MERGER AGREEMENT
This Merger Agreement (the "MERGER AGREEMENT") is entered into as of
December 21, 1999 by and among SelectQuote Insurance Services, a California
corporation ("SQIS"), SelectTech, a Nevada corporation ("SELECTTECH"),
SelectQuote, Inc., a Delaware corporation ("HOLDING COMPANY"), and
SelectQuote Acquisition Sub, a California corporation and a wholly-owned
subsidiary of Holding Company ("SUB;" together with SQIS, SelectTech and
Holding Company, the "PARTIES").
RECITALS
A. The Boards of Directors of the Parties deem it advisable and in
the best interests of the Parties and their respective shareholders that
SelectTech and Sub merge with and into SQIS (the "MERGER").
B. The Parties previously have entered into an Agreement and Plan of
Reorganization dated as of August 17, 1999 as amended by an Amendment to
Agreement and Plan of Reorganization dated as of December 17, 1999 (the "PLAN
OF REORGANIZATION") setting forth certain representations, warranties and
agreements in connection with the Merger and the transactions associated
therewith.
AGREEMENT
NOW, THEREFORE, the parties do hereby agree as follows:
ARTICLE I
THE CONSTITUENT CORPORATIONS
1.1 SQIS. SQIS is incorporated under the laws of the State of
California and will be the surviving corporation in the Merger. SQIS is
authorized to issue an aggregate of 5,000,000 shares of Common Stock ("SQIS
COMMON STOCK") and 5,000,000 shares of Preferred Stock, of which 600,000
shares are designated Series A Preferred Stock, 300,000 shares are designated
Series B Preferred Stock and 200,000 shares are designated Series C Preferred
Stock (the Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock, collectively, the "SQIS PREFERRED STOCK").
1.2 SELECTTECH. SelectTech was incorporated under the laws of the
State of Nevada on April 30, 1997. SelectTech is authorized to issue an
aggregate of 18,500,000 shares of Common Stock, $0.001 par value ("SELECTTECH
COMMON STOCK"), and 1,500,000 shares of Preferred Stock, $0.001 par value, of
which 750,000 shares are designated Series A Preferred Stock ("SELECTTECH
PREFERRED STOCK").
1.3 HOLDING COMPANY. Holding Company was incorporated under the
laws of the State of Delaware on August 19, 1999. Holding Company is
authorized to issue an aggregate of 50,000,000 shares of Common Stock, $0.01
par value ("HOLDING COMPANY COMMON STOCK"), and 10,000,000 shares of
Preferred Stock, $0.01 par value.
1.4 SUB. Sub was incorporated under the laws of the State of
California on August 18, 1999. Sub is authorized to issue an aggregate of 100
shares of Common Stock, ("SUB COMMON STOCK").
ARTICLE II
THE MERGER
2.1 CLOSING OF MERGER. After all conditions to the Merger have been
satisfied, this Merger Agreement, along with certificates meeting the
requirements of the California General Corporation Law and the Nevada General
Corporation Law, shall be filed with the Secretary of State of California and
the Secretary of State of Nevada. At the time such filings are both effected,
the Merger shall become effective ("EFFECTIVE TIME").
2.2 EFFECT OF MERGER.
(a) At the Effective Time, SelectTech shall be merged into
SQIS and the separate corporate existence of SelectTech shall thereupon
cease. SQIS shall be the surviving corporation in the Merger and the separate
corporate existence of SQIS, with all its purposes, objects, rights,
privileges, powers, immunities and franchises, shall continue unaffected and
unimpaired by the Merger.
(b) At the Effective Time, Sub shall be merged into SQIS
and the separate corporate existence of Sub shall thereupon cease. SQIS shall
be the surviving corporation in the Merger (the "SURVIVING CORPORATION") and
the separate corporate existence of SQIS, with all its purposes, objects,
rights, privileges, powers, immunities and franchises, shall continue
unaffected and unimpaired by the Merger.
(c) SQIS, as the Surviving Corporation (the "Surviving
Corporation"), shall succeed to all of the rights, privileges, powers,
immunities and franchises of SelectTech and Sub, all of the properties and
assets of SelectTech and Sub and all of the debts, choses in action and other
interests due or belonging to SelectTech and Sub and shall be subject to, and
responsible for, all of the debts, liabilities and obligations of SelectTech
and Sub with the effect set forth in the California General Corporation Law
and the Nevada General Corporation Law, as applicable.
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ARTICLE III
ARTICLES OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION
3.1 ARTICLES OF INCORPORATION. At the Effective Time, the Articles
of Incorporation of the Surviving Corporation shall continue in the form in
effect immediately prior to the Effective Time.
3.2 BYLAWS. At the Effective Time, the Bylaws of the Surviving
Corporation shall continue in the form in effect immediately prior to the
Effective Time.
ARTICLE IV
MANNER AND BASIS OF CONVERTING CAPITAL STOCK AND SECURITIES
4.1 CONVERSION OF STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of the holders of any shares of
stock of the Parties:
(a) Each full share of SelectTech Common Stock which is
outstanding immediately prior to the Effective Time shall be canceled and
extinguished and will be converted into 0.641597 shares of Holding Company
Common Stock upon surrender of the certificate representing such share of
SelectTech Common Stock.
(b) Each full share of SelectTech Preferred Stock which is
outstanding immediately prior to the Effective Time shall be canceled and
extinguished and will be converted into 0.703455 shares of Holding Company
Common Stock upon surrender of the certificate representing such share of
SelectTech Preferred Stock.
(c) Each option for SelectTech Common Stock which is
outstanding immediately prior to the Effective Time shall be canceled and
extinguished and will be converted into an option to purchase 0.641597 shares
of Holding Company Common Stock at an exercise price for each such share of
Holding Company Common Stock equal to the previous option exercise price for
each share of SelectTech Common Stock divided by 0.641597 ("SELECTTECH
CONVERTED OPTIONS"). Each SelectTech Converted Option will be granted under
the SelectQuote, Inc. 1999 Stock Option Plan and subject to the terms and
conditions thereof.
(d) Each debenture of SelectTech, convertible into shares
of SelectTech Common Stock, which is outstanding immediately prior to the
Effective Time shall be canceled and extinguished and will be converted into
debentures of Holding Company, convertible into shares of Holding Company
Common Stock at a conversion price equal to the previous debenture conversion
price for each share of SelectTech Common Stock divided by 0.641597.
(e) Each full share of SQIS Common Stock which is
outstanding immediately prior to the Effective Time shall be canceled and
extinguished and will be converted into
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3.286852 shares of Holding Company Common Stock upon surrender of the
certificate representing such share of SQIS Common Stock.
(f) Each full share of SQIS Series A Preferred Stock which
is outstanding immediately prior to the Effective Time shall be canceled and
extinguished and will be converted into 3.286852 shares of Holding Company
Series A Preferred Stock upon surrender of the certificate representing such
share of SQIS Preferred Stock.
(g) Each full share of SQIS Series B Preferred Stock which
is outstanding immediately prior to the Effective Time shall be canceled and
extinguished and will be converted into 3.286852 shares of Holding Company
Series B Preferred Stock upon surrender of the certificate representing such
share of SQIS Preferred Stock.
(h) Each full share of SQIS Series C Preferred Stock which
is outstanding immediately prior to the Effective Time shall be canceled and
extinguished and will be converted into 3.286852 shares of Holding Company
Series C Preferred Stock upon surrender of the certificate representing such
share of SQIS Preferred Stock (the shares of Holding Company Common Stock
into which shares described in clauses (a) through (g) are converted, the
"MERGER CONSIDERATION").
(i) Each option for SQIS Common Stock which is outstanding
immediately prior to the Effective Time shall be canceled and extinguished
and will be converted into an option to purchase 3.286852 shares of Holding
Company Common Stock at an exercise price for each such share of Holding
Company Common Stock equal to the previous option exercise price for each
share of SelectTech Common Stock divided by 3.286852 ("SQIS CONVERTED
OPTIONS"). Each SQIS Converted Option will be granted under the SelectQuote,
Inc. 1999 Stock Option Plan and subject to the terms and conditions thereof.
(j) Each full share of Sub Common Stock which is
outstanding immediately prior to the Effective Time shall be canceled and
extinguished and will be converted into one share of SQIS Common Stock.
(k) Each full share of Holding Company common which is
outstanding immediately prior to the Effective Time shall be canceled and
extinguished.
(l) Notwithstanding the foregoing, any shares of SelectTech
Common Stock, SelectTech Preferred Stock, SQIS Common Stock or SQIS Preferred
Stock, as applicable (the "CONVERTED SHARES"), owned by Holding Company or
SQIS shall not be converted as provided above but shall be cancelled.
4.2 DISSENTING SHARES. Notwithstanding the other provisions of this
Article IV, no shares owned by any shareholder who dissents from the Merger
pursuant to Section 92A.380 of the Nevada General Corporation Law or Section
1300 of the California General Corporation Law, as applicable, shall be
converted into the Merger Consideration, but shall be converted into the
right to receive such consideration as may be determined to be due with
respect to such
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dissenting shares pursuant to the law of the State of Nevada or the State of
California, as applicable.
4.3 EXCHANGE CERTIFICATES. As soon as practicable after the
Effective Time, and after surrender to the Holding Company of any certificate
which prior to the Effective Time represented Converted Shares the Holding
Company shall cause to be distributed to the person in whose name such
certificate is registered a certificate or certificates representing the
Merger Consideration. Until surrendered as contemplated by the preceding
sentence, each certificate which immediately prior to the Effective Time
represented any Converted Shares, shall be deemed at and after the Effective
Time to represent only the right to receive the Merger Consideration. If any
certificate representing the Merger Consideration is to be issued to a person
or entity ("PERSON") other than the Person in whose name the certificate
representing Converted Shares surrendered in exchange therefor is registered,
it will be a condition of the issuance thereof that the certificate so
surrendered will be properly endorsed and accompanied by all documents
reasonably required by the Holding Company to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been
paid. If any certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such certificate
to be lost, stolen or destroyed and, if required by the Holding Company, the
posting by such Person of a bond in such reasonable amount as the Holding
Company may direct as indemnity against any claim that may be made against it
with respect to such certificate, the Holding Company will cause the Merger
Consideration to be issued in exchange for such lost, stolen or destroyed
certificate.
ARTICLE V
TERMINATION AND AMENDMENT
5.1 TERMINATION. This Merger Agreement shall terminate forthwith in
the event that the Plan of Reorganization shall be terminated as therein
provided.
5.2 AMENDMENT. This Merger Agreement may be amended by the Parties
at any time before or after approval hereof by the shareholders of
SelectTech, SQIS, Sub and or Holding Company, but, after any such approval,
no amendment which by law requires the further approval of the shareholders
of any of SelectTech, SQIS, Sub and/or Holding Company may be made without
such approval having first been obtained. This Merger Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
Parties.
* * *
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IN WITNESS WHEREOF, the parties have duly executed this Merger
Agreement as of the date first written above.
SELECTQUOTE INSURANCE SERVICES SELECTTECH
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By: Xxxxxx X. Xxxxx By: Xxxxxx X. Xxxxxx
Title: President Title: President
-------------------------------- -------------------------------
By: Xxxxx Xxxxx By: Xxxxx X. Xxxxxxx
Title: Secretary Title: Secretary
SELECTQUOTE, INC. SELECTQUOTE ACQUISITION SUB
-------------------------------- -------------------------------
By: Xxxxxx X. Xxxxxx By: Xxxxxx X. Xxxxx
Title: President Title: President
-------------------------------- -------------------------------
By: Xxxxx X. Xxxxxxx By: Xxxxx X. Xxxxxxx
Title: Assistant Secretary Title: Secretary
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