EXHIBIT 2.2
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
AND PLAN OF REORGANIZATION
THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
AND PLAN OF REORGANIZATION (this "AMENDMENT") is made and entered into as of
April 11, 2000 by and among by and among HA-LO Industries, Inc., an Illinois
corporation ("ACQUIROR"), HA-LO Industries, Inc., a Delaware corporation
("ACQUIROR SUB"), and Xxxxxxxxx.xxx, Inc., a Delaware corporation f/k/a
XxxXxxxx.xxx, Inc. (the "COMPANY").
RECITALS
WHEREAS, Acquiror, Acquiror Sub and the Company are parties to that
certain Agreement and Plan of Merger and Plan of Reorganization dated as of
January 17, 2000 (the "MERGER AGREEMENT") and desire to amend the Merger
Agreement in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual promises and agreements of
the parties hereto, and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in the Merger Agreement.
2. AMENDMENTS TO SECTION 2.01(a)(i). Section 2.01(a)(i) of the
Merger Agreement is deleted in its entirety and the following is hereby
substituted therefor as Section 2.01(a)(i) of the Merger Agreement:
"(a)(i) At the Effective Time, by virtue of the Merger, Acquiror shall
pay to (or for the benefit of) the Stockholders, or reserve for the
benefit of the holders of the Company Options pursuant to Section 6.13,
Two Hundred and Forty Million Dollars ($240,000,000), payable as follows:
(A) Nineteen Million Dollars ($19,000,000) in cash MINUS
Expenses of the Stockholders and the Company in excess of
$500,000 pursuant to section 8.03(a) hereof (the "CASH
CONSIDERATION");
(B) Shares of Acquiror's Series A Convertible Preferred Stock,
without par value ("ACQUIROR SERIES A PREFERRED STOCK"),
valued at its liquidation value, with an aggregate
liquidation value of Fifty-One Million Dollars
($51,000,000) (the "PREFERRED STOCK CONSIDERATION"); and
(C) Shares of Acquiror's common stock, without par value
("ACQUIROR COMMON STOCK"), valued at the Acquiror Share
Price, with an aggregate value of One Hundred Seventy
Million Dollars ($170,000,000) (together
with the Cash Consideration and the Preferred Stock
Consideration, the "MERGER CONSIDERATION").
Provided, however, that, at the Effective Time, Merger
Consideration valued at $25,000,000 (the "CAP"), shall be withheld from
the Escrowed Stockholders and held pursuant to the Escrow Agreements
referred to in Section 2.04 hereof;"
3. AMENDMENTS TO SECTION 2.01(d). Section 2.01(d) of the Merger
Agreement is deleted in its entirety and the following is hereby substituted
therefor as Section 2.01(d) of the Merger Agreement:
"(d) ACKNOWLEDGEMENT. The parties hereto agree and acknowledge that,
notwithstanding anything to the contrary contained in this Section 2.01,
each of (i) the Series B Portion, the Series A Portion and the Common
Stock Portion, and (ii) the aggregate of the cash paid and the value of
the shares of Acquiror Series A Preferred Stock and Acquiror Common Stock
issued pursuant to Sections 2.01(b)(ii), (iii) and (iv), as such value is
determined pursuant to such Sections, must equal Two Hundred Forty
Million Dollars ($240,000,000) MINUS the sum of (A) the Expenses of the
Stockholders and the Company in excess of $500,000 pursuant to Section
8.03(a) hereof and (B) the aggregate value of Acquiror Common Stock and
Acquiror Series A Preferred Stock which would be issued on exercise of
all Adjusted Options outstanding at the Effective Time, valued in
accordance with this Section 2.01."
4. AMENDMENTS TO SECTION 6.11. Section 6.11 of the Merger Agreement
is deleted in its entirety and the following is hereby substituted therefor as
Section 6.11 of the Merger Agreement:
"Section 6.11. ACQUIROR BOARD REPRESENTATION. At the Effective Time,
the Board of Directors of Acquiror shall be reconstituted so that it is
no more than eleven (11) members and so that it contains as members two
directors designated by Xxxx and one director designated by Xxxx. In
order to satisfy its obligations hereunder, Acquiror further agrees prior
to the Effective Time to amend its Bylaws and to take such other action
as reasonably requested by the Company."
5. AMENDMENTS TO SECTION 6.13. Section 6.13 of the Merger Agreement
is deleted in its entirety and the following is hereby substituted therefor as
Section 6.13 of the Merger Agreement:
"Section 6.13 COMPANY OPTIONS UNDER THE PLAN.
(a) As of the Effective Time, Acquiror shall assume the
obligations of the Company under the Plan and each outstanding Company
Option shall be assumed by Acquiror and become and represent an option
(an "ADJUSTED OPTION") to purchase:
(i) the number of shares of Acquiror Common Stock (such
number, before rounding, is the "ADJUSTED OPTION NUMBER"),
decreased to the nearest whole share, determined by multiplying
(A) the number of shares of Company Common Stock subject to such
Company Option immediately prior to the
Effective Time by (B) the portion (the "COMMON STOCK FRACTION") of
a share of Acquiror Common Stock to be issued upon conversion of
one share of Company Common Stock pursuant to Section 2.01(b)(iv)
of this Agreement; and
(ii) the number of shares of Acquiror Series A Preferred
Stock, or portion thereof, determined by multiplying (A) the
Adjusted Option Number by (B) a fraction, the numerator of which
is the portion of a share of Acquiror Series A Preferred Stock to
be issued upon conversion of one share of Company Common Stock
pursuant to Section 2.01(b)(iv) of this Agreement and the
denominator of which is the Common Stock Fraction.
Each Adjusted Option shall be exercisable at an exercise price per share
of Acquiror Common Stock subject thereto (decreased to the nearest whole
cent) equal to (1) the exercise price per share of Company Common Stock
subject to the corresponding Company Option immediately prior to the
Effective Time, (2) divided by the Common Stock Fraction. All references
to the Company in each Company Option shall be deemed, in the
corresponding Adjusted Option, to refer to Acquiror, where appropriate.
Notwithstanding the foregoing, the adjustments provided in this Section
6.13(a) with respect to any Company Options that are "incentive stock
options" (as defined in Section 422 of the Code) or which are described
in Section 423 of the Code, shall be effected in a manner consistent with
the requirements of Section 424(a) of the Code. The other terms of each
Adjusted Option, and the plans or agreements under which they were
issued, shall continue to apply in accordance with their terms. The date
of grant of each Adjusted Option shall be the date on which the
corresponding Company Option was granted.
(b) The Company and Acquiror agree that the Plan shall
be amended, to the extent necessary, to reflect the transactions
contemplated by this Agreement, including, but not limited to the
conversion of shares of Company Class A Common Stock held or to be
awarded or paid pursuant to the Plan, into shares of Acquiror
Common Stock and Acquiror Series A Preferred on a basis consistent
with the transactions contemplated by this Agreement. The Company
and Acquiror agree to submit the amendments to the Plan and the
new plan under which Acquiror will assume the obligations of the
Company under the Plan to their respective stockholders, if such
submission is determined to be necessary by counsel to the Company
or Acquiror after consultation with one another; provided, however
that such approval shall not be a condition to the consummation of
the Merger.
(c) Acquiror shall (i) reserve for issuance the number
of shares of Acquiror Common Stock and Acquiror Series A Preferred
Stock that will become subject to the Plan and (ii) issue or cause
to be issued the appropriate number of shares of Acquiror Common
Stock and Acquiror Series A Preferred Stock pursuant to the Plan,
upon the exercise or maturation of rights existing thereunder on
the Effective Time or thereafter granted or awarded. No later
than the Effective Time, Acquiror shall prepare and file with the
Commission a registration statement on Form S-8 (or other
appropriate form) registering a number of shares of Acquiror
Common Stock and Acquiror Series A Preferred Stock necessary to
fulfill Acquiror's obligations under this Section 6.13(c). Such
registration statement shall be kept effective and the current
status of the
prospectus required thereby shall be maintained for at least as
long as Adjusted Options remain outstanding.
(d) As soon as practicable after the Effective Time,
Acquiror shall deliver to the holders of Company Options
appropriate notices setting forth such holders' rights pursuant to
the Plan and the agreements evidencing the grants of such Company
Options and that such Company Options and the related agreements
shall be assumed by Acquiror and shall continue in effect on the
same terms and conditions (subject to the adjustments required by
this Section after giving effect to the Merger); provided that
Acquiror shall make good faith efforts to so deliver such notices
on the same day as the Effective Time.
(e) Prior to the Effective Time, the Company may cause
(i) fifty percent (50%) of all Company Options held by each Key
Employee to become fully vested at the Effective Time (and the
remainder of each such employee's Company Options shall vest on
the date they would have otherwise vested absent such accelerated
vesting), and (ii) thirty-three and one-third percent (33 1/3%) of
all Company Options held by each employee of the Company
identified by the Company (other than the Principal Executives or
Key Employees) to become fully vested at the Effective Time (and
the remainder of each such employee's Company Options shall vest
on the date they would have otherwise vested absent such
accelerated vesting).
(f) Between the date hereof and the Effective Time, the
Company will prohibit (in accordance with the terms of the Plan)
exercises of Company Options to the extent that the issuance
hereunder of the Merger Consideration would not be exempt from the
Securities Act."
6. AMENDMENTS TO SECTION 6.17(b). Section 6.17(b) of the Merger
Agreement is deleted in its entirety and the following is
substituted therefore:
"(b) Intentionally Omitted."
7. AMENDMENTS TO SECTION 8.01 (d), (e) AND (f). The word "or" at the
end of Section 8.01(d) of the Merger Agreement is deleted and
Sections 8.01(e) and (f) of the Merger Agreement are deleted in
their entirety and the following is substituted therefor as
Sections 8.01(e) and (f) of the Merger Agreement:
"(e) by Acquiror or the Company if (i) the Shareholder
Approval shall not have been obtained at the Shareholders Meeting
duly convened therefor or at any adjournment or postponement
thereof, or (ii) the Merger shall not have been consummated on or
prior to May 5, 2000 (the "Outside Date"); or
(f) by the Company if Acquiror takes action pursuant to
its fiduciary duties as contemplated by Section 5.04(m) in
connection with an Acquiror Competing Transaction."
8. INTERPRETATION WITH THE MERGER AGREEMENT. Except as and to the
extent modified by this Amendment, the terms and provisions of the
Merger Agreement are hereby
ratified and confirmed for all purposes and in all respects.
9. SEVERABILITY. If any term or other provision of this Amendment
is invalid, illegal or incapable of being enforced by a court of
competent jurisdiction, all other conditions and provisions of
this Amendment shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Amendment so as to effect
the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby
are fulfilled to the extent possible. In the event the parties
are unable to agree upon any such modification, this Amendment
shall remain in full force and effect without the deleted
provision.
10. MODIFICATION; WAIVER. No modification of or amendment to this
Amendment shall be deemed effective unless it is in writing and
signed by a duly authorized representative of each of the parties
hereto.
11. GOVERNING LAW. This Amendment shall be governed by and construed
in accordance with the Laws of the State of Illinois, regardless
of the Laws that might otherwise govern under applicable
principles of conflicts of law.
12. COUNTERPARTS. This Amendment may be executed in or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and
the same agreement.
13. BINDING ON SUCCESSORS. This Amendment is binding upon and inures
to the benefit of the parties hereto and their respective legal
representatives, successors, and permitted assignees.
14. NOTICES. Any notice required to be given pursuant to this
Amendment shall be in writing and shall be given or made in
accordance with the notice provisions of the Merger Agreement.
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IN WITNESS WHEREOF, Acquiror, Acquiror Sub and the Company have caused
this Agreement to be executed as of the date first written above, in the case of
each corporate entity, by their respective officers duly authorized.
HA-LO INDUSTRIES, INC., an Illinois
corporation
By: Xxxx X. Xxxxxx, Xx.
-------------------
Its: Chief Executive Officer
HA-LO INDUSTRIES, INC., a Delaware
corporation
By: Xxxx X. Xxxxxx, Xx.
-------------------
Its: Chief Executive Officer
XXXXXXXXX.XXX, INC., a Delaware corporation
By: Xxxx Xxxxxxxxx
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Its: President and Secretary