Plan of Merger - RSI Systems Inc. and Viseon Inc.
PLAN OF MERGER
THIS PLAN OF MERGER (the "Plan of Merger"), dated as of the 9th day of
April, 2001 is by and between RSI Systems, Inc., a Minnesota corporation ("RSI")
with its principal place of business at 5593 West 78th Street, Edina, Minnesota
55439, and Viseon, Inc., a Nevada corporation (the "Surviving Corporation").
WHEREAS, the respective Boards of Directors of RSI and the Surviving
Corporation deem it advisable for the general welfare and advantage of the
respective corporations and their respective shareholders that RSI be
reincorporated as Nevada Corporation and therefore, in accordance with the
applicable laws of the States of Minnesota and Nevada, RSI be merged with and
into the Surviving corporation (the "Merger");
NOW, THEREFORE, the parties hereto, subject to the approval of RSI's
shareholders as required by law, in consideration of the premises and of the
mutual covenants and agreements contained herein and of the benefits to accrue
to the parties hereto, have agreed and do hereby agree that RSI be merged with
and into the Surviving Corporation pursuant to the laws of the States of
Minnesota and Nevada, and do hereby agree upon, prescribe and set forth the
terms and conditions of the Merger, the method of carrying the same into effect,
and the manner and basis of converting shares of RSI into shares of Stock of the
Surviving Corporation and cash, as follows:
1. The Merger. Subject to the terms and conditions of this Plan of
Merger, at the Effective Time (as defined in Section 2 hereof), RSI shall be
merged with and into Surviving Corporation in accordance with the applicable
laws of the States of Minnesota and Nevada, whereupon the separate corporate
existence of RSI shall cease, and Surviving Corporation shall continue as the
surviving corporation (the "Surviving Corporation"). From and after the
Effective Time, the Surviving Corporation shall possess all the property,
rights, privileges, immunities, powers, and franchises and be subject to all the
debts, liabilities, obligations, restrictions, disabilities, and duties of RSI
and Surviving Corporation.
2. Effective Time. The Merger shall be effective upon filing with the
Minnesota Secretary of State and the Nevada Secretary of State Articles of
Merger including this Plan of Merger (the "Effective Time").
3. Conversion of Shares. At the Effective Time, by virtue of the Merger
and without any action on the part of RSI or Surviving Corporation or any holder
of any share of capital stock of RSI or Surviving Corporation, each share of
common stock of RSI, $.01 par value per share ("RSI Common Stock"), issued and
outstanding immediately prior thereto (except for shares as to which the holders
thereof have asserted dissenters' rights pursuant to Minnesota Statutes Sections
302A.471 and 302A.473 and pursuant to Section 4 below) shall be converted into
the right to receive one (the "Conversion Ratio") share of common stock of
Surviving Corporation, par value $.01 per share (the "Surviving Corporation
Common Stock"). Each share of Surviving Corporation Common Stock issued and
outstanding immediately prior to the Effective Time shall be canceled at the
Effective Time.
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4. RSI Dissenters' Rights.
(a) Notwithstanding any provision of this Plan of Merger to
the contrary, any shares of RSI Common Stock held by a holder who has
properly asserted dissenters' rights pursuant to Minnesota Statutes
Sections 302A.471 and 302A.473 with respect to such shares and who, as
of the Effective Time, has not effectively withdrawn or lost such
rights shall not be converted into or represent a right to receive
shares of Surviving Corporation Common Stock pursuant to Section 3, but
the holder thereof shall only be entitled to such rights as are granted
by Minnesota law.
(b) Notwithstanding the provisions of subsection (a) of this
Section, if any holder of RSI Common Stock who asserts dissenters'
rights with respect to such RSI Common Stock under Minnesota law
effectively withdraws or loses (through failure to perfect or
otherwise) such dissenters' rights, then, as of the later of the
Effective Time or the occurrence of such event, such holder's RSI
Common Stock shall automatically be converted into and represent only
the right to receive the shares of Surviving Corporation Common Stock
as provided in Section 3, without interest thereon, upon surrender of
the certificate or certificates representing such RSI Common Stock.
(c) RSI shall give Surviving Corporation (i) prompt notice of
any notice of intent to assert dissenters' rights with respect to any
RSI Common Stock, withdrawals of such notices, and any other
instruments served pursuant to the MBCA and received by RSI and (ii)
the opportunity to participate in all negotiations and proceedings with
respect to assertion of dissenters' rights with respect to RSI Common
Stock under Minnesota law. RSI shall not, except with the prior written
consent of Surviving Corporation, voluntarily make any payment with
respect to any assertion of dissenters' rights with respect to RSI
Common Stock or offer to settle or settle any such demands.
5. Exchange of RSI Common Stock.
(a) Prior to the Effective Time, Company shall cause Company's
stock transfer agent to act as exchange agent (the "Exchange Agent")
hereunder. As promptly as practicable after the Effective Time, with
respect to the shares of Surviving Corporation Common Stock into which
shares of RSI Common Stock have been converted pursuant to Section 3,
Surviving Corporation shall deliver written instructions to the
transfer agent instructing such transfer agent to issue such shares of
Surviving Corporation Common Stock pursuant to the provisions of this
Section 5. As promptly as practicable after the Effective Time,
Surviving Corporation shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates that immediately
prior to the Effective Time represented outstanding shares of RSI
Common Stock ("RSI Certificates"), who has not previously delivered
such RSI Certificates to Surviving Corporation at the Closing, a form
letter of transmittal and instructions for such holder's use in
effecting the surrender of RSI Certificates in exchange for
certificates representing shares of Surviving Corporation Common Stock.
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(b) As soon as practicable after the Effective Time, the
Exchange Agent shall distribute to holders of shares of RSI Common
Stock, upon surrender to the Exchange Agent of one or more RSI
Certificates for cancellation, together with a duly executed letter of
transmittal, (i) one or more certificates representing the number of
whole shares of Surviving Corporation Common Stock into which the
shares represented by RSI Certificate(s) shall have been converted
pursuant to Section 3, and (ii) any dividends or other distributions to
which such holder is entitled pursuant to Section 5(c), and RSI
Certificate(s) so surrendered shall be canceled. In the event of a
transfer of ownership of RSI Common Stock that is not registered in the
transfer records of RSI, it shall be a condition to the issuance of
shares of Surviving Corporation Common Stock that RSI Certificate(s) so
surrendered shall be properly endorsed or be otherwise in proper form
for transfer and that such transferee shall (i) pay to the Exchange
Agent any transfer or other taxes required or (ii) establish to the
satisfaction of the Exchange Agent that such tax has been paid or is
not payable.
(c) Holders of RSI Common Stock will be entitled to any
dividends or other distributions pertaining to the Surviving
Corporation Common Stock received in exchange therefor that become
payable to persons who are holders of record of Surviving Corporation
Common Stock as of a record date that follows the Effective Time, but
only after they have surrendered their RSI Certificates for exchange.
Surviving Corporation shall deposit with the Exchange Agent any such
dividend or other distributions, and subject to the effect, if any, of
applicable law, the Exchange Agent shall receive, hold, and remit any
such dividends or other distributions to each such record holder
entitled thereto, without interest, at the time that such RSI
Certificates are surrendered to the Exchange Agent for exchange.
(d) All certificates evidencing shares of Surviving
Corporation Common Stock that are issued upon the surrender for
exchange of RSI Certificates in accordance with the terms hereof shall
be deemed to have been issued in full satisfaction of all rights
pertaining to the shares of RSI Common Stock represented by the
surrendered RSI Certificates.
(e) After the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of RSI Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
RSI Certificates representing such shares are presented to the
Surviving Corporation, they shall be canceled and exchanged as provided
in this Plan of Merger. As of the Effective Time, the holders of RSI
Certificates representing shares of RSI Common Stock shall cease to
have any rights as stockholders of RSI, except such rights, if any, as
they may have pursuant to Minnesota law or this Plan of Merger. Except
as provided above, until such RSI Certificates are surrendered for
exchange, each such RSI Certificate shall, after the Effective Time,
represent for all purposes only the right to receive a certificate or
certificates evidencing the number of shares of Surviving Corporation
Common Stock into which the shares of RSI Common Stock shall have been
converted pursuant to the Merger as provided in Section 3 hereof and
the right to receive any dividends or distributions as provided in
Section 5(c).
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(f) In the event any RSI Certificates shall have been lost,
stolen, or destroyed, the Exchange Agent shall issue in respect of such
lost, stolen, or destroyed RSI Certificates, upon the holder thereof
posting an insurance bond as required by Exchange Agent and performing
such other acts as reasonably required by Exchange Agent, such shares
of Surviving Corporation Common Stock and dividends or other
distributions, if any, as may be required pursuant to this Plan of
Merger.
6. Stock Options and Warrants.
(a) Each option or warrant to purchase shares of RSI Common
Stock that is outstanding at the Effective Time, whether or not
exercisable and whether or not vested (a "RSI Option"), shall, without
any action on the part of RSI or the holder thereof, be assumed by
Surviving Corporation in such manner that Surviving Corporation (i) is
a corporation "assuming a stock option in a transaction to which
Section 424(a) applies" within the meaning of Section 424 of the Code
and the regulations thereunder, or (ii) to the extent that Section 424
of the Code does not apply to any such RSI Option, would be such a
corporation if Section 424 of the Code were applicable to such RSI
Option. Surviving Corporation shall assume RSI's Stock Option Plan (the
"RSI Option Plan"). From and after the Effective Time, all references
to RSI in RSI Options shall be deemed to refer to the Surviving
Corporation. RSI Options assumed by Surviving Corporation shall be
exercisable upon the same terms and conditions as under RSI Options
(including provisions regarding vesting and the acceleration thereof)
except that (i) such RSI Options shall entitle the holder to purchase
from the Surviving Corporation the number of shares of Surviving
Corporation Common Stock that equals the product of the Conversion
Ratio multiplied by the number of shares of RSI Common Stock subject to
such RSI Option immediately prior to the Effective Time, (ii) the
option exercise price per share of Surviving Corporation Common Stock
shall be an amount equal to the exercise price per share of RSI Common
Stock in effect immediately prior to the Effective Time, and (iii) RSI
Options shall vest to the extent required pursuant to the current terms
of such RSI Options. Except to the extent required pursuant to the
current terms of such RSI Options, RSI shall not take any action to
accelerate the vesting of any RSI Options.
(b) As promptly as practicable after the Effective Time, the
Surviving Corporation shall issue to each holder of a RSI Option a
written instrument informing such holder of the assumption by Surviving
Corporation of such RSI Option. Surviving Corporation shall take all
corporate action necessary to reserve for issuance a sufficient number
of shares of Surviving Corporation Common Stock for delivery upon
exercise of RSI Options pursuant to the terms set forth in this Section
6. Surviving Corporation shall use its commercially reasonable efforts
to cause those RSI Options that qualified as incentive stock options
prior to the Effective Time to continue to qualify as incentive stock
options immediately after the Effective Time.
7. Capitalization Changes. If at the Effective Time, the outstanding
shares of Surviving Corporation Common Stock or RSI Common Stock shall have been
changed into or
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exchanged in accordance with the terms of Sections 1 or 2, respectively, for a
different number of shares or a different class by reason of any reorganization,
reclassification, subdivision, recapitalization, split-up, combination, exchange
of shares, stock dividend or other similar transaction, the Conversion Ratio and
calculations set forth in this Plan of Merger shall be appropriately adjusted to
reflect such reorganization, reclassification, subdivision, recapitalization,
split-up, combination, exchange of shares, stock dividend or other similar
transaction. This section shall not constitute either party's consent to the
other party effecting such reorganization, reclassification, subdivision,
recapitalization, split-up, combination, exchange of shares, stock dividend or
other similar transaction.
8. Articles of Incorporation of the Surviving Corporation. The Articles
of Incorporation of Surviving Corporation as in effect immediately prior to the
Effective Time shall remain in effect; a copy of the Articles is attached hereto
as Annex A.
9. Bylaws of the Surviving Corporation. The Bylaws of Surviving
Corporation, as in effect immediately prior to the Effective Time, shall be
remain in effect; a copy of the Bylaws is on file with the Surviving Corporation
and will be made available to shareholders of the Surviving Corporation upon
request.
10. Directors and Officers of the Surviving Corporation. As of the
Effective Time, the officers and directors of RSI holding office immediately
prior to the Effective Time shall remain in office until the next annual meeting
of Surviving Corporation or until their successor is duly elected and qualified,
unless the director shall retire, resign, die or be removed, whichever occurs
first.