AGREEMENT AND PLAN OF MERGER
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this
“Agreement”)
is entered into as of March 28, 2019, by and among BK Technologies,
Inc., a Nevada corporation (the “Company”),
BK Technologies Corporation, a Nevada corporation and a direct
wholly owned subsidiary of the Company (“HoldCo”),
and BK Merger Sub, Inc., a Nevada corporation and a direct wholly
owned subsidiary of HoldCo (“Merger
Sub”).
RECITALS
WHEREAS, as of the date hereof, the Company has
the authority to issue 21,000,000 shares, consisting of (i)
20,000,000 shares of common stock, par value $0.60 per share
(“Company Common
Stock”), of which
12,742,807 shares are issued and outstanding, and (ii) 1,000,000
shares of preferred stock, par value $1.00 per share
(“Company Preferred
Stock”), of which no
shares are issued and outstanding;
WHEREAS, as of the date hereof, HoldCo has the
authority to issue 21,000,000 shares, consisting of (i) 20,000,000
shares of common stock, par value $0.60 per share
(“HoldCo Common
Stock”), of which 100
shares are issued and outstanding and held by the Company, and (ii)
1,000,000 shares of preferred stock, par value $1.00 per share
(“HoldCo Preferred
Stock”), of which no
shares are issued and outstanding;
WHEREAS, as of the date hereof, Merger Sub has the
authority to issue 1,000 shares of common stock, par value $0.60
per share (“Merger Sub Common
Stock”), of which 100
shares are issued and outstanding and held by
HoldCo;
WHEREAS,
HoldCo and Merger Sub are newly formed corporations organized for
the sole purpose of participating in the transactions contemplated
herein and actions related thereto, own no assets (other than
HoldCo’s ownership of Merger Sub and nominal capital) and
have taken no actions other than those necessary or advisable to
organize the corporations and to effect the transactions
contemplated herein and actions related thereto;
WHEREAS, the Company desires to reorganize into a
holding company structure pursuant to NRS 92A.180, NRS 92A.200,
NRS 92A.230 and NRS 92A.250 of Chapter 92A, “Mergers,
Conversions, Exchanges and Domestications” of the Nevada
Revised Statutes (“MCED”),
under which HoldCo would become a holding company, by the merger of
Merger Sub with and into the Company (the
“Merger),
and with each share of Company Common Stock being converted in the
Merger into a share of HoldCo Common Stock as of the Effective Time
(as defined below);
WHEREAS,
as of the Effective Time, the designations, rights, powers and
preferences, and the qualifications, limitations and restrictions
of the HoldCo Common Stock and HoldCo Preferred Stock will be the
same as those of the Company Common Stock and Company Preferred
Stock, respectively;
WHEREAS, the Articles of Incorporation of HoldCo
(the “HoldCo
Charter”) and the Bylaws
of HoldCo (the “HoldCo
Bylaws”), which will be
in effect immediately following the Effective Time, contain
provisions identical to the Articles of Incorporation of the
Company (as amended, the “Company
Articles”), and the
Second Amended and Restated Bylaws of the Company (the
“Company
Bylaws”), in effect as of
the date hereof and that will be in effect immediately prior to the
Effective Time, respectively (other than as permitted by NRS
92A.200 of the MCED);
WHEREAS,
on or about the date hereof, the Company and HoldCo will enter into
an Omnibus Amendment to the Company’s Equity Plans (as
defined below) pursuant to which, among other things, the Company
will, contingent upon the consummation of the Merger, transfer to
HoldCo, and HoldCo will assume, sponsorship of all of the
Company’s Equity Plans and all of the Company’s rights
and obligations thereunder effective as of the Effective
Time;
WHEREAS,
the respective boards of directors of HoldCo and the Company have
approved and declared advisable this Agreement and the transactions
contemplated hereby, including, without limitation, the
Merger;
WHEREAS,
the sole director of Merger Sub has (i) approved and declared
advisable this Agreement and the transactions contemplated hereby,
including, without limitation, the Merger, (ii) resolved to submit
the approval of the adoption of this Agreement and the transactions
contemplated hereby, including, without limitation, the Merger, to
the sole stockholder of Merger Sub, and (iii) resolved to recommend
to the sole stockholder of Merger Sub that the sole director
approves the adoption of this Agreement and the transactions
contemplated hereby, including, without limitation, the Merger;
and
WHEREAS,
the parties intend, for United States federal income tax purposes,
that the Merger shall qualify as an exchange described in Section
351 of the Internal Revenue Code of 1986, as amended.
NOW,
THEREFORE, in consideration of the premises and the covenants and
agreements contained in this Agreement, and intending to be legally
bound hereby, the Company, HoldCo and Merger Sub hereby agree as
follows:
1. THE MERGER. In accordance with NRS 92A.180 of the MCED and
subject to, and upon the terms and conditions of, this Agreement,
Merger Sub shall be merged with and into the Company (the
“Merger”),
the separate corporate existence of Merger Sub shall cease, and the
Company shall continue as the surviving corporation of the Merger
(the “Surviving
Corporation”). At the
Effective Time, the effects of the Merger shall be as provided in
this Agreement and in NRS 92A.250 of the
MCED.
2. EFFECTIVE
TIME. As soon as practicable on
or after the date hereof, the Company shall file articles of merger
executed in accordance with the relevant provisions of the MCED,
with the Secretary of State of the State of Nevada (the
“NV Secretary of
State”) and shall make
all other filings or recordings required under the MCED to
effectuate the Merger. The Merger shall become effective at such
time as the articles of merger are duly filed with and accepted by
the NV Secretary of State or at such later date and time as the
parties shall agree and specify in the articles of merger (the date
and time the Merger becomes effective being referred to herein as
the “Effective
Time”).
3. ARTICLES OF INCORPORATION AND
BYLAWS.
(a) From
and after the Effective Time, by virtue of the Merger and without
any action on the part of any party, the Company Articles, as in
effect immediately prior to the Effective Time, shall constitute
the articles of incorporation of the Surviving Corporation until
thereafter amended as provided therein or pursuant to the MCED (the
“Surviving Corporation
Articles”).
(b) From
and after the Effective Time, by virtue of the Merger and without
any action on the part of any party, the Company Bylaws, as in
effect immediately prior to the Effective Time, shall constitute
the bylaws of the Surviving Corporation until thereafter amended as
provided therein or pursuant to applicable law (the
“Surviving Corporation
Bylaws”).
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4. DIRECTORS. The directors of the Company in office immediately
prior to the Effective Time shall be the directors of the Surviving
Corporation and will continue to hold office from the Effective
Time until the earlier of their resignation, removal or retirement
or until their successors are duly elected or appointed and
qualified in the manner provided in the Surviving Corporation
Articles and Surviving Corporation Bylaws, or as otherwise provided
by law.
5. OFFICERS. The officers of the Company in office immediately
prior to the Effective Time shall be the officers of the Surviving
Corporation and will continue to hold office from the Effective
Time until the earlier of their resignation, removal or retirement
or until their successors are duly elected or appointed and
qualified in the manner provided in the Surviving Corporation
Articles and Surviving Corporation Bylaws, or as otherwise provided
by law.
6. ADDITIONAL ACTIONS.
If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that
any deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation its
right, title or interest in, to or under any of the rights,
properties or assets of either Merger Sub or the Company acquired
or to be acquired by the Surviving Corporation as a result of, or
in connection with, the Merger or otherwise to carry out this
Agreement, the officers and directors of the Surviving Corporation
shall be authorized to execute and deliver, in the name and on
behalf of each of Merger Sub and the Company, all such deeds, bills
of sale, assignments and assurances and to take and do, in the name
and on behalf of each of Merger Sub and the Company or otherwise,
all such other actions and things as may be necessary or desirable
to vest, perfect or confirm any and all right, title and interest
in, to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out this
Agreement.
7. CONVERSION OF
SECURITIES. At the Effective
Time, by virtue of the Merger and without any action on the part of
the Company, HoldCo, Merger Sub or any holder of any securities
thereof:
(a) Conversion
of Company Common Stock. Each
share of Company Common Stock issued and outstanding immediately
prior to the Effective Time shall be converted into one validly
issued, fully paid and nonassessable share of HoldCo Common
Stock.
(b) Conversion
of Company Stock Held as Treasury Stock. Each share of Company Common Stock held in the
Company’s treasury shall be converted into one validly
issued, fully paid and nonassessable share of HoldCo Common Stock
to be held immediately after completion of the Merger in the
treasury of HoldCo.
(c) Conversion
of Capital Stock of Merger Sub.
Each share of Merger Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of Common Stock,
par value $0.60 per share, of the Surviving
Corporation.
(d) Rights
of Certificate Holders. Upon
conversion thereof in accordance with this Section
7, all shares of Company Common
Stock shall no longer be outstanding and shall cease to exist, and
each holder of a certificate representing any such shares of
Company Common Stock shall cease to have any rights with respect to
such shares of Company Common Stock except, in all cases, as set
forth in Section 8
herein. In addition, each outstanding
book-entry that, immediately prior to the Effective Time, evidenced
shares of Company Common Stock, shall, from and after the Effective
Time, be deemed and treated for all corporate purposes to evidence
the ownership of the same number of shares of HoldCo Common
Stock.
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8. CERTIFICATES.
At and after the Effective Time until
thereafter surrendered for transfer or exchange in the ordinary
course, each outstanding certificate which immediately prior
thereto represented shares of Company Common Stock, shall be deemed
for all purposes to evidence ownership of and to represent the
shares of HoldCo Common Stock, as applicable, into which the shares
of Company Common Stock, represented by such certificate, have been
converted as herein provided and shall be so registered on the
books and records of HoldCo and its transfer agent. If any
certificate that prior to the Effective Time represented shares of
Company Common Stock shall have been lost, stolen or destroyed,
then, upon the making of an affidavit of such fact by the person or
entity claiming such certificate to be lost, stolen or destroyed
and the providing of an indemnity by such person or entity to
HoldCo, in form and substance reasonably satisfactory to HoldCo,
against any claim that may be made against it with respect to such
certificate, HoldCo shall issue to such person or entity, in
exchange for such lost, stolen or destroyed certificate,
certificated shares representing the applicable shares of HoldCo
Common Stock, in accordance with the procedures set forth in the
preceding sentence.
9. ASSUMPTION OF EQUITY PLANS AND
AWARDS. At the Effective Time,
pursuant to this Merger Agreement and an Omnibus Amendment entered
into between HoldCo and the Company on or about the date hereof
(the “Compensation Plan
Amendment”), the Company
will transfer to HoldCo, and HoldCo will assume, sponsorship of the
Company’s 2007 Incentive Compensation Plan, as amended, and
2017 Incentive Compensation Plan (collectively, the
“Equity
Plans”), along with all
of the Company’s rights and obligations under the Equity
Plans, and all rights of the parties thereto and the participants
therein to acquire shares of Company Common Stock on the terms and
conditions of the Equity Plans, the award agreements and such other
agreements will be converted on a one-for-one basis into rights to
acquire shares of HoldCo Common Stock, in each case, to the extent
set forth in, and in accordance with, the terms of such Equity
Plans, awards and other agreements. From and after the Effective
Time and pursuant to the terms of the Compensation Plan Amendment,
HoldCo shall have all amendment and administrative authority with
respect to such Equity Plans, awards and agreements to the extent
that the Company had such authority immediately prior to the
Effective Time.
10. HOLDCO SHARES.
Prior to the Effective Time, the
Company and HoldCo shall take any and all actions as are necessary
to ensure that each share of capital stock of HoldCo that is owned
by the Company immediately prior to the Effective Time shall be
cancelled and cease to be outstanding at the Effective Time, and no
payment shall be made therefor, and the Company, by execution of
this Agreement, agrees to forfeit such shares and relinquish any
rights to such shares.
11. NO APPRAISAL RIGHTS.
In accordance with the MCED, no
appraisal rights shall be available to any holder of shares of
Company Common Stock in connection with the
Merger.
12. CONTRACTS AND
AGREEMENTS. Except as set forth
in Section 9 of
this Agreement, any and all contracts and agreements with the
Company will not be transferred to the surviving issuer or HoldCo
and will stay with the Company as the Surviving Corporation in the
Merger.
13. SUCCESSOR ISSUER.
The parties hereto intend that HoldCo
be deemed a successor issuer of the Company in accordance with Rule
12g-3 under the Securities Exchange Act of 1934, as amended, and
Rule 414 under the Securities Act of 1933, as amended. At or after
the Effective Time, HoldCo shall file (i) an appropriate report on
Form 8-K describing the Merger and (ii) appropriate amendments to
any Registration Statements of the Company.
14. TERMINATION.
This Agreement may be terminated, and
the Merger and the other transactions provided for herein may be
abandoned, whether before or after the adoption of this Agreement
by the sole stockholder of Merger Sub, at any time prior to the
Effective Time, by action of the board of directors of the Company.
In the event of termination of this Agreement, this Agreement shall
forthwith become void and have no effect, and neither the Company,
HoldCo, Merger Sub nor their respective stockholders, directors or
officers shall have any liability with respect to such termination
or abandonment.
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15. AMENDMENTS. At any time prior to the Effective Time, this
Agreement may be supplemented, amended or modified, whether before
or after the adoption of this Agreement by the sole stockholder of
Merger Sub, by the mutual consent of the parties to this Agreement,
or by action taken by their respective boards of directors;
provided, however, that, no amendment shall be effected subsequent
to the adoption of this Agreement by the sole stockholder of Merger
Sub that by law requires further approval or authorization by the
sole stockholder of Merger Sub or the stockholders of the Company
without such further approval or authorization. No amendment of any
provision of this Agreement shall be valid unless the same shall be
in writing and signed by all of the parties
hereto.
16. GOVERNING LAW.
This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Nevada,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws.
17. COUNTERPARTS.
This Agreement may be executed in one
or more counterparts, each of which when executed shall be deemed
to be an original but all of which shall constitute one and the
same agreement.
18. ENTIRE AGREEMENT.
This Agreement, including the
documents and instruments referred to herein, constitutes the
entire agreement and supersedes all other prior agreements and
undertakings, both written and oral, among the parties, or any of
them, with respect to the subject matter
hereof.
19. SEVERABILITY.
The provisions of this Agreement are
severable, and in the event any provision hereof is determined to
be invalid or unenforceable, such invalidity or unenforceability
shall not in any way affect the validity or enforceability of the
remaining provisions hereof.
(Signature Page Follows)
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IN
WITNESS WHEREOF, the Company, HoldCo and Merger Sub have caused
this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
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By: /s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President
BK TECHNOLOGIES CORPORATION
By: /s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President
BK MERGER SUB, INC.
By: /s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President
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