APPENDIX B
AGREEMENT AND PLAN OF MERGER
AMONG EARTHLINK NETWORK, INC.,
A DELAWARE CORPORATION
DOLPHIN, INC.,
A DELAWARE CORPORATION, AND
DOLPHIN SUB, INC.,
A DELAWARE CORPORATION
THIS AGREEMENT AND PLAN OF MERGER dated as of February 10, 1998 (the
"Agreement") is among Earthlink Network, Inc., a Delaware corporation
("Earthlink"), Dophin, Inc., a Delaware corporation ("Newco"), and Dolphin
Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Dolphin
("Newco Sub"), Earthlink and Newco Sub are sometimes referred to herein as
the "Constituent Corporation."
RECITALS
A. Earthlink is a corporation duly organized and existing under the
laws of the State of Delaware and has an authorized capital of sixty million
(60,000,000) shares, fifty million (50,000,000) of which are designated as
common stock, $.01 par value share (the "EarthLink Common Stock"), and ten
million (10,000,000) of which are designated as preferred stock, $.01 par
value per share.
B. Newco is a corporation duly organized and existing under the laws
of the State of Delaware and has an authorized capital of seventy-five
million (75,000,000) shares, fifty million (50,000,000) of which are
designated as common stock, $.01 par value per share (the "Newco Common
Stock") and twenty five million (25,000,000) of which are designated as
preferred stock $.01 par value per share (the "Newco Preferred Stock"). As of
February 10, 1998, ten (10) shares of Newco Common Stock were issued and
outstanding (the "Newco Subscription Shares") and no shares of Newco
Preferred Stock were issued and outstanding.
C. Newco Sub is a corporation duly organized and existing under the
laws of the State of Delaware and has an authorized capital of sixty million
(60,000,000) shares, fifty million (50,000,000) of which are designated as
common stock, $.01 par value per share (the "Newco Sub Common Stock.") and
ten million (10,000,000) of which are designated as preferred stock, $.01 par
value per share. As of February 10, 1998, ten (10) shares of Newco Sub Common
Stock were issued and outstanding, all of which were held by Newco.
D. The Boards of Directors of EarthLink and Newco Sub have
determined that is is advisable and in the best interests of EarthLink and
Newco Sub, respectively, that Newco Sub merge with and into EarthLink upon
the terms and conditions herein provided.
E. The Boards of Directors of each of EarthLink, Newco and Newco Sub
have approved this Agreement and the transactions contemplated hereby and
directed that this agreement be excuted by the respective undersigned
officers of each of those corporations.
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F. The Board of Directors of EarthLink and Newco Sub have directed
that this Agreement be submitted to a vote of their respective stockholders
with the recommendation that such stockholders approve the Agreement and the
transactions contemplated hereby.
NOW THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, EarthLink Newco and Newco Sub hereby agree, subject to the
terms and conditions hereinafter set forth as follows:
1. Merger
1.1 Merger. In accordance with the provisions of this Agreement and
the Delaware General Corporation Law, Newco Sub shall be merged with and into
EarthLink (the "Merger"), the separate existence of Newco Sub shall cease and
EarthLink shall be, and is herein sometimes referred to as, the "Surving
Corporation," and the name of the surviving Corporation shall be EarthLink
Operations, Inc. Upon the Effective Date of the Merger (as defined below),
Newco shall file a change of name amendment to its Certificate of
Incorporation, whereby it shall assume the name "EarthLink Network, Inc."
1.2 Filing and Effectiveness. The Merger shall become effective when
the following actions shall have been completed:
(a.) This Agreement and Merger shall have been adopted and
approved by the stockholders of each of the Constituent Corporations in
accordance with the requirements of the Delaware General Corporation Law; and
(b.) An executed Certificate of Merger or an executed
counterpart of this Agreement meeting the requirements of the Delaware
General Corporation Law shall have been filed with the Secretary of the State
of Delaware.
The date and time when the Merger shall become effective, as aforesaid,
is herein called the "Effective Time of the Merger."
1.3 Effect of the Merger. Upon the Effective Time of the Merger,
the separate existence of Newco Sub shall cease and EarthLink, as the
Surviving Corporation, (i) shall continue to possess all of its assets,
rights, powers, and property as constuted immediately prior to the Effective
Time of the Merger, (ii) shall be subject to all actions previously taken by
its and Newco Sub's Board of Directors, (iii) shall succeed, without other
transfer, to all of the assets, rights, powers, and property of Newco Sub in
the manner more fully set forth in Section 259 of the Delaware General
Corporation Law, (iv) shall continue to be subject to all of the debts,
liabilities, and obligations of Newco Sub in the same manner as if Earthlink
had itself incurred them, all as more fully provided under the applicable
provisions of the Delaware General Corporation Law.
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II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 Certificate of Incorporation. The Certificate of Incorporation
of Newco Sub as in effect immediately prior to the Effective Time of the
Merger shall continue in full force and effect as the Certificate of
Incorporation of the Surving Corporation until duly amended in accordance
with the provisions thereof and applicable law. The Certificate of
Incorporation of Newco Sub is attached hereto as Appendix A.
2.2 Bylaws. The Bylaws of Newco Sub as in effect immediately prior
to the Effective Time of the Merger shall continue in full force and
effect as the Bylaws of the Surviving Corporation until duly amended in
accordance with the provisions thereof and applicable law. The Bylaws of
Newco Sub are attached hereto as Appendix B.
2.3 Directors and Officers. The directors and officers of EarthLink
immediately prior to the Effective Time of the Merger shall be the directors
and officers of each of Newco and the Surviving Corporation until their
successors shall have been duly elected and qualified or until as otherwise
provided by law, the Certificate of Incorporation or the Bylaws of Newco or
the Surviving Corporation, respectively.
III. MANNER OF CONVERSION OF STOCK
3.1 Newco Sub Common Stock. Upon the Effective Time of the Merger,
the shares of Newco Sub Common Stock issued and outstanding immediately prior
thereto shall by virtue of the Merger and without any action by the
Constituent Corporations, the holder of such shares or any other person, be
converted into and exchanged for such number of fully paid and nonassessable
shares of common stock of the Surviving Corporation as is equal to the number
of shares of EarthLink Common Stock outstanding at the Effective Time of the
Merger.
3.2 EarthLink Common Stock. Upon the Effective Time of the Merger,
each share of EarthLink Common Stock issued and outstanding immediately prior
thereto shall by virtue of the Merger and without any action by the
Constituent Corporations, the holder of such shares or any other person, be
converted into and exchanged for one fully paid and nonassessable share of
Newco Common Stock.
3.3 Newco Subscription Shares. Upon the Effective Time of the
Merger, the Newco Subscription Shares shall be canceled and thereafter held
as treasury stock of Newco.
3.4 EarthLink Options, Stock Purchase Rights and Convertible
Securities.
(a.) Upon the Effective Time of the Merger to the extent
permitted by the terms of such instruments as in effect at the Effective Time
of the Merger, Newco shall assume the obligations of EarthLink under any and
all securities, warrants, calls, rights to purchase, rights of first refusal,
securities convertible into or exchangeable for voting securities,
commitments, agreements, arrangements, or undertakings of any kind to which
EarthLink is a party or by which it is bound obligating EarthLink to issue,
deliver or sell or create, or cause to
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be issued, delivered or sold or created, additional shares of the capital
stock of or other voting securities or phantom stock or other contractual
rights the value of which is determined in whole or in part of the value of
any capital stock of EarthLink, or obligating EarthLink to issue, grant,
extend or enter into any such security, option, warrant, call right,
commitment, agreement, arrangement, or undertaking (collectively, the
"Dilutive Securities") on the same terms and conditions as were in effect
immediately prior to the Merger; thereafter, each such Dilutive Security
shall become, subject to the provisions in paragraph (c) hereof, an option,
right to purchase or a security convertible into Newco Common Stock on the
basis of one share of Newco Common Stock for each one share of EarthLink
Common Stock issuable pursuant to any such Dilutive Security, on the same
terms and conditions and at an exercise price equal to the exercise price
applicable to any Dilutive Security at the Effective Time of the Merger.
(b.) A number of shares of Newco Common Stock shall be
reserved for issuance upon the exercise of options, stock purchase rights and
convertible securities equal to the number of shares of EarthLink Common
Stock so reserved immediately prior to the Effective Date of the Merger.
(c.) The assumed Rights shall not entitle any holder thereof
to a fractional share upon exercise or conversion (unless the holder was
entitled to a fractional interest immediately prior to the Merger). In lieu
thereof, any fractional share interests to which a holder of an assumed Right
(other than an option issued pursuant to EarthLink's 1995 Stock Option Plan,
as amended) would otherwise be entitled upon exercise or conversion shall be
aggregated (but only with other similar Rights which have the same per share
terms.) To the extent that after such aggregation the holder would still be
entitled to a fractional share with respect thereto upon exercise of
conversion, the holder shall be entitled, upon the exercise or conversion of
all such assumed Rights pursuant to their terms (as modified herein), to one
full share of common stock in lieu of such fractional share. With respect to
each class of such similar Rights, no holder will be entitled to more than
one full share in lieu of a fractional share upon exercise or conversion.
3.5 Stock Certificates
(a.) Upon the Effective Time of the Merger, each
outstanding certificate theretofor representing shares of EarthLink Common
Stock shall be deemed for all purposes to represent the number of shares of
Newco Common Stock into which such shares of EarthLink Common Stock were
converted in the Merger. The registered owner of shares of EarthLink Common
Stock on the books and records of EarthLink shall be entitled, as of the
Effective Time of the Merger, to exercise any voting and other rights with
respect to, and receive dividends and other distributions upon, the shares of
Newco Common Stock represented by such outstanding certificate as provided
above.
(b.) Upon the Effective Time of the Merger, Newco, the
sole stockholder of Newco Sub, shall surrender the outstanding certificate
representing shares of Newco Sub to the Surviving Corporation in exchange for
a certificate or certificates representing the number of shares of common
stock of the Surviving Corporation into which the surrended shares were
converted as herein provided. Such certificate for shares of common stock of
the Surviving
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Corporation shall bear the same legends, if any, with respect to the
restrictions on transferability as the certificate of Newco Sub so converted
and given in exchange therefor, unless otherwise determined by the Board of
Directors of the Surviving Corporation in compliance with applicable laws.
IV. GENERAL
4.1 Assurances. From time to time, as and when required by the
parties hereto or by their successors or assigns, there shall be executed and
delivered on behalf of the parties hereto such deeds and other instruments,
and there shall be taken or caused to be taken by it such further and other
actions as shall be appropriate or necessary in order to vest or perfect in
or conform of record or otherwise by the parties hereto the title to and
possession of all the property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of the parties hereto and
otherwise to carry out the purposes of this Agreement, and the officers and
directors of the parties hereto are fully authorized in the name and on
behalf of such parties or otherwise to take any and all such action and to
execute and deliver any and all such deeds and other instruments.
4.2 Abandonment. At any time before the Effective Time of the
Merger, this Agreement may be terminated and the Merger may be abandoned for
any reason whatsoever by the Board of Directors of any of EarthLink, Newco or
Newco Sub, notwithstanding the approval of this Agreement by the stockholders
of EarthLink or by the sole stockholder of Newco or Newco Sub.
4.3 Amendment. Subject to the Investment Agreement dated February
10, 1998, by and among EarthLink, Newco, Newco Sub, Sprint Corporation and
Sprint Communications Company L.P., the Boards of Directors of the
Constituent Corporations may amend this Agreement at any time prior to the
filing of this Agreement (or certificate in lieu thereof) with the Secretary
of State of the State of Delaware, provided that an amendment made subsequent
to the adoption of this Agreement by the stockholders of either Constituent
Corporation shall not: (i) alter or change the amount or kind of shares,
securities, cash, property and/or rights to be received in exchange for or in
conversion of all or any of the shares of any class or series thereof of
either of the Constituent Corporations, (ii) alter or change any term of the
Certificate of Incorporation of the Surviving Corporation to be effected by
the Merger, or (iii) alter or change any of the terms and conditions of this
Agreement if such alteration or change would adversely affect the holders of
any class or series of capital stock or either of the Constituent
Corporations.
4.4 Registered Office. The registered office of the Surviving
Corporation in the State of Delaware is 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX
00000 and The Corporation Trust Company is the registered agent of the
Surviving Corporation at such address.
4.5 Agreement. Executed copies of this Agreement will be on file
at the principal place of business of the Surviving Corporation at 0000 Xxx
Xxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000, and copies thereof will be
furnished to any stockholder of either Constituent Corporation upon request
and without cost.
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4.6 Governing Law. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed by the
laws of the State of Delaware.
4.7 Counterparts. In order to facilitate the filing and recording of
this Agreement, the same may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement having first been approved by the
resolutions of the Board of Directors of EarthLink Network, Inc., a Delaware
corporation, Dolphin, Inc., a Delaware corporation, Dolphin Sub, Inc., a
Delaware corporation, and is hereby executed on behalf of each such
corporations and attested by their respective officers thereunto duly
authorized.
EARTHLINK, NETWORK, INC.
a Delaware corporation
By: __________________________
Sky X. Xxxxxx, Chairman
ATTEST:
_________________________________________
Xxxxxxx Xxxxxx, Secretary
DOLPHIN, INC.
a Delaware corporation
By: ________________________
Sky X. Xxxxxx, Chariman
ATTEST:
________________________________________
Xxxxxxx Xxxxxx, Secretary
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DOLPHIN SUB, INC.
a Delaware corporation
By: ________________________
Sky X. Xxxxxx, Chariman
ATTEST:
________________________________________
Xxxxxxx Xxxxxx, Secretary
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