U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14(a)-6(e)(2))
[X] Definitive Information Statement
WORLD SHOPPING NETWORK, INC.
(Name of the Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee Computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
___________________________________________________________________________
2. Aggregate number of securities to which transaction applies:
___________________________________________________________________________
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):
___________________________________________________________________________
4. Proposed aggregate offering price:
___________________________________________________________________________
5. Total fee paid:
___________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box is 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:
____________________________________________________________________________
2. Form, schedule, or registration statement number:
3. Filing party:
____________________________________________________________________________
4. Date filed:
____________________________________________________________________________
Notes:
INFORMATION STATEMENT
World Shopping Network, Inc.
1530 Brookhollow Drive, Suite C
Santa Ana, California 92705
We Are Not Asking You for a Proxy and You Are
Requested Not To Send Us a Proxy
This Information Statement is furnished by the Board of Directors of World
Shopping Inc., a Delaware corporation ("Company"), to the holders of record
at the close of business on March 15, 2001 ("Record Date") that were not
solicited by the Company, of the Company's outstanding common stock, par
value $0.001 per share ("Common Stock",) pursuant to Rule 14c-2 promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act"). This
Information Statement is being furnished to such stockholders in connection
with seeking the written consent of a majority in interest of the
stockholders to redomicile the Company from the State of Delaware to the
State of Nevada by merging with a newly formed Nevada corporation.
The Company's Board of Directors unanimously approved this merger by written
consent of the Directors on March 14, 2001. The Company has received the
consent of a majority of the outstanding shares of Common Stock for the
Company to do the following: (a) file an Amendment to the Certificate of
Incorporation with the Delaware Secretary of State changing the name of the
Company to WSN Group, Inc., a Delaware Corporation; (b) increase the
authorized common stock of the Company to 500,000,000 in such Amendment; and
(c) approve the Agreement and Plan of Merger by and between the newly named
WSN Group, Inc. (Delaware) and WSN Group, Inc. (Nevada). The filing of the
Articles of Merger with the Nevada Secretary of State, which will effect the
redomicile of the Company, will not be done until a date which is at least
twenty (20) days after the filing of this Definitive Information Statement.
This Information Statement will be sent on or about May 2, 2001, to the
Company's stockholders of record who have not been solicited for their
consent of this corporate action.
VOTING SECURITIES
The record date of shareholders entitled to receive notice of this corporate
action by the Company is the close of business on March 15, 2001. On such
date, the Company had issued and outstanding 32,215,202 shares of $0.001 par
value common stock. Each share is entitled to one vote per share on any
matter which may properly come before the shareholders and there is no
cumulative voting right on any shares. Under Delaware law, there are
dissenters' rights with respect to the Agreement and Plan of Merger as set
forth in this Information Statement.
All matters to be voted on require an affirmative vote of a majority of the
issued and outstanding shares of the Company. The Company has solicited and
received written consent of a majority of stockholders.
STOCK OWNERSHIP
The following table sets forth information regarding the beneficial ownership
of shares of the Company's common stock as of March 15, 2001 (32,215,202
issued and outstanding) by (i) all shareholders known to the Company to be
beneficial owners of more than 5% of the outstanding Common Stock; (ii) each
director and executive officer; and (iii) all officers and directors of the
Company as a group.
Title of Name and Address Amount and Percent of
Class of Beneficial Owner(1) Nature of Class
Beneficial
Owner(2)
Common Tri-Star Diversified 4,500,000 13.97%
Stock Ventures, L.L.C.
1601 East Flamingo Road
Suite 18
Las Vegas, Nevada 89119
Common John J. Anton 4,250,000 13.19%
Stock 1530 Brookhollow Drive
Suite C
Santa Ana, California 92705
Common The David Andrew Trust 4,124,924(3) 12.80%
Stock 3124 Tara Way
Costa Mesa, California 92626
Common Pelham Associates 3,000,000(4) 9.31%
Stock 3900 Birch Street, Suite 113
Newport Beach, California 92660
Common Icapital Management 2,813,000(4) 8.73%
Stock 294 South Seneca Street
Anaheim, California 92805
Common John Moore 2,012,500 6.24%
Stock 1530 Brookhollow Drive
Suite C
Santa Ana, California 92705
Common Martin Bloomenstein 150,000 0.47%
Stock 1530 Brookhollow Drive
Suite C
Santa Ana, California 92705
Common Gary Fox 150,000 0.47%
Stock 1530 Brookhollow Drive
Suite C
Santa Ana, California 92705
Common Shares of all directors and 6,562,500 20.37%
Stock executive officers as a group
(4 persons)
(1) Except as noted, each person has sole voting power and sole dispositive
power as to all of the shares shown as beneficially owned by them.
(2) None of these security holders has the right to acquire any amount of
common stock within 60 days from options, warrants, rights, conversion
privilege, or similar obligations.
(3) The David Andrew Trust is controlled by the trustee, Richard Nuthmann.
(4) The shares of each of these corporations is owned by The Michael Andrew
Trust. The trustee of this trust is Marcine Aniz Uhler.
CHANGE IN NAME;
INCREASE IN AUTHORIZED SHARES
Description of Securities.
(a) Shareholder Rights.
The Company's articles of incorporation authorize the issuance of 100,000,000
shares of common stock, with a par value of $0.001. The holders of the
shares:
have equal ratable rights to dividends from funds legally available
therefore, when, as, and if declared by the board of directors of the
Company.
are entitled to share ratably in all of the assets of the company available
for distribution upon winding up of the affairs of the Company.
are entitled to one non-cumulative vote per share on all matters on which
shareholders may vote at all meetings of shareholders.
These securities do not have any of the following rights:
special voting rights.
preference as to dividends or interest.
preemptive rights to purchase in new issues of shares.
preference upon liquidation.
any other special rights or preferences.
In addition, the shares are not convertible into any other security. There
are no restrictions on dividends under any loan, financing arrangements or
otherwise.
(b) Non-Cumulative Voting.
The holders of shares of common stock of the Company will not have cumulative
voting rights, which means that the holders of more than 50% of such
outstanding shares, voting for the election of directors, can elect all of
the directors to be elected, if they so choose. In such event, the holders
of the remaining shares will not be able to elect any of the company's
directors.
(c) Dividends.
The Company does not currently intend to pay cash dividends. The Company's
dividend policy is to make distributions of its revenues to its stockholders
when the Company's board of directors deems such distributions appropriate.
Because the Company does not intend to make cash distributions, potential
shareholders would need to sell their shares to realize a return on their
investment. A distribution of revenues will be made only when, in the
judgment of the Company's board of directors, it is in the best interest of
the Company's stockholders to do so.
(d) Possible Anti-Takeover Effects of Authorized but Unissued Stock.
One effect of the existence of authorized but unissued capital stock
may be to enable the Board of Directors to render more difficult or to
discourage an attempt to obtain control of the Company by means of a merger,
tender offer, proxy contest, or otherwise, and thereby to protect the
continuity of the Company's management. If, in the due exercise of its
fiduciary obligations, for example, the Board of Directors were to determine
that a takeover proposal was not in the Company's best interests, such shares
could be issued by the Board of Directors without stockholder approval in one
or more private placements or other transactions that might prevent, or
render more difficult or costly, completion of the takeover transaction by
diluting the voting or other rights of the proposed acquiror or insurgent
stockholder or stockholder group, by creating a substantial voting block in
institutional or other hands that might undertake to support the position of
the incumbent board of directors, by effecting an acquisition that might
complicate or preclude the takeover, or otherwise.
(e) Transfer Agent.
The Company has engaged the services of Corporate Stock Transfer, 3200
Cherry Creek Drive South, Suite 430, Denver, Colorado 80209, to act as
transfer agent and registrar.
Amendment to the Certificate of Incorporation.
The corporate action to be taken consists of the Company filing an
Amendment to the Certificate of Incorporation wherein the First Article of
the Certificate of Incorporation is amended to read: "The name of this
Corporation is WSN Group, Inc. The corporate action also consists of the
Company, in such Amendment, amending the Fourth Article to read: "The amount
of the total authorized capital stock of this corporation is 500,000,000
shares of $0.001 par value."
REDOMICILE TO THE STATE OF NEVADA
The Board of Directors has unanimously approved, and the shareholders have
approved, by written consent of a majority of issued and outstanding shares
of common stock of the Company, the merger of the Company with a Nevada
corporation of the same for the purpose of redomiciling the Company to the
State of Nevada. In the following discussion of the merger, the term
"Company" refers to the Delaware corporation of which you are currently a
shareholder, and the term "WSN-Nevada" refers to a newly formed corporation
which is incorporated in the State of Nevada. The redomicile will be effected
by merging the Company with and into WSN-Nevada, which will be the survivor
of the merger. After the merger, shareholders will continue to own an
interest in a company which will be engaged in the same business that the
Company was engaged in before the merger. Shareholders' proportionate
ownership and relative voting rights will not change as a result of the
merger. The Agreement and Plan of Merger between the Company and WSN-Nevada
is the legal document that governs the merger (a copy of this agreement is
available upon request from the Company).
Reasons for the Merger.
The Company believes that Nevada law will provide greater efficiency,
predictability and flexibility in its legal affairs than is presently
available under Delaware law. Nevada has adopted comprehensive and flexible
corporate laws. The Nevada legislature is particularly sensitive to issues
regarding corporate law and is especially responsive to developments in
modern corporate law and changes in business circumstances. In addition, the
Nevada Secretary of State is particularly flexible, expert and responsive in
its administration of the filings required for corporate transactions. In
addition, a change in domicile offers the following advantages:
(a) Unlike Delaware, there is no corporate income tax in Nevada;
(b) Unlike Delaware (which taxes shares of a resident of that state), there
is no taxation on corporate shares in Nevada; and
(c) Unlike Delaware, there is no annual franchise tax in Nevada.
Merger Procedure.
The Company's redomicile as a Nevada corporation will be effected by merging
the Company with and into WSN-Nevada. WSN-Nevada will be the surviving
corporation following the merger. WSN-Nevada has not engaged in any
activities except in connection with the proposed merger transaction. The
mailing address of its principal executive offices and its telephone number
are the same as those of the Company. When the merger is complete, each
outstanding share of common stock of the Company will be automatically
converted into one share of common stock of WSN-Nevada. It will not be
necessary for shareholders of the Company to exchange their existing stock
certificates for certificates of WSN-Nevada. Certificates for shares of the
Company common stock will automatically represent an equal number of shares
of WSN-Nevada common stock when the merger is completed. If shareholders
desire to sell some or all of their shares after the merger, delivery of the
stock certificate or certificates that previously represented the Company
shares will be sufficient. Following the merger, certificates bearing the
name of WSN-Nevada will be issued in the normal course upon surrender of
outstanding the Company certificates for transfer or exchange. If
shareholders surrender a certificate representing the Company shares for
exchange or transfer and new certificates are to be issued in a name other
than that appearing on the surrendered certificate, the surrendered
certificate must be accompanied by (1) all documents required to evidence and
effect the transfer and (2) evidence that any applicable stock transfer taxes
have been paid.
Conditions to Consummation of the Merger.
The merger will not be completed unless, among other things, the following
conditions are satisfied or, if allowed by law, waived: (a) The merger is
approved by the requisite vote of shareholders of the Company, which has
already occurred; (b) none of the parties to the Agreement and Plan of Merger
is subject to any decree, order or injunction that prohibits the consummation
of the merger; and (c) the WSN-Nevada shares to be issued pursuant to the
merger are authorized for listing on the Over the Counter Bulletin Board,
subject to official notice of issuance. There are no regulatory approvals
needed for the merger.
Amendment or Termination.
The Agreement and Plan of Merger may be amended, modified or supplemented at
any time before or after its adoption by the shareholders of the Company.
However, after adoption, no amendment, modification or supplement may be made
or effected that requires further approval by the Company shareholders
without obtaining that approval. The Board of Directors of the Company may
terminate the Agreement and Plan of Merger and abandon the merger at any time
before its effectiveness.
Effective Time.
The Company anticipates that the merger will become effective promptly
following twenty days after filing of this Information Statement with the
Securities and Exchange Commission. The merger of the Company with and into
WSN-Nevada, if not terminated by its Board of Directors, will become
effective upon the filing of Articles of Merger with the Nevada Secretary of
State, unless a later effective time is specified in this filing. Articles
of Merger are also required to be filed with the Delaware Secretary of State.
Required Vote.
The merger requires the affirmative vote of the holders of a majority of the
outstanding Company common stock, which has already occurred by written
consent.
Material Federal Income Tax Consequences.
The reorganization contemplated by the reorganization agreement is intended
to qualify as a tax-free reorganization, as contemplated by Section 368(A)
of the Internal Revenue Code of 1986, as amended.
Shareholders will not, under Section 354 of the Internal Revenue Code,
recognize gain or loss when they receive shares of WSN-Nevada common stock in
exchange for an equal number of shares of the Company common stock in the
merger; a stockholder's aggregate basis of the shares in WSN-Nevada common
stock received in the merger will be the same as the aggregate basis of the
shares of the Company common stock surrendered in exchange for those shares;
a stockholder's holding period in the shares of WSN-Nevada common stock
received in the merger will include the holding period of the shares of the
Company common stock surrendered in exchange for those shares, provided that
such stockholder holds those shares of the Company common stock as capital
assets when the merger occurs; and no gain or loss will be recognized by WSN-
Nevada or the Company as a result of the merger.
The Company believes that the foregoing addresses the material United States
federal income tax consequences of the acquisition to shareholders. The
opinion is based upon the Code, applicable Treasury Regulations, judicial
decisions and current administrative rulings, all of which are subject to
change with retroactive effect.
The tax consequences to shareholders of the acquisition may be affected by
their particular circumstances and by the applicability to them of one or
more special rules like those which apply to dealers in securities, foreign
persons, mutual funds, insurance companies and persons who do not hold their
shares as capital assets. Therefore, the Company urges shareholders to
consult their own tax advisor concerning the effect of the acquisition upon
them, including the effect of any state, local or other tax to which they may
be subject. An opinion of tax counsel will not be provided to shareholders.
Comparative Rights of Shareholders.
When the merger is completed, the rights of shareholders will be governed by
WSN-Nevada's certificate of incorporation and bylaws and the Nevada Revised
Statutes ("NRS"). Shareholders should consider the following comparison of
the NRS and WSN-Nevada's articles of incorporation and bylaws, on the one
hand, and the Delaware General Corporation Law ("DGCL") and the Company's
existing articles of incorporation and bylaws, on the other. This comparison
is not intended to be complete and is qualified in its entirety by reference
to the NRS and WSN-Nevada's articles of incorporation and bylaws and the DGCL
and the Company's articles of incorporation and bylaws. WSN-Nevada's
articles of incorporation and its bylaws are available for inspection and
copying upon request by any shareholder. The Company's existing articles of
incorporation and bylaws are also available for inspection and copying upon
request by any shareholder. The NRS and WSN-Nevada's articles of
incorporation and bylaws contain provisions that could have an anti-takeover
effect. The provisions included in WSN-Nevada's articles of incorporation and
bylaws are intended to enhance the likelihood of continuity and stability in
the composition of the board of directors and in the policies formulated by
the board of directors and to discourage transactions that may involve an
actual or threatened change of control of WSN-Nevada that the Board of
Directors does not believe is in the best interests of shareholders.
The NRS provides that any merger, consolidation or share exchange of a Nevada
corporation, as well as the sale, lease, exchange or disposal of all or
substantially all of its assets not in the ordinary course of business,
generally must be recommended by the Board of Directors and approved by a
vote of a majority of the outstanding shares of stock of the corporation
entitled to vote on such matters, unless the articles of incorporation
provides otherwise. Under the NRS, the vote of the shareholders of a
corporation surviving a merger is not required if: (a) The articles of
incorporation of the surviving domestic corporation will not differ from its
articles before the merger; (b) each stockholder of the surviving domestic
corporation whose shares were outstanding immediately before the effective
date of the merger will hold the same number of shares, with identical
designations, preferences, limitations and relative rights immediately after
the merger; (c) the number of voting shares outstanding immediately after the
merger, plus the number of voting shares issued as a result of the merger,
either by the conversion of securities issued pursuant to the merger or the
exercise of rights and warrants issued pursuant to the merger, will not
exceed by more than 20 percent the total number of voting shares of the
surviving domestic corporation outstanding immediately before the merger; and
(d) the number of participating shares outstanding immediately after the
merger, plus the number of participating shares issuable as a result of the
merger, either by the conversion of securities issued pursuant to the merger
or the exercise of rights and warrants issued pursuant to the merger, will
not exceed by more than 20 percent the total number of participating shares
outstanding immediately before the merger. The DGCL contains similar
provisions.
Under the NRS and DGCL, unless the articles of incorporation of a corporation
otherwise provides, amendments of its articles of incorporation generally
require the approval of the holders of a majority of the outstanding stock
entitled to vote on the amendment, and if the amendment would increase or
decrease the number of authorized shares of any class or series or the par
value of shares of that class or series or would adversely affect the rights,
powers or preferences of that class or series, a majority of the outstanding
stock of that class or series also would be required to approve the
amendment.
Under the DGCL, directors can amend the bylaws of a corporation only if the
right to do so is expressly conferred upon the directors in its articles of
incorporation. In contract, under NRS the directors are free to amend the
bylaws.
Under the NRS and DGCL, a special meeting of shareholders can be called by
the corporation's board of directors or by any person or persons as may be
authorized by the corporation's articles of incorporation or bylaws. Under
WSN-Nevada's bylaws special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the
President or by the Board of Directors, and shall be called by the President
at the request of the holders of not less than 10% of all the outstanding
shares of the corporation entitled to vote at the meeting. Under the
Company's bylaws the difference is that the special meeting may be called
only by one-fifth of the outstanding shares entitled to vote.
Both the NRS and the DGCL permit corporate action without a meeting of
shareholders upon the written consent of the holders of that number of shares
necessary to authorize the proposed corporate action being taken, unless the
certificate of incorporation or bylaws expressly provide otherwise. If
proposed corporate action is taken without a meeting by less than the
unanimous written consent of shareholders, the DGCL require that prompt
notice of the taking of the action be sent to those shareholders who have not
consented in writing (the NRS does not requires this). WSN-Nevada's bylaws
provide that corporate action without a meeting of shareholders may be taken
by a majority of the outstanding shares of the company.
The bylaws of the Company provide that the number of directors is to be 6 in
number; WSN-Nevada's bylaws specify not less than one. As of the date of
this Information Statement, the Board of Directors of the Company consisted
of four persons. Under both bylaws, the directors are to serve until the
next annual meeting of the shareholders.
No holder of WSN-Nevada common stock or the Company common stock has the
right to vote cumulatively in the election of directors.
Under the DGCL, any director or the entire board of directors may be removed,
with or without cause, by the holders of a majority of the shares entitled to
vote in an election of directors unless provided otherwise by the
corporation's articles of incorporation. Under the NRS, any director may be
removed by the vote of shareholders representing not less than two-thirds of
the voting power entitled to vote. The bylaws of the Company follow the
provisions in DGCL; WSN-Nevada's bylaws are silent on the removal of
directors, therefore the NRS would control. Under both the WSN-Nevada and
the Company bylaws, newly created directorships resulting from any increase
in the number of directors or any vacancies on the board of directors may be
filled by the affirmative vote of a majority of the directors then in office.
In addition, both bylaws provide that the directors elected to fill vacancies
on the board of directors will hold office until the annual meeting of the
shareholders.
The NRS and DGCL both have provisions and limitations regarding directors'
liability. The NRS and DGCL permit a corporation to include in its articles
of incorporation a provision that eliminates or limits the personal liability
of a director to the corporation or its shareholders for monetary damages for
breach of fiduciary duties as a director. However, under DGCL this provision
may not eliminate or limit the liability of a director: (1) for any breach of
the director's duty of loyalty to the corporation or its shareholders; (2)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (3) for declaration of unlawful
dividends or illegal redemptions or stock repurchases; or (4) for any
transaction from which the director derived an improper personal benefit.
Under the NRS, the limitation of liability is for other than acts or
omissions which involve intentional misconduct, fraud, or a knowing violation
of law. The articles of incorporation of both WSN-Nevada and the Company
contain provisions which follow the numbered items listed above. While these
provisions provide directors with protection from awards for monetary damages
for breaches of their duty of care, it does not eliminate that duty.
Accordingly, these provisions have no effect on the availability of equitable
remedies like an injunction or rescission based on a director's breach of his
duty of care. These provisions apply to an officer only if he/she is also a
director and is acting in the capacity as a director, and does not apply to
officers who are not directors.
Both the NRS and DGCL generally permit a corporation to indemnify its
directors and officers against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with a third-party
action, other than a derivative action, and against expenses actually and
reasonably incurred in the defense or settlement of a derivative action,
provided that there is a determination that the individual acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation. That determination must be made, in the case of
an individual who is a director or officer at the time of the determination:
By a majority of the disinterested directors, even though less than a quorum;
by independent legal counsel, regardless of whether a quorum of disinterested
directors exists; or by a majority vote of the shareholders, at a meeting at
which a quorum is present. Both NRS and DGCL require indemnification of
directors and officers for expenses relating to a successful defense on the
merits or otherwise of a derivative or third-party action. Also, both NRS
and DGCL permit a corporation to advance expenses relating to the defense of
any proceeding to directors and officers contingent upon those individuals'
commitment to repay any advances unless it is determined ultimately that
those individuals are entitled to be indemnified. WSN-Nevada's bylaws make
indemnification of directors and officers mandatory to the fullest extent
permitted by law; the Company's bylaws do not address the indemnification of
these individuals. WSN-Nevada's bylaws, provide for the advancement of
expenses to defend claims and establish procedures for determining whether a
director or officer is entitled to indemnification and enforcing rights to
indemnification and advancement of expenses.
Both the NRS and DGCL permit corporations to purchase or redeem their own
shares of capital stock, except, under DGCL, when the corporation is impaired
or when such purchase or redemption would cause any impairment of the capital
of the corporation.
No holder of WSN-Nevada common stock or the Company common stock has a
preemptive right to subscribe to any or all additional issues of the stock of
WSN-Nevada or The Company, respectively.
Under both the NRS and DGCL, any stockholder with a proper purpose may
inspect and copy the books, records and stockholder lists of the corporation.
Effect of Merger.
The effect of the merger will be that the new corporation will succeed
to, without other transfer, and will possess and enjoy all rights,
privileges, powers and franchises, and be subject to all restrictions,
disabilities and duties of each of two constituent corporations, and the
rights, privileges, powers and franchises of each of corporations, and all
property, real, personal and mixed, and all debts to either of the
constituent corporations shall be vested in the continuing corporation. In
addition, all rights of creditors and all liens on any property of each of
constituent corporations will be preserved unimpaired, limited to property
affected by the liens at time of merger, and all debts, liabilities and
duties of constituent corporations will attach to the continuing corporation,
and may be enforced against it to the same extent as if debts, liabilities
and duties had been incurred or contracted by it.
Appraisal Rights.
Section 262 of the Delaware General Corporation Law provides that any
stockholder of a corporation of who holds shares of stock on the date of the
making of a demand pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the effective date of
the merger or consolidation, who has otherwise complied with subsection (d)
of this section and who has neither voted in favor of the merger or
consolidation nor consented thereto in writing pursuant to shall be entitled
to an appraisal by the Court of Chancery of the fair value of the
stockholder's shares of stock under the circumstances described in
subsections (b) and (c) of this section.
Appraisal rights may be perfected as follows:
(a) If the merger or consolidation was approved by written consent,
each constituent corporation, either before the effective date of the merger
or consolidation or within ten days thereafter, shall notify each of the
holders of any class or series of stock of such constituent corporation who
are entitled to appraisal rights of the approval of the merger or
consolidation and that appraisal rights are available for any or all shares
of such class or series of stock of such constituent corporation, and shall
include in such notice a copy of this section; provided that, if the notice
is given on or after the effective date of the merger or consolidation, such
notice shall be given by the surviving or resulting corporation to all such
holders of any class or series of stock of a constituent corporation that are
entitled to appraisal rights. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also notify such
stockholders of the effective date of the merger or consolidation. Any
stockholder entitled to appraisal rights may, within 20 days after the date
of mailing of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal
of such holder's shares. If such notice did not notify stockholders of the
effective date of the merger or consolidation, either (i) each such
constituent corporation shall send a second notice before the effective date
of the merger or consolidation notifying each of the holders of any class or
series of stock of such constituent corporation that are entitled to
appraisal rights of the effective date of the merger or consolidation or (ii)
the surviving or resulting corporation shall send such a second notice to all
such holders on or within 10 days after such effective date; provided,
however, that if such second notice is sent more than 20 days following the
sending of the first notice, such second notice need only be sent to each
stockholder who is entitled to appraisal rights and who has demanded
appraisal of such holder's shares in accordance with this subsection. An
affidavit of the secretary or assistant secretary or of the transfer agent of
the corporation that is required to give either notice that such notice has
been given shall, in the absence of fraud, be prima facie evidence of the
facts stated therein. For purposes of determining the stockholders entitled
to receive either notice, each constituent corporation may fix, in advance, a
record date that shall be not more than 10 days prior to the date the notice
is given, provided, that if the notice is given on or after the effective
date of the merger or consolidation, the record date shall be such effective
date. If no record date is fixed and the notice is given prior to the
effective date, the record date shall be the close of business on the day
next preceding the day on which the notice is given.
(b) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who
has complied with these subsections and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw such stockholder's demand for appraisal and to accept the terms
offered upon the merger or consolidation. Within 120 days after the
effective date of the merger or consolidation, any stockholder who has
complied with the requirements of subsections (a) and (d) hereof, upon
written request, shall be entitled to receive from the corporation surviving
the merger or resulting from the consolidation a statement setting forth the
aggregate number of shares not voted in favor of the merger or consolidation
and with respect to which demands for appraisal have been received and the
aggregate number of holders of such shares. Such written statement shall be
mailed to the stockholder within 10 days after such stockholder's written
request for such a statement is received by the surviving or resulting
corporation or within 10 days after expiration of the period for delivery of
demands for appraisal under subsection (d) hereof, whichever is later.
(c) Upon the filing of any such petition by a stockholder, service of
a copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If
the petition shall be filed by the surviving or resulting corporation, the
petition shall be accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the time and place
fixed for the hearing of such petition by registered or certified mail to the
surviving or resulting corporation and to the stockholders shown on the list
at the addresses therein stated. Such notice shall also be given by 1 or
more publications at least 1 week before the day of the hearing, in a
newspaper of general circulation published in the City of Wilmington,
Delaware or such publication as the Court deems advisable. The forms of the
notices by mail and by publication shall be approved by the Court, and the
costs thereof shall be borne by the surviving or resulting corporation.
(d) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates
to submit their certificates of stock to the Register in Chancery for
notation thereon of the pendency of the appraisal proceedings; and if any
stockholder fails to comply with such direction, the Court may dismiss the
proceedings as to such stockholder.
(e) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or expectation of the
merger or consolidation, together with a fair rate of interest, if any, to be
paid upon the amount determined to be the fair value. In determining such
fair value, the Court shall take into account all relevant factors. In
determining the fair rate of interest, the Court may consider all relevant
factors, including the rate of interest which the surviving or resulting
corporation would have had to pay to borrow money during the pendency of the
proceeding. Upon application by the surviving or resulting corporation or by
any stockholder entitled to participate in the appraisal proceeding, the
Court may, in its discretion, permit discovery or other pretrial proceedings
and may proceed to trial upon the appraisal prior to the final determination
of the stockholder entitled to an appraisal. Any stockholder whose name
appears on the list filed by the surviving or resulting corporation pursuant
to subsection (f) of this section and who has submitted such stockholder's
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that such
stockholder is not entitled to appraisal rights under this section.
(f) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and
the case of holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock. The Court's
decree may be enforced as other decrees in the Court of Chancery may be
enforced, whether such surviving or resulting corporation be a corporation of
this State or of any state.
(g) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances.
Upon application of a stockholder, the Court may order all or a portion of
the expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(h) From and after the effective date of the merger or consolidation,
no stockholder who has demanded appraisal rights shall be entitled to vote
such stock for any purpose or to receive payment of dividends or other
distributions on the stock (except dividends or other distributions payable
to stockholders of record at a date which is prior to the effective date of
the merger or consolidation); provided, however, that if no petition for an
appraisal shall be filed within the time provided in subsection (e) of this
section, or if such stockholder shall deliver to the surviving or resulting
corporation a written withdrawal of such stockholder's demand for an
appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of
Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court
deems just.
(i) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized
and unissued shares of the surviving or resulting corporation.
Preparation for the Merger.
In preparation for this change, a Nevada corporation named "WSN Group, Inc."
has been established. This corporation has not issued any capital stock. Its
capital structure is identical to that of the Company, and it has the same
directors and officers as the Company. Its principal place of business is the
same as that of the Company, and is expected to remain in that location:
1530 Brookhollow Drive, Suite C
Santa Ana, California 92705
By order of the Board of Directors
March 14, 2001
/s/ John J. Anton
John J. Anton, President