PRELIMINARY PROXY STATEMENT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
American Telstar, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------
3) Filing Party:
----------------------------------------------------
4) Date Filed:
------------------------------------------------------
AMERICAN TELSTAR, INC.
36 Mclean Street
Red Bank, NJ 07701
December ______, 2010
Dear Shareholder:
American Telstar, Inc. will hold a Special Meeting of Shareholders on
Tuesday, December 28, 2010, beginning at 10:00 a.m. local time, at the offices
of counsel for American Telstar, Inc. at 730 West Randolph, Suite 600, Chicago,
Illinois 60661. We look forward to your attending either in person or by proxy.
The enclosed notice of meeting, the proxy statement and the proxy card from the
Board of Directors describe the proposal to be acted upon at the meeting.
This special meeting has been called for the purpose of asking holders of
common stock, par value $0.0001 per share, of American Telstar, Inc., a Colorado
corporation ("American Telstar"), to approve the adoption of a proposed
Agreement and Plan of Merger, to reincorporate American Telstar in the State of
Nevada by merger with and into a Nevada corporation under the name American
Telstar, Inc. ("American Telstar Nevada") which American Telstar formed for such
purpose (the "Migratory Merger"). The Board of Directors of American Telstar
(the "Board") recommends that you vote FOR the adoption of the proposed
Agreement and Plan of Merger of American Telstar.
On December 1, 2010, the Board unanimously adopted resolutions, subject to
shareholder approval, the Agreement and Plan of Merger and recommended adoption
of the Agreement and Plan of Merger by its shareholders. Upon the effectiveness
of the Agreement and Plan of Merger:
1. American Telstar will adopt the capital structure of American Telstar Nevada,
which includes total authorized capital stock of 540,000,000 shares, of which
500,000,000 are common stock, with a par value of $0.0001 per share (the
"American Telstar Nevada Common Stock") and 40,000,000 shares are blank check
preferred stock, with a par value of $0.10 per share (the "Preferred Stock").
The Preferred Stock may be issued from time to time in one or more
participating, optional, or other special rights and qualifications, limitations
or restrictions thereof, as shall be stated in the resolutions adopted by
American Telstar Nevada's Board of Directors providing for the issuance of such
Preferred Stock or series thereof; and
2. The issued and outstanding shares of American Telstar Common Stock will
automatically convert into the right to receive shares of American Telstar
Nevada Common Stock at a ratio of one (1) share of American Telstar Nevada
Common Stock for each five hundred (500) shares of Common Stock of American
Telstar provided that holders of American Telstar Common Stock who would receive
fewer than 100 shares of American Telstar Nevada Common Stock shall be rounded
up so that they will receive 100 shares of American Telstar Nevada Common Stock
(the "Conversion Ratio").
The Board believes that the proposed Migratory Merger will be beneficial to
American Telstar and its shareholders because it will enhance American Telstar's
ability to attract a transaction consistent with its current business plan and
purpose.
Please refer to the enclosed proxy statement for detailed information on
the proposal. If you have any further questions concerning the meeting or the
proposal, please feel free to contact us at 201-970-4987. Your vote is
important. Whether or not you expect to attend the meeting, your shares should
be represented. Therefore, we urge you to complete, sign, date and promptly
return the enclosed proxy card.
On behalf of the Board of Directors, we would like to express our
appreciation for your continued interest in American Telstar.
Sincerely yours,
/s/ Lisa Guise
- -------------------------------------
LISA GUISE
President and Chief Executive Officer
- --------------------------------------------------------------------------------
AMERICAN TELSTAR, INC.
36 MCLEAN STREET, RED BANK, NJ 07701
NOTICE OF SPECIAL MEETING
- --------------------------------------------------------------------------------
TO BE HELD DECEMBER 28, 2010
To Shareholders:
A Special Meeting of Shareholders of American Telstar, Inc. will be held on
Tuesday, December 28, 2010 at 10:00 a.m. local time, at the offices of counsel
for American Telstar, Inc. at 730 West Randolph, Suite 600, Chicago, Illinois.
60661, in order to approve the adoption of a proposed Agreement and Plan of
Merger, to reincorporate American Telstar, Inc., a Colorado corporation
("American Telstar" or the "Company") in the State of Nevada by merger with and
into a Nevada corporation with the name American Telstar, Inc. ("American
Telstar Nevada") which American Telstar formed for such purpose (the "Migratory
Merger") in which American Telstar shareholders will receive shares of American
Telstar Nevada Common Stock for shares of common stock held in American Telstar
(the "American Telstar Common Stock.). Upon shareholder approval of the adoption
of the Agreement and Plan of Merger:
1. The capital structure of American Telstar Nevada includes total authorized
capital stock of 540,000,000 shares, of which 500,000,000 are common stock, with
a par value of $0.0001 per share (the "American Telstar Nevada Common Stock")
and 40,000,000 shares are blank check preferred stock, with a par value of $0.10
per share (the "Preferred Stock"). The Preferred Stock may be issued from time
to time in one or more participating, optional, or other special rights and
qualifications, limitations or restrictions thereof, as shall be stated in the
resolutions adopted by American Telstar Nevada's Board of Directors providing
for the issuance of such Preferred Stock or series thereof; and
2. The issued and outstanding shares of American Telstar Common Stock will
automatically convert into the right to receive shares of American Telstar
Nevada Common Stock at a ratio of one (1) share of American Telstar Nevada
Common Stock for each five hundred (500) shares of American Telstar Common Stock
held immediately prior to the effectiveness of the Migratory Merger, provided,
however, that holders of American Telstar Common Stock who would receive fewer
than 100 shares of American Telstar Nevada Common Stock shall be rounded up so
that they will receive 100 shares of American Telstar Nevada Common Stock (the
"Conversion Ratio").
No other business may properly be brought before the meeting.
The Board of Directors has fixed the close of business on December 1, 2010
as the record date for the meeting. All shareholders of record on that date are
entitled to notice of and to vote at the meeting.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN
PERSON. IF YOU ATTEND THE MEETING, YOU MAY CONTINUE TO HAVE YOUR SHARES VOTED AS
INSTRUCTED IN THE PROXY OR YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN
PERSON.
By Order of the Board of Directors,
/s/ Lisa Guise
- -------------------------------------
LISA GUISE
President and Chief Executive Officer
Chicago, Illinois
December __, 2010
AMERICAN TELSTAR, INC.
36 MCLEAN STREET
RED BANK, NJ 07701
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
WHY AM I RECEIVING THESE MATERIALS?
We are mailing this proxy statement, with the accompanying proxy card, to
you on or about December ______, 2010, in connection with the solicitation of
proxies by the Board of Directors of American Telstar, Inc. (the "Company") for
a special meeting of shareholders to be held on Tuesday, December 28, 2010, and
any adjournment or postponement of that meeting, beginning at 10:00 a.m. local
time, at the offices of counsel for American Telstar, Inc. at 730 West Randolph,
Suite 600, Chicago, IL 60661. You are invited to attend the special meeting, and
we request that you vote on the proposal described in this proxy statement. You
do not need to attend the meeting in person to vote your shares. You may simply
complete, sign and return your proxy card in order to have your shares voted at
the meeting on your behalf.
WHAT AM I VOTING ON?
You are being asked to approve the adoption of the proposed Agreement and
Plan of Merger, attached hereto as Exhibit A, between American Telstar, Inc., a
Colorado corporation ("American Telstar") and American Telstar, Inc., a Nevada
corporation ("American Telstar Nevada"), which American Telstar formed for such
purpose (the "Migratory Merger"). Upon the effectiveness of the Agreement and
Plan of Merger, the Migratory Merger would result in:
* A change of domicile state of the Company from the State of Colorado
to the State of Nevada;
* Your right to receive shares of common stock, $0.0001 par value per
share, of American Telstar Nevada at a ratio of one (1) share of
American Telstar Nevada Common Stock for each five hundred (500)
shares of American Telstar Common Stock owned by you as of the
Effective Date of the Migratory Merger except that holders who would
receive fewer than 100 shares shall be rounded up so that they will
receive 100 shares of American Telstar Nevada Common Stock (the
"Conversion Ratio");
* The person presently serving as our sole executive officer and
director serving in the same positions with American Telstar Nevada;
* The adoption of the Articles of Incorporation of American Telstar
Nevada under the laws of the state of Nevada as the Articles of
Incorporation of the Company, in the form of Exhibit B attached
hereto, pursuant to which there are 540,000,000 shares of authorized
capital stock, consisting of 500,000,000 shares of common stock, par
value $0.0001 per share, and 40,000,000 shares of "blank check"
preferred stock, par value $0.10 per share, with the right conferred
upon the Board of Directors to set the dividend, voting, conversion,
liquidation, and other rights as well as the qualifications,
limitations, and restrictions, with respect to the preferred stock as
the Board of Directors may determine from time to time; and
* The adoption of the Bylaws of American Telstar Nevada under the laws
of the state of Nevada as the Bylaws of the Company in the form of
Exhibit C attached hereto.
WHY ARE WE RECOMMENDING THAT SHAREHOLDERS APPROVE THESE PROPOSALS?
The Board of Directors of American Telstar (the "Board") believes that the
proposed Migratory Merger will be beneficial to American Telstar and its
shareholders because it will enhance American Telstar's ability to attract a
transaction consistent with its current business plan and purpose.
2
Further, the State of Nevada is recognized as a desirable state in which to
do business because it has favorable corporate income tax treatment, nominal
annual fees, and stockholders are not public record. For these reasons, the
Board believes that it is in the Company's best interest if the Company
incorporates in the State of Nevada.
WHY ARE THESE PROPOSALS BEING SUBMITTED AT A SPECIAL MEETING INSTEAD OF AN
ANNUAL MEETING?
Our management and Board of Directors believe that the longer we wait to
implement the Migratory Merger we are losing out on potential investment. Per
the Bylaws of American Telstar, the Board of Directors has the discretion when
to call meetings of shareholders. Due to the cost of facilitating such meeting,
the Board does not intend to call annual meetings at this time.
WHO CAN ATTEND AND VOTE AT THE MEETING?
Shareholders of record at the close of business on December 1, 2010, are
entitled to attend and vote at the meeting. Each share of our common stock is
entitled to one vote on all matters to be voted on at the meeting and may be
voted only if the record owner is present to vote or is represented by proxy.
The proxy card provided with this proxy statement indicates the number of shares
of common stock that you own and are entitled to vote at the meeting.
WHAT CONSTITUTES A QUORUM AT THE MEETING?
The presence at the meeting, in person or represented by proxy, of the
holders of a majority of the common stock outstanding on December 1, 2010, the
record date, will constitute a quorum for purposes of the meeting. On the record
date, 3,664,225 shares of Common Stock were outstanding. For purposes of
determining whether a quorum exists, proxies received but marked "abstain" and
so-called "broker non-votes" (described below) will be counted as present.
HOW DO I VOTE BY PROXY?
If you properly fill in your proxy card and we receive it in time to vote
at the meeting, your "proxy" (one of the individuals named on your proxy card)
will vote your shares as you have directed.
If you sign, date and return the proxy card but do not specify how your
shares are to be voted, then your proxy will vote your shares FOR approval of
the proposed Agreement and Plan of Merger described in this proxy statement.
HOW DO I VOTE IF MY SHARES ARE HELD BY MY BROKER?
If your shares are held by your broker you will need to instruct your
broker concerning how to vote your shares in the manner provided by your broker.
If you wish to vote them in person at the meeting, you must obtain from your
broker a properly executed legal proxy, identifying you as a shareholder of the
Company, authorizing you to act on behalf of the broker at the meeting and
specifying the number of shares with respect to which the authorization is
granted.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
The vote of a proxy is final, binding, and not subject to challenge. Once
your vote is cast, it cannot be changed.
HOW ARE VOTES COUNTED?
The approval of the proposed Agreement and Plan of Merger, and thus the
resulting Migratory Merger, requires the favorable vote of a majority of the
votes cast on the matter. ABSTENTIONS AND BROKER NON-VOTES, WHICH ARE DESCRIBED
ABOVE, WILL HAVE NO EFFECT ON THE OUTCOME OF VOTING ON THESE MATTERS.
HOW IS THE COMPANY SOLICITING PROXIES?
We bear the cost of preparing, assembling and mailing the proxy material
relating to the solicitation of proxies by the Board of Directors for the
meeting.
3
PROPOSAL TO APPROVE A MIGRATORY MERGER
BACKGROUND AND PURPOSE
Since the termination of its operating business, the business plan of
American Telstar has consisted of exploring potential targets for a business
combination through a purchase of assets, share purchase or exchange, merger or
similar type of transaction. In order to facilitate such a transaction, the
Board of Directors believes that, among other things, American Telstar should
reincorporate in the State of Nevada by merger with and into a Nevada
corporation with the name American Telstar, Inc. which American Telstar formed
for such purpose (the "Migratory Merger") pursuant to the adoption of the
Agreement and Plan of Merger (the "Migratory Merger Agreement").
The Board believes that that Migratory Merger would make the Company more
attractive for a potential business combination and therefore be in the best
interest of the Company's shareholders and American Telstar. The Migratory
Merger will become effective upon filing of the Merger Certificates (as
described below), which filings are expected to occur as promptly as practicable
after the requisite shareholder approval is obtained of the Agreement and Plan
of Merger (and thus the Migratory Merger) (the "Effective Date"). The Board
reserves the right to elect not to proceed, and abandon, the Migratory Merger if
it determines, in its sole discretion, that this proposal is not in the best
interest of American Telstar's shareholders.
REASONS FOR MIGRATION TO NEVADA
The Board believes that the Migratory Merger will benefit American Telstar
and its shareholders giving American Telstar more flexibility and simplicity in
various corporate transactions and reduce costs of doing business. The State of
Nevada is recognized as a desirable state in which to do business because it has
favorable corporate income tax treatment, nominal annual fees, and stockholders
are not public record. Further, Nevada provides a recognized body of corporate
law that will facilitate corporate governance by our officers and directors. For
these reasons, the Board of Directors believes that it is in American Telstar's
best interest if American Telstar reincorporates in the State of Nevada.
PRINCIPAL FEATURES OF PROPOSED MIGRATORY MERGER
The Migratory Merger will be effected by merging American Telstar with and
into a newly formed Nevada corporation, American Telstar Nevada. American
Telstar Nevada has not engaged in any activities except in connection with the
Migratory Merger. This Proxy Statement summarizes the material terms of the
proposed Migratory Merger, as well as the Migratory Merger Agreement, Articles
of Incorporation of American Telstar Nevada and Bylaws of American Telstar
Nevada. The full texts of the Migratory Merger Agreement, the Articles of
Incorporation, and Bylaws are attached as Exhibits A, B, and C, respectively.
Upon the Effective Date, American Telstar will be merged with and into American
Telstar Nevada. We will then be subject to Nevada General Corporation Law and
the Articles of Incorporation and Bylaws of the Nevada entity will replace our
current Articles of Incorporation and Bylaws. These changes may alter the rights
of our stockholders.
CONVERSION RATIO
The issued and outstanding shares of American Telstar common stock, with a
par value of $0.0001 per share (the "American Telstar Common Stock") will
automatically convert into the right to receive shares of common stock, par
value $0.0001 per share, of American Telstar Nevada (the "American Telstar
Nevada Common Stock") at a ratio of one (1) share of American Telstar Nevada
Common Stock for each five hundred (500) shares of American Telstar Common Stock
held as of the Effective Date of the Migratory Merger except that holders who
would otherwise receive fewer than one hundred (100) shares of American Telstar
Nevada Common Stock will be rounded up to receive one hundred (100) shares of
American Telstar Nevada Common Stock (the "Conversion Ratio"). As of the Record
Date, the number of shares issued and outstanding was 3,664,225 shares of Common
Stock. Upon completion of the Migratory Merger, the number of issued and
outstanding shares of American Telstar Nevada Common Stock will be approximately
9,806.
There are no issued or outstanding options, warrants, or other rights to
acquire any American Telstar Common Stock.
4
CAPITAL STRUCTURE
The Company will adopt the capital structure of American Telstar Nevada,
which includes total authorized capital stock of 540,000,000 shares of
authorized capital stock, consisting of 500,000,000 shares of common stock, par
value $0.0001 per share, and 40,000,000 shares of "blank check" preferred stock,
par value $0.10 per share, with the right conferred upon the Board to set the
dividend, voting, conversion, liquidation, and other rights as well as the
qualifications, limitations, and restrictions, with respect to the preferred
stock as the Board may determine from time to time.
In addition, following the Migratory Merger, there will be no holders of
odd lots (fewer than 100 shares) because holders of American Telstar Common
Stock who would otherwise receive fewer than one hundred (100) shares will be
rounded up to receive one hundred (100) shares of American Telstar Nevada Common
Stock. Shareholders who own odd lots typically may experience an increase in the
cost of selling their shares and may have greater difficulty in effecting sales.
EFFECTIVE DATE OF MIGRATORY MERGER
The Migratory Merger will become effective upon the filing of the requisite
merger documents in Nevada and Colorado, which filings are expected to occur as
promptly as practicable after the requisite shareholder approval is obtained of
the Migratory Merger Agreement (and thus the Migratory Merger). As a result of
the Migratory Merger, we will cease our corporate existence in the state of
Colorado. Beginning on the Effective Date, holders of American Telstar Common
Stock, pre-Migratory Merger, will be deemed for all corporate purposes to be
holders of shares of American Telstar Nevada Common Stock, subject to the
Conversion Ratio.
NO CHANGE IN BUSINESS, MANAGEMENT, BOARD MEMBERS, ASSETS OR LIABILITIES
Upon completion of the Migratory Merger, the daily business operations of
the Company will continue as they are presently conducted. The individuals who
will serve as executive officers of the Company following the Migratory Merger
are those who currently serve as executive officers of the Company. The
Migratory Merger will not affect our daily business operations. The address of
our principal executive offices will remain at 36 Mclean Street, Red Bank, NJ
07701.
CERTAIN RISK FACTORS ASSOCIATED WITH MIGRATORY MERGER
THERE CAN BE NO ASSURANCE THAT IF THE MIGRATORY MERGER IS EFFECTED, THE
RESULTING COMPANY WILL ATTRACT ANY, OR SATISFY POTENTIAL ACQUISITION, TARGETS
AND THERE IS NO GUARANTEE THAT ANY TRANSACTION WILL BE EFFECTED.
THERE CAN BE NO ASSURANCE THAT THE TOTAL MARKET CAPITALIZATION OF THE AMERICAN
TELSTAR NEVADA COMMON STOCK, AS DEFINED BELOW (THE AGGREGATE VALUE OF ALL ISSUED
AND OUTSTANDING AMERICAN TELSTAR NEVADA COMMON STOCK AT THE THEN MARKET PRICE),
WILL BE EQUAL TO OR GREATER THAN THE TOTAL MARKET CAPITALIZATION OF AMERICAN
TELSTAR BEFORE THE MIGRATORY MERGER OR THAT THE PER SHARE MARKET PRICE OF THE
AMERICAN TELSTAR NEVADA COMMON STOCK WILL INCREASE IN PROPORTION TO THE
REDUCTION IN THE NUMBER OF SHARES OUTSTANDING AFTER THE MIGRATORY MERGER.
IF CONVERSION OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK, PAR VALUE
$0.0001 PER SHARE, OF AMERICAN TELSTAR'S COMMON STOCK INTO AMERICAN TELESTAR
NEVADA COMMON STOCK IS EFFECTED AT THE CONVERSION RATIO, AS DEFINED ABOVE, THE
RESULTING PER-SHARE STOCK PRICE MAY NOT ATTRACT OR SATISFY POTENTIAL ACQUISITION
TARGETS AND THERE IS NO GUARANTEE THAT ANY TRANSACTION WILL BE EFFECTED.
A DECLINE IN THE MARKET PRICE OF THE AMERICAN TELSTAR NEVADA COMMON STOCK MAY
RESULT IN A GREATER PERCENTAGE DECLINE THAN WOULD OCCUR IN THE ABSENCE OF THE
CONVERSION OF AMERICAN TELSTAR COMMON STOCK AT THE CONVERSION RATIO, AND THE
5
LIQUIDITY OF AMERICAN TELSTAR NEVADA COMMON STOCK COULD BE ADVERSELY AFFECTED
FOLLOWING SUCH CONVERSION.
IMPACT OF MIGRATORY MERGER
GENERAL
Following the Migratory Merger, the proportionate ownership interest of
shareholders will be affected. The following is a table which illustrates how
the Migratory Merger will affect the ownership interests of shareholders:
American Telstar Nevada
American Telstar Stock Ownership Stock Ownership
Pre-Merger Post-Merger
-------------------------------- ------------------------
Number of Percentage Number of Percentage
Shares Ownership Shares Ownership
------ --------- ------ ---------
200 * 100 1.02%
350 * 100 1.02%
375 * 100 1.02%
400 * 100 1.02%
500 * 100 1.02%
575 * 100 1.02%
700 * 100 1.02%
750 * 100 1.02%
1,200 * 100 1.02%
1,400 * 100 1.02%
1,800 * 100 1.02%
2,000 * 100 1.02%
3,450 * 100 1.02%
10,000 * 100 1.02%
15,000 * 100 1.02%
20,000 * 100 1.02%
95,000 2.6% 190 1.94%
3,507,750 95.73% 7,016 71.55%
* Less than 1%
IF VOTED FOR, THE MIGRATORY MERGER WILL AFFECT ALL OF COMPANY'S STOCKHOLDERS AND
WILL AFFECT STOCKHOLDERS' PERCENTAGE OWNERSHIP INTERESTS IN THE COMPANY AND
PROPORTIONATE VOTING POWER AS ILLUSTRATED ABOVE.
FRACTIONAL SHAREHOLDERS
You will not receive fractional shares of American Telstar Nevada Common
Stock in connection with the Migratory Merger. All American Telstar Nevada
Common Stock ownership will be rounded to the nearest full share, and
shareholders who would otherwise receive less than 100 shares of American
Telstar Nevada Common Stock will be rounded up so that they will receive 100
shares of American Telstar Nevada Common Stock.
REGISTERED AND BENEFICIAL STOCKHOLDERS
Upon effecting the Migratory Merger, we intend to treat shareholders
holding American Telstar Nevada Common Stock in "street name", through a bank,
broker or other nominee, in the same manner as registered stockholders whose
shares are registered in their names. If you hold your shares with a bank,
broker or nominee and if you have questions in this regard, we encourage you to
contact your nominee.
6
EFFECT ON REGISTERED AND BENEFICIAL SHAREHOLDERS
Some of our registered shareholders hold all their shares in certificate
form. We do not intend to issue certificates representing shares of American
Telstar Nevada Common Stock following the effectiveness of the Migratory Merger.
After the Effective Date of the Migratory Merger, our transfer agent,
Computershare Trust Company, Inc., will hold the shares of American Telstar
Nevada Common Stock in book entry form.
SIGNIFICANT CHANGES CAUSED BY THE MIGRATORY MERGER
AUTHORIZED CAPITAL
On the Effective Date, American Telstar will adopt the capital structure of
American Telstar Nevada which includes total authorized capital stock of
540,000,000 shares, consisting of 500,000,000 shares of common stock, par value
$0.0001 per share, and 40,000,000 shares of preferred stock, par value $0.10 per
share, with the right conferred upon the Board to set the dividend, voting,
conversion, liquidation and other rights, as well as the qualifications,
limitations or restrictions thereof, as shall be stated in the resolutions
adopted by American Telstar Nevada's Board of Directors providing for the
issuance of such Preferred Stock or series thereof. The Articles of
Incorporation of American Telstar Nevada are attached hereto as Exhibit B. On
the record date of this Proxy Statement, American Telstar had 500,000,000 shares
of authorized Common Stock of which 3,664,225 shares were issued and
outstanding. Authorized but unissued shares of American Telstar Nevada will be
available for issuance, and American Telstar Nevada may issue such shares in the
future. If American Telstar Nevada issues additional shares, the ownership
interest of American Telstar Nevada's stockholders will be diluted.
Further, the authorized shares of common stock in excess of those issued or
reserved for issuance and the newly authorized shares of preferred stock, will
be available for issuance at such times and for such corporate purposes as our
Board of Directors may deem advisable without further action by our
stockholders, except as may be required by applicable laws or the rules of any
stock exchange or national securities association trading system on which the
securities may be listed or traded. This issuance could result in a significant
dilution of the voting rights and the stockholders' equity of then-existing
stockholders. The holders of American Telstar Nevada Common Stock have no
preemptive right to purchase any of the additional shares of common stock when
issued.
CHANGE IN CHARTER AND BY-LAWS
We are incorporated under the laws of the State of Colorado and American
Telstar Nevada is incorporated under the laws of the State of Nevada. The
Company's corporate affairs are currently governed by Colorado corporate law and
our Articles of Incorporation and By-laws which were created pursuant to
Colorado law. On the Effective Date, issues of corporate governance and control
will be controlled by Nevada law and American Telstar Nevada's Articles of
Incorporation and Bylaws, which were created under Nevada law.
There are certain significant differences between Colorado corporate law
and Nevada corporate law. Stockholders should refer to the Nevada General
Corporation Law and the Colorado Business Corporation Act to understand how
these laws apply to American Telstar Nevada and American Telstar, respectively.
For example, Nevada law provides that, unless the articles of incorporation
provide otherwise, any action required or permitted to be taken at a meeting of
the stockholders may be taken without a meeting if the holders of outstanding
stock having at least the minimum number of votes that would be necessary to
authorize or take such action at a meeting consent to the action in writing.
Colorado law requires an action required or permitted to be taken at a meeting
of the shareholders may be taken without a meeting by written action signed, or
consented to by authenticated electronic communication, by all of the
shareholders entitled to vote on that action.
POTENTIAL ANTI-TAKEOVER EFFECT
The number of authorized shares available for issuance could adversely
affect the ability of third parties to takeover or effect a change in control of
American Telstar Nevada by, for example, permitting issuances that would dilute
the stock ownership of a person seeking to effect change in the composition of
the American Telstar Nevada's Board of Directors or contemplating a tender offer
7
or other transaction for the combination of American Telstar Nevada with another
company. Although the proportion of unissued authorized shares to issued shares
could, under certain circumstances, have an anti-takeover effect, neither the
adoption of the Conversion Ratio or the Preferred Stock is in response to any
effort of which American Telstar is aware to accumulate its shares or shares of
American Telstar Nevada or obtain control of American Telstar or American
Telstar Nevada, nor is it part of a plan by management to recommend a series of
similar amendments to the Board and stockholders.
ACCOUNTING MATTERS
The Migratory Merger will have no effect on the par value of Common Stock.
As a result, as of the Effective Date, the stated capital attributable to
American Telstar Nevada Common Stock on the balance sheet as compared to
American Telstar Common Stock will be lowered in proportion to the Conversion
Ratio, and the additional paid-in capital attributable to American Telstar
Nevada Common Stock on the balance sheet as compared to American Telstar Common
Stock will be increased by the amount by which the stated capital is reduced.
The per-share net income or loss and net book value of American Telstar Common
Stock will be restated because there will be fewer shares of American Telstar
Nevada Common Stock outstanding.
PROCEDURE FOR EFFECTING THE MIGRATORY MERGER
As soon as practicable after the requisite shareholder approval of the
Migratory Merger Agreement and (thus the Migratory Merger), American Telstar
will promptly cause a Statement of Merger to be filed with the Office of the
Secretary of State of Colorado and Articles of Merger to be filed with the
Secretary of State of Nevada (collectively both are "Merger Certificates"). The
Migratory Merger will become effective on the date of filing of the Merger
Certificates or on such later date as determined by the Board, which is referred
to as the "Effective Date." Beginning on the Effective Date, shares of American
Telstar Common Stock, pre-Migratory Merger, will be deemed for all corporate
purposes, to evidence shares of American Telstar Nevada Common Stock, subject to
the Conversion Ratio.
DISSENTERS' RIGHT OF APPRAISAL
Common stockholders of American Telstar who follow the appropriate
procedures are entitled to dissent from the consummation of the Migratory Merger
and receive payment of the fair value of their shares under Sections 7-113-101
through 7-113-3-2 of the Colorado Revised Statutes.
The following information is intended as a brief summary of the material
provisions of the statutory procedures you must follow in order to perfect your
appraisal rights. You are urged to read the full text of the Colorado
dissenters' rights statute, which is reprinted in its entirety and attached as
Exhibit D to this document. A person having a beneficial interest in shares of
our common stock that are held of record in the name of another person, such as
a bank, broker or other nominee, must act promptly to cause the record holder to
follow the steps summarized below, properly and in a timely manner, if such
person wishes to perfect any dissenters' rights such person may have.
This discussion and Exhibit D should be reviewed carefully by you if you
wish to exercise statutory dissenters' rights or wish to preserve the right to
do so, because failure to strictly comply with any of the procedural
requirements of the Colorado dissenters' rights statute may result in a
termination or waiver of dissenters' rights under the Colorado dissenters'
rights statute.
Under the Colorado dissenters' rights statute, you have the right to
dissent from the Migratory Merger and demand payment of the fair value of your
shares of American Telstar Common Stock. If you elect to dissent, you must (a)
file with us a written notice of dissent stating that you intend to demand
payment for your shares of American Telstar Common Stock if the Migratory Merger
is consummated; and (b) not vote in favor of the Migratory Merger. Such written
notice of dissent must be filed with us no later than December 27, 2010. If you
fail to comply with this notice requirement, you will not be entitled to
dissenters' rights. The "fair value" of the shares as used in the Colorado
dissenters' rights statute is the value of the shares immediately before the
Effective Date of the proposed Migratory Merger, excluding any appreciation or
depreciation in anticipation of the Migratory Merger except to the extent that
exclusion would be inequitable.
8
After the proposed action of the Migratory Merger has been approved, we
will give written notice of the Effective Date of the Migratory Merger to each
shareholder who filed a written notice of dissent and did not vote in favor of
the Migratory Merger. The notice will also state the address to which demand for
payment must be sent and the address to which share certificates shall be
deposited, among other information. Within the thirty (30) days following the
date notice is delivered, the dissenting shareholder must make a written demand
on us for payment of the fair value of his or her shares and deposit his or her
share certificates in accordance with the notice.
Upon the Effective Date of the Migratory Merger or upon receipt of a valid
demand for payment, whichever is later, we will pay to each dissenter who
complied with the required procedures, the amount we estimate to be the fair
value of the dissenters' shares, plus accrued interest. Additionally, we will
mail to each dissenting shareholder a balance sheet and statement of income as
of the end of its most recent fiscal year, together with the latest available
interim financial statements, a statement of the Company's estimate of the fair
value of the shares, an explanation of how the interest was calculated, a
statement of the dissenters' right to demand payment of fair value under
Colorado law, and a copy of the relevant provisions of Colorado law.
A dissenting shareholder, within thirty (30) days following receipt of
payment for the shares, may send us a notice containing such shareholder's own
estimate of fair value and accrued interest, and demand payment for that amount
less the amount received pursuant to our payment of fair value to such
shareholder.
If a demand for payment remains unresolved, we may petition the court to
determine fair value and accrued interest. If we fail to commence an action
within sixty (60) days following the receipt of the shareholder's demand, we
will pay to the shareholder the amount demanded by the shareholder in the
shareholder's notice containing the shareholder's estimate of fair value and
accrued interest.
If you wish to seek dissenters' rights, you are urged to review the
applicable Colorado statutes attached to this Proxy Statement as Exhibit D.
MISCELLANEOUS
We will pay all of the costs of the Migratory Merger in Nevada, including
the costs of preparing and distributing this Proxy Statement. We may also pay
brokerage firms and other custodians for their reasonable expenses for
forwarding information materials to the beneficial owners of our common stock.
We do not anticipate contracting for other services in connection with the
Migratory Merger.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MIGRATORY MERGER
The following is a discussion of certain federal income tax consequences to
holders of our common stock who receive shares of American Telstar Nevada Common
Stock in exchange for their American Telstar Common Stock (i.e. the Conversion
Ratio) as a result of the Migratory Merger. The discussion is based on the
Internal Revenue Code of 1986, as amended ("Code"), and laws, regulations,
rulings and decisions in effect as of the date of this Proxy Statement, all of
which are subject to change, possibly with retroactive effect, and to differing
interpretations. No state, local or foreign tax consequences are addressed
herein.
This discussion is for general information only and does not purport to be
a complete discussion or analysis of all potential tax consequences that may
apply to a shareholder. In view of the varying nature of such tax consequences,
shareholders are urged to consult their own tax advisors as to the specific tax
consequences to them of the Migratory Merger, including the applicability of
federal, state, local or foreign tax laws.
We believe that, for federal income tax purposes, no gain or loss will be
recognized by our Company or American Telstar Nevada, or our shareholders who
receive American Telstar Nevada Common Stock for their shares of our American
Telstar Common Stock in connection with the Conversion Ratio. The adjusted tax
basis of each whole share of American Telstar Nevada Common Stock received by a
shareholder of our Company as a result of the Conversion Ratio will be the same
as the shareholder's aggregate adjusted tax basis in the shares of our common
stock converted into such shares of American Telstar Nevada Common Stock. A
shareholder who holds American Telstar Common Stock will include in his holding
period for the American Telstar Nevada Common Stock that he receives as a result
of the Migratory Merger, his holding period for American Telstar Common Stock.
9
Because of the complexity of the capital gains and loss provisions of the
Code and the uniqueness of each individual's capital gain or loss situation,
shareholders contemplating exercising statutory dissenters' rights should
consult their own tax advisors regarding the federal income tax consequences of
exercising such rights. Additionally, state, local or foreign income tax
consequences to shareholders may vary from the federal income tax consequences
described above. Further, our view regarding the tax consequences of the
Conversion Ratio is not binding on the Internal Revenue Service or the courts.
ACCORDINGLY, SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
CONSEQUENCES TO THEM OF THE CONVERSION OF COMMON STOCK AT THE CONVERSION RATIO
UNDER ALL APPLICABLE TAX LAWS.
VOTING SECURITIES
OWNERS OF MORE THAN 5% OF OUR COMMON STOCK
As of December 1, 2010 (the "Record Date"), there were 3,664,225 shares of
our common stock issued and outstanding. On that date, to our knowledge there
was one shareholder who owned beneficially more than 5% of our common stock. The
table below contains information, as of that date (except as noted below),
regarding the beneficial ownership of that person. Unless otherwise indicated,
we believe that the person listed below has sole voting and investment power
with respect to all the shares of common stock indicated.
Number of
Shares Percent
Name and Address Beneficially of
of Beneficial Owner Owned Class
------------------- ----- -----
Lisa Guise 3,507,750 95.73%
c/o American Telstar, Inc.
36 Mclean Street
Red Bank, NJ 07701
Totals 3,507,750 95.73%
COMMON STOCK OWNED BY COMPANY DIRECTORS AND EXECUTIVE OFFICERS
The following information is furnished as of December 1, 2010, with respect
to common stock beneficially owned by: (1) our directors (including our chief
executive officer); (2) our four most highly compensated executive officers
other than the chief executive officer; and (3) all directors and executive
officers as a group. Information relating to the beneficial ownership of common
stock by our principal stockholders and management is based upon information
furnished by each person using "beneficial ownership" concepts under the rules
of the Securities and Exchange Commission. Under these rules, a person is deemed
to be a beneficial owner of a security if that person has or shares voting
power, which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security. Under the Securities and Exchange Commission rules, more than one
person may be deemed to be a beneficial owner of the same securities, and a
person may be deemed to be a beneficial owner of securities, as to which he or
she may not have any pecuniary beneficial interest.
Number of
Shares Percent
Name and Address Beneficially of
of Beneficial Owner Owned Class
------------------- ----- -----
Lisa Guise 3,507,750 95.73%
c/o American Telstar, Inc.
36 Mclean Street
Red Bank, NJ 07701
All directors and executive
officers as a group (1 person) 3,507,750 95.73%
10
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP OF 5% HOLDERS FOLLOWING THE MIGRATORY
MERGER
Amount and Nature of Beneficial Ownership
---------------------------------------------------
Name and Address of Pre-Migratory Post-Migratory
Beneficial Owner Merger Percent Merger Percent
---------------- ------ ------- ------ -------
Lisa Guise 3,507,750 95.73% 7,016 71.55%
c/o American Telstar, Inc.
36 Mclean Street
Red Bank, NJ 07701
INTEREST OF CERTAIN PERSONS IN OR IN OPPOSITION TO MATTERS TO BE ACTED UPON.
No director, executive officer, associate of any director or executive
officer or any other person has any substantial interest, direct or indirect, by
security holdings or otherwise, in the Migratory Merger proposal which is not
shared by all other holders of American Telstar Common Stock. See "Voting
Securities And Principal Holders Thereof."
FUTURE SHAREHOLDER PROPOSALS
You may request inclusion in the Company's proxy statement for shareholder
meetings certain proposals for action which you intend to introduce at such
meeting. Shareholder proposals must be presented at a reasonable time before the
proxy materials for the next meeting are sent to shareholders. The submission of
a proposal does not guarantee its inclusion in the proxy statement and is
subject to limitations under the federal securities laws. American Telstar is
not required to hold regular meetings of shareholders and in order to minimize
its costs, does not intend to hold meetings of the shareholders unless so
required by applicable law, regulatory policy, or if otherwise deemed advisable
by American Telstar's management. Therefore, it is not practicable to specify a
date by which proposals must be received in order to be incorporated in an
upcoming proxy statement for a meeting of shareholders.
FINANCIAL STATEMENTS
The Company's audited financial statements for the fiscal year ended July
31, 2010 appear in our Annual Report on Form 10-K filed with the U. S.
Securities and Exchange Commission (the "SEC") on October 20, 2010. The
Company's interim financial statements for the quarter ended October 31, 2010
appear in our Quarterly Report on Form 10-Q filed with the SEC on November 15,
2010. The Company hereby incorporates its financial statements by reference and
urges you to carefully review the Company's financial statements which may be
inspected and copied at the Public Reference Room of the SEC located at 100 F
Street, N. E., Washington, DC 20549 at prescribed rates. You may call the SEC at
1-800-SEC-0330 to obtain information on the operation of the Public Reference
Room. Such materials may also be accessed electronically by means of the SEC's
home page on the internet (http://www.sec.gov).\
OTHER MATTERS
No other business may be presented at the meeting.
IF YOU HAVE ANY QUESTIONS REGARDING THIS PROXY STATEMENT, PLEASE CONTACT:
Kristen A. Baracy
730 West Randolph, Suite 600
Chicago, IL 60661
(312) 454-0015
Chicago, Illinois
December __, 2010
11
- --------------------------------------------------------------------------------
SPECIAL MEETING PROXY CARD - AMERICAN TELSTAR, INC.
- --------------------------------------------------------------------------------
A: ISSUES
The Board of Directors recommends a vote FOR the following proposal.
FOR AGAINST ABSTAIN
1. To approve the proposed Agreement [ ] [ ] [ ]
and Plan of Merger (i.e. the
Migratory Merger)
Mark here if you plan to attend the
meeting [ ]
Mark this box with an X if you have made
comments below. [ ]
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
B AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Special Meeting of Shareholders and the Proxy Statement with respect
thereto and hereby revoke(s) any proxy or proxies heretofore given.
Please sign exactly as your name(s) appear(s) on this proxy card. When shares
are held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
SIGNATURE 1 - PLEASE KEEP SIGNATURE 2 - PLEASE KEEP DATE (MM/DD/YYYY)
SIGNATURE WITHIN THE BOX SIGNATURE WITHIN THE BOX
[_______________________] [_______________________] [____/____/____]
- --------------------------------------------------------------------------------
PROXY - AMERICAN TELSTAR, INC.
- --------------------------------------------------------------------------------
AMERICAN TELSTAR, INC.
36 MCLEAN STREET, RED BANK, NJ 07701
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Lisa Guise, Kristen A. Baracy, or each of them
singly, with full power of substitution, as proxies to represent the undersigned
at the Special Meeting of Shareholders of American Telstar, Inc. to be held on
Tuesday, December 28, 2010, at 10:00 a.m., local time, at the offices of counsel
for American Telstar, 730 West Randolph, Suite 600, Chicago, Illinois 60661, and
at any adjournments or postponements thereof, to vote in the name and place of
the undersigned, with all powers which the undersigned would possess if
personally present, upon the proposal set forth on the reverse side of this
proxy card.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES REPRESENTED WILL BE VOTED FOR THE APPROVAL OF
THE MIGRATORY MERGER.
PLEASE VOTE, DATE AND SIGN THIS PROXY IN THE SPACE PROVIDED AND RETURN IT IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON.
Dear Shareholder:
Please take note of the important information enclosed with this proxy card.
There is an important issue related to your company that requires your immediate
attention and approval. This issue is discussed in the enclosed proxy materials.
Your vote counts and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the appropriate box on this proxy card to indicate how your shares
will be voted. Then sign the card, and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Special Meeting of Shareholders on
December 28, 2010.
Thank you in advance for your prompt consideration of this matter.
Sincerely,
American Telstar, Inc.
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (hereinafter called this "AGREEMENT"),
dated as of December 1, 2010, is entered into between American Telstar, Inc., a
Nevada corporation ("American Telstar Nevada") and American Telstar, Inc., a
Colorado corporation (the "Company").
RECITALS
WHEREAS, the board of directors of each of American Telstar Nevada and the
Company deem it advisable, upon the terms and subject to the conditions herein
stated, that the Company be merged with and into American Telstar Nevada, and
that American Telstar Nevada be the surviving corporation (the "MIGRATORY
MERGER"); and
WHEREAS, the Company will submit this Agreement for approval by separate
vote of the holders of shares of common stock, $0.0001 par value, of the Company
("COMMON STOCK") at a special meeting.
NOW, THEREFORE, in consideration of the premises and of the agreements of
the parties hereto contained herein, the parties hereto agree as follows:
ARTICLE I
THE MIGRATORY MERGER; EFFECTIVE TIME
1.1. THE MIGRATORY MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time (as defined in Section 1.2), the
Company shall be merged with and into American Telstar Nevada, whereupon the
separate existence of the Company shall cease. American Telstar Nevada shall be
the surviving corporation (sometimes hereinafter referred to as the "SURVIVING
CORPORATION") in the Migratory Merger and shall continue to be governed by the
laws of the State of Nevada. The Migratory Merger shall have the effects
specified in the Colorado Business Corporation Act of the State of Colorado as
amended (the "CBCA") and in the Nevada Revised Statutes as amended (the "NRS")
and the Surviving Corporation shall succeed, without other transfer, to all of
the assets and property (whether real, personal or mixed), rights, privileges,
franchises, immunities and powers of the Company, and shall assume and be
subject to all of the duties, liabilities, obligations and restrictions of every
kind and description of the Company, including, without limitation, all
outstanding indebtedness of the Company.
1.2. EFFECTIVE TIME. Provided that the condition set forth in Section 5.1
has been fulfilled or waived in accordance with this Agreement and that this
Agreement has not been terminated or abandoned pursuant to Section 6.1, on the
date of the closing of the Migratory Merger, the Company and American Telstar
Nevada shall cause Articles of Merger to be executed and filed with the
Secretary of State of the State of Nevada (the "NEVADA ARTICLES OF MERGER") and
shall cause a Statement of Merger to be executed and filed with the Secretary of
State of the State of Colorado (the "COLORADO STATEMENT OF MERGER"). The
Migratory Merger shall become effective upon the date and time specified in the
Nevada Articles of Merger and the Colorado Statement of Merger (the "EFFECTIVE
TIME").
ARTICLE II
CHARTER AND BYLAWS OF THE SURVIVING CORPORATION
2.1. ARTICLES OF INCORPORATION. The Articles of Incorporation of American
Telstar Nevada in effect at the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation, until amended in accordance with the
provisions provided therein or applicable law.
2.2. THE BYLAWS. The bylaws of American Telstar Nevada in effect at the
Effective Time shall be the bylaws of the Surviving Corporation, until amended
in accordance with the provisions provided therein or applicable law.
ARTICLE III
OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
3.1. OFFICERS. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation,
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal.
3.2. DIRECTORS. The directors of the Company at the Effective Time shall,
from and after the Effective Time, be the directors of the Surviving
Corporation, until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal.
ARTICLE IV
EFFECT OF MERGER ON CAPITAL STOCK
4.1. EFFECT OF MERGER ON CAPITAL STOCK. At the Effective Time, as a result
of the Migratory Merger and without any action on the part of the Company,
American Telstar Nevada or the shareholders of the Company:
(a) Each share of common stock (other than shares ("DISSENTING
SHARES") that are owned by shareholders ("DISSENTING SHAREHOLDERS")
exercising dissenters' rights pursuant to Sections 7-113-101 through
7-113-302 of the CRS), issued and outstanding immediately prior to the
Effective Time shall be converted at a ratio of one (1) share of American
Telstar Nevada Common Stock, par value $0.0001, ("AMERICAN TELSTAR NEVADA
COMMON STOCK"), for five hundred (500) shares of Company Common Stock, par
value $0.0001, provided that holders who would otherwise receive fewer than
100 shares of American Telstar Nevada Common Stock shall be rounded up so
that they will receive 100 shares of American Telstar Nevada Common Stock,
with the same rights, powers and privileges as the shares so converted and
all shares of Company Common Stock shall be cancelled and retired and shall
cease to exist. No fractional shares will be issued and all American
Telstar Nevada Common Stock ownership will be rounded to the nearest full
share.
(b) Each share of American Telstar Nevada common stock owned by the
Company shall no longer be outstanding and shall be cancelled and retired
and shall cease to exist.
4.2. CERTIFICATES. At and after the Effective Time, all of the outstanding
certificates which immediately prior thereto represented shares of common stock
(other than Dissenting Shares)of the Company shall be deemed for all purposes to
evidence ownership of and to represent the shares of the respective American
Telstar Nevada Common Stock, into which the shares of common stock of the
Company represented by such certificates have been converted as herein provided
and shall be so registered on the books and records of the Surviving Corporation
or its transfer agent. The registered owner of any such outstanding certificate
shall be entitled to exercise any voting and other rights with respect to, and
to receive any dividends and other distributions upon, the shares of American
Telstar Nevada Common Stock and shall be held in book entry form by the transfer
agent for the Company.
4.3 DISSENTERS' RIGHTS. No Dissenting Shareholder shall be entitled to
shares of American Telstar Nevada Common Stock under this Article IV unless and
until the holder thereof shall have failed to perfect or shall have effectively
withdrawn or lost such holder's right to dissent from the Migratory Merger under
the CRS, and any Dissenting Shareholder shall be entitled to receive only the
payment provided by Sections 7-113-101 through 7-113-302 with respect to
Dissenting Shares owned by such Dissenting Shareholder. If any person or entity
who otherwise would be deemed a Dissenting Shareholder shall have failed to
properly perfect or shall have effectively withdrawn or lost the right to
dissent with respect to any shares which would be Dissenting Shares but for that
failure to perfect or withdrawal or loss of the right to dissent, such
Dissenting Shares shall thereupon be treated as though such Dissenting Shares
had been converted into shares of American Telstar Nevada Common Stock pursuant
to Section 4.1 hereof.
ARTICLE V
CONDITION
5.1. CONDITION TO EACH PARTY'S OBLIGATION TO EFFECT THE MIGRATORY MERGER.
The respective obligation of each party hereto to effect the Migratory Merger is
subject to receipt prior to the Effective Date of the requisite approval of this
Agreement and the transactions contemplated hereby by the holders of common
stock pursuant to the CRS and the Articles of Incorporation of the Company.
ARTICLE VI
TERMINATION
6.1. TERMINATION. This Agreement may be terminated, and the Migratory
Merger may be abandoned, at any time prior to the Effective Time, whether before
or after approval of this Agreement by the shareholders of the Company, if the
board of directors of the Company determines for any reason, in its sole
judgment and discretion, that the consummation of the Migratory Merger would be
inadvisable or not in the best interests of the Company and its shareholders. In
the event of the termination and abandonment of this Agreement, this Agreement
shall become null and void and have no effect, without any liability on the part
of either the Company or American Telstar Nevada or any of their respective
shareholders, directors or officers.
ARTICLE VII
MISCELLANEOUS AND GENERAL
7.1. MODIFICATION OR AMENDMENT. Subject to the provisions of applicable
law, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement; provided, however, that an amendment made subsequent to
the approval of this Agreement by the holders of common stock shall not (i)
alter or change the amount or kind of shares and/or rights to be received in
exchange for or on conversion of all or any of the shares or any class or series
thereof of such corporation, (ii) alter or change any provision of the Articles
of Incorporation of the Surviving Corporation to be effected by the Migratory
Merger, or (iii) alter or change any of the terms or conditions of this
Agreement it such alteration or change would adversely affect the holders of any
class or series of capital stock of any of the parties hereto.
7.2. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
7.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEVADA WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
7.4. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
supercedes all other prior agreements, understandings, representations and
warranties, both written and oral, among the parties, with respect to the
subject matter hereof.
7.5. NO THIRD PARTY BENEFICIARIES. This Agreement is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.
7.6. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is determined by any court or other authority of competent
jurisdiction to be invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
7.7. HEADINGS. The headings therein are for convenience of reference only,
do not constitute part of this Agreement and shall not be deemed to limit or
otherwise affect any of the provisions hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.
American Telstar, Inc.
a Nevada corporation
By /s/Lisa Guise
------------------------------------------
Name: Lisa Guise
Title: President and Chief Executive Officer
American Telstar, Inc.
a Colorado corporation
By /s/Lisa Guise
------------------------------------------
Name: Lisa Guise
Title: President and Chief Executive Officer
EXHIBIT B
ARTICLES OF INCORPORATION
OF
AMERICAN TELSTAR, INC.
KNOW ALL BY THESE PRESENTS:
That the undersigned, desiring to be incorporated as a Corporation in accordance
with the laws of the State of Nevada, hereby certifies and adopts the following
Articles of Incorporation, the terms whereof have been agreed upon to be equally
obligatory upon the party signing this instrument and all others who may from
time to time hereafter become members of this Corporation and who may hold stock
therein.
ARTICLE I
The name of the Corporation is: AMERICAN TELSTAR, INC.
ARTICLE II
The name and address of the registered agent of the Corporation in the State of
Nevada is:
National Registered Agents, Inc. of NV
1000 E. William St., Ste 204
Carson City, NV 89701
Principal and branch offices may hereinafter be established at such place or
places, either within or without the State of Nevada as may from time to time be
determined by the Board of Directors.
ARTICLE III
The nature and purpose of this business shall be to conduct any lawful activity
as governed by the laws of the State of Nevada.
ARTICLE IV
The authorized capital stock of this Corporation is 540,000,000 shares of
capital stock, consisting of 500,000,000 shares of common stock with full voting
rights and with a par value of $0.0001 per share, and 40,000,000 shares of
preferred stock, with a par value of $0.10 per share (the "Preferred Stock").
The Preferred Stock may be issued from time to time in one or more
participating, optional, or other special rights and qualifications, limitations
or restrictions thereof, as shall be stated in the resolutions adopted by the
Corporation's Board of Directors providing for the issuance of such Preferred
Stock or series thereof,
The Preferred Stock may be issued from time to time in one or more series with
such designations, preferences and relative participating, optional or other
special rights and qualifications, limitations or restrictions thereof, as shall
be stated in the resolutions adopted by the Corporation's Board of Directors
(the "Board") providing for the issuance of such Preferred Stock or series
thereof; and the Board is hereby vested with authority to fix such designations,
preferences and relative participating, optional or other special rights or
qualifications, limitations, or restrictions for each series, including, but not
by way of limitation, the power to fix the redemption and liquidation
preferences, the rate of dividends payable and the time for and the priority of
payment thereof and to determine whether such dividends shall be cumulative or
not and to provide for and fix the terms of conversion of such Preferred Stock
or any series thereof into Common Stock of the Corporation and fix the voting
Power, if any, of shares of Preferred Stock or any series thereof.
Pursuant to NRS 78.385 and NRS 78.390, and any successor statutory provisions,
the Board of Directors is authorized to adopt a resolution to increase,
decrease, add, remove or otherwise alter any current or additional classes or
series of this Corporation's capital stock by a board resolution amending these
Articles, in the Board of Directors' sole discretion for increases or decreases
of any class or series of authorized stock where applicable pursuant to NRS
78.207 and any successor statutory provision, or otherwise subject to the
approval of the holders of at least a majority of shares having voting rights,
either in a special meeting or the next annual meeting of shareholders.
Notwithstanding the foregoing, where any shares of any class or series would be
materially and adversely affected by such change, shareholder approval by the
holders of at least a majority of such adversely affected shares must also be
obtained before filing an amendment with the Office of the Secretary of State of
Nevada. The capital stock of this Corporation shall be non-assessable and shall
not be subject to assessment to pay the debts of the Corporation.
ARTICLE V
Members of the governing Board shall be known and styled as "Directors" and the
number thereof shall be one (1) and may be increased or decreased from time to
time pursuant to the Bylaws. The name and address of the first Board of
Directors is as follows:
Lisa Guise
36 Mclean Street
Red Bank, NJ 07701
The number of members of the Board of Directors shall not be less than one (1)
or more than nine (9). The officers of the Corporation shall be a President,
Secretary and Treasurer. The Corporation may have such additional officers as
may be determined from time to time in accordance with the Bylaws. The officers
shall have the powers, perform the duties, and be appointed as may be determined
in accordance with the Bylaws and laws of the State of Nevada. Any person may
hold two (2) or more offices in this Corporation.
ARTICLE VI
The Corporation shall have perpetual succession by its corporate name and shall
have all the powers herein enumerated or implied herefrom and the powers now
provided or which may hereafter be provided by law for corporations in the State
of Nevada.
ARTICLE VII
No stockholder shall be liable for the debts of the Corporation beyond the
amount that may be due or unpaid upon any share or shares of stock of this
Corporation owned by that person.
ARTICLE VIII
Each shareholder entitled to vote at any election for directors shall have the
right to vote, in person or by proxy, the number of shares owned by such
shareholder for each director to be elected. Shareholders shall not be entitled
to cumulative voting rights.
ARTICLE IX
The Directors shall have the powers to make and alter the Bylaws of the
Corporation. Bylaws made by the Board of Directors under the powers so conferred
may be altered, amended, or repealed by the Board of Directors or by the
stockholders at any meeting called and held for that purpose.
ARTICLE X
The Corporation specifically elects not to be governed by NRS 78.411 to NRS
78.444, inclusive, and successor statutory provisions.
ARTICLE XI
The Corporation shall indemnify all directors, officers, employees, and agents
to the fullest extent permitted by Nevada law as provided within NRS 78.7502 and
NRS 78.751 or any other law then in effect or as it may hereafter be amended.
The Corporation shall indemnify each present and future director, officer,
employee or agent of the Corporation who becomes a party or is threatened to be
made a party to any suit or proceeding, whether pending, completed or merely
threatened, and whether said suit or proceeding is civil, criminal,
administrative, investigative, or otherwise, except an action by or in the right
of the Corporation, by reason of the fact that he is or was a director, officer,
employee, or agent of the Corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses, including, but not limited to, attorneys' fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit, proceeding or settlement, provided such person acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interest of the Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
The expenses of directors, officers, employees or agents of the Corporation
incurred in defending a civil or criminal action, suit, or proceeding may be
paid by the Corporation as they are incurred and in advance of the final
disposition of the action, suit, or proceeding, if and only if the director,
officer, employee or agent undertakes to repay said expenses to the Corporation
if it is ultimately determined by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, that he is not entitled to be indemnified
by the corporation. No indemnification shall be applied, and any advancement of
expenses to or on behalf of any director, officer, employee or agent must be
returned to the Corporation, if a final adjudication establishes that the
person's acts or omissions involved a breach of any fiduciary duties, where
applicable, intentional misconduct, fraud or a knowing violation of the law
which was material to the cause of action.
ARTICLE XII
The name and address of the incorporator of this Corporation is:
Kristen A. Baracy
730 W. Randolph, Suite 600
Chicago, IL 60661
IN WITNESS WHEREOF, the undersigned incorporator has executed these Articles of
Incorporation of AMERICAN TELSTAR, INC.
/s/ Kristen A. Baracy
-------------------------------
Kristen A. Baracy, incorporator
EXHIBIT C
BYLAWS OF
AMERICAN TELSTAR, INC.
ARTICLE I: OFFICES
1.1 REGISTERED OFFICE The registered office shall be at 1000 E. William St., Ste
204, Carson City, NV 89701.
1.2 ADDITIONAL OFFICES.. The corporation may also have offices at such other
places both within and without the State of Nevada as the Board of Directors may
from time to time determine or the business of the corporation may require.
ARTICLE II: SHAREHOLDERS' MEETINGS
2.1 ANNUAL MEETINGS
Regular meetings of the shareholders of this corporation may be held at the
discretion of the Board of Directors on an annual or less frequent periodic
basis on such date and at such time and place as may be designated by the Board
of Directors in the notice of meeting. At regular meetings the shareholders
shall elect a Board of Directors and transact such other business as may be
appropriate for action by shareholders. If a regular meeting of shareholders has
not been held for a period of fifteen (15) months, one or more shareholders
entitled to vote may call a regular meeting of shareholders by delivering to the
President or Treasurer a written demand for a regular meeting. Within thirty
(30) days after the receipt of such written demand by the President or
Treasurer, the Board of Directors shall cause a regular meeting of shareholders
to be called and held on notice no later than ninety (90) days after the receipt
of written demand, all at the expense of the corporation.
2.2 SPECIAL MEETINGS
Special meetings of the shareholders for any purpose may be called at any time
by the President, or by the Board of Directors, or by any two or more members
thereof, or by one or more shareholders holding not less than twenty percent
(20%) of the voting power of the Corporation. Such meetings shall be held at the
principal office of the Corporation or at such other place within or without the
State of Nevada as may be designated in the notice of meeting. No business shall
be transacted at any special meeting of the shareholders except as is specified
in the notice calling for such special meeting.
2.3 NOTICE OF MEETINGS
2.3.1 Notices of meetings, annual or special, to shareholders entitled to
vote shall be given in writing and signed by the President or a Vice-President
or the Secretary or the Assistant Secretary, or by any other natural person
designated by the Board of Directors.
2.3.2 Such notices shall be sent to the shareholder's address appearing on
the books of the Corporation, or supplied by him to the Corporation for the
purpose of notice, not less than ten (10) nor more than sixty (60) days before
such meeting. Such notice shall be deemed delivered, and the time of the notice
shall begin to run, upon being deposited in the mail.
2.3.3 Notice of any meeting of shareholders shall specify the place, the
day and the hour of the meeting, and in case of a special meeting shall state
the purpose(s) for which the meeting is called.
2.3.4 When a meeting is adjourned to another time, date or place, notice of
the adjourned meeting need not be given if announced at the meeting at which the
adjournment is given.
2.3.5 Any shareholder may waive notice of any meeting by a writing signed
by him, or his duly authorized attorney, either before or after the meeting.
2.3.6 No notice is required for matters handled by the consent of the
shareholders pursuant to NRS 78.320.
2.3.7 No notice is required of the annual shareholders meeting, or other
notices, if two annual shareholder notices are returned to the corporation
undelivered pursuant to NRS 78.370(6).
2.4 CONSENT TO SHAREHOLDER MEETINGS AND ACTION WITHOUT MEETING
2.4.1 Any meeting is valid wherever held by the written consent of all
persons entitled to vote thereat, given either before or after the meeting.
2.4.2 The transactions of any meeting of shareholders, however called and
noticed, shall be valid as though if taken at a meeting duly held after regular
call and notice if a quorum be present either in person or by proxy, and if,
either before or after the meeting, each of the shareholders entitled to vote,
not present in person or by proxy, signs a written waiver of notice, or consent
to the holding of such meeting, or an approval of the minutes thereof.
2.4.3 Any action that could be taken by the vote of shareholders at a
meeting, may be taken without a meeting if authorized by the written consent of
shareholders holding at least a majority of the voting power (NRS 78.320), and
any actions at meetings not regularly called shall be effective subject to the
ratification and approval provisions of NRS 78.325.
2.4.4 All such waivers, consents or approvals shall be filed with the
corporate records, or made a part of the minutes of the meeting.
2.5 QUORUM
The holders of a majority of the shares entitled to vote thereat, present in
person or by proxy, shall constitute a quorum for the transaction of business.
2.6 VOTING RIGHTS
Except as may be otherwise provided in the Corporation's Articles of
Incorporation, Bylaws or by the Laws of the State of Nevada, each shareholder
shall be entitled to one (1) vote for each share of voting stock registered in
his name on the books of the Corporation, and the affirmative vote of a majority
of voting shares represented at a meeting and entitled to vote thereat shall be
necessary for the adoption of a motion or for the determination of all questions
and business which shall come before the meeting.
2.7 PROXIES
Subject to the limitation of NRS 78.355, every person entitled to vote or to
execute consents may do so either in person or by proxy executed by the person
or by his duly authorized agent.
ARTICLE III: DIRECTORS - MANAGEMENT
3.1 POWERS
Subject to the limitation of the Articles of Incorporation, of the Bylaws and of
the Laws of the State of Nevada as to action to be authorized or approved by the
shareholders, all corporate powers shall be exercised by or under authority of,
and the business and affairs of this Corporation shall be controlled by, a Board
of at least one (1) Director.
3.2 ELECTION AND TENURE OF OFFICE
The number of directors which shall constitute the whole board shall be one (1).
The number of directors may from time to time be increased to not less than one
(1) nor more than nine (9) by action of the Board of Directors. The directors
shall be elected at the annual meeting of stockholders and except as provided in
Section 3.3 of this Article, each director elected shall hold office until his
or her successor is elected and qualified. Directors need not be stockholders. A
Director need not be a resident of the State of Nevada.
3.3 REMOVAL AND RESIGNATION
3.3.1 Any Director may be removed either with or without cause, as provided by
NRS 78.335.
3.3.2 Any Director may resign at any time by giving written notice to the Board
of Directors or to the President, or to the Secretary of the Corporation. Any
such resignation shall take effect at the date of the receipt of such notice or
any later time specified therein; and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.4 VACANCIES
Vacancies in the Board of Directors may be filled by a majority of the remaining
Directors, though such action by less than a quorum or by a sole remaining
Director shall be adequate, and each Director so elected shall hold office until
his successor is elected at an annual meeting of shareholders or at a special
meeting called for that purpose. The shareholders may at any time elect a
Director to fill any vacancy not filled by the directors.
3.5 PLACE OF MEETINGS AND MEETINGS BY TELEPHONE
Meetings of the Board of Directors may be held at any place within or without
the State of Nevada that has been designated by the Board of Directors. In the
absence of such designation, meetings shall be held at the principal office of
the Corporation. Any meeting, regular or special, may be held by conference
telephone or similar communication equipment, and all such Directors shall be
deemed to be present in person at the meeting, so long as all Directors
participating in the meeting can hear one another.
3.6 ANNUAL ORGANIZATIONAL MEETINGS
The annual organizational meetings of the Board of Directors shall be held
immediately following the adjournment of the annual meetings of the
shareholders. No notice of such meetings need be given.
3.7 OTHER REGULAR MEETINGS
There shall be no requirement for the Board of Directors to hold regular
meetings, other than the annual organizational meeting.
3.8 SPECIAL MEETINGS - NOTICES
3.8.1 Special meetings of the Board of Directors for any purpose shall be called
at any time by the President or if he is absent or unable or refuses to act, by
any Vice President or by any two Directors.
3.8.2 Written notice of the time and place of special meetings of the Board of
Directors shall be delivered personally to each Director or sent to each
Director by mail or other form of written communication at least forty-eight
(48) hours before the meeting. Notice of the time and place of holding an
adjourned meeting need not be given to absent Directors if the time and place
are fixed at the meeting adjourned.
3.9 CONSENT TO DIRECTORS' MEETINGS AND ACTION WITHOUT MEETING
3.9.1 Any meeting is valid wherever held by the written consent of all
persons entitled to vote thereat, given either before or after the meeting.
3.9.2 The transactions of any meetings of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice if all the Directors are
present, or if a quorum is present and either before or after the meeting, each
of the Directors not present signs a written waiver of notice, a consent to the
holding of the meeting, or an approval of the minutes thereof.
3.9.3 Any action required or permitted to be taken by the Board of
Directors may be taken without a meeting, if all members of the Board shall
individually or collectively consent in writing to such action. Such action by
written consent shall have the same force and effect as a unanimous vote of the
Board of Directors.
3.9.4 All such waivers, consents, or approvals shall be filed with the
Corporate records or made part of the minutes of the meeting.
3.10 QUORUM AND VOTING RIGHTS
So long as the Board of Directors is composed of one or two Directors, one of
the authorized Directors constitutes a quorum for the transaction of business.
If there are three or more Directors, a majority thereof shall constitute a
quorum. Except as may be otherwise provided in the Corporation's Articles of
Incorporation, Bylaws or by the Laws of the State of Nevada, the affirmative
vote of a majority of Directors represented at a meeting and entitled to vote
thereat shall be necessary for the adoption of a motion or resolution or for the
determination of all questions and business which shall come before the meeting.
3.11 COMPENSATION
Directors may receive such reasonable compensation for their services as
Directors and such reimbursement for expenses incurred in attending meetings as
may be fixed from time to time by resolution of the Board of Directors. No such
payment shall preclude a Director from serving in any other capacity and
receiving compensation therefor.
ARTICLE IV: OFFICERS
4.1 OFFICERS
The Board of Directors shall appoint a President, a Secretary and a Treasurer.
The Board of Directors, in their discretion, may also appoint a Chair of the
Board, a Chief Executive Officer, a Chief Financial Officer, one or more Vice
Presidents and such other officers and assistant officers as they shall from
time to time deem proper. Any two or more offices may be held by the same
person. The Board may choose not to fill any of the other officer positions for
any period.
4.2 APPOINTMENT AND TERM OF OFFICE
The officers of the corporation shall be appointed by the Board of Directors at
the first meeting of the Directors. If the appointment of officers shall not be
held at such meeting, such appointment shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until a successor shall have
been duly appointed and qualified or until the officer's death or until the
officer resigns or is removed in the manner hereinafter provided.
4.3 REMOVAL
Any officer or agent appointed by the Board of Directors may be removed by the
Board of Directors at any time with or without cause, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
4.4 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, or otherwise, may be filled by the Board of Directors.
4.5 CHAIR OF THE BOARD
The Chair of the Board, if there be such an office, shall, if present, preside
at all meetings of the Board of Directors and meetings of the shareholders, and
exercise and perform such other powers and duties as may be from time to time
assigned to the Chair by the Board of Directors. In the event that there is no
Chair of the Board designated or present, the Secretary of the Board of
Directors shall preside over the meeting, or if there is no Secretary of the
Board of Directors designated or present at the meeting, the Directors present
at any meeting of the Board of Directors shall designate a Director of their
choosing to serve as temporary chair to preside over the meeting.
4.6 CHIEF EXECUTIVE OFFICER
Subject to the control of the board of directors and such supervisory powers, if
any, as may be given by the Board of Directors to another person or persons, the
powers and duties of the Chief Executive Officer shall be: To act as the general
manager and, subject to the control of the Board of Directors, to have general
supervision, direction and control of the business and affairs of the
Corporation; To see that all orders and resolutions of the Board of Directors
are carried into effect; To maintain records of and, whenever necessary, certify
all proceedings of the Board of Directors and the shareholders; and To affix the
signature of the Corporation to all deeds, conveyances, mortgages, guarantees,
leases, obligations, bonds, certificates and other papers and instruments in
writing which have been authorized by the Board of Directors or which, in the
judgment of the Chief Executive Officer, should be executed on behalf of the
Corporation; to sign certificates for the Corporation's shares; and, subject to
the direction of the Board of Directors, to have general charge of the property
of the Corporation and to supervise and control all officers, agents and
employees of the corporation.
4.7 CHIEF FINANCIAL OFFICER OR TREASURER
Subject to the control of the Board of Directors and such supervisory powers, if
any, as may be given by the Board of Directors to another person or persons, the
powers and duties of the Chief Financial Officer or Treasurer shall be: To keep
accurate financial records for the Corporation; To deposit all money, drafts and
checks in the name of and to the credit of the Corporation in the banks and
depositories designated by the board of directors; To endorse for deposit all
notes, checks, drafts received by the Corporation as ordered by the Board of
Directors, making proper vouchers therefore; To disburse corporate funds and
issue checks and drafts in the name of the Corporation, as ordered by the Board
of Directors; To render to the Chief Executive Officer and the Board of
Directors, whenever requested, an account of all transactions by the Chief
Financial Officer and the financial condition of the Corporation; and To perform
all other duties prescribed by the Board of Directors or the Chief Executive
Officer.
4.8 PRESIDENT
Unless otherwise determined by the Board of Directors, the President shall be
the Chief Executive Officer of the Corporation. If an officer other than the
President is designated as the Chief Executive Officer, the President shall
perform such duties as may from time to time be assigned by the Board of
Directors. The President shall have the duty to call meetings of the
shareholders or Board of Directors, as set forth in Section 3.8.1, above, to be
held at such times and, subject to the limitations prescribed by law or by these
Bylaws, at such places as the President shall deem proper.
4.9 VICE PRESIDENTS
In the absence of the President or in the event of the President's death,
inability or refusal to act, the Vice President (or in the event there shall be
more than one Vice President, the Vice Presidents in the order designated at the
time of their appointment, or in the absence of any designation then in the
order of their appointment) shall perform the duties of the President, and when
so acting shall have all the powers of and be subject to all the restrictions
upon the President; and shall perform such other duties as from time to time may
be assigned to the Vice President by the President or by the Board of Directors.
In the event there are no Vice Presidents, the Board of Directors may designate
a member of the Board of Directors or another officer of the Corporation to
serve in such capacity until a new President is appointed.
4.10 SECRETARY
The Secretary shall: (a) prepare the minutes of the shareholders' and Board of
Directors' meetings and keep them in one or more books provided for that
purpose; (b) authenticate such records of the Corporation as shall from time to
time be required; (c) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (d) be custodian of the
corporate records and of the corporate seal, if any, and see that the seal of
the Corporation, if any, is affixed to all documents the execution of which on
behalf of the Corporation under its seal is duly authorized; (e) keep a register
of the post office address of each shareholder; (f) if requested, sign with the
President certificates for shares of the Corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors; (g) have
general charge of the stock transfer books of the Corporation; and (h) in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to the Secretary by the Chief
Executive Officer or the Board of Directors.
4.11 DELEGATION OF AUTHORITY
The Board of Directors may from time to time delegate the powers of any officer
to any other officer or agent, notwithstanding any provision hereof, except as
may be prohibited by law.
4.12 COMPENSATION
Officers shall be awarded such reasonable compensation for their services and
provisions made for their expenses incurred in attending to and promoting the
business of the Corporation as may be fixed from time to time by resolution of
the Board of Directors.
ARTICLE V: COMMITTEES
The Board of Directors may appoint and prescribe the duties of an executive
committee and such other committees, as it may from time to time deem
appropriate. Such committees shall hold office at the pleasure of the Board.
ARTICLE VI: RECORDS AND REPORTS - INSPECTION
6.1 INSPECTION OF BOOKS AND RECORDS
All books and records provided for by Nevada Revised Statutes shall be open to
inspection of the directors and shareholders to the extent provided by such
statutes. (NRS 78.105).
6.2 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these Bylaws, as amended or otherwise altered to date,
certified by the Secretary, shall be open to inspection by the shareholders of
the company in the manner provided by law.
6.3 CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for payment of money, notes or other
evidences of indebtedness, issued in the name of or payable to the Corporation,
shall be signed or endorsed by such person or persons and in such manner as
shall be determined from time to time by resolution of the Board of Directors.
6.4 ANNUAL REPORT
No annual report to shareholders shall be required; but the Board of Directors
may cause to be sent to the shareholders annual or other reports in such form as
may be deemed appropriate by the Board of Directors.
ARTICLE VII: AMENDMENTS TO BYLAWS
New Bylaws may be adopted or these Bylaws may be repealed or amended by a vote
or the written assent of either stockholders entitled to exercise a majority of
the voting power of the Corporation, or by a majority of the number of Directors
authorized to conduct the business of the Corporation.
ARTICLE VIII: CORPORATE SEAL
This Corporation shall have the power to adopt and use a common seal or stamp,
and to alter the same, at the pleasure of the Board of Directors. The use or
nonuse of a seal or stamp, whether or not adopted, shall not be necessary to,
nor shall it in any way effect, the legality, validity or enforceability of any
corporate action or document (NRS 78.065).
ARTICLE IX: CERTIFICATES OF STOCK
9.1 CERTIFICATES OF STOCK; UNCERTIFICATED SHARES
Certificates for shares shall be of such form and device as the Board of
Directors may designate and shall state the name of the record holder of the
shares represented thereby, its number; date of issuance; the number of shares
for which it is issued; a statement of the rights, privileges, preferences and
restrictions, if any; and statement of liens or restrictions upon transfer or
voting, if any; and, if the shares be assessable, or, if assessments are
collectible by personal action, a plain statement of such facts. The Corporation
may also provide for uncertificated shares; provided, however, that upon
request, every holder of uncertificated shares shall be entitled to have a
certificate (representing the number of shares registered in certificate form)
signed in the name of and on behalf of the Corporation.
9.2 EXECUTION
Every certificate for shares must be signed by the President or the Secretary or
must be authenticated by facsimile of the signature of the President or
Secretary. Before it becomes effective, every certificate for shares
authenticated by a facsimile of a signature must be countersigned by an
incorporated bank or trust Company, either domestic or foreign as registrar of
transfers.
9.3 TRANSFER
Upon surrender to the Secretary or transfer agent of the Corporation of a
certificate for shares duly endorsed or accompanied by a proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction upon its books.
9.4 LOST OR DESTROYED CERTIFICATES
Any person claiming a certificate of stock to be lost or destroyed shall make an
affidavit or affirmation of that fact and advertise the same in such manner as
the Board of Directors may require and shall, if the Directors so require, give
the Corporation a bond of indemnity, in form and with one or more sureties
satisfactory to the Board, in at least double the value of the stock represented
by said certificate, whereupon a new certificate may be issued of the same tenor
and for the same number of shares as the one alleged to be lost or destroyed.
9.5 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer agents or transfer
clerks, and one or more registrars, which shall be an incorporated bank or trust
company, either domestic or foreign, who shall be appointed at such times and
places as the requirements of the Corporation may necessitate and the Board of
Directors may designate.
9.6 CLOSING STOCK TRANSFER BOOKS
The Board of Directors may close the transfer books in their discretion for a
period not exceeding the sixty (60) days preceding any meeting, annual or
special, of the shareholders, or the date appointed for the payment of a
dividend.
EXHIBIT D
COLORADO REVISED STATUTES
SECTIONS 7-113-101 - SECTION 7-113-302
DISSENTERS' RIGHTS
PART 1
RIGHT OF DISSENT -
PAYMENT FOR SHARES
7-113-101. DEFINITIONS.
For purposes of this article:
(1) "Beneficial shareholder" means the beneficial owner of shares held in a
voting trust or by a nominee as the record shareholder.
(2) "Corporation" means the issuer of the shares held by a dissenter before the
corporate action, or the surviving or acquiring domestic or foreign corporation,
by merger or share exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to dissent from corporate
action under section 7-113-102 and who exercises that right at the time and in
the manner required by part 2 of this article.
(4) "Fair value", with respect to a dissenter's shares, means the value of the
shares immediately before the effective date of the corporate action to which
the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action except to the extent that exclusion would
be inequitable.
(5) "Interest" means interest from the effective date of the corporate action
until the date of payment, at the average rate currently paid by the corporation
on its principal bank loans or, if none, at the legal rate as specified in
section 5-12-101, C.R.S.
(6) "Record shareholder" means the person in whose name shares are registered in
the records of a corporation or the beneficial owner of shares that are
registered in the name of a nominee to the extent such owner is recognized by
the corporation as the shareholder as provided in section 7-107-204.
(7) "Shareholder" means either a record shareholder or a beneficial shareholder.
7-113-102. RIGHT TO DISSENT.
(1) A shareholder, whether or not entitled to vote, is entitled to dissent and
obtain payment of the fair value of the shareholder's shares in the event of any
of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party if:
(I) Approval by the shareholders of that corporation is required for the merger
by section 7-111-103 or 7-111-104 or by the articles of incorporation; or
(II) The corporation is a subsidiary that is merged with its parent corporation
under section 7-111-104;
(b) Consummation of a plan of share exchange to which the corporation is a party
as the corporation whose shares will be acquired;
(c) Consummation of a sale, lease, exchange, or other disposition of all, or
substantially all, of the property of the corporation for which a shareholder
vote is required under section 7-112-102 (1);
(d) Consummation of a sale, lease, exchange, or other disposition of all, or
substantially all, of the property of an entity controlled by the corporation if
the shareholders of the corporation were entitled to vote upon the consent of
the corporation to the disposition pursuant to section 7-112-102 (2); and
(e) Consummation of a conversion in which the corporation is the converting
entity as provided in section 7-90-206 (2).
(1.3) A shareholder is not entitled to dissent and obtain payment, under
subsection (1) of this section, of the fair value of the shares of any class or
series of shares that either were listed on a national securities exchange
registered under the federal "Securities Exchange Act of 1934", as amended, or
were held of record by more than two thousand shareholders, at the time of:
(a) The record date fixed under section 7-107-107 to determine the shareholders
entitled to receive notice of the shareholders' meeting at which the corporate
action is submitted to a vote;
(b) The record date fixed under section 7-107-104 to determine shareholders
entitled to sign writings consenting to the corporate action; or
(c) The effective date of the corporate action if the corporate action is
authorized other than by a vote of shareholders.
(1.8) The limitation set forth in subsection (1.3) of this section shall not
apply if the shareholder will receive for the shareholder's shares, pursuant to
the corporate action, anything except:
(a) Shares of the corporation surviving the consummation of the plan of merger
or share exchange;
(b) Shares of any other corporation which, at the effective date of the plan of
merger or share exchange, either will be listed on a national securities
exchange registered under the federal "Securities Exchange Act of 1934", as
amended, or will be held of record by more than two thousand shareholders;
(c) Cash in lieu of fractional shares; or
(d) Any combination of the foregoing described shares or cash in lieu of
fractional shares.
(2) (Deleted by amendment, L. 96, p. 1321, ss. 30, effective June 1, 1996.)
(2.5) A shareholder, whether or not entitled to vote, is entitled to dissent and
obtain payment of the fair value of the shareholder's shares in the event of a
reverse split that reduces the number of shares owned by the shareholder to a
fraction of a share or to scrip if the fractional share or scrip so created is
to be acquired for cash or the scrip is to be voided under section 7-106-104.
(3) A shareholder is entitled to dissent and obtain payment of the fair value of
the shareholder's shares in the event of any corporate action to the extent
provided by the bylaws or a resolution of the board of directors.
(4) A shareholder entitled to dissent and obtain payment for the shareholder's
shares under this article may not challenge the corporate action creating such
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
7-113-103. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.
(1) A record shareholder may assert dissenters' rights as to fewer than all the
shares registered in the record shareholder's name only if the record
shareholder dissents with respect to all shares beneficially owned by any one
person and causes the corporation to receive written notice which states such
dissent and the name, address, and federal taxpayer identification number, if
any, of each person on whose behalf the record shareholder asserts dissenters'
rights. The rights of a record shareholder under this subsection (1) are
determined as if the shares as to which the record shareholder dissents and the
other shares of the record shareholder were registered in the names of different
shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to the shares held
on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder causes the corporation to receive the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder dissents with respect to all shares beneficially
owned by the beneficial shareholder.
(3) The corporation may require that, when a record shareholder dissents with
respect to the shares held by any one or more beneficial shareholders, each such
beneficial shareholder must certify to the corporation that the beneficial
shareholder and the record shareholder or record shareholders of all shares
owned beneficially by the beneficial shareholder have asserted, or will timely
assert, dissenters' rights as to all such shares as to which there is no
limitation on the ability to exercise dissenters' rights. Any such requirement
shall be stated in the dissenters' notice given pursuant to section 7-113-203.
PART 2 PROCEDURE FOR EXERCISE
OF DISSENTERS' RIGHTS
7-113-201. NOTICE OF DISSENTERS' RIGHTS.
(1) If a proposed corporate action creating dissenters' rights under section
7-113-102 is submitted to a vote at a shareholders' meeting, the notice of the
meeting shall be given to all shareholders, whether or not entitled to vote. The
notice shall state that shareholders are or may be entitled to assert
dissenters' rights under this article and shall be accompanied by a copy of this
article and the materials, if any, that, under articles 101 to 117 of this
title, are required to be given to shareholders entitled to vote on the proposed
action at the meeting. Failure to give notice as provided by this subsection (1)
shall not affect any action taken at the shareholders' meeting for which the
notice was to have been given, but any shareholder who was entitled to dissent
but who was not given such notice shall not be precluded from demanding payment
for the shareholder's shares under this article by reason of the shareholder's
failure to comply with the provisions of section 7-113-202 (1).
(2) If a proposed corporate action creating dissenters' rights under section
7-113-102 is authorized without a meeting of shareholders pursuant to section
7-107-104, any written or oral solicitation of a shareholder to execute a
writing consenting to such action contemplated in section 7-107-104 shall be
accompanied or preceded by a written notice stating that shareholders are or may
be entitled to assert dissenters' rights under this article, by a copy of this
article, and by the materials, if any, that, under articles 101 to 117 of this
title, would have been required to be given to shareholders entitled to vote on
the proposed action if the proposed action were submitted to a vote at a
shareholders' meeting. Failure to give notice as provided by this subsection (2)
shall not affect any action taken pursuant to section 7-107-104 for which the
notice was to have been given, but any shareholder who was entitled to dissent
but who was not given such notice shall not be precluded from demanding payment
for the shareholder's shares under this article by reason of the shareholder's
failure to comply with the provisions of section 7-113-202 (2).
7-113-202. NOTICE OF INTENT TO DEMAND PAYMENT.
(1) If a proposed corporate action creating dissenters' rights under section
7-113-102 is submitted to a vote at a shareholders' meeting and if notice of
dissenters' rights has been given to such shareholder in connection with the
action pursuant to section 7-113-201 (1), a shareholder who wishes to assert
dissenters' rights shall:
(a) Cause the corporation to receive, before the vote is taken, written notice
of the shareholder's intention to demand payment for the shareholder's shares if
the proposed corporate action is effectuated; and
(b) Not vote the shares in favor of the proposed corporate action.
(2) If a proposed corporate action creating dissenters' rights under section
7-113-102 is authorized without a meeting of shareholders pursuant to section
7-107-104 and if notice of dissenters' rights has been given to such shareholder
in connection with the action pursuant to section 7-113-201 (2), a shareholder
who wishes to assert dissenters' rights shall not execute a writing consenting
to the proposed corporate action.
(3) A shareholder who does not satisfy the requirements of subsection (1) or (2)
of this section is not entitled to demand payment for the shareholder's shares
under this article.
7-113-203. DISSENTERS' NOTICE.
(1) If a proposed corporate action creating dissenters' rights under section
7-113-102 is authorized, the corporation shall give a written dissenters' notice
to all shareholders who are entitled to demand payment for their shares under
this article.
(2) The dissenters' notice required by subsection (1) of this section shall be
given no later than ten days after the effective date of the corporate action
creating dissenters' rights under section 7-113-102 and shall:
(a) State that the corporate action was authorized and state the effective date
or proposed effective date of the corporate action;
(b) State an address at which the corporation will receive payment demands and
the address of a place where certificates for certificated shares must be
deposited;
(c) Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;
(d) Supply a form for demanding payment, which form shall request a dissenter to
state an address to which payment is to be made;
(e) Set the date by which the corporation must receive the payment demand and
certificates for certificated shares, which date shall not be less than thirty
days after the date the notice required by subsection (1) of this section is
given;
(f) State the requirement contemplated in section 7-113-103 (3), if such
requirement is imposed; and
(g) Be accompanied by a copy of this article.
7-113-204. PROCEDURE TO DEMAND PAYMENT.
(1) A shareholder who is given a dissenters' notice pursuant to section
7-113-203 and who wishes to assert dissenters' rights shall, in accordance with
the terms of the dissenters' notice:
(a) Cause the corporation to receive a payment demand, which may be the payment
demand form contemplated in section 7-113-203 (2) (d), duly completed, or may be
stated in another writing; and
(b) Deposit the shareholder's certificates for certificated shares.
(2) A shareholder who demands payment in accordance with subsection (1) of this
section retains all rights of a shareholder, except the right to transfer the
shares, until the effective date of the proposed corporate action giving rise to
the shareholder's exercise of dissenters' rights and has only the right to
receive payment for the shares after the effective date of such corporate
action.
(3) Except as provided in section 7-113-207 or 7-113-209 (1) (b), the demand for
payment and deposit of certificates are irrevocable.
(4) A shareholder who does not demand payment and deposit the shareholder's
share certificates as required by the date or dates set in the dissenters'
notice is not entitled to payment for the shares under this article.
7-113-205. UNCERTIFICATED SHARES.
(1) Upon receipt of a demand for payment under section 7-113-204 from a
shareholder holding uncertificated shares, and in lieu of the deposit of
certificates representing the shares, the corporation may restrict the transfer
thereof.
(2) In all other respects, the provisions of section 7-113-204 shall be
applicable to shareholders who own uncertificated shares.
(1) Except as provided in section 7-113-208, upon the effective date of the
corporate action creating dissenters' rights under section 7-113-102 or upon
receipt of a payment demand pursuant to section 7-113-204, whichever is later,
the corporation shall pay each dissenter who complied with section 7-113-204, at
the address stated in the payment demand, or if no such address is stated in the
payment demand, at the address shown on the corporation's current record of
shareholders for the record shareholder holding the dissenter's shares, the
amount the corporation estimates to be the fair value of the dissenter's shares,
plus accrued interest.
(2) The payment made pursuant to subsection (1) of this section shall be
accompanied by:
(a) The corporation's balance sheet as of the end of its most recent fiscal year
or, if that is not available, the corporation's balance sheet as of the end of a
fiscal year ending not more than sixteen months before the date of payment, an
income statement for that year, and, if the corporation customarily provides
such statements to shareholders, a statement of changes in shareholders' equity
for that year and a statement of cash flow for that year, which balance sheet
and statements shall have been audited if the corporation customarily provides
audited financial statements to shareholders, as well as the latest available
financial statements, if any, for the interim or full-year period, which
financial statements need not be audited;
(b) A statement of the corporation's estimate of the fair value of the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under section
7-113-209; and
(e) A copy of this article.
7-113-206. PAYMENT.
(1) Except as provided in section 7-113-208, upon the eff ive date of the
corporate action creating dissenters' rights under section 7-113-102 or upon
receip f a payment demand pursuant to section 7-113-204, whichever is later, the
corporation shall pay h dissenter who complied with section 7-113-204, at the
address stated in the payment demand, o f no such address is stated in the
paymen demand, at the address shown on the corporation's current cord of
shareholders for the record shareholder holding the dissenter's shares, the
amount th orporation estimates to be the fair value of the dissenter's shares,
plus accrued interest.
(2) The payment made pursuant to subsection (1) of this section shall be
accompanied by:
(a) The corporation's balance sheet as of the end of its most recent fiscal year
or, if that is not available, the corporation's balance sheet as of the end of a
fiscal year ending not more than sixteen months before the date of payment, an
income statement for that year, and, if the corporation customarily provides
such statements to shareholders, a statement of changes in shareholders' equity
for that year and a statement of cash flow for that year, which balance sheet
and statements shall have been audited if the corporation customarily provides
audited financial statements to shareholders, as well as the latest available
financial statements, if any, for the interim or full-year period, which
financial statements need not be audited;
(b) A statement of the corporation's estimate of the fair value of the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under section
7-113-209; and
(e) A copy of this article.
7-113-207. FAILURE TO TAKE ACTION. t u n
(1) If the effective date of the corporate action creating dissenters' rights
under section 7-113-102 does not occur within sixty days after the date set by
the corporation by which the corporation must receive the payment demand as
provided in section 7-113-203, the corporation shall return the deposited
certificates and release the transfer restrictions imposed on uncertificated
shares.
(2) If the effective date of the corporate action creating dissenters' rights
under section 7-113-102 occurs more than sixty days after the date set by the
corporation by which the corporation must receive the payment demand as provided
in section 7-113-203, then the corporation shall send a new dissenters' notice,
as provided in section 7-113-203, and the provisions of sections 7-113-204 to
7-113-209 shall again be applicable.
7-113-208. SPECIAL PROVISIONS RELATING TO SHARES ACQUIRED AFTER ANNOUNCEMENT OF
PROPOSED CORPORATE ACTION.
(1) The corporation may, in or with the dissenters' notice given pursuant to
section 7-113-203, state the date of the first announcement to news media or to
shareholders of the terms of the proposed corporate action creating dissenters'
rights under section 7-113-102 and state that the dissenter shall certify in
writing, in or with the dissenter's payment demand under section 7-113-204,
whether or not the dissenter (or the person on whose behalf dissenters' rights
are asserted) acquired beneficial ownership of the shares before that date. With
respect to any dissenter who does not so certify in writing, in or with the
payment demand, that the dissenter or the person on whose behalf the dissenter
asserts dissenters' rights acquired beneficial ownership of the shares before
such date, the corporation may, in lieu of making the payment provided in
section 7-113-206, offer to make such payment if the dissenter agrees to accept
it in full satisfaction of the demand.
(2) An offer to make payment under subsection (1) of this section shall include
or be accompanied by the information required by section 7-113-206 (2).
7-113-209. PROCEDURE IF DISSENTER IS DISSATISFIED WITH PAYMENT OR OFFER.
(1) A dissenter may give notice to the corporation in writing of the dissenter's
estimate of the fair value of the dissenter's shares and of the amount of
interest due and may demand payment of such estimate, less any payment made
under section 7-113-206, or reject the corporation's offer under section
7-113-208 and demand payment of the fair value of the shares and interest due,
if:
(a) The dissenter believes that the amount paid under section 7-113-206 or
offered under section 7-113-208 is less than the fair value of the shares or
that the interest due was incorrectly calculated;
(b) The corporation fails to make payment under section 7-113-206 within sixty
days after the date set by the corporation by which the corporation must receive
the payment demand; or
(c) The corporation does not return the deposited certificates or release the
transfer restrictions imposed on uncertificated shares as required by section
7-113-207 (1).
(2) A dissenter waives the right to demand payment under this section unless the
dissenter causes the corporation to receive the notice required by subsection
(1) of this section within thirty days after the corporation made or offered
payment for the dissenter's shares.
PART 3
JUDICIAL APPRAISAL OF SHARES
7-113-301. COURT ACTION.
(1) If a demand for payment under section 7-113-209 remains unresolved, the
corporation may, within sixty days after receiving the payment demand, commence
a proceeding and petition the court to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding within
the sixty-day period, it shall pay to each dissenter whose demand remains
unresolved the amount demanded.
(2) The corporation shall commence the proceeding described in subsection (1) of
this section in the district court for the county in this state in which the
street address of the corporation's principal office is located, or, if the
corporation has no principal office in this state, in the district court for the
county in which the street address of its registered agent is located, or, if
the corporation has no registered agent, in the district court for the city and
county of Denver. If the corporation is a foreign corporation without a
registered agent, it shall commence the proceeding in the county in which the
domestic corporation merged into, or whose shares were acquired by, the foreign
corporation would have commenced the action if that corporation were subject to
the first sentence of this subsection (2).
(3) The corporation shall make all dissenters, whether or not residents of this
state, whose demands remain unresolved parties to the proceeding commenced under
subsection (2) of this section as in an action against their shares, and all
parties shall be served with a copy of the petition. Service on each dissenter
shall be by registered or certified mail, to the address stated in such
dissenter's payment demand, or if no such address is stated in the payment
demand, at the address shown on the corporation's current record of shareholders
for the record shareholder holding the dissenter's shares, or as provided by
law.
(4) The jurisdiction of the court in which the proceeding is commenced under
subsection (2) of this section is plenary and exclusive. The court may appoint
one or more persons as appraisers to receive evidence and recommend a decision
on the question of fair value. The appraisers have the powers described in the
order appointing them, or in any amendment to such order. The parties to the
proceeding are entitled to the same discovery rights as parties in other civil
proceedings.
(5) Each dissenter made a party to the proceeding commenced under subsection (2)
of this section is entitled to judgment for the amount, if any, by which the
court finds the fair value of the dissenter's shares, plus interest, exceeds the
amount paid by the corporation, or for the fair value, plus interest, of the
dissenter's shares for which the corporation elected to withhold payment under
section 7-113-208.
7-113-302. COURT COSTS AND COUNSEL FEES.
(1) The court in an appraisal proceeding commenced under section 7-113-301 shall
determine all costs of the proceeding, including the reasonable compensation and
expenses of appraisers appointed by the court. The court shall assess the costs
against the corporation; except that the court may assess costs against all or
some of the dissenters, in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily, vexatiously, or not in good faith
in demanding payment under section 7-113-209.
(2) The court may also assess the fees and expenses of counsel and experts for
the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any dissenters if the court finds
the corporation did not substantially comply with part 2 of this article; or
(b) Against either the corporation or one or more dissenters, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this article.
(3) If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to said counsel reasonable fees to be paid out of the amounts awarded to
the dissenters who were benefited.