SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES EXCHANGE ACT
OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[ X ] Definitive Information Statement
CIMARRON-GRANDVIEW GROUP, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14c-5(g).
[ ] Fee Computed on Table Below Per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of Each Class of Securities to Which Transaction Applies: NONE
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2) Aggregate Number of Securities to Which Transaction Applies: NONE
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3) Per Unit Price or Other Underlying Value of Transaction Computed Pursuant
to Exchange Act Rule 0-11 (Set Forth the Amount on Which the Filing Fee Is
Calculated and State How It Was Determined.): -$0- THE TRANSACTION IS NOT OF
THE TYPE REQUIRING A FILING FEE UNDER RULE 0-11
4) Proposed Maximum Aggregate Value of Transaction: $-0-
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5) Total fee paid: $-0-
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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: N/A
(2) Form, Schedule, or Registration Statement No: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 4, 2001
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders of Cimarron-
Grandview Group, Inc. (the "Company"), will be held at 10:00 a.m. (PST), on
January 4, 2001, at the Doubletree Hotel, Cascade 9 Room, Seattle Airport, 18740
Pacific Highway South, Seattle, Washington 98188, to consider and act upon the
following matters:
1. To elect three (3) member to the Board of Directors to serve for a one
year term or until their respective successors are elected and qualified;
2. To consider and vote upon the adoption of amendments to the Company's
Articles of Incorporation to (a) change the name of the Company to Full Moon
Universe, Inc., (b) re-stating the purpose of the Company, (c) to consolidate
each five outstanding shares of Common Stock into one share of Common Stock, (d)
to change the authorized capital of the Company to increase the number of shares
of Common Stock from 30,000,000 to 100,000,000 and to authorize a class of
preferred stock consisting of 10,000,000 shares, (e) to eliminate cumulative
voting for election of Directors; (f) to eliminate preemptive rights ; (g)
limiting the personal liability of directors; and, (h) providing for
indemnification of directors
3. To approve the engagement of LeMaster & Daniels, PLLC as independent
certified public accountants for the Company for the fiscal year ending December
31, 2000.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only Shareholders of record on the books of the Company at the close of business
on November 2, 2000, will be entitled to notice of and to vote at the meeting or
any adjournment thereof.
December 10, 2000
By Order of the Board of Directors
Gregory B. Lipsker, President
CIMARRON-GRANDVIEW GROUP, INC.
601 W. MAIN AVE.
SPOKANE, WA 99201
INFORMATION STATEMENT
For the Annual Meeting of Shareholders
To be Held January 4, 2001
This Information Statement is furnished in connection with matters to be voted
upon at the 2000 Annual Meeting of Shareholders of CIMARRON-GRANDVIEW GROUP,
INC. (the "Company") to be held at 10:00 a.m. (PST), on Thursday, January 4,
2001, at the Doubletree Hotel, Cascade 9 Room, 18740 Pacific Highway South,
Seattle, Washington 98188, and at any and all adjournments thereof with respect
to the matters referred to in the accompanying notice. This Information
Statement is first being mailed to Shareholders on or about December 14, 2000.
Management of the Company is the record and beneficial owner of 9,954,538 shares
(approximately 59%) of the outstanding common stock. It is management's
intention to vote all of its shares in favor of each matter to be considered by
the Shareholders, thereby assuring approval. Although approval of each matter
to be considered by the Shareholders is assured, the Company is required by
applicable law to submit each of the matters to be considered to the vote of all
Shareholders. There are no dissenter's rights applicable with respect to any
matter to be considered by the Shareholders.
The Company has determined November 2, 2000, as the record date with respect to
the determination of Shareholders entitled to vote at the Annual Meeting of
Shareholders.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
PURPOSES OF THE ANNUAL MEETING
ELECTION OF DIRECTORS
At the Annual Meeting, Shareholders will be asked to consider and to take action
on the election of three (3) members to the Board of Directors to serve for a
one year term or until their respective successors are elected and qualified
(SEE " ELECTION OF DIRECTORS").
AMENDMENT TO THE ARTICLES OF INCORPORATION
To consider and vote upon the adoption of amendments to the Company's Articles
of Incorporation to (a) change the name of the Company to Full Moon Universe,
Inc., (b) re-stating the purpose of the Company, (c) to consolidate each five
outstanding shares of Common Stock into one share of Common Stock, (d) to change
the authorized capital of the Company to increase the number of shares of Common
Stock from 30,000,000 to 100,000,000 and to authorize a class of preferred stock
consisting of 10,000,000 shares, (e) to eliminate cumulative voting for election
of Directors; (f) to eliminate preemptive rights ; (g) limiting the personal
liability of directors; and, (h) providing for indemnification of directors (SEE
"AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION").
APPROVAL OF ENGAGEMENT OF AUDITORS
At the Annual Meeting, Shareholders will be asked to consider and vote upon the
selection of LeMaster & Daniels, PLLC as the Company's independent auditors for
the fiscal year ending December 31, 2000 (SEE "SELECTION OF AUDITORS").
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following information as of the fiscal year ended December 31, 1999, is
provided with respect to each director and executive officer of the Company.
NAME (AGE) POSITION LENGTH OF SERVICE
- ----------------------------- -------- -------------------
William R. Green (61) Director Since 1993
Gregory B. Lipsker (50) Director Since 1993
Eunice R. Campbell (54) Director 1992 and 1994 (1)
Albert M. Zlotnick (75) Director Since 2000 (2)
(1) Ms. Campbell resigned as a Director of the Company in June, 2000.
(2) Mr. Zlotnick was appointed to fill the vacancy created by Ms. Campbell's
resignation.
The directors are elected for a one-year term and until their successors have
been elected and qualified. There are no arrangements or understandings between
any of the directors and other persons pursuant to which such person was elected
as a director.
(B) IDENTIFICATION OF EXECUTIVE OFFICERS
Set forth below is the name, age and length of service of the Company's present
Executive Officers:
NAME (AGE) POSITION LENGTH OF SERVICE
- -------------------------- -------------------- -------------------
Gregory B. Lipsker (50) President Since 1998 (1)
William R. Green (61) Vice President/
Asst. Secretary Since 1993
Eunice R. Campbell (54) Secretary/Treasurer Since 1992 (2)
(1) Gregory B. Lipsker served as the Company's Secretary from 1993 until
February, 1998.
(2) Ms. Campbell resigned as an Executive Officer of the Company in June,
2000.
Executive Officers are appointed to serve until the meeting of the Board of
Directors following the next annual meeting of shareholders and until their
successors have been elected and qualified. There are no arrangements or
understandings between any of the directors, officers, and other persons
pursuant to which such person was selected as an Executive Officer.
FAMILY RELATIONSHIPS: none
BUSINESS EXPERIENCE
Set forth below is certain biographical information regarding each Director and
Executive Officer of the Company:
Gregory B. Lipsker - Mr. Lipsker is a practicing attorney in Spokane,
Washington. Mr. Lipsker's practice emphasizes corporate and securities matters.
Mr. Lipsker is an Executive Officer and Director of Metaline Mining and Leasing
Company, a publicly-held, inactive mining exploration company.
Dr. William R. Green - William R. Green is a mining engineer and geologist, and
was a professor of mining engineering at the University of Idaho from 1965 to
1983. He has been actively involved in the mining business since 1962 and is
currently an officer and director of Canadian public companies: Maya Gold
Limited and Petromin Resources Ltd., and US companies Mines Management, Inc. and
Metaline Mining and Leasing Co.
Albert M. Zlotnick - Mr. Zlotnick is a Director of the Company. Mr. Zlotnick's
primary occupation is as a private investor and financial consultant. Mr.
Zlotnick currently serves as the Chairman of the Board of Directors of the
following companies: P.H.C., Inc., Upward Technology Corporation, Robin
Industries, Inc., Bala Cynwyd, Inc., Electronic Data Controls Corp. and
Convention Centers, Inc. He also serves as a director of Comprehensive Holding
Corporation, S.A. of Geneva, Switzerland.
COMMITTEES OF THE BOARD
The Company has no standing audit, nominating or compensation committees, or
committees performing similar functions.
BOARD MEETINGS
During the fiscal year ended December 31, 1999 there were two special meetings
of the Board and one regular meeting. Each director was present at each special
and regular meeting of the Board of Directors.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Registrant pursuant to Section 240.16a-3 during its most recent fiscal year
and Form 5 and amendments thereto furnished to the Registrant with respect to
the most recent fiscal year, all executive officers, directors and beneficial
owner of more than ten percent of any class of equity securities of the Company
registered pursuant to Section 12 of the Exchange Act of the Company timely
filed the reports required under Section 16(a) of the Securities Exchange Act of
1934, as amended except that one Form 5 reporting of a single transaction was
filed late for Mr. Albert Zlotnick.
LEGAL PROCEEDINGS
As of the date hereof, it is the opinion of management that there is no material
proceeding to which any director, officer or affiliate of the registrant, any
owner of record or beneficially of more than five percent of any class of voting
securities of the registrant, or any associate of any such director, officer,
affiliate of the registrant, or security holder is a party adverse to the
registrant or any of its subsidiaries or has a material interest adverse to the
registrant or any of its subsidiaries.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS: none
REMUNERATION AND OTHER COMPENSATION OF MANAGEMENT
The following table lists, on an accrual basis, for each of the three years
ended December 31, 1999, the remuneration paid by the Company to its Chief
Executive Officer any officers or directors in excess of $100,000 and to all
officers and directors as a group who were officers or directors of the Company
at any time during the year ended December 31, 1999:
Summary Compensation Table
- ----------------------------
Long-Term Compensation
Annual Compensation Awards Payouts
- ---------------------------------------------- ---------------------- -----------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Other Restricted Securities
and Annual Stock Underlying LTIP All Other
Principal Year Salary Bonus Comp. Awards(1) Options/ Payouts Comp.
Position ($) ($) ($) ($) SARs(#) ($) ($)
- ------------------ ---- ------ ----- ------ ---------- ---------- ------- --------
Gregory B. 1997 $0 $0 $500 $50 -0- $0 $ 750*
Lipsker 1998 $0 $0 $500 $50 -0- $0 $18,341*
President 1999 $0 $0 $500 $ 0 -0- $0 $ 1,971*
*These amounts were paid to the law firm in which Mr. Lipsker is a member for
legal services rendered
COMPENSATION FOR LAST FISCAL YEAR
Cash Compensation Security Grants
Cash Compensation Security Grants
- ------------------------------------------- ------------------------------------------
Number of
Annual Meeting Consulting Number of Securities
Retainer Fees ($) Fees/Other Shares (#) Underlying
Name Fees ($) Fees ($) Options/SARs(#)
(a) (b) (c) (d) (e) (f)
- ------------------ --------- ------------ ------------ ------------- ---------------
Gregory Lipsker $ -0- -0- -0- 0 0
William R. Green $ -0- -0- -0- 0 0
Eunice Campbell $ -0- -0- -0- 0 0
The Company had no qualified or nonqualified stock option plans as of December
31, 1999 and November 2, 2000.
The Company has no outstanding stock options.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Company has one class of voting securities entitled to be voted at the
Annual Meeting. At November 2, 2000 there were 16,862,476 shares of Common
Stock held by 2,770 shareholders of record. Each share of Common Stock is
entitled to one vote on each matter to be considered. The presence of the
holders of a majority of the outstanding voting shares is necessary to
constitute a quorum at the Annual Meeting. Approval of the proposals to be
presented at the Annual Meeting will require the affirmative vote of the holders
of a majority of the shares present at the meeting. There is cumulative voting
for directors
The Company has determined November 2, 2000, as the record date with respect to
the determination of Shareholders entitled to vote at the 2000 Annual Meeting of
Shareholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below is certain information concerning parties, excluding management,
who are known by the Company to directly own more than 5% of any class of the
Company's voting shares on November 2, 2000:
Amount and
Nature of
Title Beneficial Percent
of Class Name of Beneficial Owner Ownership of Class
- ------------- --------------------------- ------------ ----------
Common stock Eunice R. Campbell 857,000 5.08
(b) SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of July 31, 1998 information concerning the
direct ownership of each class of equity securities by all directors and all
directors and officers of the Company as a group:
Amount and
Nature of
Title Beneficial Percent
of Class Name of Beneficial Owner Ownership of Class
- ------------- -------------------------------- ------------ ----------
Common stock Albert M. Zlotnick 8,431,538 50.00
Common stock Gregory B. Lipsker 877,000 5.20
Common stock William R. Green* 636,000 3.72
Common stock All directors and officers 9,944,538 58.92
as a group (3 individuals)
*Subsequent to November 2, 2000 William Green sold 30,000 shares of Common
Stock.
MATTERS TO BE CONSIDERED AND VOTED UPON AT THE ANNUAL MEETING OF SHAREHOLDERS
1. ELECTION OF DIRECTORS
At the Annual Meeting, Shareholders will be asked to consider and to take action
on the election of three (3) members to the Board of Directors to serve for a
one-year term or until their respective successors are is elected and qualified.
The nominees for director, together with certain information with respect to
him, is as follows:
Shares Owned Beneficially directly
Name Age Director Since or indirectly, as of 11-02-00
- -------------------- --- --------------- ------------------------------------
Charles Band 48 New nominee -0-
Mickey M. Kaiserman 51 New nominee -0-
Herbert Wolas* 67 New nominee -0-
Charles Band - Mr. Band has been involved in the motion picture industry for
over 20 years. During this time he has been the president and sole shareholder
of a number of companies involved in video production and distribution. Mr. Band
has produced over 200 films. Mr. Band is the founder and principal shareholder
of Full Moon Universe, Inc.
Mickey M. Kaiserman - Mr. Kaiserman is graduated from Cornell University and
received his MBA from the University of Chicago. From 1989 to the present, Mr.
Kaiserman has been a self-employed consultant providing financial and managerial
consulting. For more than the past five years, Mr. Kaiserman has dedicated
substantially all of his time to the business and financial affairs of the Full
Moon Universe, Inc., or its predecessors and affiliates.
Herbert Wolas - Mr. Wolas is graduated from the University of California at Los
Angeles where he received his B.A. Degree and his Juris Doctorate. Mr. Wolas is
a practicing attorney in Los Angeles. Mr. Wolas has served as an officer and
director of various public and private companies. *Mr. Wolas' consent to serve
as a Director is conditional on the Company obtaining directors' liability
insurance.
2. AMENDMENTS TO THE COMPANY'S ARTICLES OF INCORPORATION
The Board of Directors proposes the following amendments to the Articles of
Incorporation.
AMENDED ARTICLE I
NAME
The name of this Corporation shall be Full Moon Universe, Inc.
DISCUSSION: It is proposed to change the name of the Company from
Cimarron-Grandview Group, Inc to Full Moon Universe, Inc. The purpose of the
name change is to reflect our new business, the production and distribution of
motion pictures for direct to video release. The motion pictures are released
under the Full Moon brand. Management believes that the name change is important
to avoid confusion as to the Company's business since the name
Cimarron-Grandview Group, Inc has historically been associated with the mineral
exploration industry.
AMENDED ARTICLE IV
PURPOSE
The purpose of this corporation shall be to transact any and all lawful business
for which corporations may be incorporated under the Washington Business
Corporation Act, in general, to have and exercise all the powers conferred by
the laws of Washington upon corporations formed under the Washington Business
Corporation Act and to do any and all things hereinbefore set forth to the same
extent as natural persons might or could do.
DISCUSSION: The reason for this amendment is to streamline the language setting
forth the Company's purpose. This amendment does not change the purpose of the
Company. This amendment is not intended to alter the Company's purpose in any
manner. Its purpose is merely for the sake of corporate flexibility and
simplification of the Amended Articles of Incorporation. The new language
eliminates many of the specific purposes set forth in the original 1927 Articles
of Incorporation which related to the mineral industry. Since the time the
Company was first incorporated the trend in stating business purpose has been to
give a broad charter to companies to engage in any lawful business. The original
language gave such broad powers but also included many specific powers which are
not needed and are eliminated by this amendment.
AMENDED ARTICLE V
DIRECTORS
The Board of Directors of this corporation shall consist of three (3) directors.
The number of directors constituting the Board of Directors of this corporation
may be increased or decreased from time to time in the manner specified in the
Bylaws of this corporation; provided, however, that the number shall not be less
than three (3) or more than nine (9). In case of a vacancy in the Board of
Directors because of a director's resignation, removal or other departure from
the board, or because of an increase in the number of directors, the remaining
directors, by majority vote, may elect a successor to hold office for the
unexpired term of the director whose position is vacant, and until the election
and qualification of a successor.
DISCUSSION: This amendment sets a range in the number of directors. Under
the bylaws as now existing the number was set at a specific number and directors
were called Trustees, a term no longer used.
AMENDED ARTICLE VI
REVERSE SPLIT
Each five outstanding shares of Common Stock now outstanding are hereby
consolidated into one share of Common Stock.
DISCUSSION: Management believes that it is advisable to consolidate the
outstanding shares of Common Stock by effecting a five for one reverse split.
There are currently each currently outstanding five shares of Common Stock will
become one share of Common Stock. To arrive at the number of shares of
post-reverse split shares you will own, take the number of shares you currently
own and divide that number by 5. Therefore, a person currently holding one
hundred shares of Common Stock will hold twenty shares of Common Stock after the
reverse split. Shareholders who will receive fractional shares will be given the
opportunity to "round up" to the next whole share by paying the fair value of
the remaining fraction of a share needed to make a whole share. The fair value
of the share will be determined by management using the guidelines that would
apply to determination of fair value if dissenters' rights existed.
AMENDED ARTICLE VI
CAPITALIZATION
The authorized capital stock of the corporation shall consist of two classes of
stock, designated as Common Stock and Preferred Stock.
The total number of shares of Common Stock that the corporation will have
authority to issue is One Hundred Million (100,000,000). The shares shall have
a par value of $0.001 per share. All of the Common Stock authorized herein
shall have equal voting rights and powers without restrictions in preference.
The total number of shares of Preferred Stock that the corporation will have
authority to issue is Ten Million (10,000,000). The Preferred Stock shall have
a stated value of $0.001 per share. The authorized but unissued shares of
Preferred Stock may be divided into and issued in designated series from time to
time by one or more resolutions adopted by the Board of Directors. The Directors
in their sole discretion shall have the power to determine the relative powers,
preferences, and rights of each series of Preferred Stock.
DISCUSSION: The Company is currently authorized to issue 30,000,000 shares of
its no par value Common Stock, of which 16,862,476 shares were issued and
outstanding as of November 2, 2000.
The Board of Directors has determined that it would be advisable and in the best
interest of the Company to increase the number of authorized shares of Common
Stock from 30,000,000 shares to 100,000,000 shares in order to provide the
Company with an adequate supply of authorized but unissued shares of Common
Stock for general corporate needs including obtaining additional financing,
possible stock dividends, employee incentive and benefit plans or consummation
of acquisitions at times when the Board, in its discretion, deems it
advantageous to do so. At present, the Company has a commitment to issue
approximately 19,110,800 shares to the holders of Full Moon Universe, Inc.
Common Stock in exchange for their shares of Full Moon Universe, Inc. Common
Stock. Approval of this amendment will provide sufficient shares to complete the
share exchange. The Company has no other commitments to issue additional shares
of common stock.
All shares of Common Stock are equal to each other with respect to voting,
liquidation, dividend and other rights. Owners of shares of Common Stock are
entitled to one vote for each share they own at any Shareholders' meeting.
Holders of shares of Common Stock are entitled to receive such dividends as may
be declared by the Board of Directors out of funds legally available therefore,
and upon liquidation are entitled to participate pro rata in a distribution of
assets available for such a distribution to Shareholders. Although the Board of
Directors would authorize the issuance of additional shares of Common Stock
based on its judgment as to the best interests of the Company and its
Shareholders, the issuance of authorized shares of Common Stock could have the
effect of diluting the voting power and book value per share of the outstanding
Common Stock.
Authorized shares of Common Stock in excess of those shares outstanding
(including, if authorized, the additional Common Stock provided for in the
Proposal) will remain available for general corporate purposes, may be privately
placed and could be used to make a change in control of the Company more
difficult. Under certain circumstances, the Board of Directors could create
impediments to, or frustrate, persons seeking to effect a takeover or transfer
in control of the Company by causing such shares to be issued to a holder or
holders who might side with the Board of Directors in opposing a takeover bid
that the Board of Directors determines is not in the best interests of the
Company and its stockholders, but in which unaffiliated stockholders may wish to
participate. In this connection, the Board of Directors could issue authorized
shares of Common Stock to a holder or holders which, when voted together with
the shares held by members of the Board of Directors and the executive officers
and their families, could prevent the majority stockholder vote required by the
Company's Restated Articles of Incorporation to effect certain matters.
Furthermore, the existence of such shares might have the effect of discouraging
any attempt by a person, through the acquisition of a substantial number of
shares of Common Stock, to acquire control of the Company, since the issuance of
such shares should dilute the Company's book value per share and the Common
Stock ownership of such person. One of the effects of the Proposal, if
approved, might be to make a tender offer more difficult to accomplish. This
may be beneficial to management in a hostile tender offer, thus having an
adverse impact on stockholders who may want to participate in such tender offer.
If the proposal is approved, the additional, authorized Common Stock, as well as
the currently authorized but unissued Common Stock, would be available for
issuance in the future for such corporate purposes as the Board of Directors
deems advisable from time to time without the delay and expense incident to
obtaining shareholder approval, unless such action is required by applicable law
or by the rules of the National Association of Securities Dealers, Inc., or of
any stock exchange upon which the Company's shares may then be listed. It
should be noted that subject to the limitations discussed above, all of the
types of Board action with respect to the issuance of additional shares of
Common Stock that are described in the preceding paragraphs can currently be
taken and that the power of the Board of Directors to take such actions would
not be enhanced by the proposal, although the proposal would increase the number
of shares of Common Stock that are available for the taking of such action
The Company will have authority to issue up to Ten Million (10,000,000) shares
of newly created preferred stock ("Preferred Stock"). The Preferred Stock with
a stated value of $0.001 per share. The Preferred Stock shall be entitled to
preference over the Common Stock with respect to the distribution of assets of
the Company in the event of liquidation, dissolution, or winding-up of the
Company, whether voluntarily or involuntarily, or in the event of any other
distribution of assets of the Company among its shareholders for the purpose of
winding-up its affairs. The authorized, but unissued shares of Preferred Stock,
may be divided into and issued in designated series from time to time by one or
more resolutions adopted by the Board of Directors. The Directors, in their sole
discretion, shall have the power to determine the relative powers, preferences,
and rights of each series of Preferred Stock.
If approved, the Board of Directors would be empowered without the necessity of
further action or authorization by the Company's Shareholders (unless such
action or authorization is required in a specific case by applicable laws or
regulations or stock exchange rules) to authorize the issuance of the Preferred
Shares from time to time in one or more series or classes, and to fix by
resolution the designations, preferences, limitations, and relative rights of
each such series or class. Each series of Preferred Shares would, as determined
by the Board of Directors at the time of issuance, rank senior to the Company's
shares of Common Stock with respect to dividends and redemption and liquidation
rights.
The Preferred Shares will provide authorized and unissued shares of Preferred
Stock, which may be used by the Company for any proper corporate purpose. Such
purpose might include, without limitation, issuance as part or all of the
consideration required to be paid by the Company in the acquisition of other
businesses or properties, or issuance in public or private sales for cash as a
means of obtaining additional capital for use in the Company's business and
operations. There are no transactions currently under review by the Board of
Directors which contemplate the issuance of Preferred Shares.
It is not possible to state the precise effects of the authorization of the
Preferred Shares upon the rights of the holders of the Company's Common Stock
until the Board of Directors determines the respective preferences, limitations,
and relative rights of the holders of each class or series of the Preferred
Shares. Such effects might include, however: (a) reduction of the amount
otherwise available for payment of dividends on Common Stock to the extent
dividends are payable on any issued Preferred Shares; (b) restrictions on
dividends on the Common Stock; (c) dilution of the voting power of the Common
Stock to the extent that the Preferred Shares had voting rights; (d) conversion
of the Preferred Shares into Common Stock at such prices as the Board of
Directors determines, which could include issuance at below the fair market
value or original issue price of the Common Stock; and (e) the holders of Common
Stock not being entitled to share in the Company's assets upon liquidation until
satisfaction of any liquidation preference granted to holders of the Preferred
Shares.
In addition, the Preferred Shares could, in certain instances, render more
difficult or discourage a merger, tender offer or proxy contest and thus
potentially have an "anti-takeover" effect, especially if Preferred Shares were
issued in response to a potential takeover. In addition, issuances of
authorized Preferred Shares can be implemented, and have been implemented by
some companies in recent years, with voting or conversion privileges intended to
make acquisition of the Company more difficult or more costly. Such an issuance
could deter the types of transactions which may be proposed or could discourage
or limit Shareholders' participation in certain types of transactions that might
be proposed (such as a tender offer), whether or not such transactions were
favored by the majority of the Shareholders, and could enhance the ability of
officers and directors to retain their positions.
Although the Board of Directors would authorize the issuance of additional
Preferred Shares based on its judgment as to the best interests of the Company
and its Shareholders, the issuance of authorized Preferred Shares could have the
effect of diluting the voting power and book value per share of the outstanding
Common Stock.
AMENDED ARTICLE VII
VOTING
The holders of any of the Corporation's capital stock shall possess voting power
for the election of Directors and for all other purposes, subject to such
limitations as may be imposed by law and by any provision of the Articles of
Incorporation in the exercise of their voting power. The holders of capital
stock shall be entitled to one vote for each share held. Cumulative voting for
the election of Directors is hereby expressly prohibited.
DISCUSSION: In the election of directors, owners of Common Stock currently have
cumulative voting rights. Under cumulative voting procedures, each Shareholder
has the right to vote in person or by proxy the number of shares registered in
his name for as many persons as there are directors to be elected, or to
cumulate such shares and to give one candidate as many votes as shall equal the
number of directors to be elected multiplied by the number of his shares, or
distribute the votes so cumulated among as many candidates as he may desire.
The Common Stock of the Company does now, but if this proposal is approved will
not, have cumulative voting rights which means that the holders of more than 50
percent of the shares voting in an election of directors may elect all of the
directors if they choose to do so. In such event, the holders of the remaining
shares aggregating less than 50 percent would not be able to elect any
directors.
AMENDED ARTICLE VIII
PREEMPTIVE RIGHTS
Shareholders of this corporation will have no preemptive rights to acquire
additional shares issued by the corporation, or any securities convertible into,
or carrying or evidencing any rights or option to purchase, any such shares.
DISCUSSION: The Company's shareholders currently have preemptive rights.
Preemptive rights grant each shareholder of the Company the right to acquire, on
uniform terms and conditions set by the board, proportional amounts of the
Company's unissued shares as the board authorizes their issuance. This amendment
will eliminate preemptive rights. Management believes that the existence of
preemptive rights may hinder the Company in future efforts to obtain financing
or strategic partners.
AMENDED ARTICLE IX
INDEMNIFICATION AND LIABILITY OF DIRECTORS
A director of the corporation shall not be personally liable to the corporation
or its shareholders for monetary damages for conduct as a director, except for
liability of the director for (i) acts or omissions that involve intentional
misconduct or a knowing violation of law by the director; (ii) conduct which
violates RCW 23B.08.310 of the Washington Business Corporation Act, pertaining
to unpermitted distributions to shareholders or loans to directors; or (iii) any
transaction from which the director will personally receive a benefit in money,
property, or services to which the director is not legally entitled. If the
Washington Business Corporation Act is amended to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the corporation shall be eliminated or limited to the
fullest extent permitted by the Washington Business Corporation Act, as so
amended. Any repeal or modification of the foregoing paragraph by the
shareholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
The corporation is authorized to indemnify, agree to indemnify or obligate
itself to advance or reimburse expenses incurred by its Directors, Officers,
employees or agents in any Proceeding (as defined in the Washington Business
Corporation Act) to the full extent of the laws of the State of Washington as
may now or hereafter exist.
DISCUSSION: These provisions did not exist under Washington law when the
Company was incorporated. Indemnification and limitation of liabilities are now
permitted under Washington law and is considered "state of the art" under
corporate laws of most states. These provisions are being proposed to conform
the Articles of Incorporation to contemporary corporate law and to enable the
Company to more effectively attract and retain competent management personnel.
3. APPOINTMENT OF AUDITORS
At the Annual Meeting, Shareholders will be asked to consider and to take action
on the appointment of LeMaster & Daniels, PLLC LLP as its independent auditors
for the year ending December 31, 2000. It is not expected that a representative
of LeMaster & Daniels PLLC will be present at the Annual Meeting.
4. OTHER MATTERS
Management does not know of any other matters likely to be brought before the
2000 Annual Meeting of Shareholders. However, in the event any other matters
properly come before the 2000 Annual Meeting of Shareholders, such matters will
be acted upon accordingly.
FINANCIAL AND OTHER INFORMATION
This information is incorporated by reference to the balance sheets and the
related statements of operations, stockholders' equity and cash flows appearing
in the Company's 1999 Annual Report, the Form 10K for the fiscal year ended
December 31, 1999 and the Form 10Q for the quarterly period ended September 30,
2000.
SHAREHOLDER PROPOSALS
Proposals by shareholders intended to be presented at the next Annual Meeting of
Shareholders to be held in 2002, must be received by the Secretary of the
Company on or before October 1, 2001, in order to be included in the information
statement for that meeting. Proposals should be directed to Corporate
Secretary, 601 W. Main Ave. Spokane, WA 99201.
A copy of the Company's Annual Report for the period ended December 31, 1999
(Form 10-K) as filed with the Securities and Exchange Commission, including the
financial statements and schedules thereto, may be obtained by shareholders
without charge by writing to:
Cimarron Grandview Group, Inc.
601 W. Main Ave., Suite 714
Spokane, Washington 99201
/s/ Gregory B. Lipsker
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Gregory B. Lipsker, President