SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 16, 1996
Date of Report
CASDIM INTERNATIONAL SYSTEMS, INC.
formerly, S.W. Financial Corp.
(Exact name of registrant as specified in its charter)
Colorado
(State or other jurisdiction of incorporation)
33-27742 83-0288100
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(Commission File No.) (I.R.S. Employer I.D.#)
5 Haofan Street, Kiryat-Arie
Petah Tikva, Israel 49130
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(Address of principal executive offices and Zip Code)
972-3-924-7910
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(Registrant's telephone number, including area code)
ITEM 5. Other Events.
On or about September 16, 1996, the Company mailed to its shareholders (i)
the Notice of Annual Meeting and Proxy Statement and accompanying Transmittal
Letter to Shareholders, and (ii) Proxy Card pertaining to the Annual Meeting of
Shareholders to be held October 16, 1996, copies of which are annexed hereto as
Exhibits 1 and 2, respectively.
Accompanying this mailing was the Chairman's Letter to Shareholders, a copy
of which is annexed hereto as Exhibit 3, and a copy of the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1995, such report having
previously been filed with the Commission (see Exhibit 4).
ITEM 7. Financial Statements and Exhibits
(b) The following exhibits are hereby made part of this Form 8-K:
Exhibit No.1 Letter to Shareholders, Notice of Annual
Meeting of Shareholders and Proxy
Statement relating to 1996 Annual Meeting.
Exhibit No. 2 Form of Proxy Card
Exhibit No. 3 Chairman's Letter to Shareholders
*Exhibit No. 4 Annual Report on Form 10-KSB for the year
ended December 31, 1995.
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*Incorporated by reference to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1995.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CASDIM INTERNATIONAL SYSTEMS, INC.
By: /s/Yehuda Shimshon
-----------------------------
Yehuda Shimshon, President
Dated: October 7, 1996
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Exhibit 1
CASDIM INTERNATIONAL SYSTEMS, INC.
90 Park Avenue
New York, New York 10016
September 16, 1996
To Our Shareholders:
On behalf of the Board of Directors, I cordially invite you to attend
the 1996 Annual Meeting of the Shareholders of Casdim International Systems,
Inc. The Annual Meeting will be held at 10:00 a.m., local time, on Wednesday,
October 16, 1996, at the offices of Carter, Ledyard & Milburn, 114 West 47th
Street, 17th floor, New York, New York.
We are gratified by your interest in Casdim International Systems, Inc.
and are pleased that you are part of our family of shareholders. We hope that
you will be able to attend the meeting.
The matters expected to be acted upon at the meeting are described in
the attached Proxy Statement. During the meeting, shareholders who are present
at the meeting will have the opportunity to ask questions and express their
views.
It is important that your views be represented whether or not you are
able to be present at the Annual Meeting. Please sign and date the enclosed
proxy card and promptly return it to us in the postpaid envelope provided. The
return of a proxy card will not prevent you from voting in person at the
meeting.
Sincerely,
Yehuda Shimshon
Chairman, President & CEO
CASDIM INTERNATIONAL SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on October 16, 1996
September 16, 1996
The Annual Meeting of Shareholders of Casdim International Systems,
Inc., a Colorado corporation (the "Company"), will be held at the offices of
Carter, Ledyard & Milburn, 114 West 47th Street, 17th floor, New York, New York,
on Wednesday, October 16, 1996 at 10:00 a.m., local time, for the following
purposes:
i. To elect five directors for the ensuing year;
ii. To approve a Plan of Merger under which the Company would
be merged into a wholly-owned subsidiary of the Company incorporated in the
State of Delaware;
iii. To approve the Company's 1996 Stock Option Plan; and
iv. To act upon any other matters that may properly be brought
before the meeting and any adjournment thereof.
Shareholders of record at the close of business on September 9, 1996
will be entitled to notice of and to vote at the meeting. Shareholders who do
not vote to approve the Plan of Merger will be entitled to dissenters' rights
under Article 113 of the Colorado Business Corporation Act, a copy of which is
attached to the accompanying Proxy Statement.
By order of the Board of Directors,
Gary Tober
Secretary
PLEASE SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE
PROVIDED FOR THAT PURPOSE.
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CASDIM INTERNATIONAL SYSTEMS, INC.
90 Park Avenue
New York, New York 10016
Proxy Statement
Annual Meeting of Shareholders
October 16, 1996
This Proxy Statement is being furnished to shareholders of Casdim
International Systems, Inc., a Colorado corporation (the "Company"), in
connection with the Annual Meeting of the Company's Shareholders (the "Annual
Meeting") to be held at 10:00 a.m., local time, on Wednesday, October 16, 1996
at the offices of Carter, Ledyard & Milburn, 114 West 47th Street, 17th floor,
New York, New York, and at any adjournment thereof. The Board of Directors of
the Company (the "Board") is soliciting proxies to be voted at the Annual
Meeting.
This Proxy Statement and Notice of Annual Meeting, the proxy card and
the Company's Annual Report on Form 10-KSB are expected to be distributed to
shareholders beginning September 16, 1996.
Proxy Procedure
Only shareholders of record at the close of business on September 9,
1996 (the "Record Date"), are entitled to receive notice of and to vote in
person or by proxy at the Annual Meeting.
Shareholders are urged to mark the boxes on the proxy card to indicate
how their shares are to be voted. When a proxy card is returned properly signed
and dated, the shares represented thereby will be voted in accordance with the
instructions marked on the proxy card. If a shareholder returns a signed and
dated proxy card but does not mark the appropriate boxes, the shares represented
by that proxy card will be voted for the election as directors of the five
persons nominated herein, and for the Plan of Merger and the 1996 Stock Option
Plan described herein. The proxy card gives the individuals named as proxies
discretionary authority to vote the shares represented on any other matter that
is properly presented for action at the Annual Meeting.
A shareholder may revoke his or her proxy at any time before it is
voted by: (i) giving notice of revocation in writing to the Secretary of the
Company at the address given above; (ii) returning a proxy card bearing a letter
date; or (iii) appearing in person and voting at the Annual Meeting.
Cost of Solicitation
The cost of soliciting proxies will be borne by the Company. Proxies
may be solicited in person or by telephone or other means by directors, officers
or other regular employees of the Company, who will not be specially compensated
therefor. The Company will reimburse brokerage houses and other custodians,
nominees and fiduciaries for their expenses in forwarding proxy material to the
beneficial owners of stock.
Voting
The outstanding voting stock of the Company as of the Record Date
consisted of 13,634,000 shares of Common Stock, each of which is entitled to one
vote. A majority of the outstanding shares of the Common Stock, represented in
person or by proxy at the Annual Meeting, will constitute a quorum.
Directors are elected by a plurality of the votes cast, i.e., a
shareholder can vote all his or her shares for each of up to five persons, and
the five persons who receive the highest number of votes cast in favor of their
election will be elected to the Board. The affirmative vote of two-thirds of all
the votes entitled to be cast at the Annual Meeting will be required for the
proposal to approve the Plan of Merger (the "Merger Proposal"). Thus,
shareholders who do not vote on, or who vote to abstain from, the Merger
Proposal will in effect be voting against the Merger Proposal. The proposal to
approve the 1996 Stock Option Plan (the "Option Plan Proposal") will require the
affirmative vote of a majority of the votes cast on the Option Plan Proposal.
Thus, shareholders who do not vote on, who vote to abstain from, the Option Plan
Proposal will not affect the outcome of the Option Plan Proposal, provided that
a quorum is present at the Annual Meeting. A broker who holds shares of Common
Stock as nominee for a beneficial owner will have discretionary authority to
vote such shares for the election of directors and the Option Plan Proposal, but
not the Merger Proposal, if the broker has not received voting instructions from
such beneficial owner by the tenth day before the Annual Meeting, provided that
this Proxy Statement is transmitted to such beneficial owner at least 15 days
before the Annual Meeting.
Management has been advised by Yehuda Shimshon, the Company's Chief
Executive Officer, and Cedarwood Trading & Investment Ltd., who together are the
beneficial owners of approximately 60.5% of the outstanding shares of Common
Stock, that they presently intend to vote in favor of all five of the nominees
for director proposed below, and in favor of the Merger Proposal and the Option
Plan Proposal.
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I. ELECTION OF DIRECTORS
Five directors are to be elected at the Annual Meeting to serve until
the next Annual Meeting of Shareholders and the due election and qualification
of their successors. Duly executed and returned proxies will be voted, unless
otherwise specified, in favor of the election as directors of the five persons
hereinafter named. Should any of the nominees not be available for election, the
proxies will be voted for a substitute nominee designated by the Board. It is
not expected that any of the nominees will be unavailable. All of the five
nominees are now members of the Board.
Background information with respect to the five incumbent director
nominees appears below. See "Security Ownership of Certain Beneficial Owners and
Management" for information regarding such persons' beneficial ownership of
Common Stock.
Yehuda Shimshon, 43, Chairman of the Board, President, CEO, and Chief
Financial Officer of the Company since December 1995, began his career in the
Israeli Defense Forces and rose to the rank of Captain. Upon his discharge from
the Israel Defense Forces in 1977, he began a career as a consultant to
organizations active in international trade throughout Europe and Africa. Mr.
Shimshon became active in the field of computer research, developing and writing
programs which led to the establishment by him of Casdim Software Systems Ltd.
in 1986, an Israeli company which develops clinical laboratory management
systems ("CSS Ltd."), and Casdim Interactive Systems Ltd. in 1994, an Israeli
company and wholly-owned subsidiary of the Company which designs and develops
interactive kiosks and customized databases and performs network integration
("Casdim Israel"). Mr. Shimshon has been the Chief Executive Officer of these
companies since their inception.
Israel Shimshon, 66, a director of the Company since March 1996, has
been principally employed as the managing director of Hagadish Insurance Agency,
an Israeli general insurance agency, since 1953. Israel Shimshon is the father
of Yehuda Shimshon.
Doron Leave, 42, a director of the Company since August 1996, has been
the Company's Vice President of Operations since July 1996. From September 1990
to July 1996, Mr. Leave was employed by Bank Hapoalim Ltd., most recently as
Branch Manager of its Allenby, Tel Aviv branch. Mr. Leave holds a degree in
Business Administration from Tel Aviv University.
Ilan Mintz, 33, a director of the Company since December 1995, has been
principally employed in various executive positions with CSS Ltd. Mr. Mintz
began his employment with CSS Ltd., a company wholly owned by Mr. Shimshon, in
1990 as manager of the Customer Support and Training Division. In June 1993 he
became the director of the Marketing Division of CSS Ltd. and has served as
General Manager since January 1995.
David Tamir, 52, a director of the Company since May 1996, currently is
engaged as an independent consultant. From May 1992 to December 1995, Mr. Tamir
was president of
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Powerspectrum Technology, a majority-owned subsidiary of Geotek Communications,
Inc. ("Geotek"), a wireless communications provider. From January 1996 to May
1996 Mr. Tamir was employed in Israel by Geotek in a non-executive position.
From 1990 until May 1992, Mr. Tamir served as a representative of the Israeli
Armament Development Authority in Washington, D.C.
The Board recommends that the shareholders vote FOR the election of each nominee
for Director named above.
Board of Directors
The business and affairs of the Company are managed under the direction
of the Board, composed, as of the date of this Proxy Statement, of three
non-employee directors (Messrs. Leave, Tamir and Israel Shimshon) and two
employee directors. The Board establishes the overall policies and standards for
the Company and reviews the performance of management. Members of the Board are
kept informed of the Company's operations at meetings of the Board and through
reports and discussions with management.
An Audit Committee of the Board was formed in May 1996, composed of
Messrs. Tamir and Mintz. The duties of the Audit Committee include the review of
any transaction of the Company with affiliated parties or entities in excess of
$60,000, the recommendation of the appointment of independent public accountants
for the Company, review of the scope of audits proposed by the independent
public accountants, and consultations with the independent public accountants on
matters relating to internal financial controls and procedures. The Board has no
standing nominating or compensation committees.
The Company currently does not compensate its directors for their
services as such, although it reimburses directors for their out-of-pocket
expenses incurred in the performance of their duties as directors of the
Company.
Under the Company's 1996 Directors' Stock Option Plan (the "Director
Option Plan"), a total of 100,000 shares of Common Stock has been reserved for
issuance upon exercise of options granted to directors of the Company who are
not employees of the Company or any subsidiary. The Director Option Plan
provides for the granting of options which (i) are not "incentive stock
options,"(ii) have a per-share exercise price equal to 100% of the fair market
value per share on the option grant date, and (iii) expire five years from the
grant date. The Board has the authority to determine which directors will be
granted options, to determine any vesting schedule of options to be granted and
to make all other determinations which the Board deems necessary or advisable
for the administration of the Director Option Plan. No options have yet been
granted under the Director Option Plan.
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Security Ownership of Certain Beneficial Holders and Management
The following table shows the number of shares of the Company's Common
Stock beneficially owned by each person known by the Company to own beneficially
more than five percent of the Company's Common Stock, by each individual
director and executive officer of the Company, and by all of the current
directors and executive officers as a group as of the Record Date.
Shares
Name (1) Beneficially Owned Percent of Class
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Yehuda Shimshon 8,250,000 (2) 60.5%
Cedarwood Trading & Investment Ltd. 4,000,000 29.3%
Israel Shimshon None ---
Doron Leave None ---
Ilan Mintz None ---
David Tamir None ---
Gary P. Tober None ---
All executive officers and directors
as a group (6 persons) 8,250,000 60.5%
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(1) The address for Yehuda Shimshon is 90 Park Avenue, New York, New York
10016. The address of Cedarwood is c/o Bank of Bermuda, 6 Front Street,
Hamilton HM 11, Bermuda.
(2) Includes the 4,250,000 shares held by Cedarwood, in which entity Yehuda
Shimshon has a controlling beneficial interest.
The Common Stock is not registered under Section 12 of the Securities
Exchange Act of 1934. Accordingly, the Company's directors, officers and major
stockholders are not subject to the reporting requirements of Section 16(a) of
the Securities Exchange Act of 1934 with respect to their beneficial ownership
and acquisitions and dispositions of Common Stock, or to the liability
provisions of Section 16(b) of the said Act.
Executive Compensation
None of the Company's executive officers received any compensation
during 1995. Yehuda Shimshon's salary for 1996 is expected to be $240,000. The
Company does not have any retirement
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plans for its executives. There are currently no employment agreements between
the Company and any of its officers.
Stock Options
There were no options granted to or exercised by any officers or
directors in 1995.
Certain Transactions
In October 1995, Casdim Israel entered into an agreement with CSS Ltd.,
a company wholly owned by Yehuda Shimshon. Pursuant to this agreement, Casdim
Israel paid CSS Ltd. $700,000 for services and products to be supplied by CSS
Ltd. to the Company. These products and services included: (i) adaptation of the
Scope(TM) LIS system operating in the 140 laboratories of Kupat Holim Klalit
("Kupat Holim") to work with the medical kiosk; (ii) development and
implementation of a central data base for laboratory test results; (iii)
implementation of the "Laboratory Test Results Central Data Base" to work with
the 140 laboratories and 400 clinics of Kupat Holim; and (iv) communication
software and adaptation of various interfaces between CSS Ltd. and Casdim
Israel's products. The agreement also provided that in the event Kupat Holim or
other companies purchased the above-mentioned products from CSS Ltd., the
proceeds, up to the sum of $700,000 would be repaid to Casdim Israel. On October
31, 1995, Kupat Holim ordered a central data base for laboratory test results
from CSS Ltd. for $260,000, excluding additional payments covering certain
extras. In January 1996, CSS Ltd. paid $125,000 of the $260,000 to Casdim
Israel. The Company expects that the remaining amount due under the agreement
will be received later in 1996.
Also in October 1995, Casdim Israel loaned CSS Ltd. $300,000 at a rate
of interest linked to the Israeli CPI, which loan was repaid in 1996. In January
1995, Casdim Israel purchased a pending patent from CSS Ltd. relating to the
medical multi-media kiosks for the sum of $500,000.
II. THE MERGER PROPOSAL
General
The Board has unanimously approved, and for the reasons discussed
below, recommends that the shareholders approve, the Plan of Merger, a copy of
which is attached to this Proxy Statement as Exhibit A. In the Merger, the
Company would be merged with and into a wholly-owned subsidiary of the Company
incorporated in the State of Delaware ("Delco"), Delco's name would be changed
to the Company's name, and each outstanding share of the Company's Common Stock
would be converted into a share of the common stock of Delco ("Delco Common
Stock"). The assets and business operations of Delco after the Merger would be
identical to those of the Company immediately prior to the Merger. Thus, the
primary effect of the Merger would be a change in the corporate state of
incorporation from Colorado to Delaware.
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Exchange of Certificates
Shareholders may, but will not be required to, exchange their
certificates of the Company's Common Stock for certificates evidencing their
interest in Delco.
Reasons for the Merger
The Company is a Colorado corporation and the rights of the Company's
shareholders are therefore governed by Colorado law. However, the Company, which
has not had any operational ties to or connections with Colorado for many years,
recently established its executive offices in New York City and maintains its
development facilities in Israel. Accordingly, the Company's contacts with the
State of Colorado are not significant. Additionally, many American corporations,
including a number of the largest and most successful enterprises, have chosen
Delaware for their state of incorporation. Because of the large number of
corporations maintaining their incorporation in Delaware and the policies of
Delaware to encourage incorporation there, the judiciary in Delaware over the
years has become particularly familiar with corporate issues, and a substantial
body of case law has developed construing the law of Delaware and establishing
public policies affecting corporations. As a consequence, the Delaware corporate
law has been, and presumably will continue to be, interpreted and tested in a
number of significant cases, thus tending to assure a significant measure of
predictability with respect to legal aspects of corporate affairs. Since there
is a much smaller body of case law interpreting Colorado corporate statutes,
there is less certainty in the interpretation of such statutes. Accordingly, it
is appropriate, in the opinion of the Board, to reorganize the Company as a
Delaware corporation, and the Board recommends that the shareholders vote to
approve the Plan of Merger.
Certain U.S. Federal Income Tax Consequences
The following discussion summarizes the principal United States Federal
income tax consequences associated with the proposed Merger under the Internal
Revenue Code of 1986, as amended (the "Code"). The following discussion does not
describe all of the potentially relevant tax considerations; accordingly, each
holder of Company Common Stock should consult his own tax advisor regarding the
tax consequences of the proposed Merger in light of such holder's own situation,
including the application and effect of any state, local or foreign income and
other tax laws. This information is directed to Shareholders of the Company who
hold their Company Common Stock as "capital assets" within the meaning of the
Code.
Special tax consequences not described below may be applicable to
particular classes of taxpayers, including financial institutions,
broker-dealers, persons who are not citizens or residents of the United States
or who are foreign corporations, foreign partnerships or foreign estates or
trusts as to the United States, and holders who acquired their Company Common
Stock through the exercise of an employee stock option or otherwise as
compensation.
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No rulings have been or will be requested from the Internal Revenue
Service with respect to any of the matters discussed herein. The discussion is
based upon the Federal income tax laws in effect on the date hereof; there can
be no assurance that future legislation, regulations, administrative rulings or
court decisions will not adversely affect the accuracy of the statements
contained herein.
Management believes that the Merger would constitute a reorganization
within the meaning of Section 368(a)(1)(A) of the Code with the result that for
United States federal income tax purposes:
(a) No gain or loss will be recognized by the Company or Delco in
the Merger.
(b) Each Shareholder of the Company will not recognize gain or
loss upon the exchange of Company Common Stock in the Merger
for Delco Common Stock.
(c) The basis of the Delco Common Stock received by a Shareholder
of the Company in the Merger in exchange for Company Common
Stock will, in the aggregate, be the same as the aggregate
basis of the Company Common Stock surrendered in exchange
therefor.
(d) The holding period of the Delco Common Stock received by a
Shareholder of the Company in the Merger in exchange for
Company Common Stock will include the period during which the
shares of Company Common Stock surrendered in the Merger were
held.
There can be no assurance that the Merger will constitute a
reorganization as set forth above. In the event the Merger does not constitute a
reorganization for Federal income tax purposes, the Merger will be a taxable
event. In such case, each shareholder of the Company will recognize gain or loss
equal to the difference between (i) the per share fair market value as of the
effectiveness of the Merger of the Delco Common Stock received, and (ii) such
shareholder's per share tax basis in the Company Common Stock exchanged
therefor. Such gain or loss will be treated as a capital gain or loss if the
shares of Company Common Stock were held as capital assets by the shareholder.
Any shareholder of the Company who receives cash upon the exercise of
appraisal rights (see below) will, assuming the holder does not own (actually or
constructively) any Delco Common Stock after the Merger, recognize capital gain
or loss equal to the difference between the basis of the Company Common Stock
surrendered and the cash received. A shareholder of the Company who does own
(actually or constructively) Delco Common Stock after the Merger may recognize
either a dividend equal to the amount of the cash received or a capital gain or
loss as described above.
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The Federal income tax consequences set forth above are for general
information only. Each shareholder is urged to consult his own tax advisor to
determine the particular tax consequences of the Merger, including the
applicability and effect of federal, state, local and foreign tax laws.
Appraisal Rights
Shareholders who do not vote to approve the Plan of Merger will be
entitled to dissenters' rights under Article 113 of the Colorado Business
Corporation Act, a copy of which is attached to this Proxy Statement as Exhibit
B. The provisions of Article 113 are technical in nature and complex.
Shareholders considering whether to exercise dissenters' rights should consult
Colorado counsel, since failure to comply strictly with the provisions of
Article 113 may result in termination or waiver of such rights.
SUMMARY COMPARISON OF SHAREHOLDER RIGHTS UNDER
DELAWARE AND COLORADO CORPORATE LAW
The Company is incorporated in Colorado. Shareholders of the Company,
whose rights as shareholders are currently governed by Colorado law and the
Company's Colorado Articles of Incorporation and By-Laws, will, upon
effectiveness of the Merger become shareholders of a Delaware corporation and
their rights will be governed by Delaware law and Delco's Delaware Certificate
of Incorporation and By-Laws. Although it is impractical to note all of the
changes in rights of the shareholders of the Company resulting from the Merger,
the following is a summary of the more significant of such changes.
Decreased Authorized Common Stock
The Company's Colorado Articles of Incorporation authorizes 500,000,000
shares of Common Stock and 100,000,000 shares of Preferred Stock, $0.00001 par
value per share. The authorized share capital of Delco after the Merger will be
30,000,000 shares of Common Stock, par value $0.01 per share, and no shares of
preferred stock. The change in par value will result in no change to the overall
capitalization of the Company. There will be a reclassification of the dollar
amounts recorded as capital stock and additional paid-in capital as presented in
the consolidated balance sheets. The amount of the reclassification adjustment
will be approximately $90,000 at December 31, 1995.
Voting Rights
Colorado law requires approval of a merger, share exchange,
dissolution, the sale of substantially all of a corporation's assets, or
amendments to a corporation's Articles of Incorporation, by a vote of a majority
of the outstanding shares of the corporation entitled to vote thereon (or
two-thirds in the case of a Colorado corporation, like the Company, that was in
existence
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on June 30, 1994 and whose articles of incorporation do not require a greater
vote). Under Delaware law, such matters, as well as corporate consolidations
(which are not provided for under Colorado law) require approval by only a
majority of the outstanding stock entitled to vote thereon unless otherwise
expressly provided in the certificate of incorporation.
Shareholder Action Without a Meeting
Under Colorado law, any action required or permitted to be taken at a
meeting of the Company's shareholders may be taken without a meeting if all
shareholders entitled to vote thereon consent to such action in writing.
Delaware law permits corporate action without a meeting of shareholders upon the
written consent of that number of shares necessary to authorize the proposed
corporate action being taken, unless the certificate of incorporation expressly
provides otherwise.
Dividends
Colorado law prohibits distributions to shareholders if, after giving
effect to the distribution, (a) the corporation would not be able to pay its
debts as they become due, or (b) the corporation's total assets would be less
than the sum of its total liabilities plus (unless the articles of incorporation
provide otherwise) the amount of any liquidation preferences. A Delaware
corporation may pay dividends not only out of surplus but also out of net
profits for the fiscal year in which declared or out of net profits for the
preceding fiscal year, even if it has no surplus, provided that after such
payment capital shall not be less than an amount represented by all classes of
stock having a preference upon the distribution of assets.
Appraisal Rights
Colorado law permits appraisal rights, in the case of the consummation
of a plan of merger or share exchange, a sale, lease, exchange or other
disposition of all or substantially all of the property of a corporation or an
amendment to the articles of incorporation which "materially and adversely
affects" either preferential or redemption rights or excludes or limits the
right of the shares to vote or to cumulate votes. Appraisal rights are not
available for shares of stock listed on a national securities exchange or on the
national market system of the national association of securities dealers
automated quotation system or held of record by more than 2,000 shareholders.
Under Delaware law, appraisal rights are available only in connection with a
statutory merger or consolidation, except that such rights are not available
when the corporation is to be the surviving corporation and no vote of its
shareholders is required for the merger or, unless otherwise provided in the
certificate of incorporation, for shares of stock listed on a national
securities exchange or held of record by more than 2,000 shareholders, unless
such shareholders are required by the terms of the merger to accept anything
other than shares of stock of the surviving corporation, shares of stock of
another corporation which are so listed or held by such number of record
holders, cash in lieu of fractional shares of such stock, or any combination
thereof.
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Provisions Concerning Directors and Officers
Indemnification
In general, Colorado law provides that a Colorado corporation may
indemnify a person made a party to a proceeding because such person is or was a
director or officer of such corporation, against liability incurred in the
proceeding if the person conducted himself or herself in good faith and
reasonably believed that his or her conduct was in the best interests of the
corporation, and, in the case of any criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful. Although Delaware
law includes a similar provision, it is specifically stated not to be exclusive
of any other rights to which a director or officer may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Loans
Colorado law provides that the board of directors shall not authorize a
loan or guaranty to a director or an entity in which a director has a financial
interest until at least ten days after written notice of the proposed
authorization has been given to the shareholders who would be entitled to vote
if such loan or guaranty had been submitted to a shareholders' vote. Delaware
law permits the board of directors to authorize loans to corporate employees
(including directors) if, in the judgment of the board, such loan may reasonably
be expected to benefit the corporation.
Removal of Directors
The Company's By-laws currently provide that directors may be removed
with or without cause by a vote of shareholders holding a majority of the shares
entitled to vote at an election of directors. Under Delaware law, this right
would remain unchanged. Delaware law provides that all of the directors may be
removed with or without cause by a vote of the holders of a majority of the
outstanding shares of the Company entitled to vote in the election of directors.
Anti-Takeover Provisions
Delaware law provides that a person who acquires stock of a corporation
representing 15% or more of the outstanding stock of any class or series
entitled to vote generally in the election of directors ("voting stock") becomes
an "interested stockholder," and the corporation may not effect mergers or
certain other "business combinations" with the interested stockholder for a
period of three years, unless (i) prior to the date on which a person becomes an
interested stockholder, the board of directors approves either the business
combination or the transaction which results in the person's becoming an
interested stockholder, or (ii) the interested stockholder is able, by means of
the tender offer or other transaction by which he becomes an interested
stockholder, to acquire ownership of stock of the corporation representing at
least 85% of the outstanding voting stock (excluding, for purposes of
determining the outstanding stock, shares owned by directors of the corporation
who are also officers and shares owned by certain employee stock plans), or
(iii) the
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board of directors approves a business combination and such business combination
is authorized by a vote of at least two-thirds of the total voting stock not
owned by the interested stockholder. The definition of interested stockholder
under Delaware law does not include (i) persons who owned as of December 23,
1987 stock of the corporation representing 15% or more of the outstanding voting
stock, (ii) persons who received stock of the corporation representing 15% or
more of the outstanding voting stock as a gift or bequest from a person who
owned it before that date, or (iii) persons whose ownership of the voting stock
rises over the 15% threshold as a result of action taken by the corporation
(stock as a stock repurchase) unless that person thereafter acquires additional
shares.
A "business combination" is defined broadly in the Delaware law to
include any merger or consolidation with or caused by the interested
stockholder, and the sale, lease, exchange, mortgage, pledge, transfer or other
disposition to the interested stockholder of any assets of the corporation
having a market value equal to or greater than 10% of the aggregate market value
of the assets of the corporation. "Business combination" is also defined to
include transfers of stock of the corporation or a subsidiary to the interested
stockholder (except for transfers in a conversion, exchange or pro rata
distribution which does not increase the interested stockholder's proportionate
ownership of a class or series), or any receipt by the interested stockholder
(except proportionately as a stockholder) of any loans, advances, guarantees,
pledges or other financial benefits.
There are no comparable provisions under Colorado law.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR THE PLAN
OF MERGER. SHARES REPRESENTED BY PROPERLY EXECUTED, DATED AND RETURNED PROXIES
WILL BE VOTED FOR APPROVAL OF THE PLAN OF MERGER, UNLESS A PROXY IS SPECIFICALLY
MARKED TO DISAPPROVE, OR ABSTAIN FROM VOTING FOR, THE PLAN OF MERGER.
III. OPTION PLAN PROPOSAL
The Board of Directors of the Company has unanimously adopted, subject
to shareholder approval, the Company's 1996 Stock Option Plan (the "1996 Plan")
which authorizes the issuance of options to purchase up to 500,000 shares of
Common Stock of the Company (or Delco in the event that the Merger is effected).
A copy of the 1996 Plan is attached to this Proxy Statement as Exhibit C. The
Board believes that establishing the 1996 Plan (i) will provide the Company with
significant means to attract and retain talented personnel, (ii) will result in
saving cash which otherwise would be required to maintain current key employees
and adequately reward key personnel, and (iii) consequently will enhance to the
Company's ability to be competitive.
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1996 Plan
The 1996 Plan provides for the granting of incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), to key employees and for the
granting of options which are not Incentive Stock Options ("Nonstatutory
Options") to key employees and consultants. The 1996 Plan will be administered
by the Board, which will determine the terms and conditions of the options
granted under the 1996 Plan, including the exercise price, number of shares
subject to each option and the vesting thereof. As of the date hereof, no
options have been issued under the 1996 Plan.
The exercise price of all Incentive Stock Options granted under the
1996 Plan must be at least equal to the fair market value of the Common Stock of
the Company on the date of grant. If an incentive stock option is granted to an
individual who owns shares having more than 10% of the combined voting power of
all classes of shares of the Company, the option price must be at least 110% of
the fair market value of the shares subject to the option on the date of grant
and the option cannot be for a term of more than five years. The exercise price
of all Nonstatutory Options granted under the 1996 Plan must be at least 75% of
the fair market value of the Company's Common Stock on the date of grant. Except
as mentioned above, the terms of options granted under the 1996 Plan may not
exceed 10 years. Shares subject to options under the 1996 Plan may be purchased
for cash or, with the consent of the Board, in exchange for shares of the
Company's Common Stock already owned by the optionee (valued at their fair
market value on the date of exercise), or by a promissory note.
The 1996 Plan may be amended, suspended or terminated by the Board, but
no such action may impair rights under a previously granted option. No options
may be granted under the 1996 Plan after May 2006.
Options terminate before their expiration dates one year after the
optionee's death while in the employ of the Company, three months after the
optionee's retirement for reasons of age or disability or involuntary
termination of employment other than for cause, and immediately upon voluntary
termination of employment or involuntary termination of employment for cause.
The Board may, in its discretion, modify, revise or terminate the 1996
Plan at any time, but the aggregate number of shares issuable pursuant to
options may not be increased (except in the event of certain changes in the
Company's capital structure), the eligibility provisions and minimum option
price may not be changed, and the permissible maximum term of options may not be
increased, without the consent of the Company's stockholders.
The 1996 Plan also contains provisions protecting optionees against
dilution of the value of their options in the case of stock splits, stock
dividends or other changes in the capital structure of the Company, in the event
of any proposed reorganization or merger involving the Company or in the event
of any spin-off or distribution of assets of the Company to stockholders.
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Income Tax Consequences
Certain of the U.S. Federal income tax consequences applicable to the
1996 Plan are set forth below. This discussion is intended to be general in
scope.
With respect to Incentive Stock Options granted under the 1996 Plan:
The recipient of an Incentive Stock Option will not realize any taxable income
and the Company will not be entitled to a deduction upon the grant of such
option. When an optionee exercises an Incentive Stock Option while employed by
the Company or within the permitted periods after termination of employment, no
ordinary income will be recognized by the optionee at that time but the excess
of the fair market value of shares acquired by such exercise over the option
price will be an item of tax preference for purposes of the Federal alternative
minimum tax applicable to individuals. If the shares acquired upon exercise are
not disposed of until more than two years from the date the option was granted
or one year after the date of exercise, the excess of the sale proceeds over the
aggregate option price of such shares will be long-term capital gain to the
optionee, and the Company will not be entitled to a tax deduction under such
circumstances. If shares are disposed of prior to such date (a "disqualifying
disposition"), the excess of the fair market value of such shares at the time of
exercise over the aggregate option price (but generally not more than the amount
of gain realized on the disposition) will generally be ordinary income to the
optionee at the time of such disqualifying disposition. In the event of a
disqualifying disposition, the Company generally will be entitled to a Federal
income tax deduction in an amount equal to the amount of ordinary income so
recognized.
With respect to Nonstatutory Options granted under the 1996 Plan: The
recipient of a Nonstatutory Option will not realize any taxable income and the
Company will not be entitled to a deduction upon the grant of such option. When
an optionee exercises a Nonstatutory Option, the difference between the option
price and any higher fair market value of the shares on the date of exercise
will be ordinary income to the optionee and generally will be allowed as a
deduction for Federal income tax purposes to the Company. When an optionee
disposes of shares acquired by the exercise of the option, any amount received
in excess of the fair market value of the shares on the date of exercise will be
treated as long-term or short-term capital gain to the optionee, depending upon
the holding period of the shares If the amount received is less than the market
value of the shares on the date of exercise, the loss will be treated as
long-term or short-term capital loss, depending upon the holding period of the
shares.
The tax consequences of the payment of the option exercise price by
delivery of Common Stock of the Company may differ from the description set
forth above.
THE BOARD RECOMMENDS A VOTE FOR THE OPTION PLAN PROPOSAL.
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OTHER MATTERS
The Board does not intend to bring any matters before the Annual
Meeting other than those specifically set forth in the attached Notice of the
Annual Meeting and knows of no matters to be brought before the Annual Meeting
by others. If any other matters properly come before the Annual Meeting, it is
the intention of the persons named in the accompanying proxy to vote such proxy
in accordance with the judgment of the Board.
Shareholders of the Company may submit proposals for possible inclusion
in the proxy material distributed by the Company for future meetings of its
shareholders. In order to be considered for inclusion in the proxy material for
the 1997 annual meeting of shareholders, a shareholder's proposal must be
received not later than May 19, 1997 at the Company's headquarters, 90 Park
Avenue, New York, New York 10016, Attention: Secretary.
Financial statements for the Company are included in its Annual Report
on Form 10-KSB for the year 1995, which is expected to be mailed to the
Shareholders beginning September 16, 1996.
By Order of the Board of Directors,
Gary Tober
Secretary
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EXHIBIT A
PLAN OF MERGER
PLAN OF MERGER adopted by Casdim International Systems, Inc., a
business corporation organized under the laws of the State of Colorado, by
resolution of its Board of Directors on August 6, 1996, and adopted by Casdim
Delaware, Inc., a business corporation organized under the laws of Delaware, by
resolution of its Board of Directors on September 6, 1996. The names of the
corporations planning to merge are Casdim International Systems, Inc., a
business corporation organized under the laws of the State of Colorado ("Casdim
Colorado"), and Casdim Delaware, Inc., a business corporation organized under
the laws of Delaware. The name of the surviving corporation into which Casdim
Colorado plans to merge is Casdim Delaware, Inc.
1. Casdim Colorado and Casdim Delaware, Inc. shall, pursuant to the
provisions of the Colorado Business Corporation Act and pursuant to the laws of
Delaware, the jurisdiction of organization of Casdim Delaware, Inc., be merged
with and into a single corporation, to wit, Casdim Delaware, Inc., which shall
be the surviving corporation at the effective time and date of the merger and
which is sometimes hereinafter referred to as the "surviving corporation," and
which shall continue to exist as said surviving corporation under the name of
Casdim International Systems, Inc. pursuant to the provisions of the laws of
Delaware. The separate existence of Casdim Colorado, which is sometimes
hereinafter referred to as the "non-surviving corporation," shall cease at the
effective time and date of the merger in accordance with the provisions of the
Colorado Business Corporation Act.
2. The certificate of incorporation of the surviving corporation
immediately prior to the merger will continue to be the certificate of
incorporation of said surviving corporation after the merger, and said
certificate of incorporation shall continue in full force and effect until
amended and changed in the manner prescribed by the provisions of the laws of
the jurisdiction of organization of the surviving corporation.
3. The bylaws of the surviving corporation immediately prior to the
merger will continue to be the bylaws of said surviving corporation after the
merger, and will continue in full force and effect until changed, altered, or
amended as therein provided and in the manner prescribed by the provisions of
the laws of the jurisdiction of organization of the surviving corporation.
4. The directors and officers in office of the surviving corporation at
the effective time and date of the merger will continue to be the directors and
officers of the surviving corporation after the merger, all of whom shall hold
their respective offices until the election and qualification of their
respective successors or until their tenure is otherwise terminated in
accordance with the bylaws of the surviving corporation.
5. Each issued share of the non-surviving corporation immediately
before the effective time and date of the merger shall be converted into one
share of the surviving corporation. The issued shares of the surviving
corporation shall not be converted or exchanged in any manner, but each said
share which is issued at the effective time and date of the merger shall
continue to represent one issued share of the surviving corporation.
6. This Plan of Merger shall be submitted to the shareholders of the
non-surviving corporation in the manner prescribed by the provisions of the
Colorado Business Corporation Act and of the laws of the jurisdiction of
organization of the surviving corporation.
7. In the event that this Plan of Merger shall have been approved by
the shareholders entitled to vote of the non-surviving corporation in the manner
prescribed by the provisions of the Colorado Business Corporation Act and of the
laws of the jurisdiction of organization of the surviving corporation, the
non-surviving corporation and the surviving corporation hereby stipulate that
they will cause to be executed and filed and/or recorded any document or
documents prescribed by the laws of the State of Colorado and by the laws of the
State of Delaware, and that they will cause to be performed all necessary acts
therein and elsewhere to effectuate the merger.
8. The Board of Directors and the proper officers of the non-surviving
corporation and the Board of Directors and the proper officers of the surviving
corporation, respectively, are hereby authorized, empowered, and directed to do
any and all acts and things, and to make, execute, deliver, file, and/or record
any and all instruments, papers, and documents which shall be or become
necessary, proper, or convenient to carry out or put into effect any of the
provisions of this Plan of Merger or of the merger herein provided for.
EXHIBIT B
Exhibit B
COLORADO Business Corporation Act
ARTICLE 113
Dissenters' Rights
PART 1
Right of Dissent - Payment for Shares
7-113-101 DEFINITIONS. -- For purposes of this article:
(1) "Beneficial shareholder" means the beneficial owner of shares held
in a voting trust or by a nominee as the record shareholder.
(2) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring domestic or foreign
corporation, by merger or share exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 7-113-102 and who exercises that right at the
time and in the manner required by part 2 of this article.
(4) "Fair value", with respect to a dissenter's shares, means the value
of the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action except to the extent that exclusion would
be inequitable.
(5) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at the legal rate as
specified in section 5-12-101, C.R.S.
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
that are registered in the name of a nominee to the extent such owner is
recognized by the corporation as the shareholder as provided in section
7-107-204.
(7) "Shareholder" means either a record shareholder or a beneficial
shareholder.
7-113-102 RIGHT TO DISSENT. -- (1) A shareholder, whether or not
entitled to vote, is entitled to dissent and obtain payment of the fair value of
his or her shares in the event of any of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a
party if:
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(I) Approval by the shareholders of that corporation is required for
the merger by section 7-111-103 or 7-111-104 or by the articles of
incorporation, or
(II) The corporation is a subsidiary that is merged with its parent
corporation under section 7-111-104;
(b) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired;
(c) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of the corporation for which a
shareholder vote is required under section 7- 112-102(1); and
(d) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of an entity controlled by the
corporation if the shareholders of the corporation were entitled to vote upon
the consent of the corporation to the disposition pursuant to 7-112-102(2).
(2) A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares in the
event of:
(a) An amendment to the articles of incorporation that materially and
adversely affects rights in respect of the shares because it:
(I) Alters or abolishes a preferential right of the shares; or
(II) Creates, alters, or abolishes a right in respect of redemption of
the shares, including a provision respecting a sinking fund for their redemption
or repurchase; or
(b) An amendment to the articles of incorporation that affects rights
in respect of the shares because it:
(I) Excludes or limits the right of the shares to vote on any matter,
or to cumulate votes, other than a limitation by dilution through issuance of
shares or other securities with similar voting rights; or
(II) Reduces the number of shares owned by the shareholder to a
fraction of a share or to scrip if the fractional share or scrip so created is
to be acquired for cash or the scrip is to be voided under section 7-106-104.
(3) A shareholder is entitled to dissent and obtain payment of the fair
value of the shareholder's shares in the event of any corporate action to the
extent provided by the bylaws or a resolution of the board of directors.
(4) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this article may not challenge the corporate action
creating such entitlement unless the action is unlawful or fraudulent with
respect to the shareholder or the corporation.
7-113-103 DISSENT BY NOMINEES AND BENEFICIAL OWNERS. -- (1) A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in the record shareholder's name only if the record shareholder
dissents with respect to all shares beneficially owned by any one person and
causes the corporation to receive written notice which states such dissent and
the name, address, and federal taxpayer identification number, if any, of each
person on whose behalf the record shareholder asserts dissenters' rights. The
rights of a record shareholder under this subsection(1) are determined as if the
shares as to which the record shareholder dissents and the other shares of the
record shareholder were registered in the names of different shareholders.
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(2) A beneficial shareholder may assert dissenters' rights as to the
shares held on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder causes the corporation to receive the
record shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder dissents with respect to all shares
beneficially owned by the beneficial shareholder.
(3) The corporation may require that, when a record shareholder
dissents with respect to the shares held by any one or more beneficial
shareholders, each such beneficial shareholder must certify to the corporation
that the beneficial shareholder and the record shareholder or record
shareholders of all shares owned beneficially by the beneficial shareholder have
asserted, or will timely assert, dissenters' rights as to all such shares as to
which there is no limitation on the ability to exercise dissenters' rights. Any
such requirement shall be stated in the dissenters' notice given pursuant to
section 7-113-203.
PART 2
Procedures for Exercise of Dissenters' Rights
7-113-201 NOTICE OF DISSENTERS' RIGHTS. -- (1) If a proposed corporate
action creating dissenters' rights under section 7-113-102 is submitted to a
vote at a shareholders' meeting, the notice of the meeting shall be given to all
shareholders, whether or not entitled to vote. The notice shall state that
shareholders are or may be entitled to assert dissenters' rights under this
article and shall be accompanied by a copy of this article and the materials, if
any, that, under articles 101 to 117 of this title, are required to be given to
shareholders entitled to vote on the proposed action at the meeting. Failure to
give notice as provided by this subsection (1) to shareholders not entitled to
vote shall not affect any action taken at the shareholders' meeting for which
the notice was to have been given.
(2) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-107-104, any written or oral solicitation of a shareholder to execute
a writing consenting to such action contemplated in section 7-1-7-104 shall be
accompanied or preceded by a written notice stating that shareholders are or may
be entitled to assert dissenters' rights under this article, by a copy of this
article, and by the materials, if any, that, under articles 101 to 117 of this
title, would have been required to be given to shareholders entitled to vote on
the proposed action if the proposed action were submitted to a vote at a
shareholders' meeting. Failure to give notice as provided by this subsection (2)
to shareholders not entitled to vote shall not affect any action taken pursuant
to section 7-107-104 for which the notice was to have been given.
7-113-302 NOTICE OF INTENT TO DEMAND PAYMENT. -- (1) If a proposed
corporate action creating dissenters' rights under section 7-113-102 is
submitted to a vote at a shareholders' meeting, a shareholder who wishes to
assert dissenters' rights shall:
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(a) Cause the corporation to receive, before the vote is taken, written
notice of the shareholder's intention to demand payment for the shareholder's
shares if the proposed corporate action is effectuated; and
(b) Note vote the shares in favor of the proposed corporate action.
(2) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-107-104, a shareholder who wishes to assert dissenters' rights shall
not execute a writing consenting to the proposed corporate action.
(3) A shareholder who does not satisfy the requirements of subsection
(1) or (2) of this section is not entitled to demand payment for the
shareholder's shares under this article.
7-113-203 DISSENTERS' NOTICE. -- (1) If a proposed corporate action
creating dissenters' rights under section 7-113-102 is authorized, the
corporation shall give a written dissenters' notice to all shareholders who are
entitled to demand payment for their shares under this article.
(2) The dissenters' notice required by subsection (1) of this section
shall be given no later than ten days after the effective date of the corporate
action creating dissenters' rights under section 7-113-102 and shall:
(a) State that the corporate action was authorized and state the
effective date or proposed effective date of the corporate action;
(b) State an address at which the corporation will receive payment
demands and the address of a place where certificates for certificated shares
must be deposited;
(c) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(d) Supply a form for demanding payment, which form shall request a
dissenter to state an address to which payment is to be made;
(e) Set the date by which the corporation must receive the payment
demand and certificates for certificated shares, which date shall not be less
than thirty days after the date the notice required by subsection (1) of this
section is given;
(f) State the requirement contemplated in section 7-113-103 (3), if
such requirement is imposed; and
(g) Be accompanied by a copy of this article.
7-113-204 PROCEDURE TO DEMAND PAYMENT. -- (1) A shareholder who is
given a dissenters' notice pursuant to section 7-113-203 and who wishes to
assert dissenters' rights shall, in accordance with the terms of the dissenters'
notice:
(a) Cause the corporation to receive a payment demand, which may be the
payment demand form contemplated in section 7-113-203(2)(d), duly completed, or
may be stated in another writing; and
(b) Deposit the shareholder's certificates for certificated shares.
(2) A shareholder who demands payment in accordance with subsection (1)
of this section retains all rights of a shareholder, except the right to
transfer the shares, until the effective date of the proposed of the proposed
corporate action giving rise to the shareholder's exercise of dissenters' rights
and has only the right to receive payment for the shares after the effective
date of such corporate action.
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(3) Except as provided in section 7-113-207 or 7-113-209 (1)(b), the
demand for payment and deposit of certificates are irrevocable.
(4) A shareholder who does not demand payment and deposit the
shareholder's share certificates as required by the date or dates in the
dissenters' notice is not entitled to payment for the shares under this article.
7-113-205 UNCERTIFICATED SHARES. -- (1) Upon receipt of a demand for
payment under 7-113-204 from a shareholder holding uncertificated shares, and in
lieu of the deposit of certificates representing the shares, the corporation may
restrict the transfer thereof.
(2) In all other respects, the provisions of section 7-113-204 shall be
applicable to shareholders who own uncertificated shares.
7-113-206 PAYMENT. -- (1) Except as provided in section 7-113-208, upon
the effective date of the corporate action creating dissenters' rights under
section 7-113-102 or upon receipt of a payment demand pursuant to section
7-113-204, whichever is later, the corporation shall pay each dissenter who
complied with section 7-113-204, at the address stated in the payment demand, or
if no such address is stated in the payment demand, at the address shown on the
corporation's current record of shareholders for the record shareholder holding
the dissenter's shares, the amount the corporation estimates to be the fair
value of the dissenter's shares, plus accrued interest.
(2) The payment made pursuant to subsection (1) of this section shall
be accompanied by:
(a) The corporation's balance sheet as of the end of its most recent
fiscal year or, if that is not available, the corporation's balance sheet as of
the end of a fiscal year ending not more than sixteen months before the date of
payment, an income statement for that year, and, if the corporation customarily
provides such statements to shareholders, a statement of changes in
shareholders' equity for that year and a statement of cash flow for that year,
which balance sheet and statements shall have been audited if the corporation
customarily provides audited financial statements to shareholders, as well as
the latest available financial statements, if any, for the interim or full-year
period, which financial statements need not be audited;
(b) A statement of the corporation's estimate of the fair value of the
shares; (c) An explanation of how the interest was calculated; (d) A
statement of the dissenter's right to demand payment under section
7-113-209;
and
(e) A copy of this article.
7-113-207 FAILURE TO TAKE ACTION. -- (1) If the effective date of the
corporate action creating dissenters' right under section 7-113-102 does not
occur within sixty days after the date set by the corporation by which the
corporation must receive the payment demand as provided in section 7-113-203,
the corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(2) If the effective date of the corporate action creating dissenters'
rights under section 7-113-102 occurs more than sixty days after the date set by
the corporation by which the corporation must receive the payment demand as
provided in section 7-113-203, then the
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corporation shall send a new dissenters' notice, as provided in section
7-113-203, and the provisions of sections 7-113-204 to 7-113-209 shall again be
applicable.
7-113-208 SPECIAL PROVISIONS RELATING TO SHARES ACQUIRED
AFTER ANNOUNCEMENT OF PROPOSED CORPORATION ACTION. -- (1) The
corporation may, in or with the dissenters' notice given pursuant to section
7-113-203, state the date of the first announcement to news media or to
shareholders of the terms of the proposed corporate action creating dissenters'
rights under section 7-113-102 and state that the dissenter shall certify in
writing, in or with the dissenter's payment demand under section 7-113-204,
whether or not the dissenter (or the person on whose behalf dissenters' rights
are asserted) acquired beneficial ownership of the shares before that date. With
respect to any dissenter who does not so certify in writing, in or with the
payment demand, that the dissenter or the person on whose behalf the dissenter
asserts dissenters' rights acquired beneficial ownership of the shares before
such date, the corporation may, in lieu of making the payment provided in
section 7-113- 206, offer to make such payment if the dissenter agrees to accept
it in full satisfaction of the demand.
(2) An offer to make payment under subsection (1) of this section shall
include or be accompanied by the information required by section 7-113-206(2).
7-113-209 PROCEDURE IF DISSENTER IS DISSATISFIED WITH PAYMENT
OR OFFER. -- (1) A dissenter may give notice to the corporation in writing of
the dissenter's estimate of the fair value of the dissenter's shares and of the
amount of interest due and may demand payment of such estimate, less any payment
made under section 7-113-206, or reject the corporation's offer under section
7-113-208 and demand payment of the fair value of the shares and interest due,
if:
(a) The dissenter believes that the amount paid under section 7-113-206
or offered under section 7-113-208 is less than the fair value of the shares or
that the interest due was incorrectly calculated;
(b) The corporation fails to make payment under section 7-113-206
within sixty days after the date set by the corporation by which the corporation
must receive the payment demand; or
(c) The corporation does not return the deposited certificates or
release the transfer restrictions imposed on uncertificated shares as required
by section 7-113-207 (1).
(2) A dissenter waives the right to demand payment under this section
unless the dissenter causes the corporation to receive the notice required by
subsection (1) of this section within thirty days after the corporation made or
offered payment for the dissenter's shares.
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PART 3
Judicial Appraisal of Shares
7-113-301 COURT ACTION. -- (1) If a demand for payment under section
7-113-209 remains unresolved, the corporation may, within sixty days after
receiving the payment demand, commence a proceeding and petition the court to
determine the fair value of the shares and accrued interest. If the corporation
does not commence the proceeding within the sixty-day period, it shall pay to
each dissenter whose demand remains unresolved the amount demanded.
(2) The corporation shall commence the proceeding described in
subsection (1) of this section in the district court of the county in this state
where the corporation's principal office is located or, if it has no principal
office in this state, in the district court of the county in which its
registered office is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic corporation
merged into, or whose shares were acquired by, the foreign corporation was
located.
(3) The corporation shall make all dissenters, whether or not residents
of this state, whose demands remain unresolved parties to the proceeding
commenced under subsection (2) of this section as in an action against their
shares, and all parties shall be served with a copy of the petition. Service on
each dissenter shall be by registered or certified mail, to the address stated
in such dissenter's payment demand, or if no such address is stated in the
payment demand, at the address shown on the corporation's current record of
shareholders for the record shareholder holding the dissenter's shares, or as
provided by law.
(4) The jurisdiction of the court in which the proceeding is commenced
under subsection (2) of this section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend a
decision on the question of fair value. The appraisers have the powers described
in the order appointing them, or in any amendment to such order. The parties to
the proceeding are entitled to the same discovery rights as parties in other
civil proceedings.
(5) Each dissenter made a party to the proceeding commenced under
subsection (2) of this section is entitled to judgment for the amount, if any,
by which the court finds the fair value of the dissenter's shares, plus
interest, exceeds the amount paid by the corporation, or for the fair value,
plus interest, of the dissenter's shares for which the corporation elected to
withhold payment under section 7-113-208.
7-113-302 COURT COSTS AND COUNSEL FEES. -- (1) The court in an
appraisal proceeding commenced under section 7-113-301 shall determine all costs
of the proceeding, including the reasonable compensation and expenses of
appraisers appointed by the court. The court shall assess the costs against the
corporation; except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court find
the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding
payment under section 7-113-209.
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(2) The court may also assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any dissenters if the court
finds the corporation did not substantially comply with the requirements of part
2 of this article; or
(b) Against either the corporation or one or more dissenters, in favor
of any other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this article.
(3) If the court finds that the services of counsel for any dissenter
were of substantial benefit to the other dissenters similarly situated, and that
the fees for those services should not be assessed against the corporation, the
court may award to said counsel reasonable fees to be paid out of amounts
awarded to the dissenters who were benefitted.
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EXHIBIT C
CASDIM INTERNATIONAL SYSTEMS, INC.
1996 Employee Stock Option Plan
1. Purpose of the Plan. The 1996 Stock Option Plan (the "Plan") is
intended as an incentive to: (i) retain persons of training, experience, and
ability in the employ of Casdim International Systems, Inc. (the "Company") and
its subsidiaries; and (ii) attract new employees whose services are considered
unusually valuable, to encourage the sense of proprietorship of such persons,
and to stimulate the active interest of such persons in the development and
financial success of the Company. Stock options ("Options") granted under the
Plan may contain such terms as will qualify the options as incentive stock
options ("ISOs") within the meaning of Section 422(b) of the United States
Internal Revenue Code of 1986, as amended (the "Code").
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock, par value $0.00001
per share, of the Company.
(d) "Company" shall mean Casdim International Systems, Inc.
(e) "Director" shall mean a member of the Board.
(f) "Effective Date" shall mean the date on which the Plan is
approved by the stockholders of the Company.
(g) "Employee" shall mean any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary
of the Company. The payment of a director's fee by the Company
shall not be sufficient in and of itself to constitute
"employment" by the Company.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(i) "Option" shall mean a stock option granted pursuant to the
Plan.
(j) "Optioned Stock" shall mean the Common Stock subject to an
Option.
(k) "Optionee" shall mean an Outside Director who receives an
option.
(l) "Outside Director" shall mean a Director who is not an
Employee.
(m) "Parent" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(n) "Plan" shall mean this 1996 Directors' Stock Option Plan.
(o) "Share" shall mean a share of the Common Stock of the Company,
as adjusted in accordance with Section 11 of the Plan.
(p) "Subsidiary" shall mean a "subsidiary corporation", whether
now or hereafter existing, as defined in Section 424(f)
of the Code.
2. Administration of the Plan. The Board of Directors (the "Board") or
a Stock Option Committee (the "Committee") appointed and maintained by the Board
shall have the power to administer the Plan. The Committee shall consist of at
least two members who shall serve at the pleasure of the Board, and any member
of such Committee shall be eligible to receive Options under the Plan while
serving on the Committee, unless otherwise specified herein. The Board or the
Committee shall have full power and authority to: (i) designate participants;
(ii) designate Options or any portion thereof as ISOs; (iii) determine the terms
and provisions of respective option agree ments (which need not be identical)
including, but not limited to, provisions concerning the time or times when and
the extent to which the Options may be exercised and the nature and duration of
restrictions as to transferability or restrictions constituting substantial risk
of forfeiture; (iv) accelerate the right of an optionee to exercise in whole or
in part any previously granted ISO; and (v) interpret the provisions and
supervise the administration of the Plan.
The Board or the Committee shall have the authority to grant, in its
discretion, to the holder of an outstanding Option, in exchange for the
surrender and cancellation of such Option, a new Option having a purchase price
lower than provided in the Option so surrendered and cancelled and containing
such other terms and conditions as the Board or the Committee may prescribe in
accor dance with the provisions of the Plan.
All decisions and selections made by the Board or the Committee
pursuant to the provisions of the Plan shall be made by a majority of its
members except that no member of the Board or Committee shall vote on, or be
counted for quorum purposes, with respect to any proposed action of the Board or
Committee relating to any Option to be granted to that member. Any decision
reduced to writing and signed by a majority of the members who are authorized to
make such decision shall be fully effective as if it had been made by a majority
at a meeting duly held.
Each member of the Board or the Committee shall be indemnified and held
harmless by the Company against any cost or expense (including counsel fees)
reasonably incurred by him or liability (including any sum paid in settlement of
a claim with the approval of the Company) arising out of any act or omission to
act in connection with the Plan unless arising out of such member's own fraud or
bad faith, to the extent permitted by applicable law. Such indemnification shall
be in addition to any rights of indemnification the members may have as
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directors or otherwise under the memorandum of association of the Company, any
agreement, any vote of stockholders or disinterested directors, or otherwise.
3. Designation of Participants. The persons eligible for participation
in the Plan as recipients of Options shall include only key employees of the
Company or of any subsidiary of the Company. Directors of the Company who are
not employees of the Company shall be eligible for participation in the 1996
Directors' Stock Option Plan. A person who has been granted an Option hereunder
may be granted additional Options, if the Board or the Committee shall so
determine.
4. Stock Reserved for the Plan. Subject to adjustment as provided in
paragraph 6 hereof, a total of 500,000 shares of common stock (the "Shares") of
the Company shall be subject to the Plan. The Shares shall consist of unissued
shares, and such number of shares shall be, and hereby is, reserved for sale for
such purpose. Any of such Shares which may remain unsold and which are not
subject to outstanding options at the termination of the Plan shall cease to be
reserved for the purpose of the Plan, but until termination of the Plan the
Company shall at all times reserve a sufficient number of Shares to meet the
requirements of the Plan. Should any Option for any reason expire or be
cancelled prior to its exercise or relinquishment in full, the shares
theretofore subject to such Option may again be subjected to an Option under the
Plan.
5. Option Price.
(a) Exercise Price. The purchase price of each Share subject
to an ISO shall not be less than 100% (or 110%, if at the time of grant
the optionee owns more than 10% of the voting stock of the Company) of
the Fair Market Value of such Share (as defined in paragraph (b)) on
the date the ISO is granted. The purchase price of each Share subject
to an Option or any portion thereof which is not designated as an ISO
shall not be less than 75% of the Fair Market Value of such Share on
the date the Option is granted and in no event shall the purchase price
be less than the par value of the Stock.
(b) Fair Market Value. The fair market value per Share shall
be the mean of the bid and asked prices of the common stock of the
Company in the over-the-counter market on the date of grant, as
reported in The Wall Street Journal (or, if not so reported, as
otherwise reported by the National Association of Securities Dealers
Automated Quotation ("NASDAQ") System) or, in the event that the common
stock is traded on the NASDAQ National Market System or listed on a
stock exchange, the fair market value per Share shall be the closing
price on such system or exchange on the date of grant of the Option, as
reported in The Wall Street Journal, provided, however, that if such
market or exchange is closed on the date of the grant of the Option
then the fair market value per Share shall be based on the most recent
date on which such trading occurred immediately prior to the date of
the grant of the Option; provided, further, that if the fair market
value cannot be determined in accordance with the forgoing, it shall be
determined in good faith by the Board.
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(c) Form of Consideration. The consideration to be paid for
the Shares to be issued upon exercise of an Option shall consist
entirely of cash, check, other Shares having a fair market value on the
date of surrender equal to the aggregate exercise price of the Shares
as to which said Option shall be exercised (which, if acquired from the
Company, shall have been held for at least six months), delivery of a
properly executed exercise notice together with instructions to a
broker to deliver promptly to the Company the amount of sale proceeds
required to pay the exercise price, or any combination of such methods
of payment and/or any other consider ation or method of payment as
shall be permitted under applicable corporate law.
1. Adjustments. (a) If the Company is separated or reorganized, or
merged, consolidated or amalgamated with or into another corporation while
unexercised Options remain outstanding under the Plan, there shall be
substituted for the shares subject to the unexercised portions of such
outstanding Options an appropriate number of shares of each class of stock or
other securities of the separated or reorganized, or merged, consolidated or
amalgamated corporation which were distributed to the shareholders of the
Company in respect of such shares; provided, however, that all such Options may
be exercised in full by the optionees as of the effective date of any such
separation, reorganization, merger, consolidation or amalgamation without regard
to the installment exercise provisions of paragraph 7(a), by the optionees
giving notice in writing to the Company of their intention to so exercise.
(b) If the Company is liquidated or dissolved while unexercised Options
remain outstanding under the Plan, then all such outstanding Options may be
exercised in full by the optionees as of the effective date of any such
liquidation or dissolution of the Company without regard to the installment
exercise provisions of paragraph 7(a), by the optionees giving notice in writing
to the Company of their intention to so exercise.
(c) If the outstanding shares of Stock shall at any time be changed or
exchanged by declaration of a stock dividend, stock split, combination or
exchange of shares, recapitalization, extraordinary dividend payable in stock of
a corporation other than the Company, or otherwise in cash, or any other like
event by or of the Company, and as often as the same shall occur, then the
number, class and kind of shares subject to this Plan or subject to any Options
theretofore granted, and the option prices, shall be appropriately and equitably
adjusted so as to maintain the proportionate number of shares without changing
the aggregate option price; provided, however, that no adjustment shall be made
by reason of the distribution of subscription rights on outstanding stock.
2. Term and Exercise of Options. (a) Each Option granted under this
Plan shall be exercisable on the date and for the number of shares as shall be
provided in the option agreement evidencing the Option and setting forth the
terms thereof. However, (i) no Option shall be exercisable after the expiration
of ten years from the date of grant, and (ii) no ISO granted to a person who at
the time of grant owns more than 10% of the voting stock of the Company may be
exercisable after the expiration of five years from the date of grant.
(b) Options granted under the Plan shall not be transferable by
optionees other than by will or the laws of descent and distribution, and during
an optionee's lifetime shall be exercisable only by that optionee.
(c) Options may not be exercised after the termination of employment
and/or service as a director unless (i) prior to the date of such termination,
the Board or the Committee shall authorize, in the relevant option agreement or
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otherwise, an extension of the term of all or part of the Option beyond the
date of such termination for a period not to exceed the period during which the
Option by its terms would otherwise have been exercisable, (ii) termination is
without cause, in which event any Options still in force and unexpired may be
exercised within a period of 90 days from the date of such termination, but only
with respect to the number of shares purchasable at the time of such
termination, (iii) termination is the result of death or disability, in which
event any Options still in force and unexpired may be exercised within a period
of six (6) months from the date of termination, but only with respect to the
number of shares purchasable at the time of such termination, or (iv)
termination of employment is the result of retirement under any deferred
compensation agreement or retirement plan of the Company or of any subsidiary of
the Company or after age 60, while Options granted hereunder are still in force
and unexpired, in which case the Board or Committee shall have the discretion to
permit any unmatured installments of the Options to be accelerated as of the
later of the date of retirement or a date one year following the date of grant,
and the Options shall thereupon be exercisable in full without regard to the
installment exercise provisions of paragraph 7(a).
(d) The holders of Options shall not be or have any of the rights or
privileges of shareholders of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until, following exercise,
certificates representing such shares shall have been issued by the Company to
such holders.
(e) Any form of option agreement authorized by the Plan may contain
such other provisions as the Board or the Committee may, from time to time, deem
advisable. Without limiting the foregoing, the Board or the Committee may, with
the consent of the optionee, from time to time cancel all or any portion of any
Option then subject to exercise, and the Company's obligation in respect of such
Option may be discharged by (i) payment to the optionee of an amount in cash
equal to the excess, if any, of the Fair Market Value of the shares at the date
of such cancellation subject to the portion of the Option so cancelled over the
aggregate purchase price of such shares, (ii) the issuance or transfer to the
optionee of shares of Stock with a Fair Market Value at the date of such
transfer equal to any such excess, or (iii) a combination of cash and shares
with a combined value equal to any such excess, all as determined by the Board
or the Committee in its sole discretion.
(f) Options shall be exercised by the optionee by giving written notice
to the Company, which exercise shall be effective upon receipt of such notice by
the Secretary of the Company at its principal office. The notice shall specify
the number of shares with respect to which the Option is being exercised.
3. Maximum ISO Award. The aggregate Fair Market Value of Stock
(determined as of the date of the grant of options) with respect to which ISOs
are exercisable for the first time by any optionee during any calendar year
shall not exceed the limitation provided under Section 422(d) of the Code.
4. Purchase for Investment. Unless shares of Stock covered by the
Plan have been registered under the United States Securities Act of 1933, as
amended, or the Company has determined that such registration is unnecessary,
each person exercising an Option under the Plan may be required by the Company
to give a representation in writing that he is acquiring such shares for his own
account, for investment and not with a view to, or for sale in connection with,
the distribution of any part thereof.
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5. Term Date of Plan. The Plan shall be effective as of June 1, 1996
and shall terminate on May 31, 2006.
6. Amendments or Termination. The Board may amend, alter, or
discontinue the Plan, except that no amendment or alteration shall be made which
would impair the rights of the holder of any Option theretofore granted without
his consent, and except that no amendment or alteration shall be made which,
without the approval of the shareholders, would:
(a) Increase the total number of shares reserved for the purposes of
the Plan, except as is provided in Section 6, or decrease the option price
provided in Section 5, or change the class of persons eligible to participate in
the Plan as provided in Section 3; or
(b) Extend the option period provided for in Section 7.
7. Government Regulations. The Plan, and the granting and exercise of
Options hereunder, and the obligation of the Company to sell and deliver shares
or cash under such Options, shall be subject to all applicable laws, rules, and
regulations, including the registration of the shares under to the United States
Securities Act of 1933, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
8. Governing Law. This Plan shall be deemed made in Israel and shall
be governed by and construed and enforced in accordance with the laws of
Delaware applicable to contracts made and to be performed therein, without
giving effect to the principles of conflict of laws.
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Exhibit 2
CASDIM INTERNATIONAL SYSTEMS, INC.
90 Park Avenue
New York, New York 10016
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Yehuda Shimshon, the Chairman, President &
CEO of Casdim International Systems, Inc. (the "Company"), attorney of the
undersigned, for and in the names(s) of the undersigned, with power of
substitution and revocation in each to vote any and all shares of Common Stock,
par value, $0.00001 per share, of the Company, which the undersigned would be
entitled to vote as fully as the undersigned could if personally present at the
Annual Meeting of Shareholders of the Company to be held at 10:00 a.m., local
time, on Wednesday, October 16, 1996, at the offices of Carter, Ledyard &
Milburn, 114 West 47th Street, 17th floor, New York, New York, and at any
adjournment or adjournments thereof, hereby revoking any prior proxies to vote
said stock, upon the following items of business more fully described in the
notice of and proxy statement for such Annual Meeting (receipt of which is
hereby acknowledged):
(1) The election of five Directors.
[ ]FOR all nominees listed below (except as marked to contrary)
[ ]WITHHOLD AUTHORITY to vote for all nominees below
YEHUDA SHIMSHON, ISRAEL SHIMSHON, DORON LEAVE, ILAN MINTZ, DAVID TAMIR.
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name above.
(2) To approve a Plan of Merger under which the Company would be merged
into a wholly-owned subsidiary of the Company incorporated in the State
of Delaware. (The Company is currently incorporated in the State of
Colorado.)
[ ]FOR [ ]AGAINST [ ]ABSTAIN
(3) To approve the Company's 1996 Stock Option Plan.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
(4) To act upon any other matters that may properly be brought before the
meeting and any adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. UNLESS OTHERWISE
INDICATED, THIS PROXY WILL BE VOTED FOR:
(i) ELECTION OF THE FIVE NOMINEES NAMED IN ITEM 1; (ii) APPROVAL OF THE PLAN OF
MERGER DESCRIBED IN ITEM 2; AND (iii) THE APPROVAL OF THE COMPANY'S 1996 STOCK
OPTION PLAN.
Dated____________________, 1996
-------------------------------
Signature(s)
-------------------------------
Signatures, if held jointly
(Please sign exactly as name(s) appear(s) hereon. When signing as attorney,
executor, administrator, trustee, guardian, or as an officer signing for a
corporation, please give full title under signature.)
Exhibit 3
CASDIM INTERNATIONAL SYSTEMS, INC.
90 Park Avenue
New York, New York 10016
Dear Shareholders,
Allow me to present the first annual report of the Company as Casdim
International Systems, Inc. This report is really a historical statement and
1996, to date, has been a year of transformation and hard work to lay the
foundation for future growth in the interactive multimedia kiosk industry.
We expect that the remainder of 1996 will reflect our continued efforts
to establish the base for significant growth in 1997 and beyond. We are
currently assembling a team of executives and technical and administrative
personnel who will lead the Company to its goal of becoming a leading supplier
of interactive multimedia kiosks.
We look forward to the future of our Company and thank you for your
continued support.
August 5, 1996
/s/Yehuda Shimshon
Yehuda Shimshon
President & CEO