Agreement And Plan of Merger

EXHIBIT 10.12


Appendix A


AGREEMENT AND PLAN OF MERGER


AGREEMENT AND PLAN OF MERGER, dated as of December 27, 1999 (the "Agreement"), by and between Jostens, Inc., a Minnesota corporation (the "Company"), and Saturn Acquisition Corporation, a Minnesota corporation ("MergerCo").


WHEREAS, the Board of Directors of the Company (the "Board") and the Board of Directors of MergerCo have determined that the merger of MergerCo with and into the Company (the "Merger"), in accordance with the Minnesota Business Corporation Act (the "MBCA") and upon the terms and subject to the conditions set forth in this Agreement, would be fair to and in the best interests of their respective shareholders, and such Boards of Directors have approved such Merger, pursuant to which each share of Common Stock, par value $.33 1/3 per share of the Company (the "Common Stock") issued and outstanding immediately prior to the Effective Time (as defined in Section 1.2) will be converted into either (i) the right to receive cash or (ii) subject to the terms hereof and other than as set forth herein, the right to retain at the election of the holder thereof one share of Common Stock (which will thereafter be denominated as a share of Class A Common Stock);


WHEREAS, (i) the Board has, in light of and subject to the terms and conditions set forth herein, determined that the consideration to be paid for each share of Common Stock in the Merger is fair to the shareholders of the Company, and the Merger is otherwise in the best interest of the Company and its shareholders, (ii) the Board and the Board of Directors of MergerCo have approved this Agreement and the transactions contemplated hereby, (iii) the shareholders of MergerCo have approved and adopted this Agreement and the transactions contemplated hereby, and (iv) the Board has resolved to submit this Agreement to a vote of the shareholders of the Company and, subject to the terms hereof, to recommend approval and adoption of this Agreement by the shareholders of the Company;


WHEREAS, it is intended that the Merger be recorded as a recapitalization for financial reporting purposes; and


WHEREAS, MergerCo and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger.


NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the parties agree as follows:


ARTICLE 1


THE MERGER


Section 1.1 The Merger. Upon the terms and subject to the conditions hereof, at the Effective Time (as defined in Section 1.2) and in accordance with the provisions of the MBCA, MergerCo shall be merged with and into the Company, whereupon the separate corporate existence of MergerCo shall cease, and the Company shall continue as the surviving corporation (the "Surviving Corporation"). From and after the Effective Time, the Surviving Corporation shall possess all the rights, privileges, immunities, powers and franchises, of a public as well as a private nature, of the Company and MergerCo and be subject to all the liabilities, obligations and duties of the Company and MergerCo, all as more fully described in the MBCA.


Section 1.2 Closing: Effective Time. Subject to the provisions of Article 6, the closing of the Merger (the "Closing") shall take place in New York City at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York 10166, as soon as practicable but in no event later than 10:00 a.m. New York City time on the first business day after the date on which each of the conditions set forth in Article 6 has been satisfied or waived by the party or parties entitled to the benefit of such conditions, or at such other place, at such other time


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or on such other date as MergerCo and the Company may mutually agree. The date on which the Closing actually occurs is hereinafter referred to as the "Closing Date." At the Closing, MergerCo and the Company shall cause articles of merger for the Merger (the "Articles of Merger") to be executed and filed with the Secretary of State of the State of Minnesota in the form required by and executed in accordance with the applicable provisions of the MBCA. The Merger shall become effective as of the date and time of such filings or such other time after such filings as MergerCo and the Company shall agree to in the Articles of Merger (the "Effective Time").


Section 1.3 Articles of Incorporation. At the Effective Time, and without any further action on the part of the Company or MergerCo, the articles of incorporation of the Company (as amended and restated in substantially the form of which is set forth in Exhibit A hereto) shall be the articles of incorporation of the Surviving Corporation and thereafter may be amended or repealed as provided by law.


Section 1.4 Bylaws. The bylaws of MergerCo, as in effect immediately prior to the Effective Time, shall become, from and after the Effective Time, the bylaws of the Surviving Corporation, until thereafter altered, amended or repealed as provided therein or in the articles of incorporation of the Surviving Corporation and in accordance with applicable law.


Section 1.5 Directors and Officers. The directors of MergerCo and officers of the Company, respectively, immediately prior to the Effective Time shall become, from and after the Effective Time, the directors and officers of the Surviving Corporation, until their respective successors are duly elected or appointed or their earlier resignation or removal.


ARTICLE 2


CONVERSION OF SHARES; SHAREHOLDER APPROVAL


Section 2.1 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of Common Stock or any shares of capital stock of MergerCo:


(a) Capital Stock of MergerCo. Each share of Class A Common Stock, Class B Common Stock, Class C Common Stock, Class D Common Stock and Class E Common Stock of MergerCo issued and outstanding immediately prior to the Effective Time shall be converted into and become one share of Class A Common Stock, Class B Common Stock, Class C Common Stock, Class D Common Stock and Class E Common Stock, as the case may be, of the Surviving Corporation.


(b) Treasury Stock and MergerCo-Owned Stock. Each share of Common Stock that is owned by the Company or any subsidiary of the Company and each share of Common Stock that is owned by MergerCo or any affiliate of MergerCo shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor.


(c) Conversion (Or Retention) of Common Stock. Except as otherwise provided in Section 2.1(b) or 2.1(d) and subject to Sections 2.2 and 2.3 hereof, each issued and outstanding share of Common Stock (each, a "Share") shall be converted into the following (the consideration set forth in clauses (i), (ii) and (iii) below being collectively referred to as the "Merger Consideration"):


(i) each Share with respect to which an election to retain such
Share has been effectively made pursuant to Section 2.2 and not revoked
or lost ("Electing Shares"), shall remain as one fully paid and
nonassessable Share (a "Non-Cash Election Share"), which shall be
denominated as a share of Class A Common Stock of the Surviving
Corporation at the Effective Time;


(ii) each Share listed on Exhibit B held by the persons set forth on
such Exhibit B (such persons, the "Management Continuing Shareholders,"
and such Shares, the "Management Rollover Shares"), shall remain as one
fully paid and nonassessable Share, which shall be denominated as a
share of Class A Common Stock of the Surviving Corporation at the
Effective Time; and


(iii) each other Share, other than Dissenting Shares (as defined in
Section 2.1(d)), shall be converted into the right to receive in cash,
without interest, from the Company following the Merger an amount equal
to $25.25 (the "Cash Election Price").


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(d) Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, each share of Common Stock that is issued and outstanding immediately prior to the Effective Time and that is held by a shareholder who has properly demanded and perfected such shareholder's rights to dissent from the Merger and to be paid the fair value of such shares in accordance with Sections 302A.471 and 302A.473 of the MBCA (the "Dissenting Shares"), shall not be converted into or exchangeable for the right to receive the Merger Consideration, but the holder thereof shall be entitled to such rights as are granted by the MBCA and the Surviving Corporation shall make all payments to the holders of the shares of Common Stock with respect to such demands in accordance with the MBCA; provided, however, that if such holder shall have failed to perfect or shall have lost the right to dissent and payment under the MBCA, each share of Common Stock held such holder shall thereupon be deemed to have been converted into and to have become exchangeable for, as of the Effective Time, solely the right to receive Merger Consideration as follows: subject to compliance with Section 2.6, the holder of such Dissenting Shares shall be entitled to receive the same combination of cash (without interest) and Non-Cash Election Shares as a holder of the same number of shares who did not make a Non-Cash Election with respect to any of such shares would be entitled to receive in the Merger. The Company shall give reasonably prompt notice to MergerCo of any demands received by the Company for payment under Sections 302A.471 and 302A.473 of the MBCA, and MergerCo shall have the right to participate in all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of MergerCo, make any payment with respect to, or settle or offer to settle, such demands.


(e) Cancellation and Retirement of Common Stock. Each Share converted into the right to receive the Cash Election Price pursuant to Section 2.1(c) shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such Shares shall, to the extent such certificate represents such Shares, cease to have any rights with respect thereto, except the right to receive the cash applicable thereto, upon surrender of such certificate in accordance with Section 2.5.


Section 2.2 Common Stock Elections. (a) Each person who, on or prior to the Election Date referred to in clause (b) below, is a record holder of Shares will be entitled, with respect to all or any portion of such holder's Shares (other than Shares described in Section 2.1(b), Dissenting Shares, Management Rollover Shares and any other Shares held by any of the Management Continuing Shareholders), to make an unconditional election (a "Non-Cash Election") on or prior to such Election Date to retain such Shares, on the basis set forth below, subject to Section 2.3.


(b) MergerCo shall prepare and mail a form of election, which form shall be subject to the reasonable approval of the Company (the "Form of Election"), to be mailed by the Company with the Proxy Statement (as defined in Section 2.5) to the record holders of Shares as of the record date for the Shareholders Meeting (as defined in Section 2.5), which Form of Election shall be used by each record holder of Shares who wishes to elect to retain, subject to the provisions of Section 2.3, any or all Shares held by such holder. The Company will use its reasonable efforts to make the Form of Election and the Proxy Statement available to all persons who become holders of Shares during the period between such record date and the Election Date (as defined below). Any such holder's election to retain Shares shall have been properly made only if the Exchange Agent (as defined in Section 2.6) shall have received at its designated office, by 5:00 p.m., New York City time on the third trading day preceding the date of the Shareholders Meeting (the "Election Date"), a Form of Election properly completed and signed and accompanied by certificates for the Shares to which such Form of Election relates, duly endorsed in blank or otherwise in form acceptable for transfer on the books of the Company (or by an appropriate guarantee of delivery of such certificates as set forth in such Form of Election from a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, provided such certificates are in fact delivered to the Exchange Agent within three New York Stock Exchange trading days after the date of execution of such guarantee of delivery).


(c) Any Form of Election may be revoked by the holder submitting it to the Exchange Agent only by written notice received by the Exchange Agent prior to 5:00 p.m., New York City time, on the Election Date (unless


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MergerCo and the Company determine not less than two business days prior to the Election Date that the Effective Time is not likely to occur within five business days following the date of the Shareholders Meeting, in which case the Form of Election will remain revocable until a subsequent date which shall be a date prior to the Effective Time determined by MergerCo and the Company). In addition, all Forms of Election shall automatically be revoked if the Exchange Agent is notified in writing by MergerCo and the Company that this Agreement has been terminated in accordance with its terms and the Merger has been abandoned. If a Form of Election is revoked, the certificate or certificates (or guarantees of delivery, as appropriate) for the Shares to which such Form of Election relates shall be promptly returned to the shareholder submitting the same to the Exchange Agent.


(d) The determination of the Exchange Agent shall be binding as to whether or not elections to retain Shares have been properly made or revoked pursuant to this Section 2.2 with respect to Shares and when elections and revocations were received by it. If the Exchange Agent determines that any election to retain Shares was not properly made, such Shares shall be treated by the Exchange Agent as Shares for which no election was received and such Shares shall be converted in accordance with Section 2.1(c)(iii). The Exchange Agent shall also make all computations as to the allocation and the proration contemplated by Section 2.3, and any such computation shall be conclusive and binding on the holders of Shares. The Exchange Agent may, with the mutual agreement of MergerCo and the Company, make such rules as are consistent with this Section 2.2 for the implementation of the elections provided for herein as shall be necessary or desirable fully to effect such elections.


Section 2.3 Proration. (a) Notwithstanding anything in this Agreement to the contrary, the aggregate number of Shares (excluding for purposes of this Section 2.3 Management Rollover Shares) to be converted into the right to retain Shares at the Effective Time (the "Non-Cash Election Number") shall be equal to the sum of (i) the number of shares of Class A Common Stock, Class B Common Stock, Class C Common Stock, Class D Common Stock and Class E Common Stock of MergerCo which are outstanding as of immediately prior to the Effective Time and (ii) the number of Management Rollover Shares, multiplied by 0.06383, rounded up to the nearest whole number.


(b) If the number of Electing Shares exceeds the Non-Cash Election Number, then each Electing Share shall be converted into the right to retain Non-Cash Election Shares or receive the Cash Election Price in the following manner:


(i) a proration factor (the "Non-Cash Proration Factor") shall be determined by dividing the Non-Cash Election Number by the total number of Electing Shares;


(ii) the number of Electing Shares covered by each Non-Cash Election to be converted into the right to retain Non-Cash Election Shares shall be determined by multiplying the Non-Cash Proration Factor by the total number of Electing Shares covered by such Non-Cash Election rounded up to the nearest whole number; and


(iii) all Electing Shares, other than those shares converted into the right to retain Non-Cash Election Shares in accordance with Section 2.3(b)(ii), shall be converted into the right to receive the Cash Election Price in accordance with Section 2.1(c)(iii) (on a consistent basis among shareholders who made a Non-Cash Election in Section 2.1(c)(i), pro rata to the number of Shares as to which they made such Non-Cash Election) as if such Shares were not Electing Shares.


(c) If the number of Electing Shares is less than the Non-Cash Election Number, then:


(i) all Electing Shares shall be converted into the right to retain Shares in accordance with the terms of Section 2.1(c)(i);


(ii) additional Shares (other than Electing Shares, Dissenting Shares, Management Rollover Shares and any other Shares held by any of the Management Continuing Shareholders) shall be converted into the right to retain Non-Cash Election Shares in accordance with the terms of Section 2.1(c) in the following manner:


(1) a proration factor (the "Cash Proration Factor") shall be
determined by dividing (x) the difference between the Non-Cash Election
Number and the number of Electing Shares, by (y) the total number of
Shares (other than Shares described in Section 2.1(b), Electing Shares,
Dissenting Shares and Management Rollover Shares); and


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(2) the number of Shares in addition to Electing Shares to be
converted into the right to retain Non-Cash Election Shares shall be
determined by multiplying the Cash Proration Factor by the total number
of Shares (other than Shares described in Section 2.1(b), Electing
Shares, Dissenting Shares and Management Rollover Shares); and


(iii) subject to Section 2.1(d), Shares subject to clause (ii) of this paragraph (c) shall be converted into the right to retain Non-Cash Election Shares in accordance with Section 2.1(c)(i) (on a consistent basis among shareholders who held Shares as to which they did not make a Non-Cash Election (other than shares described in Section 2.1(b), Dissenting Shares and Management Rollover Shares), pro rata to the number of Shares as to which they did not make a Non-Cash Election).


Section 2.4 Treatment of Options. (a) Subject to Section 2.4(b), the Company shall take all action necessary so that each option to purchase shares of Common Stock (each, a "Company Stock Option") (and any rights thereunder) outstanding immediately prior to the Effective Time shall be canceled immediately prior to the Effective Time in exchange for the right to receive an amount in cash equal to the product of (i) the number of shares of Common Stock subject to such Company Stock Option immediately prior to the Effective Time and (ii) the excess, if any, of the Cash Election Price over the per share exercise price of such Company Stock Option, to be delivered by the Surviving Corporation immediately following the Effective Time. All applicable withholding taxes attributable to the payments made hereunder or to distributions contemplated hereby shall be deducted from the amounts payable under this Section 2.4 and all such taxes attributable to the exercise of Company Stock Options shall be withheld from the proceeds received in respect of the shares of Common Stock issuable upon such exercise. Notwithstanding the foregoing, any Company Stock Option with an exercise price greater than the Cash Election Price immediately prior to the Effective Time shall be cancelled immediately prior to the Effective Time, without any payment being made therefor. The Company shall use its reasonable best efforts to obtain the consent of each holder of Options to the foregoing treatment of such Options to the extent required under the option plan of the Company pursuant to which such Options were granted.


(b) Notwithstanding the provisions of Section 2.4(a), and subject to agreeing with MergerCo upon a mutually satisfactory tax-free "rollover" mechanism, each person listed on Exhibit C who, on or prior to the Election Date, is the holder of a Company Stock Option will be entitled, with respect to all or any portion of such holder's Company Stock Option, to make an unconditional election to the Company in writing (a "Retention Election") on or prior to the Election Date, to retain such portion of their Company Stock Options as may be specified in such Retention Election in lieu of receiving a cash payment, if any, in consideration for the cancellation of such portion of their Company Stock Options in the manner described in Section 2.4(a). Any portion of a Company Stock Option with respect to which a timely Retention Election has been delivered to the Company (the "Elected Portion") shall, whether or not then vested or exercisable, effective as of the Effective Time, become and represent an option (a "Continuing Option") for the number of Shares subject to the Elected Portion of such Company Stock Option immediately prior to the Effective Time at an exercise price per share and on such terms and conditions as may be mutually agreed upon with MergerCo. After the Effective Time, each Continuing Option shall as of the Effective Time be immediately fully vested and exercisable.


(c) Prior to the Effective Time, the Company shall have taken all actions necessary or appropriate in the judgment of MergerCo to ensure that all stock option, stock appreciation right or other equity-based plans maintained with respect to the Shares, including the Jostens, Inc. 1992 Stock Incentive Plan, shall terminate as of the Effective Time and the provisions in any other compensation or benefit plan providing for the issuance, transfer or grant of any capital stock of the Company or any interest in respect of any capital stock of the Company shall be terminated as of the Effective Time, and the Company shall use its reasonable best efforts to ensure that following the Effective Time neither the Company nor any of its subsidiaries is or will be bound by any Options (other than Continuing Options) which would entitle any person, other than MergerCo or its affiliates, to beneficially own, or receive any payments (other than as otherwise contemplated by Section 2.1 and this Section 2.4) in respect of, any capital stock of the Company or the Surviving Corporation.


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Section 2.5 Shareholders' Meeting; Proxy Statement. (a) Shareholders Meeting. The Company, acting through the Board, will, as promptly as practicable following the date of this Agreement and in consultation with MergerCo:


(i) duly call, give notice of, convene and hold a meeting of its shareholders for the purpose of approving and adopting this Agreement and the transactions contemplated hereby (the "Shareholders Meeting"); and


(ii) (A) include in the Proxy Statement (as defined in Section 2.6(b)) the recommendation of the Board that the shareholders of the Company vote in favor of the approval and adoption of this Agreement and the transactions contemplated hereby, as well as the written opinion of Credit Suisse First Boston Corporation ("CSFB"), the Board's financial advisor, that, as of the date of such opinion, the consideration to be received by the shareholders of the Company pursuant to the Merger (other than members of the Company's management who will retain, and other shareholders who make a valid election to retain, an equity interest in the Company after the Merger) is fair to such shareholders from a financial point of view and (B) use its reasonable best efforts to obtain the necessary approval and adoption of this Agreement and the transactions contemplated hereby by its shareholders, provided, however, that the Board may fail to make or may withdraw or modify such recommendation or fail to seek such approval if one or more persons or group shall have made a Superior Proposal (as defined in Section 7.1), and the Board has determined in good faith after consultation with outside counsel that failure to so act would reasonably likely be inconsistent with its fiduciary duties to the Company's shareholders.


(b) Proxy Statement. Promptly following the date of this Agreement, the Company shall prepare a proxy statement relating to the Shareholders Meeting (as amended or supplemented, the "Proxy Statement") and the Company shall prepare and file with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 (as amended or supplemented, the "Form S- 4"), in which the Proxy Statement will be included. The Company shall use its reasonable best efforts to have the Form S-4 declared effective under the Securities Act of 1933, as amended (the "Securities Act"), as promptly as practicable after such filing. The Company will use its reasonable best efforts to cause the Proxy Statement to be mailed to the Company's shareholders as promptly as practicable after the Form S-4 is declared effective under the Securities Act. The Company shall also take any action required to be taken under any applicable state securities laws in connection with the registration and qualification of the Non-Cash Election Shares in connection with the Merger. MergerCo and the Company will cooperate with each other in the preparation of the Proxy Statement. Without limiting the generality of the foregoing, the Company will as promptly as practicable notify MergerCo of the receipt of any comments from the SEC and any request by the SEC for any amendment to the Proxy Statement or for additional information. All filings with the SEC, including the Proxy Statement and any amendment thereto, and all mailings to the Company's shareholders in connection with the Merger, including the Proxy Statement, shall be subject to the prior review, comment and approval of MergerCo (which approval by MergerCo shall not be unreasonably withheld or delayed). MergerCo will furnish to the Company the information relating to it required by the Securities Act, Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder, to be set forth in the Proxy Statement. The Company agrees to use its reasonable best efforts, after consultation with the other parties hereto, to respond promptly to any comments made by the SEC with respect to the Proxy Statement and any preliminary version thereof filed by it and cause such Proxy Statement to be mailed to the Company's shareholders at the earliest practicable time.


Section 2.6 Payment for Common Stock. (a) Exchange Agent. At or before the Effective Time, MergerCo shall designate a bank or trust company reasonably acceptable to the Company to act as Exchange Agent in connection with the Merger (the "Exchange Agent") for the purpose of exchanging certificates representing Shares for the Merger Consideration. On the Closing Date, MergerCo will make available to the Exchange Agent the cash portion of the Merger Consideration to be paid in respect of the Shares. For purposes of determining the cash portion of the Merger Consideration to be made available, MergerCo shall assume that no holder of Shares will exercise dissenters rights.


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(b) Exchange. Promptly after the Effective Time, the Surviving Corporation shall cause the Exchange Agent to mail to each record holder, except the holders of Dissenting Shares, as of the Effective Time, of any outstanding certificate or certificates which immediately prior to the Effective Time represented outstanding shares of Common Stock (the "Certificates"), a form letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Exchange Agent) and instructions for use in effecting the surrender of the Certificates for payment therefor. In effecting the payment of the Cash Election Pric ...