EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of October
17, 1997, among Big Flower Press Holdings, Inc., a Delaware corporation (the
"Company"), Big Flower Holdings, Inc., a Delaware corporation ("BFHI") and a
direct, wholly-owned subsidiary of the Company, and Big Flower Merger Co., a
Delaware corporation ("Mergeco") and a direct, wholly-owned subsidiary of BFHI.
RECITALS
WHEREAS, (A) as of the close of business on October 3, 1997, the
authorized capital stock of the Company consisted of (i) 50,000,000 shares of
common stock, par value $0.01 per share ("Company Common Stock"), of which
18,485,696 shares were issued and outstanding, 4,499,346 shares were reserved
for issuance under the Company's Restated 1993 Stock Award and Incentive Plan,
up to 1,000,000 shares were reserved for issuance in connection with the
acquisition of Columbine JDS Systems, Inc., up to 21,668 shares were reserved
for issuance in exchange for shares of Scanforms, Inc., and no shares were held
in treasury, and (ii) 10,000,000 shares of preferred stock, par value $0.01 per
share, of which none is outstanding but 250,000 shares have been designated as
Series A Junior Preferred Stock ("Company Series A Preferred Stock"), (B) on
October 14, 1997 a further 4,000,000 shares of Company Common Stock were
reserved for issuance upon conversion of the Company's Convertible Subordinated
Debentures Due 2007.
WHEREAS, as of the date hereof, the authorized capital stock of BFHI
consists of (i) 50,000,000 shares of common stock, par value $0.01 per share
("BFHI Common Stock"), of which 1,000 shares are issued and outstanding and no
shares are held in treasury, and (ii) 10,000,000 shares of preferred stock, par
value $0.01 per share, of which none is outstanding but 250,000 shares have been
designated as Series A Junior Preferred Stock ("BFHI Series A Preferred Stock").
WHEREAS, the designations, rights and preferences, and the qualifications,
limitations and restrictions thereof, of the BFHI Series A Preferred Stock and
the BFHI Common Stock are the same as those of the Company Series A Preferred
Stock and the Company Common Stock, respectively.
WHEREAS, the Restated Certificate of Incorporation and the By-laws of BFHI
immediately after the Effective Time (as hereinafter defined) will contain
provisions identical to the Restated Certificate of Incorporation and By-laws of
the Company immediately before the Effective Time (other than with respect to
matters excepted by Section 251(g) of the General Corporation Law of the State
of Delaware (the "DGCL")).
WHEREAS, the directors of the Company immediately prior to the Merger (as
hereinafter defined) will be the directors of BFHI as of the Effective Time.
WHEREAS, BFHI and Mergeco are newly formed corporations organized for the
purpose of participating in the transactions herein contemplated.
WHEREAS, the Company desires to create a new holding company structure by
merging Mergeco with and into the Company with the Company being the surviving
corporation (sometimes hereinafter referred to as the "Surviving Corporation"),
and converting each outstanding share of Company Common Stock into one share of
BFHI Common Stock, all in accordance with the terms of this Agreement.
WHEREAS, the Boards of Directors of BFHI, Mergeco and the Company have
approved this Agreement and the merger of Mergeco with and into the Company upon
the terms and subject to the conditions set forth in this Agreement (the
"Merger").
WHEREAS, pursuant to authority granted by the Board of Directors of the
Company, the Company will, immediately prior to the Effective Time, contribute
to the capital of BFHI any shares of Company Common Stock then held by the
Company in its treasury.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained in this Agreement, and intending to be legally bound
hereby, the Company, BFHI and Mergeco hereby agree as follows:
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ARTICLE I
THE MERGER
Section 1.1 The Merger. In accordance with Section 251(g) of the DGCL and
subject to and upon the terms and conditions of this Agreement, Mergeco shall,
at the Effective Time, be merged with and into the Company, the separate
corporate existence of Mergeco shall cease and the Company shall continue as the
surviving corporation. The Company as the surviving corporation after the Merger
is hereinafter sometimes referred to as the "Surviving Corporation." At the
Effective Time, the effect of the Merger shall be as provided in Section 259 of
the DGCL.
Section 1.2 Effective Time. The Merger shall become effective upon the
filing, on or after the date hereof and on or before October 20, 1997, of a copy
of this Agreement with the Secretary of State of the State of Delaware (the time
of such filing being referred to herein as the "Effective Time").
Section 1.3 Restated Certificate of Incorporation of the Surviving
Corporation. From and after the Effective Time the Restated Certificate of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation of the Surviving Corporation
until thereafter amended as provided by law; provided, however, that, from and
after the Effective Time:
(a) Article FOURTH thereof shall be amended so as to read in its
entirety as follows:
"FOURTH: The aggregate number of shares which the Corporation shall
have authority to issue shall be three thousand (3,000), consisting of three
thousand (3,000) shares of Common Stock, par value $0.01 per share. No shares of
the previously designated Series A Junior Preferred Stock having been issued,
such series is hereby terminated and all matters set forth in this certificate
of incorporation with respect to such series are hereby eliminated from this
certificate of incorporation. No shares of the Class B Common Stock remaining
outstanding, the Class B Common Stock has been terminated and all matters set
forth in this certificate of incorporation with respect to such series have been
eliminated from this certificate of incorporation."
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(b) A new Article EIGHTH shall be added thereto which shall be and
read in its entirety as follows:
"EIGHTH: Any act or transaction by or involving the Corporation that
requires for its adoption under the General Corporation Law of the State of
Delaware or this certificate of incorporation the approval of the stockholders
of the Corporation shall, by virtue of this reference to Section 251(g) of the
General Corporation Law of the State of Delaware, require, in addition, the
approval of the stockholders of Big Flower Holdings, Inc., a Delaware
corporation, or any successor thereto by merger, so long as such corporation or
its successor is the ultimate parent, directly or indirectly, of this
Corporation, by the same vote that is required by the General Corporation Law of
the State of Delaware and/or the certificate of incorporation of this
Corporation. For the purposes of this Article Eighth, the term "parent" shall
mean a corporation that owns, directly or indirectly, at least a majority of the
outstanding capital stock of this Corporation entitled to vote in the election
of directors of this Corporation without regard to the occurrence of any
contingency."
Section 1.4 By-laws. From and after the Effective Time, the By-laws of the
Company, as in effect immediately prior to the Effective Time, shall be the
By-laws of the Surviving Corporation until thereafter amended as provided
therein or by applicable law.
Section 1.5 Directors. The directors of the Company immediately prior to
the Effective Time shall be the initial directors of the Surviving Corporation
and will hold office from the Effective Time until their successors are duly
elected or appointed and qualified in the manner provided in the Certificate of
Incorporation and the By-laws of the Surviving Corporation or as otherwise
provided by law.
Section 1.6 Officers. The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation and
will hold office from the Effective Time until their successors are duly elected
or appointed and qualified in the manner provided in the Certificate of
Incorporation and the By-laws of the Surviving Corporation or as otherwise
provided by law.
Section 1.7 Additional Actions. Subject to the terms of this Agreement,
the parties hereto shall take all such reasonable and lawful action as may be
necessary or
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appropriate in order to effectuate the Merger. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, properties or assets of either of Mergeco or the Company acquired or
to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of each of Mergeco and the Company, all such
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of each of Mergeco and the Company or otherwise, all such other
actions and things as may be necessary or desirable to vest, perfect or confirm
any and all right, title and interest in, to and under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out this Agreement.
Section 1.8 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of BFHI, Mergeco, the Company or
the holder of any of the following securities:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into the right to
receive one duly issued, fully paid and nonassessable share of BFHI Common
Stock.
(b) Each share of common stock, par value $0.01 per share, of
Mergeco issued and outstanding immediately prior to the Effective Time shall be
converted into and thereafter represent one duly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
(c) From and after the Effective Time, holders of certificates
formerly evidencing Company Common Stock shall cease to have any rights as
stockholders of the Company, except as provided by law; provided, however, that
such holders shall have the rights set forth in Section 1.10 herein.
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Section 1.9 Preferred Share Purchase Rights.
(a) In accordance with Section 23 of the Rights Agreement dated as
of November 28, 1995, as thereafter amended, between the Company and The Bank of
New York, as Rights Agent (the "Company Rights Plan"), each outstanding
preferred share purchase right of the Company shall terminate as of the
Effective Time.
(b) BFHI shall, prior to the Effective Time, adopt a preferred share
purchase rights plan (the "BFHI Rights Plan") substantially similar in form and
substance to the Company Rights Plan and, in accordance therewith, BFHI shall,
at the Effective Time but without duplication of BFHI's obligations under the
BFHI Rights Plan, issue to each holder of BFHI Common Stock issued pursuant
hereto one preferred share purchase right ("BFHI Purchase Right") for each share
of BFHI Common Stock issued by it pursuant to Section 1.8(a) herein.
Section 1.10 No Surrender of Certificates; Stock Transfer Books. At the
Effective Time, the designations, rights, powers and privileges, and
qualifications, limitations and restrictions thereof, of the capital stock of
BFHI will, in each case, be identical with those of the Company immediately
prior to the Effective Time. Accordingly, until thereafter surrendered for
transfer or exchange in the ordinary course, each outstanding certificate that,
immediately prior to the Effective Time, evidenced Company Common Stock shall,
from the Effective Time, be deemed and treated for all corporate purposes to
evidence the ownership of the same number of shares of BFHI Common Stock.
ARTICLE II
ACTIONS TO BE TAKEN IN
CONNECTION WITH THE MERGER
Section 2.1 Assumption of Plan and Severance Agreement. BFHI and the
Company hereby agree that they will, at the Effective Time, execute, acknowledge
and deliver an assumption agreement pursuant to which BFHI will, from and after
the Effective Time, assume and agree to perform all obligations of the Company
pursuant to (x) the Company's Restated 1993 Stock Award and Incentive Plan ("the
Plan") and (y) the Executive Change in Control Severance Agreement, dated
January 6, 1997 (the "Severance
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Agreement"), by and between Big Flower Press Holdings, Inc. and Xxxxxxx X.
Xxxxxxx.
Section 2.2 Reservation of Shares. On or prior to the Effective Time, BFHI
will reserve sufficient shares of BFHI Common Stock to provide for the issuance
of BFHI Common Stock upon exercise of options outstanding under the Plan, in
connection with the acquisition of Columbine JDS Systems Inc. and in exchange
for shares of Scanforms, Inc., and will reserve a number of shares of BFHI
Series A Preferred Stock sufficient to provide for the issuance thereof upon
exercise of BFHI Purchase Rights.
ARTICLE III
CONDITIONS OF MERGER
Section 3.1 Conditions Precedent. The obligations of the parties to this
Agreement to consummate the Merger and the transactions contemplated by this
Agreement shall be subject to fulfillment or waiver by the parties hereto at or
prior to the Effective Time of each of the following conditions:
(a) The BFHI Common Stock to be issued pursuant to the Merger shall have
been approved for listing, upon official notice of issuance, by the New York
Stock Exchange.
(b) BFHI shall have adopted the BFHI Rights Plan and passed a resolution
declaring a dividend of one BFHI Purchase Right for each share of BFHI Common
Stock, the BFHI Purchase Rights to be issued in conjunction with the issuance of
BFHI Common Stock pursuant to the Merger shall have been approved for listing,
upon official notice of issuance, by the New York Stock Exchange.
(c) No order, statute, rule, regulation, executive order, injunction,
stay, decree, judgment or restraining order that is in effect shall have been
enacted, entered, promulgated or enforced by any court or governmental or
regulatory authority or instrumentality which prohibits or makes illegal the
consummation of the Merger or the transactions contemplated hereby.
(d) Xxxxxxxx & Xxxxxxxx, special tax counsel to the Company, shall not
have withdrawn its opinion that holders of Company Common Stock will not
recognize gain or loss for
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United States federal income tax purposes as a result of the Merger.
ARTICLE IV
COVENANTS
Section 4.1 Election of Directors. Effective as of the Effective Time, the
Company, in its capacity as the sole stockholder of BFHI, will, if necessary to
comply with Section 251(g) of the DGCL, remove each of the then directors of
BFHI, cause the board of directors of BFHI to effect such amendments to the
bylaws of BFHI as are necessary to increase the number of directors of BFHI to
equal the number of directors of the Company immediately prior to the Effective
Time, and elect each person who is then a member of the board of directors of
the Company as a director of BFHI, each of whom shall serve until the next
annual meeting of stockholders of BFHI and until his successor shall have been
elected and qualified.
Section 4.2 Listing of BFHI Common Stock. BFHI will use its best efforts
to obtain, at or before the Effective Time, authorization to list, upon official
notice of issuance, on the New York Stock Exchange BFHI Common Stock issuable
pursuant to the Merger and BFHI Purchase Rights issuable in conjunction
therewith.
Section 4.3 The Plan. The Company and BFHI will take or cause to be taken
all actions necessary or desirable in order for BFHI to assume the Plan and to
assume (or become a participating employer in) each other existing employee
benefit plan and agreement of the Company, with or without amendments, or to
adopt comparable plans, including, without limitation, the Severance Agreement,
all to the extent deemed appropriate by the Company and BFHI and permitted under
applicable law.
Section 4.4 Change in Capitalization. Prior to the Effective Time, BFHI
and the Company will take all action necessary or desirable under the DGCL to
designate 250,000 shares of Preferred Stock of BFHI as Series A Junior Preferred
Stock having terms and provisions substantially similar to those of the
Company's Series A Junior Preferred Stock.
Section 4.5 Contribution of Treasury Stock. Immediately prior to the
Effective Time, the Company will
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contribute to the capital of BFHI any shares of Company Common Stock then held
in the treasury of the Company.
Section 4.6 Contribution of Outstanding BFHI Stock. At the Effective Time,
the Company will contribute to the capital of BFHI all shares of BFHI Common
Stock and all BFHI Purchase Rights outstanding immediately prior to the Merger
and owned of record and beneficially by the Company.
ARTICLE V
TERMINATION AND AMENDMENT
Section 5.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time by
action of the Board of Directors of the Company, the Board of Directors of BFHI
or the Board of Directors of Mergeco if such Board of Directors should determine
that for any reason the completion of the transactions provided for herein would
be inadvisable or not in the best interest of such corporation or its
stockholders. In the event of such termination and abandonment, this Agreement
shall become void and neither the Company, BFHI or Mergeco nor their respective
stockholders, directors or officers shall have any liability with respect to
such termination and abandonment.
Section 5.2 Amendment. This Agreement may be supplemented, amended or
modified by the mutual consent of the Boards of Directors of the parties to this
Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Governing Law. This Agreement shall be governed by and
construed and enforced under the laws of the State of Delaware.
Section 6.2 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which shall constitute one and the same agreement.
Section 6.3 Entire Agreement. This Agreement, including the documents and
instruments referred to herein, constitutes the entire agreement and supersedes
all other prior agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.
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IN WITNESS WHEREOF, BFHI, Mergeco and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
BIG FLOWER PRESS HOLDINGS, INC.
By:________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Associate General Counsel
BIG FLOWER HOLDINGS, INC.
By: _______________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Associate General Counsel
BIG FLOWER MERGER CO.
By: _______________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Associate General Counsel
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I, Xxxx X. Xxxxxxxx, Executive Vice President, General Counsel and
Secretary of the Board of Directors of Big Flower Press Holdings, Inc. do hereby
certify that the Board of Directors of Big Flower Press Holdings, Inc. has
approved and adopted this Agreement by duly authorized written consent dated
October 14, 1997.
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Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President,
General Counsel and Secretary of
the Board of Directors
I, Xxxx X. Xxxxxxxx, Executive Vice President, General Counsel and
Secretary of the Board of Directors of Big Flower Holdings, Inc. do hereby
certify that the Board of Directors of Big Flower Holdings, Inc. has approved
and adopted this Agreement by duly authorized written consent dated October 14,
1997.
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Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President,
General Counsel and Secretary of
the Board of Directors
I, Xxxx X. Xxxxxxxx, Executive Vice President, General Counsel and
Secretary of the Board of Directors of Big Flower Merger Co. do hereby certify
that the Board of Directors of Big Flower Merger Co. has approved and adopted
this Agreement by duly authorized written consent dated October 14, 1997.
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President,
General Counsel and Secretary of
the Board of Directors
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CERTIFICATE OF THE SECRETARY
OF
BIG FLOWER MERGER CO.
I, Xxxx X. Xxxxxxxx, the Secretary of Big Flower Merger Co., hereby
certify that the Agreement of Merger to which this certificate is attached,
after having been first duly signed on behalf of the corporation by the
President and Secretary under the corporate seal of said corporation, was duly
approved and adopted at a meeting of the stockholders of Big Flower Merger Co.
held on October 17th, 1997 by the holders of a majority of the outstanding stock
entitled to vote thereon.
Witness my hand and seal of said Big Flower Merger Co. on October 17,
1997.
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Xxxx X. Xxxxxxxx
Secretary
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CERTIFICATE OF THE SECRETARY
OF
BIG FLOWER PRESS HOLDINGS, INC.
I, Xxxx X. Xxxxxxxx, the Secretary of Big Flower Press Holdings, Inc.,
hereby certify that the Agreement of Merger to which this certificate is
attached has been adopted pursuant to Section 251(g) of the General Corporation
Law of the State of Delaware and that the conditions of the first sentence of
such subsection have been met.
Witness my hand and seal of said Big Flower Merger Co. on October 17,
1997.
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Xxxx X. Xxxxxxxx
Secretary
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