
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made
as of March 22, 1999 by and among U.S. Concrete, Inc., a Delaware corporation
("USC"), Xxxx Acquisition Inc., a Delaware corporation and a wholly owned
subsidiary of USC ("USC Sub"), Xxxx Concrete, Incorporated, a New Jersey
corporation (the "Company"), and the person listed on the signature page hereof
under the caption "Stockholder" (the "Stockholder").
PRELIMINARY STATEMENT
The parties to this Agreement have determined it is in their best
long-term interests to effect a business combination pursuant to which:
(a) USC Sub will merge into the Company on the terms and subject to
the conditions set forth herein (that merger being the "Merger");
(b) USC will acquire the stock of all or some of the entities listed
in the accompanying Addendum 1 (each, other than the Company, an "Other
Founding Company" and, collectively with the Company, the "Founding
Companies") pursuant to agreements that are (i) similar to this Agreement
and (ii) entered into among those entities and their equity owners, USC
and subsidiaries of USC (collectively, the "Other Agreements"); and
(c) USC will effect a public offering of shares of its common stock
and issue and sell those shares.
The respective boards of directors of USC, USC Sub and the Company
have approved and adopted this Agreement to effect a transaction subject to
Section 351 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and undertakings this Agreement contains, the
parties hereto hereby agree as follows:
Paragraph 1 CERTAIN DEFINED TERMS. The following terms this
Agreement uses have the meanings this Paragraph 1 specifies. Capitalized terms
this Agreement uses, but this Paragraph 1 does not define, have the meanings the
preamble to this Agreement, the Preliminary Statement above or Article IX of the
Uniform Provisions, as the case may be, specifies.
"Acquired Business" means the Company.
"Acquisition" means the Merger.
"Acquisition Consideration" has the meaning Paragraph 2 specifies.
-1-
"Additional Cash Consideration" means the product of (i) the
quotient obtained from dividing (A) the sum of the amount of cash
Paragraph B of Schedule 2(D) sets forth in dollars and the 1998 Restricted
Payment Amount by (B) $8.50 multiplied by (ii) the amount, if any, by
which (A) the IPO Price exceeds (B) $8.50.
"Applied Consideration" means the sum of the fair market values on
the IPO Closing Date of the assets Schedule 6.08 lists. In the case of the
loans payable that Schedule 6.08 lists, their fair market value will equal
their unpaid principal amounts and accrued and unpaid interest on the IPO
Closing Date. In the case of the life insurance policies Schedule 6.08
lists, their fair market value will be their cash surrender value on the
IPO Closing Date as determined by the Company and agreed to by USC. In the
case of the remaining assets Schedule 6.08 lists, their fair market value
will be as determined by the Company and agreed to by USC.
"Ceiling Amount" means the sum of (i) $4,800,000, (ii) the
Additional Cash Consideration, if any, (iii) the Positive Net Adjustment,
if any, and (iv) the Negative Net Adjustment, if any; provided, however,
that, for purposes of Sections 6.06(b) and 7.06(b), the Ceiling Amount is
$3,600,000.
"Closing" has the meaning Paragraph 3 specifies.
"Closing Date" means the IPO Pricing Date.
"Company Capital Stock" means the Common Stock, no par value per
share, of the Company.
"Company Financial Statements" means (i) the audited balance sheets
of the Company as of December 31, 1998 and the related audited statements
of operations, cash flows and shareholders' equity for the year ended
December 31, 1998, together with the related audit report of the
Independent Accountants.
"Counsel for USC and USC Sub" means Xxxxx & Xxxxx, L.L.P.
"Counsel for the Company and the Stockholder" means Xxxxxxx X.
Xxxxxxxx.
"Current Balance Sheet" means the audited balance sheet of the
Company as of December 31, 1998.
"Current Balance Sheet Date" means December 31, 1998.
"Current Balance Sheet Date Working Capital" means $(1,397,000).
"Effective Date" means the IPO Closing Date.
-2-
"Executive Employment Agreement" means the Employment Agreement
entered into effective as of the IPO Closing Date between the Company and
Xxxxxxx X. Xxxxxxxxx.
"Initial Financial Statements" means the Company Financial
Statements.
"Minimum Cash Balance" means $0.
"NJBCA" means the New Jersey Business Corporation Act.
"Pro Rata Share" of the Stockholder means 100%.
"Responsible Officer" means Xxxxxxx X. Xxxxxxxxx.
"Surviving Corporation" means the Company, which the Certificate of
Merger will designate as the surviving corporation of the Merger.
"Termination Date" means May 31, 1999; provided, however, that if
(i) USC has filed the Registration Statement with the SEC prior to that
date and (ii) the Stockholder would not be entitled to terminate this
Agreement on that date otherwise than pursuant to Section 11.01(a)(ii),
"Termination Date" means September 30, 1999.
"Uniform Provisions" has the meaning Paragraph 4 specifies.
"USC Award Agreements" means the award agreements, each in the form
of Exhibit 1-B, pursuant to which USC, on the Closing Date, will grant to
certain key employees of the Company Xxxxxxx X. Xxxxxxxxx has designated
by written notice to USC and USC has approved by written notice to the
Responsible Officer (which approval USC will not unreasonably withhold)
prior to the Closing Date, pursuant to the U.S. Concrete, Inc. 1999
Employee Incentive Plan, or other similar stock option plan, options to
purchase an aggregate not to exceed 22,605 shares of USC Common Stock at a
per share exercise price equal to the IPO Price.
"USC Sub Common Stock" means the Common Stock, par value $1.00 per
share, of USC Sub.
-3-
"1998 Restricted Payment Amount" means $0.
Paragraph 2 (A) CERTIFICATE OF MERGER. Subject to the terms and
conditions hereof, the Company will cause the Certificate of Merger to be duly
executed and delivered on or promptly after the Closing Date and filed with the
Secretary of State of the State of New Jersey and the Secretary of State of the
State of Delaware.
(B) THE EFFECTIVE TIME. The effective time of the Merger (the
"Effective Time") will be the time on the Effective Date which the Certificate
of Merger specifies or, if the Certificate of Merger does not specify another
time, 8:00 a.m., Houston, Texas time, on the Effective Date.
(C) CERTAIN EFFECTS OF THE MERGER. At and as of the Effective Time,
(1) USC Sub will be merged with and into the Company in accordance with the
provisions of the NJBCA and the DGCL, (2) USC Sub will cease to exist as a
separate legal entity, (3) the certificate of incorporation of the Company will
be amended to change the Company's authorized shares of capital stock to 1,000
shares, par value $1.00 per share, of Common Stock, (4) the Company will be the
Surviving Corporation and, as such, will, all with the effect provided by the
NJBCA and the DGCL, (a) possess all the properties and rights, and be subject to
all the restrictions and duties, of the Company and USC Sub and (b) be governed
by the laws of the State of New Jersey, (5) the Charter Documents of the Company
then in effect (after giving effect to the amendment to the Company's
certificate of incorporation specified in clause (3) of this sentence) will
become and thereafter remain (until changed in accordance with (a) applicable
law (in the case of the certificate of incorporation) or (b) their terms (in the
case of the bylaws)) the Charter Documents of the Surviving Corporation, (6) the
initial board of directors of the Surviving Corporation will be the persons
Schedule 2(C) names as such, and those persons will hold the office of director
of the Surviving Corporation, subject to the provisions of the applicable laws
of the State of New Jersey and the Charter Documents of the Surviving
Corporation, and (7) the initial officers of the Surviving Corporation will be
as Schedule 2(C) sets forth, and each of those persons will serve in each office
Schedule 2(C) specifies for that person, subject to the provisions of the
Charter Documents of the Surviving Corporation, until that person's successor is
duly elected to, and, if necessary, qualified for, that office.
(D) EFFECT OF THE MERGER ON CAPITAL STOCK. As of the Effective Time,
as a result of the Merger and without any action on the part of any holder
thereof:
(1) the shares of Company Capital Stock issued and outstanding
immediately prior to the Effective Time will (a) convert into the right to
receive, subject to the provisions of Paragraph 2(E), without interest, on
surrender of the certificates evidencing those shares, the amount of cash
and the number of whole and fractional shares of USC Common Stock Schedule
2(D) sets forth and, if any, the Additional Cash Consideration (the
"Acquisition Consideration"), (b) cease to be outstanding and to exist and
(c) be canceled and retired;
-4-
(2) each share of Company Capital Stock held in the treasury of the
Company or any Company Subsidiary will (a) cease to be outstanding and to
exist and (b) be canceled and retired; and
(3) each share of USC Sub Common Stock issued and outstanding
immediately prior to the Effective Time will convert into one share of
Common Stock, par value $1.00 per share, of the Surviving Corporation and
the shares of Common Stock of the Surviving Corporation issued on that
conversion will constitute all the issued and outstanding shares of
Capital Stock of the Surviving Corporation.
Each holder of a certificate representing shares of Company Capital Stock
immediately prior to the Effective Time will, as of the Effective Time and
thereafter, cease to have any rights respecting those shares other than the
right to receive, subject to the provisions of Paragraph 2(E), without interest,
the Acquisition Consideration and the additional cash, if any, owing with
respect to those shares as provided in Paragraph 2(F).
(E) DELIVERY, EXCHANGE AND PAYMENT. (1) At or after the Effective
Time: (a) the Stockholder, as the holder of certificates representing shares of
Company Capital Stock, will, on surrender of those certificates to USC (or any
agent that USC may appoint for purposes of this Paragraph 2(E)), receive,
subject to the provisions of this Paragraph 2(E) and Paragraph 2(F), the
Acquisition Consideration; and (b) until any certificate representing Company
Capital Stock has been surrendered and replaced pursuant to this Paragraph 2(E),
that certificate will, for all purposes, be deemed to evidence ownership of the
number of whole shares of USC Common Stock included in the Acquisition
Consideration payable in respect of that certificate pursuant to Paragraph 2(D);
provided, however, that the Stockholder hereby directs USC to withhold the
Applied Consideration until such time as the Stockholder directs USC in writing
to deliver the Applied Consideration to the Company as payment of the purchase
price the Stockholder then owes pursuant to Section 6.08. All shares of USC
Common Stock issuable in the Merger will be deemed for all purposes to have been
issued by USC at the Effective Time.
(2) The Stockholder will deliver to USC (or any agent that USC may
appoint for purposes of this Paragraph 2(E)) on or before the IPO Closing Date
the certificates representing all the Company Capital Stock owned by the
Stockholder, duly endorsed in blank, or accompanied by stock powers in blank
duly executed, by that Person, and with all necessary transfer tax and other
revenue stamps, acquired at that Person's expense, affixed and canceled. The
Stockholder will cure any deficiencies in the endorsement of the certificates or
other documents of conveyance respecting, or in the stock powers accompanying,
the certificates representing Company Capital Stock that Person delivers.
(3) No dividends (or interest) or other distributions declared or
earned after the Effective Time with respect to USC Common Stock and payable to
the holders of record thereof after the Effective Time will be paid to the
holder of any unsurrendered certificates representing shares of Company Capital
Stock for which whole shares of USC Common Stock have been issued
-5-
in the Merger until those certificates are surrendered as provided herein, but
(a) on that surrender USC will cause to be paid, to the Person in whose name the
certificates representing those whole shares of USC Common Stock will then be
issued, the amount of dividends or other distributions previously paid with
respect to those whole shares of USC Common Stock with a record date, or which
have accrued, subsequent to the Effective Time, but prior to that surrender, and
the amount of any cash payable to that Person for and in lieu of fractional
shares pursuant to Paragraph 2(F) and (b) at the appropriate payment date or as
soon as practicable thereafter, USC will cause to be paid to that Person the
amount of dividends or other distributions with a record date, or which have
been accrued, subsequent to the Effective Time, but which are not payable until
a date subsequent to surrender, which are payable with respect to those whole
shares of USC Common Stock, subject in all cases to any applicable escheat laws.
No interest will be payable with respect to the payment of those dividends or
other distributions or cash for and in lieu of fractional shares on surrender of
outstanding certificates.
(F) Notwithstanding any other provision herein, USC will not issue
any fractional shares of USC Common Stock, and if the Stockholder would be
entitled hereunder to receive a fractional share of USC Common Stock but for
this Paragraph 2(F), the Stockholder will be entitled hereunder to receive a
cash payment for and in lieu thereof in the amount (rounded upward to the
nearest whole cent) equal to the Stockholder's fractional interest in a share of
USC Common Stock multiplied by the IPO Price.
Paragraph 3 THE CLOSING. On or before the Closing Date, the parties
hereto will take all actions necessary to (A) effect the Acquisition (including,
as permitted by the NJBCA and the DGCL, (i) the execution of a Certificate of
Merger (a) meeting the requirements of the NJBCA and the DGCL and (b) providing
that the Merger will become effective on the Effective Date and (ii) the
transmitting for filing of that Certificate of Merger with the Secretary of
State of the State of New Jersey and the Secretary of State of the State of
Delaware), (B) verify the existence and ownership of the certificates evidencing
the Company Capital Stock to be exchanged for the Acquisition Consideration
pursuant to Paragraph 2(E) and (C) satisfy the document delivery requirements on
which the obligations of the parties to effect the Acquisition and the other
transactions contemplated hereby are conditioned by the provisions of Article V
(all those actions collectively being the "Closing"). The Closing will take
place at the offices of Xxxxx & Xxxxx, L.L.P., 00xx Xxxxx, 000 Xxxxxxxxx,
Xxxxxxx, Xxxxx at 10:00 a.m., Houston time, on the Closing Date, or at such
later time on the Closing Date as USC specifies by written notice to the
Responsible Officer. The actions taken at the Closing will not include the
delivery of the Company Capital Stock to USC or the payment of the Acquisition
Consideration to the Stockholder. Instead, on the IPO Closing Date, the Company
Capital Stock will be surrendered in exchange for the Acquisition Consideration
(with the cash portion of the Acquisition Consideration being paid by wire
transfer in immediately available funds pursuant to instructions the Stockholder
delivers to USC prior to Closing or, in the absence of those instructions, a USC
check), and all transactions contemplated by this Agreement to be closed or
completed on or before the IPO Closing Date will be closed and completed, as the
case may be.
-0-
Xxxxxxxxx 4 INCORPORATION OF UNIFORM PROVISIONS. (A) The U.S.
Concrete, Inc. Uniform Provisions for the Acquisition of Founding Companies
attached hereto as Annex 1 (the "Uniform Provisions") hereby are incorporated in
this Agreement by this reference and constitute a part of this Agreement with
the same force and effect as if set forth at length herein.
(B) Notwithstanding the provisions of Section 10.07, Article VIII
and the rights and obligations thereunder of the parties thereto will be
governed by and construed in accordance with the substantive laws of the State
of New Jersey without regard to the conflicts of law provisions thereof.
(C) The Uniform Provisions are hereby amended by adding a Section
10.16 which reads in its entirety as follows:
Section 10.16 REMEDIATION AGREEMENT. To the extent required in order
to achieve compliance under the New Jersey Industrial Site Recovery Act
(N.J.S.A. 13:1K-6 et seq.) prior to the IPO Closing Date and to the extent
permitted by the New Jersey Department of Environmental Protection, (i)
the Stockholder will use his best efforts to enter into a pre-closing
remediation agreement with the New Jersey Department of Environmental
Protection in order to permit the closing of the transactions contemplated
hereby without the need to complete any required site remediation work
prior to the IPO Closing Date or (ii) in the event that the Stockholder is
unable to enter into such a pre-closing remediation agreement, the
Stockholder will cause the Company to enter into such a pre-closing
remediation agreement on the request of USC, in which event Stockholder
will indemnify USC or the Company, as applicable, for the cost of any
remediation which is required to be performed pursuant to such pre-closing
remediation agreement.
(D) The Uniform Provisions are hereby amended by changing the
definition of "Positive Net Adjustment", "Current Balance Sheet Date Adjusted
Working Capital" and "Final Balance Sheet" in Section 6.07 to read as follows:
"Positive Net Adjustment" means $0.
"Current Balance Sheet Date Adjusted Working Capital" means "Current
Balance Sheet Date Working Capital"
"Final Balance Sheet" means a balance sheet of the Acquired Business
as of the later of (i) May 31, 1999 and (ii) the effective date USC uses
to record the Acquisition in accordance with GAAP on the same basis on
which the Current Balance Sheet was prepared.
(E) The Uniform Provisions are hereby amended by adding a Section
10.17 which reads in its entirety as follows:
-7-
Section 10.17 COVENANTS OF USC PRIOR TO MAY 31, 1999. If the IPO
Closing Date occurs before May 31, 1999, USC covenants and agrees that it
will not take any action between the IPO Closing Date and May 31, 1999,
which is outside the ordinary course of business and which adversely
affects Final Working Capital.
(F) Article VI is hereby amended by adding at the end thereof the
following:
Section 6.08 PURCHASE OF CERTAIN ASSETS. On the IPO Closing Date and
following the Effective Time, the Stockholder will purchase from the
Company for cash in immediately available funds the assets Schedule 6.08
lists at an aggregate purchase price for all those assets equal to the
Applied Consideration, whereupon the Company will deliver and otherwise
transfer title to those assets to the Stockholder.
Paragraph 5 CERTAIN CONDITIONS TO CLOSING AND CONSUMMATION. (A) The
obligations of the Stockholder with respect to the actions to be taken on the
IPO Closing Date are subject to the satisfaction of the following condition in
addition to those set forth or referred to in Section 5.02(b): (i) the Executive
Employment Agreement then will be in full force and effect and (ii) USC shall
have tendered the USC Award Agreements to the respective recipients thereof,
duly signed on its behalf by an authorized officer of USC.
(B) The obligations of USC and USC Sub with respect to the actions
to be taken on the IPO Closing Date are subject to the satisfaction of the
following conditions in addition to those set forth or referred to in Section
5.03(b): (i) the Executive Employment Agreement then will be in full force and
effect and (ii) Stockholder shall have performed his obligations pursuant to
Section 10.16.
Paragraph 6 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be an original, but all of which together will
constitute one and the same agreement.
Paragraph 7 NOTICES. For purposes of Section 10.06, notices will be
initially addressed to the Stockholder and the Company, as follows:
(A) if to the Stockholder, addressed to him at:
Xx. Xxxxxxx X. Xxxxxxxxx
00 Xxxxx Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxx Xxxxxx 00000
; and
-8-
(B) if to the Company, addressed to it at:
Xxxx Concrete, Incorporated
000 Xxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxx Xxxxxx 00000
Fax No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxxx
with copies (which will not constitute notice for purposes of this
Agreement) to:
Xxxxxxx X. Xxxxxxxx, Esq.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxx Xxxxxx 00000
Fax No.: (000) 000-0000
Paragraph 8 ABANDONMENT OF MERGER. If this Agreement is terminated
pursuant to Section 11.01, the Merger will be deemed for all purposes to have
been abandoned and of no force or effect and, if the Certificate of Merger has
been filed with the Secretary of State of the Company's Organization State prior
to that termination, each of the Company and USC Sub is authorized to execute
and file with the Secretary of State of the Company's Organization State a
certificate of that termination pursuant to Section 14A:10-9 of the NJBCA.
[Signatures on following page]
-9-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
U.S. CONCRETE, INC.
By:_______________________________________
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
XXXX ACQUISITION INC.
By:_______________________________________
Xxxxxx X Xxxxxxxxx
President
XXXX CONCRETE, INCORPORATED
By:_______________________________________
Xxxxxxx X. Xxxxxxxxx
President
Stockholder:
____________________________________________
Xxxxxxx X. Xxxxxxxxx
-10-
ADDENDUM 1
to the
Agreement and Plan of Reorganization
to which
U.S. Concrete, Inc.
and
Xxxx Concrete, Incorporated
are parties
A. Capitalized terms this Addendum uses, but does not define, have the
meanings the captioned Agreement specifies.
B. The Founding Companies are:
Xxxx Concrete, Incorporated
Bay Cities Building Materials Co., Inc.
Central Concrete Supply Co., Inc.
Opportunity Concrete Corporation
X. X. Xxxxx/Associates d/b/a Santa Xxxx Cast Products Co.
Xxxxxx'x Concrete, Inc.
SCHEDULE 2(C)
to the
Agreement and Plan of Reorganization
to which
U.S. Concrete, Inc.
and
Xxxx Concrete, Incorporated
are parties
A. Capitalized terms this Schedule uses, but does not define, have
the meanings the captioned Agreement specifies.
B. The directors of the Surviving Corporation immediately after the
Effective Time are as follows: Xxxxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxxxx.
C. The officers of the Surviving Corporation immediately after the
Effective Time are as follows:
President.................................. Xxxxxxx X. Xxxxxxxxx
Senior Vice President...................... Xxxxxx X. Xxxxxxxxx
Vice President, Treasurer and Secretary.... Xxxxxxx X. Xxxxxx
End of Schedule
SCHEDULE 2(D)
to the
Agreement and Plan of Reorganization
to which
U.S. Concrete, Inc.
and
Xxxx Concrete, Incorporated
are parties
A. Capitalized terms this Schedule uses, but does not define, have
the meanings the captioned Agreement specifies.
B. Subject to increase by the amount of the Positive Net Adjustment,
if any, and to decrease by the amount of the Negative Net Adjustment, if any,
the aggregate Acquisition Consideration will be comprised of (1) $1,200,000 in
cash, (2) 423,529 shares of USC Common Stock, (3) the Additional Cash
Consideration and (4) the Applied Consideration.
C. The Stockholder will be entitled to receive his Pro Rata Share of
the Acquisition Consideration pursuant to Paragraph 2(D), subject to the
provisions of Paragraphs 2(E) and 2(F).
End of Schedule
