Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and between
LESLIE’S POOLMART, INC.
and
LPM ACQUISITION LLC
Dated as of January 7, 2005
TABLE OF CONTENTS
P a g e
ARTICLE 1 MERGER AND ORGANIZATION
1
Se cti
The Merger
1
on 1. 1 Se cti on 1. 2
Effect of Merger
1
ARTICLE 2 CONVERSION OF SECURITIES ON THE EFFECTIVE DATE
3
Se cti on 2. 1 Se cti on 2. 2 Se cti on 2. 3
Conversion of Securities of Leslie’s and Acquisition
3
Payment of Cash for Other Common Stock
4
Exchange of Stock Certificates
4
ARTICLE 3 ADDITIONAL AGREEMENTS IN CONNECTION WITH THE MERGER
4
Se cti on 3. 1 Se cti on 3. 2 Se cti on 3.
Stockholder Approval
4
Termination of Leslie’s Stock Option Plans
5
Reasonable Best Efforts
5
3 Se cti on 3. 4 Se cti on 3. 5 Se cti on 3. 6 Se cti on 3. 7
Debt Tender Offer
5
Financing
5
Conduct of Business by Leslie’s Pending the Merger
6
Leslie’s Notification of Certain Matters
7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF LESLIE’S
8
Se cti on 4. 1 Se cti on 4. 2 Se cti on 4. 3 Se cti on 4. 4 Se
Organization and Good Standing
8
Authorization; Binding Agreement
8
Capitalization
8
Financial Statements Absence of Certain Changes or Events
9 9
cti on 4. 5 Se cti on 4. 6 Se cti on 4. 7 Se cti on 4. 8 Se cti on 4. 9 Se cti on 4. 10 Se cti on 4. 11 Se cti on 4. 12 Se cti on 4. 13 Se cti on 4.
SEC Reports and Other Documents
9
Governmental and Other Consents and Approvals
1 0
No Violation
1 0
Litigation
1 1
Governmental Approvals; Compliance with Law
1 1
Brokers and Finders
1 1
Fairness Opinions and Approval by Board of Directors
1 1
Taxes
1 2
Employee Benefits
1 2
14 Se cti on 4. 15
Environmental Matters
1 3
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ACQUISITION
1 4
Se cti on 5. 1 Se cti on 5. 2
Organization and Good Standing
1 4
Authorization; Binding Agreement
1 4
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Table of Contents (Continued)
P a g e
Se cti on 5. 3 Se cti on 5.
Capitalization
1 4
No Violation
1 4
4 Se cti on 5. 5 Se cti on 5. 6 Se cti on 5. 7 Governmental and Other Consents and Approvals 1 5
No Prior Activities
1 5
Litigation
1 5
ARTICLE 6 CONDITIONS
1 6
Se cti on 6. 1 Se cti on 6. 2 Se cti on 6. 3
Conditions to Each Party’s Obligation to Effect the Merger
1 6
Conditions to Obligation of Leslie’s to Effect the Merger
1 6
Conditions to Obligations of Acquisition to Effect the Merger
1 7
ARTICLE 7 TERMINATION; NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; WAIVER AND AMENDMENT
1 8
Se cti on 7.
Termination
1 8
1 Se cti on 7. 2 Se cti on 7. 3 Se cti on 7. 4 Se cti on 7. 5 Non-Survival of Representations, Warranties and Covenants 1 8
Amendment
1 9
Waiver
1 9
Effect of Termination
1 9
ARTICLE 8 GENERAL AGREEMENTS
1 9
Se cti on 8. 1 Se cti on 8. 2 Se cti on 8. 3 Se cti on 8. 4
Notice
1 9
Entire Agreement
2 0
Indemnification
2 0
Parties in Interest
2 2
Se cti on 8. 5 Se cti on 8. 6 Se cti on 8. 7 Se cti on 8. 8 Se cti on 8. 9 Se cti on 8. 10 Se cti on 8. 11 Se cti on 8. 12 Se cti on 8. 13 Se cti on
Material Events
2 2
Publicity
2 2
Headings
2 2
Interpretation
2 2
Subsidiaries
2 2
Successors and Assigns
2 2
Governing Law
2 2
Costs and Expenses
2 2
Counterparts
2 2
Tax Withholding
2 2
8. 14
E xh ibi t A E xh ibi t B E xh ibi t C
STOCKHOLDERS PARTY TO CONTRIBUTION AGREEMENT
CERTIFICATE OF INCORPORATION
CERTIFICATE OF MERGER
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the “Agreement”) dated as of January 7, 2005 by and between LESLIE’S POOLMART, INC. a Delaware corporation (“Leslie’s”) and LPM ACQUISITION LLC, a Delaware limited liability company (“Acquisition”).
RECITALS
The board of directors of Leslie’s and the managers of Acquisition deem it advisable for the mutual benefit of Leslie’s and Acquisition and their stockholders and members, respectively, that Acquisition be merged with and into Leslie’s (the “Merger”) upon the terms and subject to the conditions set forth herein and in accordance with the Delaware General Corporation Law (the “Delaware Law”). Each of the respective board of directors, managers, stockholders and members of Leslie’s and Acquisition have approved and adopted this Agreement.
Prior to the consummation of the Merger, it is anticipated that those persons whose names are set forth on Exhibit A attached hereto will enter into one or more contribution agreements with Acquisition (collectively, the “Contribution Agreement”).
In consideration of the mutual covenants, agreements, representations and warranties contained herein, and for the
purpose of setting forth certain terms and conditions of the Merger, and the mode of carrying the same into effect, Leslie’s and Acquisition hereby agree as follows:
ARTICLE 1
MERGER AND ORGANIZATION
Section 1.1 The Merger. Acquisition shall be merged with and into Leslie’s as soon as practicable following the execution of this Agreement, upon the terms and subject to the conditions hereinafter set forth, as permitted by and in accordance with the Delaware Law. Leslie’s and Acquisition are herein sometimes referred to as the “Constituent Entities.” Leslie’s shall be the surviving entity following the effectiveness of the Merger (sometimes referred to herein as the “Surviving Corporation”).
Section 1.2 Effect of Merger. The parties agree to the following provisions with respect to the Merger:
(a) Name of Surviving Corporation. The name of the Surviving Corporation shall from and after the Effective Date (as hereinafter defined) be and continue to be “Leslie’s Poolmart, Inc.” until changed in accordance with applicable law.
(b) Certificate of Incorporation. The certificate of incorporation substantially in the form attached hereto as Exhibit B shall from and after the Effective Date be the certificate of incorporation of the Surviving Corporation until changed or amended in accordance with the provisions of applicable law.
(c) Bylaws. The bylaws of Leslie’s as in effect immediately prior to the Effective Date shall from and after the Effective Date be and continue to be the bylaws of the Surviving Corporation until changed or amended in accordance with the provisions of applicable law.
(d) Corporate Organization. On the Effective Date, the separate existence of Acquisition shall cease, and Leslie’s as the surviving entity and successor and shall succeed to Acquisition in the manner of and as more fully set forth in Section 259 of the Delaware Law.
(e) Directors and Officers. The directors of Leslie’s immediately prior to the Effective Date will be the initial directors of the Surviving Corporation, and the officers of Leslie’s immediately prior to the Effective Date will be the initial officers of the Surviving Corporation, in each case until their successors are elected and qualified.
(f) Filing of Certificate of Merger. If this Agreement is not terminated pursuant to Article 7 hereof, as soon as practicable after all conditions to the Merger set forth in Article 6 hereof shall have been satisfied or waived, Leslie’s and Acquisition shall cause the certificate of merger substantially in the form attached hereto as Exhibit C (“Certificate of Merger”) to be executed and acknowledged and, as required by the Delaware Law, filed with the
Secretary of State of the State of Delaware as provided in the Delaware Law. The Merger shall be consummated and the closing of the transactions contemplated by this Agreement (the “Closing”) shall occur immediately upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware (the date and time of such filing and Closing being referred to herein as the “Effective Date”). The Closing shall take place at the offices of Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, California 90071, or at such other place as the parties may mutually agree.
(g) Further Assurances. If at any time after the Effective Date, the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments or assurances or any other acts or things are necessary, desirable or proper (i) to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation, its right, title or interest in, to or under any of the rights, properties or assets of the Constituent Entities acquired or to be acquired as a result of the Merger, or (ii) otherwise to carry out the purposes of this Agreement, the Surviving Corporation and its proper officers and directors or their designees shall be authorized to execute and deliver, in the name and on behalf of the Constituent Entities, all such deeds, bills of sale, assignments and assurances and do, in the name and on behalf of the Constituent Entities, all such other acts and things necessary, desirable or proper to vest, perfect or confirm its right, title or interest in, to or under any of the rights, properties or assets of the Constituent Entities acquired or to be acquired as a result of the Merger and otherwise to carry out the purposes of this Agreement.
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ARTICLE 2
CONVERSION OF SECURITIES ON THE EFFECTIVE DATE
Section 2.1 Conversion of Securities of Leslie’s and Acquisition. At the Effective Date, pursuant to this Agreement and by virtue of the Merger and without any action on the part of Leslie’s, Acquisition or the holders of any of the following securities:
(a) Each share of common stock, par value $.001 per share, of Leslie’s (“Leslie’s Common Stock”) issued and outstanding immediately prior to the Effective Date (other than any shares of Leslie’s Common Stock to be cancelled pursuant to Section 2.1(c)) shall be cancelled and shall be converted automatically into the right to receive an amount equal to $15.00 in cash, without interest, payable to the holder thereof upon surrender of the certificate formerly representing such share of Leslie’s Common Stock in the manner provided in Section 2.2;
(b) Each share of exchangeable cumulative redeemable preferred stock, Series A, par value $.001 per share, of Leslie’s (“Leslie’s Preferred Stock”) (shares of Leslie’s Common Stock and Leslie’s Preferred Stock being hereinafter collectively referred to as “Leslie’s Shares” and individually as a “Leslie’s Share”) issued and outstanding immediately prior to the Effective Date (other than any shares of Leslie’s Preferred Stock to be cancelled pursuant to Section 2.1(c)) shall be cancelled and shall be converted automatically into the right to receive an amount in cash equal to the sum that would be payable to a holder pursuant to the “optional redemption” provisions of the Leslie’s Preferred Stock if the redemption date were the Effective Date, payable to the holder thereof upon surrender of the certificate formerly representing such share of Leslie’s Preferred Stock in the manner provided in Section 2.2; and
(c) Each Leslie’s Share held in the treasury of Leslie’s, if any, and each Leslie’s Share owned by Acquisition, immediately prior to the Effective Date shall be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto;
(d) Each Acquisition Common Unit (as hereinafter defined and, collectively with the Acquisition Common Units, the “Acquisition Units”) that is issued and outstanding immediately prior to the Effective Date shall be converted into one (1) newly issued, fully paid and nonassessable share of New Leslie’s Common Stock. Each Acquisition Preferred Unit (as hereinafter defined ) that is issued and outstanding immediately prior to the Effective Date shall be converted into one (1) newly issued, fully paid and nonassessable share of New Leslie’s Preferred Stock (as hereinafter defined). As used herein, “New Leslie’s Common Stock” means the common stock, par value $.001 per share, of the Surviving Corporation and “New Leslie’s Preferred Stock” means the 10% senior redeemable exchangeable cumulative preferred stock, par value $.001 per share, of the Surviving Corporation.
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Section 2.2 Payment of Cash for Leslie’s Shares.
(a) After surrender to the Surviving Corporation of any certificate which prior to the Effective Date shall have represented any Leslie’s Shares to be converted to cash, the Surviving Corporation shall promptly distribute to the person in whose name such certificate shall have been registered, a check representing the amount of cash into which such Leslie’s Shares shall have been converted at the Effective Date pursuant to Sections 2.1(a) and (b) hereof. Until so surrendered and exchanged, each such certificate shall, after the Effective Date, be deemed to represent only the right to receive such cash, and until such surrender and exchange, no cash shall be paid to the holder of such outstanding certificate in respect thereof. The Surviving Corporation shall promptly after the Effective Date cause to be distributed to such holders appropriate materials to facilitate such surrender.
(b) From and after the Effective Date, the holders of Leslie’s Shares outstanding immediately prior to the Effective Date shall cease to have any rights with respect to such Leslie’s Shares except as otherwise provided herein or by law.
(c) After the Effective Date, there shall be no transfers on the stock transfer books of the Surviving Corporation of any Leslie’s Shares which were outstanding immediately prior to the Effective Date. If, after the Effective Date, certificates for Leslie’s Shares are presented to the Surviving Corporation, they shall be cancelled and promptly exchanged for cash to the extent provided in this Section 2.2.
Section 2.3 Exchange of Stock Certificates. Immediately after the Effective Date, the Surviving Corporation shall deliver to each record holder of outstanding Acquisition Units that were converted into the right to receive shares of New Leslie’s Common Stock and New Leslie’s Preferred Stock in accordance with Section 2.1(d), in exchange for such holder’s Acquisition Units, share certificates, registered in the name of such holder, representing the number of shares of New Leslie’s Common Stock and New Leslie’s Preferred Stock to which such record holder is so entitled by virtue of Section 2.1(d). Each such certificate will bear a legend (a) restricting the transferability of such shares of New Leslie’s Common Stock and New Leslie’s Preferred Stock, which restrictions include restrictions designed to
assure the Surviving Corporation that these shares will not be offered or sold in contravention of any federal or state securities laws and (b) disclosing the existence of the Stockholders Agreement to be entered into by the holders of such shares.
ARTICLE 3
ADDITIONAL AGREEMENTS IN CONNECTION WITH THE MERGER
Section 3.1 Stockholder Approval. Leslie’s shall take all actions reasonably necessary in accordance with applicable law and its certificate of incorporation and bylaws either to cause the stockholders to