AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 6,
1997 (this "Agreement"), among Rose's Holdings, Inc., a Delaware
corporation ("Holdings"), Rose's Transitory, Inc., a Delaware
corporation and a wholly-owned subsidiary of Holdings
("Transitory"), and Rose's Stores, Inc., a Delaware corporation
("Stores").
WHEREAS, the Boards of Directors of Holdings,
Transitory, and Stores have each approved the merger (the
"Merger") of Transitory with and into Stores in accordance with
the General Corporation Law of the State of Delaware ("Delaware
Law") and upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements herein contained, and
intending to be legally bound hereby, Holdings, Transitory, and
Stores hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger.
At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement
and Delaware Law, Transitory shall be merged with and into
Stores, the separate corporate existence of Transitory shall
cease, and Stores shall continue as the surviving corporation.
Stores as the surviving corporation after the Merger is
hereinafter sometimes referred to as the "Surviving Corporation."
SECTION 1.2 Effective Time.
The Merger shall be consummated by delivering this
Agreement or a Certificate of Merger to the Secretary of State of
the State of Delaware for filing by the Secretary of State. The
Certificate of Merger shall be filed on or before August 7,1997
and shall state that the Merger will become effective on August
7, 1997 (the "Effective Time").
SECTION 1.3 Effect of the Merger.
At the Effective Time, the effect of the Merger shall
be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the rights, privileges,
powers, franchises, and property of Transitory and Stores shall
vest in the Surviving Corporation, and all restrictions,
disabilities, duties, debts, and liabilities of Transitory and
Stores shall become the restrictions, disabilities, duties,
debts, and liabilities of the Surviving Corporation.
SECTION 1.4 Certificate of Incorporation; By-Laws.
At the Effective Time, the Certificate of Incorporation
and By-Laws of Stores shall be the Certificate of Incorporation
and By-Laws of the Surviving Corporation until thereafter
amended, except that, effective as of the Effective Time, such
Certificate of Incorporation will be amended as follows:
(a) Article FOURTH shall be amended to read in its
entirety as follows:
"FOURTH: The Corporation shall have the authority to issue an
aggregate of One Thousand (1,000) shares of capital stock. The
authorized capital shall be divided into common stock (the
"Common Stock") and preferred stock (the "Preferred Stock"). The
Common Stock of the Corporation shall consist of Five Hundred
(500) shares with no par value. The Preferred Stock of the
Corporation shall consist of Five Hundred (500) shares with no par
value."
(b) Article SIXTEENTH, which shall read in its
entirety as follows, shall be added thereto:
"SIXTEENTH: Any act or transaction by or
involving the Corporation that requires for its
adoption under the General Corporation Law of the
State of Delaware or this Certificate of
Incorporation the approval of the stockholders of
the Corporation shall, pursuant to Section 251(g)
of the General Corporation Law of the State of
Delaware, require, in addition, the approval of
the stockholders of Rose's Holdings, Inc., a
Delaware corporation (or any successor by merger),
by the same vote as is required by the General
Corporation Law of the State of Delaware or this
Certificate of Incorporation."
SECTION 1.5 Directors and Officers.
The directors of the Surviving Corporation shall be the
directors of Stores immediately prior to the Effective Time, and
the officers of the Surviving Corporation shall be the officers
of Stores immediately prior to the Effective Time, in each case
until their respective successors are duly elected or appointed
and qualified.
SECTION 1.6 Conversion of Securities.
At the Effective Time, by virtue of the Merger and
without any action on the part of Transitory, Holdings, Stores,
or the holders of any of the securities of Transitory, Holdings
or Stores, Stores will become a wholly-owned subsidiary of
Holdings, and the stockholders of Stores will become stockholders
of Holdings. To effect the foregoing:
(a) each share of common stock, no par value ("Stores
Common Stock"), of Stores then held by Stores as a treasury share
or then held by Transitory or Holdings shall be canceled and
extinguished without payment of any consideration therefor and
without any conversion thereof;
(b) each share of Stores Common Stock then issued and
outstanding (other than those referred to in Section 1.6(a))
shall, subject to and in accordance with Section 1.7 hereof, be
converted into and thereafter shall represent the right to
receive one validly issued, fully paid, and non-assessable share
of common stock, no par value, of Holdings ("Holdings Common
Stock");
(c) each then outstanding warrant, option or other
right to purchase or receive one share of Stores Common Stock
(collectively, the "Stores Warrants") shall, subject to and in
accordance with Section 1.7 hereof, be automatically canceled and
extinguished and thereafter shall represent the right to receive
one validly issued, fully paid and nonassessable warrant, option
or other right (as the case may be) representing the right to
purchase or receive, subject to the identical terms and
provisions of the applicable Shares Warrant, one share of
Holdings Common Stock (collectively, the "Holdings Warrants");
(d) each share of common stock, no par value, of
Transitory issued and outstanding immediately prior to the
Effective Time shall be converted into and thereupon and
thereafter shall represent one validly issued, fully paid, and
non-assessable share of common stock, no par value, of the
Surviving Corporation; and
(e) each share of Holdings Common Stock held by Stores
immediately prior to the Effective Time shall be canceled and
extinguished without payment of any consideration therefor and
without any conversion thereof.
(f) Stores shall: (i) make any amendments to the
[Warrant Agreement] and any other plan, agreement, or arrangement
of Stores; (ii) use all reasonable best efforts to obtain any
consents or releases; and (iii) take any other action necessary
to effect the transactions contemplated by this Section 1.6.
Notwithstanding any other provision of this Section 1.6, the
transactions contemplated by this Section 1.6 may be delayed in
respect of any Warrant until any necessary consents or releases
are obtained.
SECTION 1.7 Surrender and Exchange.
(a) Prior to the Effective Time, Stores shall
designate a commercial bank or trust company organized under the
laws of the United States or any state of the United States with
capital, surplus, and undivided profits of at least $100,000,000
to act as agent (the "Exchange Agent") for the purpose of
exchanging certificates representing shares of Stores Common
Stock and Stores Warrants for certificates representing shares of
Holdings Common Stock and Holdings Warrants.
Each holder of shares of Stores Common Stock or Stores
Warrants that have been converted into a right to receive shares
of Holdings Common Stock or Holdings Warrants, upon surrender to
the Exchange Agent of a certificate or certificates representing
such shares of Stores Common Stock or Stores Warrants, together
with a properly completed letter of transmittal covering such
shares of Stores Common Stock or Stores Warrants, will be
entitled to receive a certificate or certificates representing an
equal number of shares of Holdings Common Stock or Holdings
Warrants. After the Effective Time, each such certificate shall,
until so surrendered, represent for all purposes only the right
to receive such shares of Holdings Common Stock or Holdings
Warrants.
(b) After the Effective Time, there shall be no
further registration of transfers of shares of Stores Common
Stock or Stores Warrants outstanding prior to the Effective Time.
If, after the Effective Time, certificates representing shares of
Stores Common Stock or Stores Warrants outstanding prior to the
Effective Time are presented to the Surviving Corporation, they
shall be canceled and exchanged for certificates representing the
shares of Holdings Common Stock or Holdings Warrants provided
for, and in accordance with the procedures set forth, in this
Agreement.
(c) Any holder of Stores Common Stock or Stores
Warrants who has not exchanged his shares of Stores Common Stock
or Stores Warrants for shares of Holdings Common Stock or
Holdings Warrants in accordance with this Section 1.7 within one
year from the Effective Time shall thereafter look only to
Holdings for transfer of his shares of Stores Common Stock or
Stores Warrants. Notwithstanding the foregoing, no Stores
Warrants shall be exchangeable after the date of expiration
thereof.
SECTION 1.8 Options and Restricted Shares.
(a) Immediately following the Effective Time, each
outstanding stock option (an "Option") granted under Stores's New
Equity Compensation Plan (the "Option Plan"), whether or not then
vested or exercisable, shall be converted into the right to
receive an equal amount of Options to purchase Holdings Common
Stock.
(b) Immediately following the Effective Time, each
outstanding Option and warrant granted under any plan, agreement,
or arrangement of Stores, other than the Option Plan, whether or
not then vested or exercisable, shall be canceled and the holders
thereof shall be entitled to receive from Holdings, in
cancellation and settlement of the Options, an equal amount of
Options to purchase Holdings Common Stock.
(c) Stores shall: (i) make any amendments to the
Option Plan and any other plan, agreement, or arrangement of
Stores; (ii) use all reasonable best efforts to obtain any
consents or releases; and (iii) take any other action necessary
to effect the transactions contemplated by this Section 1.8.
Notwithstanding any other provision of this Section 1.8, the
transactions contemplated by this Section 1.8 may be delayed in
respect of any Option until any necessary consents or releases
are obtained.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HOLDINGS,
TRANSITORY AND STORES
Each of Holdings, Transitory and Stores hereby repre-
sents and warrants to each of the others that:
SECTION 2.1 Corporate Organization.
It is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority
and any necessary governmental authority to own, operate, or
lease the properties that it purports to own, operate, or lease
and to carry on its business as it is now being conducted, and is
in good standing in each jurisdiction where the character of its
properties owned, operated, or leased or the nature of its
activities makes such qualification necessary, except for such
failures which, individually or in the aggregate, would not have
a material adverse effect on its business.
SECTION 2.2 Authority Relative to this Agreement.
It has all necessary corporate power and authority to
enter into this Agreement, and to carry out its obligations
hereunder and thereunder. Its execution and delivery of this
Agreement and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action. It has duly executed and delivered this
Agreement, which constitutes a legal, valid, and binding
obligation, enforceable against it in accordance with its terms,
except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, and other similar laws
relating to or affecting creditors' rights generally, by general
equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
ARTICLE III
AMENDMENT
This Agreement may be amended by the parties hereto by
action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time, except as
provided by Delaware Law. This Agreement may be terminated any
time prior to the Effective Time by the boards of directors of
Holdings, Transitory or Stores notwithstanding approval of this
Agreement by the stockholders of Holdings, Transitory or Stores.
[END OF TEXT]
PAGE
IN WITNESS WHEREOF, Holdings, Transitory and Stores
have caused this Agreement to be executed as of the date first
written above by their respective officers thereunto duly
authorized.
ROSE'S HOLDINGS, INC.
By:/s/ R. Xxxxxx Anderson______
Name: R. Xxxxxx Xxxxxxxx
Title: President
ROSE'S TRANSITORY, INC.
By:/s/ R. Xxxxxx Anderson______
Name: R. Xxxxxx Xxxxxxxx
Title: President
ROSE'S STORES, INC.
By:/s/ R. Xxxxxx Anderson______
Name: R. Xxxxxx Xxxxxxxx
Title: President
This Agreement has been adopted pursuant to Section 251(g) of the
General Corporation Law of the State of Delaware, and the
conditions specified in the first sentence of that Section 251(g)
have been satisfied.
/s/ X. Xxxxxxxxx Xxxxxxxxx, II
Name: X. Xxxxxxxxx Xxxxxxxxx, II
Title: Secretary of Rose's Stores, Inc.
