Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of September 17, 1999 among Everest
Reinsurance Holdings, Inc., a Delaware corporation ("Everest Holdings"),
Everest Reinsurance Group, Ltd., a Bermuda company and wholly-owned subsidiary
of Everest Holdings ("Everest Group"), and Everest Re Merger Corporation, a
Delaware corporation and wholly-owned subsidiary of Everest Group ("Everest
Merger").
WHEREAS, the respective Boards of Directors of Everest Holdings, Everest
Group and Everest Merger deem it advisable and in the best interests of their
respective stockholders to reorganize so that Everest Group becomes the parent
holding company for Everest Holdings;
WHEREAS, the respective Boards of Directors of Everest Holdings, Everest
Group and Everest Merger have approved the merger of Everest Merger with and
into Everest Holdings (the "Merger"), upon the terms and subject to the
conditions set forth in this Agreement, whereby each outstanding share of
common stock, par value $.01 per share, of Everest Holdings ("Everest Holdings
Common Stock") (other than those shares held by Everest Holdings or any direct
or indirect wholly-owned subsidiary of Everest Holdings), will be automatically
converted into one common share, par value $.01 per share, of Everest Group
("Everest Group Common Share"), and each outstanding share of common stock, par
value $.01 per share, of Everest Merger ("Everest Merger Common Stock"), will
be automatically converted into one share of Everest Holdings Common Stock; and
WHEREAS, the Merger requires the approval of Everest Group, as sole
stockholder of Everest Merger, and the approval of the holders of a majority of
the outstanding shares of Everest Holdings Common Stock entitled to vote
thereon at the meeting of holders of Everest Holdings Common Stock to be called
therefor (the "Everest Holdings Stockholder Approval");
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
MERGER
1.01. Merger. Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the General Corporation Law of the State of
Delaware (the "DGCL"), Everest Merger shall be merged with and into Everest
Holdings at the Effective Time (as defined in Section 1.02). Following the
Effective Time, the separate corporate existence of Everest Merger shall cease
and Everest Holdings shall continue as the surviving corporation (the
"Surviving Corporation") and shall succeed to and assume all the rights and
obligations of Everest Merger in accordance with the DGCL.
1.02. Effective Time. Subject to the provisions of this Agreement, as soon
as practicable following the satisfaction or waiver of the conditions set forth
in Section 5.01, the parties shall file a certificate of merger or other
appropriate documents (in any case, the "Certificate of Merger") executed in
accordance with the DGCL and shall make all other filings or recordings
required under the DGCL. The Merger shall become effective at the close of
business on the date that the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware, or at such later time as Everest
Merger and Everest Holdings shall agree should be specified in the Certificate
of Merger (the time the Merger becomes effective being hereinafter referred to
as the "Effective Time").
1.03. Effects of the Merger. The Merger shall have the effects set forth in
Section 259 of the DGCL.
ARTICLE II
NAME, CERTIFICATE OF INCORPORATION, BY-LAWS,
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
2.01. Name of the Surviving Corporation. The name of the Surviving
Corporation shall be "Everest Reinsurance Holdings, Inc."
2.02. Certificate of Incorporation. The Certificate of Incorporation of
Everest Holdings, as in force and effect immediately prior to the Effective
Time, shall, from and after the Effective Time, be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
2.03. By-Laws. The by-laws of Everest Holdings, as in force and effect
immediately prior to the Effective Time, shall, from and after the Effective
Time, be the by-laws of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
2.04. Directors. The directors of Everest Holdings in office immediately
prior to the Effective Time shall be the directors of the Surviving Corporation
and shall hold their respective directorships until the election and
qualification of their respective successors or until their tenure is otherwise
terminated in accordance with the certificate of incorporation and by-laws of
the Surviving Corporation, or as otherwise provided by applicable law.
2.05. Officers. The officers of Everest Holdings in office immediately prior
to the Effective Time shall be the officers of the Surviving Corporation and
shall hold their respective directorships until the election and qualification
of their respective successors or until their tenure is otherwise terminated in
accordance with the certificate of incorporation and by-laws of the Surviving
Corporation, or as otherwise provided by applicable law.
ARTICLE III
CONVERSION AND EXCHANGE OF STOCK
3.01. Conversion. At the Effective Time, by virtue of the Merger and without
any action on the part of the holder of any shares:
(a) Conversion of Everest Holdings Common Stock. Each issued and
outstanding share of Everest Holdings Common Stock (other than shares to be
canceled in accordance with Section 3.01(c)) shall be automatically
converted into and shall become one validly issued, fully paid and non-
assessable Everest Group Common Share.
(b) Everest Merger Common Stock. Each issued and outstanding share of
Everest Merger Common Stock shall be converted into and become one fully
paid and nonassessable share of Everest Holdings Common Stock.
(c) Cancellation of Everest Holdings-Owned Stock. Each outstanding
Everest Group Common Share that is owned by Everest Holdings prior to the
Effective Time shall immediately after the Effective Time be repurchased by
Everest Group for $0.01 per share, or $12,000 in the aggregate, and shall
upon such repurchase be canceled and retired and shall cease to be issued.
Each outstanding share of Everest Holdings Common Stock that is owned by
Everest Holdings or by any direct or indirect wholly-owned subsidiary of
Everest Holdings prior to the Effective Time shall automatically be
canceled and retired and shall cease to be issued and no Everest Group
Common Shares or other consideration shall be delivered or deliverable in
exchange for such shares of Everest Holdings Common Stock.
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3.02. Exchange of Stock.
(a) Exchange Procedures. Following the Effective Time, each holder of an
outstanding certificate or certificates theretofore representing shares of
Everest Holdings Common Stock may, but shall not be required to, surrender
the same to Everest Group for cancellation or transfer, and each such
holder or transferee will be entitled to receive certificates representing
the same number of Everest Group Common Shares as the shares of Everest
Holdings Common Stock previously represented by the stock certificates
surrendered. If any certificate representing Everest Group Common Shares is
to be issued in a name other than that in which the certificate theretofore
representing Everest Holdings Common Stock surrendered is registered, it
shall be a condition to such issuance that the certificate surrendered
shall be properly endorsed and otherwise in proper form for transfer and
that the person requesting such issuance shall either: (i) pay Everest
Group or its agents any taxes or other governmental charges required by
reason of the issuance of certificates representing Everest Group Common
Shares in a name other than that of the registered holder of the
certificate so surrendered; or (ii) establish to the satisfaction of
Everest Group or its agents that such taxes or governmental charges have
been paid. Until so surrendered or presented for transfer, each outstanding
certificate which, prior to the Effective Time, represented Everest
Holdings Common Stock shall be deemed and treated for all corporate
purposes to represent the ownership of the same number of Everest Group
Common Shares as though such surrender or transfer and exchange had taken
place.
(b) No Further Ownership Rights in Everest Holdings Common Stock. All
Everest Group Common Shares issued upon the surrender for exchange of
certificates in accordance with the terms of this Article III shall be
deemed to have been issued and paid in full satisfaction of all rights
pertaining to the shares of Everest Holdings Common Stock theretofore
represented by such certificates, subject, however, to the Surviving
Corporation's obligation (if any) to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have
been declared or made by Everest Holdings on such shares of Everest
Holdings Common Stock in accordance with the terms of this Agreement or
prior to the date of this Agreement and which remain unpaid at the
Effective Time. Following the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Everest Holdings Common Stock that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates are presented to the Surviving Corporation,
they shall be canceled and exchanged as provided in this Article III,
except as otherwise provided by law.
ARTICLE IV
EMPLOYEE BENEFIT AND COMPENSATION PLANS
4.01. Plans Assumed by Everest Group. At the Effective Time, Everest Group
shall assume all the rights and obligations of Everest Holdings under the
Annual Incentive Plan, the Executive Performance Annual Incentive Plan, the
1995 Stock Incentive Plan, the 1995 Stock Option Plan for Non-Employee
Directors, the Senior Executive Change of Control Plan and all other plans,
arrangements or agreements pursuant to which options with respect to Everest
Holdings Common Stock have been or may be granted, as each such plan,
arrangement or agreement has been or may be amended prior to the Effective Time
(collectively, the "Plans"). The outstanding options assumed by Everest Group
shall be exercisable upon the same terms and conditions as under the Plans and
the agreements relating thereto immediately prior to the Effective Time, except
that upon the exercise of such options Everest Group Common Shares shall be
issuable in lieu of shares of Everest Holdings Common Stock. The number of
Everest Group Common Shares issuable upon the exercise of an option immediately
after the Effective Time and the option price of each such option shall be the
number of shares and option price in effect immediately prior to the Effective
Time.
4.02. Other Benefit Plans. At the Effective Time, each employee benefit plan
and incentive compensation plan other than the Plans to which Everest Holdings
is then a party shall be assumed by, and continue to be the plan of, the
Surviving Corporation.
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ARTICLE V
CONDITIONS PRECEDENT
5.01. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver of the following conditions:
(a) Stockholder Approval. The Everest Holdings Stockholder Approval
shall have been obtained.
(b) Form S-4. The registration statement on Form S-4 filed with the
Securities and Exchange Commission by Everest Group in connection with the
issuance of the Everest Group Common Shares in the Merger shall have become
effective under the Securities Act of 1933, as amended, and shall not be
the subject of any stop order or proceedings seeking a stop order.
(c) NYSE Listing. The Everest Group Common Shares issuable pursuant to
the terms of this Agreement shall have been approved for listing by the New
York Stock Exchange, Inc., subject to official notice of issuance.
(d) Governmental, Regulatory and Other Consents. All filings required to
be made prior to the Effective Time with, and all consents, approvals,
permits and authorizations required to be obtained prior to the Effective
Time from, any court or governmental or regulatory authority or agency,
domestic or foreign, or other person, in connection with the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby will have been made or obtained (as the case may be)
and all applicable waiting periods shall have expired.
(e) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger or any of the other transactions
contemplated hereby shall be in effect.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.01. Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether or not the Everest Holdings Stockholder Approval
shall have been obtained, by action of the Board of Directors of Everest
Holdings or of Everest Group.
6.02. Effect of Termination. In the event of termination of this Agreement
as provided in Section 6.01, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of Everest
Holdings, Everest Merger or Everest Group, other than the provisions of this
Article VI and Article VII.
6.03. Amendment. This Agreement may be amended by the parties at any time
before or after the Stockholder Approval shall have been obtained; provided,
however, that after any such approval, there shall be made no amendment that
by law requires further approval by the stockholders of Everest Holdings
without the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
6.04. Waiver. At any time prior to the Effective Time, the parties may
waive compliance by the other parties with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of such
rights.
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6.05. Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 6.01, an amendment of this
Agreement pursuant to Section 6.03 or a waiver pursuant to Section 6.04 shall,
in order to be effective, require in the case of Everest Holdings, Everest
Merger or Everest Group, action by its Board of Directors.
ARTICLE VII
GENERAL PROVISIONS
7.01 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Everest Holdings:
Everest Reinsurance Holdings, Inc.
000 Xxxxxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxx Xxxxxx, Xxx Xxxxxx 00000-0000
(b) if to Everest Group:
Everest Reinsurance Group, Ltd.
c/o ABG Financial & Management Services Inc.
Xxxxxx House
Xxxxxx Business Park, Xxxxxx Road
St. Xxxxxxx, Barbados
(c) if to Everest Merger:
Everest Re Merger Corporation
c/o Everest Reinsurance Holdings, Inc.
000 Xxxxxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxx Xxxxxx, Xxx Xxxxxx 00000-0000
7.02. Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (a) constitutes
the entire agreement, and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter of
this Agreement and (b) except for the provisions of Articles III and IV, are
not intended to confer upon any person other than the parties any rights or
remedies.
7.03. Further Assurances. The parties shall execute and deliver such further
instruments and do such further acts and things as may be required to carry out
the intent and purposes of this Agreement.
7.04. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws
thereof.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed, by their respective officers thereunto duly authorized, all as of the
date first written above.
Everest Reinsurance Holdings, Inc.
/s/ Xxxxxxx X. Xxxxxxx
By: _________________________________
Xxxxxxx X. Xxxxxxx
Name: ____________________________
Senior Vice President and
Comptroller
Title: ___________________________
Everest Re Merger Corporation
/s/ Xxxxx X. Xxxxx
By: _________________________________
Xxxxx X. Xxxxx
Name: ____________________________
Senior Vice President and
Secretary
Title: ___________________________
Everest Reinsurance Group, Ltd.
/s/ Xxxxx X. Xxxxx
By: _________________________________
Xxxxx X. Xxxxx
Name: ____________________________
Deputy Chairman
Title: ___________________________
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