EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Plan"), dated as of September
17, 1997, is among Business Telecom, Inc., a North Carolina corporation ("BTI"),
BTI Telecom Corp., a North Carolina corporation ("BTITC") and BTI OpCo Inc., a
North Carolina corporation and wholly owned subsidiary of Telecom ("OpCo"). BTI
and OpCo are hereinafter collectively referred to as the "Constituent
Corporations" and individually as a "Constituent Corporation".
1. THE MERGER. On the Effective Time (as hereinafter defined), OpCo
shall be merged with and into BTI (the "Merger"), the separate corporate
existence of OpCo shall thereupon cease, and BTI shall be the surviving
corporation in the Merger (the "Surviving Corporation"). The name of the
Surviving Corporation shall be Business Telecom, Inc. The Merger shall be
effected pursuant to the provisions of and shall have the effect provided by the
Business Corporation Act of the State of North Carolina (the "BCA").
2. ARTICLES OF INCORPORATION AND BYLAWS. On and subsequent to the
Effective Time, the Articles of Incorporation and Bylaws of BTI in effect
immediately prior to the Effective Time shall continue to be the Articles of
Incorporation and Bylaws of the Surviving Corporation, until duly amended in
accordance with the terms thereof and the BCA.
3. EFFECT OF THE MERGER. On the Effective Time, the corporate existence
of OpCo shall, as provided in the BCA, be merged into and continued in the
Surviving Corporation, and the Surviving Corporation shall be deemed a
continuation in entity and identity of each of the Constituent Corporations. The
Surviving Corporation shall, from and after the Effective Time, possess all the
rights, privileges, powers and franchises of whatsoever nature and description,
as well as a public or private nature, and be subject to all the restrictions,
liabilities and duties of each of the Constituent Corporations; and all rights,
privileges, powers and franchises of each of the Constituent Corporations, and
all property, tangible and intangible, real, personal and mixed, and debts due
to either of the Constituent Corporations on whatever account as well for stock
subscriptions as all other things in action or belonging to each of the
Constituent Corporations shall be vested in the Surviving Corporation; and all
property, rights, privileges, powers and franchises, and all and every other
interest shall be thereafter as effectually the property of the Surviving
Corporation as they were of the several and respective Constituent Corporations,
and the title to any real estate vested by deed or otherwise in any of the
Constituent Corporations shall not revert or be in any way impaired by reason of
the Merger. All rights of creditors and all liens upon the property of the
Constituent Corporations shall be preserved unimpaired, and all debts,
liabilities and duties of the Constituent Corporations shall thenceforth attach
to the Surviving Corporation, and may be enforced against it to the same extent
as if said debts, liabilities and duties had been incurred or contracted by it.
Any claim existing or action or proceeding, whether civil, criminal or
administrative, pending by or against either Constituent
Corporation may be prosecuted to judgment or decree as if the Merger had not
taken place, or the Surviving Corporation may be substituted in such action or
proceeding.
4. CONVERSION AND EXCHANGE OF SHARES. The manner and basis of
converting and exchanging shares of the capital stock of the Constituent
Corporations shall be as follows:
4.1 Stock of OpCo. Upon and by reason of the Merger becoming
effective, each one (1) share of OpCo Common Stock issued and
outstanding immediately prior to the Effective Time shall thereupon,
without any action on the part of the holder thereof or the Constituent
Corporations, be changed and converted into and become one (1) fully
paid and nonassessable share of the Common Stock of the Surviving
Corporation.
4.2 Stock of BTITC. Upon and by reason of the Merger becoming
effective, each share of BTITC Common Stock issued and outstanding
immediately prior thereto shall be cancelled and returned to the status
of authorized but unissued shares.
4.3 Stock of BTI. Upon and by reason of the Merger becoming
effective, each share of BTI Common Stock issued and outstanding
immediately prior to the Effective Time shall thereupon, without any
action on the part of the holder thereof or the Constituent
Corporations, be converted into and become an aggregate of 272.72
shares (the "Exchange Ratio") of the Common Stock of BTITC.
5. Stock Certificates. After the Effective Time, each holder
of an outstanding certificate or certificates which prior thereto represented
shares of the Common Stock of BTI shall surrender the same, and such holder
shall be entitled, upon such surrender, to receive in exchange therefor a
certificate or certificates representing the number of whole shares of BTITC
Common Stock, into and for which the shares of BTI Common Stock, so surrendered
shall have been converted and exchanged as provided above. Until a certificate
which represented shares of BTI Common Stock prior to the Effective Time and
which is held by a person entitled to receive BTI Common Stock is surrendered,
such certificate shall evidence for all purposes, other than the payment of any
dividends or other distributions to holders of record of shares of BTI Common
Stock, the ownership of shares of BTI Common Stock into which the shares of BTI
Common Stock represented by such certificate prior to the Effective Time have
been converted as provided above; provided, however, that upon surrender of a
certificate theretofore representing shares of BTI Common Stock, there shall be
paid to the record holder or holders of the certificate or certificates of BTITC
Common Stock issued in conversion thereof the amount without interest thereon of
such dividends and other distributions, if any, which theretofore have become
payable with respect to the number of the whole shares of BTITC Common Stock
represented thereby.
6. STOCK OPTIONS. On the Effective Time, BTI hereby assigns, delegates
and transfers to BTITC, and BTITC hereby assumes and continues: (i) all of BTI's
stock option plans (including, without limitation, all of BTI's rights, title,
interests, remedies, powers, obligations and duties under such stock option
plans) in existence on the Effective Time, and (ii) the outstanding and
unexercised portions of all outstanding options to purchase BTI Common Stock
(including, without limitation, all of BTI's rights, title, interests, remedies,
powers, obligations
and duties under such stock options), whether granted under any such stock
option plan or otherwise. The outstanding and unexercised portions of all
options to purchase BTI Common Stock, including without limitation all options
outstanding under BTI's stock option plans and any other outstanding stock
options shall, as of the Effective Time, become options to purchase the number
of shares of BTI Common Stock equal to the number of shares of BTI Common Stock
subject to such option multiplied by the Exchange Ratio with no other changes in
terms or conditions, (except for a corresponding adjustment to the per share
exercise price), unless such changes shall be required to maintain the tax
qualified status of incentive stock options under the Internal Revenue Code of
1986, as amended (the "Code"). Consistent with the provisions of the Code and
the regulations, BTITC may, in its discretion, grant new options to purchase
shares of BTITC Common Stock under the continued stock plans or otherwise, in
the stead of BTI Common Stock as if BTITC had been the creator of BTI's stock
option plans and stock options, and BTITC shall be substituted for and have all
the obligations and liabilities of BTI under such continued stock plans and
stock options. BTITC Common Stock shall be substituted for BTI Common Stock on a
272.72-for-1 basis as to any options granted by BTITC pursuant to the continued
stock plans or otherwise subsequent to the Effective Time. It is the intention
of the parties hereto that while the benefits of BTI's stock option plans and
stock options shall be preserved for the employees of BTI, the assumption of
such stock option plans and the outstanding and unexercised portions of all
options to purchase BTI Common Stock by BTITC shall not confer any additional
benefits on the holders of options granted under the stock option plans or
otherwise, whether now outstanding or hereafter granted.
7. OFFICERS AND DIRECTORS. The officers of the Surviving Corporation at
and as of the Effective Time shall consist of all the persons who are officers
of BTI immediately prior to the Effective Time until their successors have been
duly elected or appointed and qualified in accordance with the Surviving
Corporation's Articles of Incorporation and Bylaws. The Board of Directors of
the Surviving Corporation at and as of the Effective Time shall consist of all
the persons who are directors of BTI immediately prior to the Effective Time
until their successors have been duly elected or appointed and qualified in
accordance with the Surviving Corporation's Articles of Incorporation and
Bylaws.
8. RATIFICATION BY SHAREHOLDERS. This Plan shall be submitted to the
shareholders of BTI , OpCo and BTITC for approval in accordance with applicable
laws and the respective Articles of Incorporation and Bylaws of the Constituent
Corporations. BTI, OpCo, and BTITC shall proceed expeditiously and cooperate
fully in the procurement of any other consents and approvals and the taking of
any other action, and the satisfaction of all other requirements prescribed by
law or otherwise, necessary for consummation of the Merger on the terms herein
provided.
9. TERMINATION. If for any reason the consummation of the Merger is
inadvisable in the opinion of the Boards of Directors of BTI , OpCo or Telecom,
this Plan may be terminated at any time before the Effective Time by written
notice by one or more party to the other. Upon termination by written notice as
provided in this Section, this Plan shall be void and of no further force or
effect.
10. EFFECTIVE TIME. The Merger shall become effective, and the
Effective Time of the Merger shall occur upon filing of the Articles of Merger
with the North Carolina Secretary of State.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of this 17th day of September 1997.
BUSINESS TELECOM, INC.
By:__________________________
Name:________________________
Title:_________________________
BTI OPCO INC.
By:__________________________
Name:________________________
Title:_________________________
BTI TELECOM CORP.
By:___________________________
Name:________________________
Title:_________________________
