SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by the Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
PAK MAIL CENTERS OF AMERICA, INC.
----------------------------------------------
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which the transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PAK MAIL CENTERS OF AMERICA, INC.
3033 South Parker Road, Suite 1200
Aurora, Colorado 80014
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on June 19, 1998
NOTICE IS HEREBY GIVEN that an Annual Meeting of Shareholders (the
"Meeting") of Pak Mail Centers of America, Inc., a Colorado corporation (the
"Company"), will be held at the offices of the Company, 3033 South Parker Road,
Suite 1200, Aurora, Colorado 80014 on Friday, June 19, 1998, at 9:00 a.m.
Mountain Time, for the purpose of considering and voting upon proposals to:
(1) Elect five directors to serve until the next Annual Meeting of
Shareholders;
(2) Approve an amendment to Article IX of the Company's Articles of
Incorporation to increase the number of votes necessary to establish a
quorum at shareholder meetings to one-third of the votes entitled to
be cast on a matter by a voting group;
(3) Approve an amendment to the Company's Articles of Incorporation to
amend Article X to revise the votes necessary to amend the Company's
Articles of Incorporation to a majority of a quorum, and to delete
Articles XI and XII; and
(4) Transact such other business as may lawfully come before the Meeting
or any adjournment(s) thereof.
Only shareholders of record at the close of business on April 29, 1998, are
entitled to notice of and to vote at the Meeting and at any adjournment thereof.
The enclosed Proxy is solicited by and on behalf of the Board of Directors of
the Company. All shareholders are cordially invited to attend the Meeting in
person. Whether you plan to attend or not, please date, sign and return the
accompanying proxy in the enclosed return envelope. The giving of a proxy will
not affect your right to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
RAYMOND S. GOSHORN, SECRETARY
Aurora, Colorado
May 1, 1998
PAK MAIL CENTERS OF AMERICA, INC.
3033 South Parker Road, Suite 1200
Aurora, Colorado 80014
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 19, 1998
This proxy statement ("Proxy Statement") is being furnished in connection
with the solicitation of proxies by the Board of Directors of Pak Mail Centers
of America, Inc. (the "Company") to be used at the Annual Meeting of
Shareholders (the "Meeting") to be held at the offices of the Company, 3033
South Parker Road, Suite 1200, Aurora, Colorado 80014 on Friday, June 19, 1998,
at 9:00 a.m. Mountain Time, and at any adjournment thereof.
It is planned that this Proxy Statement and the accompanying Proxy will be
mailed to the Company's shareholders on or about May 1, 1998.
Any person signing and mailing the enclosed Proxy may revoke it at any time
before it is voted by (i) giving written notice of the revocation to the
Company's corporate secretary at the Company's principal executive offices; (ii)
voting in person at the Meeting; or (iii) voting again by submitting a new proxy
card. The principal executive offices of the Company are located at 3033 South
Parker Road, Suite 1200, Aurora, Colorado 80014. Only the latest dated proxy
card, including one which a person may vote in person at the Meeting, will
count.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
Voting rights at the Meeting are vested in the holders of the Company's
$0.001 par value common stock (the "Common Stock") with each share entitled to
one vote. Cumulative voting in the election of directors is not permitted. Only
holders of record of the Common Stock at the close of business on April 29,
1998, are entitled to notice of and to vote at the Meeting or any adjournments
thereof. On April 29, 1998, the Company had 2,989,483 shares of Common Stock
outstanding.
The following table sets forth as of April 29, 1998, the number of shares
of the Company's outstanding Common Stock beneficially owned by each of the
Company's current directors and executive officers, sets forth the number of
shares of the Company's outstanding Common Stock beneficially owned by all of
the Company's current directors and executive officers as a group and sets forth
the number of shares of the Company's Common Stock owned by each person who
owned of record, or was known to own beneficially, more than 5% of the Company's
outstanding shares of Common Stock:
Name of Director, Executive Amount and Nature
Officer or Beneficial Owner of Beneficial Ownership(1) Percent of Class
- --------------------------- -------------------------- ----------------
J. S. Corcoran 1,000(2) (5)
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
Raymond S. Goshorn 1,000 (5)
3033 South Parker Road, Suite 1200
Aurora, Colorado 80014
John W. Grant 800(3) (5)
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
F. Edward Gustafson 20,000(2)(4) (5)
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
John E. Kelly 12,000 (5)
3033 South Parker Road, Suite 1200
Aurora, Colorado 80014
William F. White 2,000 (5)
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
P. Evan Lasky -0- (5)
3033 South Parker Road, Suite 1200
Aurora, Colorado 80014
Tonya D. Sarina -0- (5)
3033 South Parker Road, Suite 1200
Aurora, Colorado 80014
Alex Zai 112 (5)
3033 South Parker Road, Suite 1200
Aurora, Colorado 80014
2
Name of Director, Executive Amount and Nature
Officer or Beneficial Owner of Beneficial Ownership(1) Percent of Class
- --------------------------- -------------------------- ----------------
All directors and executive 36,912(2) 1.2%
officers as a group (9 persons)
D.P. Kelly & Associates, L.P. 298,400(6) 9.1%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
Pak Mail Investment Partnership, L.P. 2,404,264(7) 66.9%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
Janie M. D'Addio 188,833(8) 6.3%
610 Security Manufacturing
Corporation
815 South Main Street
Grapevine, Texas 76051
- --------------------
(1) The beneficial owners listed have sole voting and investment power with
respect to the shares of Common Stock unless otherwise indicated below.
(2) Excludes 1,800,000 shares of Common Stock owned by Pak Mail Investment
Partnership, L.P. ("PMIP") and 604,264 shares of Common Stock underlying
presently exercisable warrants owned by PMIP. Mr. Corcoran and Mr.
Gustafson are officers, directors and shareholders of Norcross Corporation,
701 Harger Road, Suite 190, Oak Brook, Illinois 60523, which exercises
control over PMIP, and therefore may be deemed to have the ability to vote
or dispose of securities owned by PMIP. Messrs. Corcoran and Gustafson
disclaim beneficial ownership of the shares of Common Stock owned by PMIP.
(3) The shares are owned jointly by Mr. Grant and his wife.
(4) Includes 6,000 shares of Common Stock owned by Mr. Gustafson's children,
for whom he acts as custodian; excludes 280,000 shares of Common Stock
underlying warrants owned by D.P. Kelly & Associates, L.P. ("D.P. Kelly").
Mr. Gustafson is an executive officer of D. P. Kelly but disclaims
beneficial ownership of the 280,000 shares.
(5) Less than 1%.
(6) Includes 280,000 shares of Common Stock underlying presently exercisable
warrants.
3
(7) Includes 604,264 shares of Common Stock underlying presently exercisable
warrants.
(8) Information with respect to Ms. D'Addio's Common Stock is given to the best
of the Company's knowledge based upon the records of the Company's transfer
agent.
DIRECTORS AND EXECUTIVE OFFICERS
The present term of office of each director will expire at the Meeting. The
executive officers of the Company are elected annually at the first meeting of
the Company's Board of Directors held after each annual meeting of shareholders.
Each executive officer holds office until his or her successor is duly elected
and qualified or until his or her resignation or death or until he or she shall
be removed in the manner provided by the Company's Bylaws. The name, position
with the Company, the age of each director and executive officer, and the period
during which each has served are as follows:
Name and Position Director or Principal Occupation
in the Company Age Officer Since During the Last Five Years
- -------------- --- ------------- --------------------------
John E. Kelly 58 September, Executive officer of the
(President, Chief Executive 1989 Company since September,
Officer and Director) 1989.
P. Evan Lasky 56 March, 1988 Executive officer of the
(Executive Vice President and Company since March, 1988.
Chief Operating Officer)
Raymond S. Goshorn 39 December, Executive officer of the
(Chief Financial Officer, 1988 Company since December,
Treasurer, Secretary) 1988.
Tonya D. Sarina 36 December, Executive officer of the
(Vice President of Sales and 1996 Company since December
Marketing) 1996; Marketing manager of
the Company from March,
1991 through November, 1996.
Alex Zai 38 May, 1996 Executive officer of the Com-
(Vice President of pany since May, 1996; director
Store Operations) of store operations of the Com-
pany since April, 1994.
4
Name and Position Director or Principal Occupation
in the Company Age Officer Since During the Last Five Years
- -------------- --- ------------- --------------------------
J. S. Corcoran 55 September, Self-employed as a business
(Director) 1989 consultant since October, 1996.
Executive officer of D.P. Kelly &
Associates L.P., a firm offering
management services, from
November, 1988 to January, 1997;
executive officer of Envirodyne
Industries, Inc., a manufacturer
of food packaging and food service
supplies, from June, 1989 to
March, 1996.
John W. Grant 73 September, Retired since September, 1987.
(Director) 1989
F. Edward Gustafson 56 September, Executive officer of D.P. Kelly
(Director) 1989 & Associates L.P., a firm offering
management services, since November,
1988; executive officer of Envirodyne
Industries, Inc., a manufacturer of
food packaging and food service
supplies, since June, 1989; director
of Envirodyne Industries, Inc. since
December, 1993; executive officer of
Viskase Corporation, a wholly-owned
subsidiary of Envirodyne Industries,
Inc., from February, 1990 to August, 1993.
William F. White 67 September, Executive officer of Whitnell &
(Director) 1989 Co., an investment advisory firm, since
January, 1988; executive officer of
Donegal, Inc., an investment management
firm, since January, 1991.
5
The Company's Board of Directors held 2 meetings during the Company's last
fiscal year ended November 30, 1997, both of which were actual meetings at which
four of the five directors were present in person or by telephone. Each of the
directors attended at least 75% of the Board of Directors meetings except for
John Grant and William White, who each attended 1 of the 2 meetings. The Board
of Directors has no standing nominating or compensation committees or committees
performing similar functions.
The Company has an audit committee. John W. Grant and William F. White are
the members of the audit committee. The audit committee recommends to the Board
of Directors the engagement of independent accountants, reviews with the
accountants the audit and reviews the Company's internal financial controls and
auditing. The audit committee held one meeting during the last fiscal year ended
November 30, 1997 at which both members were present.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of the
Company's outstanding Common Stock to file reports of ownership with the
Securities and Exchange Commission ("SEC"). Officers, directors and greater than
ten percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on a review of Forms 3, 4 and 5 and amendments thereto
furnished to the Company during and for the Company's fiscal year ended November
30, 1997, there were no directors, officers or more than 10% shareholders of the
Company that failed to timely file a Form 3, Form 4 or Form 5.
RELATED PARTY TRANSACTIONS
The Company purchases mailboxes from Security Manufacturing Corporation
("Security") for resale to the Company's franchisees. Security is controlled by
Janie M. D'Addio, who owns 6.3% of the Company's Common Stock. During fiscal
1997 and fiscal 1996, the Company made purchases in the total amounts of $82,128
and $64,300, respectively, from Security.
PMIP owns a controlling interest in the Company through its ownership of
1,800,000 shares of the Company's Common Stock, representing approximately 60.2%
of the outstanding Common Stock of the Company. In addition, PMIP owns presently
exercisable warrants (described below) to purchase 604,264 shares of Common
Stock, which, if exercised, will increase PMIP's ownership to approximately
66.9% of the outstanding Common Stock of the Company.
In December 1997, the Company paid in full two outstanding promissory notes
with an original principal balance of $50,000 each to D.P. Kelly, an affiliate
and limited partner of PMIP. The promissory notes were made on February 14,
1996. In February 1998, D.P. Kelly became the beneficial owner of more than 5%
of the Company's outstanding shares of Common Stock.
6
In February 1998, effective November 30, 1997, PMIP and D.P. Kelly
relinquished any rights to dividends in the respective amounts of $604,264 and
$280,000 on the shares of Series A Preferred Stock and Series B Preferred Stock
they owned in the Company in exchange for shares of Series C Preferred Stock
with the same aggregate liquidation preferences as the Series A Preferred Stock
and Series B Preferred Stock they previously owned. In addition, as a part of
the exchange, PMIP and D.P. Kelly received warrants to purchase 604,264 shares
of the Company's Common Stock and warrants to purchase 280,000 shares of the
Company's Common Stock, respectively, that are exercisable until November 30,
2007 at an exercise price of $0.10 per share. The Series A Preferred Stock and
Series B Preferred Stock had cumulative dividends of $80 per year on each share
of Series A Preferred Stock; provided that, no dividends were payable on the
Series A Preferred Stock or Series B Preferred Stock until the Company's net
income from and after December 1, 1993, exceeded the product of $200,000
multiplied by the number of years elapsed from December 1, 1993, through the
last day of the fiscal year next proceeding the dividend due date with respect
to such year. The Series C Preferred Stock has cumulative dividends at the rate
of $60 per twelve month period commencing December 1, 1997, on each share of
Series C Preferred Stock. Cash dividends on the outstanding shares of Series C
Preferred Stock are payable on each March 31, commencing March 31, 1999.
Due to the restrictions on paying dividends on the Series A Preferred Stock
and Series B Preferred Stock as described in the preceding paragraph, the
accumulated dividends on the Series A Preferred Stock and Series B Preferred
Stock would continue to increase from year to year. As a result, the Board of
Directors of the Company believed that the continual accumulation of unpaid
dividends would possibly diminish the value of the outstanding Common Stock of
the Company. Further, the Board of Directors believed that the holders of the
Series A Preferred Stock and Series B Preferred Stock were entitled to receive a
return on their investment. The exchange of the Series A Preferred Stock and
Series B Preferred Stock for Series C Preferred Stock eliminates the increase in
obligations created by the accumulation of dividends on the Series A Preferred
Stock and Series B Preferred Stock and provides a potential return for the
holders thereof.
The Series C Preferred Stock has no voting rights except that, without the
affirmative vote or consent of the holders of at least a majority of all
outstanding shares of Series C Preferred Stock, the Company may not amend its
Articles of Incorporation or Bylaws so as to adversely affect the powers,
preferences or special rights of the Series C Preferred Stock, the Company may
not authorize, or increase the authorized amount of, any class or series of
stock, or any equity security convertible into stock of such class or series,
ranking senior to the Series C Preferred Stock in respect of the payment of
dividends or upon liquidation, dilution or winding up, and the Company may not
consummate any reclassification of the Series C Preferred Stock. The Series C
Preferred Stock is also entitled to vote on any matter in which the holders
thereof are required by Colorado law to have a vote and on any other matter with
respect to which the Company's Board of Directors shall direct.
Further, the affirmative vote or consent of the holders of the majority of
the outstanding shares of Series C Preferred Stock, voting or consenting
7
separately as a series, is required to approve any merger or consolidation of
the Company with or into any other corporation or entity, any sale, lease,
exchange or other transfer of all or substantially all of the assets of the
Company and any issuance of shares of Common Stock of the Company that would
cause the ownership of the outstanding shares of Common Stock by the holders of
shares of Series C Preferred Stock to be less than 51% of the outstanding Common
Stock of the Company.
The Series A Preferred Stock and Series B Preferred Stock had similar
voting rights to the Series C Preferred Stock except that the Series A Preferred
Stock and Series B Preferred Stock were only entitled to be voted on a merger or
consolidation if the terms of the merger or consolidation did not provide that
the terms of the Series A Preferred Stock and Series B Preferred Stock remained
unchanged and on a parity with or senior to any other class or series of capital
stock authorized by the surviving corporation as to dividends and upon
liquidation, dissolution or winding up except as to any such class or series of
preferred stock of the Company ranking senior to the Series A Preferred Stock
and Series B Preferred Stock either as to dividends or upon liquidation,
dissolution or winding up that was created prior to the merger or consolidation.
EXECUTIVE COMPENSATION
The following table shows all cash compensation paid by the Company for
services rendered during the fiscal years ended November 30, 1997, November 30,
1996 and November 30, 1995 to John E. Kelly and P. Evan Lasky (there were no
other executive officers of the Company whose annual salary and bonus exceeded
$100,000).
Summary Compensation Table
Annual Compensation
Name and -----------------------------------------------
Principal Position Fiscal Year Salary Bonus
------------------ ----------- ------ -----
John E. Kelly 1997 $131,040 $44,554(1)
President and Chief 1996 $126,000 $16,630(1)
Executive Officer 1995 $120,000 $33,600(1)
P. Evan Lasky 1997 $ 91,000 $21,840(1)
Executive Vice 1996 $ 86,000 $11,000(1)
President and Chief 1995 $ 80,050 $16,583(1)
Operating Officer
(1) The bonus was earned in the fiscal year indicated, although it may have
been paid in the following fiscal year.
No options to purchase the Company's Common Stock were granted to or
exercised by John E. Kelly or P. Evan Lasky during the Company's fiscal year
ended November 30, 1997, and neither John E. Kelly or P. Evan Lasky owned any
options to purchase shares of the Company's Common Stock at November 30, 1997.
8
Members of the Board of Directors, other than members who are also officers
of the Company, are entitled to receive a fee of $2,000 per year and $250 for
each attended meeting of the Board of Directors. During the fiscal year ended
November 30, 1997, the Company paid $2,000 to Mr. Grant and $2,000 to Mr. White
for service as a director. Other than the payments to Mr. Grant and Mr. White,
the Company has not paid any directors' fees.
ACTIONS TO BE TAKEN AT MEETING
The Meeting is called by the Board of Directors of the Company to consider
and act upon the following matters:
(1) The election of five directors of the Company;
(2) The approval of an amendment to Article IX of the Company's Articles
of Incorporation to increase the number of votes necessary to
establish a quorum at shareholder meetings to one-third of the votes
entitled to be cast on a matter by a voting group;
(3) The approval of an amendment to the Company's Articles of
Incorporation to amend Article X to revise the votes necessary to
amend the Company's Articles of Incorporation to a majority of a
quorum, and to delete Articles XI and XII; and
(4) Such other matters as may properly come before the Meeting or any
adjournment thereof.
The holders of a majority of the outstanding shares of Common Stock of the
Company, present at the Meeting in person or represented by proxy, shall
constitute a quorum. If a quorum is present, directors are elected by a
plurality of the vote, i.e., the candidates receiving the highest number of
votes cast in favor of their election will be elected to the Board of Directors.
As to the proposals to amend the Company's Articles of Incorporation, if a
quorum is present, the affirmative vote of a majority of the shares entitled to
vote at the Meeting shall be the act of the shareholders. As to all other
matters voted on at the Meeting, if a quorum is present, the affirmative vote of
a majority of the shares represented at the Meeting and entitled to vote on the
subject matter shall be the act of the shareholders. Where brokers have not
received any instruction from their clients on how to vote on a particular
proposal, brokers are permitted to vote on routine proposals but not on
nonroutine matters. The absence of votes on nonroutine matters are "broker
nonvotes." Abstentions and broker nonvotes will be counted as present for
purposes of establishing a quorum, but will have no effect on the election of
directors. Abstentions and broker nonvotes on proposals other than the election
of directors, if any, will be counted as present for purposes of the proposal
and will have the effect of a vote against the proposals to amend the Company's
Articles of Incorporation.
9
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
The number of directors on the Company's Board of Directors has been
established by the bylaws of the Company and by resolution of the Board of
Directors as five directors.
The persons named in the enclosed form of Proxy will vote the shares
represented by Proxies received by them for the election of the five nominees
for director named below. If, at the time of the Meeting, any of these nominees
shall become unavailable for any reason, which event is not expected to occur,
the persons entitled to vote the Proxies will vote for such substitute nominee
or nominees, if any, as they determine in their sole discretion or the Board of
Directors may reduce the number of directors to be elected. If elected, Messrs.
J. S. Corcoran, John W. Grant, F. Edward Gustafson, John E. Kelly and William F.
White will hold office until the annual meeting of shareholders to be held in
1999, until their successors are duly elected or appointed or until their
earlier death, resignation or removal. The nominees for director, each of whom
has consented to serve if elected, are as follows:
Director Principal Occupation
Name of Nominee Since Age for Last Five Years
- --------------- ----- --- -------------------
J. S. Corcoran 1989 54 Self-employed as a business consultant
since October, 1996; executive officer of D.
P. Kelly & Associates L.P., a firm offering
management services, from November,
1988 to January, 1997; executive officer of
Envirodyne Industries, Inc., a manufacturer
of food packaging and food service sup-
plies, from June, 1989 to March 1996.
John W. Grant 1989 73 Retired since September, 1987.
F. Edward Gustafson 1989 56 Executive officer of D. P. Kelly & Associ-
ates L.P., a firm offering management ser-
vices, since November, 1988; executive
officer of Envirodyne Industries, Inc., a
manufacturer of food packaging and food
service supplies since June, 1989; director
of Envirodyne Industries, Inc. since Decem-
ber, 1993; executive officer of Viskase
Corporation, a wholly-owned subsidiary of
Envirodyne Industries, Inc., from February,
1990 to August, 1993.
10
Director Principal Occupation
Name of Nominee Since Age for Last Five Years
- --------------- ----- --- -------------------
John E. Kelly 1989 57 Executive officer of the Company since
September, 1989.
William F. White 1989 67 Executive officer of Whitnell & Co., an
investment advisory firm, since January,
1988; executive officer of Donegal, Inc., an
investment management firm, since January,
1991.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF THE NOMINEES.
PROPOSAL NUMBER TWO
ADOPTION OF AN AMENDMENT TO ARTICLE IX OF THE
ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF VOTES NECESSARY
TO ESTABLISH A QUORUM
Background and Discussion of Proposed Amendment. The Company was
incorporated under the laws of the State of Colorado on January 27, 1984.
Article IX, Section 9.1 of the Company's articles of incorporation, as amended
("Articles of Incorporation"), expressly provides that ten percent of all shares
entitled to vote on a matter shall constitute a quorum.
When the Colorado Business Corporation Act ("CBCA") became effective on
July 1, 1994, Section 7-107-206(1) of the CBCA set forth shareholder voting
requirements and provides that a quorum shall not consist of fewer than
one-third of the votes entitled to be cast on a matter by a voting group. The
Articles of Incorporation are therefore in conflict with Section 7-107- 206(1)
of the CBCA.
To resolve the conflict between the Articles of Incorporation and Section
7-107-206(1) of the CBCA, the Board of Directors of the Company recommends that
the Articles of Incorporation be amended by deleting the second sentence of
Article IX, Section 9.1 in its entirety and replacing it as follows:
"Unless otherwise ordered by a court of competent
jurisdiction, at all meetings of shareholders one-third of the shares
of a voting group entitled to vote at such meeting, represented in
person or by proxy, shall constitute a quorum of that voting group."
11
Effect of Amendment on Shareholders. When Section 7-107-206(1) of the CBCA
was enacted effective July 1, 1994, the statute specified that the minimum
number of shares necessary to constitute a quorum was one-third of all shares
entitled to vote on a matter. The Company's Articles of Incorporation provide
that only one-tenth of the shares entitled to vote on a matter are necessary to
constitute a quorum, therefore creating a conflict between Section 7-107-206(1)
of the CBCA and the Articles of Incorporation. Therefore, it is the position of
the Board of Directors that the minimum number of shareholders necessary to
constitute a quorum must be increased from ten percent of the shares entitled to
vote on a matter, as stated in the Articles of Incorporation, to one-third of
the shares entitled to vote on a matter, as required by the CBCA. Because PMIP
owns more than a majority of the shares entitled to vote on this proposed
amendment, if PMIP votes in favor of this proposal, it will be approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ADOPTION OF THE
AMENDMENT TO ARTICLE IX OF THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER
OF VOTES NECESSARY TO ESTABLISH A QUORUM AT SHAREHOLDER MEETINGS TO ONE-THIRD OF
THE VOTES ENTITLED TO BE CAST ON A MATTER BY A VOTING GROUP.
PROPOSAL NUMBER THREE
ADOPTION OF AN AMENDMENT TO THE
ARTICLES OF INCORPORATION
TO AMEND ARTICLE X
TO REVISE THE VOTES NECESSARY TO AMEND
THE ARTICLES OF INCORPORATION
AND TO DELETE ARTICLES XI AND XII
Background and Discussion of Proposed Amendment. The Company was
incorporated under the laws of the State of Colorado on January 27, 1984. The
Company's Articles of Incorporation, with three exceptions, are silent with
respect to the votes necessary to constitute an act of the shareholders. The
three exceptions to this silence are set forth in Articles X, XI and XII of the
Company's Articles of Incorporation.
Article X, Section 10.1 of the Company's Articles of Incorporation provides
that the shareholders, by vote or concurrence of a majority of the outstanding
shares of the Company, may take action which would otherwise require a
two-thirds vote under the Colorado Corporation Code, as amended ("Prior
Corporate Code"). Without such a provision as Article X, Section 10.1, the Prior
Corporate Code required a two-thirds vote in certain circumstances such as the
approval of a merger or the approval of a sale of all or substantially all of
the assets of the Company.
12
Article XI, Section 11.1 of the Company's Articles of Incorporation governs
the shareholder voting requirements with respect to amending the Company's
Articles of Incorporation, and provides that the affirmative vote of the holders
of at least a majority of the shares entitled to vote at a meeting duly called
or the written consent of the holders of all of the shares entitled to vote
thereon is required to amend the Company's Articles of Incorporation.
Article XII, Sections 12.1 and 12.2 of the Company's Articles of
Incorporation govern the shareholder voting requirements regarding dissolution
of the Company. Section 12.1 of the Company's Articles of Incorporation provides
that the Company shall be dissolved upon the affirmative vote of the holders of
at least a majority of the shares entitled to vote thereon at a meeting duly
called for that purpose. Section 12.2 of the Company's Articles of Incorporation
provides that a voluntary dissolution proceeding may be revoked by the
affirmative vote of the holders of at least a majority of the shares entitled to
vote thereon at a meeting duly called for that purpose.
Other than Articles X, XI and XII, the Company's Articles of Incorporation
are silent with respect to shareholder voting requirements, causing the Colorado
corporate code then in effect to govern those shareholder actions not otherwise
specified in the Articles of Incorporation. Except for the matters described
above regarding Articles X, XI and XII, under the Prior Corporate Code, if a
quorum was present, the affirmative vote of a majority of the shares represented
at a meeting and entitled to vote on the subject matter constituted an act of
the shareholders. This voting requirement continued to exist when the CBCA
became effective on July 1, 1994. Other sections of the CBCA, however, revised
the Prior Corporate Code with respect to shareholder voting requirements. For
example, although the shareholder voting requirements to amend the Articles of
Incorporation under the Prior Corporate Code required the affirmative vote of at
least a majority of the shares entitled to vote on the amendment, Sections
7-107-206(3) and 7-110-103(5) of the CBCA provide that an amendment only need be
approved by a majority of a quorum. The CBCA therefore reduced the minimum votes
necessary to amend the Company's Articles of Incorporation from a majority of
the shares entitled to vote on a matter to a majority of the votes constituting
a quorum.
The Company's Articles of Incorporation are silent with respect to the
voting requirements necessary to elect directors. Section 7-109-209(4) of the
CBCA governs the election of directors, and provides that the number of
candidates equaling the number of directors to be elected, having the highest
number of votes cast in favor of their election, shall be elected to a board of
directors.
The Board of Directors of the Company recommends that the Company's
Articles of Incorporation be amended to allow the Company to operate its
business in a manner that is consistent with the minimum voting requirements
under the CBCA necessary to constitute an act of the shareholders, and in order
to resolve any confusion as to the shareholder voting requirements due to the
changes between the Prior Corporate Code and the CBCA, as well as the silence in
the Company's Articles of Incorporation as to certain shareholder voting
requirements. Therefore, the Board of Directors of the Company recommends that
the Company's Articles of Incorporation be amended by deleting Articles X in its
entirety and replacing it as follows:
13
"ARTICLE X. Section 10.1. Shareholder Vote. In an
election of directors, that number of candidates equaling
the number of directors to be elected, having the highest
number of votes cast in favor of their election, shall be
elected to the Board of Directors of the Corporation. With
respect to action on a plan of merger or share exchange, on
the disposition of all or substantially all of the property
of the Corporation, on the granting of consent to the
disposition of all or substantially all of the property by
an entity controlled by the Corporation, and on the
dissolution of the Corporation, such action shall be
approved by each voting group entitled to vote separately on
the proposed action by a majority of all the votes entitled
to be cast on the proposed action by that voting group.
Except as bylaws adopted by the shareholders may provide for
a greater voting requirement and except as is otherwise
provided by the Colorado Business Corporation Act, action on
an amendment to these Articles of Incorporation and action
on a matter other than as provided above in this Article X
is approved if a quorum exists and if the votes cast
favoring the action exceed the votes cast opposing the
action. Any bylaw adding, changing, or deleting a greater
quorum or voting requirement for shareholders shall meet the
same quorum requirement and be adopted by the same vote
required to take action under the quorum and voting
requirements then in effect or proposed to be adopted,
whichever is greater."
The proposed amendment to Article X of the Company's Articles of
Incorporation sets forth the voting requirements necessary to amend the Articles
of Incorporation and to dissolve the Company, which are currently governed by
Articles XI and XII, respectively, of the Articles of Incorporation. Therefore,
the proposed amendment, if passed, will also delete Articles XI and XII of the
Company's Articles of Incorporation.
Effect of Amendment on Shareholders. The Company's Articles of
Incorporation became effective on January 27, 1984 under the Prior Corporate
Code. When the CBCA became effective on July 1, 1994, Sections 7-107-206(3) and
7-110-103(5) of the CBCA reduced the minimum shareholder votes necessary to
amend the Articles of Incorporation from a majority of all shares entitled to
vote on an amendment (as required under the Prior Corporate Code) to a majority
of a quorum. The proposed amendment will allow the Company to obtain shareholder
approval of amendments to the Company's Articles of Incorporation in a way that
is consistent with the CBCA by reducing the shareholder voting requirements to
require a majority of a quorum. The reduction in the shareholder voting
requirements to a majority of a quorum will allow a smaller number of
shareholder votes to amend the Company's Articles of Incorporation.
The proposed amendment to the Company's Articles of Incorporation will not
revise the shareholder voting requirements with respect to the election of
directors, to action on a plan of merger or share exchange, on the disposition
of all or substantially all of the property of the Company, on the granting of
consent to the disposition of all or substantially all of the property by an
entity controlled by the Company, on the dissolution of the Company, or on any
other actions by the shareholders (other than to approve an amendment to the
Articles of Incorporation as stated above), but merely clarifies any confusion
as to such shareholder voting requirements. Despite the deletion of Article XII
14
of the Company's Articles of Incorporation, the proposed amendment will not
change the shareholder voting requirements necessary to dissolve the Company,
which will continue to require the affirmative vote of a majority of all
outstanding shares entitled to vote on the dissolution.
Approval of the proposed amendment by the shareholders will clarify the
shareholder voting requirements for the Company and allow the Company to obtain
shareholder approval in a way that is consistent with the CBCA. Therefore, it is
the position of the Board of Directors of the Company that the votes necessary
to amend the Company's Articles of Incorporation be reduced from a majority of
all shares entitled to vote on a matter to a majority of a quorum, and that the
remaining shareholder voting requirements be expressly provided or referenced to
the CBCA. Because PMIP owns more than a majority of the shares entitled to vote
on the proposed amendment, if PMIP votes in favor of this proposal, it will be
approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ADOPTION OF THE
AMENDMENT TO THE ARTICLES OF INCORPORATION TO AMEND ARTICLE X TO REVISE THE
VOTES NECESSARY TO AMEND THE ARTICLES OF INCORPORATION TO A MAJORITY OF A
QUORUM, AND TO DELETE ARTICLES XI AND XII.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's principal independent public accountants for the fiscal year
ended November 30, 1997, were Erhardt, Keefe, Steiner & Hottman, P.C. The Board
of Directors has not met to select the principal independent public accountants
for the fiscal year ended November 30, 1998, although it is anticipated that
Erhardt, Keefe, Steiner & Hottman, P.C. will be selected as the Company's
principal independent public accountants for the fiscal year ended November 30,
1998. Representatives of Erhardt, Keefe, Steiner & Hottman, P.C. are expected to
be present at the Meeting, have an opportunity to make a statement if they
desire to do so and to be available to respond to appropriate questions.
1997 ANNUAL REPORT TO SHAREHOLDERS
Included with this Proxy Statement is the Company's 1997 Annual Report to
Shareholders which contains the Company's Annual Report on Form 10-KSB for the
fiscal year ended November 30, 1997. The Company will provide, without charge,
to each person solicited upon written request, an additional copy of the
Company's Annual Report on Form 10-KSB for the fiscal year ended November 30,
1997 as required to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended. For additional
copies please write Mr. Raymond Goshorn, Secretary of the Company, at 3033 South
Parker Road, Suite 1200, Aurora, Colorado 80014.
15
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next annual
meeting of the Company's shareholders must be received by the Company by January
1, 1999 to be considered for inclusion in the proxy statement and form of proxy
relating to the next annual meeting.
SOLICITATION OF PROXIES
The cost of soliciting proxies, including the cost of preparing, assembling
and mailing this proxy material to shareholders, will be borne by the Company.
Solicitations will be made only by use of the mails, except that, if necessary
to obtain a quorum, officers and regular employees of the Company may make
solicitations of proxies by telephone or electronic facsimile or by personal
calls. Brokerage houses, custodians, nominees and fiduciaries will be requested
to forward the proxy soliciting material to the beneficial owners of the
Company's shares held of record by such persons and the Company will reimburse
them for their charges and expenses in this connection.
OTHER BUSINESS
The Company's Board of Directors does not know of any matters to be
presented at the Meeting other than the matters set forth herein. If any other
business should come before the Meeting, the persons named in the enclosed form
of Proxy will vote such Proxy according to their judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
RAYMOND S. GOSHORN, SECRETARY
Aurora, Colorado
May 1, 1998
16
PROXY
PAK MAIL CENTERS OF AMERICA, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 19, 1998
The undersigned hereby constitutes and appoints John Kelly, P. Evan Lasky
and Raymond Goshorn, and each of them, the true and lawful attorneys and proxies
of the undersigned with full power of substitution and appointment, for and in
the name, place and stead of the undersigned, to act for and to vote all of the
undersigned's shares of $0.001 par value common stock of Pak Mail Centers of
America, Inc. (the "Company") at the Annual Meeting of Shareholders (the
"Meeting") to be held at the offices of the Company, 3033 South Parker Road,
Suite 1200, Aurora, Colorado 80014, on Friday, June 19, 1998, at 9:00 a.m.
Mountain Time, and at all adjournments thereof for the following purposes:
1. Election of Directors.
[ ] FOR THE DIRECTOR NOMINEES LISTED [ ] WITHHOLD AUTHORITY TO VOTE FOR ALL
BELOW (EXCEPT AS MARKED TO THE NOMINEES LISTED BELOW
CONTRARY BELOW)
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
J. S. Corcoran John W. Grant
F. Edward Gustafson John E. Kelly
William F. White
2. Approval of an amendment to Article IX of the Company's Articles of
Incorporation to increase the number of shareholders necessary to establish a
quorum at shareholder meetings to one-third of the votes entitled to be cast on
a matter by a voting group.
[ ] FOR [ ] AGAINST [ ] ABSTAIN FROM VOTING
3. Approval of an amendment to the Company's Articles of Incorporation to
amend Article X to revise the votes necessary to amend the Company's Articles of
Incorporation to a majority of a quorum, and to delete Articles XI and XII.
[ ] FOR [ ] AGAINST [ ] ABSTAIN FROM VOTING
4. In their discretion, the Proxies are authorized to vote upon such other
business as lawfully may come before the Meeting.
The undersigned hereby revokes any proxies as to said shares heretofore
given by the undersigned and ratifies and confirms all that said attorneys and
proxies lawfully may do by virtue hereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THEN THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
AT THE MEETING (1) FOR ELECTION OF THE NOMINEES FOR DIRECTOR AS SELECTED BY THE
BOARD OF DIRECTORS; (2) TO APPROVE THE AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO REQUIRE ONE-THIRD OF THE VOTES ENTITLED TO BE CAST TO ESTABLISH
A QUORUM AT SHAREHOLDER MEETINGS; AND (3) TO APPROVE THE AMENDMENT TO THE
COMPANY'S ARTICLES OF INCORPORATION TO AMEND ARTICLE X TO REQUIRE A MAJORITY OF
A QUORUM TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION, AND TO DELETE
ARTICLES XI AND XII.
It is understood that this proxy confers discretionary authority in respect
to matters not known or determined at the time of the mailing of the Notice of
Annual Meeting of Shareholders to the undersigned. The proxies and attorneys
intend to vote the shares represented by this proxy on such matters, if any, as
determined by the Board of Directors.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders and the Proxy Statement and Annual Report to Shareholders
furnished therewith.
Dated and Signed:
, 1998
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Signature(s) should agree with the
name(s) stenciled hereon. Executors,
administrators, trustees, guardians
and attorneys should so indicate
when signing.Attorneys should submit
powers of attorney.