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Exhibit 2.1
AGREEMENT AND PLAN OF SHARE EXCHANGE
This Agreement and Plan of Share Exchange (the "Agreement"), entered
into between SUN HYDRAULICS INCORPORATED, a Delaware corporation ("the
Company"), and SUN HYDRAULICS CORPORATION, a Florida corporation ("Sunopco");
W I T N E S S E T H:
WHEREAS, Sunopco is in the business of designing, manufacturing and
marketing screw-in hydraulic cartridge valves and manifolds;
WHEREAS, Sun Hydraulik Holdings Limited, a private limited company
organized under the laws of England and Wales ("Holdings") and an affiliate of
Sunopco under common control and management, is also in the business of
designing, manufacturing and marketing screw-in hydraulic cartridge valves and
manifolds;
WHEREAS, management and the Boards of Directors of Sunopco and
Holdings have determined that it is in best interests of Sunopco and Holdings
to join together as wholly-owned subsidiaries of a United States holding
company and to that end have caused the Company to be formed to serve as such a
holding company;
WHEREAS, in order to effect the transfer of all of the shares of the
capital stock of Sunopco from the current shareholders thereof to the Company
in exchange for common stock of the Company (the "Share Exchange") as a
tax-exempt exchange pursuant to Section 351 of the Internal Revenue Code of
1986, as amended, and as a statutory share exchange pursuant to the provisions
of Section 607.1102 of the Florida Business Corporation Act (the "FBCA"), the
Boards of Directors of the Company and Sunopco have proposed, declared
advisable, and approved by resolution this Agreement which will effect the
Share Exchange;
NOW, THEREFORE, in consideration of the premises, of the mutual
covenants, agreements, representations and warranties herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Sunopco hereby make this Agreement and set
forth the terms and conditions of the Share Exchange and the mode of carrying
out the same as follows:
1. Share Exchange. Upon the terms and subject to the
satisfaction of the conditions precedent contained in this Agreement, the Share
Exchange shall be completed pursuant to the provisions of, and with the effect
provided in, the FBCA. At the Effective Time (as hereinafter defined), each of
the outstanding shares of common stock of Sunopco, par value $.01 per share
("Sunopco Common Stock") shall be exchanged for and shall thereafter represent
the right to receive 9.90372627 shares of
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validly issued, fully paid, nonassessable shares of the common stock of the
Company, par value $.001 per share ("Company Common Stock").
2. Effective Time of the Share Exchange. If (a) all conditions
precedent to the Share Exchange have either been satisfied or waived and (b)
this Agreement and the Share Exchange are not thereafter terminated as
permitted by the provisions of this Agreement, then duly executed articles of
share exchange (the "Articles of Share Exchange") shall be filed with the
Department of State of the State of Florida (the "Florida Department of State")
in the manner provided in Section 607.1105 of the FBCA. The Share Exchange
shall become effective at the time and on the date specified in the Articles of
Share Exchange (the "Effective Time"), which date shall be the Closing Date (as
hereinafter defined).
3. Closing Date. The consummation of the Share Exchange shall be
on the date (the "Closing Date") of the closing of the sale by the Company to
the public of 2,000,000 shares of Company Common Stock (the "IPO"), pursuant to
that certain registration statement on Form S-1, filed with the Securities and
Exchange Commission on October 15, 1996 (SEC File No. 333-14183). The Share
Exchange shall be consummated immediately prior to the closing of the IPO.
4. Conditions Precedent. The following conditions must occur on
or before the Closing Date in order for the Share Exchange to be effectuated:
(i) approval of this Agreement by all of the holders of
the outstanding shares of Sunopco Common Stock;
(ii) acceptance by the holders of at least 90% of all of
the outstanding shares of capital stock of Holdings of the offer by the Company
to acquire such shares; and
(iii) the closing of the IPO.
5. Fractional Shares. No fractional shares of Company Common
Stock, nor certificates therefor, shall be issued by the Company. If the
number of shares of Company Common Stock issuable to a shareholder of Sunopco
pursuant to Section 1 hereof includes a fraction, the number of shares shall be
rounded up to the next whole number.
6. Stock Options. Each outstanding option to purchase a share of
Sunopco Common Stock shall be converted on the Closing Date into an option to
purchase 9.90372627 shares of Company Common Stock, at a purchase price equal
to the purchase price for the share of Sunopco Common Stock divided by
9.90372627. No options for fractional shares of Company Common Stock shall be
issued by the Company. If the aggregate number of shares of Company Common
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Stock issuable to a optionholder of Sunopco pursuant to this Section 6 for all
stock options held by such optionholder which have identical purchase prices,
vesting dates and termination dates includes a fraction, the number of shares
shall be rounded up to the next whole number. All of such options to purchase
shares of Company Common Stock shall be issued under and pursuant to the terms
of the Company's 1996 Stock Option Plan.
7. Physical Exchange of Shares. Within three (3) business
days after the Closing Date, the Company shall issue and deliver to each
shareholder of Sunopco a letter of transmittal in the form attached hereto as
Exhibit A. Within twenty (20) days after receipt by the Company from a
shareholder of Sunopco of a duly executed letter of transmittal, accompanied by
stock certificates representing such shareholders Sunopco Common Stock, a
certificate representing the shares of Company Common Stock issuable to such
shareholder shall be mailed by the Company to such shareholder. From and after
the Effective Time and until surrendered in accordance with the provisions of
this Section 7, each Sunopco stock certificate shall represent for all purposes
the right to receive Company Common Stock pursuant to the terms of this
Agreement. Unless and until any outstanding Sunopco stock certificate shall be
so surrendered, no dividend or other distribution (cash or stock), if any,
payable to holders of record of the Company Common Stock as of any date
subsequent to the Effective Time shall be paid to the holder of such
outstanding Sunopco stock certificate; provided, however, that upon such
surrender of such outstanding Sunopco stock certificate there shall be paid to
the record holder of such certificate the amount of dividends and other
distributions, if any, but without interest, that have theretofore become
payable with respect to the number of whole shares of the Company Common Stock
represented by such certificate issued upon such surrender and exchange. All
shares of Company Common Stock issued upon the surrender of Sunopco stock
certificates pursuant to this Section 7 shall be deemed to have been made in
full satisfaction of all rights pertaining to the converted and exchanged
shares of Sunopco Common Stock represented by such Sunopco stock certificates.
8. Closing of Stock Transfer Books. The stock transfer books of
Sunopco shall be closed upon the execution of this Agreement. In the event of
a transfer of ownership of Sunopco Common Stock which is not registered in the
transfer records of Sunopco, Company Common Stock issuable with respect thereto
may be distributed to a transferee if the certificate representing such Sunopco
Common Stock is presented to the Company accompanied by all documents required
to evidence and effect such transfer and by payment of any applicable stock
transfer taxes. The Company shall be entitled to rely upon the stock transfer
books of Sunopco to establish the identity of those persons entitled to receive
the considerations specified in this Agreement for their shares of Sunopco
Common Stock, which books shall be conclusive with respect
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to the ownership of such shares. In the event of a dispute with respect to the
ownership of any shares of Sunopco Common Stock, the Company shall be entitled
to deposit any consideration represented thereby in escrow with an independent
party and thereafter be relieved with respect to any claims to such
considerations.
9. Dissenters' Rights. Under Sections 607.1302 and 607.1320 of
the FBCA, each Sunopco shareholder is entitled to demand and receive payment of
the fair value of his or her shares in cash if dissenting to the Share Exchange
if such shareholder:
(i) files with the Company, before the vote is taken, a
written notice of his intent to demand payment for
his or her shares if the Share Exchange is effected;
(ii) does not vote in favor of the Share Exchange; and
(iii) within 20 days after the Company notifies the holder
of the authorization of the Share Exchange, files
with the Company a written notice of election to
dissent stating the holder's name and address and the
number, class, and series of the shares to which he
dissents, and demanding payment of the fair value of
those shares, and simultaneously deposits with the
Company the certificates for any certified shares.
10. Supplemental Action. At any time after the Effective Time, if
the Company shall determine that any further conveyances, agreements,
documents, instruments, and assurances or any further action is necessary or
desirable to effectuate the provisions of this Agreement, the appropriate
officers of the Company and Sunopco, as the case may be, whether past or
remaining in office, shall execute and deliver all conveyances, agreements,
documents, instruments, and assurances, and perform all acts reasonably
necessary or desirable to effectuate the provisions of this Agreement.
11. Amendment and Waiver. Any of the terms or conditions of this
Agreement may be amended or modified in whole or in part at any time before the
vote of the shareholders of Sunopco on the Share Exchange by an agreement in
writing executed in the same manner as this Agreement (but not necessarily by
the same persons), or at any time thereafter so long as such change is in
accordance with Section 607.1103 of the FBCA. The conditions precedent set
forth in Section 4(i) and 4(ii) hereof may be waived by the joint action of the
Boards of Directors of the Company and Sunopco, provided that, with respect to
Section 4(i), this Agreement and the Share Exchange have been approved by the
holders of at least a majority of the outstanding shares of Sunopco Common
Stock, and with respect to Section 4(ii), the holders of at least 90% of the
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outstanding shares of capital stock of Holdings have accepted the offer of the
Company to acquire such shares.
12. Termination and Abandonment.
A. At any time prior to the Effective Time (whether before or
after filing the Articles of Share Exchange), this Agreement may be terminated
and the Share Exchange abandoned by joint action of the Boards of Directors of
the Company and Sunopco, notwithstanding approval of the Share Exchange by the
shareholders of Sunopco.
B. This Agreement shall be canceled automatically if Articles of
Share Exchange are not filed with the Secretary of State on or before January
31, 1997, specifying an Effective Time of not later than 11:59 p.m. on January
31, 1997. In the event of the abandonment of the Share Exchange and the
termination of this Agreement pursuant to the foregoing provision, this
Agreement shall become void and have no effect, without any liability on the
part of any of the parties or their stockholders, directors, or officers.
13. Entire Agreement. This Agreement constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings of the
parties in connection herewith.
14. Severability. The Company and Sunopco hereby agree and affirm
that none of the above provisions is dependent on the validity of any other
provision and invalidity as to any provision or any part thereof shall not
affect any other provision.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed by its authorized officer and its corporate seal affixed, all as of
the 13th day of November, 1996.
ATTEST: SUN HYDRAULICS INCORPORATED,
a Delaware corporation
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
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Secretary Xxxxx X. Xxxxx, President
ATTEST: SUN HYDRAULICS CORPORATION,
a Florida corporation
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
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Secretary Xxxxxx X. Xxxxx, Chairman
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