Exhibit 2
AGREEMENT OF MERGER
AND
RECAPITALIZATION
THIS AGREEMENT (the "Agreement"), dated as of June 18, 1998, is by and
between MATEC Corporation, a Delaware corporation (the "Company"), and MATEC
Corporation, a Maryland corporation (the "Maryland Company").
RECITALS
WHEREAS, the Board of Directors of the Company and the Board of Directors
of the Maryland Company each has determined that it is in the best interest of
their respective shareholders to effect the merger provided for herein and
thereafter to effect the recapitalization of the Maryland Company provided for
herein, all upon the terms and subject to the conditions set forth therein,
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto adopt the plan of reorganization encompassed by this Agreement
and agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1 The Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.2), the Company shall be merged with
and into the Maryland Company and the separate corporate existence of the
Company shall thereupon cease (the "Merger"). To the extent the Merger
constitutes a transaction for federal income tax purposes, the parties intend
that the Merger qualify as a reorganization described in Section 368(a)(1)(F) of
the Internal Revenue Code of 1986, as amended. The Maryland Company (sometimes
hereinafter referred to as the "Surviving Entity") shall be the surviving entity
in the Merger and shall continue to be governed by the laws of the State of
Maryland, and its separate existence with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger. The
Merger shall have the effects specified in the General Corporation Law of the
State of Delaware (the "DGCL") and the Maryland General Corporation Law (the
"MGCL").
1.2 Effective Time. Promptly after the conditions set forth in Section 6.1
shall be fulfilled, and provided that this Agreement has not been terminated or
abandoned pursuant to Article VII, the Company and the Maryland Company shall
cause a Certificate of Merger (the "Certificate of Merger") to be executed and
filed with the Secretary of State of Delaware as provided in Section 251 of the
DGCL and Articles of Merger (the "Articles of Merger") to be executed and filed
with the State Department of Assessments and Taxation of Maryland (the "SDAT")
as provided in Section 3-107 of the MGCL. The Merger shall become effective at
6:00 P.M. Eastern Time on July 2, 1998 (the "Effective Time"), but only if prior
to that date such Certificate of Merger and Articles of Merger have been so
filed.
ARTICLE II
ARTICLES OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION
2.1 Articles of Incorporation.The Articles of Incorporation of the Maryland
Company in effect at the Effective Time, as amended by this Agreement, shall be
the Articles of Incorporation of the Surviving Entity, until duly amended in
accordance with the MGCL.
2.2 The Bylaws. The Bylaws of the Maryland Company in effect at the
Effective Time shall be the Bylaws of the Surviving Entity, until duly amended
in accordance with the terms thereof and the MGCL.
ARTICLE III
DIRECTORS AND OFFICERS
OF THE SURVIVING CORPORATION
Directors and Officers. The directors and officers of the Company at the
Effective Time shall, from and after the Effective Time, be the directors and
officers, respectively, of the Surviving Entity until their successors have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Entity's Articles of
Incorporation and Bylaws.
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK
4.1 Effect on Capital Stock. At the Effective Time, by virtue of the Merger
and without any action on the part of any holder of capital stock of the
Company:
(a) Except as provided in (b) below, each share of the common stock,
par value $0.05 per share, of the Company ("Company Stock") issued prior to the
Effective Time and not theretofore retired (other than shares held by the
Company) shall be converted into 1/100th of one validly issued, fully paid and
nonassessable share of common stock, par value $0.05 per share, of the Maryland
Company ("Maryland Company Stock"), and each share of Company Stock held by the
Company shall be retired.
(b) Stockholders holding less than 100 shares of Company Stock of
record immediately prior to the Effective Time ("Fractional Holders") shall not
receive or be entitled to any fractional shares of Maryland Company Stock and,
except as set forth in the immediately following sentence, shall not have any
rights as a stockholder of the Surviving Entity. In lieu of all other rights,
Fractional Holders shall be entitled to receive, upon surrender of the
certificate or certificates evidencing their shares of Company Stock, the cash
value of such shares based on the average daily closing price per share of the
Company Stock on the American Stock Exchange (the "AMEX") for the 10 trading
days immediately preceding the Effective Time, without interest.
(c) Each issued certificate which immediately prior to the Effective
Time represented at least 100 shares of Company Stock shall, from and after the
Effective Time and the effectiveness of the amendment of the Articles of
Incorporation of the Maryland Company referred to in Section 6.1(c) (the
"Split"), be deemed for all purposes to evidence ownership of and represent the
number of shares of Maryland Company Stock which the shares of Company Stock
represented by such certificates have become as a result of the Merger and the
Split, and shall be so registered on the books and records of the Maryland
Company and its transfer agent.
(d) Each option or other right to purchase or otherwise acquire shares
of Company Stock outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and the Split and without any action on the part of the
holder of such option or right, be converted into and become an option or right
to purchase or otherwise acquire the same number of shares of Maryland Company
Stock at the same price per share and upon the same terms and subject to the
same conditions as applicable to such options or other rights immediately prior
to the Effective Time.
(e) Each share of the Maryland Company Stock outstanding immediately
prior to the Effective Time shall be canceled and retired, without payment of
any consideration therefore, and resume the status of an authorized and unissued
share of Maryland Company Stock.
ARTICLE V
COVENANTS
5.1 Stock Exchange Listing. The Maryland Company shall use its best efforts
to cause the Maryland Company Stock to be issued in the Merger and Split to be
approved for listing on the AMEX prior to the Effective Time subject to official
notice of issuance.
ARTICLE VI
CONDITIONS
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of the Maryland Company and the Company to consummate the
Merger are subject to the fulfillment of each of the following conditions:
(a) Shareholder Approval. This Agreement shall have been duly approved
by the holders of a majority of the outstanding shares of Company Stock.
(b) AMEX Listing. The Maryland Company Stock issuable pursuant to this
Agreement shall have been approved for listing on AMEX upon official notice of
issuance.
(c) The Articles of Incorporation of the Maryland Company shall have
been amended by adding to Article FOURTH thereof a Paragraph (c) providing as
follows:
"(c) Pursuant to Section 2-602(8) of the MGCL and effective one hour
after the merger of MATEC Corporation (a Delaware corporation) with and
into this Corporation shall become effective, each issued share of the
common stock, par value five cents ($0.05) per share, of this Corporation
and each fraction thereof is hereby reclassified, converted and changed
into multiple shares on the basis of 100 shares for each one share."
ARTICLE VII
TERMINATION
7.1 Termination by Mutual Consent. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, before or after
the approval by holders of the Company Stock, by the mutual consent of the Board
of Directors of the Company and the Board of Directors of the Maryland Company
7.2 Effect of Termination and Abandonment. In the event of termination of
this Agreement and abandonment of the Merger pursuant to this Article VII, no
party hereto (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement.
ARTICLE VIII
MISCELLANEOUS AND GENERAL
8.1 Modification or Amendment.Subject to the applicable provisions of the
DGCL and the MGCL, at any time prior to the Effective Time, the parties hereto
may modify or amend this Agreement, by written agreement executed and delivered
by duly authorized officers of the respective parties.
8.2 Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.
8.3 Counterparts. For the convenience of the parties hereto, this Agreement
may be executed in any number of counterparts, each such counterpart being
deemed to be an original instrument, and all such counterparts shall together
constitute the same agreement.
8.4 Headings. The Article, Section and paragraph headings herein are for
convenience of reference only, do not constitute a part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first
hereinabove written.
MATEC CORPORATION
ATTEST:
_________________________ By: _________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III, ▇▇▇ ▇▇▇▇▇▇, ▇▇.,
Secretary President
MATEC CORPORATION
ATTEST:
_________________________ By: _________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III, ▇▇▇ ▇▇▇▇▇▇, ▇▇.,
Secretary President