AGREEMENT AND PLAN OF MERGER
EXHIBIT
99.1
AGREEMENT
AND PLAN OF MERGER
of
HOMETOWN
ACQUISITION I CORPORATION (a Delaware corporation)
with
and into
HOMETOWN
AUTO RETAILERS, INC. (a Delaware corporation)
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(a)
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Hometown
Acquisition I Corporation,
a
corporation organized under the laws of the State of Delaware (for
the
sole purpose of effectuating the merger described in this paragraph)
with
a principal office at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxx, XX 00000
(the
“Disappearing
Corporation”),
shall merge with and into Hometown
Auto Retailers, Inc.,
a
corporation organized under the laws of the State of Delaware with
a
principal office at 0000
Xxxxx Xxxx Xxxxxx, Xxxxxxxxx, XX 00000 (the
“Surviving
Corporation”),
as authorized by Title 8, Section 251 of the General Corporation
Law of
the State of Delaware.
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(b)
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Upon
completion of the merger, the Surviving Corporation shall be the
“surviving corporation” of the
merger.
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(c)
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The
name of the Surviving Corporation is and shall be Hometown
Auto Retailers, Inc.
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(d)
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There
will be no changes to the Certificate of Incorporation or the Bylaws
of
the Surviving Corporation as a result of the
merger.
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(e)
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As
a result of the merger and effective as of the Effective Time (as
defined
below), all assets of the Disappearing Corporation shall be vested
in the
Surviving Corporation, and all liabilities of the Disappearing Corporation
shall be assumed by the Surviving
Corporation.
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(f)
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At
the Effective Time, each of the issued and outstanding shares of
Common
Stock, par value $0.001 per share, of the Disappearing Corporation
immediately before the Effective Time shall be cancelled and shall
cease
to exist.
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At
the
Effective Time, each of the issued and outstanding shares of Class A Common
Stock and Class B Common Stock, par value $0.001 per share, of the Surviving
Corporation owned immediately before the Effective Time by stockholders of
the
Surviving Corporation other than members of the Shaker Group or the Xxxxxx
Group
(as defined below) (the “Public Stockholder Shares”) shall be converted into and
become a right to receive cash in the amount of $2.30 per share in cash ($2.40
per share reduced by legal fees in the amount of $0.10); provided,
however,
that any
of the Public Stockholder Shares which are owned by stockholders who perfect
their appraisal rights pursuant to Title 8, Section 262 of the General
Corporation Law of the State of Delaware (the “Dissenting Shares”) shall be
converted into and become a right to receive the fair value of such shares
as
determined pursuant to Title 8, Section 262 of the General Corporation Law
of
the State of Delaware.
At
the
Effective Time, each option to acquire shares of the Class A or Class B Common
Stock, par value $0.001 per share, of the Surviving Corporation held by any
member of the Xxxxxx Group or the Shaker Group shall be cancelled without
payment to the option holder and each option to acquire shares held by anyone
other than members of the Xxxxxx Group and the Shaker Group shall be converted
into and become a right to receive a per share cash payment equal to the excess,
if any, of $2.30 ($2.40 per share reduced by legal fees in the amount of $0.10)
over the exercise price per share of the option.
At
the
Effective Time, each of the issued and outstanding shares of Class A Common
Stock and Class B Common Stock of the Surviving Corporation owned immediately
before the Effective Time by stockholders of the Surviving Corporation who
are
members of the Shaker Group or the Xxxxxx Group (as defined below) shall remain
unchanged as outstanding shares of Class A Common Stock and Class B Common
Stock, respectively, of the Surviving Corporation.
The
Shaker Group consists of the following individuals and trusts: Xxxxx Xxxxxx
(individually and as custodian for Lindsay Shaker, Xxxxxxx Xxxxxx and Xxxxxx
Xxxxxx), Xxxxxx Xxxxxx Family Trust, Xxxxxx Xxxxxx, Shaker Irrevocable Trust,
Xxxxxxx Xxxxxx Family Trust, Xxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxx
X.
Shaker, Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx and Xxxx Xxxxxx.
The
Xxxxxx Group consists of the following individuals and trust: Xxxxxxx X. Xxxxxx,
Xx., Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxx Xxxxxx Trust, Xxxxxx Xxxxx Xxxxx,
Xxxxxx X. Xxxxxxx and Xxxxxxxx Xxxxxx.
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(g)
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Each
of the directors of the Surviving Corporation immediately preceding
the
Effective Time shall remain as a director of the Surviving Corporation
following the Effective Time, and shall continue to serve until his
or her
death, resignation or removal in accordance with the Bylaws of the
Surviving Corporation.
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(h)
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Each
of the officers of the Surviving Corporation immediately preceding
the
Effective Time shall remain as an officer of the Surviving Corporation
following the Effective Time, and shall continue to serve until his
or her
death, resignation or removal in accordance with the Bylaws of the
Surviving Corporation
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(i)
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Notwithstanding
anything else herein to the contrary, the obligations of the Disappearing
Corporation and the Surviving Corporation to consummate the merger
described in this Agreement and Plan of Merger are subject to the
satisfaction or waiver of all of the following conditions: (1) each
of the
conditions precedent to the consummation of the exchanges described
in the
Exchange Agreement among the Surviving Corporation, the Shaker Group
and
the Xxxxxx Group which was approved by the board of directors of
the
Surviving Corporation on June 2, 2005 (the “Exchange Agreement”) shall
have been satisfied or waived; (2) each of the conditions contained
in the
Stipulation and Agreement of Compromise, Settlement and Release relating
to the case of Xxxxxxx
et al. v. Hometown Auto Retailers, Inc. et al.,
C.A. No. 1466-N in the Court of Chancery of the State of Delaware
in and
for New Castle County (the “Settlement Agreement”) other than the
consummation of the merger and the exchanges described in the Exchange
Agreement shall have been satisfied or waived; (3) a majority of
the
stockholders of the Disappearing Corporation and the Surviving Corporation
shall have approved this Agreement and Plan of Merger; (4) Hometown
Auto
Retailers, Inc. and the Shaker Group shall have obtained a supplemental
opinion from BDO Xxxxxxx, LLP, the independent registered certified
public
accountants of Hometown Auto Retailers, Inc., indicating that the
consummation of the merger described in this Agreement and Plan of
Merger
will not cause the exchanges described in the Exchange Agreement
to fail
to be tax-free exchanges under the Internal Revenue Code of 1986,
as
amended, or to result in the recognition of income for federal income
tax
purposes by either Hometown Auto Retailers, Inc. or the Shaker Group;
and
(5) the number of Dissenting Shares which are owned by stockholders
who
perfect their appraisal rights pursuant to Title 8, Section 262 of
the
General Corporation Law of the State of Delaware does not exceed
seven
percent (7%) of the number of outstanding shares of Class A Common
Stock.
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(j)
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This
merger shall become effective at the time of filing of an appropriate
Certificate of Merger with the Delaware Secretary of State (or such
later
time as agreed by the parties and provided in the Certificate of
Merger)
(such time and date being referred to as the “Effective
Time”).
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(k)
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At
any time prior to the Effective Time, this Agreement and Plan of
Merger
may be amended, to the fullest extent permitted by applicable law,
by an
agreement in writing duly approved by the board of directors of each
of
the Disappearing Corporation and the Surviving
Corporation.
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(l)
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At
any time prior to the Effective Time, notwithstanding the approval
of this
Agreement and Plan of Merger by the stockholders of the Disappearing
Corporation and/or the Surviving Corporation, this Agreement and
Plan of
Merger may be terminated and abandoned by an agreement in writing
duly
approved by the board of directors of each of the Disappearing Corporation
and the Surviving Corporation.
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(m)
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This
Agreement and Plan of Merger shall be governed and construed in accordance
with the laws of the State of
Delaware.
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IN
WITNESS WHEREOF, the parties have caused this Agreement and Plan of Merger
to be
executed by their respective duly authorized officers as of November 22,
2006.
| DISAPPEARING CORPORATION: |
SURVIVING
CORPORATION:
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| HOMETOWN ACQUISITION I |
HOMETOWN
AUTO RETAILERS,
CORPORATION INC.
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By:
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/s/ Xxxxx X. Shaker |
By:
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/s/ Xxxxx X. Shaker | |
| Name: Xxxxx X. Shaker | Name: Xxxxx X. Shaker | |||
| Title: President | Title: President | |||
CERTIFICATE
OF SECRETARY
OF
HOMETOWN
ACQUISITION I CORPORATION
I,
Xxxxxxx X. Xxxxxxxx, the Secretary of Hometown Acquisition I Corporation, hereby
certifies that the Agreement and Plan of Merger to which this certificate is
attached, after having been first signed on behalf of the Corporation by the
President, was duly approved and adopted by the unanimous consent of the
stockholders of the Corporation dated November 22, 2006.
IN
WITNESS WHEREOF, I have affixed my hand and the seal of the Corporation this
22nd
day of
November, 2006.
[SEAL]
| /s/ Xxxxxxx X. Schwartz_____ | ||
| Xxxxxxx X. Xxxxxxxx | ||
| Secretary |
CERTIFICATE
OF SECRETARY
OF
HOMETOWN
AUTO RETAILERS, INC.
I,
Xxxxxxx X. Xxxxxxxx, the Secretary of Hometown Auto Retailers, Inc., hereby
certifies that the Agreement and Plan of Merger to which this certificate is
attached, after having been first signed on behalf of the Corporation by the
President, was duly approved and adopted by the consent of the stockholders
of
the Corporation holding a majority of the voting power of the outstanding shares
of common stock entitled to vote on November 22, 2006.
IN
WITNESS WHEREOF, I have affixed my hand and the seal of the Corporation this
22nd
day of
November, 2006.
[SEAL]
| /s/ Xxxxxxx X. Schwartz_____ | ||
| Xxxxxxx X. Xxxxxxxx | ||
| Secretary |
