EXHIBIT 2.2
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AGREEMENT OF MERGER
This Agreement of Merger is dated as of March 6, 1998, by and between
Prisma Acquisition Corp., a Delaware corporation (the "Company"), and Synbiotics
Corporation, a California corporation (the "Acquiror").
R E C I T A L S
A. The Company and Acquiror have entered into an Agreement and Plan of
Reorganization, dated February 27, 1998 (the "Merger Agreement"), which
contemplates the merger of the Company with and into the Acquiror (the "Merger")
in accordance with this Agreement of Merger.
B. The respective Boards of Directors of the Company and the Acquiror deem
it advisable and in the best interest of each such corporation and their
respective shareholders that the Company be merged with and into the Acquiror as
provided herein and in the Merger Agreement, and they have accordingly adopted
resolutions approving the Merger Agreement and this Agreement of Merger.
C. The stockholders of the Company have approved this Agreement of Merger
and the principal terms of the Merger in accordance with the laws of Delaware.
D. The approval of the Merger by the shareholders of the Acquiror is not
required under Section 1201 of the California Corporations Code.
Capitalized terms not otherwise defined herein shall have the meanings
given them in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
At the Effective Time (as defined in Article II) and subject to the
applicable provisions of the California Corporations Code ("California Law") and
the Delaware General Corporate Law ("Delaware Law"), the Company shall be merged
with and into the Acquiror, the separate corporate existence of Company shall
cease and the Acquiror shall continue as the surviving corporation. Acquiror as
the surviving corporation after the Merger is hereinafter sometimes referred to
as the "Surviving Corporation."
ARTICLE II
EFFECTIVE TIME
As used in this Agreement of Merger, the term "Effective Time" shall mean
the time the Secretary of State of the State of California files this Agreement
of Merger and the officers' certificates required by California Law.
ARTICLE III
ARTICLES OF INCORPORATION AND BYLAWS
At the Effective Time, the Articles of Incorporation of Acquiror, as in
effect immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Articles of Incorporation. The Bylaws of Acquiror, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation until thereafter amended.
ARTICLE IV
MANNER AND BASIS OF EXCHANGING SHARES
By virtue of the Merger and without any action on the part of Acquiror,
Company or Company Stockholders:
A. Conversion of Company Common Stock.
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1. At the Effective Time, the holders of shares of Company
Common Stock issued and outstanding immediately prior to the Effective
Time (other than shares to be cancelled pursuant to Section C below)
shall be entitled to receive in the aggregate such number of shares of
Acquiror Common Stock (the "Merger Shares") as is equal to (i) the
Merger Consideration (as defined in Section E below) less (ii) all
Assumed Option Shares (as defined below).
2. At the closing of the Merger (the "Closing"), the holders of
shares of Company Common Stock outstanding at the Effective Time shall
be entitled to receive in the aggregate such number of shares of
Acquiror Common Stock (the "Initial Shares") as is equal to ninety
percent (90%) the Merger Shares. Ten percent (10%) of the Merger
Shares shall at the Closing be deposited with the Escrow Agent and
shall be held and disposed of in accordance with the terms of the
Merger Agreement and the Escrow Agreement.
3. For purposes of determining the pro rata allocation of the
Initial Shares among the holders of Company Common Stock outstanding
at the Effective Time, the numerator shall be the number of shares of
Company Common Stock held by such holder at the Effective Time and the
denominator shall be the aggregate number of shares of Company Common
Stock issued and outstanding at the Effective Time less the shares to
be cancelled pursuant to Section C below.
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4. No fraction of a share of Acquiror Common Stock will be
issued under this Section A of Article IV, but in lieu thereof each
holder of shares of Company Common Stock who would otherwise be
entitled to a fraction of a share of Acquiror Common Stock (after
aggregating all fractional shares of Acquiror Common Stock to be
received by such holder) shall receive from Acquiror an amount of cash
(rounded to the nearest whole cent) equal to the product of (i) such
fraction, multiplied by (ii) the mean average closing sales price of a
share of Acquiror Common Stock for the thirty (30) most recent trading
days that Acquiror Common Stock has traded ending on the trading day
immediately prior to the Effective Time, as reported on the Nasdaq
National Market (the "Closing Price").
B. Conversion of Company Options. At the Effective Time, all options to
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purchase Company Common Stock then outstanding ("Company Options") shall be
assumed by Acquiror in accordance with this Section B of Article IV. At the
Effective Time, all Company Options granted and outstanding immediately prior to
the Effective Time shall be converted and exchanged for options to purchase such
number of shares of Acquiror Common Stock (the "Assumed Options") as is equal to
(a) the number of shares of Company Common Stock for which the unexercised
portion of all such Company Options would be exercisable multiplied by (b) the
Merger Consideration per share of Company Common Stock calculated on a Fully
Diluted Basis as of the Effective Time (with any fraction resulting from such
multiplication to be rounded down to the nearest whole number) (the "Assumed
Option Shares"). The exercise price per share of each such Assumed Option Share
shall be equal to (c) the exercise price of such Assumed Option immediately
prior to the Effective Time divided by (d) the Merger Consideration per share of
Company Common Stock calculated on a Fully Diluted Basis as of the Effective
Time (with any fraction resulting from such multiplication to be rounded down to
the nearest whole number). The term "Fully Diluted Basis" as used in this
Agreement shall mean (e) the number of shares of Company Common Stock issued and
outstanding as of the Effective Time (after giving effect to the provisions of
Section C below) plus (f) the number of shares of Company Common Stock issuable
pursuant to Company Options.
For purposes of determining the pro rata allocation of the Assumed
Option Shares among the holders of Company Options outstanding at the Effective
Time, the numerator for each such option holder shall be the number of shares of
Company Common Stock for which the unexercised portion of the Company Options
owned by said holder were exercisable immediately prior to the Effective Time
and the denominator shall be the aggregate number of shares of Company Common
Stock for which all Company Options issued and outstanding immediately prior to
the Effective Time were exercisable.
C. Cancellation of Company Common Stock Owned by Acquiror or Company. At
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the Effective Time, all shares of Company Common Stock that are owned by Company
as treasury stock, and each share of Company Common Stock owned by Acquiror or
any direct or indirect wholly owned subsidiary of Acquiror or of Company
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof.
D. Adjustments to Merger Consideration. The Merger Consideration shall
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be adjusted to reflect fully the effect of any stock split, reverse split, stock
dividend (including any dividend or distribution of
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securities convertible into Acquiror Common Stock or Company Common Stock),
reorganization, recapitalization or other like change with respect to Acquiror
Common Stock or Company Common Stock occurring after the date hereof and prior
to the Effective Time.
E. Definition of "Merger Consideration". The maximum number of shares of
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Acquiror Common Stock to be issued (including Acquiror Common Stock to be
reserved for issuance upon exercise of Assumed Options) shall be equal to that
number of shares of Acquiror Common Stock obtained by dividing $2,000,000 by the
mean average of the closing sales price for a share of Acquiror Common Stock as
quoted on the Nasdaq National Market for the thirty (30) trading days
immediately preceding and ending on the trading day that is one (1) calendar day
prior to the Closing Date (the "Merger Consideration"). No other adjustment
shall be made in the number of shares of Acquiror Common Stock issued in the
Merger as a result of (x) any increase or decrease in the market price of
Acquiror Common Stock prior to the Effective Time not otherwise required by the
immediately preceding sentence, or (y) any cash proceeds received by Company
from the date hereof to the Effective Time pursuant to the exercise of Company
Options, or (z) any expiration or termination after the Effective Time of any
Assumed Options.
F. Surrender of Certificates.
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1. Exchange Agent. ChaseMellon Shareholder Services, LLC shall act
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as exchange agent (the "Exchange Agent") in the Merger.
2. Acquiror to Provide Common Stock and Cash. Promptly after the
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Effective Time, Acquiror shall make available to the Exchange Agent for exchange
in accordance with this Section F of Article IV, through such reasonable
procedures as Acquiror may adopt, (i) the Merger Shares and (ii) cash in an
amount sufficient to permit payment of cash in lieu of fractional shares
pursuant to Section A(4) of Article IV.
3. Exchange Procedures. Promptly after the Effective Time, the
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Surviving Corporation shall cause to be mailed to each holder of record of a
certificate or certificates (the "Certificates") which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock, whose
shares were converted into the right to receive shares of Acquiror Common Stock
(and cash in lieu of fractional shares) pursuant to Section A of Article IV, (i)
a letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon receipt of
the Certificates by the Exchange Agent, and shall be in such form and have such
other provisions as Acquiror may reasonably specify, and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for certificates
representing shares of Acquiror Common Stock (and cash in lieu of fractional
shares). Upon surrender of a Certificate for cancellation to the Exchange Agent
or to such other agent or agents as may be appointed by Acquiror, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, the holder of such Certificate shall be entitled
to receive in exchange therefor a certificate representing the number of whole
shares of Acquiror Common Stock less the number of shares of Acquiror Common
Stock to be deposited in the "Escrow Fund" on such holder's behalf and payment
in lieu of fractional shares which such holder has the right to receive pursuant
to Section A(4) of Article IV, and the Certificate so surrendered shall
forthwith be cancelled. Until so surrendered, each outstanding Certificate that,
prior to the Effective Time, represented shares of Company Common Stock will be
deemed from and after the Effective
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Time, for all corporate purposes, to evidence the ownership of the number of
full shares of Acquiror Common Stock into which such shares of Company Common
Stock shall have been so converted and the right to receive an amount in cash in
lieu of the issuance of any fractional shares in accordance with Section A(4) of
Article IV. As soon as practicable after the Effective Time, Acquiror shall
cause to be distributed to the Escrow Agent a certificate or certificates
representing ten percent (10%) of the Merger Shares which shall be registered in
the name of the Escrow Agent as nominee for the holders of Certificates
cancelled pursuant to this Section F(3) of Article IV. Such shares shall be
beneficially owned by such holders and shall be held in escrow and shall be
available to compensate Acquiror for certain damages. To the extent not used for
such purpose, such shares shall be released.
4. Transfers of Ownership. If any certificate for shares of
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Acquiror Common Stock is to be issued in a name other than that in which the
Certificate 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 otherwise in proper form for transfer and that the person
requesting such exchange will have paid to Acquiror or any agent designated by
it any transfer or other taxes required by reason of the issuance of a
certificate for shares of Acquiror Common Stock in any name other than that of
the registered holder of the Certificate surrendered, or established to the
satisfaction of Acquiror or any agent designated by it that such tax has been
paid or is not payable.
5. No Liability. Notwithstanding anything to the contrary in this
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Section F of Article IV, none of the Exchange Agent, the Surviving Corporation
or any party hereto shall be liable to any person for any amount properly paid
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
G. No Further Ownership Rights in Company Common Stock. All shares of
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Acquiror Common Stock issued in the Merger in accordance with the terms hereof
(including any cash paid in lieu of fractional shares) shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
Company Common Stock, and there shall be no further registration of transfers on
the records of the Surviving Corporation of shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be cancelled and exchanged as provided in this Article IV.
H. Lost, Stolen or Destroyed Certificates. In the event any Certificates
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evidencing shares of Company Common Stock shall have been lost, stolen or
destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Certificates, upon the making of an affidavit of that fact by the
holder thereto, such cash and shares of Acquiror Common Stock, if any, as may be
required pursuant to Section B of Article IV; provided, however, that Acquiror
may, in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed Certificates to deliver a
bond in such sum as it may reasonably direct as indemnity against any claim that
may be made against Acquiror or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
ARTICLE V
ABANDONMENT OF MERGER
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This Agreement of Merger shall be terminated and abandoned without further
action by the parties hereto in the event that the Merger Agreement is
terminated in accordance with its terms, and in such event this Agreement of
Merger shall have no further force and there shall be no liability on the part
of the parties hereto to each other, except to the extent otherwise provided in
the Merger Agreement.
ARTICLE VI
AMENDMENT
Subject to applicable law, this Agreement of Merger may be amended or
modified or supplemented only by written agreement of the Company and the
Acquiror, duly authorized by each of their respective Boards of Directors, at
any time prior to the filing of the officers' certificates required by
California Law with respect to the Merger with the Secretary of State of the
State of California; provided, however, that no such amendment, modification or
supplement shall change the amount or the form of the consideration to be
furnished to the Company Stockholders in accordance with Article IV hereof.
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IN WITNESS HEREOF, the parties hereto have executed this Agreement of Merger
as of the date first written above.
SYNBIOTICS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Vice President, Chief Financial
Officer, and Secretary
PRISMA ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Secretary
[SIGNATURE PAGE TO AGREEMENT OF MERGER]
