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Title: |
Agreement and Plan of Merger |
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Date: |
2003 |
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$70 |
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#1138054 |
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<SEQUENCE>3
<FILENAME>july03magt8-kexh.txt
<DESCRIPTION>AGREEMENT AND PLAN OF MERGER
<TEXT>
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of June 27,
2003, by and among MCE TECHNOLOGIES, INC., a Michigan corporation ("MCE"),
MICHAEL J. ENDRES (the "Shareholders' Representative"), on behalf of the
Shareholders and Warrantholders of MCE, MCE ACQUISITION CORPORATION, a Michigan
corporation ("Acquisition"), and AEROFLEX INCORPORATED, a Delaware corporation
("Aeroflex").
W I T N E S S E T H :
WHEREAS, Acquisition (which is a wholly-owned subsidiary of Aeroflex)
desires to merge with MCE and be the surviving corporation after such merger
(the "Merger") and MCE also desires that Acquisition merge with MCE upon the
terms and conditions set forth herein and in accordance with the Michigan
Business Corporation Act (the "BCA"), and that the outstanding shares of common
stock, without par value, of MCE (referred to collectively as the "MCE Shares"
and individually as an "MCE Share") be converted upon such Merger into the right
to receive common stock of Aeroflex ("Aeroflex Common Stock"), par value $.10
per share (Acquisition and MCE sometimes being hereinafter referred to as the
"Constituent Corporations" and Acquisition, following the effectiveness of the
Merger, as the "Surviving Corporation");
WHEREAS, simultaneously with the execution and delivery of this
Agreement, each of the Warrantholders (as defined herein) holding the warrants
to acquire MCE Shares listed on Schedule 2.2(c) (the "Warrants") have entered
into an agreement with Aeroflex pursuant to which, among other things, the
Warrantholders and Aeroflex have agreed that, at the Effective Time (as defined
herein), each of the Warrants shall be exchanged for, and convert into that
number of shares of Aeroflex Common Stock into which the MCE Shares underlying
such Warrants otherwise would be convertible in accordance with the Exchange
Ratio (as defined herein) (each a "Warrant Exchange Agreement" and collectively
the "Warrant Exchange Agreements");
WHEREAS, the parties intend, by executing this Agreement, to qualify
as a plan of reorganization within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(D) of the Internal Revenue Code of 1986, as amended; and
WHEREAS, the respective Boards of Directors of Aeroflex, Acquisition
and MCE have approved this Agreement and the Merger.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein, and in order
to set forth the terms and conditions of the Merger and the mode of carrying the
same into effect, the parties hereto agree
<PAGE>
as follows:
ARTICLE I
PRINCIPAL TERMS OF MERGER
1.1 Surviving Corporation. At the Effective Time (as defined in
----------------------
Section 1.3 hereof), MCE shall be merged with and into Acquisition upon the
terms and conditions hereinafter set forth as permitted by and in accordance
with the BCA. At the Effective Time, the identity and separate existence of MCE
shall cease, and Acquisition shall succeed to all rights, privileges, powers,
franchises, properties, assets, debts, liabilities and obligations of MCE in
accordance with the BCA.
1.2 Closing.
-------
(a) Subject to the provisions of Article VII hereof, the closing of
the transactions provided for in this Agreement (the "Closing") shall take place
in the offices of Kramer, Coleman, Wactlar & Lieberman, P.C., or such other
place as the parties may agree, as soon as practicable (and in any event not
later than two business days) following the satisfaction or waiver of the
conditions set forth in Article VII hereof, or at such other time and place or
on such other date as MCE and Acquisition may mutually agree upon (the date and
time of such Closing being herein referred to as the "Closing Date").
(b) Subject to the provisions of Article VII hereof, Acquisition and
MCE shall execute a certificate of merger (the "Certificate of Merger") and
cause such Certificate of Merger to be filed in accordance with the applicable
provisions of the BCA.
1.3 Effective Time. The Merger shall become effective when the
---------------
Certificate of Merger is filed in accordance with the applicable provisions of
the BCA (or at such later time specified as the effective time in the
Certificate of Merger), which Certificate of Merger shall be submitted for
filing as soon as practicable after the Closing. The date and time when the
Merger shall become effective are herein referred to as the "Effective Time."
1.4 Articles of Incorporation and Bylaws. The Articles of
------------------------------------------
Incorporation and Bylaws of Acquisition shall be the Articles of Incorporation
and Bylaws of the Surviving Corporation from and after the Effective Time, until
thereafter amended as provided by law; provided, however, that the Articles of
Incorporation of Surviving Corporation shall be amended so that the name of
Surviving Corporation shall be "Aeroflex MCE Technologies, Inc".
1.5 Directors and Officers. The directors and officers of Acquisition
----------------------
immediately prior to the Effective Time shall be the initial directors and
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified. Immediately after the
Effective Time, Aeroflex and Acquisition shall cause the individuals listed
<PAGE>
on Schedule 1.5 to be elected to the offices of Surviving Corporation listed on
such Schedule.
1.6 Approval of MCE Shareholders. MCE shall take all action necessary
----------------------------
in accordance with applicable state law, its Articles of Incorporation and
Bylaws and the terms of this Agreement to obtain shareholder approval of this
Agreement, the Pledge Escrow Agreement, and the authorization of the Merger as
soon as reasonably possible.
ARTICLE II
STATUS AND CONVERSION OF SECURITIES
2.1 Status and Conversion of Shares. At the Effective Time, by virtue
-------------------------------
of the Merger and without any action on the part of the holders thereof:
(a) Any MCE Shares held by MCE as treasury shares shall be cancelled
and retired.
(b) Each then outstanding MCE Share remaining at the Effective Time
(other than MCE Shares to be cancelled in accordance with Section 2.1(a) hereof)
shall be converted into the right to receive that number of shares of Aeroflex
Common Stock equal to the Exchange Ratio. No fraction of a share of Aeroflex
Common Stock will be issued by virtue of the Merger, but, in lieu thereof, each
holder of MCE Shares who would otherwise be entitled to a fraction of a share of
Aeroflex Common Stock (after aggregating all fractional shares to be received by
such holder) shall receive from Aeroflex a number of shares of Aeroflex Common
Stock rounded up or down to the nearest whole share.
(c) In accordance with Section 762(2)(b) of the BCA, upon the adoption
and approval of this Agreement and the authorization of the Merger by the
Shareholders in accordance with the BCA, no Shareholder of MCE who is entitled
to receive Aeroflex Common Stock upon the conversion of such Shareholder's MCE
Shares as described in Section 2.1(b) shall have the right to elect to dissent
and demand payment of the fair value for any or all of such MCE Shares.
2.2 MCE Stock Options; Warrants. At the Effective Time:
---------------------------
(a) all outstanding options to purchase MCE Shares under the 1996
Stock Option Plan, as amended, of MCE (referred to collectively as the "1996
Options" and individually as a "1996 Option") not exercised as of the Effective
Time shall be converted by Aeroflex into options to purchase shares of Aeroflex
Common Stock in accordance with Section 6.3(i) hereof, and
(b) all outstanding options to purchase MCE Shares under the 2000
Stock Incentive Plan of MCE (referred to collectively as the "2000 Options" and
individually as a
<PAGE>
"2000 Option") not exercised as of the Effective Time shall be canceled.
(c) pursuant to the terms of the Warrant Exchange Agreements, each of
the Warrants listed on Schedule 2.2(c) shall be exchanged for, and convert into
that number of shares of Aeroflex Common Stock into which the MCE Shares
underlying such Warrants otherwise would be convertible in accordance with the
Exchange Ratio.
2.3 Exchange Procedures.
-------------------
(a) Promptly after the Effective Time, Aeroflex shall cause American
Stock Transfer and Trust (the "Exchange Agent") to mail to each holder of record
(as of the Effective Time) of a certificate or certificates (the "MCE
Certificates") which immediately prior to the Effective Time represented
outstanding MCE Shares that were converted into the right to receive shares of
Aeroflex Common Stock pursuant to Section 2.1(b), the following:
(i) a letter of transmittal (which shall specify that delivery
shall be effected,and risk of loss and title to the MCE Certificates shall pass,
only upon delivery of the MCE Certificates to the Exchange Agent accompanied by
a properly executed letter of transmittal and shall be in such form and have
such other provisions as Aeroflex may reasonably specify) and
(ii) instructions for use in effecting the surrender of the MCE
Certificates in exchange for certificates representing shares of Aeroflex Common
Stock pursuant to Section 2.1(b). Upon surrender to the Exchange Agent of one or
more MCE Certificates for cancellation, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holder of such MCE Certificate(s) shall be entitled to
receive in exchange therefor a certificate representing the number of whole
shares of Aeroflex Common Stock which such holder has the right to receive
pursuant to Section 2.1(b), subject to Section 2.9 and such Shareholder's
obligation to pledge to Aeroflex and deliver to the Escrow Agent accordingly in
respect of the Shareholders Indemnity Obligations, 40% of such shares of
Aeroflex Common Stock to be received rounded up or down to the nearest whole
share (the "Escrow Share Allocation").
(b) Upon surrender to Aeroflex of the Warrants in accordance with the
terms of the Warrant Exchange Agreements, the holder of such Warrant(s) shall be
entitled to receive in exchange therefor a certificate representing the number
of whole shares of Aeroflex Common Stock which such holder has the right to
receive pursuant to Section 2.2(c), subject to Section 2.9 and such
Warrantholder's obligation (as set forth in the Warrant Exchange Agreements) to
pledge to Aeroflex and deliver accordingly to the Escrow Agent in respect of the
Shareholder's Indemnity Obligations, the Escrow Share Allocation.
(c) Until so surrendered, each outstanding MCE Certificate and Warrant
will
<PAGE>
be deemed from and after the Effective Time, for all corporate purposes, to
evidence the ownership of the number of full shares of Aeroflex Common Stock
into which such MCE Shares or Warrants, as the case may be, shall have been so
converted.
2.4 Distributions With Respect to Unexchanged Shares. No dividends or
------------------------------------------------
other distributions declared or made after the date of this Agreement with
respect to Aeroflex Common Stock with a record date after the Effective Time
will be paid to the holder of any unsurrendered MCE Certificate with respect to
the shares of Aeroflex Common Stock represented thereby until the holder of
record of such MCE Certificate shall surrender such MCE Certificate. Subject to
applicable law, following surrender of any such MCE Certificate, there shall be
paid to the record holder thereof certificates representing whole shares of
Aeroflex Common Stock issued in exchange therefor, without interest, along with
the amount of dividends or other distributions with a record date after the
Effective Time payable with respect to such whole shares of Aeroflex Common
Stock.
2.5 Transfers of Ownership. If any certificate for shares of Aeroflex
----------------------
Common Stock is to be issued in a name other than that in which the MCE
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the MCE Certificate so surrendered will
be properly endorsed and otherwise in proper form for transfer and that the
person requesting such exchange will have paid to the Exchange Agent any
transfer or any other taxes required by reason of the issuance of a certificate
for shares of Aeroflex Common Stock in any name other than that of the
registered holder of the MCE Certificate surrendered, or established to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
2.6 No Further Ownership Rights in Shares. All shares of Aeroflex
----------------------------------------
Common Stock (including dividends and distributions thereon) issued upon the
surrender for exchange of MCE Certificates in accordance with the terms hereof
shall be deemed to have been issued in full satisfaction of all rights
pertaining to the MCE Shares, and there shall be no further registration of
transfers on the records of the Surviving Corporation of MCE Shares which were
outstanding immediately prior to the Effective Time. If after the Effective
Time, MCE Certificates are presented to the Surviving Corporation for any
reason, they shall, when accompanied by proper documentation, be exchanged and
canceled as provided in this Article II.
2.7 Lost, Stolen or Destroyed Certificates. In the event any MCE
------------------------------------------
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed MCE Certificates, upon the
making of an affidavit of that fact by the holder thereof, such whole number of
shares of Aeroflex Common Stock into which the MCE Shares evidenced thereby
shall have been converted; provided, however, that Aeroflex may, in its
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