1
EXHIBIT 2.1
AGREEMENT OF MERGER
OF
CISCO SYSTEMS, INC.
AND
MONTEREY NETWORKS, INC.
This Agreement of Merger, dated as of the 28th day of September, 1999
("Merger Agreement"), between Cisco Systems, Inc., a California corporation
("Acquiror"), and Monterey Networks, Inc., a Delaware corporation ("Target").
RECITALS
A. Target was incorporated in the State of Delaware on May 6, 1998
and on the date hereof has outstanding 9,326,742 shares of Common Stock ("Target
Common Stock"), 17,559,327 shares of Series A Preferred Stock (the "Target
Series A Preferred Stock") and 3,250,000 shares of Series B Preferred Stock (the
"Target Series B Preferred Stock "). The Target Series A Preferred Stock and the
Target Series B Preferred Stock are hereinafter collectively referred to as the
"Target Preferred Stock," and together with the shares of Target Common Stock as
the "Target Shares."
B. Acquiror and Target have entered into an Agreement and Plan of
Reorganization (the "Agreement and Plan of Reorganization") providing for
certain representations, warranties, covenants and agreements in connection with
the transactions contemplated hereby. This Merger Agreement and the Agreement
and Plan of Reorganization are intended to be construed together to effectuate
their purpose.
C. The Boards of Directors of Target and Acquiror deem it advisable
and in their mutual best interests and in the best interests of the stockholders
of Target, that Target be acquired by Acquiror through a merger ("Merger") of
Target with and into Acquiror.
D. The Boards of Directors of Acquiror and Target and the
stockholders of Target have approved the Merger.
AGREEMENTS
The parties hereto hereby agree as follows:
1. Target shall be merged with and into Acquiror, and Acquiror
shall be the surviving corporation.
2. The Merger shall become effective at such time (the "Effective
Time") as this Merger Agreement and the officers' certificate of Target is filed
with the Secretary of State of the State of California pursuant to Section 1103
of the Corporations Code of the State of California.
3. Immediately prior to the Effective Time of the Merger, each
share of Target Series A Preferred Stock and Series B Preferred Stock shall
convert into Target Common Stock. At the Effective Time of the Merger (i) all
Target shares that are owned directly or indirectly by Target, Acquiror or any
other subsidiary of Acquiror shall be cancelled, and no securities of Acquiror
or other consideration shall be delivered in exchange therefor, (ii) each of the
issued and outstanding shares of Target Common Stock (other than shares, if any,
held by persons who have not voted such shares for approval of the Merger and
with respect to which such persons shall become entitled to exercise dissenters'
rights in accordance with the Delaware General Corporation Law, referred to
hereinafter as "Dissenting Shares") shall be converted automatically into and
exchanged for 0.240 of a share of
2
Acquiror Common Stock; provided, however, that no more than 8,160,000 shares of
Common Stock of Acquiror shall be issued in such exchange (including Acquiror
Common Stock reserved for issuance upon exercise of Target options assumed by
Acquiror). Those shares of Acquiror Common Stock to be issued as a result of the
Merger are referred to herein as the "Acquiror Shares".
4. Any Dissenting Shares shall not be converted into Acquiror
Common Stock but shall be converted into the right to receive such consideration
as may be determined to be due with respect to such Dissenting Shares pursuant
to the law of the State of Delaware. If after the Effective Time any Dissenting
Shares shall lose their status as Dissenting Shares, then as of the occurrence
of the event which causes the loss of such status, such shares shall be
converted into Acquiror Common Stock in accordance with Section 3.
5. Notwithstanding any other term or provision hereof but subject
to the proviso in the second sentence of Section 3, no fractional shares of
Acquiror Common Stock shall be issued, but in lieu thereof each holder of Target
Shares who would otherwise, but for rounding as provided herein, be entitled to
receive a fraction of a share of Acquiror Common Stock shall receive from
Acquiror an amount of cash equal to the per share market value of Acquiror
Common Stock (deemed to be $68.125) multiplied by the fraction of a share of
Acquiror Common Stock to which such holder would otherwise be entitled. The
fractional share interests of each Target stockholder shall be aggregated, so
that no Target stockholder shall receive cash in an amount greater than the
value of one full share of Acquiror Common Stock.
6. The conversion of Target Common Stock into Acquiror Common Stock
and the conversion of Target Series A Preferred Stock and Series B Preferred
Stock into Target Common Stock as provided by this Merger Agreement shall occur
automatically at the Effective Time of the Merger without action by the holders
thereof. Each holder of Target Common Stock and Target Preferred Stock shall
thereupon be entitled to receive shares of Acquiror Common Stock in accordance
with the Agreement and Plan of Reorganization.
7. At the Effective Time of the Merger, the separate existence of
Target shall cease, and Acquiror shall succeed, without other transfer, to all
of the rights and properties of Target and shall be subject to all the debts and
liabilities thereof in the same manner as if Acquiror had itself incurred them.
All rights of creditors and all liens upon the property of each corporation
shall be preserved unimpaired, provided that such liens upon property of Target
shall be limited to the property affected thereby immediately prior to the
Effective Time of the Merger.
8. This Merger is intended as a plan of reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended.
9. (a) The Amended and Restated Articles of Incorporation of
Acquiror in effect immediately prior to the Effective Time shall be the Amended
and Restated Articles of Incorporation of the Surviving Corporation unless and
until thereafter amended.
(b) The Bylaws of Acquiror in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation unless and
until amended or repealed as provided by applicable law, the Articles of
Incorporation of the Surviving Corporation and such Bylaws.
(c) The directors and officers of Acquiror immediately prior
to the Effective Time shall be the directors and officers of the Surviving
Corporation.
10. (a) Notwithstanding the approval of this Merger Agreement by
the stockholders of Target, this Merger Agreement shall terminate forthwith in
the event that the Agreement and Plan of Reorganization shall be terminated as
therein provided.
(b) In the event of the termination of this Merger Agreement
as provided above, this Merger Agreement shall forthwith become void and there
shall be no liability on the part of Target or Acquiror or their respective
officers or directors, except as otherwise provided in the Agreement and Plan of
Reorganization.
3
(c) In the event of the termination of this Merger Agreement
as provided above, each share of Target Series A Preferred Stock and Series B
Preferred Stock shall not convert into Target Common Stock.
(d) This Merger Agreement may be signed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement.
(e) This Merger Agreement may be amended by the parties
hereto any time before or after approval hereof by the stockholders of Target,
but, after such approval, no amendments shall be made which by law require the
further approval of such stockholders without obtaining such approval. This
Merger Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
4
IN WITNESS WHEREOF, the parties have executed this Merger
Agreement as of the date first written above.
CISCO SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxx, President
By: /s/ XXXXX X. XXXXXX
-------------------------------------
Xxxxx X. Xxxxxx, Secretary
MONTEREY NETWORKS, INC.
By: /s/ XXX XXXX
-------------------------------------
Xxx Xxxx, President
and Chief Executive Officer
By: /s/ XXXXXX X. X'XXXXX
-------------------------------------
Xxxxxx X. X'Xxxxx, Secretary
