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EXHIBIT 2
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of June 21, 2000,
is entered into between PAMECO CORPORATION, a Georgia corporation ("Pameco
Georgia"), and PAMECO ACQUISITION CORPORATION, a Delaware corporation ("Pameco
Delaware"). Pameco Georgia and Pameco Delaware are hereinafter sometimes
collectively referred to as the "Constituent Corporations."
W I T N E S E T H:
WHEREAS, Pameco Georgia is a corporation duly organized and existing under
the laws of the State of Georgia;
WHEREAS, Pameco Delaware is a corporation duly organized and existing under
the laws of the State of Delaware;
WHEREAS, on the date of this Agreement, Pameco Georgia has authority to
issue 65,000,000 shares of capital stock, consisting of: (i) 40,000,0000
shares of Class A common stock, par value $0.01 per share, 7,383,261 of which
shares are issued and outstanding; (ii) 20,000,000 shares of Class B common
stock, par value $0.01 per share (collectively "Pameco Georgia Common Stock"),
1,872,929 of which are issued and outstanding; and (iii) 5,000,000 shares of
preferred stock, par value $1.00 per share ("Pameco Georgia Preferred Stock"),
of which 600,000 shares of Pameco Georgia Preferred Stock have been designated
as Series A Cumulative Pay-in-Kind Preferred Stock (the "Georgia Series A
Preferred Stock") and 140,000 shares of Georgia Series A Preferred Stock are
issued and outstanding;
WHEREAS, on the date of this Agreement, Pameco Delaware has authority to
issue 25,000,000 shares of capital stock, consisting of: (i) 20,000,000 shares
of common stock, par value $0.01 per share ("Pameco Delaware Common Stock"),
of which 100 shares are issued and outstanding; (ii) 5,000,000 shares of
preferred stock, par value $1.00 per share ("Pameco Delaware Preferred
Stock"), of which 600,000 shares of Pameco Delaware Preferred Stock have been
designated as Series A Cumulative Pay-in-Kind Preferred Stock (the "Delaware
Series A Preferred Stock"), and none of which are issued and outstanding;
WHEREAS, the respective Boards of Directors of Pameco Georgia and Pameco
Delaware have determined that it is advisable and in the best interests of the
Constituent Corporations that Pameco Georgia merge with and into Pameco
Delaware upon the terms and subject to the conditions set forth in this
Agreement for the purpose of effecting the change of the state of
incorporation of Pameco Georgia from Georgia to Delaware (the "Merger");
WHEREAS, the respective Boards of Directors of Pameco Georgia and Pameco
Delaware have, by resolutions duly adopted, approved this Agreement;
WHEREAS, Pameco Georgia has approved this Agreement as the sole stockholder
of Pameco Delaware; and
WHEREAS, the stockholders of Pameco Georgia have approved this Agreement;
WHEREAS, this merger is being done solely to effectuate a change of place
of incorporation of Pameco Georgia and is intended to qualify as a
reorganization under section 368(a)(1)(f) of the Internal Revenue Code of 1986
as amended (the "Code").
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NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, Pameco Georgia and Pameco Delaware hereby agree as follows:
1.MERGER. Subject to the conditions of this Agreement, Pameco Georgia shall
be merged with and into Pameco Delaware, and Pameco Delaware shall be the
surviving corporation in the Merger (hereinafter sometimes referred to as the
"Surviving Corporation"). The Merger shall become effective upon the date and
at the time of filing of an appropriate certificate or articles of merger,
providing for the Merger, with the Secretary of State of the State of Georgia
and with the Secretary of State of the State of Delaware, whichever later
occurs (the "Effective Time").
2.GOVERNING DOCUMENTS. The Certificate of Incorporation of Pameco Delaware,
as in effect immediately prior to the Effective Time, shall be the Certificate
of Incorporation of the Surviving Corporation (the "Surviving Corporation
Certificate of Incorporation") without change or amendment until thereafter
amended in accordance with the provisions thereof and applicable laws, except
that the Surviving Corporation Certificate of Incorporation shall be amended
to change the name of Pameco Delaware to "Pameco Corporation." The Bylaws of
Pameco Delaware, as in effect immediately prior to the Effective Time, shall
be the Bylaws of the Surviving Corporation without change or amendment until
thereafter amended in accordance with the provisions thereof, of the Surviving
Corporation Certificate of Incorporation and applicable law.
3.SUCCESSION. At the Effective Time, the separate corporate existence of
Pameco Georgia shall cease, and Pameco Delaware shall possess all the rights,
privileges, powers and franchises of a public and private nature and be
subject to all the restrictions, disabilities and duties of each of the
Constituent Corporations; and all the rights, privileges, powers and
franchises of each of the Constituent Corporations, and all property, real,
personal and mixed, and all debts due to each of the Constituent Corporations
on whatever account, including subscriptions for shares, and all other choses
in action, shall be vested in the Surviving Corporation; and all property,
rights, privileges, powers and franchises, and all and every other interest
shall thereafter effectively be the property of the Surviving Corporation as
they were of the respective Constituent Corporations, and the title to any
real estate vested by deed or otherwise, in either of such Constituent
Corporations shall not revert or be in any way impaired by reason of the
Merger; but all rights of creditors and all liens upon any property of Pameco
Georgia shall be preserved unimpaired. To the extent permitted by law, any
claim existing or action or proceeding pending by or against either of the
Constituent Corporations may be prosecuted as if the Merger had not taken
place. All debts, liabilities and duties of the respective Constituent
Corporations shall thenceforth attach to the Surviving Corporation and may be
enforced against it to the same extent as if such debts, liabilities and
duties had been incurred or contracted by it. All corporate acts, plans,
policies, agreements, arrangements, approvals and authorizations of Pameco
Georgia, its stockholders, Board of Directors and committees thereof, officers
and agents which were valid and effective immediately prior to the Effective
Time, shall be taken for all purposes as the acts, plans, policies,
agreements, arrangements, approvals and authorizations of the Surviving
Corporation and shall be as effective and binding thereon as the same were
with respect to Pameco Georgia. The employees and agents of Pameco Georgia
shall become the employees and agents of the Surviving Corporation and
continue to be entitled to the same rights and benefits which they enjoyed as
employees and agents of Pameco Georgia. The requirements of any plans or
agreements of Pameco Georgia involving the issuance or purchase by Pameco
Georgia of certain shares of its capital stock shall be satisfied by the
issuance or purchase of a like number and same class of shares of the
Surviving Corporation.
4.DIRECTORS AND OFFICERS. The directors and officers of Pameco Georgia on
the Effective Time shall be and become the sole directors and officers,
holding the same titles and positions, of the Surviving Corporation on the
Effective Time, and after the Effective Time shall serve in accordance with
the Bylaws of the Surviving Corporation.
5.FURTHER ASSURANCES. From time to time, as and when required by the
Surviving Corporation or by its successors or assigns, there shall be executed
and delivered on behalf of Pameco Georgia such deeds and other instruments,
and there shall be taken or caused to be taken by it all such further and
other action, as shall be appropriate, advisable or necessary in order to
vest, perfect or confirm, of record or otherwise, in the
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Surviving Corporation the title to and possession of all property, interests,
assets, rights, privileges, immunities, powers, franchises and authority of
Pameco Georgia, and otherwise to carry out the purposes of this Agreement, and
the officers and directors of the Surviving Corporation are fully authorized
in the name and on behalf of Pameco Georgia or otherwise, to take any and all
such action and to execute and deliver any and all such deeds and other
instruments.
6.CANCELLATION AND CONVERSION OF SHARES. Each share of Pameco Delaware
Common Stock issued and outstanding to Pameco Georgia shall be cancelled and
retired for no consideration and resume the status of authorized and issued
shares of Pameco Delaware Common Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder thereof, (a) each
three shares of Pameco Georgia Common Stock outstanding immediately prior to
the Effective Time shall be changed and converted into and shall be one fully
paid and non-assessable share of Pameco Delaware Common Stock (the "Reverse
Stock Split"), and (b) each share of Georgia Series A Preferred Stock
outstanding, immediately prior to the Effective Time shall be changed and
converted into and shall be one fully paid and non-assessable share of
Delaware Series A Preferred Stock (with the Reverse Stock Split, collectively
the "Conversion"). All certificates of a single holder of Pameco Georgia
Common Stock and Georgia Series A Preferred will be aggregated (respectively)
for the purpose of the Conversion.
7.NO FRACTIONAL SHARES. No fractional shares of Pameco Delaware Common
Stock and Delaware Series A Preferred Stock shall be issued. In lieu of
fractional shares, the former holders of Pameco Georgia Common affected by the
Conversion pursuant to the Merger who would otherwise be entitled to
fractional shares of Pameco Delaware Common Stock, shall receive, in lieu
thereof, cash (without interest) in an amount equal to the product of (i) such
fractional part of a share of Pameco Delaware Common Stock , multiplied by
(ii) the closing price per share of Pameco Georgia Common Stock on the New
York Stock Exchange ("NYSE") on the business day immediately prior to the
Effective Time.
8.CONDITIONS TO OBLIGATIONS. The obligations of each party to complete the
Merger are subject to the following conditions:
a)Pameco Georgia Shareholder Approval of the Merger. The Merger shall
have received the requisite approval of the shareholders of Pameco Georgia
pursuant to the General Business Corporation Code of the State of Georgia.
b)Pameco Georgia Shareholder Approval of the Surviving Corporation
Certificate of Incorporation. The Surviving Corporation Certificate of
Incorporation shall have received the requisite approval of the shareholders
of Pameco Georgia pursuant to the General Business Corporation Code of the
State of Georgia and the General Corporation Law of the State of Delaware.
c)Pameco Georgia Shareholder Approval of the Reverse Stock Split. The
Reverse Stock Split shall have received the requisite approval of the
shareholders of Pameco Georgia pursuant to the General Business Corporation
Code of the State of Georgia and the General Corporation Law of the State of
Delaware.
d)Approval from Government Agencies. All governmental approvals and
other actions required to effect the Merger and related transactions shall
have been obtained, if any, without conditions or restrictions that the
affected party reasonably considers unduly burdensome.
e)Approval from Fleet Capital Corporation. All approvals and other
actions required to effect the Merger and related transactions shall have been
obtained from Fleet Capital Corporation, if any, without conditions or
restrictions that the affected party reasonably considers unduly burdensome.
f)Limited Dissenters' Rights. The holders of not more than 5% of the
outstanding shares of any class of capital stock of Pameco Georgia shall have
properly sought and not withdrawn a request to invoke dissenters' rights under
Section 14-2-1301, et seq. of the Georgia Business Corporation Code, which may
be waived by Pameco Delaware in its sole discretion.
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9.STOCK CERTIFICATES. At and after the Effective Time, all of the
outstanding certificates which, immediately prior to the Effective Time,
represented shares of Pameco Georgia Common Stock and Georgia Series A
Preferred Stock shall be deemed for all purposes to evidence ownership of, and
to represent, respectively, shares of Pameco Delaware Common Stock, and
Delaware Series A Preferred Stock into which the shares of Pameco Georgia
Common Stock and Georgia Series A Preferred Stock, formerly represented by
such certificates, have been converted as herein provided. The registered
owner on the books and records of the Surviving Corporation or its transfer
agents of any such outstanding stock certificate shall, until such certificate
shall have been surrendered for transfer or otherwise accounted for to the
Surviving Corporation or its transfer agents, have and be entitled to exercise
any voting and other rights with respect to, and to receive any dividends and
other distributions upon, the shares of Pameco Delaware Common Stock and
Delaware Series A Preferred Stock evidenced by such outstanding certificate as
above provided.
10. OPTIONS AND WARRANTS.
a)Each option to purchase, or other award of shares of, Pameco Georgia
Common Stock outstanding immediately prior to the Effective Time, shall, by
virtue of the Merger and without any action on the part of the holder thereof,
shall cease to represent a right to acquire shares of Pameco Georgia Common
Stock and shall be converted into and become an option to purchase, or award
of, that number of shares of Pameco Delaware Common Stock determined by
multiplying the number of shares of Pameco Georgia Common Stock granted under
each option, or other award, by the ratio of one-third (1/3), at an exercise
price for shares of Pameco Georgia Common Stock equal to the original exercise
price to purchase shares of Pameco Georgia Common Stock multiplied by three
(3), and upon the same terms and subject to the same conditions as set forth
in each of the respective options or other awards, as in effect at the
Effective Time.
b)Each warrant to purchase, or other award of shares of Georgia Series
A Preferred Stock outstanding immediately prior to the Effective Time, shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become a warrant to purchase, or award of, the
same number of shares of Delaware Series A Preferred Stock at the same
exercise price per share, and upon the same terms and subject to the same
conditions as set forth in each of the respective options or other awards, as
in effect at the Effective Time.
c)The adjustment provided herein with respect to any option to
purchase, or other award of shares of Pameco Georgia Common Stock ("Original
Stock Options") which are "incentive stock options" (as defined in Section 422
of the Code) shall be and are intended to be effected in a manner which is
consistent with Section 424(a) of the Code. Pameco Delaware acknowledges and
confirms that the option plans of Pameco Georgia under which the Original
Stock Options were issued are assumed by Pameco Delaware, and the duration and
other terms of the new option shall be the same as the Original Stock Option,
except that all references to Pameco Georgia shall be deemed to be references
to Pameco Delaware. As soon as practicable after the Effective Time, Pameco
Delaware shall deliver to holders of Original Stock Options appropriate option
agreements representing the right to acquire Pameco Delaware Common Stock on
the terms and conditions set forth in this Section 10.
d)Pameco Delaware shall take all corporate action necessary to reserve
for issuance a sufficient number of Pameco Delaware Common Stock for delivery
upon exercise of options or warrants and/or upon the Conversion of Delaware
Series A Preferred Stock in accordance with this Section 10. Pameco Delaware
shall file a registration statement on Form S-8 (or any successor form) or
another appropriate form, effective promptly after the Effective Time, with
respect to Pameco Delaware Common Stock subject to the new options and shall
use all reasonable efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options
remain outstanding.
11. OTHER EMPLOYEE BENEFIT PLANS. As of the Effective Time, Pameco
Delaware acknowledges and confirms its assumption by operation of law all
obligations under any and all employee benefit plans of Pameco Georgia in
effect as of the Effective Time or with respect to which employee rights or
accrued benefits are outstanding as of the Effective Time.
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12. AMENDMENT. Subject to applicable law, this Agreement may be amended,
modified or supplemented by written agreement of the parties hereto at any
time prior to the Effective Time with respect to any of the terms contained
herein; provided, however, that no such amendment, modification or supplement
not adopted and approved by the stockholders of Pameco Georgia and Pameco
Delaware shall affect the rights of either or both of such stockholders in a
manner which is materially adverse to either or both of them.
13. TERMINATION. At any time prior to the Effective Time, this Agreement
may be terminated and the Merger may be abandoned by the Board of Directors of
Pameco Georgia, notwithstanding approval of this Agreement by the sole
stockholder of Pameco Delaware or by the stockholders of Pameco Georgia, or
both, if, in the opinion of the Board of Directors of Pameco Georgia,
circumstances arise which, in the opinion of such Board of Directors, make the
Merger for any reason inadvisable.
14. COUNTERPARTS; FACSIMILE. In order to facilitate the filing and
recording of this Agreement, the same may be executed in two or more
counterparts (including by facsimile signature), each of which shall be deemed
to be an original and the same agreement.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, Pameco Georgia and Pameco Delaware have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first above written.
PAMECO ACQUISITION CORPORATION
/s/ Robert J. Davis
By: _________________________________
Robert J. Davis
Name: _______________________________
Chief Financial Officer
Title: ______________________________
PAMECO CORPORATION
/s/ Dixon R. Walker
By: _________________________________
Dixon R. Walker
Name: _______________________________
President and CEO
Title: ______________________________
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