SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [X]
Filed by a 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))
[ ]Definitive Proxy Statement
[X]Definitive Additional Materials
[ ]Soliciting Material Pursuant to {section} 240.14a-11(c) or {section}
240.14a-12
QUAD METALS CORPORATION
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ]$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ]$500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[X]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 transaction applies: None
2)Aggregate number of securities to which transaction applies: None
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- no fee is payable pursuant to Rule 0-11(c) (ii)
4)Proposed maximum aggregate value of transaction: n/a
5)Total fee paid: $-0-
[ ]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 of 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
1)Date Filed: n/a
QUAD METALS CORPORATION
NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 18, 2002
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Shareholders of Quad
Metals Corporation (the "Company"), will be held at 2:00 p.m. (PDST), on
November 18, 2002, at the Washington Mutual Building, Conference Room A located
at 601 W. Main Avenue, Spokane, Washington 99201, to consider and act upon the
following matters:
1. To consider and vote upon the merger of the Company with and into
its wholly-owned Nevada subsidiary;
2. To consider and vote upon a reverse stock split of the Company's
common stock whereby each fifty outstanding shares of common stock
will be consolidated into one share of common stock.
3. To elect three (3) members to the Board of Directors to serve for a
one year term or until their respective successors are elected and
qualified
4. To approve the engagement of DeCoria, Maichel & Teague PS as
independent auditors for the Company for the fiscal year ending
December 31, 2002; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on September 30, 2002 has been fixed as the record date
for the determination of the Shareholders entitled to notice of, and to vote
at, the Annual Meeting and at any postponements or adjournments thereof. Only
Shareholders of record on the books of the Company at the close of business on
September 30, 2002 shall be entitled to notice of, and to vote at, the meeting
or any adjournment thereof.
It is important that your shares be represented at the meeting whether or not
you are personally able to attend. You are therefore urged to complete, date
and sign the accompanying Proxy and mail it in the enclosed postage-paid
envelope as promptly as possible. Your Proxy is revocable, either in writing or
by voting in person at the Annual Meeting, at any time prior to its exercise.
Thank you for your cooperation.
Sincerely,
Robert W. O'Brien, President
QUAD METALS CORPORATION
601 W. MAIN AVENUE, SUITE 1017
SPOKANE, WA 99201
_________________________
PROXY STATEMENT
Relating to
Annual Meeting of Shareholders
to be held on November 18, 2002
_________________________
INTRODUCTION
This Proxy Statement is being furnished by the Board of Directors of Quad
Metals Corporation (the "Company") to holders of shares of the Company's no par
value Common Stock (the "Common Stock") in connection with the solicitation by
the Board of Directors of Proxies to be voted at the Annual Meeting of
Shareholders of the Company to be held on November 18, 2002, and any
adjournment or adjournments thereof (the "Annual Meeting") for the purposes set
forth in the accompanying Notice of Annual Meeting. This Proxy Statement is
first being mailed to Shareholders on or about October 27, 2002.
Management is the record and beneficial owner of 24,500,000 shares
(approximately 25.6%) of the Company's 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.
PURPOSES OF ANNUAL MEETING
MERGER WITH SUBSIDIARY
At the Annual Meeting, Shareholders entitled to vote (see "Voting at Annual
Meeting") will be asked to consider and vote upon the merger of the Company
with and into its wholly-owned Nevada subsidiary. If approved, the domicile of
the Company will be changed from the State of Washington to the State of Nevada
(see "Merger with Subsidiary").
REVERSE STOCK SPLIT
At the Annual Meeting shareholders will be asked to consider and vote upon a
50:1 reverse stock split whereby each Shareholder of the Company will receive
one share of the Company's common stock in exchange for each fifty shares of
the Common Stock of the Company currently owned. If the reverse stock split is
approved, it will be accomplished in conjunction with the Company's merger into
its wholly-owned subsidiary.
ELECTION OF DIRECTORS
At the Annual Meeting, Shareholders will be asked to consider and to take
action on the election of three members to the Board of Directors to serve for
one-year terms or until their respective successors are elected and qualified
(see "Election of Directors").
SELECTION OF INDEPENDENT AUDITORS
At the Annual Meeting, Shareholders will be asked to consider and vote upon the
selection of DeCoria, Maichel & Teague PS as independent auditors of the
Company for the fiscal year ending December 31, 2002; and
OTHER BUSINESS
To transact such other business as may properly come before the Annual Meeting
or any postponements or adjournments thereof.
AS YOUR VOTE IS IMPORTANT, IT IS REQUESTED THAT YOU COMPLETE AND SIGN THE
ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE RETURN ENVELOPE PROVIDED. SHARES
CANNOT BE VOTED AT THE MEETING UNLESS THE OWNER IS PRESENT TO VOTE OR IS
REPRESENTED BY PROXY.
VOTING AT ANNUAL MEETING
1. RECORD DATE. The Board of Directors of the Company has fixed the close of
business on September 30, 2002, as the record date for the purpose of
determining Shareholders of the Company entitled to notice of and to vote
at the Annual Meeting. At the close of business on that date, the Company
had 95,474,665 issued and outstanding shares of Common Stock. A majority
of such shares will constitute a quorum for the transaction of business at
the Annual Meeting. Proxies which are submitted but are not voted for or
against (because of abstention, broker nonvotes or otherwise) will be
treated as present for all matters considered at the meeting.
2. SOLICITATION OF PROXIES. The accompanying Proxy is solicited on behalf of
the Board of Directors of the Company, and the cost of solicitation will
be borne by the Company. Following the original mailing of the Proxies
and soliciting materials, directors, officers and employees of the Company
may, but do not presently intend, to solicit Proxies by mail, telephone,
telegraph, or personal interviews. The Company may request brokers,
custodians, nominees, and other record holders to forward copies of the
Proxies and soliciting materials to persons for whom they hold shares of
the Company and to request authority for the exercise of Proxies. In such
cases, the Company will reimburse such holders for their reasonable
expenses. The Company does not intend to utilize the services of an
outside proxy solicitation firm.
3. REVOCATION OF PROXY. Any Proxy delivered in the accompanying form may be
revoked by the person executing the Proxy by written notice to that effect
received by the Secretary of the Company at any time before the authority
thereby granted is exercised, by execution of a Proxy bearing a later date
presented at the meeting, or by attendance of such person at the Annual
Meeting.
<page>
4. HOW PROXIES WILL BE VOTED. Proxies received by the Board of Directors in
the accompanying form will be voted at the Annual Meeting as specified
therein by the person giving the Proxy. If no specification is made with
respect to the matters to be voted upon at the meeting, the shares
represented by such Proxy will be voted FOR the merger of the Company with
and into its wholly-owned Nevada subsidiary; FOR the 50:1 reverse split of
the Company's outstanding common stock; FOR the nominees to the Board of
Directors in the election of Directors; and FOR approval of the
appointment of DeCoria, Maichel & Teague PS as the Company's independent
auditors for the fiscal year ending December 31, 2002.
All shares represented by valid Proxy will be voted at the discretion of
the proxy holders on any other matters that may properly come before the
meeting. However, the Board of Directors does not know of any matters to
be considered at the meeting other than those specified in the Notice of
Meeting.
5. VOTING POWER. Shareholders of the Common Stock of the Company are
entitled to one vote for each share held. There is no cumulative voting
for directors.
6. PRINCIPAL SHAREHOLDERS. The following table sets forth the identity of
the record owners of more than five percent (5%) of the outstanding shares
of any class of the Company as of September 30, 2002:
COMMON
STOCK PERCENT OF
SHAREHOLDER OWNED OUTSTANDING
----------------------------- --------------- -------------
Terry J. Dunne 18,000,000 18.85%
Robert W. O'Brien 18,000,000 18.85%
The Estate of Dr. Tibor Klobusicky (1) 15,750,000 16.50%
Stanley Harrison 10,000,000 10.47%
Martyn A. Powell 5,000,000 5.4%
(1) Includes 3,000,000 shares held of record and owned beneficially by
the Estate of Tibor Klobusicky and 12,750,000 as to which Tibor Klobusicky
claims beneficial ownership through the shares held of record by the
Family of Dr. Tibor Klobusicky, The Klobusicky Family Trust, and the
Klobusicky Family Partnership.
The Company does not know of any other person who held more than five
percent (5%) of the Company's outstanding Common Stock as of September 30,
2002, or as of the date of the preparation of this Proxy Statement.
7. REQUIRED APPROVALS. On June 8, 2002 the Board of Directors of the Company
unanimously adopted resolutions (1) to merge the Company with and into a
wholly-owned Nevada subsidiary and thereby (a) change the domicile of the
Company from the State of Washington to the State of Nevada and; (b)
effect a fifty for one reverse split of its Common Stock; (2) to elect
Robert W. O'Brien, Martyn A. Powell and Michael L. McLaughlin to the Board
of Directors of the Company to serve for a one-year term or until his
respective successor is elected and has qualified; (3) to consider and
vote upon the selection of DeCoria, Maichel & Teague PS as independent
auditors of the Company for the fiscal year ending December 31, 2002; and
(4) that the Directors recommend that the Company's Shareholders vote to
approve each of the above matters to be submitted to the Shareholders for
consideration at the Annual Meeting of Shareholders.
<page>
Directors are elected by a plurality of the votes cast by the holders of
the Common Stock meeting at which a quorum is present. "Plurality" means
that the individuals who receive the largest number of votes cast are
elected as Directors up to the maximum number of Directors to be chosen at
the meeting. Consequently, any shares not voted (whether by abstentions,
broker nonvotes or otherwise) have no impact in the election of Directors,
except to the extent the failure to vote for an individual results in
another individual receiving a larger number of votes. The election of
Directors will be accomplished by determining the three nominees receiving
the highest total votes.
The proposal to change the Company's state of domicile from Washington to
Nevada by merging with its wholly-owned Nevada subsidiary will require the
affirmative vote of the holders of at least a majority of the shares
entitled to vote thereon. Abstentions and broker nonvotes will have the
effect of a vote against the proposal with respect changing the Company's
state of domicile.
The proposal for the reverse split of the Company's common stock will
require the affirmative vote of the holders of at least a majority of the
shares entitled to vote thereon. Abstentions and broker nonvotes will have
the effect of a vote against the proposal with respect changing the
Company's state of domicile.
The approval of the independent auditors requires the favorable vote of
the holders of a majority of the shares of Common Stock present at the
meeting, provided a quorum is present; abstentions would have the effect
of negative votes for this matter; broker nonvotes are not counted for
purposes of determining the number of shares present, and thus would have
no effect on this matter.
8. DISSENTERS' RIGHTS. There are no dissenters' rights applicable to any
matters to be considered at the Annual Meeting.
RECENT MARKET PRICES
The Company shares are not traded. The Company shares have not been
listed for trading for approximately the last ten years. As of September 30,
2002, there were approximately 940 holders of record of the Company's Common
Stock.
THE FOLLOWING PROPOSALS ARE SUBMITTED TO THE SHAREHOLDERS FOR CONSIDERATION AT
THE ANNUAL MEETING OF SHAREHOLDERS:
1. MERGER WITH SUBSIDIARY
Upon the effective date of the Merger, the Company will be merged with and into
its Nevada subsidiary, which will be the surviving company. The merger of the
Company with and into its wholly-owned subsidiary will have the effect of
changing the domicile of the Company from the State of Washington to the State
of Nevada. The Company will thereafter be governed by the laws of the State of
Nevada rather than the laws of the State of Washington. As a practical matter,
this will have little effect on corporate governance because of amendments to
the Company's Articles of Incorporation made approximately two years ago.
The name of the Company will remain Quad Metals Corporation. There will be no
need to exchange the shares of stock you currently hold for shares in the
surviving company.
<page>
The Company will be governed by the articles of incorporation of the Nevada
corporation, a copy of which is attached as Exhibit II. The following
discussion identifies the material differences between our current articles of
incorporation and the articles of incorporation of the surviving company and
the rationale for the changes.
Capital Structure - Common Stock. The Company is currently authorized to issue
100,000,000 shares of its no par value Common Stock, of which 95,474,665 shares
were issued and outstanding and held of record by approximately 940
Shareholders as of September 20, 2002. The surviving company will have three
hundred million (300,000,000) shares of $0.001 par value Common Stock
authorized and 1,909,493 shares issued and outstanding. The change in par
value is significant only in that filing fees in Nevada are based on par value.
If no par value shares exist, Nevada imputes a $10.00 per share par value. The
$0.001 par value was chosen to minimize filing fees.
Management believes that the increased number of authorized shares of Common
Stock will 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 no
commitment for the issuance of additional shares.
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, and upon
liquidation are entitled to participate pro rata in a distribution of assets
available for such a distribution to Shareholders. There are no conversion,
preemptive or other subscription rights or privileges with respect to any
shares. 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 will be
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
shareholders, but in which unaffiliated shareholders 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 shareholder vote required by the Company's
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. This may be beneficial to management in a hostile tender
offer, thus having an adverse impact on shareholders who may want to
participate in such tender offer.
<page>
The additional authorized shares of Common Stock would, when issued, have the
same rights as the issued and outstanding existing shares of Common Stock.
Shareholders of the Company do not have preemptive rights nor will they as a
result of the merger.
If the merger is approved, the additional authorized 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 merger, although the merger
would increase the number of shares of Common Stock that are available for the
taking of such action.
The Board of Directors has no present agreement, commitment, plan or intent to
issue any of the additional shares provided for in the merger.
Capital Structure - Preferred Stock. We currently have 10,000,000 shares of
Preferred Stock authorized. The articles of incorporation of the surviving
company authorizes the Company to issue, from time to time as determined by the
Board of Directors, up to 10,000,000 shares of Preferred Stock, with no stated
value and a par value of $0.001 per share ("Preferred Shares"). This represents
no material difference from the present capital structure.
CORPORATE LAW COMPARISON
The following sets forth an analysis of material differences in corporate law
between the states of Washington and Nevada.
CUMULATIVE VOTING
SIMILAR: In both states a stockholder who has the right of cumulative voting
for directors is entitled to as many votes as equal to the number of shares of
stock multiplied by the number of directors to be elected. The stockholder may
cast all his votes for a single director or distribute them among two or more
directors.
DIFFERENT: In Washington stockholders have the right of cumulative voting
unless the articles of incorporation provide otherwise. Nevada law allows a
corporation to authorize cumulative voting in the articles of incorporation.
There are no provisions for cumulative voting in the Articles of Incorporation
of the wholly-owned subsidiary. Washington law does not require stockholders
to give notice that they plan to vote cumulatively, whereas Nevada law requires
the corporation to provide notice of the voting rights to the stockholders in
the notice calling the meeting or the proxy material, requires stockholder to
give written notice to the president or secretary that they desire to vote
cumulatively, and requires an announcement to that effect before the election.
<page>
PREEMPTIVE RIGHTS
SIMILAR: If stockholders have preemptive rights, both states provide that they
may waive them and a written waiver is enforceable even though it is not
supported by consideration. Both states provide that shares issued under
certain circumstances have no preemptive rights; these provisions are the same
except Washington excludes shares issued pursuant to the initial plan of
financing, where Nevada excludes shares authorized in the articles of
incorporation that are issued within 6 months from the effective date of
incorporation. The remaining provisions are the same and both states provide
that the rights may be altered by the articles of incorporation.
DIFFERENT: Washington law provides that the stockholders have preemptive
rights unless the articles of incorporation state otherwise. Under Nevada law
stockholders do not have preemptive rights unless provided for in the articles
of incorporation. Preemptive rights are not provided for in the Articles of
Incorporation of the wholly-owned subsidiary.
AMENDMENT OF ARTICLES
SIMILAR: Both states grant broad authority to amend the articles of
incorporation. Although NRS 78.385(a)-(d) grants specific authority to certain
items, NRS 78.385(e) and .385(2) broaden the authority to include anything that
would be permissible if the original articles were filed at the time of making
the amendment. Washington Statute grants blanket authority to change required
or permitted provisions of the articles of incorporation.
DIFFERENT: Washington law allows the board of directors to make limited
changes without shareholder action including changing the number of authorized
shares when there is only one class outstanding. Nevada requires all amendments
to be approved the stockholders. In addition, Washington law provides that a
shareholder does not have a vested property right resulting from the articles
of incorporation. The Nevada code is silent on this matter.
REVERSE SPLIT
SIMILAR: Corporations in both states are allowed to change the number of
authorized shares by amending the articles of incorporation.
DIFFERENT: Washington law provides that the board of directors can change the
number of authorized shares without shareholder vote in order to effectuate a
split, when there is only one class of stock outstanding. However, this grant
of authority may have additional limitations depending upon the details of the
transaction.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
There are no material differences between Washington and Nevada corporate law
regarding provisions for indemnification of directors, officers, employees and
agents.
MERGER/SHARE EXCHANGE (CLASS VOTING)
SIMILAR: Nevada provides that the plan for exchange must be approved by a
majority of the voting power of each class and each series to be exchanged
pursuant to the plan of exchange. The Washington statutes regarding mergers
and share exchanges require approval by two-thirds of the votes instead of a
simple majority. In both states the articles of incorporation may alter the
number of votes required.
<page>
DIFFERENT: Under Nevada law a plan for merger must be approved by a majority
of the voting power of the stockholders. Under Washington law, the plan for
merger must be approved by each voting group entitled to vote separately on the
plan by two-thirds of all the votes entitled to be cast on the plan by that
voting group.
MERGER/SHARE EXCHANGE (NOTICE)
There are no material differences between Nevada and Washington corporate law
regarding the shareholder notice requirements for mergers or share exchanges.
LESS THAN UNANIMOUS CONSENT (NOTICE)
SIMILAR: Both Nevada and Washington permit less than unanimous consent for
shareholder actions.
DIFFERENT: Under Nevada law actions permitted or required to be taken at a
meeting of the stockholders may be taken without a meeting if a written consent
is signed by stockholders holding at least a majority of voting power. If a
different proportion of votes would be required at a meeting, that proportion
of written consents is required. In no instance where action is authorized by
written consent need a meeting of stockholders be called or notice given.
Washington law requires unanimous consent unless the corporation is privately
held and the articles of incorporation authorize majority consent. Washington
requires that notice be given to all shareholders entitled to vote on the
action and nonvoting shareholders in circumstances where notice would be
required to nonvoting shareholders.
DISSENTER'S RIGHTS
SIMILAR: Both Nevada and Washington corporate laws make provisions for
notification of the right to dissent, demand for payment, payment; procedures
if the shareholder is dissatisfied, court action, court costs and fees, and
beneficial shareholders the right to dissent where the shareholder's shares are
held in "street name" by nominees;.
DIFFERENT: In a merger situation Nevada allows stockholders to dissent
regardless of whether the stockholder is entitled to vote on the plan;
Washington only allows a shareholder to dissent if the shareholder was entitled
to vote on the plan. Nevada puts additional limitations on the right of
dissent where the shareholder's securities are listed on a national securities
exchange, included in the national security market system by the National
Association of Securities Dealers, Inc., or held by at least 2,000 stockholders
of record or if the plan for merger does not require action of the stockholders
of the surviving domestic corporation.
SIGNIFICANT BUSINESS TRANSACTIONS/ACQUISITION OF CONTROLLING INTEREST
SIMILAR: The applicable statutes do not have much in common except for the
common purpose of preventing acquisition of controlling interests without
approval of the board of directors or the stockholders.
DIFFERENT: The Washington Takeover Act is aimed at preventing certain
significant transactions within a five year period after a person acquires 10%
or more of a corporation's outstanding voting shares unless the transaction or
the acquisition of the shares was approved by a majority of the board of
directors prior to the acquiring person's share acquisition. The Nevada
statutes on the other hand prevent the acquirer from voting its shares by
providing that the acquirer only obtains such voting rights as conferred by a
resolution of the stockholders of the corporation. The voting rights must be
approved by the majority of the voting power of the corporation (not including
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shares held by the acquirer). If the acquirer is afforded full voting rights
dissenting stockholders may obtain payment of the fair value of their shares.
TAX ASPECTS
It is management's belief that pursuant to the Internal Revenue Code Section
368 (a)(1)(F), this change of domicile from Washington to Nevada will qualify
as a tax free exchange as a mere change in identity, form or place of
incorporation of one corporation, however effected.
Assuming that the merger of the Company into its wholly-owned subsidiary
qualifies as a reorganization within the meaning of Section 368(a) of the Code:
{circle}No gain or loss will be recognized by a Shareholder of the Company as a
result of the merger with respect to shares of the Company converted solely
into shares of the surviving company;
{circle}The tax basis of the shares of stock of the surviving company received
by the Company's Shareholders will be the same as the tax basis of the
Company's stock exchanged therefor;
{circle}The holding period of the surviving company stock received by the
Company's Shareholders in the merger will include the period during which
the Company's stock surrendered in exchange therefor were held, provided
that such shares of the Company were held as capital assets at the effective
date of the merger.
NO OPINION OF COUNSEL AND ADVICE TO SEEK OWN TAX ADVISER
Neither the Company nor the nominees for Director have sought an opinion of
counsel with respect to the tax consequences of the transactions to be
considered at the meeting. The Company and the nominees do not believe that the
reincorporation in Nevada will have any tax consequences to the Company's
Shareholders. Shareholders are advised to consult with their own tax advisers
or counsel if they have any questions regarding the tax aspects of the
transaction.
BOARD RECOMMENDATION
The proposal to merge the Company with its wholly-owned Nevada subsidiary will
require the affirmative vote of the holders of at least a majority of the
shares entitled to vote thereon. The Board of Directors recommends a vote FOR
the change of the Company's state of domicile from Washington to Nevada.
2. REVERSE STOCK SPLIT
Each currently outstanding fifty 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 50. Therefore, a person currently holding one thousand shares of
Common Stock will hold twenty shares of Common Stock after the reverse split.
No fractional shares will be issued. Any fractional shares will be rounded up
to the next whole share.
If both the merger and the reverse stock split are approved, each fifty shares
of Common Stock held by our current Shareholders will automatically become one
share of the surviving company. This is the same effect as a 50:1 reverse
stock split. No fractional shares will be issued. Any resulting fractional
shares will be rounded up to the nearest whole share. If the reverse stock
split is approved but the merger is not approved, the Company will amend its
current Articles of Incorporation to effect the reverse Stock Split. In the
event that the merger is approved but the reverse stock split is not approved,
the Plan of Merger (attached hereto as Exhibit I) will be amended change the
share exchange ration from 50:1 to 1:1.
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3. ELECTION OF DIRECTORS
At the meeting, three (3) Directors are to be elected who shall hold office
until the next Annual Meeting of Shareholders and until their respective
successors shall have been elected and qualified. There are no standing audit,
nominating or compensation committees of the Board of Directors.
The Proxies appointed in the accompanying Proxy intend to vote, unless directed
to the contrary therein, in their discretion, for the election to the Board of
Directors of the three persons named below, all of whom management believes are
willing to serve the Company in such capacity. However, if any nominee at the
time of election is unable or unwilling to serve, or is otherwise unavailable
for election, such that substitute nominees are designated, the Proxies in
their discretion intend to vote for all or a lesser number of such other
nominees.
The nominees for Directors, together with certain information with respect to
them, are as follows:
Year Common Shares Owned
First Became Beneficially, Directly or
Name Age A Director Indirectly, as of Sept. 20, 2002
- --------------------- --- ------------ --------------------------------
Robert W. O'Brien 67 2001 18,000,000
Michael L. McLaughlin 69 2001 1,500,000
Martyn A. Powell 49 2001 5,000,000
ROBERT W. O'BRIEN.
Mr. O'Brien has served as President and a Director of the Company since June
2001. Mr. O'Brien graduated from Gonzaga University with a BA Degree in
Economics. Since July 1996, Mr. O'Brien has been the sole owner and manager of
Spokane Quotation Bureau, LLC, a company that publishes stock quotations for
companies traded over-the-counter. From 1985 to October 1995, Mr. O'Brien was
a Director and Secretary/Treasurer of Inland Gold and Silver, now Inland
Resources, Inc., a public company traded on the NASDAQ supervised Bulletin
Board. Mr. O'Brien currently serves as Secretary/Treasurer, and a Director of
Gold Bond Resources, Inc., a reporting company.
MICHAEL L. MCLAUGHLIN
Mr. McLaughlin has served as Vice-President, Assistant Secretary and a Director
of the Company since June 2001. Mr. McLaughlin has been retired from full-time
employment since 1992, at which time he sold financing for IBM Credit Corp.
Since 1980, Mr. McLaughlin has been employed part-time by the Washington State
Horse Racing Commission as an auditor for satellite racing facilities. Mr.
McLaughlin currently serves as Vice-President and a Director of Gold Bond
Resources, Inc., a reporting company.
MARTYN A. POWELL
Mr. Powell has served as Secretary/Treasurer and a Director of the Company
since June 2001. Mr. Powell has been employed as a realtor in the greater
Seattle area for the past 11 years. Mr. Powell has served as President and a
Director of Missouri River and Gold Gem Corp, a reporting company, since 1999
and President and a Director of Aberdeen-Idaho Mining Co., a reporting company,
since early 2002.
<page>
COMPENSATION OF DIRECTORS AND OFFICERS
During the past three fiscal years, none of the officers or directors has
received any compensation directly or indirectly for service to the Company in
such positions.
BOARD RECOMMENDATION
The Board of Directors recommends a vote FOR each nominee to the Board of
Directors.
4. SELECTION OF AUDITORS
DeCoria, Maichel & Teague PS, independent public accountants, have been
selected by the Board of Directors as independent auditors for the Company for
the fiscal year ending December 31, 2002, subject to approval by the
Shareholders. This firm is experienced in the business of mergers and
acquisitions as well as the accounting aspect of securities law matters and is
well qualified to act in the capacity of auditors for the Company. The approval
of the independent auditors requires the favorable vote of the holders of a
majority of the shares of Common Stock present at the meeting, provided a
quorum is present.
BOARD RECOMMENDATION
The Board of Directors recommends a vote FOR the appointment of DeCoria,
Maichel & Teague PS as the independent auditors for the Company for the year
ended December 31, 2002. No representative of DeCoria, Maichel & Teague PS is
expected to be present at the Annual Meeting.
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than
ten percent (10%) of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than ten percent (10%)
beneficial owners are required by Securities and Exchange Commission regulation
to furnish the Company with copies of all Section 16(a) forms filed by them.
Based solely on its review of copies of such forms furnished to the Company,
the Company believes that during the fiscal year ended December 31, 2001, the
following persons were delinquent complying with the 16(a) filing requirements
applicable to them: Robert W. O'Brien, Michael L. McLaughlin and Martyn A.
Powell each had one delinquent Form 3 and one delinquent Form 4 filing; and
Terry J. Dunne had one delinquent Form 3 filing.
ADDITIONAL SHAREHOLDER INFORMATION
SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
The Company will review shareholder proposals intended to be included in the
Company's proxy materials for the 2003 Annual Meeting of Shareholders which are
received by the Company at its principal executive offices no later than July
21, 2003 (unless the date of the next annual meeting is changed by more than 30
days from the date of this year's meeting, in which case the proposal must be
received a reasonable time before the Company begins to print and mail its
proxy materials). Such proposals must be submitted in writing and should be
sent to the attention of the Secretary of the Company. The Company will comply
with Rule 14a-8 of the Exchange Act with respect to any proposal that meets its
requirements.
<page>
ANNUAL REPORT
The Company's Annual Report to Shareholders, consisting of the Corporation's
Form 10-KSB for the year ended December 31, 2001 is being mailed to all
Shareholders with this Proxy Statement. In addition, a Shareholder of record
may obtain a copy of the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2001 (the "Form 10-KSB"), without cost, upon written
request to the Secretary of the Company. The Annual Report on Form 10-KSB is
not part of the proxy solicitation materials for the Annual Meeting.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors is not aware of
any matters that will be presented for action at the Annual Meeting other than
those described above. However, should other business properly be brought
before the Annual Meeting, the proxies will be voted thereon in the discretion
of the persons acting thereunder.
By Order of the Board of Directors
Robert W. O'Brien, President
PROXY
QUAD METALS CORPORATION
601 W. Main, Suite 1017
Spokane, WA 99201
The undersigned hereby appoints Robert W. O'Brien and Michael L. McLaughlin, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and vote, as designated below, all of the
shares of Common Stock of Quad Metals Corporation held on record by the
undersigned on September 30, 2002 at the 2002 Annual Meeting of Shareholders to
be held on November 18, 2002, or any adjournment thereof.
1. CHANGE OF DOMICILE FROM WASHINGTON TO NEVADA (MERGER WITH WHOLLY-OWNED
NEVADA SUBSIDIARY) __FOR __AGAINST __ABSTAIN
2. FIFTY TO ONE REVERSE SPLIT OF OUTSTANDING COMMON STOCK
__FOR __AGAINST __ABSTAIN
3. ELECTION OF DIRECTORS (check one):
______ FOR EACH NOMINEE LISTED BELOW PRO
______ WITHHOLD AUTHORITY FOR PROXIES TO VOTE FOR ANY NOMINEES LISTED
______ CUMULATE OR WITHHOLD MY VOTES AS PROVIDED BELOW
ROBERT W. O'BRIEN ______ MICHAEL L. MCLAUGHLIN ______ MARTYN A. POWELL _____
The Board of Directors is elected by the process of cumulative voting. Under
cumulative voting systems, each shareholder has a number of votes that is equal
to the number of voting shares he or she owns multiplied by the number of
Directors to be elected. Total votes available to cast for the election of
Directors may be calculated as follows: Multiply number of Shares you are
voting by the number of Directors to be elected (3) to arrive at the total
votes you may cast. If you elect to vote pro rata, 1/3 of your votes will be
cast for each nominee.
For example, a person who owns one hundred (100) shares would multiply the
number of shares owned times the three (3) directors to be elected. The
shareholder would have three hundred (300) votes to vote for or against each
Director nominated for the Board of Directors. The votes could be concentrated
on one person or distributed among others as he or she sees fit.
4. APPROVAL OF DECORIA, MAICHEL & TEAGUE PS AS INDEPENDENT PUBLIC ACCOUNTANTS
AND AUDITORS FOR THE COMPANY: __FOR __AGAINST __ABSTAIN
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted for each proposal.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATED: __________________________
PLEASE MARK, SIGN, DATE, AND RETURN THIS
___________________________ PROXY PROMPTLY USING THE ENCLOSED ENVELOPE