Exhibit 2.2
AGREEMENT AND PLAN OF MERGER OF
DYNCORP MANAGEMENT RESOURCES INC.
WITH AND INTO TEKINSIGHT SERVICES, INC.
AGREEMENT AND PLAN OF MERGER ("Plan of Merger") dated as of December 27,
2001 by and among DynCorp Management Resources Inc. ( "DMR"), a Virginia
corporation having its principal executive office at 00000 Xxxxx Xxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxx 00000, Xxxxxxxxxx.xxx, Inc. ("TekInsight"), a Delaware
corporation having its principal executive office at 00000 Xxx Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, DynCorp ("DynCorp"), a Delaware corporation
having its principal executive office at 00000 Xxxxx Xxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxx 00000 and TekInsight Services, Inc. ("DynTek"), a Delaware corporation
and a direct wholly owned subsidiary of TekInsight, having its principal
executive office at 00000 Xxx Xxxxxx Xxx., Xxxxx 000, Xxxxxx, XX 00000.
WITNESSETH
WHEREAS, the respective Boards of Directors of DMR, DynCorp, DynTek and
TekInsight deem the merger of DMR with and into DynTek, under and pursuant to
the terms and conditions herein set forth or referred to, desirable and in the
best interests of the respective corporations and their respective shareholders,
and the respective Boards of Directors of DMR, DynCorp, DynTek and TekInsight
have adopted resolutions approving this Plan of Merger and an Agreement and Plan
of Reorganization dated of even date herewith, as amended ("Reorganization
Agreement");
WHEREAS, the Plan of Merger has been adopted by the unanimous consent of
the shareholders of DMR and DynTek; and
WHEREAS, the parties hereto intend that the Merger shall qualify as a
reorganization under Section 368(a) of the Internal Revenue Code of 1986, as
amended ("the Code").
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto do hereby agree as follows:
I. MERGER
Subject to the terms and conditions of this Plan of Merger, at the
Effective Time (as hereinafter defined), DMR shall be merged with and into
DynTek, pursuant to the provisions of, and with the effect provided in the
Delaware General Corporation Law and the Code of Virginia (said transaction
being hereinafter referred to as the "Merger"). At the Effective Time, the
separate existence of DMR shall cease and DynTek, as the surviving entity, shall
continue unaffected and unimpaired by the Merger. (DynTek as existing at and
after the Effective Time being hereinafter sometimes referred to as the
"Surviving Corporation").
II. CERTIFICATE OF INCORPORATION AND BY-LAWS
The Certificate of Incorporation and the Bylaws of DynTek in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation and the Bylaws of the Surviving Corporation, in each case until
amended in accordance with applicable law.
III. BOARD OF DIRECTORS
The directors and officers of the Surviving Corporation shall be the
officers and directors of DynTek in office immediately prior to the Effective
Time, each to hold office in accordance with the Certificate of Incorporation
and Bylaws of the Surviving Corporation.
IV. CAPITAL
At the Effective Time, all of the shares of capital stock of DynTek issued
and outstanding immediately prior to the Effective Time shall remain outstanding
and unchanged by virtue of the Merger and shall constitute all of the issued and
outstanding shares of capital stock of the Surviving Corporation.
V. INITIAL CONVERSION AND EXCHANGE OF COMPANY SHARES
1. Merger Consideration. At the Effective Time, all of the outstanding
common stock of DMR, par value $1.00 per share ("DMR Common Stock"), issued and
outstanding immediately prior to the Effective Time (subject to Section 6 of
this Article 5), shall, by virtue of the Merger, automatically and without any
action on the part of the holder thereof, become and be converted into the
Initial Merger Consideration (as defined below) and the right to receive the
Additional Merger Consideration (as defined below) and TekInsight shall deliver
certificates representing such Initial Merger Consideration to DynCorp. The
Initial Merger consideration and the Additional Merger Consideration are
collectively referred to herein as the "Merger Consideration."
2. Initial Merger Consideration. The Initial Merger Consideration shall be
a number of shares of Class B common stock of TekInsight, par value $0.0001 per
share ("TekInsight Class B Stock"), equal to two-thirds of the number of
TekInsight Outstanding Share Equivalents (as defined below) outstanding
immediately prior to the Effective Time. The "TekInsight Outstanding Share
Equivalents" shall mean all outstanding shares of common stock of TekInsight,
plus all shares of common stock of TekInsight that may be issued upon
conversion, redemption or exchange of or otherwise with respect to any
outstanding shares of preferred stock of TekInsight, XxxXxxxxx.Xxx, Inc. or any
other company that was a Subsidiary of TekInsight at the time of issuance of
such shares ,plus the following shares underlying those convertible notes issued
in connection with the 2001 Bridge Financing: 604,000 shares issued based upon
an indebtedness to equity conversion ratio of $1.75 and 411,765 shares issued
based upon an indebtedness to equity conversion ratio of $1.70. If the notes are
held until maturity, and are converted at a ratio of $1.50 per share, an
additional 100,667 shares of Class B common stock shall be issued.
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3. Treasury Stock. At the Effective Time, all shares of DMR Common Stock
held in the treasury of DMR shall be cancelled and no cash, stock or other
property shall be delivered in exchange therefor.
4. Stock Transfers. At the Effective Time, the stock transfer books of DMR
shall be closed and no transfer of DMR Common Stock shall thereafter be made or
recognized. If, after the Effective Time, certificates representing such shares
are presented for transfer to the Surviving Corporation, they shall be cancelled
and exchanged for the Merger Consideration as provided herein.
5. Changes in TekInsight Common Stock. In the event that prior to the
Effective Time, the outstanding shares of common stock shall of any class or
series of TekInsight have been increased, decreased or changed into or exchanged
for a different number or kind of shares or securities by reorganization,
recapitalization, reclassification, stock dividend, stock split or other like
changes in TekInsight's capitalization, then an appropriate and proportionate
adjustment shall be made to the Merger Consideration.
6. Fractional Shares. Notwithstanding any other provision hereof, each
holder of shares of DMR Common Stock who would otherwise have been entitled to
receive pursuant to this Article 5 a fraction of a share of TekInsight Class B
Stock (after taking into account all certificates delivered by such holder)
shall receive, in lieu thereof, cash in an amount equal to such fraction of a
share of TekInsight Class B Stock multiplied by the market value (as defined
below) of TekInsight Class A Stock (as defined below). The "market value" of
TekInsight Class B Stock shall be the last reported sale price of the TekInsight
Common Stock on the Nasdaq Small Cap Market for the trading day immediately
preceding the date on which the Effective Time occurs. No such holder shall be
entitled to dividends, voting rights or any other shareholder right in respect
of such fractional share.
7. Lost, Stolen or Destroyed Certificates. In the event any certificate
representing DMR Common Stock shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such certificate
to be lost, stolen or destroyed and, if required by TekInsight, the posting by
such person of a bond in such amount as TekInsight may reasonably direct as
indemnity against any claim that may be made against it with respect to such
certificate, TekInsight will issue in exchange for such lost, stolen or
destroyed certificate the shares of TekInsight Class B Stock constituting the
Merger Consideration and cash in lieu of fractional shares deliverable in
respect thereof pursuant to this Plan of Merger.
VI. ADDITIONAL ISSUANCES OF NEWCO PARENT CLASS B STOCK
1. Dilutive Issuances. Subject to Article VI, Section 9 below, if and
whenever on or after the Effective Time, TekInsight issues or sells any shares
of its Class A common stock, par value $0.0001 per share ("TekInsight Class A
Stock"), pursuant to any Stock Equivalents (as defined below) at a price per
share less than the per share Fair Market Value (as defined below) of the
TekInsight Class A Stock at the time of issue or sale, then upon such issue or
sale (a "Dilutive Issuance"), DynTek shall issue to DynCorp for no additional
consideration such number of shares of TekInsight Class B Stock as equal the
Additional Merger Consideration (as defined below) with respect to such Dilutive
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Issuance. DynTek shall issue such Additional Merger Consideration and deliver
the corresponding TekInsight Class B Stock certificate within 90 days after the
Dilutive Issuance but in any event prior to the first Trigger Date after such
Dilutive Issuance.
2. Issuance. The issuance of certificates for shares of TekInsight Class B
Stock issued under this Article VI will be made without charge to DynCorp for
any issuance tax in respect thereof or other cost incurred by TekInsight in
connection with such issuance of shares of TekInsight Class B Stock. Each share
of TekInsight Class B Stock issued hereunder will be fully paid and
nonassessable and free from all liens and charges with respect to the issuance
thereof.
3. Reservation of TekInsight Class B Stock. TekInsight shall at all times
reserve and keep available out of its authorized but unissued shares of
TekInsight Class B Stock solely for the purpose of issuance hereunder, such
number of shares of TekInsight Class B Stock as may be issuable hereunder,
subject to Section 9 of this Article VI. TekInsight shall take all such actions
as may be necessary to assure that all such shares of TekInsight Class B Stock
may be so issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange upon which
shares of TekInsight Common Stock may be listed.
4. Fractional Shares. If the determination of the Additional Merger
Consideration has the result that a fractional share of Class B Stock would be
issuable, TekInsight will at the time of the issuance of the Additional Merger
Consideration, deliver to DynCorp cash in lieu of such fractional share in an
amount equal to the Fair Market Value of the TekInsight Class A Stock into which
such fractional shares are convertible.
5. Determination of Consideration Received. If any shares of TekInsight
Class A Stock are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefor will be deemed to be the net amount received
by TekInsight. In case any shares of TekInsight Class A Stock are issued or sold
for a consideration other than cash, the amount of the consideration other than
cash received by TekInsight will be the fair market value of such consideration.
If such consideration is in the form a security traded in a market identified in
the definition of Fair Market Value below, then the fair market value of such
security shall be its Fair Market Value. If such consideration is neither cash
nor in the form a security defined in the immediately preceding sentence, then
its fair market value shall be determined by agreement between TekInsight and
DynCorp or, failing such agreement, by an independent appraiser appointed by
agreement of TekInsight and DynCorp.
6. Reorganization, Reclassification, Consolidation, Merger or Sale. Any
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or substantially all of TekInsight's assets to another Person or other
transaction which is effected in such a way that holders of TekInsight Common
Stock are entitled to receive (either directly or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for TekInsight Common
Stock is referred to herein as "Organic Change." Prior to the consummation of
any Organic Change, TekInsight will make appropriate provision (in form and
substance reasonably satisfactory to DynCorp) with respect to DynCorp's rights
and interests to ensure that the provisions of this Article VI will be
applicable with respect to shares of stock, securities or assets issued in
connection with the Organic Change, or payable as a result of the Organic Change
with respect to or in exchange for shares of TekInsight Common Stock, in each
case in respect of Stock Equivalents. TekInsight will not effect any such
Organic Change, unless prior to the consummation thereof, the successor entity
(if other than TekInsight) resulting from such Organic Change or the corporation
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purchasing such assets in the Organic Change agrees by written instrument (in
form and substance reasonably satisfactory to DynCorp) to issue to DynCorp
shares of capital stock of the successor entity with respect to Stock
Equivalents of the successor entity received in exchange for, as a result of a
conversion of, Stock Equivalents that are subject to the provisions hereof, on
equivalent terms as herein.
7. Notices. Immediately upon any Dilutive Issuance, TekInsight will give
written notice thereof to DynCorp, setting forth in reasonable detail the terms
of the Dilutive Issuance and certifying the calculation of the Additional Merger
Consideration to be issued to DynCorp. TekInsight will also give written notice
to DynCorp at least 20 days prior to any Trigger Event.
8. Definitions. All Capitalized terms not otherwise defined herein shall
have the meanings ascribed thereto in the Reorganization Agreement. As used in
this Article VI, the following terms have meanings set forth below:
"Additional Merger Consideration" means, with respect to a Dilutive
Issuance, such number of shares of TekInsight Class B Stock that equal forty
percent (40%) of the quotient obtained by dividing (a) (i) the aggregate of the
Fair Market Value per share of the TekInsight Class A Stock issued in the
Dilutive Issuance minus (ii) the net consideration received by TekInsight
(determined in accordance with Article VI, Section 5) by (b) the Fair Market
Value per share of the TekInsight Class A Stock at the time of the Dilutive
Issuance.
"Fair Market Value" of any security means the closing price of such
security's sales on the principal domestic securities market (including Nasdaq)
on which such security may at the time be listed, or if there has been no such
sales on any measuring day, the average of the highest bid and lowest asked
prices on such market at the end of the day, or, if on any measuring day such
security is not so listed, the average of the hightest bid and lowest asked
prices in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of thirty (30) days consisting of the day as of
which "Fair Market Value" is being determined and the 29 consecutive business
days prior to such day.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
"Stock Equivalents" means any option, warrant, right or similar security or
claim, outstanding at the Effective Time, exercisable into, exchangeable for, or
convertible into shares of TekInsight Common Stock or securities that are
exercisable into, exchangeable for, or convertible into TekInsight Common Stock,
excluding stock options covering not more than 2,000,000 shares of TekInsight
Class A Stock granted to employees of TekInsight pursuant to its 1992 Stock
Option Plan and excluding any shares of preferred stock of Newco or TekInsight
used to calculate the number of TekInsight Outstanding Share Equivalents.
"Trigger Event" means any of the following: (i) the date on which
TekInsight closes its books or takes a record (A) with respect to any dividend
or distribution upon TekInsight Common Stock or (B) for determining rights of
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stockholders to vote with respect to any matter at any annual or special meeting
of stockholders of TekInsight or (ii) the date on which any Organic Change,
dissolution or liquidation will take place.
9. Restrictions. Notwithstanding anything hereto to the contrary, (i) no
issuance of Additional Merger Consideration shall be made after the fifth
anniversary of the Effective Time, (ii) in no event shall the numbers of shares
of TekInsight Class B Stock issued as Additional Merger Consideration exceed the
number of shares of TekInsight Class B Stock issued as Initial Merger
Consideration, each as adjusted for any reorganization, recapitalization,
reclassification, stock dividend, stock split or other like changes in
TekInsight's capitalization, and (iii) DynCorp may not assign its right to
receive the Additional Merger Consideration (other than by operation of law).
VII. EFFECTIVE TIME OF THE MERGER
A certificate of merger evidencing the transactions contemplated herein
shall be delivered to the Delaware Secretary of State for filing and articles of
merger evidencing the transactions contemplated herein shall be delivered to the
State Corporation Commission of Virginia, each as provided in the Reorganization
Agreement. The Merger shall be effective at the time and on the date specified
in such certificate of merger and articles of merger (such date and time being
herein referred to as the "Effective Time").
VIII. CONDITIONS PRECEDENT
The obligations of DMR, DynCorp, Dyntek and TekInsight to effect the Merger
as herein provided shall be subject to satisfaction, unless duly waived, of the
conditions to the obligations of such person set forth in Article V of the
Reorganization Agreement.
IX. TERMINATION
Anything contained in the Plan of Merger to the contrary notwithstanding,
and notwithstanding adoption hereof by the shareholders of DMR or DynTek, this
Plan of Merger may be terminated and the Merger abandoned as provided in the
Reorganization Agreement.
X. NAME
At the time of the Merger, the name of the Surviving Corporation shall be
changed to DynTek Services, Inc.
XI. MISCELLANEOUS
1. This Plan of Merger may be amended or supplemented at any time prior to
the Effective Time by mutual agreement of DMR, DynCorp, DynTek and TekInsight.
Any such amendment or supplement must be in writing and approved by their
respective Boards of Directors and/or by officers authorized thereby.
2. Any notice or other communication required or permitted under this Plan
of Merger shall be given, and shall be effective, in accordance with the
provisions of the Reorganization Agreement.
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3. The headings of the several Articles herein are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Plan of Merger.
4. This Plan of Merger shall be governed by and construed in accordance
with the laws of Delaware applicable to the internal affairs of DMR and DynTek.
5. Merger This Plan of Merger, taken together with the Reorganization
Agreement, shall constitute a plan of reorganization within the meaning of
Section 1.368-2(g) of the Treasury Regulations promulgated under the Code.
[Remainder of this page left intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Plan of Merger to be executed in counterparts by their
duly authorized officers, all as of the day and year first above written.
DYNCORP MANAGEMENT
RESOURCES INC.
By /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President
TEKINSIGHT SERVICES, INC.
By /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: CEO
XXXXXXXXXX.XXX, INC.
By /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: CEO
DYNCORP
By /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President
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