<PAGE>
Exhibit 2.2
Agreement and
Plan of Reorganization
Whereas, this Agreement and Plan of Reorganization ("Agreement"), dated as
of December 26, 2000, between The Rouse Company, a Maryland corporation
("Rouse"), and The Rouse Company Incentive Compensation Statutory Trust
("Shareholder"), being the owner of record of ninety-one (91) shares of the
issued and outstanding Class A Common Stock of Howard Hughes Properties, Inc.
("PSS").
Whereas, Rouse wishes to acquire and the Shareholder wishes to transfer all
of the Shareholder's stock in PSS in a transaction intended to qualify as a
reorganization within the meaning of Section 368(a)(1)(B) of the Internal
Revenue Code, as amended.
Now, Therefore, Rouse and the Shareholder adopt this plan of reorganization
and agree as follows:
Section 1 -- Exchange of Stock
1.1 Number of Shares. The Shareholder agrees to transfer to Rouse at the
Closing the number of shares of Class A Common Stock of PSS, $0.01 par value per
share, shown in Exhibit A, in exchange for an aggregate of approximately 14,500
shares (exact number of shares to be determined using the closing price of Rouse
common stock as of December 29, 2000) of voting common stock of Rouse, $0.01 par
value per share, to be delivered at the Closing to the Shareholder. The
transfer of the voting common stock by Rouse shall be effected by the delivery
to the Shareholder at Closing of certificates representing the transferred
shares endorsed in blank or accompanied by stock powers executed in blank, with
all necessary transfer tax and other revenue stamps, acquired at Rouse's
expense, affixed.
1.2 Delivery of Certificates by Shareholder. The transfer of PSS shares by
the Shareholder shall be effected by the delivery to Rouse at the Closing of
certificates representing the transferred shares endorsed in blank or
accompanied by stock powers executed in blank, with all necessary transfer tax
and other revenue stamps, acquired at the Shareholder's expense, affixed.
1.3 Further Assurances. At the Closing and from time to time thereafter,
the Shareholder and Rouse shall execute such additional instruments and take
such other action as either party may request in order more effectively to sell,
transfer, and assign the transferred stock to the Shareholder and Rouse and to
confirm such party's title thereto.
<PAGE>
1.4 Changes in Rouse's Capitalization. If between the date of this
Agreement and the Closing, the outstanding shares of Rouse common stock are,
without the receipt of new consideration by Rouse, increased, decreased, changed
into, or exchanged for a different number or kind of shares or securities of
Rouse through reorganization, reclassification, stock dividend, stock split,
reverse stock split, or similar change in Rouse's capitalization, Rouse will
issue and deliver to the Shareholder in addition to or in lieu of the Rouse
Shares specified in Section 1.1, voting stock of Rouse in equitably adjusted
amounts. In the event of any such change in Rouse's capitalization, all
references to Rouse shares herein shall refer to the number of Rouse shares at
thus adjusted.
Section 2 -- Closing
The Closing contemplated by Section 1.1 shall be held at the principal
offices of Rouse, 10275 Little Patuxent Parkway, Columbia, Maryland, on January
2, 2001, unless another place or time is agreed upon writing by the parties.
Section 3 -- Representations and Warranties of the Shareholder
The Shareholder represents and warrants to Rouse as follows:
3.1 Corporate Status. PSS is a corporation duly organized, validly
existing, and in good standing under the laws of the state of its incorporation
and is licensed or qualified as a foreign corporation in all states in which the
nature of its business or the character or ownership of its properties makes
such licensing or qualification necessary.
3.2 Capitalization. The authorized capital stock of PSS consists of one
hundred (100) shares of Class A Common Stock, having a par value of $0.01 per
share, of which one hundred (100) shares are issued and outstanding, all fully
paid and nonassessable, nine thousand (9,000) shares of Class B Common Stock,
having a par value of $0.01 per share, of which nine thousand (9,000) shares are
issued and outstanding, all fully paid and nonassessable and twenty five
thousand (25,000) Series A Preferred Stock, having a par value of $0.01 per
share of which twenty-five thousand (25,000) are issued and outstanding, all
fully paid and nonassessable.
3.3 Financial Statements. The audited financial statements of PSS
furnished to Rouse, consisting of balance sheets as of December 31, 1999, 1998,
and related statements of income for the periods then ended, and the unaudited
balance sheet as of September 30, 2000 ("PSS' Latest Balance Sheet"), and the
related statement of income, are correct and fairly present the financial
condition of PSS as of the dates and for the periods involved, and such
statements were prepared in accordance with generally accepted accounting
principles consistently applied.
-2-
<PAGE>
3.4 Undisclosed Liabilities. PSS had no liabilities of any nature except
to the extent reflected or reserved against in PSS' Latest Balance Sheet,
whether accrued, absolute, contingent, or otherwise, including, without
limitation, tax liabilities and interest due or to become due, and PSS' accounts
receivable are collectible in accordance with the terms of such accounts, except
to the extent of the reserve therefor in PSS' Latest Balance Sheet.
3.5 Interim Changes. Between January 2, 2001, and the date of this
Agreement, there have not been, except as set forth in a list certified by the
president of PSS and delivered to Rouse, (1) any changes in PSS' financial
condition, assets, liabilities, or business which, in the aggregate, have been
materially adverse; (2) any damage, destruction, or loss of or to PSS' property,
whether or not covered by insurance; (3) any declaration or payment of any
dividend or other distribution in respect of PSS' capital stock (other than Year
2000 dividends on common and preferred shares), or any direct or indirect
redemption, purchase, or other acquisition of any such stock; or (4) any
increase paid or agreed to in the compensation, retirement benefits, or other
commitments to employees.
3.6 Title to Property. PSS has good and marketable title to all properties
and assets, real and personal, reflected in PSS' Latest Balance Sheet, except as
since sold or otherwise disposed of in the ordinary course of business, and PSS'
properties and assets are subject to no mortgage, pledge, lien, or encumbrance,
except for liens shown therein, with respect to which no default exists.
3.7 Access to Records, and So Forth. From the date of this Agreement to
the Closing, the Shareholder will cause PSS (1) to give to Rouse and its
representatives full access during normal business hours to all of its offices,
books, records, contracts, and other corporate documents and properties so that
Rouse may inspect and audit them and (2) to furnish such information concerning
PSS' properties and affairs as Rouse may reasonably request.
3.8 Title to Shares. The Shareholder is the owner, free and clear of any
liens and encumbrances, of the number of PSS shares which the Shareholder has
contracted to exchange.
3.9 General Release. As of the date of the Closing, PSS and the
Shareholder will execute a mutual release of all claims in the form attached
hereto as Exhibit B.
Section 4 -- Representations, Warranties, and Covenants of Rouse
Rouse represents and warrants to, and covenants with, the Shareholder as
follows:
4.1 Corporate Status. Rouse is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland and is
licensed or qualified
-3-
<PAGE>
as a foreign corporation in all states in which the nature of its business or
the character or ownership of its properties makes such licensing or
qualification necessary.
4.2 Capitalization. The authorized capital stock of Rouse consists of
those shares of capital stock which are set forth as issued and outstanding in
filings made with the Securities and Exchange Commission.
4.3 Financial Statements. The audited financial statements of Rouse
furnished to the Shareholder, consisting of balance sheets as of December 31,
1999, 1998 and 1997, and related statements of income for the periods then
ended, and the unaudited balance sheet as of September 30, 2000 ("Rouse's Latest
Balance Sheet"), and the related statement of income, are correct and fairly
present the financial condition of Rouse as of the dates and for the periods
involved, and such statements were prepared in accordance with generally
accepted accounting principles consistently applied.
4.4 Investment Intent. Rouse is acquiring the PSS shares to be transferred
to it under this Agreement for investment and not with a view to the sale or
distribution thereof, and Rouse has no commitment or present intention to
liquidate PSS or to sell or otherwise dispose of its stock.
4.5 Corporate Authority. Rouse has full corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder, and will
deliver to the Shareholder at the Closing a certified copy of resolutions of its
board of directors authorizing execution of this Agreement by its officers and
performance thereunder.
4.6 Due Authorization. Execution of this Agreement and performance by
Rouse hereunder has been duly authorized by all requisite corporate action on
the part of Rouse, and this Agreement constitutes a valid and binding obligation
of Rouse; performance hereunder will not violate any provision of Rouse's
Articles of Incorporation, Bylaws, agreements, mortgages, or other commitments.
4.7 Title to Shares. Rouse is the owner, free and clear of any liens and
encumbrances, of the number of Rouse shares which Rouse has contracted to
exchange.
4.8 General Release. As of the date of Closing, PSS and the Shareholder
will execute a mutual release of all claims in the form attached hereto as
Exhibit B.
Section 5 -- Conduct of PSS Pending the Closing
The Shareholder agrees that PSS will conduct itself in the following manner
pending the closing:
5.1 Certificate of Incorporation and Bylaws. No change will be made in
PSS' certificate of incorporation or bylaws.
-4-
<PAGE>
5.2 Capitalization, and So Forth. PSS will not make any change in its
authorized or issued capital stock, declare or pay any dividend or other
distribution (other than 2000 common and preferred stock dividends), or issue,
encumber, purchase, or otherwise acquire any of its capital stock.
5.3 Conduct of Business. PSS will use its best efforts to maintain and
preserve its business organization, employee relationships, and goodwill intact,
and will not, without the written consent of Rouse, enter into any material
commitment except in the ordinary course of business.
Section 6 -- Conduct of Rouse Pending the Closing
Rouse agrees that between the date hereof and the Closing:
Issue of Rouse Common Stock. Rouse will provide for transfer as of the
Closing Date of approximately 14,500 shares (exact number of shares to be
determined using the closing price of Rouse common stock as of December 29,
2000) of Rouse Common Stock in exchange for the shares of PSS Common Stock.
Section 7 -- Conditions Precedent -- Rouse
All obligations of Rouse under this Agreement are subject, at Rouse's
option, to the fulfillment, before or at the Closing, of each of the following
conditions:
7.1 Representations and Warranties True at Closing. The Shareholder's
representations and warranties contained in this Agreement shall be deemed to
have been made again at and as of the Closing and shall then be true in all
material respects.
7.2 Due Performance. The Shareholder shall have performed and complied
with all the terms and conditions required by this Agreement to be performed or
complied with by it before the Closing.
7.3 Books and Records. The Shareholder shall have caused PSS to make
available to Rouse all books and records of PSS, including minute books and
stock transfer records.
7.4 Revocation of Prior Authorizations. The Shareholder shall have
delivered to Rouse certified copies of resolutions of PSS' board of directors
revoking as of the Closing all prior authorizations, powers of attorney,
designations, and appointments relating to the signing of checks, borrowing of
funds, access to corporate safe-deposit boxes and other similar matters, to the
extent requested by Rouse.
7.5 Resignations. There shall have been delivered to Rouse the signed
resignations of such directors of PSS as Rouse shall request, dated as of the
Closing.
-5-
<PAGE>
Section 8 -- Conditions Precedent; The Shareholder
All obligations of the Shareholder under this Agreement are subject, at its
option, to the fulfillment, before or at the Closing, of each of the following
conditions:
8.1 Representations and Warranties True at Closing. Rouse's
representations and warranties contained in this Agreement shall be deemed to
have been made again at and as of the Closing and shall then be true in all
material respects.
8.2 Due Performance. Rouse shall have performed and complied with all the
terms and conditions required by this Agreement to be performed or complied with
by it before the Closing.
8.3 Officers' Certificate. The Shareholder shall have been furnished with
a certificate signed by an officer and secretary (or assistant secretary) of
Rouse, dated as of the Closing, certifying (1) to the effects set out in
Sections 6.1 and 11.10 and (2) that since December 26, 2000, there has been no
material adverse change in the financial condition, business, or properties of
Rouse and its subsidiaries taken as a whole.
Section 9 -- Indemnification
9.1 Indemnification of Rouse. The Shareholder agrees to indemnify Rouse
against any loss, damage, or expense (including reasonable attorney fees)
suffered by Rouse from (1) any breach by the Shareholder of this Agreement or
(2) any inaccuracy in or breach of any of the representations, warranties, or
covenants by the Shareholder herein, provided, however, that (a) Rouse shall be
entitled to assert rights of indemnification hereunder only if and to the extent
that it suffers losses, damages, and expenses (including reasonable attorney
fees) exceeding $50,000 in the aggregate and (b) Rouse shall give notice of any
claims hereunder within twenty-four months beginning on the date of the Closing.
No loss, damage, or expense shall be deemed to have been sustained by Rouse to
the extent of insurance proceeds paid to, or tax benefits realizable by, Rouse
or PSS as a result of the event giving rise to such right to indemnification.
9.2 Indemnification of Shareholder. Rouse agrees to indemnify the
Shareholder against any loss, damage, or expense (including reasonable attorney
fees) suffered by any of the Shareholder from (1) any breach by Rouse of this
Agreement or (2) any inaccuracy in or breach of any of Rouse's representations,
warranties, or covenants herein.
9.3 Defense of Claims. Upon obtaining knowledge thereof, the indemnified
party shall promptly notify the indemnifying party of any claim which has given
or could give rise to a right of indemnification under this Agreement. If the
right of indemnification relates to a claim asserted by a third party against
the indemnified party, the indemnifying party shall have the right to employ
counsel acceptable to the
-6-
<PAGE>
indemnified party to cooperate in the defense of any such claim. As long as the
indemnifying party is defending any such claim in good faith, the indemnified
party will not settle such claim. If the indemnifying party does not elect to
defend any such claim, the indemnified party shall have no obligation to do so.
Section 10 -- Termination
This Agreement may be terminated (1) by mutual consent in writing; (2) by
either the Shareholder or Rouse if there has been a material misrepresentation
or material breach of any warranty or covenant by the other party; or (3) by
either the Shareholder or Rouse if the Closing shall not have taken place,
unless adjourned to a later date by mutual consent in writing, by January 31,
2001.
Section 11 -- General Provisions
11.1 Further Assurances. At any time, and from time, after the Closing
Date, each party will execute such additional instruments and take such action
as may be reasonably requested by the other party to confirm or perfect title to
any property transferred hereunder or otherwise to carry out the intent and
purposes of this Agreement.
11.2 Waiver. Any failure on the part of either party hereto to comply
with any of its obligations, agreements, or conditions hereunder may be waived
in writing by the party to whom such compliance is owed.
11.3 Brokers. Each party represents to the other party that no broker or
finder has acted for it in connection with this Agreement and agrees to
indemnify and hold harmless the other party against any fee, loss, or expense
arising out of claims by brokers or finders employed or alleged to have been
employed by it.
11.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first-class registered or certified mail, return receipt requested, as
follows:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland
Attn: General Counsel
Fax: 410-992-6392
The Rouse Company
Incentive Compensation Statutory Trust
10275 Little Patuxent Parkway
Columbia, Maryland
-7-
<PAGE>
Attn: Jeffrey H. Donahue
Fax: 410-964-3412
11.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
11.6 Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.7 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Maryland.
11.8 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns; provided,
however, that any assignment by either party of its rights under this Agreement
without the written consent of the other party shall be void.
11.9 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.10 Listing. Upon demand by Shareholder, Rouse will register the subject
shares of Rouse Common Stock pursuant to a customary rights and registration
agreement.
THE ROUSE COMPANY
By: _______________________________________________
Gordon H. Glenn, Vice President and General Counsel
THE ROUSE COMPANY INCENTIVE COMPENSATION
STATUTORY TRUST
By: _______________________________________________
Jeremiah E. Casey, Trustee
By: _______________________________________________
Rohit M. Desai, Trustee
-8-
<PAGE>
By: _______________________________________________
Jeffrey H. Donahue, Trustee
-9-
<PAGE>
Exhibit A
<TABLE>
<CAPTION>
No. of PSS No. of Rouse
Taxpayer Shares To be Shares To Be
Name of Shareholder Address ID No. Transferred Received
<S> <C> <C> <C> <C>
The Rouse Company
Incentive Compensation 10275 Little Patuxent Parkway 91 Class A
Statutory Trust Columbia, MD 21044 52-2069348 Common Shares 14,500*
</TABLE>
*Approximate. Exact number of shares to be determined based on the closing
price of Rouse common stock as of December 29, 2000.
<PAGE>
Exhibit B
Agreement made this 26th of December, 2000, between Howard Hughes
Properties, Inc. ("PSS"), and The Rouse Company Incentive Compensation Statutory
Trust (the "Shareholder"), being the owner of ninety-one (91) shares of the
issued and outstanding Class A Common Stock of PSS.
As of the date hereof, PSS hereby releases the Shareholder and the
Shareholder hereby releases PSS from all claims of every kind and description,
known and unknown, without regard to the capacity in which such claims may have
arisen.
Howard Hughes Properties, Inc.
By: _______________________________________________
Gordon H. Glenn, Vice President and General Counsel
THE ROUSE COMPANY INCENTIVE COMPENSATION
STATUTORY TRUST
By: _______________________________________________
Jeremiah E. Casey, Trustee
By: _______________________________________________
Rohit M. Desai, Trustee
By: _______________________________________________
Jeffrey H. Donahue, Trustee
-2-
