Agreement and Plan of Merger (2001)Full Document 

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                          AGREEMENT AND PLAN OF MERGER

                                   DATED AS OF

                                  JULY 9, 2001

                                      AMONG

                          FULL LINE DISTRIBUTORS, INC.,

                                BRODER BROS., CO.

                                       AND

                              FLD ACQUISITION CORP.


   2

                                TABLE OF CONTENTS

Page ---- I THE OFFER................................................................................................2 1.01 The Offer.......................................................................................2 1.02 Company Action..................................................................................3 1.03 Directors.......................................................................................5 II THE MERGER...............................................................................................6 2.01 The Merger......................................................................................6 2.02 Conversion of Shares............................................................................7 2.03 Exchange of Shares..............................................................................7 2.04 Dissenting Shares...............................................................................9 2.05 Stock Options...................................................................................9 2.06 Adjustment of the Offer Price, the Merger Consideration and the Option Consideration..................................................................................10 III THE SURVIVING CORPORATION...............................................................................11 3.01 Articles of Incorporation......................................................................11 3.02 Bylaws.........................................................................................11 3.03 Directors and Officers.........................................................................11 IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................11 4.01 Organization and Qualification; Subsidiaries...................................................11 4.02 Articles of Incorporation and Bylaws...........................................................12 4.03 Capitalization.................................................................................12 4.04 Authority Relative to this Agreement...........................................................13 4.05 Company Subsidiaries...........................................................................13 4.06 No Conflict; Required Filings and Consents.....................................................14 4.07 Compliance.....................................................................................15 4.08 SEC Filings; Financial Statements..............................................................15 4.09 Disclosure Documents...........................................................................16 4.10 Absence of Certain Changes or Events...........................................................17 4.11 Change of Control..............................................................................19 4.12 Litigation.....................................................................................19 4.13 Benefit Plans..................................................................................19 4.14 Taxes..........................................................................................21 4.15 Intellectual Property..........................................................................23
- i - 3 4.16 Licenses and Permits...........................................................................25 4.17 Material Contracts.............................................................................25 4.18 Environmental Matters..........................................................................26 4.19 Related Party Transactions.....................................................................29 4.20 Properties and Assets..........................................................................29 4.21 Labor Matters..................................................................................30 4.22 Insurance......................................................................................31 4.23 Customers and Suppliers........................................................................31 4.24 Brokers........................................................................................32 4.25 Applicability of State Takeover Statutes.......................................................32 4.26 Voting Requirements............................................................................32 4.27 Opinion of Financial Advisor...................................................................32 4.28 Transaction Expenses...........................................................................32 V REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUBSIDIARY.............................................................................33 5.01 Organization and Qualification; Subsidiaries...................................................33 5.02 Articles of Incorporation and Bylaws...........................................................33 5.03 Authority Relative to this Agreement...........................................................34 5.04 No Conflict; Required Filings and Consents.....................................................34 5.05 Documents Relating to Offer; Company Proxy Statement...........................................35 5.06 Brokers........................................................................................35 5.07 Financing......................................................................................35 5.08 Litigation.....................................................................................36 VI COVENANTS OF THE COMPANY................................................................................36 6.01 Conduct of the Company.........................................................................36 6.02 Stockholders' Meeting; Proxy Material..........................................................40 6.03 Access to Information..........................................................................41 6.04 No Solicitation................................................................................42 6.05 Notices of Certain Events......................................................................44 6.06 SEC Reports....................................................................................45 6.07 Financial Statements...........................................................................45 6.08 Director Resignations..........................................................................46 6.09 Option to Acquire Additional Shares............................................................46 6.10 Termination of 401(k) Plan.....................................................................46 VII COVENANTS OF BUYER......................................................................................47 7.01 Confidentiality................................................................................47
- ii - 4 7.02 Obligations of Merger Subsidiary...............................................................47 7.03 Voting of Shares...............................................................................47 7.04 Director and Officer Liability.................................................................47 7.05 Financing......................................................................................49 VIII COVENANTS OF BUYER AND THE COMPANY......................................................................50 8.01 Further Actions................................................................................50 8.02 Certain Filings................................................................................50 8.03 Public Announcements...........................................................................50 8.04 Delisting......................................................................................50 8.05 Stockholder Litigation.........................................................................51 8.06 Conveyance Taxes...............................................................................51 IX CONDITIONS TO THE MERGER................................................................................51 9.01 Conditions to the Obligations of Each Party....................................................51 X TERMINATION; EXPENSES...................................................................................52 10.01 Termination....................................................................................52 10.02 Effect of Termination..........................................................................53 10.03 Transaction Expenses; Termination Fee..........................................................53 XI MISCELLANEOUS...........................................................................................54 11.01 Notices........................................................................................54 11.02 Survival of Representations, Warranties and Covenants..........................................55 11.03 Amendments; No Waivers.........................................................................55 11.04 Successors and Assigns.........................................................................56 11.05 Governing Law..................................................................................56 11.06 Certain Definitions............................................................................56 11.07 Specific Performance...........................................................................57 11.08 Company Disclosure Schedule....................................................................57 11.09 Counterparts; Effectiveness....................................................................58 11.10 Headings.......................................................................................58 11.11 No Third Party Beneficiaries...................................................................58 11.12 Entire Agreement...............................................................................58 11.13 Severability...................................................................................58
- iii - 5 AGREEMENT AND PLAN OF MERGER AGREEMENT, dated as of July 9, 2001 (this "Agreement"), among Full Line Distributors, Inc., a Georgia corporation (the "Company"), Broder Bros., Co., a Michigan corporation ("Buyer"), and FLD Acquisition Corp., a Georgia corporation and a wholly owned subsidiary of Buyer ("Merger Subsidiary"). RECITALS WHEREAS, the Boards of Directors of Buyer, the Merger Subsidiary and the Company have each approved the acquisition of the Company by Buyer upon the terms and subject to the conditions set forth herein; WHEREAS, in furtherance of the acquisition of the Company by Buyer, Buyer proposes to cause Merger Subsidiary to make a tender offer (as it may be amended from time to time as permitted under this Agreement, the "Offer") to purchase all the issued and outstanding shares (the "Shares") of common stock, no par value per share, of the Company (the "Common Stock"), at a price per Share of $2.95, or such higher price per Share cash consideration paid pursuant to the Offer (the "Offer Price"), net to the seller in cash, on the terms and subject to the conditions set forth herein; WHEREAS, the Boards of Directors of Buyer, the Merger Subsidiary and the Company have each approved the merger (the "Merger") of Merger Subsidiary with and into the Company, or (at the election of Buyer) the Company with and into Merger Subsidiary, in accordance with the terms of this Agreement and the Georgia Business Corporation Code (the "Georgia Code") and with any other applicable law, whereby each issued Share not owned directly or indirectly by Buyer or the Company shall be converted into the right to receive $2.95 per Share in cash (or such higher price per Share cash consideration paid pursuant to the Offer) and each then outstanding option to purchase Shares shall be canceled with the holder thereof being entitled to receive thereof an amount in cash equal to the Option Consideration (as defined herein); WHEREAS, the Board of Directors of the Company has: (i) unanimously determined that (x) the consideration to be paid for each Share in the Offer and the Merger is fair to the stockholders of the Company and (y) the Offer and the Merger are otherwise in the best interests of the Company and its stockholders; (ii) unanimously approved this Agreement and the transactions contemplated hereby; (iii) unanimously declared that this Agreement is advisable; (iv) unanimously consented to the Offer; and (v) unanimously recommended that the holders of Shares accept the Offer, tender their Shares pursuant to the Offer and approve and adopt this Agreement; and 6 WHEREAS, simultaneously with the execution and delivery of this Agreement, (i) Buyer and certain stockholders of the Company are entering into an agreement (the "Stockholders Agreement" and, together with this Agreement, the "Transaction Agreements") pursuant to which such stockholders will agree to take specified actions in furtherance of the Offer and the Merger. AGREEMENTS NOW, THEREFORE, in consideration of the foregoing and the premises, representations, warranties, covenants and agreement herein contained, the parties hereto agree as follows: ARTICLE I THE OFFER SECTION 1.01 The Offer. (a) Provided that this Agreement shall not have been terminated in accordance with Article X hereof and that none of the conditions set forth in Exhibit A hereto shall have occurred, Buyer and Merger Subsidiary
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