AGREEMENT AND PLAN OF MERGER
Exhibit 99.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is entered into as of January 9, 2006, by
and among X.X. Xxxxx’x China Bistro, Inc. (“X.X. Xxxxx’x”), Xxx Xxx Acquisition Corporation, a
Delaware corporation (“Merger Sub”) and a wholly owned subsidiary of X.X. Xxxxx’x, Xxx Xxx Asian
Diner, Inc., a Delaware corporation (“Xxx Xxx”), and Xxxxxxx Xxxxx and Xxxx Xxxxxxxxx in their
individual capacities as stockholders of Xxx Xxx (the “Minority Stockholders”) solely with respect
to Sections 6 and 8.
RECITALS
WHEREAS, on the date of this Agreement, Xxx Xxx is authorized to issue (i) 5,000,000 shares of
Common Stock, of which 1,004,900 shares are issued and outstanding (the “Xxx Xxx Common Stock”),
and (ii) 1,000,000 shares of Preferred Stock, none of which shares are issued and outstanding (the
“Xxx Xxx Preferred Stock” and, together with the Xxx Xxx Common Stock, the “Xxx Xxx Stock”);
WHEREAS, on the date of this Agreement, Merger Sub is authorized to issue 1,000 shares of
common stock (the “Merger Sub Common Stock”), all of which are issued and outstanding and owned by
X.X. Xxxxx’x;
WHEREAS, the respective Boards of Directors of X.X. Xxxxx’x, Xxx Xxx and Merger Sub have
determined that it is advisable and to the advantage of said corporations and their respective
stockholders that Merger Sub merge with and into Xxx Xxx upon the terms and conditions herein
provided; and
WHEREAS, the respective Boards of Directors of X.X. Xxxxx’x, Xxx Xxx and Merger Sub, the
stockholders of Xxx Xxx, and the sole stockholder of Merger Sub, have adopted and approved this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein, Xxx
Xxx and Merger Sub hereby agree as follows:
1. The Merger. At the Effective Time (as defined below), Merger Sub shall be merged with and
into Xxx Xxx, the separate corporate existence of Merger Sub shall cease and Xxx Xxx shall continue
as the surviving corporation (the “Surviving Corporation”) and as a wholly owned subsidiary of X.X.
Xxxxx’x (the “Merger”).
2. Effective Time. The parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger, together with any other required certificates, properly executed, with the
Secretary of State of the State of Delaware, in accordance with the relevant provisions of the
Delaware General Corporation Law (“Delaware Law”), contemporaneously with the Closing (as defined
below) (the time of such filing being the “Effective Time”). The closing of the transactions
contemplated hereby (the “Closing”) shall take place on January 9, 2006 or at such other time, date
and place as agreed upon by the parties.
3. Effects of the Merger. At the Effective Time, all the property, rights, privileges, powers
and franchises of Xxx Xxx and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Xxx Xxx and Merger Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
4. Directors and Officers. At the Effective Time, the officers and directors of Xxx Xxx
immediately prior to the Effective Time shall be the officers and directors of the Surviving
Corporation, with such directors to serve until their respective successors are duly elected or
appointed and qualified.
5. Certificate of Incorporation and Bylaws.
(a) At the Effective Time, the Amended and Restated Certificate of Incorporation of Xxx Xxx shall be
the certificate of incorporation of the Surviving Corporation, except that Article “FOURTH” of the
Amended and Restated Certificate of Incorporation of Xxx Xxx shall be amended to read in its
entirety:
“FOURTH: The total authorized capital stock of the corporation shall be
1,000 shares of Common Stock.”
(b) At the Effective time, the Amended and Restated Bylaws of Xxx Xxx shall be the Bylaws of the
Surviving Corporation.
6. Tax Consequences. For tax purposes, the parties acknowledge and agree that the Merger will
be treated as a taxable transaction. Accordingly, the parties will report and file their
respective tax returns consistent with a taxable exchange.
7. Representations and Warranties of Xxx Xxx.
7.1 Capital Structure. The authorized capital stock of Xxx Xxx consists of 5,000,000 shares of
Xxx Xxx Common Stock, of which there were issued and outstanding as of the date hereof, 1,004,900
shares, and 1,000,000 shares of Xxx Xxx Preferred Stock, of which no shares are issued or
outstanding as of the date hereof. All outstanding shares of Xxx Xxx Common Stock are duly
authorized, validly issued, fully paid and non-assessable and are free of any liens or encumbrances
other than any liens or encumbrances created by or imposed upon the holders thereof, and are not
subject to preemptive rights or rights of first refusal created by statute, the Amended and
Restated Certificate of Incorporation or Bylaws of Xxx Xxx or any agreement to which Xxx Xxx is a
party or by which it is bound. As of the date hereof, there are 196,000 shares of Common Stock
reserved for issuance under the Xxx Xxx 2001 Stock Option Plan (the “Xxx Xxx Option Plan”), of
which 143,000 shares are subject to outstanding options and 53,000 shares are reserved for future
option grants. There are no other options, warrants, calls, rights, commitments or agreements of
any character to which Xxx Xxx is a party or by which it is bound, obligating Xxx Xxx to issue,
deliver, sell, repurchase or redeem or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of Xxx Xxx Stock or obligating Xxx Xxx to xxxxx, extend, accelerate the vesting of, change
the price of, or otherwise amend or enter into any such option, warrant, call, right, commitment or
agreement. There are no other contracts, commitments or agreements relating to voting, purchase or
sale of Xxx Xxx Stock (a) between or among Xxx Xxx and any of its stockholders, and (b) to Xxx
Xxx’x knowledge,
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between or among any of Xxx Xxx’x stockholders. All shares of outstanding Xxx Xxx
Common Stock and rights to acquire Xxx Xxx Common Stock were issued in compliance with all
applicable federal and state securities laws.
8. Representations and Warranties of the Minority Stockholders. Each Minority Stockholder,
severally and not jointly, represents and warrants to X.X. Xxxxx’x as follows:
8.1 The Minority Stockholder has good and marketable title to his shares of Xxx Xxx Stock free and
clear of any covenants, conditions, restrictions, liens, charges encumbrances, options or adverse
claims. The Minority Stockholder is not a party to, subject to or bound by any agreement,
judgment, order, writ or decree of any court or other governmental body with would prevent the
transfer or conveyance of his Xxx Xxx Stock pursuant to the Merger.
8.2 Absence of Certain Facts. The Minority Stockholder is not aware of any facts,
circumstances events or condition materially adverse to Xxx Xxx that he has not already disclosed
to the officers of X.X. Xxxxx’x.
9. Conversion/Cancellation of Securities.
9.1 Xxx Xxx Stock. As of the Effective Time, by virtue of the Merger and without any action on
the part of Merger Sub, Xxx Xxx, or the holders of any securities of such corporations, each share
of Xxx Xxx Stock issued and outstanding immediately prior to the Effective Time that is not a
Dissenting Share (as defined in Section 7.5) shall be converted and exchanged into the right to
receive $158.14 in cash (the “Per Share Purchase Price”), which the boards of directors of Xxx Xxx
and X.X. Xxxxx’x have determined is the current fair market value of one share of Xxx Xxx Stock.
As of the Effective Time, by virtue of the Merger and without any action on the part of Merger Sub,
Xxx Xxx, or the holders of any securities of such corporations, each share of Xxx Xxx Stock shall
no longer be outstanding and shall automatically be canceled and retired and shall cease to exist
and the holder of a certificate that, immediately prior to the Effective Time represented Xxx Xxx
Stock, shall cease to have any rights with respect thereto, except the right to receive the Per
Share Purchase Price, or to the extent that such holder is a Dissenting Stockholder (as defined in
Section 9.5 hereof), the rights set forth in Section 9.5 hereof.
9.2 Cancellation of Shares Owned by X.X. Xxxxx’x. Notwithstanding the provisions of Section
9.1, at the Effective Time, all shares of Xxx Xxx Stock owned by X.X. Xxxxx’x shall be cancelled
and retired and shall cease to exist and no cash, stock or any other consideration shall be
delivered by X.X. Xxxxx’x in exchange therefore.
9.3 Outstanding Common Stock of Merger Sub. As of the Effective Time, by virtue of the Merger
and without any action on the part of Merger Sub, Xxx Xxx, or the holders of any securities of such
corporations, each share of Merger Sub Common Stock outstanding immediately prior thereto shall be
changed and converted into one (1) fully paid and nonassessable share of common stock of the
Surviving Corporation and shall constitute the only shares of capital stock of the Surviving
Corporation outstanding immediately after the Effective Time.
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9.4 Xxx Xxx Options. At the Effective Time, each option to purchase Xxx Xxx common stock (each
a “Xxx Xxx Option”), whether vested or unvested, will be assumed by X.X. Xxxxx’x. Annex 9.4
attached hereto sets forth a true and complete list as of the date hereof of all holders of Xxx Xxx
Options, including the number of shares of Xxx Xxx Common Stock subject to each such option and the
number of such Xxx Xxx Options that are vested and unvested. On the Closing Date, Xxx Xxx shall
deliver to X.X. Xxxxx’x an updated Annex 9.4 current as of such date. Each option assumed by X.X.
Xxxxx’x under this Agreement shall continue to have, and be subject to, the same terms and
conditions set forth in the Xxx Xxx Option Plan and any other document governing such option
immediately prior to the Effective Time, except that: (a) such Xxx Xxx Option will be exercisable
for that number of whole shares of X.X. Xxxxx’x Common Stock equal to the product of the number of
shares of Xxx Xxx Common Stock that were issuable upon exercise of such option immediately prior to
the Effective Time multiplied by a ratio (the “Exchange Ratio”), the numerator of which is the Per
Share Purchase Price and the denominator of which is the closing sales price of one share of X.X.
Xxxxx’x Common Stock on January 6, 2006, and rounded down to the nearest whole number of shares of
X.X. Xxxxx’x Common Stock; (b) the per share exercise price for the shares of Xxx Xxx Common Stock
issuable upon exercise of such Xxx Xxx Option will be equal to the quotient determined by dividing
the exercise price per share of Xxx Xxx Common Stock at which such Xxx Xxx Option was exercisable
immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole
tenth of a cent (the “Adjusted Exercise Price”); and (c) any restriction on the exercisability of
such Xxx Xxx Option will continue in full force and effect, and the term, exercisability, vesting
schedule and other provisions of such Xxx Xxx Option will remain unchanged. Consistent with the
terms of the Xxx Xxx Option Plan and the documents governing the outstanding options under the Xxx
Xxx Option Plan, the Merger will not terminate any of the outstanding Xxx Xxx Options or accelerate
the exercisability or vesting of such Xxx Xxx Options or the shares of X.X. Xxxxx’x Common Stock
underlying Xxx Xxx Options upon X.X. Xxxxx’x assumption thereof in the Merger. It is the intention
of the parties that Xxx Xxx Options so assumed by X.X. Xxxxx’x will remain incentive stock options
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, to the extent such Xxx
Xxx Options qualified as incentive stock options prior to the Effective Time. Within ten (10)
business days after the Effective Time, X.X. Xxxxx’x will promptly issue to each person who,
immediately prior to the Effective Time, was a holder of an outstanding Xxx Xxx Option under the
Xxx Xxx Option Plan a document evidencing the foregoing assumption. X.X. Xxxxx’x will also
promptly file a registration statement with the Securities and Exchange Commission covering the
registration of the X.X. Xxxxx’x Common Stock underlying the Xxx Xxx Options assumed pursuant to
this Section 9.4
9.5 Dissenters’ Rights. Notwithstanding any provision of this Agreement to the contrary, any
shares of Xxx Xxx Stock held by a holder who has demanded and perfected such holder’s right for
appraisal of such shares in accordance with Delaware Law and who, as of the Effective Time, has not
effectively withdrawn or lost such right to appraisal (“Dissenting Shares”), if any, shall not be
converted into the right to receive the Per Share Purchase Price, but shall instead be converted
into the right to receive such consideration as may be determined to be due with respect to such
Dissenting Shares pursuant to Delaware Law (the “Determined Value”). Each holder of Dissenting
Shares (a “Dissenting Stockholder”) who, pursuant to the provisions of Delaware Law, becomes
entitled to payment of the fair value for shares of Xxx Xxx Stock shall receive payment therefor as determined by Delaware Law. If,
after the Effective
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Time, any Dissenting Shares shall lose their status as Dissenting Shares, the
Surviving Corporation shall issue and deliver, upon surrender by such stockholder of a certificate
or certificates representing shares of Xxx Xxx Stock, such holder’s Per Share Purchase Price.
10. Conditions to the Closing. The obligation of X.X. Xxxxx’x to effect the Merger is subject
to the fulfillment, at or prior to the date of the Closing, of each of the following
10.1 Lock-up Agreements. Each of the individuals listed on Annex 9.5 with an asterisk next to
his or her name shall have executed and delivered the form of lock-up agreement attached hereto as
Exhibit A with respect to the number of shares of X.X. Xxxxx’x Common Stock issuable upon
exercise of the Xxx Xxx Options assumed by X.X. Xxxxx’x pursuant to Section 9.4 and listed on such
annex opposite such optionee’s name. Xxx Xxx shall cause each individual listed on Annex 9.5
without an asterisk next to his or her name to execute and deliver the form of lock-up agreement
attached hereto as Exhibit A with respect to the number of shares of X.X. Xxxxx’x Common
Stock issuable upon exercise of the Xxx Xxx Options assumed by X.X. Xxxxx’x pursuant to Section 9.4
and listed on such annex opposite such optionee’s name.
10.2 No Dissenters. At the date of the Closing, no Xxx Xxx stockholder shall have stated his
intention to perfect his dissenter’s rights or have the ability to become a Dissenting Stockholder.
10.3 Fairness Opinion. X.X. Xxxxx’x shall have received from Xxxxx Xxxxxxx its written opinion
that the Per Share Purchase Price is fair, from a financial point of view, to X.X. Xxxxx’x.
11.
Taking of Necessary Action; Further Action. If at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this Agreement and to vest
the Surviving Corporation with full right, title and possession to all assets, property, rights,
privileges, powers and franchises of Xxx Xxx and Merger Sub, the officers and directors of the
Surviving Corporation, Xxx Xxx and Merger Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary action.
12. Termination by Mutual Agreement. Notwithstanding the approval of this Agreement by the
stockholders of Merger Sub and Xxx Xxx, this Agreement may be terminated at any time prior to the
Effective Time by mutual written agreement of the Boards of Directors of Merger Sub and Xxx Xxx.
13. Amendment. This Agreement may be amended by the mutual agreement of the parties hereto at
any time prior to the Effective Time, and any time before or after approval hereof by the
stockholders of either Merger Sub or Xxx Xxx, but, after any such approval, no amendment shall be
made which, under the applicable provisions of Delaware Law, requires the further approval of
stockholders without such further approval having been obtained. This Agreement shall not be
amended except by an instrument in writing signed on behalf of each of the parties hereto.
14. Counterparts. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when one
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or more
counterparts have been signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
15. Governing Law. This Agreement shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Delaware applicable to contracts entered
into and to be performed wholly within the State of Delaware without regard to principles of
conflict of laws.
[remainder of page intentionally left blank – signature page follows]
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IN WITNESS WHEREOF, this Agreement, having first been duly approved by X.X. Xxxxx’x and
resolution of the Boards of Directors of Xxx Xxx and Merger Sub, is hereby executed on behalf of
each of said corporations by their respective officers thereunto duly authorized.
| X.X. Xxxxx’x China Bistro, Inc., a Delaware | ||||
| corporation | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxx | ||||
| Chief Executive Officer | ||||
| Xxx Xxx Asian Diner, Inc., a Delaware | ||||
| corporation | ||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Xxxxxxx X. Xxxxx | ||||
| President, Chief Financial Officer and | ||||
| Secretary | ||||
| Xxx Xxx Acquisition Corporation, a Delaware | ||||
| corporation | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxx | ||||
| President, Chief Financial Officer and | ||||
| Secretary | ||||
| /s/ Xxxxxxx Xxxxx | ||||
| Xxxxxxx Xxxxx, individually | ||||
| /s/ Xxxx Xxxxxxxxx | ||||
| Xxxx Xxxxxxxxx, individually | ||||
EXHIBIT A
Form of Lock-up
LOCK-UP AGREEMENT
January ___, 2006
X.X. Xxxxx’x China Bistro, Inc.
0000 Xxxx Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
0000 Xxxx Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that (a) X.X. Xxxxx’x China Bistro, Inc. (the “Company”) has
entered into an Agreement and Plan of Merger with Xxx Xxx Asian Diner, Inc. (“Xxx Xxx”) and Xxx Xxx
Acquisition Corporation (“Acquisition Corp”), providing for the merger of Acquisition Corp with and
into Xxx Xxx, with Xxx Xxx surviving as a wholly owned subsidiary of the Company (the
“Reorganization”); and (b) it is a condition to the closing of the Reorganization that the
undersigned execute and deliver to the Company this Lock-up Agreement.
The undersigned acknowledges that the Reorganization is of material benefit to the
undersigned, and to induce the Company to consummate the Reorganization, the undersigned, during
the period commencing on the date of the effective time of the Reorganization and ending 365 days
after such date:
(i) agrees not to (x) offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, the number of shares of Common Stock of
the Company issuable upon exercise of options to purchase Company Common Stock issued to the
undersigned in connection with the Reorganization as set forth below the undersigned’s name on the
signature page to this Lock-Up Agreement. The lock-up restriction described in this paragraph
shall not apply to dispositions to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that such trust agrees in writing to be bound
by the terms of this Lock-Up Agreement. and
(ii) authorizes the Company to cause the transfer agent to decline to transfer and/or to note stop
transfer restrictions on the transfer books and records of the Company with respect to any shares
of Restricted Stock.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into the agreements set forth herein, and that, upon request, the undersigned
will execute any additional documents necessary or desirable in connection with the enforcement
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hereof. All authority herein conferred or agreed to be conferred shall survive the death or
incapacity of the undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors, and assigns of the undersigned.
| Very truly yours, | ||
(Name – Please Type)
|
||
(Address) |
||
(Social Security or Taxpayer Identification No.) |
Number of Shares of Company Common Stock Subject to Lock-Up Agreement
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