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EXHIBIT 2
FORM OF
AGREEMENT AND PLAN OF MERGER
MERGING
PARANET, INC.
(A TEXAS CORPORATION)
WITH AND INTO
PARANET SYSTEMS, INC.
(A DELAWARE CORPORATION)
DATED: FEBRUARY ___, 1997
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT is executed as of February ___, 1997 by and
between Paranet, Inc., a Texas corporation (the "Merging Corporation"), Paranet
Systems, Inc., a Delaware corporation (the "Surviving Corporation"), and
Paranet, Inc., a Delaware corporation ("New Paranet"), which corporations are
hereinafter sometimes referred to collectively as the "Constituent
Corporations."
ARTICLE 1
RECITALS
Section 1.1. Organization of the Parties. The Merging
Corporation is a corporation duly organized and existing under the laws of
Texas. The Surviving Corporation is a corporation duly organized and existing
under the laws of Delaware. New Paranet is a corporation duly organized and
existing under the laws of Delaware.
Section 1.2. Merging Corporation's Capital Stock. The Merging
Corporation has authorized capital stock consisting of 10,000,000 shares of
common stock, $0.01 par value per share, of which 7,480,000 shares are now duly
issued and outstanding.
Section 1.3. Surviving Corporation's Capital Stock. The
Surviving Corporation has authorized capital stock consisting of 1,000 shares
of common stock, $0.01 par value per share, of which 1,000 shares are now duly
issued and outstanding. All issued and outstanding shares of capital stock of
the Surviving Corporation are owned by New Paranet.
Section 1.4. Desire to Merge. The Merging Corporation, the
Surviving Corporation and New Paranet desire to effect a statutory merger of
the Merging Corporation with and into the Surviving Corporation in the manner
herein set forth, and the Board of Directors of the signatories hereto have
duly adopted resolutions by written consent approving this Agreement and Plan
of Merger (this "Agreement").
In consideration of the premises, and the mutual covenants and
agreements herein contained, it is hereby agreed by and among the parties
hereto that the Merging Corporation shall be merged with and into the Surviving
Corporation in accordance with the applicable provisions of the Delaware
General Corporation Law, as amended (the "DGCL") and the Texas Business
Corporation Act, as amended (the "TBCA") and upon the following terms and
conditions:
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ARTICLE 2
PARTIES TO PROPOSED MERGER
Section 2.1. The Merging Corporation. The name of the
corporation proposing to merge into the Surviving Corporation is Paranet, Inc.
Section 2.2. The Surviving Corporation. The name of the
corporation into which the Merging Corporation proposes to merge is Paranet
Systems, Inc.
ARTICLE 3
TERMS AND CONDITIONS OF PROPOSED MERGER
AND MODE OF CARRYING IT INTO EFFECT
Section 3.1. General. Upon the Effective Date of the Merger (as
hereinafter defined and subject to the satisfaction of the conditions and
agreements set forth in Articles 5 and 6 hereto): (a) the Merging Corporation
shall merge into the Surviving Corporation, which shall survive the merger and
continue to be a Delaware corporation; (b) the Common Stock of the Surviving
Corporation outstanding upon the Effective Date of the Merger shall be and
remain Common Stock of the Surviving Corporation in accordance with its terms;
and (c) the separate existence of the Merging Corporation shall cease.
Section 3.2. Effective Date of the Merger. The "Effective Date
of the Merger" with respect to the merger contemplated by this Agreement shall
be February ___, 1997.
Section 3.3. Certificate of Incorporation. The certificate of
incorporation of the Surviving Corporation will continue in full force until
amended as provided in that certificate or as provided by law.
ARTICLE 4
MANNER AND BASIS OF CONVERTING
THE MERGING CORPORATION'S SHARES
Section 4.1. Conversion of Shares. Upon the Effective Date of
the Merger, by virtue of the Merger and without any action on the part of the
holder of the stock:
(a) each share of the capital stock of the Merging
Corporation that is held by the Merging Corporation or any subsidiary
thereof as treasury stock immediately prior to the Effective Date shall
be canceled, and no payment shall be made with respect thereto;
(b) subject to Section 4.3, each share of common stock
of the Merging Corporation outstanding immediately prior to the
Effective Date (other than shares referred to in clause (a)) shall be
converted into the right to receive __________ shares of the common
stock, par value $0.01 per share, of New Paranet (the "Merger
Consideration");
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(c) each share of common stock of New Paranet
outstanding immediately prior to the Effective Date (all of which are
owned by the Merging Corporation) shall be canceled, and no payment
shall be made with respect thereto; and
(d) subject to and as more fully provided in Section
6.1, each unexpired option to purchase common stock of the Merging
Corporation that is outstanding at the Effective Date, whether or not
exercisable, shall automatically and without any action on the part of
the holder thereof be converted into an option to purchase a number of
shares of common stock of New Paranet equal to the number of shares of
common stock of the Merging Corporation that could be purchased under
such option multiplied by the "Old Paranet Exchange Ratio" at a price
per share of common stock of New Paranet equal to the per share exercise
price of such option divided by the Old Paranet Exchange Ratio. The Old
Paranet Exchange Ratio, as used herein, shall mean _____________, which
is the number of shares of common stock of New Paranet that is received
for each share of common stock of the Merging Corporation pursuant to
Section 4.1(b).
Section 4.2. Surrender and Exchange of Shares.
(a) Promptly after the Effective Date, the Surviving
Corporation will send to each recordholder of shares of common stock of
the Merging Corporation immediately prior to the Effective Date, other
than Dissenting Shareholders (as defined in Section 4.3), (i) a letter
of transmittal for use in exchanging certificates representing shares of
common stock of the Merging Corporation for the Merger Consideration and
(ii) instructions for use in effecting the surrender of the certificates
representing shares of common stock of the Merging Corporation in
exchange for certificates representing shares of common stock of New
Paranet. Upon surrender of certificates for common stock of the Merging
Corporation for cancellation to the Surviving Corporation, together with
a duly executed letter of transmittal and such other documents as the
Surviving Corporation shall reasonably require, the holder of such
certificates shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of common stock of
New Paranet into which the shares of common stock of the Merging
Corporation theretofore represented by the certificates for common stock
of the Merging Corporation so surrendered shall have been converted
pursuant to the provisions of Section 4.1, and the certificates for
common stock of the Merging Corporation so surrendered shall be
canceled. The letter of transmittal shall (i) specify, among other
things, that delivery shall be effected, and risk of loss and title to
the common stock of the Merging Corporation shall pass, only upon actual
delivery of the certificates for shares of common stock of the Merging
Corporation to the Surviving Corporation and (ii) include provisions
ensuring the rights of each party hereunder including customary
provisions and a statement that satisfies the requirements of Treas.
Reg. Section 1.1445-2(b)(2) certifying that the holder submitting such
letter of transmittal is not a "foreign person" and provide that if such
statement is not made, appropriate tax withholding will be made from the
Merger Consideration.
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(b) Until surrendered in accordance with the terms
hereof, each certificate for shares of common stock of the Merging
Corporation shall after the Effective Date represent for all purposes
only the right to receive the Merger Consideration. Unless and until so
surrendered, no dividends or other distributions payable to the holders
of common stock of New Paranet, as to any time on or after the Effective
Date, will be paid to the holder of such outstanding certificates.
(c) If any portion of the Merger Consideration is to be
issued to a person other than the registered holder of the shares of the
common stock of the Merging Corporation represented by the certificate
or certificates surrendered in exchange therefor, it shall be a
condition to such issuance that any certificate or certificates so
surrendered shall be properly endorsed or otherwise be in proper form
for transfer and that the person requesting such issuance shall pay to
the Surviving Corporation any transfer or other taxes required as a
result of such issuance to a person other than the registered holder of
such shares of the common stock of the Merging Corporation or establish
to the satisfaction of the Surviving Corporation that such tax has been
paid or is not payable.
(d) From and after the Effective Date, there shall be
no further registration of transfers on the books of the Merging
Corporation of shares of common stock of the Merging Corporation that
were outstanding immediately prior to the Effective Date.
(e) Notwithstanding the foregoing, neither New Paranet
nor the Surviving Corporation shall be liable to any holder of shares of
common stock of the Merging Corporation for any amount paid to a public
official pursuant to applicable abandoned property laws. Any amounts
remaining unclaimed by holders of shares of common stock of the Merging
Corporation three years after the Effective Date (or such earlier date
immediately prior to such time as such amounts would otherwise escheat
to or become property of any governmental entity) shall, to the extent
permitted by applicable law, become the property of the Surviving
Corporation free and clear of any claims or interests of any person
previously entitled thereto.
Section 4.3. Dissenting Shares. Notwithstanding Section 4.1,
shares of the common stock of the Merging Corporation outstanding immediately
prior to the Effective Date and held by a holder who makes a written demand for
the payment of the fair value of such holder's shares in the manner provided
under the DGCL or TBCA (a "Dissenting Shareholder") shall not be converted into
the right to receive the Merger Consideration, unless such holder shall have
failed to perfect or shall have effectively withdrawn or lost his right to
payment of the fair value of his shares of the common stock of the Merging
Corporation under the DGCL or TBCA. If after the Effective Date such holder
shall have failed to perfect or shall have effectively withdrawn or lost his
right to payment of the fair value of his shares of the common stock of the
Merging Corporation under the DGCL or TBCA, such shares of the common stock of
the Merging Corporation shall be treated as if they had been converted as of
the Effective Date into the right to receive the Merger Consideration. The
Merging Corporation shall give New Paranet prompt notice of any objections
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or demands received by the Merging Corporation from any shareholder exercising
his right to dissent, and, prior to the Effective Date, New Paranet shall have
the right to participate in all negotiations and proceedings with respect
thereto. Prior to the Effective Date, the Merging Corporation shall not,
except with the prior written consent of New Paranet, make any payment with
respect to, or settle or offer or agree to settle, any such demands.
Section 4.4. No Fractional Shares. No fractional shares of
common stock of New Paranet shall be issued in the Merger. Each holder of the
common stock of the Merging Corporation will be issued a whole share of common
stock of New Paranet in lieu of any fractional share interest to which such
holder would otherwise be entitled. For purposes of determining the number of
shares of common stock of New Paranet to be issued in the Merger, the common
stock of the Merging Corporation held by one person in multiple accounts shall
be aggregated.
ARTICLE 5
APPROVALS AND TERMINATION
Section 5.1. Corporate Approvals. Pursuant to Article 5.03 of
the TBCA, this Agreement and related matters shall be submitted to the
shareholders of the Merging Corporation to vote or consent with respect
thereto.
Section 5.2. Approvals of Surviving Corporation. Pursuant to
Section 252 of the DGCL, this Agreement and related matters shall be submitted
to the shareholders of the Surviving Corporation to vote or consent with
respect thereto.
Section 5.3. Termination. At any time prior to the Effective
Date of the Merger, this Agreement may be terminated and abandoned by the
Merging Corporation by appropriate resolution of its Board of Directors. In
the event of such termination and abandonment, this Agreement shall become void
and neither the Merging Corporation nor the Surviving Corporation or their
respective shareholders, directors or officers may be held liable in respect to
such termination or abandonment.
ARTICLE 6
MISCELLANEOUS
Section 6.1. Option Plans. Prior to the Effective Date, New
Paranet and the Merging Corporation shall take such action as may be necessary
to cause each unexpired and unexercised option to purchase shares of common
stock of the Merging Corporation (each an "Old Paranet Option") to be
automatically converted at the Effective Date into an option (each a "New
Paranet Option") to purchase a number of shares of common stock of New Paranet
equal to the number of shares of common stock of the Merging Corporation that
could have been purchased under the Old Paranet Option multiplied by the Old
Paranet Exchange Ratio, at a price per share of common stock of New Paranet
equal to the option exercise price determined pursuant to the Old
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Paranet Option divided by the Old Paranet Exchange Ratio and otherwise subject
to all of the same terms and conditions as the Old Paranet Option. The date of
grant of a substituted Option shall be the date on which the corresponding Old
Paranet Option was granted. At the Effective Date, all references in the stock
option agreement to Old Paranet shall be deemed to refer to New Paranet. New
Paranet shall assume all of the Merging Corporation's obligations with respect
to Old Paranet Options as so amended and shall, from and after the Effective
Date, make available for issuance upon exercise of New Paranet Options all
shares of common stock of New Paranet covered thereby.
Section 6.2. Further Assurances. If at any time the Surviving
Corporation shall consider or be advised that any further assignment, assurance
or other action is necessary or desirable to vest in the Surviving Corporation
the title to any property or right of the Merging Corporation or otherwise to
carry out the purposes of this Agreement, the proper officers, directors or
representatives of the Merging Corporation shall execute and make all such
proper assignments or assurances and take such other actions. The proper
officers, directors or representatives of the Surviving Corporation are hereby
authorized in the name of the Merging Corporation, or otherwise, to take any
and all such action.
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EXECUTED as of the date first above written.
Paranet, Inc.
(a Texas corporation)
By:
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Xxxxxxx X. Xxxxxxxxx
President
Paranet Systems, Inc.
(a Delaware corporation)
By:
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Xxxxxxx X. Xxxxxxxxx
President
Paranet, Inc.
(a Delaware corporation)
By:
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Xxxxxxx X. Xxxxxxxxx
President
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