Exhibit 2.1
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated July 2, 2002 ("Amendment") to Agreement and
Plan of Merger dated as of February 28, 2002 (the "Agreement") by and among
Investment Technology Group, Inc., a Delaware corporation ("Parent"),
Xxxxxx Group Inc., a Delaware corporation ("Company"), and Indigo
Acquisition Corp. ("Merger Subsidiary"), a Delaware corporation and a
direct wholly owned subsidiary of Parent. Capitalized terms used herein
without definition have the meanings given to them in the Agreement.
WHEREAS, on May 9, 2002, Company announced certain unauthorized
trading and resulting trading losses at its wholly owned subsidiary Xxxxxx
& Company Limited, a U.K. limited company;
WHEREAS, in light of such losses, Parent, Merger Subsidiary and
Company have agreed to amend the Agreement in order to adjust the Merger
Consideration and make certain other changes;
WHEREAS, the boards of directors of Parent, Merger Subsidiary and
Company have approved this Amendment;
WHEREAS, each person listed on Annex A hereto is, concurrently
with the execution and delivery of this Amendment, delivering a letter in
the form of Annex B hereto;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE ONE
AMENDMENTS
SECTION 1.1. The first paragraph of the Agreement is amended to
replace "(this "Agreement") with "(as amended by Amendment No. 1, this
"Agreement")".
SECTION 1.2. Section 1.1 of the Agreement is amended as follows:
(a) The following definitions are added:
"Amendment No. 1" means Amendment No. 1 dated July 2,
2002 to this Agreement.
"Cash Merger Consideration" means (i) $11.35 plus (ii)
(A) the Escrow Reduction Amount, if any, divided by (B) the Number
of Shares and Options Outstanding.
"Cash Option Consideration" has the meaning given in
Section 2.8(a).
"Contingent Payment" means the amount, if any, required
to be paid in cash by ITG to the Agent pursuant to Section 7.03 of
the Escrow Agreement for payment to Holders pursuant to the terms
of the Paying Agent Agreement.
"Contingent Payment Right" means the right to receive an
amount equal to (i) the Contingent Payment divided by (ii) (x) the
Number of Shares and Options Outstanding less (y) the number of
Specified Rollover Options, which right shall not be assignable or
otherwise transferable except by operation of law (including the
laws of descent and distribution) or by intestacy and shall
otherwise be subject to the terms of the Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement dated as of
the date of Amendment No. 1 among Company, Xxxxxx UK, Parent and
the Committee Members named therein, in the form of Annex C to the
Amendment.
"Escrow Reduction Amount" has the meaning given to such
term in the Escrow Agreement.
"FSA Notices" means (i) the Notification of a Regulatory
Event filed by Xxxxxx UK with the Financial Services Authority in
the United Kingdom dated May 21, 2002, and (ii) the Notification
of a Regulatory Event filed by Xxxxxx UK, with the Financial
Services Authority in the United Kingdom, dated June 11, 2002.
"Xxxxxx UK" means Xxxxxx & Company Limited, a U.K.
limited company and a wholly owned subsidiary of Company.
"Specified Losses" means the trading losses totaling $7.1
million on a pre-tax basis incurred by Xxxxxx UK, described in the
FSA Notices, plus (i) all fees and expenses incurred on or before
the date of Amendment No. 1 in connection with the matters
referred to in the FSA Notices, (ii) all Escrow Expenses (as
defined in the Escrow Agreement), (iii) all penalties and fines
levied by any Governmental Entity in connection with the matters
referred to in the FSA Notices and (iv) all fees and expenses
incurred after the date of Amendment No. 1 in connection with any
inquiry, investigation or proceeding by any Governmental Entity
relating to the matters referred to in the FSA Notices.
"Specified Rollover Options" means the Rollover Options
identified as such on the schedule to be delivered by Parent
pursuant to Section 2.8(b).
(b) The following definitions are deleted in their entirety: "Net
Cash Proceeds" and "Option Consideration".
(c) The definition of "Cash-out Option Schedule" is amended to
replace "within 30 days after the date hereof" with "within 14 days after
the date of Amendment No. 1".
(d) The definition of "Exchange Ratio" is amended to replace
"Merger Consideration" with "Cash Merger Consideration".
(e) The definition of "Transaction Agreements" is amended to add
the following before the period: ", the Escrow Agreement and the Paying
Agent Agreement (as defined in the Escrow Agreement)".
SECTION 1.3. Section 2.6(b) of the Agreement is amended and
restated as follows:
"Conversion of Company Common Stock. Subject to Section
2.6(d), each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (including (i) all vested
and unvested Company RSUs and (ii) any shares of Company Common
Stock held by participants in the Company Stock Purchase Plans and
issued prior to the date hereof, but excluding (x) shares to be
canceled in accordance with Section 2.6(a) and (y) Dissenting
Shares) shall be converted at the Effective Time into (i) the
right to receive, without interest, the Cash Merger Consideration
and (ii) one Contingent Payment Right (together, the "Merger
Consideration"). Upon such conversion, all such shares of Company
Common Stock shall no longer be deemed to be outstanding and shall
automatically be canceled and retired and shall cease to exist,
and each certificate previously representing any such shares shall
thereafter represent only the right to receive the Merger
Consideration upon the surrender of the certificate representing
such shares of Company Common Stock in accordance with Section
2.7."
SECTION 1.4. All instances of "Merger Consideration" in Section
2.7 of the Agreement are changed to "Cash Merger Consideration". The last
sentence of Section 2.7(c) is amended to replace the words "amount of cash"
with "Cash Merger Consideration".
SECTION 1.5. The first sentence of Section 2.7(d) shall be amended
to add ", except with respect to the Contingent Payment Rights" before the
period.
SECTION 1.6. Section 2.8(a) of the Agreement is amended and
restated as follows:
"At the Effective Time, all Cash-out Options shall be
canceled, and holders of Cashout Options with an exercise price
below the Cash Merger Consideration shall receive from Surviving
Corporation (subject to any applicable withholding taxes), with
respect to each Cash-out Option, (i) an amount in cash, without
interest, equal to the product of (x) the excess of the Cash
Merger Consideration over the exercise price per share of such
Cash-out Option times (y) the number of shares of Company Common
Stock subject to such Cash-out Option (the "Cash Option
Consideration") and (ii) the number of Contingent Payment Rights
as is equal to the number of shares of Company Common Stock
subject to such Cash-out Option. The Cash Option Consideration
shall be due and paid at (or as soon as practicable following) the
Effective Time."
SECTION 1.7. Section 2.8(b) of the Agreement is amended as
follows:
(a) In the first sentence, "shall be converted into and become an
option" is replaced with "shall be converted into and become (x) except for
the Specified Rollover Options, the number of Contingent Payment Rights as
is equal to the number of shares of Company Common Stock subject to such
Rollover Option and (y) an option".
(b) In the second sentence, "within 30 days after the date hereof"
is replaced with "within 14 days after the date of Amendment No. 1".
(c) The following sentence shall be added after the
second sentence: "Such schedule shall identify which Company Options
constitute Specified Rollover Options."
SECTION 1.8. The lead-in to Section 3.1 of the Agreement is
amended and restated as follows:
"SECTION 3.1 Representations and Warranties. Except for
the Pursuit of Claims (each as defined in the Escrow Agreement) in
compliance with the Escrow Agreement, the Specified Losses and the
activity giving rise to the Specified Losses and matters in
respect of any Governmental Entity arising from the delivery of
the FSA Notices to any such Governmental Entity, the Company
represents and warrants to Parent as follows:"
SECTION 1.9. Section 3.1(s) of the Agreement is amended to replace
"opinion of Company's Financial Advisor, dated the date of this Agreement"
with "opinions of Company's Financial Advisor, dated the date of this
Agreement and the date of Amendment No. 1".
SECTION 1.10. Section 3.1(t) of the Agreement is amended to
replace the second sentence with the following:
"The Specified Asset Sales have been consummated in accordance
with the Specified Asset Sale Agreements. Neither Company nor any
of its Subsidiaries has any liability with respect to the
business, operations, assets or liabilities of AHA or any of its
Subsidiaries, other than those specified liabilities that are
expressly disclosed in the Specified Asset Sale Agreements. Prior
to the consummation of the Specified Asset Sale under the AHA
Stock Purchase Agreement, Company caused AHA to make such
dividends or distributions to Company so that AHA's Tangible Net
Worth (as defined in the AHA Stock Purchase Agreement) was equal
to zero (0) at the closing of such Specified Asset Sale."
SECTION 1.11. Section 3.2(f) of the Agreement is amended and
restated as follows:
"Financing. Parent has and will have at the Effective
Time sufficient funds to pay the Cash Merger Consideration and the
Cash Option Consideration."
SECTION 1.12. Section 4.1 of the Agreement is amended to add the
following before the colon:
"(provided further that none of the clauses of this Section 4.1
shall be deemed to have been violated by reason of the Pursuit of
Claims (each as defined in the Escrow Agreement) in compliance
with the Escrow Agreement, the Specified Losses and the activity
giving rise to the Specified Losses and matters in respect of any
Governmental Entity arising from the delivery of the FSA Notices
to any such Governmental Entity)"
SECTION 1.13. Section 4.1(m) is amended to add the following to
the beginning of the first sentence: "Except for any settlement or
compromise of Claims,".
SECTION 1.14. Section 4.1(p) of the Agreement is amended to delete
the second sentence.
SECTION 1.15. Section 5.1(c) of the Agreement is amended to
replace the first sentence thereof with the following:
"If required by the SEC, as promptly as practicable following the
date of Amendment No. 1, Company shall prepare a revised
preliminary Proxy Statement and file it with the SEC. After the
SEC review of the revised preliminary Proxy Statement is complete
and the Proxy Statement becomes definitive (the "Final Proxy
Statement"), Company shall mail the Final Proxy Statement to the
Company's stockholders. If the SEC does not require Company to
refile the Proxy Statement in preliminary form, Company shall file
the Final Proxy Statement with the SEC and mail it to Company's
stockholders as promptly as practicable following the date of
Amendment No. 1.".
SECTION 1.16. Each of Section 6.2(c) and Section 6.3(c) of the
Agreement is replaced with "[Intentionally Omitted]".
SECTION 1.17. Section 7.1(c) of the Agreement is amended by
replacing "August 15, 2002" with "October 15, 2002".
SECTION 1.18. Section 8.3 of the Agreement is amended by deleting
", unless the context otherwise requires," from the fifth sentence thereof.
ARTICLE TWO
MISCELLANEOUS
SECTION 2.1. Due Authorization, Etc. Each party represents and
warrants that this Amendment, the Escrow Agreement and the Paying Agent
Agreement (as defined in the Escrow Agreement) has been duly authorized,
executed and delivered by it and constitutes a valid and binding obligation
of such party, enforceable against it in accordance with its terms, except
as may be limited by bankruptcy, insolvency or other similar laws affecting
the rights and remedies of creditors generally, and subject to general
principles of equity, whether applied by a court of law or equity.
SECTION 2.2. Board Approval. Xxxxxx represents and warrants that
the Board of Directors has reaffirmed the resolutions described in Section
3.1(l) of the Agreement.
SECTION 2.3. Agreement Otherwise Unchanged. Except as expressly
set forth herein, the terms, provisions and conditions of the Agreement
shall remain in full force and effect and are in all respects hereby
ratified and confirmed. Other than as specifically provided herein, this
Amendment shall not operate as a waiver or amendment of any right, power or
privilege of any party under the Agreement or of any other term or
condition of the Agreement.
SECTION 2.4. Headings. The headings contained in this Amendment
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Amendment.
SECTION 2.5. Counterparts. This Amendment may be executed in
counterparts, each of which shall be considered one and the same agreement
and shall become effective when both counterparts have been signed by each
of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
SECTION 2.6. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be signed by their respective officers thereunto duly authorized, all as
of the first written above.
INVESTMENT TECHNOLOGY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx Xx.
__________________________________
Name: Xxxxxxx X. Xxxxxxx Xx.
Title: Chairman
INDIGO ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Director and CFO
XXXXXX GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
__________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chairman and CEO
[Annex A]
List of Stockholders Delivering Waiver
Xxxxxx X.X. Xxxxxx
Xxxxx X. Xxxxx
Xxxx X. Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx X. Xxxxxx Family Trust
Xxxxx X. Xxxxxx Grantor Retained Annuity Trust
Xxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxxx X.X. Xxxx
[Annex B]
Form of Waiver Letter
[Annex C]
Form of Escrow Agreement
