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Title: |
Agreement and Plan of Merger |
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Date: |
2003 |
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$69 |
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ID: |
#1402605 |
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<SEQUENCE>3
<FILENAME>exhibit2-1.txt
<TEXT>
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TELAXIS COMMUNICATIONS CORPORATION
AND
YOUNG DESIGN, INC.
DATED AS OF MARCH 17, 2003
<PAGE>
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
----------
into as of March 17, 2003 between TELAXIS COMMUNICATIONS CORPORATION, a
Massachusetts corporation ("Parent"), and YOUNG DESIGN, INC., a Virginia
corporation (the "Company"). --------
---------
RECITALS
--------
A. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Virginia Stock Corporation Act (the "VSCA"), Parent and the
-----
Company will enter into a business combination transaction pursuant to which a
to-be-formed Virginia corporation and wholly-owned subsidiary of Parent ("Merger
Sub") will merge with and into the Company (the "Merger"). ------
--- --------
D. The Board of Directors of each of the Company and Parent (i) has
determined that the Merger is in the best interests of each company and their
respective stockholders and (ii) has approved this Agreement, the Merger, and
the other transactions contemplated by this Agreement. The stockholders of the
Company have approved this Agreement, the Merger, and the other transactions
contemplated by this Agreement.
E. The Company and Parent desire to make certain representations and
warranties and other agreements in connection with the Merger.
F. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "Code").
-----
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
Article I
THE MERGER
----------
1.1 The Merger.
-----------
At the Effective Time (as defined in Section 1.2) and subject to and upon
the terms and conditions of this Agreement and the applicable provisions of the
VSCA, Merger Sub shall be merged with and into the Company, the separate
corporate existence of Merger Sub shall cease, and the Company shall continue as
the surviving corporation. The Company as the surviving corporation after the
Merger is hereinafter sometimes referred to as the "Surviving Corporation." At
the Effective Time, the purpose of the Surviving Corporation shall be to conduct
and engage in all lawful activities and businesses to the maximum extent
permitted by the VSCA.
1.2 Effective Time.
---------------
<PAGE>
Subject to the provisions of this Agreement, the parties hereto shall cause
the Merger to be consummated by filing Articles of Merger (the "Articles of
------------
Merger") with the Clerk of the Virginia State Corporation Commission, in
------
accordance with the relevant provisions of the VSCA (the time of such filing or
such subsequent date or time as the parties shall agree and specify in the
Articles of Merger being the "Effective Time"), as soon as practicable on or
---------------
after the Closing Date (as herein defined). The closing of the Merger (the
"Closing") shall take place at the offices of the Company at 10:00 a.m. on April
--------
1, 2003 or at such other time, date, and location as the parties hereto agree
(the "Closing Date").
------------
1.3 Effect of the Merger.
---------------------
At the Effective Time, the effect of the Merger shall be as provided in
this Agreement and the applicable provisions of the VSCA. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
property, rights, privileges, powers, and franchises of the Company and Merger
Sub shall vest in the Surviving Corporation, and all debts, liabilities, and
duties of the Company and Merger Sub shall become the debts, liabilities, and
duties of the Surviving Corporation.
1.4 Articles of Incorporation; By-laws.
-----------------------------------
(a) Unless otherwise determined by Parent prior to the Effective Time,
at the Effective Time, the Articles of Incorporation of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter amended as
provided by law and such Articles of Incorporation; provided, however, that
Article 1 of the Articles of Incorporation of the Surviving Corporation
shall be amended to read as follows: "The name of the corporation is Young
Design, Inc." At the Effective Time, the authorized capital stock of the
Surviving Corporation shall be 1,000 shares of Common Stock, par value
$0.01 per share unless otherwise agreed by Parent and the Company.
(b) The By-laws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter amended unless otherwise agreed by Parent and the Company.
1.5 Directors and Officers.
-----------------------
The directors of Merger Sub shall be the initial directors of the Surviving
Corporation, until their respective successors are duly elected or appointed and
qualified. The officers of Merger Sub shall be the initial officers of the
Surviving Corporation, until their respective successors are duly elected or
appointed and qualified. Parent and Merger Sub agree that, as of immediately
before the Effective Time, the directors and officers of Merger Sub shall be the
same persons as are intended to be, immediately after the Effective Time, the
directors and officers of Parent as contemplated by this Agreement.
1.6 Effect on Capital Stock.
------------------------
At the Effective Time, by virtue of the Merger and without any action on
the part of Merger Sub, the Company, or the holders of any of the following
securities:
2
<PAGE>
(a) Conversion of Company Common Stock. Each share of Common Stock,
-----------------------------------
par value $0.0001 per share, of the Company (the "Company Common Stock")
----------------------
issued and outstanding immediately prior to the Effective Time (other than
any shares of Company Common Stock to be canceled pursuant to Section
1.6(b)) will be canceled and extinguished and be automatically converted
(subject to Sections 1.6(e) and (f)) into the right to receive 2.50 (the
"Exchange Ratio") shares of Common Stock, par value $.01 per share, of
---------------
Parent (the "Parent Common Stock") together with cash in lieu of fractional
-------------------
shares pursuant to Section 1.6(f) (collectively, the "Merger
------
Consideration") upon surrender of the certificate representing such share
-------------
of Company Common Stock in the manner provided in Section 1.7 (or in the
case of a lost, stolen or destroyed certificate, upon delivery of an
affidavit (and bond, if required) in the manner provided in Section 1.9).
(b) Cancellation of Parent-Owned Stock. Each share of Company Common
---------------------------------------
Stock held in the treasury of the Company or owned by any direct or
indirect wholly owned subsidiary of the Company immediately prior to the
Effective Time shall be canceled and extinguished without any conversion
thereof.
(c) Stock Options. At the Effective Time, all options to purchase
------------------
Company Common Stock then outstanding under the Company's 2002 Stock
Incentive Plan (the "Company Stock Option Plan") shall be assumed by Parent
--------------------------
in accordance with Section 5.9 hereof.
(d) Capital Stock of Merger Sub. Each share of Common Stock, par value
----------------------------
$.01 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into and exchanged for one validly
issued, fully paid, and nonassessable share of Common Stock, par value $.01
per share, of the Surviving Corporation. Each stock certificate of Merger
Sub evidencing ownership of any such shares shall continue to evidence
ownership of such shares of capital stock of the Surviving Corporation.
(e) Adjustments to Exchange Ratio. If between the date hereof and the
------------------------------
Effective Time, the outstanding shares of Parent Common Stock or Company
Common Stock shall be changed into a different number of shares by reason
of any reclassification, recapitalization, reorganization, split-up,
combination, or exchange of shares, or if any dividend payable in stock or
other securities shall be declared thereon with a record date within such
period, or if the Parent Rights (as defined in Section 3.22) become
exercisable or are exercised, the Exchange Ratio shall be adjusted
accordingly to provide to the holders of Company Common Stock the same
economic benefit as was contemplated by this Agreement prior to such
reclassification, recapitalization, reorganization, split-up, combination,
exchange, dividend, or other event.
(f) Fractional Shares. No fraction of a share of Parent Common Stock
-------------------
will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of Company Common Stock who would otherwise be entitled to a
fraction of a share of Parent Common Stock (after aggregating all
fractional shares of Parent Common Stock to be received by such holder)
shall receive from Parent an amount of cash (rounded to the nearest whole
cent) equal to the product of (i) such fraction, multiplied by (ii) the
average closing price of a share of Parent Common Stock for the ten most
3
<PAGE>
recent days that Parent Common Stock has traded ending on the trading day
immediately prior to the Effective Time, as reported on Nasdaq.
1.7 Surrender of Certificates.
(a) Exchange Agent. Registrar and Transfer Company, or another similar
---------------
institution selected by Parent, shall act as the exchange agent (the
"Exchange Agent") in the Merger.
(b) Parent to Provide Common Stock. Promptly after the Effective Time,
-------------------------------
Parent shall make available to the Exchange Agent for exchange in
accordance with this Article I, through such reasonable procedures as
Parent and Company may mutually adopt, the shares of Parent Common Stock
issuable pursuant to Section 1.6 in exchange for outstanding shares of
Company Common Stock and cash in an amount sufficient for payment in lieu
of fractional shares pursuant to Section 1.6(f).
(c) Exchange Procedures. Promptly after the Effective Time, the
---------------------
Surviving Corporation shall cause to be mailed to each holder of record of
a certificate or certificates (the "Certificates") which immediately prior
------------------
to the Effective Time represented outstanding shares of Company Common
Stock whose shares were converted into the right to receive shares of
Parent Common Stock and cash in lieu of fractional shares pursuant to
Section 1.6, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing
shares of Parent Common Stock and cash in lieu of fractional shares. Upon
surrender of a Certificate for cancellation to the Exchange Agent or to
such other agent or agents as may be appointed by Parent, together with
such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, the holder of such Certificate
shall be entitled to receive in exchange therefor a certificate
representing the number of whole shares of Parent Common Stock and payment
in lieu of fractional shares which such holder has the right to receive
pursuant to Section 1.6, and the Certificate so surrendered shall forthwith
be canceled. Until so surrendered, each outstanding Certificate that, prior
to the Effective Time, represented shares of Company Common Stock will be
deemed from and after the Effective Time, for all corporate purposes, other
than the payment of dividends, to evidence the right to receive the number
of full shares of Parent Common Stock into which such shares of Company
Common Stock shall have been so converted and the right to receive an
amount in cash in lieu of the issuance of any fractional shares in
accordance with Section 1.6.
(d) Distributions With Respect to Unexchanged Shares. No dividends or
-----------------------------------------
other distributions declared or made after the date of this Agreement with
respect to Parent Common Stock with a record date after the Effective Time
will be paid to the holder of any unsurrendered Certificate with respect to
the shares of Parent Common Stock represented thereby until the holder of
record of such Certificate shall surrender such Certificate. Subject to
applicable law, following surrender of any such Certificate, there shall be
paid to the record holder of the certificates representing whole shares of
Parent Common Stock issued in exchange therefor, without interest, at the
time of such surrender, the amount of dividends or other distributions with
4
<PAGE>
a record date after the Effective Time payable with respect to such whole shares
of Parent Common Stock.
(e) Transfers of Ownership. If any certificate for shares of Parent
----------------------
Common Stock is to be issued in a name other than that in which the
certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the 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 Parent or any agent
designated by it any transfer or other taxes required by reason of the
issuance of a certificate for shares of Parent Common Stock in any name
other than that of the registered holder of the certificate surrendered, or
established to the satisfaction of Parent or any agent designated by it
that such tax has been paid or is not payable.
(f) No Liability. Notwithstanding anything to the contrary in this
--------------
Section 1.7, none of the Exchange Agent, the Surviving Corporation, Parent,
and any party hereto shall be liable to a holder of shares of Parent Common
Stock or Company Common Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
1.8 No Further Ownership Rights in Company Common Stock.
----------------------------------------------------
All shares of Parent Common Stock issued upon the surrender for exchange of
shares of Company Common Stock in accordance with the terms hereof (including
any cash paid in respect thereof) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common Stock,
and there shall be no further registration of transfers on the records of the
Surviving Corporation of shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
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