Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of May 24, 2002 (this "Plan
of Merger"), is made and entered into by and between Pillowtex Corporation, a
Texas corporation ("Parent"), and Pillowtex Corporation, a Delaware corporation
("Subsidiary").
RECITALS:
A. The Second Amended Joint Plan of Reorganization of Parent and Its
Debtor Subsidiaries, dated March 6, 2002, as modified (the "Plan"), in the
matter styled In Re: Pillowtex, Inc., a Delaware corporation, et al., Debtors,
Jointly Administered Case No. 00-4211 (SLR) (the "Reorganization Case") was
confirmed by the United States Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court") on May 1, 2002.
B. Article 4.14 of the Texas Business Corporation Act (the "TBCA")
provides, among other things, that any corporation incorporated under the TBCA
may merge with a foreign corporation pursuant to a plan of merger having terms
and provisions as required or permitted by Article 5.01 of the TBCA without
action by or notice to its board of directors or shareholders in order to carry
out a plan of reorganization ordered or decreed by a court of competent
jurisdiction under a federal statute.
C. The Plan provides for the execution and delivery of this Plan of
Merger by Parent and Subsidiary and the merger of Parent with and into
Subsidiary pursuant to the terms and provisions of this Plan of Merger, the
terms and provisions of which are required or permitted by Article 5.01 of the
TBCA.
D. In accordance with Section 253 of the General Corporation Law of
the State of Delaware (the "DGCL"), the board of directors of Parent has adopted
a resolution to effectuate the Merger (as defined below) pursuant to this Plan
of Merger, and as described in the foregoing Recitals, the Merger has been
adopted and approved in accordance with the applicable provisions of the TBCA.
E. Pursuant to the Plan, on the date hereof, each share of common
stock, par value $0.01 per share, of Parent ("Parent Common Stock") and of
preferred stock, par value $0.01 per share, of Parent outstanding on the date
the Reorganization Case was filed in the Bankruptcy Court and on the date
immediately prior to the date hereof have been canceled.
F. Pursuant to the Plan, on the date hereof, Parent issued 18,600,000
shares of Parent Common Stock immediately following the cancellation of shares
described in Recital E and those shares of Parent Common Stock remain
outstanding.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
1.1. Merger. At the Effective Time (as defined below), and subject to the
conditions and upon the terms set forth in this Plan of Merger, the DGCL and the
TBCA, Parent will be merged with and into Subsidiary, the separate corporate
existence of Parent will cease and Subsidiary will continue as the surviving
corporation (the "Merger").
1.2. Effective Time. As promptly as practicable on the date hereof, the
parties will cause the Merger to be consummated by filing a Certificate of
Ownership and Merger with the Secretary of State of the State of Delaware as
provided in the DGCL and by filing the Articles of Merger with the Secretary of
State of the State of Texas as provided in the TBCA, whereupon the Merger will
become effective in accordance with the applicable provisions of the DGCL and
the TBCA (the "Effective Time").
ARTICLE II
EFFECTS OF THE MERGER
2.1. Effects of Merger. At the Effective Time, the effect of the Merger
will be as provided in this Plan of Merger, the Certificate of Ownership and
Merger, the Articles of Merger and the applicable provisions of the DGCL and the
TBCA. Without limiting the generality of the foregoing, at the Effective Time
all properties, rights, privileges and powers of Parent and Subsidiary will vest
in the surviving corporation, and all liabilities and obligations of Parent and
Subsidiary will become the liabilities and obligations of the surviving
corporation, all as specified in the Plan.
2.2. Certificate of Incorporation; Bylaws. The Certificate of
Incorporation and the Bylaws of Subsidiary in effect immediately prior to the
Effective Time will be the Certificate of Incorporation and the Bylaws of the
surviving corporation.
2.3. Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of any holder of shares of Parent
Common Stock:
(a) each share of Parent Common Stock issued and outstanding
immediately prior to the Effective Time will be converted into one fully paid
and nonassessable share of common stock, par value $0.01 per share, of the
surviving corporation; and
(b) each share of common stock, par value $0.01 per share, of
Subsidiary issued and outstanding immediately prior to the Effective Time will
be canceled without the payment of consideration therefor.
2.4. Directors and Officers. The officers of Subsidiary immediately
prior to the Effective Time will be the officers of the surviving corporation.
The following persons will be appointed as directors of the surviving
corporation to be effective as of the Effective Time:
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Name Class of Director Expiration of Term
---- ----------------- ------------------
Jeffrey J. Keenan Class I 2003
Kenneth Liang Class I 2003
Bradley I. Dietz Class I 2003
Bruce A. Karsh Class II 2004
Ralph W. LaRovere Class II 2004
Mariusz J. Mazurek Class III 2005
James P. Seery, Jr. Class III 2005
ARTICLE III
MISCELLANEOUS
3.1. Amendment. This Plan of Merger may be amended by the Boards of
Directors of Parent and Subsidiary to the extent permitted by the DGCL and the
TBCA.
3.2. Termination. This Plan of Merger may be terminated and abandoned
by the Boards of Directors of Parent and Subsidiary so long as such termination
and abandonment is permitted by the DGCL and the TBCA.
3.3. Entire Agreement. This Plan of Merger contains the entire
agreement among the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements among the parties with respect to those
matters.
3.4. Governing Law. This Plan of Merger will be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflict of laws thereof.
3.5. Counterparts. This Plan of Merger may be executed in any number
of counterparts, each of which will be deemed to be an original but all of which
together will constitute one agreement.
3.6. Executed Copy. An executed copy of this Plan of Merger is on file
at the principal place of business of Subsidiary at One Lake Circle Drive,
Kannapolis, North Carolina 28081.
3.7. Written Request. Upon the written request of any shareholder of
Parent, a copy of this Plan of Merger will be furnished without cost by
Subsidiary to the shareholder.
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IN WITNESS WHEREOF, the parties to this Plan of Merger have caused this
Plan of Merger to be duly executed as of the date first above written.
PILLOWTEX CORPORATION,
a Texas corporation
By: /s/ JOHN F. STERLING
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John F. Sterling, Vice President
PILLOWTEX CORPORATION,
a Delaware corporation
By: /s/ JOHN F. STERLING
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John F. Sterling, Vice President
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