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| 8-K - ADVANCE DISPLAY TECHNOLOGIES INC | v197253_8k.htm |
AGREEMENT AND PLAN OF
MERGER
THIS
AGREEMENT AND PLAN OF MERGER, dated as of September 16, 2010 (the “Agreement”), is to
provide for the merger of GSLD Holdings, Inc., a Colorado corporation (“Holdings”), with and
into Advance Display Technologies, Inc., a Colorado corporation (“ADTI”). Holdings
and ADTI are sometimes hereafter referred to individually as the “party” and
collectively as the “parties.”
RECITALS
A. The
board of directors and the shareholders of Holdings individually approved this
Agreement on the terms and subject to the conditions set forth in this Agreement
by unanimous written consent on August 13, 2010.
B. ADTI
is a corporation duly organized and existing under the laws of the State of
Colorado, having authorized capital stock of Two Billion (2,000,000,000) shares
consisting of One Billion (1,000,000,000) shares of common stock, with a par
value of $0.001 (the “Common Stock”), and
One Billion (1,000,000,000) shares of Series D convertible preferred stock, with
a par value of $0.001 convertible into shares of Common Stock at a ratio of one
to one (the “Preferred
Stock”).
C.
209,017,486 shares of ADTI stock, comprised of 32,014,723 shares of Common Stock
and 177,002,763 shares of Preferred Stock (the Preferred Stock together with the
Common Stock, the “ADTI Stock”), are
issued and outstanding and are the only shares and classes of capital stock of
ADTI issued and outstanding.
D. Each
of the stockholders of ADTI listed on Exhibit A have entered into a Contribution
Agreement, dated as of August 13, 2010 (the “Contribution
Agreement”), pursuant to which such stockholders have, among other
things, agreed to contribute their ADTI Stock to Holdings, effective immediately
prior to the Effective Time (as defined below), in exchange for all of the
issued and outstanding shares of common stock and Series D convertible preferred
stock of Holdings.
E. After
Holdings acquires at least ninety percent (90%) of each class of ADTI stock
pursuant to the Contribution Agreement, Holdings shall convert 174,197,800
shares of its Preferred Stock into shares of Common Stock, resulting in
206,212,523 shares of Common Stock and 2,804,963 shares of Preferred Stock being
issued and outstanding. Next, Holdings shall merge with and into ADTI
pursuant to the Colorado “short-form” merger statute (the “Merger,” and together
with the other transactions contemplated by this Agreement, the “Transactions”),
whereby each share of issued and outstanding Common Stock shall be converted
into the right to receive shares of Common Stock in the Surviving Corporation
(as defined below) and each share of issued and outstanding Preferred Stock
shall be convertible into the right to receive shares of Preferred Stock in the
Surviving Corporation at a conversion ratio of one thousand five hundred (1,500)
shares of ADTI Stock for every one (1) share of the Surviving
Corporation. No fractional shares will be
issued. Instead, holders who would be entitled to receive fractional
shares will receive an amount in cash, without interest, equal to two United
States cents (US$0.02) per share; however, in no event shall a stockholder who
is entitled to receive cash for their shares of Common Stock or Preferred Stock
receive less than one United States dollar (US$1.00) (the “Cash
Consideration”).
AGREEMENT
NOW THEREFORE, in
consideration of the premises and the mutual agreements and covenants set forth
herein, the parties hereby agree as follows:
1.
Merger. Upon
the terms and subject to the conditions set forth in this Agreement, Holdings
shall be merged with and into ADTI pursuant to the Colorado “short-form” merger
statute and the separate existence of Holdings shall thereupon cease and ADTI
shall be the surviving corporation (in such capacity, the “Surviving
Corporation”). The name of the Surviving Corporation shall be
Advance Display Technologies Inc.
2.
Effective
Time. The Merger shall become effective on September 23,
2010 at 5:00 p.m. Eastern Standard Time (the “Effective
Time”).
3. [Reserved]
4.
Governing
Documents.
(a) The
articles of incorporation of ADTI, as in effect immediately prior to the
Effective Time, shall be the articles of incorporation of the Surviving
Corporation at and after the Effective Time until thereafter amended in
accordance with applicable law.
(b) The
bylaws of ADTI, as in effect immediately prior to the Effective Time, shall be
the bylaws of the Surviving Corporation at and after the Effective Time until
thereafter amended in accordance with applicable law.
5.
Effects of Merger;
Officers and Directors.
(a) At
the Effective Time, the separate corporate existence of Holdings shall cease,
and ADTI as the Surviving Corporation 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 Holdings; and all rights, privileges,
powers and franchises of Holdings, and all property, real, personal and mixed,
and all debts due to Holdings on whatever account, as well as for share
subscriptions and all other things in action belonging to Holdings, shall be
vested in the Surviving Corporation; and all property, rights, privileges,
powers and franchises, and all and every other interest shall be thereafter as
effectively the property of the Surviving Corporation as they were of Holdings,
and the title to any real estate vested by deed or otherwise in Holdings 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 Holdings shall be preserved
unimpaired, and all debts, liabilities and duties of Holdings 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 the Surviving Corporation. All corporate acts, plans, policies,
agreements, arrangements, approvals and authorizations of Holdings and its
shareholders, 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 ADTI and shall be as effective and binding
thereon as the same were with respect to Holdings.
(b) At
the Effective Time, the officers and directors of ADTI shall become the officers
and directors of the Surviving Corporation to hold the positions in the
Surviving Corporation to which they have been elected as officers of ADTI and to
serve in accordance with the bylaws of the Surviving Corporation.
6.
Further
Assurances. From time to time, as and when required by the
Surviving Corporation, or by its successors and assigns, there shall be executed
and delivered on behalf of Holdings 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 or necessary in order to vest, perfect or confirm, of
record or otherwise, in the Surviving Corporation the title to and possession of
all property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of Holdings, 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 Holdings or otherwise, to take any
and all such action and to execute and deliver any and all such deeds and other
instruments.
7.
Conversion of
Securities in the Merger. At the Effective Time, by virtue of
the Merger and without any action on the part of the holders of any capital
stock described below:
(a) All
shares of Common Stock and Preferred Stock that are held in ADTI’s treasury
shall be canceled and cease to exist and no cash or other consideration shall be
delivered in exchange therefor.
(b) Each
ADTI stockholder of record as of the Effective Time who holds in the
aggregate less than one thousand five hundred (1,500) shares of ADTI Stock shall
be entitled to receive for each issued and outstanding share of ADTI Stock held
by such stockholder, unless such stockholder exercises his, her or its
dissenters’ rights pursuant to Section 9 of this Agreement, an amount in cash,
without interest, equal to two United States cents (US$0.02) per share; however,
in no event shall a stockholder who is entitled to receive cash for their shares
of ADTI Stock under this Section 7(b) receive less than one United States dollar
(US$1.00). All such shares, when so converted under this Section
7(b), shall be retired, shall cease to be outstanding and shall automatically be
cancelled, and the holder of a certificate that, immediately prior to the
Effective Time, represented such shares (a “Stock Certificate”),
shall cease to have any rights with respect thereto, except the right to receive
the Cash Consideration, and any amounts payable pursuant to Section 8(c) of this
Agreement.
(c) Each
ADTI stockholder of record as of the Effective Time who holds in the aggregate
one thousand five hundred (1,500) shares or more of ADTI Stock shall
automatically receive (without surrender of stock certificates or any other
action): (i) one (1) fully paid and nonassessable share of common stock (the
“Surviving Corporation
Common Stock”) for each one thousand five hundred (1,500) issued and
outstanding shares of Common Stock held by such stockholder, and (ii) one (1)
fully paid and nonassessable share of Series D convertible preferred stock (the
“Surviving Corporation
Preferred Stock”) for each one thousand five hundred (1,500) issued and
outstanding shares of Preferred Stock held by such stockholder (the “Stock
Conversion”). After the Stock Conversion, any remaining
fractional shares held by a stockholder under this Section 7(c) shall be
disposed of, in accordance with Colorado law, by paying such stockholder an
amount in cash, without interest, equal to the product of two United States
cents (US$0.02) multiplied by the number of fractional share(s) of ADTI Stock
held by such stockholder; however, in no event shall a stockholder who is
entitled to receive cash for their fractional shares of ADTI Stock under this
Section 7(c) receive less than one United States dollar (US$1.00). By
way of example, if an ADTI stockholder of record as of the Effective Time holds
in the aggregate two thousand shares (2,000) of Common Stock and one thousand
five hundred (1,500) shares of Preferred Stock, then at the Effective Time such
stockholder would receive one (1) fully paid and nonassessable share of
Surviving Corporation Common Stock, one (1) fully paid and nonassessable share
of Surviving Corporation Preferred Stock and ten United States dollars
(US$10.00).
8.
Surrender and
Payment.
(a)
Paying Agent and
Exchange Fund . Holdings shall
authorize one or more transfer agent(s) to act as paying agent hereunder (the
“Paying Agent”)
with respect to the Merger. On the Effective Date, Holdings or ADTI
shall deposit, or Holdings or ADTI shall otherwise take all steps necessary to
cause to be deposited, by wire transfer of immediately available funds, in trust
with the Paying Agent for the benefit of the holders of ADTI Stock that are
entitled to payment under Sections 7(b) and 7(c) of this Agreement, cash in an
aggregate amount equal to Eight Thousand Five Hundred Dollars ($8,500) (such
amount, the “Exchange
Fund”). The Paying Agent shall deliver the applicable Cash
Consideration out of the Exchange Fund. Except as contemplated by
Section 8(c) of this Agreement, the Exchange Fund shall not be used for any
other purpose.
(b)
Exchange
Procedures. As soon as
practicable after the Effective Time, Holdings shall cause the Paying Agent to
send to each holder of record of a Stock Certificate as of the Effective Time a
letter of transmittal for use in the exchange contemplated by Section 7 of this
Agreement and instructions for use in effecting the surrender of Stock
Certificates in accordance with this Agreement (together, the “Exchange
Instructions”). The Surviving Corporation shall cause the
Paying Agent to pay to each person entitled thereto a check in the amount of the
Cash Consideration to which such person is entitled, after giving effect to any
required tax withholdings.
(c)
Termination of
Exchange Fund. Any portion of
the Exchange Fund made available to the Paying Agent to pay for ADTI Stock for
which appraisal rights have been perfected shall be returned to the Surviving
Corporation upon demand. Any portion of the Exchange Fund that
remains unclaimed by the holders of ADTI Stock one year after the Effective Time
shall be returned to the Surviving Corporation, upon demand, and any such holder
who has not received payment of such holder’s Stock Certificates in accordance
with this Section 8 prior to that time shall thereafter look only to the
Surviving Corporation to pay amounts to which such holder may be entitled
pursuant to this Section 8. Neither Holdings nor the Surviving
Corporation shall be liable to any holder of ADTI Stock for any such Cash
Consideration from the Exchange Fund delivered to a public official pursuant to
any abandoned property, escheat or similar law.
(d)
Withholding. Each of
Holdings, the Surviving Corporation and the Paying Agent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of ADTI Stock such amounts as Holdings, the Surviving
Corporation or the Paying Agent determines is required to be deducted and
withheld under the United States Internal Revenue Code or any provision of
state, local, or foreign tax law with respect to the making of such
payment. To the extent that amounts are so withheld by Holdings, the
Surviving Corporation or the Paying Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
ADTI Stock in respect of which such deduction and withholding was made by
Holdings, the Surviving Corporation or the Paying Agent, as the case may
be.
9.
Dissenting
Shares.
(a) Notwithstanding
anything in this Agreement to the contrary, shares of Preferred Stock that are
held by any record holder who is entitled to and has demanded appraisal rights
(the “Dissenting
Shares”) in accordance with the Colorado Business Corporation Act (the
“CBCA”) shall
not be converted into the right to receive the Cash Consideration but shall
become the right to receive such consideration as may be determined to be due in
respect of such Dissenting Shares pursuant to the CBCA; provided, however , that any
holder of Dissenting Shares who shall have failed to perfect or shall have
withdrawn or lost his rights to appraisal of such Dissenting Shares, in each
case under the CBCA, shall forfeit the right to appraisal of such Dissenting
Shares, and such Dissenting Shares shall be deemed to have been converted into
the right to receive, as of the Effective Time, the Cash Consideration without
interest. Notwithstanding the forgoing, if the Merger is rescinded or
abandoned, then the right of any stockholder to be paid the fair value of such
stockholder’s Dissenting Shares shall cease. The Surviving
Corporation shall comply with all of its obligations under the CBCA with respect
to holders of Dissenting Shares.
(b) ADTI
shall give Holdings (i) prompt written notice of any demands for appraisal, any
withdrawals of such demands received by ADTI and any other related instruments
served pursuant to the CBCA and received by ADTI, and (ii) the opportunity to
direct and participate in all negotiations and proceedings with respect to
demands for appraisal under the CBCA. ADTI shall not, except with the
prior written consent of Holdings, make any payment with respect to any demands
for appraisal or negotiate, offer to settle or settle any such
demands.
10. Stock
Options. As of March 31, 2010, ADTI had approximately
4,478,125 stock options outstanding and approximately 20,521,875 of
additional stock options authorized. All stock options are governed by ADTI’s
2007 Equity Incentive Plan (the “Plan”). Pursuant to
Article V of the Plan, upon consummation of the Merger and thirty (30) days
notice to all optionholders, all of the outstanding options shall automatically
terminate and be of no further force and effect whatsoever. ADTI intends
to deliver such notice concurrently with the filing of a Transaction Statement
under Section 13(e) of the Securities Exchange Act of 1934 so that all
outstanding options shall be terminated upon the consummation of this
Merger.
11. Closing. The
closing of the Merger will take place at the Effective Time at the offices of
Davis Graham & Stubbs, LLP, located at 1550 Seventeenth Street, Suite 550,
Denver, Colorado 80202, unless another time, date or place is agreed to in
writing by the parties hereto.
12. Amendment. Subject
to applicable law, this Agreement may be amended, modified or supplemented by
written agreement of the parties at any time prior to the Effective
Time.
13. Abandonment. 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 Holdings, notwithstanding
approval of this Agreement by the stockholders of Holdings, if circumstances
arise which, in the opinion of the board of directors of Holdings, make the
Merger inadvisable.
14. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original and the same agreement.
15. No Third Party
Beneficiaries. This Agreement is not intended to confer upon
any person other than the parties hereto any rights or remedies
hereunder.
16. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado without regard to the conflict
of law principles thereof.
17. Severability. If
any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof, which shall remain in full force and
effect. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
Merger may be consummated as originally contemplated to the fullest extent
possible.
18. Assignment. Neither
this Agreement nor any of the rights, interests or obligations hereunder will be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and
assigns. Any assignment in violation hereof shall be null and
void.
19. Interpretation. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement. All references to “dollars” or “$” shall mean United
States dollars. Whenever the words “include,” “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation.” This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the drafting party.
[Remainder
of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the
parties have caused this Agreement and Plan of Merger to be signed by its duly
authorized officers as of the date first above written.
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GSLD
HOLDINGS, INC., A COLORADO CORPORATION
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By:
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/s/ James P. Martindale
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James
P. Martindale, President
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ADVANCE
DISPLAY TECHNOLOGIES, INC., A COLORADO CORPORATION
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By:
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/s/ James P. Martindale
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James
P. Martindale, President
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ESTATE
OF GENE W. SCHNEIDER
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By:
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/s/ Tina M. Wildes
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Tina
M. Wildes, Executor
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By:
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/s/ Lawrence F. DeGeorge
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Lawrence
F. DeGeorge
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By:
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/s/ Mark L. Schneider
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Mark
L.
Schneider
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