EXHIBIT 2.2
ARTICLES/CERTIFICATE OF MERGER
OF
MERITUS INDUSTRIES, INC.
INTO
DSI TOYS, INC.
Pursuant to the provisions of Sections 14A:10-4.1 and 14A:10-7 of
the New Jersey Business Corporation Act ("NJBCA") and Articles 5.01-5.06 of the
Texas Business Corporation Act ("TBCA"), the undersigned corporations, Meritus
Industries, Inc., a New Jersey corporation and DSI Toys, Inc., a Texas
corporation (collectively, the "Constituent Corporations"), adopt the following
Articles/Certificate of Merger for the purpose of merging Meritus Industries,
Inc. into DSI Toys, Inc.:
FIRST: The name of the surviving corporation is DSI Toys, Inc.
(hereinafter, the "Surviving Corporation") and the name of the
merging corporation is Meritus Industries, Inc. (hereinafter the
"Merged Corporation").
SECOND: The Plan of Merger setting forth the terms and conditions of
the merger is attached to this Certificate as Exhibit A.
THIRD: The Plan of Merger was approved by the board of directors of
the Surviving Corporation on December 17, 1999, and no vote of the
shareholders of the Surviving Corporation was required because of
Article 5.03G of the TBCA and the applicability of the provisions of
Section 14A:10-3(4) of the NJBCA to the Plan of Merger.
FOURTH: The shareholders of the Merged Corporation approved the Plan
of Merger on October 7, 1999.
FIFTH: The number of outstanding shares of each class and series of
shares of the Merged Corporation entitled to vote on the Plan of
Merger is ten (10). The number of shares voting for the
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Plan of Merger by the Merged Corporation is 10. No shareholder voted
against the Plan of Merger.
SIXTH: The laws of the State of Texas, the jurisdiction of
organization of the Surviving Corporation, permit the merger
contemplated by the Plan of Merger, and the laws of the State of
Texas, on fulfillment of all filing and recording requirements set
forth by the applicable laws of the State of Texas, will have been
complied with.
SEVENTH: The approval of the Plan of Merger was duly authorized by
all action required by the laws of the state of incorporation of the
Merged Corporation and by the Merged Corporation's constituent
documents.
EIGHTH: The Surviving Corporation hereby agrees (i) that it will
promptly pay to the dissenting shareholders of the Merged
Corporation the amount, if any, to which they shall be entitled
under the provisions of the NJBCA with respect to the rights of
dissenting shareholders, and (ii) that it may be served with process
in the State of New Jersey in any proceeding for enforcement of any
obligation of any Constituent Corporation previously amenable to
suit in the State of New Jersey, as well as for the enforcement of
the right of any stockholders as determined in appraisal proceedings
pursuant to the provisions of Section 14A:11-1 et. seq. of the
NJBCA. The Surviving Corporation hereby irrevocably appoints the
Secretary of State of the State of New Jersey as its agent to accept
service of process in any such suit or other proceedings and such
process shall be mailed by the Secretary of State of the State of
New Jersey to the Surviving Corporation at 1100 West Sam Houston
Parkway (North), Houston, Texas 77043: Attn.: President.
NINTH: No amendments to the Articles of Incorporation of the
Surviving Corporation are desired to be effected by the merger.
(TBCA Art. 5.04(A)(1)(c).)
TENTH: A copy of the Plan of Merger is on file at the office of the
Surviving Corporation and will be furnished by the Surviving
Corporation, on written request and without cost, to any shareholder
of the Surviving Corporation. (TBCA Art. 5.04(A)(1)(f)).
ELEVENTH: The merger of the Constituent Corporations shall be
effective as of the date of the filing of this Articles/Certificate.
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IN WITNESS WHEREOF, each of the undersigned Constituent Corporations
has caused this Articles/Certificate of Merger to be executed as of the 7th day
of January, 2000.
MERITUS INDUSTRIES, INC.
a New Jersey corporation
By: /s/ WALTER REILING
Walter Reiling
President
DSI TOYS, INC.
a Texas corporation
By: /s/ ROBERT L. WEISGARBER
Robert L. Weisgarber
Chief Financial Officer/
Vice President
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EXHIBIT "A"
PLAN OF MERGER
THIS PLAN OF MERGER (the "Plan") dated the 7th day of October, 1999 is
between DSI TOYS, INC., a Texas corporation ("DSI" or the "Surviving
Corporation") and MERITUS INDUSTRIES, INC., a New Jersey corporation
("Meritus").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of each of Meritus and DSI
have approved and declared advisable the merger of Meritus with and into DSI
(the "Merger") and approved the Merger upon the terms and subject to the
conditions set forth in that certain Agreement and Plan of Merger (the
"Agreement") of even date herewith, whereby each issued and outstanding share of
the common stock, par value $.01 per share, of Meritus (a "Meritus Share" or,
collectively, the "Meritus Shares"), not owned directly or indirectly by
Meritus, will be converted into shares of common stock, $0.01 par value, of DSI
("DSI Shares"), and certain other consideration as provided in the Agreement;
WHEREAS, this Plan has been adopted by the Board of Directors of DSI and
Meritus and by the shareholders of Meritus.
NOW, THEREFORE, this Plan sets forth the following terms and conditions of
the Agreement upon which Meritus is to be merged with and into DSI:
A. TERMS AND CONDITIONS OF MERGER.
1. THE MERGER. At the Effective Time (as defined below), Meritus
shall be merged with and into DSI and the separate corporate existence of
Meritus shall thereupon cease. DSI shall be the Surviving Corporation in the
Merger and the separate corporate existence of DSI with all its rights,
privileges, immunities, powers and franchises shall continue unaffected by the
Merger, except as set forth in Section A.4 below;
2. EFFECTIVE TIME. The Merger shall become effective at the time
when the New Jersey Certificate of Merger has been duly filed with the Secretary
of State of New Jersey and the Texas Articles of Merger have been filed with the
Secretary of State of Texas.
3. CERTIFICATE OF INCORPORATION AND BYLAWS. The certificate of
incorporation of DSI as in effect immediately prior to the Effective Time shall
be the certificate of incorporation of the Surviving Corporation (the
"Charter"), until duly amended as provided therein or by applicable law. The
bylaws of DSI in effect immediately prior to the Effective Time shall be the
bylaws of the Surviving Corporation (the "Bylaws"), until thereafter amended as
provided therein or by applicable law.
4. DIRECTORS. The directors of DSI immediately prior to the
Effective Time shall, from and after the Effective Time, continue to be
directors of the Surviving Corporation until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Charter and the Bylaws. Pursuant to the terms and
conditions of a voting trust agreement, as of the date that is no later than
thirty (30) days after the Effective Time, Mr. Walter Reiling shall be appointed
to the Board of Directors of DSI.
B. SHARE CONVERSION.
1. EFFECT ON CAPITAL STOCK. At the Effective Time, as a result of
the Merger and without any action on the part of the holder of any capital stock
of DSI, the Meritus Shares issued and outstanding immediately prior to the
Effective Time (other than any Meritus Shares owned by Meritus or any other
direct or indirect subsidiary of Meritus and not held on behalf of third parties
(collectively, "Excluded Shares"), shall be converted into, and become
exchangeable for (a) Six Hundred Thousand (600,000) validly issued, fully paid
and nonassessable DSI Shares, representing Sixty Thousand (60,000) DSI Shares
for each of the ten (10) Meritus Shares issued and outstanding as of the
Effective Time (provided, however, if the closing price for DSI Shares at the
close of the market on the day prior to the Effective Time is less than $3.10
per share, then DSI shall issue additional DSI Shares to Meritus so that the
aggregate value of the DSI Shares issued in the Merger is equal to One Million
Eight Hundred Sixty Thousand Dollars ($1,860,000); (b) One Million One Hundred
Thousand Dollars ($1,100,000) in cash; and (iii) DSI's Subordinated Secured
Promissory Note for One Million Six Hundred Ninety Thousand Dollars
($1,690,000.00) (the "Note"). DSI's obligations under the Note shall be secured
by a Letter of Credit. At the Effective Time, all Meritus Shares shall no longer
be outstanding and shall be canceled and retired and shall cease to exist, and
each certificate (a "Certificate") formerly representing any of such Meritus
Shares (other than Excluded Shares, if any) shall thereafter represent only the
right to receive the DSI Shares into which such Meritus Shares have been
converted and the right to receive One Hundred and Ten Thousand Dollars
($110,000) in cash per Meritus Share and the right, if any, to receive cash in
lieu of fractional shares into which such Meritus Shares have been converted
pursuant to Section B.2 below. Each Excluded Share issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, cease to be outstanding,
shall be canceled and retired without payment of any consideration therefor and
shall cease to exist.
2. FRACTIONAL SHARES. No certificates or scrip representing
fractional DSI Shares shall be issued upon the surrender for exchange of
Certificates; no dividend or other distribution by DSI and no stock split,
combination or reclassification shall relate to any such fractional share; and
no such fractional share shall entitle the record or beneficial owner thereof to
vote or to any other rights of a stockholder of DSI. In lieu of any such
fractional share, each holder of Shares who would otherwise have been entitled
thereto upon the surrender of Certificate(s) for exchange will be paid an amount
in cash (without interest) rounded up to the nearest whole cent, determined by
multiplying (i) the per share closing price on the NASDAQ (the "NASDAQ") of DSI
Shares (as reported in The Wall Street Journal) on the date on which the
Effective Time shall occur (or, if the DSI Shares shall not trade on NASDAQ on
such date, the first day of trading in DSI Shares on NASDAQ thereafter) by (ii)
the fractional share to which such holder would otherwise be entitled.
3. ADJUSTMENTS OF CONVERSION NUMBER. In the event that Meritus
changes the number of Meritus Shares or securities convertible or exchangeable
into or exercisable for Meritus Shares, or DSI changes the number of DSI Shares
or securities convertible or exchangeable into or exercisable for DSI Shares,
issued and outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse split), dividend or
distribution, recapitalization, merger (other than the Merger), subdivision,
issuer tender or exchange offer for the issuer's own shares (other than
repurchases by DSI between the date hereof and the Effective Time of less than
5% of the outstanding DSI Shares pursuant to Rule 10b-18, promulgated under the
Securities Exchange Act of 1934, as amended), or other similar transaction with
a materially dilutive effect, or if a record date with respect to any of the
foregoing shall occur prior to the Effective Time, the conversion number shall
be equitably adjusted.
IN WITNESS WHEREOF, DSI has approved this Plan as of the date first above
written pursuant to a resolution of its Board of Directors and Meritus' Board of
Directors and shareholders have approved this Plan as of the date first above
written.
DSI TOYS, INC.,
a Texas corporation
By: /s/ ROBERT L. WEISGARBER
Name: Robert L. Weisgarber
Title: Chief Financial Officer/
Vice President
MERITUS INDUSTRIES, INC.,
a New Jersey corporation
By: /s/ WALTER REILING
Name: Walter Reiling
Title: President