Exhibit 2.7
EXHIBIT A
AGREEMENT OF MERGER
This Agreement of Merger (this "Agreement of Merger") is made and e
ntered into as of ______________, 1998 between Dollar Tree West, Inc., a
California corporation ("Sub") and Step Ahead Investments, Inc., a California
corporation ("Company" or the "Surviving Corporation").
WHEREAS, Company is a California corporation authorized to issue
________ common shares without par value and __________ preferred shares, of
which there are outstanding at the date hereof _________ common shares and
_________ preferred shares; and
WHEREAS, Sub is a California corporation authorized to issue _________
common shares, without par value, of which there are outstanding at the date
hereof __________ shares; and
WHEREAS, Dollar Tree Stores, Inc., a Virginia corporation ("Parent"),
owns all of the issued and outstanding shares of Sub.
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and
mutual covenants and agreements contained herein, Sub and Company hereby agree
as follows:
ARTICLE 1
The Merger
1.1 Merger of Sub With and Into the Company.
(a) Agreement to Acquire the Company. Upon the terms and
subject to the conditions of this Agreement of Merger and the Merger Agreement,
dated as of July __, 1998 (the "Merger Agreement"), between Sub, Company and
Parent, the Company shall be
acquired by Parent through a merger (the "Merger") of Sub with and into the
Company.
(b) Effective Time of the Merger. The Merger shall become
effective upon the filing of this Agreement of Merger and officers' certificates
of Sub and Company with the Secretary of State of the State of California
pursuant to Section 1103 of the California General Corporation Law (the "GCL").
The date and time of such filing is hereinafter referred to as the "Effective
Time."
(c) Surviving Corporation. At the Effective Time, Sub shall be
merged with and into the Company and the separate corporate existence of Sub
shall thereupon cease. The Company shall be the surviving corporation in the
Merger and shall succeed, without other transfer, to all the rights and property
of both Sub and Company and shall be subject to all the debts and liabilities of
both Sub and Company in the same manner as if the Company (sometimes referred to
as the "Surviving Corporation") had itself incurred them.
1.2 Effects of the Merger. The Merger shall have the effects set forth
in Section 1107 of the GCL.
ARTICLE 2
Articles of Incorporation, Bylaws and
Directors and Officers of the Surviving Corporation
2.1 Name and Articles of Incorporation of the Surviving Corporation.
(a) Name of Surviving Corporation. The name of the Surviving
Corporation shall be Dollar Tree West, Inc.
(b) Articles of Incorporation of Surviving Corporation. The
Articles of Incorporation of Sub shall be the Articles of Incorporation of the
Surviving Corporation unless and until amended or repealed as provided by the
GCL and such Articles of Incorporation.
2.2 Bylaws of the Surviving Corporation. The Bylaws of Sub in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation unless and until amended or repealed as provided by the GCL, the
Articles of Incorporation of the Surviving Corporation and such Bylaws;
provided, however, that all references in such Bylaws to Sub shall be replaced
with a reference to the Surviving Corporation.
2.3 Officers and Directors of Surviving Corporation. The directors of
Sub immediately prior to the Effective Time shall be the directors of the
Surviving Corporation, and the officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, in each case
until their successors shall have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in accordance with the
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Surviving Corporation's Articles of Incorporation and Bylaws or as otherwise
provided by law.
ARTICLE 3
Effect of the Merger on the Capital Stock of
Sub and Company; Conversion of Shares
3.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of capital
stock of Sub or the Company:
(a) Capital Stock of Sub. All issued and outstanding shares of
capital stock of Sub shall be converted into one share of common stock of the
Surviving Corporation.
(b) Cancellation of Company Stock. All shares of common stock,
no par value, of the Company ("Company Common") and all shares of preferred
stock of the Company ("Company Preferred") that are owned directly or indirectly
by the Company shall be canceled and retired, and no stock of Parent or other
consideration shall be exchanged therefor and all rights in respect thereof
shall cease to exist without any conversion thereof or payment therefor.
(c) Conversion of Company Stock. All shares of Company Common
and Company Preferred outstanding immediately prior to the Effective Time
("Company Shares," which term shall refer to the Company Common and Company
Preferred without distinction) shall be canceled and extinguished and converted
automatically into shares of common stock of Parent ("Parent Common Stock") as
follows: Other than Company Shares with respect to which appraisal rights have
been properly demanded in accordance with Chapter 13 of the GCL ("Dissenting
Shares"), each Company Share issued and outstanding immediately prior to the
Effective Time shall by virtue of the Merger and at the Effective Time, and
without any further action by the holders thereof, be converted into that number
of shares of Parent Common Stock as is determined by multiplying such Company
Share by a ratio equal to_____________________ ("Exchange Ratio"). An aggregate
of ten percent (10%) of the shares of Parent Common Stock issuable with respect
to Company Shares (exclusive of Dissenting Shares) in the Merger (together with
any dividends or distributions accrued or made with respect to such shares of
Parent Common Stock after the Effective Time and any other securities or
property which may be issued after the Effective Time in exchange for such
shares of Parent Common Stock in any merger or recapitalization or similar
transaction involving Parent, the "Escrow Shares") shall be transferred and
pledged when and as issued on a pro rata basis to secure the indemnification
obligations of the Company's Shareholders ("Shareholders") pursuant to the
Merger Agreement and to permit the payment of any Deficit Amount as defined in
Section 2.4 of the Merger Agreement. No scrip or fractional shares of Parent
Common Stock shall be issued in the Merger. For purposes of determining the
number of shares of Parent
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Common Stock to be issued to each Shareholder in the Merger, all the Company
Shares owned by such Shareholder shall be aggregated prior to applying the
Exchange Ratio. If, after such aggregation, any holder of Company Shares is to
receive a fractional share, such Shareholder shall be entitled to receive from
Parent an amount in cash in lieu of such fractional share, based on a price of
$______ per share of Parent Common Stock.
(d) Company Stock Options. At the Effective Time, each
unexpired and unexercised option to purchase shares of Company Common (each, a
"Stock Option") shall by virtue of the Merger and without further action on the
part of the holder thereof, whether or not exercisable or vested, shall not
terminate or lapse on account of the Merger but instead shall be assumed by
Parent and shall constitute an option (an "Assumed Option") (A) except as agreed
to by Sub and Company to acquire, on the same terms and conditions as were
applicable under such Stock Option prior to the Effective Time, a number of
shares of Parent Common Stock (rounded to the nearest whole number) determined
by multiplying the Exchange Ratio by the number of Company Shares then subject
to purchase pursuant to such Stock Option; and (B) at a per share exercise price
for the shares of Parent Common Stock issuable upon exercise of such Assumed
Option equal to the quotient determined by dividing the exercise price per share
of Company Common at which such Stock Option was exercisable immediately prior
to the Effective Time by the Exchange Ratio, rounded up or down to the nearest
whole cent. It is the intention of the parties that the Assumed Options that
qualified as incentive stock options as defined in Section 422 of the Internal
Revenue Code of 1986, as amended, ("Code"), immediately prior to the Effective
Time would continue to so qualify on and after the Effective Time; and that
notwithstanding anything contained in any provision of this Agreement of Merger,
the exercise price, the number of shares of Parent Common Stock purchasable and
the terms and conditions applicable to any Assumed Options shall be determined
so as to comply with Sections 422 and 424 of the Code and the regulations
promulgated thereunder.
(e) Dissenters' Rights. If holders of shares of Company Common
are entitled to dissenters' rights in connection with the Merger under Chapter
13 of the GCL, Dissenting Shares shall not be converted into shares of Company
Common, but shall be converted into the right to receive such consideration as
may be determined to be due with respect to such Dissenting Shares pursuant to
the GCL.
3.2 Procedures Relating to Company Shares.
(a) Exchange of Certificates. Promptly after the Effective
Date, Parent shall make available to each record holder who, as of the Effective
Time, was a holder of an outstanding certificate or certificates which
immediately prior to the Effective Time represented Company Shares (the
"Certificate" or "Certificates"), a letter of transmittal and instructions for
use in effecting the surrender of the Certificates for payment therefor and
conversion thereof. Upon surrender to Parent of a Certificate, together with
such letter of transmittal duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor (i) one or more
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certificates as requested by the holder (properly issued, executed and
countersigned, as appropriate) representing that number of whole shares of fully
paid and nonassessable shares of Parent Common Stock to which such holder of
Company Shares shall have become entitled pursuant to the provisions hereof,
(ii) as to any fractional share of Parent Common Stock, a check representing the
cash consideration to which such holder shall have become entitled pursuant
hereto, and (iii) any dividend or other distribution to which such holder is
entitled pursuant hereto, and the Certificate so surrendered shall forthwith be
canceled. No interest will be paid or accrued on the cash payable upon the
surrender of the Certificates. If any portion of the consideration to be
received upon exchange of a Certificate (whether a certificate representing
shares of Parent Common Stock or by check representing cash for a fractional
share) is to be issued or paid to a person other than the person in whose name
the Certificate surrendered in exchange therefor is registered, it shall be a
condition of such issuance and payment that the Certificate so surrendered shall
be properly endorsed or otherwise in proper form for transfer and that the
person requesting such exchange shall pay in advance any transfer or other taxes
required by reason of the issuance of a Certificate or a check representing cash
for a fractional share to such other person, or established to the satisfaction
of Parent that such tax has been paid or that such tax is not applicable. From
the Effective Time until surrender in accordance with the provisions of this
Section 3.2, each Certificate shall represent for all purposes only the right to
receive the consideration provided in this Agreement of Merger. All payments of
respective shares of Parent Common Stock that are made upon surrender of
Certificates in accordance with the terms hereof shall be deemed to have been
made in full satisfaction of rights pertaining to the Company Shares evidenced
by such Certificates.
(b) Cash Payments. No dividends or other distributions with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parent Common Stock, and no cash payment in lieu of fractional shares
shall be paid to any such holder, in each case until the surrender of such
Certificate in accordance with this Section 3.2. Following surrender of any such
Certificate, there shall be paid to the holder of the certificate representing
whole shares of Parent Common Stock issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of any cash payable in
lieu of a fractional share of Parent Common Stock to which such holder is
entitled and the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares of
Parent Common Stock and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to such surrender and with a payment date subsequent to such surrender
payable with respect to such whole shares of Parent Common Stock.
(c) Lost, Mislaid, Stolen or Destroyed Certificates. In the
case of any lost, mislaid, stolen or destroyed Certificate, the holder thereof
may be required, as a condition precedent to delivery to such holder of the
consideration described in this Agreement of Merger, to deliver to Parent a bond
in such reasonable sum or a reasonably satisfactory indemnity
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agreement as Parent may direct as indemnity against any claim that may be made
against Parent or the Surviving Corporation with respect to the Certificate
alleged to have been lost, mislaid, stolen or destroyed.
(d) No Stock Transfers. After the Effective Time, there shall
be no transfers on the stock transfer books of the Surviving Corporation of the
Company Shares that were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation for transfer, they shall be canceled and exchanged for the
consideration described in this Agreement of Merger.
(e) Unclaimed Merger Consideration. Any shares of Parent
Common Stock or cash due former shareholders of the Company pursuant to this
Agreement of Merger that remain unclaimed by such former shareholders for six
(6) months after the Effective Time shall be held by Parent, and any former
holder of Company Shares who has not theretofore complied with Section 3.2(a)
shall thereafter look only to Parent for issuance of the number of shares of
Parent Common Stock and other consideration to which such holder has become
entitled pursuant to this Agreement of Merger; provided, however, that neither
Parent nor any party hereto shall be liable to a former holder of Company Shares
for any amount required to be paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
ARTICLE 4
Termination
4.1 Termination by Mutual Agreement. Notwithstanding the approval of
this Agreement of Merger by the shareholders of the Company, this Agreement of
Merger may be terminated at any time prior to the Effective Time by mutual
agreement of the Boards of Directors of the Company and Sub and thereupon this
Agreement of Merger shall terminate forthwith.
4.2 Effects of Termination. In the event of the termination of this
Agreement of Merger, this Agreement of Merger shall forthwith become void and
there shall be no liability on the part of either the Company or Parent or their
respective officers or directors, except as otherwise provided in the Merger
Agreement.
ARTICLE 5
General Provisions
5.1 Amendment. This Agreement of Merger may be amended by the parties
hereto any time before or after approval hereof by
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the shareholders of the Company but, after such approval, no amendment shall be
made which by law requires the further approval of such shareholders without
obtaining such approval. This Agreement of Merger may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
5.2 Counterparts. This Agreement of Merger may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one agreement.
5.3 Governing Law. This Agreement of Merger shall be governed by the
laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
of Merger to be signed by their respective officers thereunto duly authorized as
of the date first written above.
STEP AHEAD INVESTMENTS, INC.
By:
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Xxxx Xxxx
President
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Secretary
DOLLAR TREE WEST, INC.
By:
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H. Xxx Xxxxxxx
Executive Vice President
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Assistant Secretary
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CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Macon X. Xxxxx, Xx. and Xxxxxxxxx X. Xxxxx certify that:
1. They are the president and the secretary, respectively, of Dollar Tree
West, Inc., a California corporation.
2. The Agreement of Merger in the form attached was duly approved by the
board of directors and shareholders of the corporation.
3. The shareholder approval was by the holders of 100% of the outstanding
shares of the corporation. The percentage vote required was more than
50%. The vote of the shareholders of the corporation's parent was not
required.
4. The corporation has only one class of shares and the number of shares
outstanding and entitled to vote on the merger is ____________.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Executed at
--------------------
DATE: , 1998
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Macon X. Xxxxx, Xx.,
President
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Xxxxxxxxx X. Xxxxx,
Secretary
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CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Xxxx X. Xxxx and _____________ certify that:
1. They are the president and the secretary, respectively, of Step Ahead
Investments, Inc., a California corporation.
2. The Agreement of Merger in the form attached was duly approved by the
board of directors and shareholders of the corporation.
3. The shareholder approval was by the holders of _______% of the
outstanding shares of common stock of the corporation and by the
holders of _______ % of the outstanding shares of the preferred stock
of the corporation. The percentage vote required was more than 50% of
each such class.
4. The corporation has only two classes of shares. The number of shares of
common stock outstanding is ________, and the number of shares of
preferred stock outstanding is
--------.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Executed at
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DATE: , 1998
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Xxxx X. Xxxx, President
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, Secretary
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