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EXHIBIT 2.1
AMENDMENT TO PLAN AND AGREEMENT OF MERGER
This Amendment, dated as of December 29, 1997 (the "Amendment"), to
that certain Plan and Agreement of Merger, made and entered into as of the 1st
day of October 1997 (the "Plan of Merger"), by and among MedPartners, Inc., a
Delaware corporation ("MedPartners"), ASG Merger Corporation, a Delaware
corporation (the "Subsidiary"), and America Service Group Inc., a Delaware
corporation ("ASG").
W I T N E S S E T H:
WHEREAS, the parties desire to amend the Plan of Merger to the extent
set forth in this Amendment and to enter into certain agreements ancillary to
the Plan of Merger in connection with such amendments;
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants and agreements contained herein, the parties to this Amendment do
hereby agree as follows:
SECTION 1.
Definitions.
1.1 Incorporation of Defined Terms. All capitalized terms used in this
Amendment that are not defined in this Amendment shall have the meanings
assigned to them in the Plan of Merger.
SECTION 2.
Matters Relating to ASG's Stockholders' Meeting.
2.1 Postponement of Meeting. MedPartners and the Subsidiary
acknowledge and agree that ASG shall convene the special meeting of its
stockholders scheduled for 10:00 am Central Standard Time on December 29, 1997
(the "Special Meeting"), and shall vote the proxies obtained by management in
favor of the Merger in favor of an adjournment of the Special Meeting until
January 20, 1998. MedPartners and the Subsidiary agree that ASG's postponement
of the Special Meeting shall not constitute a breach of ASG's performance of
any of its obligations pursuant to the Plan of Merger.
2.2 Announcement of Postponement. MedPartners and the Subsidiary
consent to the issuance by ASG of a press release announcing the postponement
of the Special Meeting, which
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press release shall be in the form attached as Exhibit 1 to this Amendment.
MedPartners and the Subsidiary further consent to the issuance of such press
release immediately following the action taken by the stockholders to adjourn
the Special Meeting as contemplated by Section 2.1.
2.3 Indemnification of ASG. MedPartners and the Subsidiary agree,
jointly and severally, to indemnify and hold ASG and its officers, directors
and agents and each person, if any, who controls ASG within the meaning of
Section 20 of the Securities Exchange Act of 1934, as amended (collectively,
the "Indemnified Parties") harmless from and against any losses, claims,
damages or liabilities to which any Indemnified Party may become subject, and
to reimburse, as incurred, any legal or other expenses reasonably incurred by
any Indemnified Person in connection with investigating or defending any action
in respect of any such loss, claim, damage or liability, insofar as the same
arise out of or are based upon the announcement of the postponement of the
Special Meeting.
SECTION 3.
Matters Relating to Conditions to Closing.
3.1 Mutual Conditions. MedPartners and the Subsidiary agree that the
conditions set forth in subsections (b), (c), (e), (g) and (h) of Section 9.1
of the Plan of Merger shall from and after the effective date of this Amendment
be conditions only to the obligation of ASG to consummate the Merger. The
parties agree that the condition set forth in subsection (f) of Section 9.1 of
the Plan of Merger shall from and after the effective date of this Amendment be
a condition only to the obligation of ASG to consummate the Merger, unless the
condition is not capable of being satisfied because of any of the arrangements
provided for in Section 4 of this Amendment, in which event, the condition may
be asserted by any of the parties.
3.2 Conditions to the Obligations of MedPartners. MedPartners and the
Subsidiary acknowledge receipt of (i) a certificate executed by a duly
authorized officer of ASG dated the date of this Amendment and covering the
matters set forth in Section 9.2(b) of the Plan of Merger and (ii) an opinion
of King & Spalding covering the matters set forth in Exhibit 9.2(e) to the Plan
of Merger. Based on their receipt of such certificate and opinion, MedPartners
and the Subsidiary acknowledge and agree that the conditions to their
respective obligations to consummate the Merger set forth in the Plan of
Merger, including, without limitation, those set forth in Section 9.2 of the
Plan of Merger, have been satisfied and that neither of them shall assert
nonperformance or nonoccurrence of any such condition as grounds for
terminating their respective obligations to consummate the Merger. Accordingly,
the parties hereby agree that the Plan of Merger shall be amended by the
deletion of Section 9.2 thereof.
3.3 Amendment of Section 8.1(b)(ii). Section 8.1(b)(ii) of the Plan of
Merger is hereby amended by the deletion of the date "March 31, 1998" where it
appears in such Section and by the insertion of "June 30, 1998" in lieu
thereof.
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SECTION 4.
Operational Matters.
4.1 Retention of Key Employees. MedPartners and the Subsidiary hereby
agree that ASG shall be permitted to pay cash compensation in an aggregate
amount not to exceed one of the annual "Target Payouts" payable to Xxxxx X.
Mercy pursuant to his employment agreement with ASG had the Merger been
consummated on December 29, 1997 (which in any event he had planned to
distribute to certain ASG employees) to certain key employees of ASG (other
than Mr. Mercy) in order to induce such key employees to remain in the employ
of ASG until consummation of the Merger. MedPartners and the Subsidiary further
agree that such payment shall not constitute a breach of ASG's performance of
any of its obligations pursuant to the Plan of Merger. The parties agree that
the foregoing is not intended to modify the terms of Mr. Mercy's employment
agreement with ASG.
4.2 Employee Benefit Plans. MedPartners acknowledges that ASG has
terminated certain of its employee benefit plans effective as of January 1,
1998, at the request of MedPartners in contemplation of the consummation of the
Merger. MedPartners agrees, at its own expense, to provide coverage
economically equivalent to that maintained by ASG to ASG's employees effective
January 1, 1998, until consummation of the Merger or, if the Plan of Merger is
terminated, until December 31, 1998.
4.3 Temporary Employees. MedPartners and the Subsidiary acknowledge
and agree that ASG will be required to hire temporary employees to perform the
functions of employees whose employment with ASG was terminated effective
December 31, 1997, in contemplation of the consummation of the Merger.
Furthermore, MedPartners and the Subsidiary acknowledge and agree that ASG may
be required to offer compensation in excess of that normally paid for
equivalent services to induce such temporary employees to accept employment
with ASG pending consummation of the Merger. Notwithstanding anything to the
contrary set forth in this Amendment, ASG shall not enter into a contract with
any temporary employee hired by it pursuant to this Section 4.3 without
obtaining the prior written consent of MedPartners, which consent will not be
unreasonably withheld by MedPartners. MedPartners and the Subsidiary further
agree that ASG shall not breach any of its obligations pursuant to the Plan of
Merger by hiring such employees on such terms as ASG deems necessary in the
good faith exercise of its reasonable judgment.
4.4 Reimbursement. If the Merger is not consummated for any reason
other than the exercise by ASG of its right to terminate the Plan of Merger
pursuant to Section 8.1(d), MedPartners shall pay to ASG an amount equal to sum
of (i) the additional cost incurred by ASG in obtaining malpractice, general
liability, and workers' compensation insurance as a result of the failure of
the Merger to occur; (ii) the bonuses paid pursuant to Section 4.1 of this
Amendment; (iii) the compensation paid in excess of normal amounts to temporary
employees pursuant to
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Section 4.3 of this Amendment; and (iv) the additional compensation paid to
employees of ASG, as previously agreed to by MedPartners, pursuant to ASG's
"severance and retention program," as set forth in Exhibit 3.13(a)(3) to the
Plan of Merger. It is the intent of the parties that any payments made by
MedPartners to ASG pursuant to the preceding sentence shall be limited to the
amount required solely to reimburse ASG for incremental costs incurred as a
result of the delay of the consummation of the Merger caused by the
postponement of the Special Meeting. If the Merger is not consummated, ASG
shall pay to MedPartners an amount equal to the cost that ASG would have
incurred in providing coverage under ASG's employee benefit plans to ASG's
employees from January 1, 1998, through the date of termination of the Plan of
Merger. ASG agrees that payment to it of the amounts specified in the first
sentence of this Section 4.4 shall be ASG's sole remedy with respect to any and
all incremental costs incurred by ASG as a result of the delay of the
consummation of the Merger caused by the postponement of the Special Meeting.
Except as provided in the preceding sentence and notwithstanding the
indemnification provision set forth in Section 2.3, acceptance of amounts paid
to it pursuant to this Section 4.4 shall not constitute waiver of any other
remedy available to the accepting party pursuant to the Plan of Merger or
otherwise as a result of the failure to consummate the Merger.
4.5 Pooling of Interests. The parties agree to determine promptly
whether the agreements of the parties set forth in this Section 4 will preclude
MedPartners from accounting for the Merger as a pooling-of-interests. The
parties further agree to modify this Section 4 as required to eliminate or
modify any provision that would preclude MedPartners from accounting for the
Merger as a pooling-of-interests, in a manner that preserves the intent of the
parties.
SECTION 5.
Miscellaneous.
5.1 Affirmation of the Plan of Merger. The parties hereby affirm to
one another their respective obligations pursuant to the Plan of Merger and
affirm the Plan of Merger, amended as set forth above. The parties hereby
represent and warrant to one another that none of them is in default in the
performance of any of its obligations to the other as of the date of this
Amendment.
5.2 Representations and Warranties. The parties represent and warrant
to one another that this Amendment has been duly authorized by all corporate
action required to be taken on each of their parts, that it has been duly
executed and delivered and that it constitutes the legal, valid and binding
obligation of each of them, except as enforcement may be subject to bankruptcy,
moratorium and similar laws and except as the availability of equitable
remedies may be subject to customary limitations.
5.3 Further Assurances. Each party hereby agrees to perform any
further acts and to execute and deliver any documents which may be reasonably
necessary to carry out the provisions of this Amendment.
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5.4 Incorporation by Reference. Sections 10.5, 10.6, 10.11, 10.12,
10.13, 10.14, 10.15 and 10.16 of the Plan of Merger are incorporated into this
Amendment by this reference to such sections and the parties agree that such
sections shall govern this Amendment as fully as if such sections were set
forth in this Amendment
IN WITNESS WHEREOF, MedPartners, the Subsidiary and ASG have caused
this Amendment to be executed by their respective duly authorized officers, all
as of the day and year first above written.
MEDPARTNERS, INC.
By:/s/ Xxxxxx X. Xxxxxx, Xx.
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ASG MERGER CORPORATION
By:/s/ Xxxxxx X. Xxxxxx, Xx.
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AMERICA SERVICE GROUP INC.
By:/s/ Xxxxx X. Mercy
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