EXHIBIT 2.1
-----------
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
May 16, 2007, is made by and among L-1 Identity Solutions, Inc., a Delaware
corporation (the "Company"), L-1 Holding Co., a Delaware corporation and a
direct, wholly-owned subsidiary of the Company ("HoldingCo"), and L-1 Merger
Co., a Delaware corporation and a direct, wholly-owned subsidiary of HoldingCo
("MergerCo").
RECITALS
WHEREAS, as of the close of business on April 30, 2007, the authorized
capital stock of the Company consisted of (i) 125,000,000 shares of common
stock, par value $0.001 per share ("Company Common Stock"), of which 72,839,945
shares were issued and outstanding, 10,119,048 shares were reserved for issuance
upon exercise of stock options and warrants and 4,815 shares were held in
treasury, and (ii) 2,000,000 shares of preferred stock, par value $0.001 per
share ("Company Preferred Stock"), of which none is outstanding.
WHEREAS, as of the date hereof, the authorized capital stock of HoldingCo
consists of 125,000,000 shares of common stock, par value $0.001 per share
("HoldingCo Common Stock"), of which 1,000 shares are issued and outstanding and
no shares are held in treasury.
WHEREAS, as of the date hereof, the authorized capital stock of MergerCo.
consists of 1,000 shares of common stock, par value $0.001 per share ("MergerCo
Common Stock"), of which 1,000 shares are issued and outstanding and no shares
are held in treasury.
WHEREAS, the Certificate of Incorporation and the By-Laws of HoldingCo
will, as of the Effective Time (as defined below), contain provisions identical
to the Certificate of Incorporation and the By-Laws, respectively, of the
Company as in effect immediately prior to the Effective Time (other than with
respect to matters excepted by Section 251(g) of the General Corporation Law of
the State of Delaware (the "DGCL")).
WHEREAS, the Board of Directors of HoldingCo (the "HoldingCo Board") will,
as of the Effective Time, be classified in a manner identical to the Board of
Directors of the Company (the "Company Board") immediately prior to the
Effective Time, and each of the directors of the Company will, prior to the
Effective Time, be elected to the class of the HoldingCo Board that corresponds
to the class of the Company Board to which such director belonged immediately
prior to the Effective Time.
WHEREAS, the officers of the Company will, at or prior to the Effective
Time, be elected as the officers of HoldingCo in accordance with the Certificate
of Incorporation and the By-Laws of HoldingCo or as otherwise provided by law.
WHEREAS, in order to facilitate Holding Co.'s offering of convertible
senior notes, and in order to facilitate the structuring of potential future
acquisitions, the Company desires to create a new holding company organizational
structure pursuant to Section 251(g) of the DGCL, by merging MergerCo with and
into the Company, with the Company continuing as the surviving corporation
(sometimes hereinafter referred to as the "Surviving Corporation"), and
converting each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time, into one share of HoldingCo Common Stock, all in
accordance with the terms of this Agreement.
WHEREAS, the Boards of Directors of each of the Company, HoldingCo and
MergerCo have approved this Agreement and the transactions contemplated hereby,
and have determined the same to be advisable and in the best interests of their
respective stockholders.
WHEREAS, for federal income tax purposes, the transaction contemplated by
this Agreement and such potential future acquisitions are hereby consummated
pursuant to a single integrated plan and such transactions are intended to
collectively qualify as an exchange described in Section 351 of the Internal
Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises, covenants and agreements
contained in this Agreement, and intending to be legally bound hereby, the
Company, HoldingCo and MergerCo hereby agree as follows:
ARTICLE I
THE MERGER
----------
SECTION 1.1. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with Section 251(g) of the DGCL,
at the Effective Time, MergerCo shall be merged with and into the Company, the
separate corporate existence of MergerCo shall cease, and the Company shall
continue as the Surviving Corporation (such transactions being collectively
referred to hereinafter as the "Merger").
SECTION 1.2. Effective Time. The Merger shall become effective upon
the filing of a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware or at such later time as is
specified in the Certificate of Merger (such time of effectiveness is referred
to herein as the "Effective Time").
SECTION 1.3. Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL. Without limiting the generality of the
foregoing,
and subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchises of the Company and MergerCo shall remain or
vest, as the case may be, in the Surviving Corporation, and all debts,
liabilities, obligations and duties of the Company and Merger Sub shall remain
or become, as the case may be, the debts, liabilities, obligations and duties of
the Surviving Corporation.
SECTION 1.4. Certificate of Incorporation of the Surviving
Corporation. At the Effective Time, the Certificate of Incorporation of the
Company shall be amended as set forth in Exhibit A hereto, and shall, as so
amended, continue in full force and effect from and after the Effective Time as
the Certificate of Incorporation of the Surviving Corporation, until thereafter
amended in accordance with applicable law.
SECTION 1.5. By-Laws of the Surviving Corporation. From and after the
Effective Time, the By-Laws of the Surviving Corporation shall be as set forth
in Exhibit B hereto, until thereafter amended in accordance with law.
SECTION 1.6. Directors and Officers of the Surviving Corporation. (a)
The directors of MergerCo immediately prior to the Effective Time shall, from
and after the Effective Time, be the initial directors of the Surviving
Corporation until their successors are duly elected or appointed and qualified,
or their earlier death, resignation or removal, in accordance with the
Certificate of Incorporation and the By-Laws of the Surviving Corporation or as
otherwise provided by law.
(b) The officers of MergerCo immediately prior to the Effective Time
shall, from and after the Effective Time, be the initial officers of the
Surviving Corporation until their successors are duly elected or appointed and
qualified, or their earlier death, resignation or removal, in accordance with
the Certificate of Incorporation and the By-Laws of the Surviving Corporation or
as otherwise provided by law.
ARTICLE II
CONVERSION OF STOCK
-------------------
SECTION 2.1. Conversion. At the Effective Time, by virtue of the
Merger and without any action on the part of HoldingCo, MergerCo, the Company or
the holder of any of the following securities:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one duly issued,
fully paid and nonassessable share of HoldingCo Common Stock.
(b) Holders of certificates formerly evidencing shares of Company
Common Stock shall cease to have any rights as stockholders of the Company
except as provided herein.
(c) Each share of Company Common Stock owned by the Company as
treasury stock immediately prior to the Effective Time shall be converted into,
and deemed
to be, one duly issued, fully paid and nonassessable share of HoldingCo Common
Stock owned by HoldingCo as treasury stock.
(d) Each share of MergerCo Common Stock, issued and outstanding
immediately prior to the Effective Time shall be converted into and thereafter
represent one duly issued, fully paid and nonassessable share of common stock,
par value $0.001 per share, of the Surviving Corporation, and such shares shall
constitute the only issued and outstanding shares of capital stock of the
Surviving Corporation.
(e) Each share of HoldingCo Common Stock owned by the Company
immediately prior to the Effective Time shall be automatically canceled and
retired and shall cease to exist.
SECTION 2.2. No Surrender of Certificates. At the Effective Time, each
outstanding certificate (or evidence of ownership in book-entry form) that,
immediately prior to the Effective Time, evidenced Company Common Stock shall,
from the Effective Time, be deemed and treated for all corporate purposes to
evidence the ownership of the same number of shares of HoldingCo Common Stock.
ARTICLE III
STOCK OPTIONS AND AWARDS; WARRANTS; ASSUMPTION
----------------------------------------------
SECTION 3.1. Conversion. (a) At the Effective Time, each stock option
of the Company then outstanding, whether or not vested or exercisable, shall
cease to represent an option to acquire Company Common Stock and shall be
converted automatically into an option to purchase the same number of shares of
HoldingCo Common Stock, on the same terms and conditions (including vesting
schedule and per share exercise price), as applied to such option immediately
prior to the Effective Time;
(b) At the Effective Time, each share of restricted stock of the
Company then outstanding, whether or not then vested or exercisable, shall cease
to represent a share of the Company's restricted stock, and shall be converted
automatically into a share of restricted stock of HoldingCo, on the same terms
and conditions (including vesting schedule) as applied to such restricted stock
of the Company immediately prior to the Effective Time;
(c) At the Effective Time, each dividend-equivalent right relating to
Company Common Stock then outstanding, shall be automatically converted into a
dividend-equivalent right relating to HoldingCo Common Stock on the same terms
and conditions (including vesting schedule) as applied to such
dividend-equivalent right immediately prior to the Effective Time; and
(d) At the Effective Time, all warrants issued by the Company that are
not exercised prior to the Effective Time shall be converted into warrants to
purchase an identical number of shares of HoldingCo Common Stock on the same
terms and conditions
as applied to such warrants immediately prior to the Effective Time, it being
understood that the Merger shall not constitute a "Change of Control" for
purposes of the warrants.
SECTION 3.2. Assumption. HoldingCo and the Company shall, at or prior
to the Effective Time, execute, acknowledge and deliver an assignment and
assumption agreement (the "Assignment and Assumption Agreement") pursuant to
which, at the Effective Time, the Company will assign to HoldingCo, and
HoldingCo will assume the obligations of the Company under, the plans,
arrangements and agreements of the Company and its subsidiaries which relate to
stock-options, employment or compensation as are listed in Exhibit C hereto (the
"Equity Plans") and such other agreements as are listed in Exhibit D hereto.
SECTION 3.3. Further Actions. After the Effective Time, each of
HoldingCo and the Surviving Corporation shall take, or cause to be taken, such
actions as the respective Boards of Directors of HoldingCo and the Surviving
Corporation shall reasonably consider to be necessary and advisable to carry out
the provisions of Section 3.1 and Section 3.2 hereof.
SECTION 3.4. Stock Options. The conversion of any stock options of the
Company into options of HoldingCo Common Stock shall be made in a manner
consistent with Section 424(a) of the Code so as not to constitute a
"modification" of such stock options within the meaning of Section 424 and
Section 409A of the Code.
SECTION 3.5. Reservation of Shares. At or prior to the Effective Time,
HoldingCo shall reserve sufficient authorized but unissued shares of HoldingCo
Common Stock to provide for the issuance thereof upon the exercise of stock
options and warrants of HoldingCo pursuant to Section 3.1 above.
ARTICLE IV
OTHER ACTIONS
-------------
SECTION 4.1. Certificate of Incorporation and By-laws of HoldingCo.
(a) HoldingCo shall take all actions necessary to amend its Certificate of
Incorporation as of the Effective Time so that it contains, as of the Effective
Time, provisions identical to the Certificate of Incorporation of the Company as
in effect immediately prior to the Effective Time (other than with respect to
matters excepted by Section 251(g) of the DGCL).
(b) HoldingCo shall amend its By-laws as of the Effective Time, so
that they contain, as of the Effective Time, provisions identical to the By-Laws
of the Company as in effect immediately prior to the Effective Time (other than
with respect to matters excepted by Section 251(g) of the DGCL).
SECTION 4.2. Holdings Agreement. HoldingCo shall, under the terms of
the Amended and Restated Credit Agreement, dated October 19, 2006 (the "Credit
Agreement"), among the Company, Bank of America, N.A., as Administrative Agent
(the "Administrative Agent") and the other parties thereto, at or prior to the
Effective Time, execute, acknowledge and deliver to the Administrative Agent,
and the other parties to the Credit Agreement, the Holdings Agreement (as
defined in the Credit Agreement) and such other documents or instruments as are
required to be executed in connection therewith.
SECTION 4.3. Listing of HoldingCo Common Stock. The Company and
HoldingCo shall use their reasonable best efforts to obtain, at or prior to the
Effective Time, confirmation of the listing of HoldingCo Common Stock on the New
York Stock Exchange (the "NYSE"), at and from the Effective Time, on the same
terms as the listing of the Company's Common Stock with the NYSE immediately
prior to the Effective Time.
SECTION 4.4. Tax. The exchange of Company Common Stock for HoldingCo
Common Stock, pursuant to the Merger and the potential future acquisitions
referred to herein are hereby consummated pursuant to a single integrated plan
and such transactions are intended to collectively qualify as an exchange
described in Section 351 of the Code.
SECTION 4.5. Further Assurances. Subject to the terms of this
Agreement, the parties hereto shall take all such reasonable and lawful action
as may be necessary or appropriate in order to effectuate and consummate the
transactions contemplated hereby and to comply with the requirements of Section
251(g) of the DGCL, the provisions of the Securities Act of 1933, the Securities
Exchange Act of 1934, and the rules and regulations of the Securities Exchange
Commission and the NYSE. At and after the Effective Time, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of the Company and MergerCo, such deeds,
instruments, bills of sale, assignments or assurances, and to take and do, in
the name and on behalf of the Company and MergerCo, any other actions and
things, necessary or appropriate, to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any property, assets, interests, rights,
privileges, immunities, powers, franchises or authority, in connection with or
pursuant to this Agreement, or to otherwise carry out this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
--------------------
SECTION 5.1. Conditions Precedent. The obligations of each of the
parties to this Agreement to effect, and the consummation of, the transactions
contemplated by this Agreement shall be subject to the satisfaction (or waiver,
if permissible under applicable law), at or prior to the Effective Time, of the
following conditions:
(a) The obligations of the parties required to have been satisfied at
or prior to the Effective Time under the terms of this Agreement shall have been
so satisfied.
(b) The listing of HoldingCo Common Stock on the NYSE, at the
Effective Time, on the same terms as the listing of Company Common Stock on the
NYSE immediately prior to the Effective Time, shall have been confirmed.
(c) The Company shall have received written resignation letters from
each of its directors, except Xxxxxx X. XxXxxxx, effective as of the Effective
Time.
(d) There shall be no statute, rule, regulation, executive order,
injunction, stay, decree, judgment or restraining order enacted, entered,
promulgated or enforced by any court or governmental or regulatory authority or
instrumentality which prohibits or makes illegal the consummation of the Merger
or the transactions contemplated hereby.
(e) The Board of Directors of the Company shall have received
evidence, in form and substance reasonably satisfactory to it that the holders
of Company Common Stock will not recognize gain or loss for United States
federal income tax purposes as a result of the merger.
(f) Prior to the Effective Time, the Company, in its capacity as the
sole shareholder of HoldingCo, shall have approved and adopted this Agreement
and the amendment of the Certificate of Incorporation of HoldingCo pursuant to
Section 4.1 hereof.
(g) Prior to the Effective Time, HoldingCo, in its capacity as the
sole shareholder of MergerCo, shall have approved and adopted this Agreement.
(h) All third party consents and approvals required, or deemed by the
Board of Directors of the Company to be advisable to be obtained, in connection
with the Merger and the transactions contemplated hereby, shall have been
obtained.
ARTICLE VI
TERMINATION
-----------
SECTION 6.1. Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time by the respective Boards of Directors of, the Company, HoldingCo
or MergerCo, upon a determination that the completion of the transactions
contemplated hereby would not be advisable or in the best interests of such
corporation or its stockholders.
SECTION 6.2. Effect of Termination. If this Agreement is terminated
pursuant to Section 6.1 above, the Agreement shall become void and none of the
parties hereto nor their respective directors, officers, employees, agents or
stockholders shall have any liability with respect to such termination.
ARTICLE VII
MISCELLANEOUS PROVISIONS
------------------------
SECTION 7.1. Amendment and Waiver. (a) Any provision of this Agreement
may, subject to applicable law, be amended or waived prior to the Effective Time
if, and only if, such amendment or waiver is in writing and signed by each of
the parties hereto.
(b) No failure or delay of any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 7.2. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
giving effect to the principles of conflicts of law.
SECTION 7.3. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the prior written consent of the other parties hereto.
SECTION 7.4. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original, and all of which,
when taken together, shall constitute one and the same instrument.
SECTION 7.5. Entire Agreement. This Agreement, including the Exhibits
hereto, together with the Assignment and Assumption Agreement, constitute the
entire agreement and supersede all other agreements and undertakings, both
written and oral, among the parties or any of them, with respect to the subject
matter hereof.
SECTION 7.6. Severability. If any term or other provision of this
Agreement is determined by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other terms, provisions and conditions of this Agreement shall nevertheless
remain in full force and effect, and such term or other provision shall be
construed so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
fullest extent possible.
SECTION 7.7. Headings. The headings set forth herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
IN WITNESS WHEREOF, the Company, HoldingCo and MergerCo. have caused this
Agreement to be signed by their respective officers duly authorized as of the
date first written above.
L-1 IDENTITY SOLUTIONS, INC
By: /s/ Xxxxx X. XxXxxxx
-------------------------------------
Xxxxx X. XxXxxxx
Executive Vice President,
Chief Financial Officer and Treasurer
L-1 HOLDING CO.
By: /s/ Xxxxx X. XxXxxxx
-------------------------------------
Xxxxx X. XxXxxxx
Executive Vice President,
Chief Financial Officer and Treasurer
L-1 MERGER CO.
By: /s/ Xxxxx X. XxXxxxx
-------------------------------------
Xxxxx X. XxXxxxx
Treasurer
