ORION ACQUISITION CORP. II
1430 Broadway, 13th Floor
New York, NY 10018-3308
___________, 1998
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders (the
"Special Meeting") of Orion Acquisition Corp. II, a Delaware business
corporation (the "Company") to be held at 10:00 a.m. local time, on Tuesday,
January 12, 1999, at the offices of Epstein Becker & Green, P.C., 250 Park
Avenue, New York, New York 10177.
As described in the accompanying Proxy Statement, and in accordance with
the terms of the Company's Prospectus (the "Prospectus") dated July 2, 1996,
at the Special Meeting you will be asked to vote on a proposal to approve and
adopt a resolution authorizing the dissolution and liquidation of the Company
(the "Liquidation") in accordance with the relevant provisions of the
Delaware General Corporation Law (the "DGCL") and, in connection therewith,
the distribution to the public holders of Company Common Stock (each a
"Stockholder", and collectively, the Stockholders") par value $.01 per share
(the "Common Stock"), the assets of the Company, including, but not limited
to, the amount held in an escrow account (together with any and all interest
accrued thereon) in respect of the gross proceeds of the sale of the Units
(as defined in Prospectus), if any, remaining following the payment of all
liabilities and after redemption of the Company's outstanding Series A
Preferred Stock at its aggregate liquidation preference value of Eleven
Thousand ($11,000) Dollars.
ADDITIONAL INFORMATION REGARDING THE LIQUIDATION IS SET FORTH IN THE
ACCOMPANYING PROXY STATEMENT AND THE ANNEXES THERETO, WHICH YOU ARE URGED
TO READ CAREFULLY IN THEIR ENTIRETY.
Consummation of the Liquidation is subject to certain conditions,
including approval and adoption of the Liquidation by the affirmative vote of
holders of a majority of the outstanding shares of Common Stock entitled to
vote thereon, in person or by proxy, at the Special Meeting. Accordingly,
failure to vote or abstentions will have the effect of a vote against the
Liquidation for the purposes of determining whether approval by a majority of
the outstanding shares is obtained.
Only holders of Common Stock of record at the close of business on
November 23, 1998 are entitled to notice of and to vote at the Special
Meeting or any adjournments or postponements thereof.
As of the date of the accompanying Proxy Statement, the Company's
pre-initial public offering stockholders beneficially owned, in the
aggregate, 90,000 shares of the Common Stock (the "Founders' Shares"),
representing approximately 10.1% of the shares of Common Stock outstanding.
All holders of the Founders' Shares, including all Company's directors and
executive officers, have heretofore agreed to vote all of their respective
shares of Common Stock in accordance with the vote of the majority of the
shares of Common Stock voted by all other Stockholders (the "Non-affiliated
Stockholders") with respect to the Liquidation.
IT IS VERY IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL
MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. FAILURE TO RETURN A PROPERLY EXECUTED PROXY CARD OR
VOTE AT THE SPECIAL MEETING WOULD HAVE THE SAME EFFECT AS A VOTE AGAINST THE
LIQUIDATION.
Very truly yours,
WILLIAM L. REMLEY
President
1
ORION ACQUISITION CORP. II
1430 BROADWAY, 13TH FLOOR
NEW YORK, NEW YORK 10018-3308
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On January 12, 1999
----------------------
To the Stockholders of
ORION ACQUISITION CORP. II:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the "Special
Meeting") of Orion Acquisition Corp. II, a Delaware business corporation (the
"Company"), will be held on January 12, 1999, at 10:00 a.m., local time, at
the offices of Epstein Becker & Green, P.C., 250 Park Avenue, New York, New
York 10177, for the following purposes:
1. To vote on a proposal to approve and adopt a resolution authorizing the
dissolution and liquidation of the Company (the "Liquidation") in accordance
with the relevant provisions of the Delaware General Corporation Law (the
"DGCL") and, in connection therewith, the distribution to the public holders of
Company Common Stock (each a "Stockholder", and collectively, the
"Stockholders") par value $.01 per share (the "Common Stock"), the assets of the
Company, including, but not limited to, the amounts held in an escrow account
(together with any and all interest accrued thereon) in respect of the gross
proceeds of the sale of the Units (as defined in the Company's Prospectus, dated
July, 2, 1996), if any, remaining following the payment of taxes and other
liabilities and after redemption of the Company's outstanding Series A Preferred
Stock at its liquidation preference value of $100.00 per share, or Eleven
Thousand ($11,000) Dollars in the aggregate. Certain relevant provisions of the
DGCL are included in the accompanying Proxy Statement as Annex A.
2. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on November 23,
1998, as the record date for the determination of the holders of Common Stock
entitled to receive notice of and to vote at the Special Meeting.
Accordingly, only Stockholders of record at the close of business on such
date will be entitled to receive notice of and to vote at the Special Meeting
or any adjournments or postponements thereof.
By Order of the Board of Directors
WILLIAM L. REMLEY
President
New York, New York
[ , 1998]
THE AFFIRMATIVE VOTE OF THE BENEFICIAL HOLDERS OF AT LEAST A MAJORITY OF
THE COMPANY'S ISSUED AND OUTSTANDING COMMON STOCK, REPRESENTED IN PERSON OR BY
PROXY AT THE SPECIAL MEETING IS REQUIRED TO APPROVE THE LIQUIDATION. ALL HOLDERS
OF THE 90,000 PRE-INITIAL PUBLIC OFFERING SHARES (THE "FOUNDERS' SHARES"),
INCLUDING ALL DIRECTORS AND OFFICERS OF THE COMPANY, HAVE AGREED TO VOTE ALL OF
THEIR RESPECTIVE SHARES OF COMMON STOCK IN ACCORDANCE WITH THE VOTE OF THE
MAJORITY OF THE SHARES VOTED BY ALL NON-AFFILIATED STOCKHOLDERS WITH RESPECT TO
THE LIQUIDATION. WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY CARD AS
PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON.
YOU MAY REVOKE THE PROXY AT ANY TIME PRIOR TO ITS EXERCISE IN THE MANNER
DESCRIBED IN THE ATTACHED PROXY STATEMENT. ANY STOCKHOLDER PRESENT AT THE
SPECIAL MEETING, INCLUDING ANY ADJOURNMENT OR POSTPONMENT THEREOF, MAY REVOKE
SUCH HOLDER'S PROXY AND VOTE PERSONALLY ON THE LIQUIDATION AT THE SPECIAL
MEETING.
2
ORION ACQUISITION CORP. II
1430 BROADWAY, 13TH FLOOR
NEW YORK, NEW YORK 10018-3308
-----------------------
PROXY STATEMENT
-----------------------
SPECIAL MEETING OF THE STOCKHOLDERS
January 12, 1999
-----------------------
INTRODUCTION
General
This Proxy Statement is being furnished to holders of Common Stock, $.01
par value per share (the "Common Stock"), of Orion Acquisition Corp. II, a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors of the Company (the "Board") for use at the
Special Meeting of Stockholders to be held on January 12, 1999, at 10:00 a.m. at
the offices of Epstein Becker & Green, P.C., 250 Park Avenue, New York, New York
10177, and any and all adjournments or postponements thereof (the "Special
Meeting"). The Board has fixed the close of business on November 23, 1998, as
the record date (the "Record Date") for the determination of stockholders
entitled to notice of, and to vote at, the Special Meeting. The cost of the
solicitation will be borne by the Company. This Proxy Statement is first being
mailed to Stockholders on or about December 14, 1998.
Matters to be Considered at the Special Meeting
At the Special Meeting, the Stockholders will be asked to consider and
vote upon (i) a proposal to approve and adopt a resolution authorizing the
dissolution and liquidation of the Company (the "Liquidation") in accordance
with the relevant provisions of the Delaware General Corporation Law (the
"DGCL") and, in connection therewith, the distribution to the public holders of
Company Common Stock (each a "Stockholder", and collectively, the Stockholders")
par value $.01 per share (the "Common Stock"), of the assets of the Company,
including, but not limited to, the amounts held in an escrow account (the
"Escrow Account") (together with any and all interest accrued thereon) in
respect of the gross proceeds of the sale of the Units (as defined in the
Company's Prospectus (the "Prospectus"), dated July, 2, 1996), if any, remaining
following the payment of liabilities and after redemption of the Company's
outstanding Series A Preferred Stock at its liquidation preference value of
$100.00 per share, or Eleven Thousand ($11,000) Dollars in the aggregate; all as
more fully described in this Proxy Statement; and (ii) transact such other
business as may properly come before the Special Meeting or any adjournments or
postponements thereof. A copy of certain of the relevant provisions of the DGCL
are attached to this Proxy Statement as Annex A.
3
Voting at the Special Meeting; Revocation of Proxies
Only holders of record of Common Stock at the close of business on
November 23, 1998 (the "Record Date") are entitled to notice of and to vote at
the Special Meeting, each such holder of record being entitled to one vote per
share on each matter to be considered at the Special Meeting. On the Record
Date, there were 890,000 shares of Common Stock issued and outstanding.
The presence, in person or by properly executed proxy, of the holders of a
majority of the outstanding shares of Common Stock entitled to vote at the
Special Meeting (445,001 shares of the 890,000 shares outstanding) is necessary
to constitute a quorum at the Special Meeting and the affirmative vote by a
majority of the outstanding shares (445,001 shares of the 890,000 shares
outstanding) is required to adopt the Liquidation. All holders of the 90,000
pre-initial public offering shares (the "Founders' Shares"), including all
directors and officers of the Company, have agreed to vote all of their
respective shares of Common Stock in accordance with the vote of the majority of
the shares voted by all non-affiliated Stockholders (all such holders being
hereinafter individually referred to as a "Non-affiliated Stockholder", and
collectively as the "Non-affiliated Stockholders") with respect to the
Liquidation.
All officers and directors of the Company collectively have beneficial
ownership of 71,250 shares of Common Stock, or 8.0% of the total Common Stock
outstanding. All of such shares must be voted in accordance with the vote of the
majority of the Non-affiliated Stockholders. Based solely upon a review of
Schedule 13D and 13G filings with the Securities and Exchange Commission, two
persons each are the beneficial owners of 5% or more of the Company's Common
Stock. Shufro Rose & Ehrman, LLC, 745 Fifth Avenue, New York, New York 10151 is
the beneficial owner of 258,575 shares, or 29.05%, and a group consisting of
members of the family of Barry Rubinstein, 68 Wheatly Road, Brookville, New York
11545 is the beneficial owner of 52,600 shares, or 5.9%. According to written
information provided to the Company by Fred Ehrman, Vice Chairman of Brean
Murray & Co., Inc., and formerly an officer of Shufro Rose & Ehrman, LLC,
approximately 125,000 of the shares beneficially owned by Shufro Rose & Ehrman
are held for approximately 120 discretionary accounts now managed by Brean
Murray & Co., Inc. The Company has no other information respecting the
beneficial ownership of the remaining shares shown on Shufro Rose & Ehrman's
Schedule 13G.
If the enclosed proxy card is properly executed and returned to the
Company prior to voting at the Special Meeting, the shares represented thereby
will be voted in accordance with the instructions marked thereon. At any time
prior to its exercise, a proxy may be revoked by the holder of Common Stock
granting it by delivering written notice of revocation or a duly executed proxy
bearing a later date to the Secretary of the Company at the address of the
Company set forth on the first page of this Proxy Statement, or by attending the
Special Meeting and voting in person.
4
Solicitation of Proxies
The Company will bear the costs of soliciting proxies from the
Stockholders. In addition to soliciting proxies by mail, directors, officers and
employees of the Company, without receiving additional compensation therefor,
may solicit proxies by telephone, by telegram or in person. Arrangements will
also be made with brokerage firms and other custodians, nominees and fiduciaries
to forward solicitation materials to the beneficial owners of shares held of
record by such persons, and the Company will reimburse such brokerage firms,
custodians, nominees and fiduciaries for reasonable out-of-pocket expenses
incurred by them in connection therewith.
Certain Federal Income Tax Consequences
Completion of the Liquidation will constitute a taxable transaction to the
Stockholders to the extent the amount distributed exceeds the Stockholder's
basis in his shares and, as such, the Board recommends that each Stockholder
seek the advice of his or her independent tax advisor as to that Stockholder's
personal tax consequences.
Discussions of the Delaware General Corporation Law
Discussions herein with respect to the applicable provisions of the DGCL
are not intended to be complete. Stockholders are urged to read Annex A
containing certain applicable provisions of the DGCL, and to seek the advice of
independent legal counsel in evaluating such provisions.
5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and the rules and regulations promulgated thereunder, and in accordance
therewith files quarterly and annual reports, proxy statements and other
information with the Commission. Such reports, proxy statements or other
information filed by the Company may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; 75 Park Place, New York, New York 10007,
and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60604. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, the Commission maintains a website
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding companies that file electronically with the
Commission through the Electronic Data Gathering, Analysis and Retrieval system.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company is mailing to its stockholders, in the same envelope as this
Proxy Statement, copies of its Annual Report on Form 10-KSB for the Company's
fiscal year ended December 31, 1997 and the Company's Quarterly Report on Form
10-QSB for the fiscal quarter ended September 30, 1998. The information
contained in these two reports us incorporated into this Proxy Statement as
through these two reports were reprinted in their entirety in this Proxy
Statement. Stockholders should also read these reports prior to deciding whether
or not to vote for the Liquidation.
6
ADOPTION OF THE PLAN OF LIQUIDATION
GENERAL
Background
The Company, which is a "blank check" or "blind pool" company, was formed
on October 19, 1995 to serve as a vehicle to effect a merger, exchange of
capital stock, asset acquisition or other business combination (a "Business
Combination") with an operating business (a "Target Business"). The Company's
initial public offering was completed on July 9, 1996 through a firm-commitment
underwriting by H.J. Meyers & Co., Inc. and Northeast Securities, Inc. The
Company issued 800,000 Class A Units at a price of $10.00 per Unit, each Unit
consisting of one share of Common Stock and one warrant to purchase an
additional share of Common Stock for $9.00, and 358,100 Class B Unit Purchase
Warrants at a price of $5.625 per Class B Unit, each Class B Unit consisting of
a warrant to purchase one Unit at a price of $0.125. The offering yielded net
proceeds of $8,000,000 placed in escrow and $1,081,783 (after underwriter
discounts and expenses) which were not placed in escrow. The business objective
of the Company has been to effect a Business Combination with a Target Business
which the Company believes has significant growth potential.
Pursuant to the terms of the Prospectus, in the event the Company had not
effected a Business Combination by July 2, 1998, the Board is required to submit
for Stockholder consideration a proposal to liquidate the Company. Upon the
affirmative vote of a majority of the Stockholders adopting such proposal for
Liquidation, all assets available for distribution to the Stockholders, if any,
following the payment of liabilities of the Company, and after redemption of the
Company's 110 shares of Series A Preferred Stock at its liquidation preference
value of $100.00 per share, or $11,000 in the aggregate, are to be distributed
to the Non-affiliated Stockholders, only. The holders of the Founder's Shares
have agreed to waive their rights to participate in any liquidation distribution
with respect to the Founders' Shares owned by them as of the date of the
Prospectus. The officers and directors of the Company will not receive any
compensation in connection with the Liquidation.
Inability to Effect a Business Combination
Despite diligent efforts to locate and acquire a suitable Target Business,
as of July 2, 1998, the Company had been unsuccessful in its efforts to effect a
Business Combination. On July 2, 1998, the Company executed a letter of intent
with Pace Holdings, LLC to acquire a sub-prime mortgage lending business owned
by that company in order to present its Stockholders with a suitable Target
Business. The Company continued its due diligence of this business opportunity
through the summer of 1998, but was not satisfied with its suitability as a
merger candidate for the Company's capital structure. No binding agreement was
ever executed with Pace Holdings, and upon termination of discussions with that
entity, the Board of Directors determined to present the Liquidation to the
Stockholders.
7
No Board Recommendation On Liquidation Proposal
The Board of Directors makes no recommendations to the Stockholders as to
the adoption of the proposed Liquidation. The Liquidation is being proposed to
the Stockholders solely because the Board of Directors is required to do so by
the terms of the Prospectus.
THE LIQUIDATION
Summary of Dissolution Process Under Delaware Law
Dissolution of a Delaware corporation such as the Company requires the
approval of the Company's Board of Directors, which has been obtained, and of
the holders of a majority of the outstanding voting shares, which approval is
being sought through this Proxy Statement.
Upon receipt of the required Stockholder vote, the Company's officers will
file a "Certificate of Dissolution" with the Delaware Secretary of State. Upon
this filing, the Company will cease to conduct its ordinary business and will
engage in conduct only to wind up its affairs.
The Company is required to give written notice of its dissolution to all
known creditors and to any contingent creditors, who will then have 60 days to
present their claims for payment. The Company must also publish a legal notice
of its dissolution in Delaware and in New York City, where its principal office
is located.
The Company expects to have sufficient cash outside of escrow to pay all
known trade payables. However, due to the accrued interest on the amounts held
in escrow, all of which constitutes taxable income to the Company, the Company
is likely to have to use some of the escrowed funds to pay federal, state and
local income taxes, and also franchise taxes to the state of Delaware.
If a creditor presents a claim which the Company believes is unjustified
and rejects, the creditor will have a further 120 days to begin a lawsuit to
prove such claim.
Finally, the Company must petition the Delaware Chancery Court to
determine the amount of money, if any, that must be reserved to pay asserted
claims that have been rejected, and to reserve for future claims from unknown
claimants who may not have received notice of the dissolution of the Company.
The Company may commence distributions to the Stockholders no earlier than
150 days after the Company rejects the last claim. Accordingly, the earliest
possible date on which any funds will be distributed to Stockholders will be
approximately seven (7) months after the Special Meeting. If claims presently
unknown are filed, or the Chancery Court does not issue a prompt ruling, actual
distributions may be delayed for a considerable period of time, possibly several
years. Management will make every reasonable effort to make distributions, or at
least partial distributions, at the earliest permissible time. Stockholders
receiving distributions from the Company will remain personally liable to any
creditors of the Company who did not receive notice of the dissolution, but only
up to the amount of the distribution actually received by such Stockholder.
8
Dissolution
Subject to the adoption of the proposed Liquidation by the holders of a
majority of the outstanding Common Stock, the Company shall file a certificate
of dissolution (the "Certificate") with the Secretary of State of the State of
Delaware, whereupon the Company shall deemed be dissolved (the "Dissolution
Date").
Notwithstanding such dissolution, pursuant to Section 278 of the DGCL, the
Company is required to continue in existence for a minimum term of three (3)
years from the Dissolution Date, or for such longer period as the Court of
Chancery of the State of Delaware may, in its sole discretion, direct, or as
required, for the purposes of (a) prosecuting and defending suits, whether
civil, criminal or administrative, by or against the Company, if any, (b)
settling and closing the business of the Company, (c) discharging liabilities of
the Company, if any, and (d) distributing any remaining assets of the Company to
the Non-affiliated Stockholders (such term being hereinafter referred to as the
"Winding-Up Period"). During the Winding-Up Period, the Company will not be
engaged in the continuation of its business purpose (i.e., the Company will not
endeavor to enter into a Business Combination).
With respect to any action, suit or proceeding commenced by or against the
Company prior to or during the Winding-Up Period, any such actions shall not
terminate by reason of the Liquidation. The Winding-Up Period will be extended,
and the Company will continue in existence, for an unlimited period, until such
time as there is a fully executed, final judgement, order or decree with respect
to each such action.
Notification of Claim Holders/Security
Immediately following the Dissolution Date, the Company will, pursuant to
Section 280 of the DGCL, send notice to all persons known to have an existing
claim against the Company, if any (other than a claim against the Company in a
pending action, suit or proceeding to which the Company is a party) requiring
such persons to present any such claim against the Company within a maximum
period of sixty (60) days from the date of the notice (the "Claim Period"). Such
notice will also be published once per week for two consecutive weeks in a
newspaper of general circulation in Kent County, Delaware, where the Company's
registered agent in Delaware is located and in a newspaper of general
circulation in New York County, where the Company's principal place of business
is located. In the event holders of any such claims fail to present them to the
Company within the Claim Period, the claims will thereafter be barred and of no
force or effect against the Company.
If, however, a claimant provides the Company with timely notice of a claim
(i.e., within such sixty (60) day period), and the Company rejects, in its sole
discretion, such claim in accordance with the provisions of Section 280(a)(3) of
the DGCL, such claimant will thereafter be required to commence an action, suit
or proceeding against the Company in respect of such claim within a maximum
period of 120 days after the Company's mailing of the rejection notice. If such
action, suit or proceeding is not commenced with such 120 day period, the claim
will thereafter be deemed barred and of no further force or effect against the
Company.
Holders of claims to whom such notice was not sent by the Company are
entitled to bring an action, suit or proceeding against the Company in respect
of such claim at any time within the Winding-Up Period.
9
Payment and Distribution of Company Assets
Following the Claim Period, and in accordance with Section 281 of the
DGCL, the assets of the Company will initially be used to (a) pay any and all
claims against the Company which have been made within the Claim Period and
which are acknowledged to be an obligation of the Company, (b) pay or make
provision for all other claims that are mature, known and uncontested or that
have been determined to be owing by the Company, and (c) post any security
required under Section 281(a)(2) and (3) of the DGCL (as discussed above).
In the event there are assets remaining following any such distributions,
such assets will be distributed pro-rata to the Non-affiliated Stockholders
within a minimum period of 150 days from the date of the final notice of
rejections given by the Company pursuant to Section 280(a)(3) of the DGCL. Any
security in respect of the Unmatured Claims which exists (i) upon the expiration
of the applicable statute of limitations, or (ii) following the full execution
of any judgment, order or decree in respect of any such conditional claim, as
applicable, will thereafter be distributed pro-rata to each of the Stockholders.
As of September 30, 1998, the balance of the Escrow Account is $8,937,952
(inclusive of any and all interest accrued on the principle balance thereof).
The Company's unaudited balance sheet at September 30, 1998 is attached hereto
as Annex B. Following the payment of all known third party claims against the
Company, and of all expenses incurred in connection with the Liquidation, there
is a substantial likelihood that the assets available for distribution to the
Stockholders will not be in excess of such Escrow Account balance, and thus
there will be no distributions to the Stockholders greater than the balance of
the Escrow Account. There can be no guarantee that claims will not exceed the
amount of cash available to the Company outside of the Escrow Account, although
the Company is not aware of any such excess claims (other than income taxes on
the interest income accruing within the Escrow Account). In such event, such
excess would be paid from the Escrow Account, and Stockholders will receive less
than their pro-rata share of the present balance of the Escrow Account, and may
receive less than the amount of their initial investment. The payment of
corporate taxes will not, by itself, cause the balance of the Escrow Account to
fall below the amount of the Stockholders' initial investment.
Continuing Liability of Stockholders to Creditors of the Company
Provided the foregoing procedures are complied with in connection with the
dissolution of the Company, the directors and officers of the Company will not
be personally liable to creditors of the Company.
10
The Non-affiliated Stockholders may, however, be personally liable to
creditors of the Company who commence an action, suit or proceeding against the
Company prior to the expiration of the Winding-Up Period in respect of any
claims against the Company to the extent, but not in excess of, the lesser of
each such Non-affiliated Stockholder's respective pro-rata share of (a) the
amount of the such creditor's claim(s), or (b) the amount received by such
Non-affiliated Stockholder in respect of the distribution of the Company's
assets (following, and only to the extent the liability of the Company on any
such claims exceeds, the application of any security afforded by the Company in
respect of such claims). In no event will the personal liability of each
Stockholder for claims against the Company exceed the amount actually
distributed to such Stockholder in the Liquidation.
REQUIRED VOTE
Adoption of the proposed Liquidation requires the affirmative vote, in
person or by properly executed proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Special Meeting.
445,001 shares of the 890,000 shares outstanding is necessary to constitute a
quorum at the Special Meeting and the affirmative vote by a majority of the
outstanding shares 445,001 shares of the 890,000 shares outstanding) is required
to adopt the Amendment. All holders the 90,000 Founders' Shares, have agreed to
vote all of their respective shares of Common Stock in accordance with the vote
of the majority of the shares voted by all Non-affiliated Stockholders with
respect to the Liquidation.
OTHER BUSINESS
Management does not know of any matter to be brought before the Special
Meeting other than as described above. In the event any other matter properly
comes before the Special Meeting, the persons named in the accompanying form of
proxy have discretionary authority to vote on such matters.
11
ANNEX A
SELECTED PROVISIONS OF THE DELAWARE
GENERAL CORPORATIONS LAW
Section 275 DISSOLUTION GENERALLY; PROCEDURE.
(a) If it should be deemed advisable in the judgment of the board of
directors of any corporation that it should be dissolved, the board, after the
adoption of a resolution to that effect by a majority of the whole board at any
meeting called for that purpose, shall cause notice to be mailed to each
stockholder entitled to vote thereon of the adoption of the resolution and of a
meeting of stockholders to take action upon the resolution.
(b) At the meeting a vote shall be taken upon the proposed dissolution. If
a majority of the outstanding stock of the corporation entitled to vote thereon
shall vote for the proposed dissolution, a certification of dissolution shall be
filed with the Secretary of State pursuant to subsection (d) of this Section.
(c) Dissolution of a corporation may also be authorized without action of
the directors if all the stockholders entitled to vote thereon shall consent in
writing and a certificate of dissolution shall be filed with the Secretary of
State pursuant to subsection (d) of this Section.
(d) If dissolution is authorized in accordance with this Section, a
certificate of dissolution shall be executed, acknowledged and filed, and shall
become effective, in accordance with Section 103 of this Title. Such certificate
of dissolution shall set forth:
(1) The name of the corporation;
(2) The date dissolution was authorized;
(3) That the dissolution has been authorized by the board of
directors and stockholders of the corporation, in accordance with subsections
(a) and (b) of this Section, or that the dissolution has been authorized by all
of the stockholders of the corporation entitled to vote on a dissolution, in
accordance with subsection (c) of this section; and
(4) The names and addresses of the directors and officers of the
corporation.
(e) The resolution authorizing a proposed dissolution may provide that
notwithstanding authorization or consent to the proposed dissolution by the
stockholders, or the members of a nonstock corporation pursuant to Section 276
of this title, the board of directors or governing body may abandon such
proposed dissolution without further action by the stockholders or members.
(f) Upon a certificate of dissolution becoming effective in accordance with
Section 103 of this title, the corporation shall be dissolved.
12
SECTION 278 CONTINUATION OF CORPORATION AFTER DISSOLUTION FOR PURPOSES OF
SUIT AND WINDING UP AFFAIRS.--All corporations, whether they expire by their own
limitation or are otherwise dissolved, shall nevertheless be continued, for the
term of 3 years from such expiration or dissolution or for such longer period as
the Court of Chancery shall in its discretion direct, bodies corporate for the
purpose of prosecuting and defending suits, whether civil, criminal or
administrative, by or against them, and of enabling them gradually to settle and
close their business, to dispose of and convey their property, to discharge
their liabilities and to distribute to their stockholders any remaining assets,
but not for the purpose of continuing the business for which the corporation was
organized. With respect to any action, suit or proceeding begun by or against
the corporation either prior to or within 3 years after the date of its
expiration or dissolution the action shall not abate by reason of the
dissolution of the corporation; the corporation shall, solely for the purpose of
such action, suit or proceeding, be continued as a body corporate beyond the
3-year period and until any judgments, orders or decrees therein shall be fully
executed, without the necessity for any special direction to that effect by the
Court of Chancery.
Section 280 NOTICE TO CLAIMANTS; FILING OF CLAIMS. -- (a)(1) After a
corporation has been dissolved in accordance with the procedures set forth in
this chapter, the corporation or any successor entity may give notice of the
dissolution, requiring all persons having a claim against the corporation other
than a claim against the corporation in a pending action, suit or proceeding to
which the corporation is a party to present their claims against the corporation
in accordance with such notice. Such notice shall state:
(a) That all such claims must be presented in writing and must
contain sufficient information reasonably to inform the corporation or successor
entity of the identity of the claimant and the substance of the claim;
(b) The mailing address to which such a claim must be sent;
(c) The date by which such a claim must be received by the
corporation or successor entity, which date shall be no earlier than 60 days
from the date thereof; and
(d) That such claim will be barred if not received by the date
referred to in subparagraph c. of this subsection; and
(e) That the corporation or a successor entity may make
distributions to other claimants and the corporation's stockholders or persons
interested as having been such without further notice to the claimant; and
(f) The aggregate amount, on an annual basis, of all distributions
made by the corporation to its stockholders for each of the 3 years prior to the
date the corporation dissolved.
Such notice shall also be published at least once a week for 2 consecutive
weeks in a newspaper of general circulation in the county in which the office of
the corporation's last registered agent in this State is located and in the
corporation's principal place of business and, in the case of a corporation
having $10,000,000 or more in total assets at the time of its dissolution, at
least once in all editions of a daily newspaper with a national circulation. On
or before the date of the first publication of such notice, the corporation or
successor entity shall mail a copy of such notice by certified or registered
mail, return receipt requested, to each known claimant of the corporation
including persons with claims asserted against the corporation in a pending
action, suit or proceeding to which the corporation is a party.
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(2) Any claim against the corporation required to be presented pursuant to
this subsection is barred if a claimant who was given actual notice under this
subsection does not present the claim to the dissolved corporation or successor
entity by the date referred to in subparagraph (1)(c) of this subsection.
(3) A corporation or successor entity may reject, in whole or in part, any
claim made by a claimant pursuant to this subsection by mailing notice of such
rejection by certified or registered mail, return receipt requested, to the
claimant within 90 days after receipt of such claim and, in all events, at least
150 days before the expiration of the period described in Section 278 of this
title; provided, however, that in the case of a claim filed pursuant to Section
295 of this title against a corporation or successor entity for which a receiver
or trustee has been appointed by the Court of Chancery the time period shall be
as provided in Section 296 of this title, and the 30-day appeal period provided
for in Section 296 of this title shall be applicable. A notice sent by a
corporation or successor entity pursuant to this subsection shall state that any
claim rejected therein will be barred if an action, suit or proceeding with
respect to the claim is not commenced within 120 days of the date thereof, and
shall be accompanied by a copy of Sections 278-283 of this title and, in the
case of a notice sent by a court-appointed receiver or trustee and as to which a
claim has been filed pursuant to Section 295 of this title, copies of Sections
295 and 296 of this title.
(4) A claim against a corporation is barred if a claimant whose claim is
rejected pursuant to paragraph (3) of this subsection does not commence an
action, suit or proceeding with respect to the claim no later than 120 days
after the mailing of the rejection notice.
(b) (1) A corporation or successor entity electing to follow the procedures
described in subsection (a) of this section shall also give notice of the
dissolution of the corporation to persons with contractual claims contingent
upon the occurrence or nonoccurrence of future events or otherwise conditional
or unmatured, and request that such persons present such claims in accordance
with the terms of such notice. Provided, however, that as used in this section
and in Section 281 of this title, the term "contractual claims" shall not
include any implied warranty as to any product manufactured, sold, distributed
or handled by the dissolved corporation. Such notice shall be in substantially
the form, and sent and published in the same manner, as described in subsection
(a)(1) of this section.
(2) The corporation or successor entity shall offer any claimant on a
contract whose claim is contingent, conditional or unmatured such security as
the corporation or successor entity determines is sufficient to provide
compensation to the claimant if the claim matures. The corporation or successor
entity shall mail such offer to the claimant by certified or registered mail,
return receipt requested, within 90 days of receipt of such claim and, in all
events, at least 150 days before the expiration of the period described in
Section 278 of this title. If the claimant offered such security does not
deliver in writing to the corporation or successor entity a notice rejecting the
offer within 120 days after receipt of such offer for security, the claimant
shall be deemed to have accepted such security as the sole source from which to
satisfy the claim against the corporation.
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(c) (1) A corporation or successor entity which has given notice in
accordance with subsection (a) of this section shall petition the Court of
Chancery to determine the amount and form of security that will be reasonably
likely to be sufficient to provide compensation for any claim against the
corporation which is the subject of a pending action, suit or proceeding to
which the corporation is a party other than a clam barred pursuant to subsection
(a) of this section.
(2) A corporation or successor entity which has given notice in accordance
with subsections (a) and (b) of this section shall petition the Court of
Chancery to determine the amount and form of security that will be sufficient to
provide compensation to any claimant who has rejected the offer for security
made pursuant to subsection (b)(2) of this section.
(3) A corporation or successor entity which has given notice in accordance
with subsection (a) of this section shall petition the Court of Chancery to
determine the amount and form of security which will be reasonably likely to be
sufficient to provide compensation for claims that have not been made known to
the corporation or that have not arisen but that, based on facts known to the
corporation of successor entity, are likely to arise, or to become known to the
corporation or successor entity within 5 years after the date of dissolution or
such longer period of time as the Court of Chancery may determine not to exceed
10 years after the date of dissolution. The Court of Chancery may appoint a
guardian ad litem in respect of any such proceeding brought under this
subsection. The reasonable fees and expenses of such guardian, including all
reasonable expert witness fees, shall be paid by the petitioner in such
proceeding.
(d) The giving of any notice or making of any offer pursuant to the
provisions of this section shall not revive any claim then barred or constitute
acknowledgment by the corporation or successor entity that any person to whom
such notice is sent is a proper claimant and shall not operate as a waiver of
any defense or counterclaim in respect of any claim asserted by any person to
whom such notice is sent.
(e) As used in this section, the term "successor entity" shall include any
trust, receivership or other legal entity governed by the laws of this State to
which the remaining assets and liabilities of a dissolved corporation are
transferred and which exists solely for the purposes of prosecuting and
defending suits, by or against the dissolved corporation, enabling the dissolved
corporation to settle and close the business of the dissolved corporation, to
dispose of and convey the property of the dissolved corporation, to discharge
the liabilities of the dissolved corporation, and to distribute to the dissolved
corporation's stockholders any remaining assets, but not for the purpose of
continuing the business for which the dissolved corporation was organized.
(f) The time periods and notice requirements of this section shall, in the
case of a corporation or successor entity for which a receiver or trustee has
been appointed by the Court of Chancery, be subject to variation by, or in the
manner provided in, the Rules of the Court of Chancery.
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SECTION 281 PAYMENT AND DISTRIBUTION TO CLAIMANTS AND STOCKHOLDERS.--
(a) A dissolved corporation or successor entity which has followed the
procedures described in Section 280 of this title:
(1) Shall pay the claims made and not rejected in accordance with Section
280(a) of this title,
(2) Shall post the security offered and not rejected pursuant to Section
280(b)(2) of this title,
(3) Shall post any security ordered by the Court of Chancery in any
proceeding under Section 280(c) of this title and (4) Shall pay or make
provision for all other claims that are mature, known and uncontested or that
have been finally determined to be owing by the corporation or such successor
entity. Such claims or obligations shall be paid in full and any such provision
for payment shall be made in full if there are sufficient assets. If there are
insufficient assets, such claims and obligations shall be paid or provided for
according to their priority, and, among claims of equal priority, ratably to the
extent of assets legally available therefor. Any remaining assets shall be
distributed to the stockholders of the dissolved corporation; provided, however,
that such distribution shall not be made before the expiration of 150 days from
the date of the last notice of rejections given pursuant to Section 280(a)(3) of
this title. In the absence of actual fraud, the judgment of the directors of the
dissolved corporation or the governing persons of such successor entity as to
the provision made for the payment of all obligations under paragraph (4) of
this subsection shall be conclusive.
(b) A dissolved corporation or successor entity which has not followed the
procedures described in Section 280 of this title shall, prior to the expiration
of the period described in Section 278 of this title, adopt a plan of
distribution pursuant to which the dissolved corporation or successor entity (i)
shall pay or make reasonable provision to pay all claims and obligations,
including all contingent, conditional or unmatured contractual claims known to
the corporation or such successor entity, (ii) shall make such provision as will
be reasonably likely to be sufficient to provide compensation for any claim
against the corporation which is the subject of a pending action, suit or
proceeding to which the corporation is a party and (iii) shall make such
provision as will be reasonably likely to be sufficient to provide compensation
for claims that have not been made known to the corporation or that have not
arisen but that, based on facts known to the corporation or successor entity,
are likely to arise or to become known to the corporation or successor entity
within 10 years after the date of dissolution. The plan of distribution shall
provide that such claims shall be paid in full and any such provision for
payment made shall be made in full if there are sufficient assets. If there are
insufficient assets, such plan shall provide that such claims and obligations
shall be paid or provided for according to their priority and, among claims of
equal priority, ratably to the extent of assets legally available therefore. Any
remaining assets shall be distributed to the stockholders of the dissolved
corporation.
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(c) Directors of a dissolved corporation or governing persons of a
successor entity which has complied with subsections (a) or (b) of this section
shall not be personally liable to the claimants of the dissolved corporation.
(d) As used in this section, the term "successor entity" has the meaning
set forth in Section 280(e) of this title.
(e) The term "priority", as used in this section, does not refer either to
the order of payments set forth in subsection (a)(1)-(4) of this section or to
the relative times at which any claims mature or are reduced to judgment.
SECTION 282 LIABILITY OF STOCKHOLDERS OF DISSOLVED CORPORATIONS.--
(a) A stockholder of a dissolved corporation the assets of which were
distributed pursuant to Section 281(a) or (b) of this title shall not be liable
for any claim against the corporation in an amount in excess of such
stockholder's pro rata share of the claim or the amount so distributed to him,
whichever is less.
(b) A stockholder of a dissolved corporation the assets of which were
distributed pursuant to Section 281(a) of this title shall not be liable for any
claim against the corporation on which an action, suit or proceeding is not
begun prior to the expiration of the period described in Section 278 of this
title.
(c) The aggregate liability of any stockholder of a dissolved corporation
for claims against the dissolved corporation shall not exceed the amount
distributed to him in dissolution.
17
ANNEX B
ORION ACQUISITION CORP. II
(a corporation in the development stage)
BALANCE SHEETS
(Unaudited)
September 30, December 31,
1998 1997
ASSETS
- ------
Cash $ 65,882 $ 312,010
Restricted cash 188,263 453,209
US Treasury bills - restricted 8,749,689 7,999,895
Accrued investment interest receivable 45,561 208,100
Deferred acquisition costs - 8,072
----------- -----------
Total Assets $ 9,049,395 $ 8,981,286
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Accrued expenses $ 61,041 $ 92,964
Common stock, subject to possible conversion
160,000 shares at redemption value 1,796,703 1,732,240
Commitments and contingencies - -
Stockholders' equity:
Convertible preferred stock, $.01 par value,
1,000,000 shares authorized:
110 shares issued and outstanding 1 1
Common stock, $.01 par value 10,000,000
Shares authorized; 890,000 shares issued
and outstanding (which includes shares
subject to possible redemption) 8,900 8,900
Additional paid-in capital 7,232,504 7,232,504
Earnings accumulated during development
stage (49,754) (85,323)
----------- -----------
Total stockholders' equity 7,191,651 7,156,082
----------- -----------
Total liabilities and stockholders' equity $ 9,049,395 $ 8,981,286
=========== ===========
See notes to accompanying unaudited financial statements.
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[FRONT OF PROXY CARD]
PROXY ORION ACQUISITION CORP. II
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William Remley and Richard Hoffman
and each of them, proxies, each with the power of substitution, to vote the
shares of the undersigned at the Special Meeting of Stockholders of Orion
Acquisition Corp. II on January 12, 1999, and any adjournments and postponements
thereof, upon all matters as may properly come before the Special Meeting.
Without otherwise limiting the foregoing general authorization, the proxies are
instructed to vote as indicated herein.
Please complete, date and sign on the reverse side and mail in the
enclosed envelope.
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[BACK OF PROXY CARD]
Please mark your votes as in this example.
(1) The adoption of the resolution authorizing the liquidation of the Company
in accordance with the relevant provisions of the Delaware General Corporation
Law.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(2) Upon any and all other business that may come before the Special Meeting.
Check here if you plan to attend the Special Meeting of Stockholders. [
]
SIGNATURE(S):
DATE: 1998
Note: Executors, Administrators, Trustees, etc.
should give full title.
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