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Agreement Plan Of Reorganization And Merger

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AGREEMENT, PLAN OF REORGANIZATION AND PLAN OF MERGER


BY AND AMONG


FIRST FINANCIAL MANAGEMENT CORPORATION,


BLUEBIRD ACQUISITION CORPORATION,


GENCAN ACQUISITION CORPORATION,


GENEX SERVICES, INC.,


GENEX SERVICES OF CANADA, LTD.


AND


THE SHAREHOLDERS OF


EACH OF


GENEX SERVICES, INC.


AND


GENEX SERVICES OF CANADA, LTD.


June 30, 1994


2
TABLE OF CONTENTS


Section Page - - ------- ---- 1. The Business Combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 The Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Effective Time of the Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Effect of the Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2


2. Conversion and Exchange of Shares; Additional Action . . . . . . . . . . . . . . . . . . . 2
2.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Reported Market Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Stock Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Surrender and Exchange of Stock Certificates . . . . . . . . . . . . . . . . . . . . 5
2.6 Dividends on FFMC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.7 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5


3. Articles of Incorporation, Bylaws, Board of Directors and Officers . . . . . . . . . . . . 6
3.1 Certificate of Incorporation; Bylaws . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Directors and Officers of the Surviving Corporation . . . . . . . . . . . . . . . . 6


4. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7


5. Representations and Warranties of the Shareholders . . . . . . . . . . . . . . . . . . . . 7
5.1 Ownership of Shares; Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Absence of Violations or Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4 No Consents Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.5 No Claims Against the Companies . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.6 Litigation Related to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . 8
5.7 Purchase for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.8 Receipt of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


6. Representations and Warranties of the Companies and the Shareholders . . . . . . . . . . . 9
6.1 Organization and Qualification of the Companies . . . . . . . . . . . . . . . . . . 9
6.2 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.3 Corporate Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.5 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.6 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.7 No Consents Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11


i 3
6.8 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.9 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.10 Governmental Authorization and Compliance with Laws . . . . . . . . . . . . . . . . 12
6.11 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.13 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.14 Adequacy; Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.15 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.16 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.17 Labor Controversies and Employees . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.18 Insider Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.19 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.21 Employee and Fringe Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.22 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.23 Customer Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.24 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.25 Pooling-of-Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.26 Major Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.27 Accuracy of Schedules, Certificates and Documents . . . . . . . . . . . . . . . . . 21


7. Representations and Warranties by FFMC, Bluebird and GENCAN . . . . . . . . . . . . . . . . 21
7.1 Existence, Power and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.3 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.4 Periodic Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.6 No Past Action That Would Defeat Pooling . . . . . . . . . . . . . . . . . . . . . . 23
7.7 Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.8 Accuracy of Schedules, Certificates and Documents . . . . . . . . . . . . . . . . . 23


8. Further Agreements of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1 Investigation; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.2 Conduct of the Business Pending the Closing . . . . . . . . . . . . . . . . . . . . 24
8.3 HSR Act Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.4 Consents, Authorizations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.5 Good Faith; Further Assurances; Cooperation . . . . . . . . . . . . . . . . . . . . 26
8.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.7 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.8 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.9 Additional Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.10 Shareholder Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.11 No Solicitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.12 Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.13 Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28


ii 4
8.14 Pooling Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.15 No Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.16 Registration of Shares Issued Pursuant to Stock Option Plan . . . . . . . . . . . . 28
8.17 Organization of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.1 Conditions Relating to FFMC, Bluebird and GENCAN . . . . . . . . . . . . . . . . . . 29
9.2 Conditions to Obligation of the Companies and the Shareholders . . . . . . . . . . . 32


9.3. Waiver and Estoppel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34


10. Documents to be Delivered at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.1 Documents to be Delivered by the Companies and the Shareholders . . . . . . . . . . 35
10.2 Documents to be Delivered by FFMC . . . . . . . . . . . . . . . . . . . . . . . . . 35


11. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.1 Filing of Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.2 Access and Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.3 Certain Audit Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37


12. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.1 Indemnification by the Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.2 Indemnification by FFMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.3 Certain Limitations and Related Matters . . . . . . . . . . . . . . . . . . . . . . . 38
12.4 Claims for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.5 Defense of Claim by Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.6 Third Party Claim Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.7 Determination of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.8 Manner of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.9 Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.10 Remedies Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42


13. Shareholders' Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.1 Appointment; Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.3 Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.4 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.6 Survival of Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44


14. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14.1 Finders, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14.2 Specific Performance and Other Remedies . . . . . . . . . . . . . . . . . . . . . . . 44
14.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
14.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
14.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
14.6 Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46


iii 5

14.7 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
14.8 No Third Party Beneficiaries; Assignment . . . . . . . . . . . . . . . . . . . . . . 46
14.9 Time of the Essence; Computation of Time . . . . . . . . . . . . . . . . . . . . . . 47
14.10 Definitions Regarding Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
14.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
14.12 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47


iv 6
CERTAIN DEFINED TERMS


Term Section - - ---- ------- Acquisition Proposal 8.11 Act 1.1 Affected Employees 8.8 Affiliate 6.9 Agreement Preamble Applicable Plan Year-End 6.21(c) Articles of Merger 1.2 Authorizations 6.10 Bluebird Preamble Bluebird Common Stock 2.1(d) Canada Common Stock Preamble Canada Shareholders Preamble Citations 6.22(c) Closing 1.3 Closing Date 1.3 Code 6.12(d) Companies Preamble Company Preamble Company Delivered Agreements 6.4 Costs 12.1 Deductible 12.3(c) Determination Date 12.7 Effective Time 1.2 Employee Plans 6.21(a) Environmental Laws 6.22(a) ERISA 6.21(a) ERISA Affiliate 6.21(a) Escrow Shares 2.5(b) Financial Statements 6.8(a) FFMC Preamble FFMC Common Stock Preamble FFMC's Benefit Programs 8.8 FTC 5.4 GAAP 6.8(a) GBCC 1.2


v 7 GCR Preamble GENCAN Preamble GENCAN Common Stock 2.1(e) GENEX Preamble GENEX Canada Preamble GENEX Common Stock Preamble GENEX Shareholders Preamble Governmental Authority 5.4 HSR Act 5.4 Indemnified Party 12.4 Indemnifying Party 12.4 Intellectual Property 6.19 Intellectual Property Agreements 6.19 IRS 6.21(a) Justice 5.4 Laws 6.5 Liens 5.1 Material Contracts 6.15 Merger(s) Preamble Merger Consideration 2.5 Multi-Employer Plan 6.21(a) Notice of Claim 12.4 Orders 6.5 Outstanding Options 2.1(g) PBGC 6.21(a) Pension/Profit-Sharing Plan 6.21(a) Pooling Letter 9.10 Post-Closing Period 11.1(a) Pre-Closing Period 11.1(a) Properties 6.14 Reported Market Price 2.3 SEC 5.7 SEC Filings 7.4 Shareholder(s) Preamble Shareholder Delivered Agreements 5.2 Shareholders' Agent 13.1 Stock Option Plan 2.1(g) Subsidiary 6.6 Superfund Notice 6.22(c) Surviving Corporation(s) 1.1 Tax Return 6.12(i) Taxes 6.12(i) Welfare Plan 6.21(a) 1993 Act 2.1(f)


vi 8


SCHEDULES TO AGREEMENT


Schedule No. Title - - --- ----- 2.5 Escrowed Shares 5.1 Ownership 5.3 Violations or Conflicts 5.4 Consents 5.5 Shareholders' Claim against Company 6.1 Organization - Jurisdiction 6.2 Capital Stock 6.5 Noncontravention 6.8 Financial - Supplementary Information on Accounts Receivable 6.9 Absence of Certain Changes 6.10 Government Compliance 6.11 Undisclosed Liabilities 6.12 Taxes 6.13 Titles to Properties 6.14 Properties 6.15 Material Contracts, (Consents Guide) 6.16 Litigation 6.17 Labor Controversies and Employees 6.18 Insider Interests 6.19 Intellectual Properties 6.20 Insurance 6.21 Employee and Fringe Benefits 6.23 Customer Warranties 6.24 Bank Accounts 6.25 Pooling of Interest Lists 6.26 Major Customers 7.3 Noncontravention 7.5 Litigation 8.2 Conduct of Business 8.10 Shareholder Notes 11.1 Filing of Returns 9
AGREEMENT, PLAN OF REORGANIZATION AND PLAN OF MERGER


THIS IS AN AGREEMENT, PLAN OF REORGANIZATION AND PLAN OF MERGER (this "Agreement"), dated as of June 30, 1994, by and among FIRST FINANCIAL MANAGEMENT CORPORATION, a Georgia corporation ("FFMC"), BLUEBIRD ACQUISITION CORPORATION, a Georgia corporation wholly owned by FFMC ("Bluebird"), GENCAN ACQUISITION CORPORATION, a Georgia corporation wholly-owned by FFMC ("GENCAN"), GENEX SERVICES, INC., a Pennsylvania corporation (formerly known as GENERAL REHABILITATION SERVICES, INC.)("GENEX"), GENEX SERVICES OF CANADA, LTD., a Pennsylvania corporation (formerly known as GENERAL REHABILITATION SERVICES OF CANADA, LTD.)("GENEX Canada")(GENEX and GENEX Canada are sometimes referred to herein individually as a "Company" and collectively as the "Companies") and the undersigned shareholders of GENEX and of GENEX Canada (referred to herein individually as a "Shareholder" and collectively as the "Shareholders"). As the context requires, the term "Company" or "Companies" shall include GENEX, as successor-in-interest to GENERAL CARE REVIEW, INC. ("GCR"), a Pennsylvania corporation that was merged with and into GENEX on October 29, 1993, and the terms "Shareholder" or "Shareholders" shall include the undersigned shareholders in their capacity as shareholders of GCR.


BACKGROUND STATEMENT


Each of GENEX and GENEX Canada is primarily engaged in the business of providing a line of services designed to reduce its customers' costs associated with work related injuries, including disability management, medical and vocational case management, bill review, early intervention and utilization management (the "Business"). FFMC and GENEX desire to effect a business combination of GENEX and Bluebird pursuant to which Bluebird will merge with and into GENEX. FFMC and GENEX Canada desire to effect a business combination of GENEX Canada and GENCAN pursuant to which GENCAN will merge with and into GENEX Canada. Pursuant to such mergers (the "Mergers"), the holders (the "GENEX Shareholders") of GENEX common stock, no par value ("GENEX Common Stock"), will receive shares of FFMC common stock, par value $.10 per share ("FFMC Common Stock"), in exchange for their shares of GENEX Common Stock and the holders (the "Canada Shareholders") of GENEX Canada common stock, par value $.01 share ("Canada Common Stock"), will receive shares of FFMC Common Stock in exchange for their shares of Canada Common Stock, each as provided in this Agreement. The Mergers are intended to be reorganizations under Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code"). The Board of Directors of each of GENEX and GENEX Canada has approved the Merger to which such Company is a party and directed that this Agreement be submitted to the GENEX Shareholders, and the Canada Shareholders, respectively, who have agreed herein to vote their respective shares of GENEX Common Stock and Canada Common Stock in favor of the Mergers. The Mergers have been approved by a duly authorized committee of the Board of Directors of FFMC, by the Board of Directors of each of Bluebird and GENCAN and by FFMC as sole shareholder of Bluebird and of GENCAN. 10
STATEMENT OF AGREEMENT


NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:


1. The Business Combinations.


1.1 The Mergers. At the Effective Time (as defined in Section 1.2 hereof), Bluebird shall be merged with and into GENEX and GENCAN shall be merged with and into GENEX Canada, each in accordance with the provisions of this Agreement and the Pennsylvania Business Corporation Law of 1988, as amended (the "Act"), and the separate existence of each of Bluebird and GENCAN shall thereupon cease, and GENEX and GENEX Canada, as the surviving corporations in the Mergers (referred to herein as a "Surviving Corporation" or the "Surviving Corporations"), shall continue their corporate existence under the laws of the Commonwealth of Pennsylvania.


1.2 Effective Time of the Mergers. As soon as practicable following fulfillment of the conditions set forth in Section 8, and provided that this Agreement has not been terminated pursuant to Section 4, GENEX and GENEX Canada shall each cause appropriate Articles of Merger and appropriate Certificates of Merger (collectively "Articles of Merger") to be duly prepared, executed, acknowledged and filed with the Secretaries of State of the Commonwealth of Pennsylvania and the State of Georgia, respectively, in accordance with the provisions of the Act and the Georgia Business Corporation Code, as amended (the "GBCC"). The Mergers shall become effective at the time of the filing of the Articles of Merger unless a different effective time is specified in the applicable Articles of Merger (the "Effective Time").


1.3 Closing. The consummation of the transactions contemplated in this Agreement (the "Closing") shall take place at the offices of FFMC, 3 Corporate Square, Suite 700, Atlanta, Georgia 30329, on a date and at a time agreed upon by FFMC and the Shareholders, but in no event later than 10:00 a.m. on the third business day after all conditions set forth in Section 8 have been satisfied or waived in writing (the "Closing Date"). At the Closing, the parties shall execute and deliver the agreements and other documents referred to in Section 9.


1.4 Effect of the Mergers. At the Effective Time: (i) Bluebird shall merge with and into GENEX; (ii) GENCAN shall merge with and into GENEX Canada; (iii) the separate existence of each of Bluebird and GENCAN shall cease; (iv) the shares of GENEX and GENEX Canada shall each be converted as provided in this Agreement; (v)the Shareholders shall be entitled only to the rights provided in this Agreement; and (vi) the Mergers shall otherwise have the effect provided under the app
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