AGREEMENT
AND PLAN OF MERGER
BETWEEN
IAC HOLDINGS CORP.
AND
INDUSTRIAL ACOUSTICS COMPANY, INC.
Agreement and Plan of Merger (the "Agreement"), dated as of
May 20, 1998, between IAC HOLDINGS CORP., a Delaware corporation ("Holdings")
and INDUSTRIAL ACOUSTICS COMPANY, INC., a New York corporation (the "Company").
WHEREAS, Holdings is a corporation duly organized and existing
under the laws of the State of Delaware and has an authorized capital of 1,000
shares of common stock, par value $.01. As of the date hereof, 1,000 shares of
Common Stock of Holdings are issued and outstanding and entitled to one vote per
share.
WHEREAS, the Company is a corporation duly organized and
existing under the laws of the State of New York and has an authorized capital
of 5,000,000 shares of common stock, $.10 par value (the "Common Stock"). As of
the date hereof, 2,981,211 shares of Common Stock are issued and outstanding and
entitled to one vote per share.
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WHEREAS, the Board of Directors of the Company has determined
that (i) a merger between Holdings and the Company is fair and in the best
interests of the Company and its shareholders and (ii) among other things, the
business purpose in effecting such a merger is to ultimately increase the value
of the Company and improve its management structure.
WHEREAS, notwithstanding anything contained herein to the
contrary, at any time prior to filing a certificate of merger with the Secretary
of State of New York, the plan of merger may be abandoned by the Board of
Directors of the Company or Holdings.
WHEREAS, the respective Boards of Directors of Holdings and
the Company and the stockholders of Holdings have approved this Agreement and
have directed that this Agreement be submitted to a vote of the shareholders of
the Company.
NOW THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, Holdings and the Company hereby agree, subject to
the terms and conditions hereinafter set forth, as follows:
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ARTICLE I
MERGER
1.1 Merger. Subject to the terms and conditions of this
agreement, Holdings shall be merged with and into the Company in accordance with
the New York Business Corporation Law (the "NYBCL") and the General Corporation
Law of the State of Delaware (the "DGCL") (the "Merger").
The separate existence of Holdings shall cease, and the
Company shall be the surviving corporation and continue its corporate existence
under the laws of the State of New York. Thereafter, without further action, the
Company shall succeed, insofar as permitted by law, to all the rights, assets,
privileges, franchises, liabilities and obligations of Holdings.
1.2 Filing and Effectiveness. The Merger shall become
effective upon the completion of the following actions:
(a) This Agreement and the Merger shall have been approved
by the shareholders of the Company in accordance with the provisions of the
NYBCL;
(b) All of the conditions precedent to the consummation of
the Merger specified in this Agreement shall have been satisfied or duly waived
by the party entitled to satisfaction thereof;
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(c) An executed Certificate of Merger, in the form attached
hereto as Exhibit A, meeting the requirements of the DGCL or an executed
counterpart of this Agreement shall have been filed with the Secretary of State
of Delaware; and
(d) An executed Certificate of Merger, in the form attached
hereto as Exhibit B, meeting the requirements of the NYBCL shall have been filed
with the Secretary of State of New York.
(e) Holdings shall have the funds necessary, or shall have
arranged to borrow the funds on terms reasonably acceptable to its Board of
Directors, to pay the Merger Consideration (as defined herein).
The date and time when the Merger shall become effective, as
set forth above, is hereinafter referred to as the "Effective Date."
1.3 Certificate of Incorporation. The Certificate of
Incorporation of the Company, attached hereto as Exhibit C, in effect
immediately prior to the Effective Date shall continue in full force and effect
as the Certificate of Incorporation of the Company until duly amended in
accordance with the provisions thereof and applicable law, and the name of the
surviving Corporation shall be Industrial Acoustics Company, Inc.
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1.4 By-laws. The By-laws of the Company in effect immediately
prior to the Effective Date shall continue in full force and effect as the
By-laws of the Company until duly amended in accordance with the provisions
thereof and applicable law.
1.5 Directors and Officers. The directors and officers of the
Company immediately prior to the Effective Date shall continue as the directors
and officers of the Company until their successors shall have been elected or
until otherwise provided by law, the Certificate of Incorporation of the Company
or the By-laws of the Company.
1.6 Effect of Merger. Upon the Effective Date, the separate
existence of Holdings shall cease and the Company, (i) shall continue to possess
all of its assets, rights, powers and property as constituted immediately prior
to the Effective Date, shall be subject to all actions previously taken by its
Board of Directors and shall succeed, without other transfer, to all of the
assets, rights, powers and property of Holdings in the manner and as more fully
set forth in Section 259 of the DGCL, and (ii) shall continue to be subject to
all of its debts, liabilities and obligations as constituted immediately prior
to the Effective Date and succeed, without other transfer, to all of the debts,
liabilities and obligations of
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Holdings in the same manner as if the Company had incurred them, all as more
fully provided under the applicable provisions of the DGCL and the NYBCL.
ARTICLE II
MANNER OF CONVERSION OF STOCK
2.1 Outstanding stock of the Company. Upon the Effective Date,
by virtue of the Merger, each share of Common Stock outstanding immediately
prior thereto (other than Common Stock held by Holdings and Common Stock held by
the Company as treasury stock) shall be converted into the right to receive
$11.00 per share in cash (the "Merger Consideration"), upon surrender of the
stock certificates representing such Common Stock in accordance with Section 2.2
herein, with any fractional shares issuable to a registered owner of Common
Stock in the aggregate to be rounded up to the nearest whole share.
Each outstanding share of Common Stock owned by Holdings or
held by the Company as treasury stock will be cancelled.
2.2 Stock Certificates. (a) After the Effective Date, each
holder of a certificate(s) formerly evidencing Common Stock which has been
converted into the right to receive the Merger Consideration, upon surrender of
the same to an
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exchange agent appointed by the Company (the "Exchange Agent"), shall be
entitled to receive the Merger Consideration.
(b) Promptly after the Effective Date, the Exchange Agent
shall send a notice and a transmittal form (which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the certificates formerly representing Common Stock to the
Exchange Agent (subject to Section 2.2(d)) to each holder of certificates
formerly evidencing Common Stock advising such holder of the effectiveness of
the Merger and the procedure for surrendering to the Exchange Agent such
certificates for exchange into the Merger Consideration. The notice and
transmittal form provided for in this Section 2.2(b) shall be sent by the
Exchange Agent to the address for each holder of Common Stock contained in the
stock record books of the Company promptly after the Effective Date. Each holder
of certificates formerly evidencing Common Stock, upon proper surrender thereof
to the Exchange Agent together and in accordance with such transmittal form,
shall be entitled to receive in exchange therefor the Merger Consideration.
Notwithstanding the foregoing, neither the Exchange Agent nor any party shall be
liable to a holder of certificates formerly evidencing Common Stock for any
amount which may be required to be paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
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(c) If any portion of the Merger Consideration is to be
delivered to a Person other than the Person in whose name the certificates
surrendered in exchange therefor are registered, it shall be a condition to such
payment that the certificates so surrendered shall be properly endorsed or
accompanied by appropriate stock powers and otherwise in proper form for
transfer, that such transfer otherwise be proper and that the Person requesting
such transfer shall pay to the Exchange Agent any transfer or other taxes
payable by reason of the foregoing or establish to the satisfaction of the
Exchange Agent that such taxes have been paid or are not required to be paid.
For purposes of this Agreement, "Person" means an individual, a corporation, a
limited liability company, a partnership, an association, a trust or any other
entity or organization, including a government or political subdivision or any
agency or instrumentality thereof.
(d) In the event any certificate theretofore representing
Common Stock shall have been lost, stolen or destroyed, upon the making of an
appropriate affidavit of that fact by the shareholder claiming such certificate
to be lost, stolen or destroyed, such shareholder shall be paid the Merger
Consideration; provided that when the Merger Consideration is paid to such
shareholder, the Board of Directors of the Company may, in its discretion and as
a condition precedent to the issuance
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thereof, require the claiming Person to give the Company a bond or
indemnification in such form and sum as the Company may reasonably direct as
indemnity against any claim that may be made against the Company with respect to
the certificate alleged to have been lost, stolen or destroyed.
2.3 Outstanding Common Stock of Holdings. Upon the Effective
Date, by virtue of the merger, each issued and outstanding common stock of
Holdings shall be cancelled and converted into one share of Common Stock of the
Company.
ARTICLE III
GENERAL
3.1 Termination and Abandonment. At any time prior to the
Effective Date, this Agreement may be terminated and the Merger abandoned by the
Board of Directors of either Holdings or the Company if (a) approval by the
shareholders of the Company specified in Article I hereof shall not have been
obtained, or (b) the respective Board of Directors of either Holdings or the
Company determines that in its sole discretion the Merger does not appear to be
in the best interests of either of Holdings or the Company or their respective
shareholders or is otherwise not advisable.
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3.2 Amendment. This Agreement may be amended, modified,
supplemented or abandoned at any time (before or after shareholder approval)
prior to the Effective Date with the mutual consent of the Boards of Directors
of Holdings and the Company; provided, however, that this Agreement may not be
amended, modified or supplemented after it has been approved by the shareholders
of the Company in any manner which, in the judgment of the Board of Directors of
the Company, would have a material adverse effect on the rights of such
shareholders or in any manner not permitted under applicable law.
3.3 Headings. The headings set forth herein are inserted for
convenience or reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
3.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, and all of which,
when taken together, shall constitute one and the same instrument.
3.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflicts of law, except to the extent that the laws of the State
of Delaware require application herein.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf and attested by its officers hereunto
duly authorized, all as of the date and year first above written.
INDUSTRIAL ACOUSTICS COMPANY, INC.
By: /s/ Xxxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxxx X. Xxxx
Title: President
Attest:
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
IAC HOLDINGS CORP.
By: /s/ Xxxxx X. Read
-------------------------------
Name: Xxxxx X. Read
Title: President
Attest:
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
