EXHIBIT 10.2
AGREEMENT OF MERGER AND PLAN OF
REORGANIZATION
AMONG
MATRIA HEALTHCARE, INC.,
MATRIA HOLDING COMPANY, INC.
AND MATRIA MERGERSUB, INC.
DECEMBER 30, 2004
AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
THIS AGREEMENT OF MERGER AND PLAN OF REORGANIZATION ("Agreement"), dated
as of December 30, 2004, is among Matria Healthcare, Inc., a Delaware
corporation (the "Company") Matria Holding Company, Inc., a Delaware corporation
("Holdco") and a direct, wholly owned subsidiary of the Company, and Matria
MergerSub, Inc., a Delaware corporation ("MergerSub") and a direct, wholly owned
subsidiary of Holdco.
RECITALS
A. The Company's authorized capital stock consists of (i) 25,000,000
shares of common stock, par value $.01 per share ("Company Common Stock"), of
which 10,563,421 shares were issued and outstanding as of December 29, 2004 and
(ii) 50,000,000 shares of preferred stock, $.01 per share, none of which is
currently outstanding ("Company Preferred Stock").
B. As of the date hereof, Holdco's authorized capital stock consists of
(i) 25,000,000 shares of common stock, par value $.01 per share ("Holdco Common
Stock"), of which 1,000 shares are issued and outstanding and (ii) 50,000,000
shares of preferred stock, no par value, none of which is currently outstanding
("Holdco Preferred Stock").
C. The designations, rights and preferences, and the qualifications,
limitations and restrictions thereof, of the Holdco Preferred Stock and the
Holdco Common Stock are the same as those of the Company Preferred Stock and the
Company Common Stock.
D. The Certificate of Incorporation and the By-laws of Holdco immediately
after the Effective time (as hereinafter defined) will contain provisions
identical to the Certificate of Incorporation and By-laws of the Company
immediately before 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").
E. The directors of the Company immediately prior to the Merger (as
hereinafter defined) will be the directors of Holdco as of the Effective Time.
F. Holdco and MergerSub are newly formed corporations organized for the
purpose of participating in the transactions herein contemplated.
G. The Company desires to create a new holding company structure by
merging MergerSub with and into the Company with the Company being the surviving
corporation, and converting each outstanding share of Company Common Stock into
a like number of shares of Holdco Common Stock, all in accordance with the terms
of this Agreement.
H. The Boards of Directors of Holdco, MergerSub and the Company have
approved this Agreement and the merger of MergerSub with and into the Company
upon the terms and subject to the conditions set forth in this Agreement (the
"Merger").
I. For federal income tax purposes, it is intended that the Merger shall
qualify as in reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained in this Agreement, and intending to be legally bound
hereby, the Company, Holdco and MergerSub hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. In accordance with Section 251(g) of the DGCL and
subject to and upon the terms and conditions of this Agreement, MergerSub shall,
at the Effective Time, be merged with and into the Company, the separate
corporate existence of MergerSub shall cease and the Company shall continue as
the surviving corporation. The Company as the surviving corporation after the
Merger is hereinafter sometimes referred to as the "Surviving Corporation." At
the Effective time, the effect of the Merger shall be as provided in Section 259
of the DGCL.
Section 1.2 Effective Time. The Merger shall become effective upon the
filing of a copy of this Agreement with the Secretary of State of the State of
Delaware, or at such other time as is specified in the Certificate of Merger
(the time of such filing, or other specified time, being referred to herein as
the "Effective Time").
Section 1.3 Certificate of Incorporation. From and after the Effective
Time the Certificate of Incorporation of the Company, as in effect immediately
prior to the Effective Time, shall be the certificate of incorporation of the
Surviving Corporation until thereafter amended as provided by law; provided,
however, that, from and after the Effective Time:
(a) Article I thereof shall be amended so as to read in its entirety as
follows:
"The name of this Corporation is Matria Women's and Children's
Health, Inc."
(b) Article IV shall be amended so as to read in its entirety as
follows:
"Article IV
The aggregate number of shares which the Corporation shall
have authority to issue shall be one thousand (1,000), consisting of
one thousand (1,000) shares of Common Stock, par value $.01 per
share."
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(c) Article V shall be deleted in its entirety.
(d) Article VI shall be renumbered Article V.
(e) Article VII shall be renumbered as Article VI and shall be amended
so as to read in its entirety as follows:
"Article VI
In furtherance and not in limitation of the powers conferred
by law, the Board of Directors is authorized to adopt, amend or
repeal the Bylaws of the Corporation."
(f) Article VIII shall be renumbered Article VII.
(g) Article IX shall be renumbered as Article VIII.
(h) A new Article IX shall be added thereto which shall be and read in
its entirety as follows:
"Article IX.
Any act or transaction by or involving the Corporation, other
than the election or removal of directors, that requires for its adoption
under the General Corporation Law of the State of Delaware or its
certificate of incorporation the approval of the stockholders of the
Corporation shall, by virtue of this reference to Section 251(g)(7)(i) of
the General Corporation Law of the State of Delaware, require, in
addition, the approval of the stockholders of Matria Healthcare, Inc., a
Delaware corporation, or any successor thereto by merger, by the same vote
as is required by the General Corporation Law of the State of Delaware
and/or the certificate of incorporation of this Corporation."
Section 1.4 Bylaws. From and after the Effective Time, the Bylaws of
MergerSub, as in effect immediately prior to the Effective time, shall
thereafter continue in full force and effect as the bylaws of the Surviving
Corporation until thereafter amended or repealed as provided therein.
Section 1.5 Directors. The directors of MergerSub immediately prior to the
Effective Time shall be the initial directors of the Surviving Corporation and
will hold office from the Effective Time until their successors are duly elected
or appointed and qualified in the manner provided in the Certificate of
Incorporation and the Bylaws of the Surviving Corporation or as otherwise
provided by law.
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Section 1.6 Officers. The officers of MergerSub immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation and
will hold office from the Effective Time until their successors are duly elected
or appointed and qualified in the manner provided in the Certificate of
Incorporation and the Bylaws of the Surviving Corporation or as otherwise
provided by law.
Section 1.7 Additional Actions. 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 the Merger. If, at any time
after the Effective Time, the Surviving Corporation shall consider or be advised
that any deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of either of MergerSub or the
Company acquired or to be acquired by the Surviving Corporation as a result of,
or in connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of each of MergerSub and the
Company, all such deeds, bills of sale, assignments and assurances and to take
and do, in the name and on behalf of each of MergerSub and the Company or
otherwise, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out this Agreement.
Section 1.8 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Holdco, MergerSub, 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 and
thereafter represent one fully paid, duly issued and nonassessable share
of Holdco Common Stock, and each such certificate previously representing
any such shares of Company Common Stock shall thereafter represent
automatically, without the requirement of any exchange thereof, the same
number of shares of Holdco Common Stock.
(b) Each share of common stock, par value $.01 per share, of
MergerSub 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 $.01 per share, of
the Surviving Corporation.
(c) From and after the Effective Time, holders of certificates
formerly evidencing Company Common Stock shall cease to have any rights as
stockholders of the Company, except as provided by law; provided, however,
that such holders shall have the rights set forth in Section 1.10 herein.
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Section 1.9 Purchase Rights.
(a) In accordance with Section 23 of that certain Amended and
Restated Rights Agreement dated as of April 27, 1999 between the Company
and SunTrust Bank, as Rights Agent (the "Company Rights Plan"), each
outstanding purchase right of the Company ("Company Purchase Right") shall
terminate as of the Effective Time.
(b) Holdco shall, prior to the Effective Time, adopt a rights plan
(the "Holdco Rights Plan") substantially similar in form and substance to
the Company Rights Plan and, in accordance therewith, Holdco shall, at the
Effective Time but without duplication of Holdco's obligations under the
Holdco Rights Plan, issue to each holder of Holdco Common Stock issued
pursuant hereto one purchase right ("Holdco Purchase Right") for each
share of Holdco Common Stock issued by it pursuant to Section 1.8(a)
herein.
Section 1.10 No Surrender of Certificates; Stock Transfer Books. As a
result of the provisions of Section 1.3 herein, in conjunction with the
provisions of a certificate of merger of the certificate of incorporation of
Holdco and Matria Mergeco, Inc. to be filed with the Secretary of State of the
State of Delaware and to become effective immediately after the Effective Time,
the corporate name of Holdco immediately following the Effective Time will be
"Matria Healthcare, Inc.," the same name as the corporate name of the Company
immediately prior to the Effective Time. Accordingly and pursuant to Section
251(g) of the DGCL, until thereafter surrendered for transfer or exchange in the
ordinary course, each outstanding certificate that, immediately prior to the
Effective Time, evidenced Company Common Stock shall be deemed and treated for
all corporate purposes to evidence the ownership of the number of shares of
Holdco Common Stock into which such shares of Company Common Stock were
converted pursuant to the provisions of Sections 1.8 (b) herein. In addition,
immediately after the Effective Time, each such certificate shall also evidence
a number of Holdco Purchase Rights equal to the number of Company Purchase
Rights evidenced thereby immediately prior to the Effective Time of the Merger.
ARTICLE II
ACTIONS TO BE TAKEN IN
CONNECTION WITH THE MERGER
Section 2.1 Company Indebtedness. As of the date of this Agreement, the
Company is a party to the following indentures (individually, an "Indenture"
and, collectively, the "Indentures"):
(1) Indenture (the "Indenture") dated as of July 9, 2001 between the
Company, Xxxxx Fargo Bank, N.A., as trustee and the subsidiary guarantors
listed therein, pursuant to which the Company has heretofore issued $122
million in aggregate principal amount of 11% Notes due 2008, the ("11%
Senior Notes"), of which $2.0 million in aggregate principal amount
currently remain outstanding; and
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(2) Indenture (the "Convertible Indenture") dated as of May 5, 2004
between the Company, the subsidiary guarantors listed therein, and Xxxxx
Fargo Bank, N.A., as trustee, pursuant to which the Company has heretofore
issued $86.250 million in aggregate principal amount of 4.875% Convertible
Senior Subordinated Notes due 2024, all of which are currently
outstanding.
As of the Effective time, Holdco and the Company shall, with respect to
each such Indenture, together with the trustee under each Indenture, execute,
acknowledge and deliver supplemental indentures (each, a "Supplemental
Indenture") to each of such Indentures pursuant to which Holdco shall assume and
agree to perform all obligations of the Company thereunder and the Company shall
be released from its obligations thereunder and Holdco will agree to pay,
perform and discharge all obligations of the Company under the Notes.
Section 2.2 Conversion of Company Notes.
(a) At the Effective Time, each 4.875% Convertible Senior
Subordinated Note due 2024 of the Company, convertible in whole or in part
into shares of Company Common Stock which is then issued and outstanding
(a "Convertible Note") shall cease to be convertible into shares of
Company Common Stock and shall be convertible, under the same terms and
conditions as were applicable to such Convertible Note immediately prior
to the Effective time, into shares of Holdco Common Stock. The number of
shares of Holdco Common Stock issuable upon conversion of such Convertible
Note shall be equal to the number of shares of Company Common Stock that
were issuable under the Convertible Note immediately prior to the
Effective Date.
(b) At or prior to the Effective Time, Holdco shall reserve for
issuance the number of shares of Holdco Common Stock necessary to satisfy
Holdco's obligations under Section 2.2(a).
Section 2.3 Assumption of Registered Stock Plans. Holdco and the Company
hereby agree that they will, at the Effective Time, execute, acknowledge and
deliver an assumption agreement pursuant to which Holdco will, from and after
the Effective Time, assume and agree to perform all obligations of the Company
pursuant to the Company's 2004 Stock Incentive Plan (Registration No.
333-117875), 2002 Stock Incentive Plan (Registration No. 333-100977), 2002 Stock
Purchase Plan (Registration No. 333-100977), 2001 Stock Incentive Plan
(Registration No. 333-72516), 2000 Directors' Non-qualified Stock Option Plan
(Registration No. 333-72512), 2000 Stock Incentive Plan (Registration No.
333-42856), 1997 Stock Incentive Plan (Registration No. 333-69347), 1996 Stock
Incentive Plan (Registration No. 333-02283), 1996 Employee Stock Purchase Plan
(Registration No. 333-01539) and the XxxxxxXxxx.xxx, Inc. 1999 Stock Option and
Stock Appreciation Rights Plan (Registration No. 333-90822) (collectively, the
"Registered Stock Plans").
The outstanding options and other awards assumed by Holdco shall be
exercisable upon the same terms and conditions as under the Plans immediately
prior to the Effective Time, except
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that, upon the exercise of each such option or award, shares of Holdco Common
Stock shall be issuable in lieu of each share of Company Common Stock issuable
upon the exercise thereof immediately prior to the Effective Time.
Section 2.4 Company Warrant. At the Effective Time, the Warrant between
the Company and Xxxxx Xxxxxxx, DPM, dated June 6, 2002 (the "Company Warrant")
shall cease to represent a right to acquire shares of Company Common Stock and
shall be converted automatically into a warrant to acquire, under the same terms
and conditions as was applicable to the Company Warrant immediately prior to the
Effective Time, shares of Holdco Common Stock, and Holdco shall assume the
Company Warrant. The number of shares of Holdco Common Stock purchasable upon
exercise of the Warrant shall be equal to the number of shares of Company Common
Stock that were purchasable under the Company Warrant immediately prior to the
Effective date, subject to adjustment as appropriate to reflect any stock split,
stock dividend, recapitalization or other similar transaction with respect to
Holdco Common Stock subsequent to the Effective Time.
Section 2.5 Post-Effective Amendments. It is the intent of the parties
hereto that Holdco, as of the Effective Time, be deemed a "successor issuer" for
purposes of continuing offerings under the Securities Act of 1933, as amended.
As soon as practicable following the Merger, Holdco will file post-effective
amendments to the Company's shelf registration statement on Form S-3
(Registration No. 333-109488), the Company's resale shelf registration on Form
S-3 (Registration No. 333-116200) pursuant to which the Company's Convertible
Notes are registered for resale, and the Company's registration statements on
Form S-8 covering the Registered Stock Plans, adopting such statements as its
own registration statements for all purposes of the Securities Act and the
Exchange Act and setting forth any additional information necessary to reflect
any material changes made in connection with or resulting from the succession,
or necessary to keep the registration statements from being misleading.
Section 2.6 Reservation of Shares. On or prior to the Effective Time,
Holdco will reserve sufficient shares of Holdco Common Stock to provide for the
issuance of Holdco Common Stock upon exercise of the Company Warrant and the
options outstanding under the Registered Stock Plans and will reserve a number
of shares of Holdco Common Stock sufficient to provide for the issuance thereof
upon exercise of Holdco Purchase Rights.
ARTICLE III
CONDITIONS OF MERGER
Section 3.1 Conditions Precedent. The obligations of the parties to this
Agreement to consummate the Merger and the transactions contemplated by this
Agreement shall be subject to fulfillment or waiver by the parties hereto of
each of the following conditions:
(a) Holdco shall have adopted the Holdco Rights Plan.
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(b) The Company, Holdco, the subsidiary guarantors and the trustee
shall have executed and delivered the Supplemental Indentures contemplated
by Article II herein subject only to the occurrence of the Effective Time
of the Merger.
(c) Prior to the Effective Time, the Company shall have received the
consent of HFG Healthco-4 LLC (the "Lender"), under that certain Credit
Agreement, dated October 22, 2002, as amended (the "Credit Agreement"), to
consummate the Merger and create the holding company structure
contemplated hereby.
(d) Prior to the Effective Time, the Company shall have received an
interpretive opinion or no-action letter from the staff of the Securities
and Exchange Commission in connection with the Company's no-action request
letter, dated November 9, 2004, or shall be reasonably assured that such
interpretive opinion or no-action letter will be received promptly
thereafter.
(e) Prior to the Effective Time, no order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or
restraining order shall have been 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.
ARTICLE IV
COVENANTS
Section 4.1 Election of Directors. Effective as of the Effective Time, the
Company, in its capacity as the sole stockholder of Holdco, will remove each of
the then directors of Holdco, and will elect each person who is then a member of
the board of directors of the Company as a director of Holdco, each of whom
shall serve until the next annual meeting of shareholders of Holdco and until
his successor shall have been elected and qualified.
Section 4.2 Employee Benefit Plans. The Company and Holdco will take or
cause to be taken all actions necessary or desirable in order for Holdco to
assume the Registered Stock Plans and to assume (or become a participating
employer in) each other existing employee benefit plan and agreement of the
Company, with or without amendments, or to adopt, comparable plans, all to the
extent deemed appropriate by the Company and Holdco and permitted under
applicable law.
Section 4.3 Section 253 Subsidiary Merger. In order to change the name of
Holdco to "Matria Healthcare, Inc.," as soon as practicable after the Effective
Time, Holdco will take or cause to be taken all such actions as may be necessary
or desirable to effect a merger, in accordance with Section 253 of the DGCL,
between Holdco and Matria Mergeco, Inc., a direct, wholly-owned subsidiary of
Holdco.
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Section 4.4 Additional Covenants. Subject to, and promptly after,
obtaining (1) any approval of the stockholders of Holdco required under Section
251(g)(7)(i) of the General Corporation Law of the State of Delaware and Article
IX of the Certificate of Incorporation of the Surviving Corporation and (2) any
consent of the Lender required under the Credit Agreement to any of the
following actions:
(a) Conversion to LLC. The Company shall take the action required
under Section 266 of the General Corporation Law of the State of Delaware
to convert from a corporation to a limited liability company organized
under the Limited Liability Company Act of the State of Delaware.
(b) Inter-Company Stock Transfers. The Surviving Corporation shall
(i) contribute to Holdco all of the issued and outstanding stock or
membership interests, as applicable, of its direct, wholly-owned
subsidiaries Diabetes Acquisition, Inc., a Georgia corporation, Matria
Insurance, Ltd., a Vermont corporation, Shared Care, Inc., a Georgia
corporation, Clinical-Management Systems, Inc., a Georgia corporation and
Facet Technologies, LLC, a Georgia limited liability company, (ii) cause
Diabetes Acquisition, Inc., the Company's direct, wholly-owned subsidiary,
to contribute to Facet Technologies, LLC the outstanding capital stock of
Facet Technologies Limited, a corporation organized under the laws of the
United Kingdom, (iii) contribute to Clinical-Management Systems, Inc. all
of the outstanding capital stock of Quality Oncology, Inc., a Delaware
corporation, and (iv) contribute to Holdco its 35% stock ownership
interest in Matria Holding GmbH, a company organized under the laws of
Germany.
(c) Name Change. Holdco shall take or cause to be taken all such
actions as may be necessary or desirable to effect an amendment to the
Articles of Incorporation of Clinical-Management Systems, Inc. to change
the name of Clinical-Management Systems, Inc. to "Matria Health
Enhancement Co."
(d) Transfer of Disease Management Contracts. The Company shall
transfer and assign to Matria Health Enhancement Co. the disease
management contracts to which the Company is a party.
(e) Subsidiary Merger. The Surviving Corporation shall cause Q
Liquidation Corp., a Delaware corporation and XxxxxxXxxx.xxx, Inc., a
Georgia corporation to merge with and into Shared Care, Inc., in
accordance with Section 252 of the DGCL and Section 14-2-1104 of the
Georgia Business Corporation Code, as applicable.
(f) Options Unlimited.
Holdco shall take or cause to be taken all such actions as may be
necessary or desirable for Diabetes Management Solutions, Inc. to transfer
all of the assets exclusively used in the operations of Options Unlimited
to Matria Case Management, Inc., a New York
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corporation and a direct, wholly-owned subsidiary of Clinical-Management
Solutions, Inc.
It is understood and agreed that none of the actions described in
paragraphs (b) - (f) of this Section 4.4 shall occur until after the action
described in paragraph (a) of this Section 4.4 has occurred.
ARTICLE V
TERMINATION AND AMENDMENT
Section 5.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time by
action of the Board of Directors of the Company, Holdco or MergerSub if it
should determine that for any reason the completion of the transactions provided
for herein would be inadvisable or not in the best interest of such corporation
or its stockholders. In the event of such termination and abandonment, this
Agreement shall become void and neither the Company, Holdco or MergerSub nor
their respective stockholders, directors or officers shall have any liability
with respect to such termination and abandonment.
Section 5.2 Amendment. This Agreement may be supplemented, amended or
modified by the mutual consent of the Boards of Directors of the parties to this
Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Governing Law. This Agreement shall be governed by and
construed and enforced under the laws of the State of Delaware.
Section 6.2 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which shall constitute one and the same agreement.
Section 6.3 Entire Agreement. This Agreement, including the documents and
instruments referred to herein, constitutes the entire agreement and supersedes
all other prior agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the Company, Holdco and MergerSub have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
MATRIA HEALTHCARE, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and Chief Executive Officer
MATRIA HOLDING COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
MATRIA MERGERSUB, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
I, Xxxxxxx X. XxXxx, Secretary of Matria Healthcare, Inc. hereby certify that
this Agreement has been adopted pursuant to Subsection 251(g) of the DGCL and
the conditions specified in the first sentence of Subsection 251(g) have been
satisfied.
Matria Healthcare, Inc.
/s/ Xxxxxxx X. XxXxx
------------------------------------
By: Xxxxxxx X. XxXxx, Secretary
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